American Oil Co.

National Labor Relations Board - Board Decisions

Apr 22, 1965

152 N.L.R.B. 56 (N.L.R.B. 1965)

56 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of Respondent, be posted by Respondent immediately upon receipt thereof, and be
maintained by it for a period of 60 consecutive days thereafter, in conspicuous places,
including all places where notices to members are customarily posted. Reasonable
steps shall be taken by Respondent to insure that such notices are not altered, defaced,
or covered by any other material.
(d) Promptly mail or deliver to said Regional Director signed copies of the at-
tached Appendix for posting, Kiewit willing, at all jobsites of Kiewit within the States
of Oregon and Washington.
(e) Notify the Regional Director for Region 19, in writing, within 20 days from
the date of the receipt of this Decision, what steps Respondent has taken to comply
herewith.le
19If this Recommended Order is adopted by the Board, this provision shall be modified
to read : "Notify said Regional Director, In writing, within 10 days from the date of
this Order, what steps Respondent has taken to comply herewith."
APPENDIX
NOTICE TO ALL MEMBERS
Pursuant to the Recommended Order of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor Rela-
tions Act, we hereby notify you that:
WE WILL NOT cause or attempt to cause Peter Kiewit Sons' Co., to lay off
Darwin T. Chapek or any other employee of the said Employer or otherwise cause
or attempt to cause the said Employer to discriminate against any employee in
violation of Section 8(a)(3) of the Act.
WE WILL NOT in any other manner restrain or coerce employees in the exercise
of rights guaranteed in Section 7 of the Act except in a manner permitted by Sec-
tion 8 (a) (3) of the Act.
WE WILL make whole Darwin T. Chapek for any loss of pay he may have
suffered by reason of his discharge by Peter Kiewit Sons' Co.
WE WILL notify Darwin T. Chapek and the aforementioned Employer, in writ-
ing, that we have no objection to the employment of Chapek in any capacity
satisfactory to the said Employer.
HOISTING AND PORTABLE ENGINEERS LOCAL No. 701, INTERNA-
TIONAL UNION OF OPERATING ENGINEERS, AFL-CIO,
Labor Organization.
Dated------------------- By-------------------------------------------
(Representative) (Title)
This notice must remain posted for 60 consecutive days from the date of posting,
and must not be altered, defaced, or covered by any other material.
Employees may communicate with the Board's Subregional Office, 612 Lincoln
Building, 208 Southwest Fifth Avenue, Portland, Oregon, Telephone No. 226-3361,
if they have any question concerning this notice or compliance with its provisions.
American Oil Company and Independent Oil Workers Union Local
No. 117, affiliated with Independent Oil Workers Union Na-
tional . Case No. 17-CA-2264. April 22, 1965
DECISION AND ORDER
On May 11, 1964, Trial Examiner William J. Brown issued his
Decision in the above-entitled proceeding, finding that the Respond-
ent had not engaged in any unfair labor practices alleged in the com-
plaint and recommending that the complaint be dismissed in its
entirety, as set forth in the attached Trial Examiner's Decision.
152 NLRB No. 7.
AMERICAN OIL COMPANY 57
Thereafter, the General Counsel and the Charging Party filed excep-
tions to the Decision with supporting briefs. The Respondent filed
cross-exceptions and a brief in support of the Trial Examiner's
Decision.'
Pursuant to the provisions of Section 3(b) of the National Labor
Relations Act, as amended, the National Labor Relations Board has
delegated its powers in connection with this case to a three-member
panel [Members Fanning, Brown, and Jenkins].
The Board has reviewed the rulings of the Trial Examiner made at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions and cross-exceptions, briefs, and
the entire record in this case, and hereby adopts the findings, con-
clusions, and recommendations of the Trial Examiner only to the ex-
tent consistent herewith.
The Trial Examiner found that the Respondent over the years
contracted out, without notice to or consultation with the Union, a
substantial amount of unit work that could be, and sometime was, per-
formed by unit employees. He also found that neither the employees
in the mechanical department nor the employees in craft classifications
then employed as laborers were either laid off or worked reduced hours
as a result of contracting out the pump installation job to Natkin,
although, had the work not been contracted out, laborers in craft
classifications would have been employed on that job at craft rates.
In the circumstances of this case, including the consideration that
there was no real change in terms and conditions of employment of the
employees in the bargaining unit, we adopt the Trial Examiner's con-
clusion that the Respondent did not violate Section 8(a) (5) and (1)
of the Act as alleged in the complaint.2
Accordingly, we shall dismiss the complaint in its entirety.
ORDER
Pursuant to Section 10(c) of the National Labor Relations Act, as
amended, the National Labor Relations Board hereby adopts the
Recommended Order of the Trial Examiner, and orders that the com-
plaint herein be, and it hereby is, dismissed.
1 The Respondent 's request for oral argument is hereby denied as the record , excep-
tions and cross-exceptions , and briefs adequately present the issues and the positions
of the parties.
2 American Oil Company, 151 NLRB 421.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
This proceeding under Section 10(b) of the National Labor Relations Act, as
amended , hereinafter sometimes referred to as the Act, originated with a charge
58 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
filed August 15, 19631 by the above-mentioned Charging Party, hereinafter some-
times referred to as the Union. The complaint, issued on November 18 by the
General Counsel of the National Labor Relations Board acting through the Regional
Director for the Board's Region 17, alleged the commission by the above-mentioned
Respondent, hereinafter sometimes called the Company, of unfair labor practices
defined in Section 8(a)(5) and (1) of the Act. Respondent's duly filed answer
denied the commission of the unfair labor practices alleged.
Hearing was held on the issues raised by the complaint and answer before Trial
Examiner William J. Brown at Independence, Kansas, on January 21 and 22, 1964.
The parties appeared as noted above and participated fully in the hearing with
full opportunity to present evidence and argument on the issues. Subsequent to
the hearing all parties filed briefs with the Board which have been fully considered.
Upon the entire record in this proceeding, and on the basis of my observation of
the witnesses, I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT EMPLOYER
The Company, a corporation organized under the laws of the State of Maryland,
owns and operates a refinery at Neodesha, Kansas, where it is engaged in the manu-
facture and sale of petroleum products. At the Neodesha plant the Company an-
nually manufactures, sells, and ships directly to purchasers located outside the State
of Kansas petroleum products valued in excess of $50,000. It appears, as the Com-
pany concedes , that it is an employer engaged in commerce within the scope of
Section 2(6) and (7) of the Act. The volume of commerce is sufficient to justify
and require the Board 's assertion of jurisdiction.
II. THE LABOR ORGANIZATION INVOLVED
The Union, as appears from the pleadings and evidence herein, is a labor organiza-
tion within the scope of the definition set forth in Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Introduction and summary of events
In 1954 the Union was certified, pursuant to proceedings under Section 9 of the
Act, as the representative of the Company's production and maintenance employees
with certain exclusions not here in question. The parties have since then engaged
in collective bargaining. At the time of the events which form the basis of the
instant case the parties were operating under a collective-bargaining agreement
executed April 19, 1962, to run for a term expiring October 8, 1963, with certain
renewability provisions. The agreement covers the production and maintenance
unit and a separate clerical unit. Within the production and maintenance unit,
seniority is recognized within three established divisions: mechanical, process, and
technical service. Within a fourth division, labor pool, an employee acquires only
plant seniority until the individual works at one or another of the more skilled
classifications.
The evidence reveals that in the negotiations leading to the 1962-63 agreement,
the Union proposed a clause which would prohibit the contracting out of work which
unit employees were qualified to perform while such unit employees were either
laid off or cut back from their craft classification; to this the Company asserted that
subcontracting was a management prerogative.2
The agreement contains a comprehensive grievance procedure permitting the
processing as a grievance of any "question" and providing for monthly meetings of
the plant manager (or his designatee) and union representatives on the third Thurs-
day of each month. Unresolved grievances may be referred to arbitration provided
they involve, inter alia, the modification or discontinuance by the Company of past
policies, practices, customs, or usages relating to working conditions.
i Dates hereinafter relate to the year 1963, unless otherwise indicated
2 This appears from the testimony of union officials , Kammerer and Holper, both of
whom impressed me as credible . Their testimony also reveals that the Company was
willing to discuss the subcontracting here complained of after the event. There does
not appear to have been a charge filed respecting the Company 's position on the general
subject of contracting out as asserted in the bargaining sessions . Neither would such
an assertion in the course of bargaining furnish any reasonable basis on inferring an
adamant opposition on the subject.
AMERICAN OIL COMPANY 59
The evidence indicates that the traditional maintenance classifications-boiler-
maker-welder, brick mason, carpenter, electrician, instrument mechanic, insulator,
machinist, pipefitter, and painter-are included in the Company's mechanical division
and that employees have progressed to varying seniority levels in one or more of
the maintenance classifications while retaining their plant seniority for purposes of
placement at work on labor assignments in event of shortage of work in their higher-
rated classifications. In the Company's processes, production units are regularly
shut down for inspection and overhaul in a step known in the industry as a "turn-
around." The turnaround involves a substantial increase of work opportunities in
the skilled maintenance classifications and, as a consequence, employees with sub-
stantial amounts of plant service necessarily will have accumulated, as a result of
turnaround assignments, some craft classification seniority. It is evident, however,
that when a turnaround is not in process, some junior craftsmen will be reduced
to lower classifications, normally the labor pool.
During the pendency of the 1962-63 agreement the Company contracted out to
a Kansas City, Missouri, contractor, Natkin & Co , hereinafter called Natkin, the
job of removing a circulating gasoline pump and installation of a new pump in
place thereof at the Neodesha refinery. Natkin commenced the work on or about
July 18 and completed the work by July 29. No prior notice was given the Union
of the Company's solicitation of bids on the pump relocation job and the Union
apparently first acquired knowledge thereof when one of the employees observed
Natkin's men at work.
On July 18 or 19, in the course of the regular monthly meeting between union
and management representatives, the Union protested the assignment of the work
to the outside contractor particularly in view of a reduction of job opportunities in
the preceding month. The management representative for the mechanical depart-
ment, Weems, stated that the department felt they needed the outside help to accom-
plish the task. The work in question called for performance of skills possessed by
company employees. Shortly prior to the award of the contract to Natkin some
10 employees in the unit represented by the Union had accepted early retirement
and severance pay as an alternative to layoff. There is also uncontradicted testi-
mony that at the time Natkin was performing the pump relocation work, there were
several mechanical department employees with craft seniority who were working in
labor classifications and at the lower laborer rate. I find that the evidence clearly
establishes that the contracting out to Natkin resulted in money losses to company
employees who would have worked on the pump relocation had it not been con-
tracted out to Natkin.
There is evidence tending to indicate that the Company over the years has regu-
larly contracted out numerous jobs which could be and sometimes were performed
by unit employees and that the matter of contracting out was widespread and re-
current. The question is as to whether it had become in effect so solidified as a
condition of employment that the award of the job in question to Natkin was not
any alteration of an existing term or condition of employment.
B. The contentions of the parties
The issues emerging from the complaint and answer, the evidence and arguments,
relate to two main topics: (1) whether the Company acted unilaterally in letting
out to Natkin, the outside contractor, the pump relocation job, and (2) whether,
unilateral or not, the company action in letting out the pump relocation job was a
change in existing working conditions.
The briefs of the General Counsel and the Charging Party are essentially
homologous and contend: (1) subcontracting of "unit work" is a mandatory subject
of collective bargaining under Town & Country Manufacturing Company, Inc.,
et al., 136 NLRB 1022, enfd. 316 F. 2d 846 (C.A. 5) and Fibreboard Paper Prod-
ucts Corp., 138 NLRB 550, enfd. sub nom. East Bay Machinists, Local 1304, 322
F. 2d 411 (C.A D C.) cert. granted 375 U.S. 963 [affd. 379 U.S. 203], whether it
resulted in elimination of an entire bargaining unit or in a temporary curtailment
of its job assignments and as a consequence an employer may not unilaterally sub-
contract even through economic and nondiscriminatory motives; (2) there has been
no fulfillment of the bargaining obligation by execution of the collective-bargaining
agreement; and (3) subcontracting of work of the type here involved has not been
a practice in the past and even if it had, there is no showing that the Union was
aware of it and is on that account estopped from complaining, estoppel being in-
applicable against the Government in any event.
Respondent, on the other hand, asserts (1) that Town & Country and Fibreboard
are erroneous statements of the law but even if they are considered as correct ex-
positions of the law they are distinguishable by virtue of their involvement with
60 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
irretrievable elimination of work whereas the present case involves the letting out
of a single small job; (2) there has been no change in working conditions in view
of the long-established pattern of contracting out of similar jobs; and (3) the subject
of contracting out was fully bargained in sessions preceding execution of the cur-
rent agreement and the Company was left free to continue contracting out.
C. The circumstances surrounding the Natkin contract
As the parties agree, there is little dispute as to much of the factual pattern against
which the issues herein have developed. Yet, the parties are poles apart as to the
inferences and conclusions to be drawn from established data and there is of course
some substantial disagreement as to one major issue, viz, whether or not like work
had been regularly done by outside contractors in the past.
The uncontradicted evidence of General Counsel's witnesses established that sub-
contracting was discussed in the bargaining sessions preceding execution of the
1962-63 agreement. Local Union President Lewis Kammerer testified that he at-
tended most of the negotiating sessions and that the Union requested a clause which
would prohibit the subcontracting out of work at any time when employees were
on layoff or cutback from their craft rates and were qualified to do the work in
question. According to Kammerer the Company took the position that contracting
out was none of the Union's business.
The testimony of Union Secretary-treasurer Bill Holper, who also attended some
of the negotiating sessions preceding the 1962-63 agreement, is generally corrobora-
tive of Kammerer. There is no contradictory evidence and I find these witnesses
credible. It must be taken as established, and I find, that the discussions preceding
the execution of the agreement which was in effect at the time of the events here in
question included a union demand for a limited prohibition against subcontracting
and a management rejection thereof. The agreement thereafter concluded is silent
on the subject.
The agreement establishes, within the production and maintenance unit, three
seniority divisions: process, technical service, and mechanical, with, apparently, a
separate seniority group of laborers prior to their working on a job within one of
the three foregoing divisions. The employees primarily affected by the contracting
out involved in the instant case are employees of the mechanical division which in-
cludes the gamut of craft-type skills. The agreement contains provisions, particu-
larly in sections 7.8: B, C, and D; 7.15: B. 3 and 13.1, confirmatory of the testimony of
several of General Counsel's witnesses on cross-examination to the effect that the
nature of the Neodesha refinery's operations is such that there are recurring periods
of diminution of work in operating units with concomitant increase of tasks in the
mechanical division. There results an accumulation, in the course of time, of
seniority in the several mechanical divisions crafts on the part of employees who
normally spend the majority of their worktime on operating or labor assignments.
Illustrations of the foregoing are seen in the situations of several of General
Counsel's witnesses. Thus the testimony of pipefitters Ivan Anveres, Wayne Smith,
and Warren Wiles established that only during turnarounds would there be such a
plentitude of skilled craft-type assignments that they could be sure of employment
at their higher rates. Wiles conceded that he worked about half his worktime at
labor assignments and at labor rates and Smith's testimony revealed that he works
more hours as a laborer than he does as a pipefitter.
There was a turnaround of major proportions in April 1963 and all employees
of the mechanical division appear to have been employed at their higher qualifica-
tions. It is reasonable to assume that the turnaround which resulted in an increase
of job opportunities for the mechanical department craftsmen with any substantial
seniority also resulted in curtailment of operators' jobs while the production equip-
ment was down for inspection and repair. The situation was apparently reversed
sometime in June and the mechanical department was notified that there would be
a necessity of laying off 10 of the mechanical department employees. This threat
of layoff was cared for, as noted above, by arranging early retirement for nine work-
ers and severance pay for one.
Sometime prior to May 21, the Company invited proposals for the job of install-
ing a new loading rack blending pump. The specifications called for the bidder to
furnish labor and materials. Since the latter item was not to include motor, pump,
starter, breaker, and pushbutton station, it is apparent that the labor element was a
major component of the cost of the job. The pump in question, supplied by the Com-
pany, was a new Peerless pump; the electric motor was one taken from the rack
pump house.
AMERICAN OIL COMPANY 61
By written communication dated June 28 the Company awarded the job to Natkin
& Co. of Kansas City , Missouri , Natkin entered on the work about July 18 and
completed the work on July 29. The work involved removal of an existing pump
and motor , repairs as necessary to the existing foundation and installation of the new
pump with its transferred motor. The work in question as appears from the un-
contradicted testimony of several mechanical department employees was work of
the type which had been at least sometimes, performed in the past by employees of
the mechanical department.
There is no doubt on the evidence but that company employees were qualified to
do the work in question and that if the work were assigned to the Company's mechani-
cal department there would have been substantial work at the craft classifications and
rates for boilermaker-welders, electricians , pipefitters , machinists , and carpenters as
well as work for the laborers of the mechanical department. The substantiality of the
work opportunities appears from testimony of General Counsel 's witnesses. There
was work for laborers in digging foundations , pouring concrete , and digging holes for
stanchions . Other classifications of employees who could be employed would include
electricians , machinists , pipefitters , boilermaker-welders, and carpenters . According
to the credited testimony of Leslie Chamberlain, a boilermaker-welder, the Natkin
job involved some 60 to 70 welds and about the same number of man -hours on the
job; similarly Edgar Neer , a company electrician , testified that he had worked on a
similar installation in the past and it involved 6 man-days of electrician 's work.
D. The prior history of contracting out
The major factual dispute in the instant case relates to the prior history of con-
tracting out. There appears to be a dispute both as to the prior history of contracting
out the particular type of work involved in the Natkin job, and the prior history of con-
tracting out other types of work which employees of the mechanical department could
perform or did perform on occasion in the past. The General Counsel's position is
that the work involved in the Natkin job had always previously been performed by
company employees except when performed as part of installation of a new operating
unit. Respondent asserts that the distinction between new units and alterations of
existing units is, insofar as location or relocation of a pump is concerned , one with-
out a difference.
The superintendent of the Company's mechanical and engineering divisions , Robert
Colwell , submitted a tabulation of all instances of location and relocation of circulat-
ing pumps at the Neodesha refinery in the period subsequent to 1955 up to the date
of hearing . The tabulation, in evidence as General Counsel 's Exhibit No. 3 lists
92 instances of location and/or relocation of circulating pumps. Of these, in 52 in-
stances the work was performed by company employees and in the remaining 42 cases
the work was let out to contractors. According to Colwell all instances of contractor
work were in connection with installation of a new unit except in the case of the
July 1963 contract awarded to Natkin . Also according to Colwell , a new unit has
reference to new production facilities resulting from construction. Colwell also
explained, however , that company employees have in several of the instances tabulated
in the exhibit worked on pump installation in connection with installation of a new
unit.
It must be concluded from analysis of General Counsel 's Exhibit No. 3 and the un-
contradicted and credited testimony of Colwell that sometimes employees work on
pump location and/or relocation both on existing units and in connection with new
units and that from 1955 to the time of the critical events herein considered whenever
outside contractors performed this work it had been in connection with new units.
The most significant item in Colwell 's testimony appears to be his assertion that work
of the type here in question had in the past been performed on occasion by company
employees and on occasion by contractors and their employees.
It is clear from the uncontradicted and credited testimony of pipefitters Shaw,
Anveres, Smith, and Wiles and that of boilermaker-welder Elam that they, or em-
ployees in their classifications , would have had employment at the craft rates on the
pump relocation in July had the work not been contracted out. By virtue of the
Company's decision to contract out they had employment only in the lower-rated
labor classifications.
E. Conclusions respecting the contracting out
The General Counsel and the Charging Party contend that the decision in
Town & Country and Fibreboard apply here and require the conclusion that the uni-
lateral contracting out to Natkin of the pump relocation work was a unfair labor prac-
62 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tice in the nature of a refusal to bargain. Respondent, on the other hand, asserts
that Town & Country and Fibreboard do not correctly state the law, that even if they
did they would not be applicable here where there has been no permanent elimination
of a whole or part of the unit and, finally, that in any event the Respondent satisfied
any bargaining obligation by discussion in the negotiations preceding the currently
effective agreement.
Town & Country Mfg. Co., 136 NLRB 1022, involved a situation in which within
1 month after the union's certification and while its initial contract proposal was under
consideration, the employer, only 3 days after advising the union of its willingness
to discuss the matter of discontinuing its trucking operations, in an abrupt and uni-
lateral volte-face, terminated the operation in question and contracted the work out
in a permanent abandonment of trucking operations accompanied by the sale of the
company trucks. The Trial Examiner characterized the employer's action as a clear
rejection of the collective-bargaining principle and conduct in derogation of the
union's representative status. In affirming the Trial Examiner's decision, the Board,
reversing its earlier decision in the first Fibreboard Paper Products Co. case, 130
NLRB 1558 (Member Fanning dissenting), concluded, at 1027:
. In our opinion, the precedents cited and discussed by the majority and
minority decisions in that case support the conclusion that the elimination of unit
jobs, albeit for economic reason, is a matter within the statutory phrase "other
terms and conditions of employment" and is a mandatory subject of collective
bargaining within the meaning of Section 8(a) (5) of the Act . . . Experience
has shown . . . that candid discussion of mutual problems by labor and manage-
ment frequently results in their resolution with attendant benefits to both sides.
Business operations may profitably continue and jobs may be preserved. Such
prior discussion with a duly designated bargaining representative is all that the
Act contemplates . But it commands no less.
The Board's Order in Town & Country was granted enforcement, Town & Country
Manufacturing Company, Inc., et al. v. N.L.R.B. 316 F. 2d 846 (C.A. 5). The court
does not appear to have accepted or rejected the Board's view that the Act requires
bargaining over a management decision to contract out a portion of an employer's op-
eration, but rather to have grasped at the Board's contention that the bargaining order
was warranted in the circumstances of the particular case including "overwhelming
evidence" of antiunion motivation in the contracting out decision.
The Fibreboard decision, 130 NLRB 1558, was reconsidered on petition of the
charging party and the second Fibreboard decision, 138 NLRB 550, is cited by the
General Counsel as authority in the instant case. In the second Fibreboard case
the Board majority held that under the authority of the Supreme Court decision in
Order of Railroad Telegraphers v. Chicago & Northwestern Ry. Co., 362 U.S. 330,
it had no alternative but to rule that a company's decision to subcontract work
theretofore performed by its employees was a mandatory subject of bargaining. The
Board's Order required the company to cease and desist from unilaterally sub-
contracting work or otherwise making changes in terms and conditions of employ-
ment without consultation with the designated bargaining agent.
In granting enforcement of the Board's Order in Fibreboard, the Court was care-
ful to adjudicate the validity of the Board's Order on the basis of the factual pattern
underlying it. Thus the Court noted that the unilateral contracting out of the
company's maintenance operation resulted in the discharge of the entire 73-man
maintenance group and the extinction of the bargaining unit; on these facts, the
Court held the Board was warranted in concluding that the employer committed
an unfair labor practice by the unilateral action. East Bay Union of Machinists,
Local 1304 (Fibreboard Paper Products Co.) v. N.L.R.B., supra.
With respect to Respondent's contention that Town & Country and the second
Fibreboard case are erroneously decided and do not correctly state the law, the con-
tention must necessarily be rejected by the Trial Examiner. Insurance Agents
International Union (Prudential Insurance Co.), 119 NLRB 768 I accept as
authoritative the Board's holding in these cases that subcontracting of an employer's
operations is a mandatory subject of collective bargaining as to which an employer is
under a duty to refrain from unilateral effectuation of change.
Respondent has asserted, in the alternative, that even assuming arguendo that
Town & Country and Fibreboard do correctly state the law they are readily dis-
tinguishable on a significant basis from the facts in the instant case in that the instant
case does not involve elimination of unit jobs. I do not accept Respondent's con-
tention in this regard. Rather I agree with General Counsel's assertion that there
is no significant or operative difference between permanent elimination or abolition
AMERICAN OIL COMPANY 63
of a job and temporary elimination of the job. In the case at bar there were sub-
stantial man-hours involved in the prior instances where company employees worked
on location and relocation of circulating pumps. While man-hours are not known
for the cases where contractors performed the work, in the 52 cases where com-
pany employees did the work the man-hours involved in 30 such instances exceeded
160 man-hours. The work involved is substantial, far from de minimis, and it does
not appear to present any real difference insofar as the obligation to bargain is con-
cerned from situations where the work is permanently lost to the unit. The sole
difference is one as to the extent of the damage.
Accordingly, in disagreement with Respondent I would hold Town & Country
and Fibreboard applicable to situations where the contracting out is a temporary loss
of work as distingished from contracting out on a permanent basis of a portion of
company operations.
The question before me is, however, not one as to generalized concepts as to the
nature and extent of the duty to bargain. The issue in the case assigned to me is
whether in the instance alleged in the complaint the Respondent engaged in a re-
fusal to bargain by its July subcontracting to Natkin without prior notice to and
consultation on request with the Union. Since I iegard Town & Country and
Fibreboard applicable to the type of contracting here involved and since the evidence
establishes beyond peradventure of doubt that there was no prior notice to the Union
of the Natkin contract I would find a refusal to bargain if the subcontracting altered
existing terms and conditions of employment unless the Union had, in the circum-
stances, no right to demand bargaining
The question to be resolved is, then, whether award of Natkin contract altered
existing terms and conditions of employment. The evidence is plain that it did not.
Contracting out of pump locations and relocations had been a practice firmly estab-
lished over the years as appears from the tabulations of instances of such work
contained in General Counsel's Exhibit No. 3, described above. While the inter-
rogation of the Company's mechanical division superintendent, Robert Colwell, by
the General Counsel and the Charging Party sought to establish some distinction
between prior instances of contracting out pump location jobs and the Natkin con-
tract, with reference to whether or not they were a part of a new unit or were
regarded as capital expenditures, the distinction suggested would not appear to
have significance The essentials are that the work is of the same type that is done
sometimes by unit employees and sometimes by contractors. There is no convinc-
ing indication that the work involved in the Natkin job is any different from that
which theretofore had been, on frequent occasions, let out to contractors.
The Company also contends that, in addition to the work of pump location and
relocation, it has over the years contracted out a large number of other jobs which
could have been and, in some 90 percent of the types of jobs listed, actually had
on occasion been, performed by employees of the Company's mechanical division.
Respondent's witness John Brewer, presently supervisor of maintenance, planning,
and coordination and prior to January 1, 1963, for 11 years general foreman of
the mechanical division, prepared Respondent's Exhibit No. 2 from company records
of 21,000 purchase orders for the 5 years, 1959 to 1963. The exhibit contains a
listing of some 1,300 items let out to contractors which items represented jobs which
could be, and according to Brewer, in 90 percent of the items had sometimes been per-
formed by unit employees.
It appears from interrogation of Brewer by the Charging Party, however, that in
the preparation of the exhibit Brewer and his assistants, with no suggestion or in-
dication of anything less than complete good faith on their part, made certain as-
sumptions as to the capacities and actions their maintenance employees. On the
basis of the Charging Party's exposition of the weaknesses of this exhibit in this
aspect, I am not disposed to place reliance on it as a reliable listing of work done
by contractors which was actually performed by unit employees. The weaknesses
in the exhibit appear to have come to light through the combination of the pene-
trating inquiry of counsel and the candor and truthfulness of the witness. Al-
though I discount the exhibit, I do accept the testimony of Brewer, who impressed
me as credible, as clearly establishing that over the years there has been substantial
contracting out of work that could be and sometimes was done by unit employees.
The conclusion that there had been substantial contracting out of unit work
receives some, though not overwhelming, support from the evidence indicating that
the Union sought in the 1962 negotiations a clause which would prohibit contracting
out when unit workers were on layoff or cut back from their craft classifications.
The undisputed testimony of union officials, Kammerer and Holper, to the effect
that the subject of contracting out was discussed in negotiations preceding the execu-
tion of the 1963 agreement gives rise to opposing contentions as to whether by
64 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
such discussion and subsequent agreement on a contract silent on the subject, the
Company may rely on a waiver by the Union of any right to raise the question
as to contracting out during the pendency of the agreement.
In this area of contention the General Counsel and the Charging Party place prin-
cipal reliance on the Board's decision in Proctor Manufacturing Corporation, 131
NLRB 1166. Respondent asserts that decision is inapposite. I read Proctor Manu-
facturing as distinguishable in the significant respect that in Proctor the employer
made no contention in the precontract bargaining that establishment and revision
of piece rates (the analogue of contracting out here) was a management preroga-
tive. In the instant case, however, as appears from the testimony of the union
officials, the Company here did bluntly assert in the bargaining the position that
contracting out was a management prerogative. No charge of unfair labor prac-
tice appears to have been filed at the time nor in any of the many previous cases
of contracting out work of locating circulating pumps or other jobs performed
and/or performable by unit employees.
Notwithstanding the inapplicability of the Proctor decision, general principles of
interpretation would seem to require the conclusion that in view of the breadth of
the scope of the obligation to bargain prior to unilateral action on so vital a matter
as the employment opportunities of unit employees I would regard the Act as im-
posing on the employer here the duty to advise the Union of an intent to contract
out work performed and/or performable by unit employees and to hear the Union's
position in reasonable patience and attention appropriate to business exigencies prior
to taking action. Were it not for the history of past action recounted above, I
would find a refusal to bargain here.
In view of my finding that Respondent has not, as alleged in the complaint, changed
existing working conditions of employees in the unit, I conclude that the General
Counsel has failed to make out an unfair labor practice within Section 8 (a) (5)
and (1) of the Act, on the part of the Company.
Upon the basis of the foregoing findings of fact, and upon the entire record in this
case, I make the following:
CONCLUSIONS OF LAW
1. The Company is an employer engaged in commerce within the purview of
Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the purview of Section 2(5) of
the Act.
3. The Company is not shown to have engaged in the unfair labor practices alleged
in the complaint.
RECOMMENDED ORDER
Upon the basis of the foregoing Findings of Fact and Conclusions of Law, it is
recommended that the complaint herein be dismissed.
Detroit Stage Employees ' Union , Local No. 38, International
Alliance of Theatrical Stage Employees and Moving Picture
Machine Operators of the United States and Canada, AFL-CIO
and Radio and Television Broadcast Engineers Local Union
1218, International Brotherhood of Electrical Workers,
AFL-CIO and Kaiser Broadcasting Corporation . Case No.
7-CD-123. April 22,1965
DECISION AND DETERMINATION OF DISPUTE
This is a proceeding pursuant to Section 10 (k) of the National Labor
Relations Act, as amended, following a charge filed by Kaiser Broad-
casting Corporation, herein called the Employer, alleging that Detroit
Stage Employees' Union, Local No. 38, International Alliance of
Theatrical Stage Employees and Moving Picture Machine Operators
152 NLRB No. 11.