Artistic Embroidery, Inc.

National Labor Relations Board - Board Decisions

Jun 7, 1963

142 N.L.R.B. 974 (N.L.R.B. 1963)

974 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
CONCLUSIONS OF LAW
1. Kit Manufacturing Company, Inc., is engaged in commerce within the meaning
of Section 2(6) and (7) of the Act.
2. Sheet Metal Workers International Association , Local 213, AFL-CIO, is a
labor organization as defined in Section 2(5) of the Act.
3. All production and maintenance employees employed by the employer at its
Caldwell, Idaho, plant, excluding office clerical employees , professional employees,
servicemen , and all supervisors as defined in the Act, constitute a unit appropriate
for the purposes of collective bargaining within the meaning of Section 9(b) of
the Act.
4. The Union at all times material herein has been , and now is, the exclusive
representative of all employees in the aforesaid appropriate unit for the purposes
of collective bargaining within the meaning of Section 9(a) of the Act.
5. By refusing , on and after June 15, 1962, to bargain collectively with the Union
as the exclusive representative of the employees in the aforesaid appropriate unit, and
by interfering with, restraining , and coercing its employees in the exercise of the
rights guaranteed them in Section 7 of the Act, the Respondent has engaged in un-
fair labor practices affecting commerce within the meaning of Section 8(a)(5) and
(1) of the Act.
6. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
7. The Respondent did not discriminatorily refuse to reinstate Charles Tveidt, as
alleged in paragraph XX of the complaint, and did not discriminatorily discharge
Pat Korn as alleged in paragraph XXI of the complaint.
[Recommended order omitted from publication.]
Artistic Embroidery, Inc. and International Ladies Garment
Workers' Union , AFL-CIO, Local No. 415. Case No. 12-CA-
2218(1-9). June 7, 1963
DECISION AND ORDER
On December 13, 1962, Trial Examiner Ramey Donovan issued
his Intermediate Report in the above-entitled proceeding, finding
that the Respondent had engaged in and was engaging in certain
unfair labor practices and recommending that it cease and desist
therefrom and take certain affirmative action, as set forth in the at-
tached Intermediate Report. Thereafter, the Respondent i and the
General Counsel filed exceptions to the Intermediate Report and the
Respondent filed a supporting brief.
The Board 2 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 In-
termediate Report, the exceptions and brief, and the entire record in
'The Respondent contends , inter alia, that the Trial Examiner 's Recommended Order
requiring it to execute the agreement reached by the parties does not indicate whether the
"renegotiability" clause is to be included or excluded from the contract The agreement
reached on October 31, 19131, was that the written contract would not contain a re-
negotiability clause, and we interpret the Trial Examiner ' s order is requiring the Respond-
ent to execute the contract offered it on or about November 17, 1961 , which excluded this
clause. As so interpreted , we are affirming the Trial Examiner's Recommended Order.
2 Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, the
Board has delegated its powers in connection with this case to a three-member panel
[ Members Rodgers , Fanning, and Brown].
142 NLRB No. 111.
ARTISTIC EMBROIDERY, INC. 975
this case , and hereby adopts the findings , conclusions , and recom-
mendations of the Trial Examiner.'
ORDER
The Board adopts the Recommended Order of the Trial Examiner
as its Order.
9 Subsequent to the issuance of the Intermediate Report, the Board received Informal
notice that the Respondent , Artistic Embroidery , Inc., was dissolved . On March 2 18, 1963,
the Board Issued a notice to show cause to all the parties as to why the Board should or
should not proceed to decide this case on the record heretofore made. Thereafter, the
Charging Party filed a response to the notice urging that the Board adopt the Trial
Examiner's Intermediate Report. It is asserted in the Charging Party's response that
Respondent' s business continues to be operated by a "purchaser " thereof who , the Charging
Party asserts , may be a successor responsible for remedying Respondent ' s unfair labor
practice . A letter received from Respondent 's attorneys states that the position of Re-
spondent "has, in all respects , heretofore been stated ." The General Counsel did not re-
spond to the notice. We have concluded , under all the circumstances , that the Board
should decide this case on the record before it and provide for an appropriate remedy.
INTERMEDIATE REPORT
STATEMENT OF THE CASE
On December 5, 1961 , the above Union filed a charge against Respondent , Artistic
Embroidery, Inc., the charge alleging violations of Section 8(a) (1) and (5) of the
Act that since December 4, 1961, Respondent had refused to bargain with the
Union, the majority representative of Respondent's employees . Another charge was
filed by the Union on December 15, 1961, alleging violations of Section 8(a)(1)
of the Act. It was stated therein that since November 17, 1961, Respondent
had procured five named employees to withdraw from the Union . A complaint
was issued on August 24, 1962. The allegations were that: in November 1961
Respondent by interrogation and promises solicited employees to resign from the
Union; in January 1962 Respondent entered into a settlement agreement in order
to avoid its obligation to bargain with the Union; Respondent has refused to sign
a contract embodying terms agreed upon with the Union on October 31, 1961, and,
by this and the other conduct specified , Respondent has refused to bargain with the
Union , all in violation of Section 8(a)(1) and (5) of the Act. Respondent in its
answer denied that it had committed unfair labor practices . The hearing was held
before Trial Examiner Ramey Donovan on October 2 and 3, 1962.
Upon the entire record in the case and upon my observation of the witnesses, I make
the following:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
Artistic Embroidery , Inc., is a Florida corporation engaged in the manufacture and
sale of embroidery at its place of business in Miami, Florida. During the calendar
year 1961 Respondent performed services valued in excess of $50,000 for enterprises
in Florida and these enterprises shipped goods and materials valued at $50,000 to
points outside Florida.
Respondent is engaged in commerce within the meaning of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The Union is a labor organization within the meaning of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
Background
On April 10 , 1959 , Respondent and the Union entered into a contract in which
the Union was recognized as the exclusive bargaining representative of Respondent's
employees . The term of the contract was May 1, 1959, to September 1, 1960. A
supplemental agreement of January 23, 1961 , extended the term of the contract
from September 1, 1960, to September 15, 1961.
976 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In addition to Respondent there were four other employers in embroidery work
in the area with whom the Union had contracts . Apparently in the latter part of
June 1960 , the above employers , including Respondent , founded an association and
negotiated jointly. The resulting supplementary contracts , although separate, were
identical in terms. Pursuant to a petition by the association aforementioned and
a hearing thereon, the Board issued a Decision on September 7, 1961, in which it
rejected the petitioner 's claim that a multiemployer unit was appropriate.
The Facts
The testimony regarding meetings between Respondent and the Union in 1961
and 1962 is that of the union's business manager, Gladnick; the union's business agent,
Metz; and Stein, president of Respondent. There is also testimony of two other em-
ployers, Zeiss, president of American Pleating and Embroidery Company, and
Schwartz, owner of Vogue Originals, both engaged in the same type of business
and in the same area as Respondent.
On the whole I regarded Gladnick as a reliable witness and Metz, for the most
part, was a corroborating witness. Zeiss and Schwartz, in their limited testimony,
impressed me as credible witnesses. I was not impressed with Stein's testimony
regarding the circumstances of some of his employees' union resignations in the latter
part of 1961. Regarding negotiations with the Union in 1961-62, I credited Stein
in some respects and in other respects did not. What follows are my findings regard-
ing various events in 1961 and 1962, based on a synthesis of the above and other testi-
mony in the record.
On September 20, 1961, Gladnick and Metz met with Stein in the office of the
Federal Conciliation Service office and in the presence of the Federal conciliator.'
It was made clear by the Union that it was not meeting with Stein as an association
representative since the Board had rejected the associationwide multiemployer unit.
Stein said he was representing Respondent and the other employers who had agreed
that they would abide by any terms arrived at and would sign individual but identical
contracts.
Gladnick stated to Stein that in the new contract the Union wanted provisions for a
retirement fund, a severance fund, and a 3-year term. Stein said he was opposed
to these proposals and probably gave as a reason the increased cost to the Company.
He said that he believed that the other employers would likewise reject these proposals
but that he would discuss the matters with them.
The same parties met again about October 13 and were unable to reach agree-
ment. Stein said he wuold report the discussions to the other employers as he had
done after the first meeting. Stein said the employers had been unwilling to agree
to the union proposals.
The parties met again on October 23 but, in addition to Stein, employers Zeiss,
Schwartz, and Doshay were present. The union proposals were again discussed.
The employers said that they were willing to agree to a 3-year contract but not to
the other proposed items. This was rejected by the Union.
As had been true of the previous meetings, the next meeting, on October 31,
was held in the Federal Conciliation office with the Federal conciliator present.
Also present were Gladnick, Metz, Stein, Zeiss, and Schwartz.
At this meeting, I find, the parties agreed on the following terms for a contract to
cover the period from the expiration of the September 15, 1961, contract to Septem-
ber 15, 1964: on December 1, 1962, the employers would start contributing 21/2
percent of payroll to the union retirement fund; on October 1, 1963, the employers
would start contributing half of 1 percent of payroll to a severance fund; that on
July 1, 1964, the employers would grant a 6 -percent across-the-board wage increase;
new employees during their first 30 days would receive only $1.15 per hour, the
minimum wage; and the regular minimum wage in each shop would be 10 cents
above the Federal minimum wage.
In the course of the discussions at the meeting that led to the foregoing the em-
ployers raised the question of what would happen if, when the contributions and in-
creases became due, they were financially unable to make such payments. The
Union, conceding that conditions in the industry were poor, said that it would be
willing, at such time as the increases accrued under the agreement, to sit down with
the employers at the time, discuss the problem, and in effect renegotiate the matter.
The employers asked that this renegotiability understanding be included in the con-
tract. The Union was unwilling to do this, saying that it was unnecessary since the
1 Prior individual contracts between the Union, Respondent. and other embroidery manu-
facturers (American, Vogue, Doshav) were the same although the dates were different.
The supplemental agreements all had the sane September 15, 1961 , termination date.
ARTISTIC EMBROIDERY, INC. 977
employers had the Union 's word on the matter and that , in effect, McAllister, the
Federal conciliator, was a witness . It also appears that the Union stated the pro-
vision regarding a $1.15 minimum for the first 30 days of a new employee 's employ-
ment would not be in the written contract but would be a verbal understanding.
It is my opinion that while the employers asked for and would have preferred to
have the renegotiability clause in the contract , they did go along with the Union on
this matter and that it did not lead to an impasse in the overall negotiations and agree-
ment. The $1 . 15 minimum 's incorporation in the contract appears to have been even
less an issue if, in fact, it ever was an issue.
At the meeting McAllister wrote out in longhand:
Memorandum of Agreement dated Oct . 31, 1961 , to supplement contract ex-
piring Sept . 15, 1961.
Artistic Embroidery Co.
American Pleating & Embroidery Co.
Vogue Originals
Doshay Embroidery Co.
and
Local 415, I.L.G.W.U.
Learners for 30 days__________________ ________________ $ 1. 15 Per Hour
Above the minimum rate___________ ______________________ . 10 Per Hour
Retirement Dec. 1 , 1962________________________________________ 21/a%
Severance Oct. 1, 1963__________________________________________ 1/z %
Wage Increase July 1, 1964_______________________________________ 6%
Expiration date Sept . 15, 1964.
Then followed the signatures and names of the parties : Gladnick and Metz for the
Union; Stein for Artistic; Schwartz for Vogue; Zeiss for American.
At the hearing, Stein 's testimony was not at variance with the foregoing facts.
He stated that the October 31 meeting ended with the Union stating that it would
call a meeting of its membership to ratify the contract and that the Union would
draw up the contract and present copies to the employers for signature. The union
meeting was scheduled for November 8. Neither Stein nor anyone else expressed
any contrary idea or qualification.
Thereafter, on November 8, the Union held a membership meeting of employees
from the shops of the employers who had participated in the October 31 contract
negotiations ? After being advised of the terms of the contract , including the oral
understandings , the members present voted unanimously to accept the contract.
Ensuing events involving Respondent and its employees are best understood if
we briefly retrace the situation prior to November 1961 . During the period of the
1959-60 contract and the period of the supplement to the contract to September 15,
1961 , Respondent's employees were members of the Union . There is therefore no
question of the Union's majority status at this time.
Stein testified that on September 18, 1961 , he advised his employees that, al-
though the contract had expired , conditions would remain the same as they were
under the contract . It is clear that there were no resignations from the Union
during this postcontract period and no question was raised by either the employees
or Stein regarding the Union 's continued status as the representative of the em-
ployees. Respondent stated that it would continue to operate under he terms
of the expired contract and this apparently included the continued checkoff of
employees ' due to the Union .3
During the contract negotiations through October 31 there was no question
raised about the Union 's representative status and the negotiations establish that
Respondent recognized the existing status of the Union as the bargaining repre-
sentative of the employees.
On November 17, 1961, the Union presented to Stein, Schwartz , and Zeiss, in-
dividually and separately , complete contracts . The contracts were identical ex-
cept that each was a contract between the individual Company and the Union. In
form and contents the contracts were the same as the preceding contracts between
the parties with the exception of the new terms set forth in the memorandum of
understanding of October 31. The new terms were set forth in the contract pursuant
3 Local 415 was apparently an amalgamated local that represented employees in a num-
ber of different plants in the industry.
8 As we shall see, Stein, around the middle of November 1961, told the employees that if
they did not want the Union they should write letters to that effect to the Union and to
Respondent. Stein testified that the reason he suggested written communications was "Aso
that I should [could] stop deducting dues from their wages."
978 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to the aforesaid memorandum . The matters such as renegotiability which, on
October 31 , were understood to be and were oral agreements , were not included in
the contract in written form.
There is considerable conflict in testimony as to events in Respondent 's plant
after the unanimous ratification of the contract at the November 8 union mem-
bership meeting and after the November 17 presentation of the contract to Stein.
Repsondent's normal complement was about 12 to 14 employees . They were all
members of the Union and continued as such until some of them , around the lat-
ter part of November , wrote letters of resignation to the Union. Respondent's wit-
nesses, Stein , and some of the employee resignees testified that they went to Stein
individually and told him they no longer wanted the Union . Stein told them to
write letters of resignation . The first two letters were postmarked November 18,
1961 , and both gave Respondent 's address as the sender 's return address. Two
other letters were dated November 29 and another was dated November 30 .4
No satisfactory explanation was given at the hearing why all this nonunion
sentiment arose spontaneously among these employees in the latter part of Novem-
ber 1961 . No one had opposed ratification of the contract on November 8 and
there is no evidence of dissatisfaction with its terms, which , of course , entailed in-
creases and other advantages for the employees.
It is pertinent to observe that most of Respondent 's employees involved in these
events were Spanish-speaking females who impressed me as people who were
primarily interested in having a job .5 They were , in my opinion , highly receptive
to their employer's wishes. There may have been some latent indifference to the
Union or a desire to get out of the Union on the part of a minority of the employees,
but I find that Stein encouraged , assisted , and developed this sentiment around
the middle of November 1961. I find that Stein instituted and urged a program
of resignation from the Union upon others of his employees at the same time and
sought unsuccssfully to have such employees resign although they had never ex-
pressed any interest in such action and in fact refused to so act. Among other
things, I find that Stein advised his employees around the middle of November
that their working conditions and terms of employment would be unaffected if they
did not have the Union.
In early December 1961 , Zeiss and Schwartz signed, for their respective com-
panies, copies of the contract that had been presented around November 17.
They testified in substance that the three employers, Zeiss, Stein , and Schwartz, had
agreed on October 31 to sign the contract and that the contract they later signed was
the one agreed upon on October 31. Zeiss and Schwartz affirmed that at the
October 31 meeting they had wanted the renegotiability clause in the contract but
the Union had refused . The contract they signed included, in their (Zeiss' and
Schwartz') view, an oral understanding on renegotiability as agreed to on Octo-
ber 31.
On December 4, 1961 , Stein, in a meeting with the Union , advised the latter
that he was not going to sign the contract because the Union did not represent a
majority of his employees . Gladnick accused Stein of having told his employees
to get out of the Union and said that the union would file charges of unfair labor
practices . Except as stated I find that Stein gave no other reason for not signing
the contract . The following day, December 5, the Union filed a charge of refusal
to bargain against Respondent.
Pickets appeared before Respondent 's plant on December 6, 1961 . There were
no meetings between the parties in December 1961, after December 4, or in January
1962. However , on January 22, 1962, the Respondent and the Union , under the
aegis of the Board 's Regional Office, executed a settlement agreement approved by
the Regional Director of the Board. By the terms of this instrument Respondent
agreed that it would bargain with the Union as the exclusive representative of Re-
spondent 's production and maintenance employees "with respect to any and all issues
unresolved as of October 31, 1961 , and if an understanding is reached embody such
understanding in a signed agreement ." Respondent also agreed to reinstate striking
employees ; not to threaten employees with reprisals for union activity; not to request,
solicit , or interrogate employees regarding their desires to become or remain mem-
bers of the Union; not to interfere with , restrain , or coerce employees in their exercise
of rights guaranteed under the Act. All the foregoing provisions were embodied in
a notice to employees that Respondent undertook to post in its plant for 60 days.
It was stated that the execution of the agreement by Respondent was not an admis-
sion that Respondent had violated the Act.
d There is also a resignation letter dated March 8, 1962.
5 This is quite understandable and my obseivation is not intended as a criticism.
ARTISTIC EMBROIDERY, INC. 979
The next meeting between the parties was held on February 5, 1962. Gladnick
told Stein that all issues had been resolved on October 31 and asked him to sign the
contract. Stein refused. He admittedly raised no question about the Union's
majority status as bargaining representative. He said that he wanted the verbal
understanding of October 31 regarding renegotiability to be placed in writing in the
contract. Gladnick said that the other employers were satisfied with the verbal
understanding and he said he was unwilling to accede to Stein's request. After con-
siderable discussion Gladnick said that "if the renegotiability matter is the only
reason why you will not sign the contract, I will give you a letter confirming the
understanding." Stein said he would discuss the matter with his attorney. Stein then
said that he wanted clarification of the health and welfare fund provisions of the
contract. Gladmck said that the provisions were the same as in the previous contract,
explaining that it was administered by a board of trustees and in conformity with
the fund's rules and regulations. Stein said he wanted the rules and regulations in
the contract and said he wished to discuss the entire matter with his attorney.6
On February 13 the parties again met. Stein said that he wanted to discuss the
health and welfare fund and its benefits and he wanted all aspects of the fund written
into the contract. Gladnick's position was in substance that he had previously ex-
plained that the fund and its operation was administered by the trustees of the fund
and by the rules and regulations of the fund. He was unwilling to discuss the matter
further. Stein said he wanted the understanding on renegotiability to be written into
the contract. Gladnick referred to the letter he had offered to write confirming the
renegotiability understanding. Stein said it was not enough. He also said that there
were other points he had in mind. When asked what these points were Stein said he
wished to go over them with his attorney first. Gladnick pressed Stein to sign the
contract that had been presented, remarking that the things Stein was insisting on
were not in any of the contracts that had been signed by the Union with other
employers Stein said he was interested only in the contract for his own firm.
On March 30, 1962, the Regional Director for the Board wrote to both Respondent
and the Union. The letter stated that Respondent has complied with the affirmative
provisions of the settlement agreement; the Regional Director had determined that
Respondent is in compliance with the negative provisions of the agreement; and "the
file in this matter is hereby closed Please note that the closing is conditioned upon
continued observance of said settlement agreement, including bargaining in good
faith, and does not preclude further proceedings should subsequent violations occur."
The next meeting of the parties was about April 25, 1962. Gladnick stated that
all matters had been resolved on October 31 but he asked Stein what other points he
had in mind. Stein was not feeling well on this occasion and asked to be excused.
He said there were other points and he needed more time. Gladmck told him he
had had 2 months since the last meeting. Although asked by Gladnick, Stein did
not specify the other points. Gladnick asked Stein to bring in his additional points
at the next session.
On May 8, 1962, the parties again met. Gladnick asked Stein what were the
points he had in mind. Stein again referred to his demand that all matters pertain-
ing to the health and welfare fund be written into the contract. Gladnick said,
"We went through all that before," and said that the provisions pertaining to the
fund that were in the contract were adequate and other aspects of the fund did not
belong in the contract. Stein testified credibly that "the same discussion started about
the renegotiation clause that I had asked for previously and Mr. Gladnick asked
me if the Union put that [the renegotiation agreement] in the contract was I ready
to sign the contract. My answer was that I was not ready to sign the contract, that
there may be certain other points that I wanted clarified before I signed the con-
tract." 7 I find that Gladnick pressed Stein to state what these other points were and
Both the prior contract and the contract presented to Stein on November 17, 1961, con-
tain the same provisions regarding the health and welfare fund Among other things, it
is stated in the contract that the fund is maintained in trust to provide (or purchasing
insurance to provide) health, welfare, death, severance, and recreation benefits and so
forth to employees of contributing firms under the rules and regulations of the fund, "said
rules and regulations being hereby incorporated into this agreement as a part thereof by
reference" (the rules and regulations are published in a separate printed booklet) The
same section of the contract also refers to provisions for annual audit of the fund and for
inspection of financial statements by interested parties at the office of the fund
7 As indicated, I find that this was the first time that Gladmick offered to write the re-
negotiation agreement into the contract. His testimony was that he had made this offer
in February. I believe Stein's testimony on this aspect was more accurate. In short,
712-548-64-vol. 142-63
980 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that Stein said he would have to talk to his (Stein's) attorney. Gladnick accused
Stein of stalling and asked, apparently in exasperation, why they were meeting. Stein
replied, "Because the National Labor Relations Board said we should." Gladnick
also made some remark, with reference to Stein's statement about having to consult
his attorney, to the effect that maybe the attorney or attorneys should take over.
No further meetings were held. The Regional Office of the Board was in com-
munication with both parties throughout this period.
Conclusionary Findings
The appropriate bargaining unit consists of all production employees at Respond-
ent's Miami, Florida, plant, excluding office clerical employees, watchmen, guards,
and supervisors as defined in the Act I find that from the period of the initial con-
tract between the parties in 1959 and at all times since, the Union has represented
a majority of Respondent's employees in the appropriate unit. It is doubtful that
the union majority ceased to exist even in the latter part of 1961 and, in any event,
such defections as arose were in a substantial degree attributable to conduct of
Respondent that in my opinion constituted interference with the rights guaranteed to
employees under Section 7 of the Act. Confirmation of the Union's status as bargain-
ing agent is found in the settlement agreement of January 17, 1962, wherein Re-
spondent agreed to bargain with the Union as the exclusive representative of its
employees and to sign a contract with the Union if agreement was reached. Such
recognition and bargaining would have been illegal with any but the majority repre-
sentative of the employees and I will not assume the commission of such an act absent
a specific allegation thereof and proof thereon. Both prior to and after the one
occasion of December 4, 1961, Respondent never questioned the Union's status.
The negotiations both before and after that date make it clear that union majority
status was recognized by Respondent and did in fact exist.
It is my opinion that as a result of a series of meetings between the parties, culmi-
nating in a memorandum of understanding signed by all on October 31, 1961, agree-
ment was reached on the last mentioned date regarding the terms of a new contract
or on the terms of a supplement to the recently expired contract.
The latter contained 34 articles. For instance, "Article I: Mutual Obligations-
the parties agree that this agreement shall be binding upon them and their respective
successors and assigns , and that they will faithfully comply with its provisions";
Article XII - Holidays ... , "Article XXXIII - Conformity to Law - Saving
Clause ...... These matters and a host of other provisions were not discussed in the
October 1961 negotiations because they were not in issue. Neither party raised
them as issues or as topics of discussion. But the parties assuredly understood that
the contract for the period from September 15, 1961, to September 15, 1964, whose
terms were being negotiated, would not consist solely of some provisions regarding
learner's pay, retirement, severance, and wage increases. These provisions and one
or two others were the matters that were in dispute or in issue. Such clauses would,
when and as agreed upon, be additions or changes in the 1961-64 contract which
otherwise would be the same as its predecessor The contract itself that was to be
signed would, depending on characterization or on physical assembly or typing, be
either the old contract with different dates and a supplement containing the new pro-
visions, or it would be the old contract with new dates and with the new provisions
altering language in appropriate places and integrated into the contract instrument.
As in most contract negotiations there had been matters in dispute between the
parties. The employers obviously were not eager to agree to various increases in
contributions to retirement, severance, and wages But they agreed on October 31
to the provisions as memorialized in the memorandum of understanding of that date.
Respondent was no exception to this agreement. The employers secured the Union's
agreement to renegotiate concerning the various increases if at the time specified
for such increases the employer 's financial position was bad. The employers sought
to have this understanding on renegotiability set forth in the contract. They were
not successful and the Respondent and the other employers acquiesced in the Union's
position that renegotiability would not be written into the contract but would be an
oral understanding. Whether foolish or wise this was the fact. There was no discus-
sion or negotiation on the health and welfare fund as such or its benefits or adminis-
the Union's original position was that there was an oral understanding on renegotiation
that was expressly excluded from the written contract at the October 31 session. Sub-
sequently, when Stein requested that the understanding be written in the contract,
Gladnick offered to furnish a letter confirming the oral understanding. The Union's ulti-
mate capitulation to Stein 's demand on 'the renegotiation clause was not made until May 8
as Stein testified.
ARTISTIC EMBROIDERY, INC. 981
tration and no topics except as noted here and previously in this report were negoti-
ated; no subject was reserved for further negotiation nor were the understandings
otherwise qualified.
What remained to be done after October 31 was the submission of the October 31
agreement to the union membership for ratification. There was no understanding
that the agreement was subject to the approval or ratification of any employer's board
of directors or anything of that nature. In addition to ratification by the union
body there remained the ministerial act of physically preparing the contract instru-
ment for signature. I have previously discussed what I believe was the understanding
of the parties on October 31, regarding the contents of the contract that they would
sign. When the contract document was submitted to the employers they, of course,
were to verify that it conformed to the October 31 understanding.
Schwartz and Zeiss, the two employers who, with Stein, had arrived at an under-
standing with the Union on October 31 regarding the terms of the contract, consum-
mated the matter and signed the contract about December 6, 1961.
After ratification of the contract by the Union on November 8 and submission of
the contract to Stein for signature on November 17, letters of resignation from the
Union by some of Respondent's employees began to appear. No letter was dated
earlier that Navember 17 and only one was dated that early. The circumstances
previously described in this report persuade me that Stein was a substantial participant
in the resignation activity and that he interfered with the employees' rights as guar-
anteed in the Act.
Stein then refused to sign the contract, stating as the reason on December 4 that
the Union did not represent a majority of his employees.
On December 5 the Union filed a charge of refusal to bargain which was obviously
and expressly directed to what had occurred on December 4. Another charge on
December 15 added an allegation that Respondent had brought about resignations
from the Union on the part of certain named employees. These were the issues
presented to the Board's Regional Office. The charges were settled by an informal
settlement on January 17, 1961. The terms of the settlement were conventional,
Respondent to bargain with the Union as to any unresolved issues between the
parties, with any understanding arrived at embodied in a signed agreement.
Between January 17 and March 30, 1962, the parties met twice. The Union's posi-
tion was that agreement on the terms of the contract had been reached on October
31. Respondent never denied this fact but said in effect that it would not sign the
contract unless the renegotiability clause was placed in the contract. Regarding the
health and welfare fund, Respondent apparently wanted the rules and regulations
physically written into the contract rather than incorporated by reference. The
parties discussed these points, with the Union endeavoring to persuade Respondent to
sign the contract as previously agreed to. The Union offered to give Respondent a
letter confirming renegotiability but this was rejected.
The Regional Director advised the parties on March 30 that in the period from
January 17 to March 30, 1962, Respondent had complied with the settlement agree-
ment and had not refused to bargain and had bargained with the Union. The parties
were advised that the file was being closed "conditioned upon the continued obser-
vances of said settlement , including bargaining in good faith , and does not preclude
further proceedings should subsequent violations occur."
"It is well established that where, after the execution of a settlement agreement,
unfair labor practices occur which violate that agreement, the Board will go behind
the agreement and litigate the presettlement as well as the postsettlement viola-
tions . . . In such cases, the effect of the settlement agreement in bringing to a
halt the Board's investigatory processes is dissipated ." 8
The instant settlement agreement at all times , from January 17, 1961, to the
present, required Respondent to bargain collectively in good faith with the Union
and to embody any understanding reached in a signed agreement . Additionally or
concurrently , the same requirement was imposed by Section 8(a)(5) of the Act.
s Courier Post Publishing Company, d/b/a Radio Station KHMO, 102 NLRB 26, 28,
. the Board has established as a working rule the principle that it ordinarily will
respect the terms of a settlement agreement approved by it. It has consistently gone be-
hind such agreements, however, where subsequent events have demonstrated that efforts
at adjustment have failed to accomplish their purpose, or where ther has been a sub-
sequent unfair labor practice . . . . [Here the Board ] was justified in considering evi-
dence as to petitioner 's conduct , both before and after the settlement and certification "
The Wallace Corporation v. N L R.B., 323 U.S. 248, 254-255 ; ". . . a duly executed settle-
ment agreement must be honored . . . unless the respondent 's conduct demonstrates that
the agreement has failed of its purpose ." Jackson Manufacturing Company, 129 NLRB
460, 462.
982 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
There is no room to doubt that the duty to bargain is of a continuing nature.
Although, in my opinion , Respondent was not bargaining in good faith during
the period of the settlement agreement covering the 60 days of a posted notice
required by the agreement, the Regional Office, at the time, apparently believed that
Respondent was bargaining in good faith. As mentioned above, the obligation
to bargain was not limited to 60 days but continued thereafter.
Prescinding from the matter of an agreement having been reached by the parties
on October 31, 1961, it is my opinion that subsequent to the 60 days of the set-
tlement agreement Respondent was not bargaining in good faith. The situation
evidently became clear to the Regional Office. In April 1962 Respondent was still
referring to "other points" that it wanted to negotiate and had failed to specify
the points although asked to do so. It is conceivable that a party might refer to
"other points" without specificity in February 1962, as Respondent did, and might
not be adjudged at the time to be acting in bad faith, but when the same vague ref-
erence is again repeated in April, it is apparent that this is not good-faith bargain-
ing. On May 8, 1962, as we have seen, the Union asked Respondent if it would
sign the contract if the renegotiation clause was written into the contract. This
clause had been perhaps Respondent's major demand over many months. But
Respondent's answer, as testified to by Stein, "was that I was not ready to sign the
contract, that there may be certain other points . . .
In addition to the fact that Respondent was not bargaining in good faith after
the 60-day period of the settlement, I also believe that Respondent was not bargain-
ing in good faith in the entire period subsequent to October 31, 1961 Respondent
has therefore violated Section 8(a)(1) and (5) of the Act Even if I were to
focus my findings on the postsettlement conduct and to limit my finding to such
period, it is evident that the entire history of the negotiations between the parties
from before October 31, 1961, and through that date to May 1962 would be
cognizable as salient facts in the case. Such facts are also pertinent and essential
aspects in fashioning the remedy for Respondent's unfair labor practices in refus-
ing and failing to bargain in good faith.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of Respondent set forth in section III, above, have a close, intimate,
and substantial relation to trade, traffic, and commerce among the several States
and tend to lead to labor disputes burdening and obstructing commerce and the
free flow of commerce.
V. THE REMEDY
Respondent, I have found, has violated Section 8(a) (1) and (5) of the Act. I
have also found as a matter of fact and of law that Respondent and the Union had
reached agreement on the terms of a contract on October 31, 1961 That
agreement was reflected in the contract document later presented to Respondent
for signature. The settlement agreement and its conditional closing after 60 days did
not alter the fact of what the Respondent and the Union had done on October 31 I
recommend that Respondent sign the contract as it had agreed since I do not believe
that a requirement to bargain in good faith alone, in the circumstances of this
case, would effectuate the policies of the Act .9
Other than with respect to the requirement to bargain, Respondent has complied
with the settlement agreement and has engaged in no independent acts of interroga-
tion, coercion, or interference, subsequent to the settlement agreement. I see no
useful purpose in requiring Respondent to do again what it has already done with
respect to the independent violations of Section 8 (a) (1) of the Act. I also am not
persuaded that the evidence warrants a finding, as alleged in the complaint, that
Respondent entered into the settlement agreement for the purpose of avoiding its
obligation to bargain with the Union. What we have, I believe, is bad-faith bar-
gaining, part of which occurred under rather fortuitous circumstances, and these
factors do not establish that Respondent entered into the settlement for the pur-
pose alleged. The settlement agreement could as well have resulted in a complaint
in February 1961 as a result of noncompliance with the settlement, rather than in
August 1962, and, as far as the record shows, Respondent could not have known
that the former was any less likely than the latter.
Upon the basis of the foregoing findings of fact, conclusionary findings, and
upon the entire record, I make the following:
o It is of course obvious that as an original proposition Respondent could have bar-
gained for practically any contract terms that it wished But when agreement is reached
the obligation of the parties is to embody their agreement in a signed contract
ARTISTIC EMBROIDERY, INC. 983
CONCLUSIONS OF LAW
1. The Union at all relevant times has represented a majority of the employees
of Respondent in an appropriate unit as set forth in section III , above.
2. Respondent has violated Section 8 ( a)(1) of the Act by acts of interference
and assistance in procuring employee resignations from the Union as found in
section III, above.
3 Respondent has violated Section 8 ( a)(1) and ( 5) of the Act by refusing to
bargain collectively in good faith with the Union since March 30, 1962, and since
October 31 , 1961, as found in section III, above.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact, conclusionary findings, and con-
clusions of law and upon the entire record in the case, it is recommended that
Respondent , its officers , agents, successors , and assigns , shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with International Ladies Garment Workers'
Union, AFL-CIO, Local No . 415 as the exclusive representative of its production
employees in the above -described appropriate unit by refusing to sign the agreement
reached with the said Union on October 31, 1961.
(b) In any like or related manner interfering with, restraining, or coercing its
employees in the exercise of the right to self-organization , to form labor organiza-
tions, to join or remain members of ILGWU, AFL-CIO, Local 415 , or any other
labor organization , to bargain collectively through representatives of their own choos-
ing, and to engage in other concerted activities for the purpose of collective bargain-
ing or other mutual aid or protection , or to refrain from any and all such activities.
2. Take the following affirmative action to effectuate the policies of the Act:
(a) Upon request , bargain collectively with ILGWU , AFL-CIO, Local 415, as
the exclusive representative of all production employees in the aforementioned appro-
priate unit by embodying the understanding reached with the said Union on Octo-
ber 31, 1961, in a signed agreement.
(b) Post at its plant in Miami , Florida, copies of the attached notice marked
"Appendix." 10 Copies of said notice , to be furnished by the Regional Director for
the Twelfth Region, shall , after being duly signed by a representative of Respondent,
be posted by it immediately upon receipt thereof and maintained for a period of 60
consecutive days thereafter in conspicuous places, including all places where notices
to employees are customarily posted. Reasonable steps shall be taken by Respond-
ent to insure that said notices are not altered , defaced, or covered by other material.
(c) Notify the Regional Director for the Twelfth Region , in writing, within 20
days from the date of receipt of this Intermediate Report, what steps it has taken
to comply herewith."
10 If this Recommended Order is adopted by the Board , the words "A Decision and
Order" shall be substituted for the words "The Recommended Order of a Trial Examiner"
in the notice. If the Board 's Order is enforced by a decree of a United States Court of
Appeals, there shall be substituted for the words "Pursuant to a Decision and Order"
the words "Pursuant to a Decree of the United States Court of Appeals , Enforcing an
Order "
u If this Recommended Order is adopted by the Board , this provision shall be modified
to read. "Notify the Regional Director for the Twelfth Region , in writing , with in 10
days from the date of this Order, what steps the Respondent has taken to comply herewith."
APPENDIX
NOTICE TO ALL EMPLOYEES
As Recommended by a Trial Examiner of the National Labor Relations Board,
and in order to conduct our labor relations as required by the National Labor Rela-
tions Act , we hereby notify our employees that:
WE WILL bargain collectively upon request with International Ladies Garment
Workers' Union , AFL-CIO, Local No. 415 , as the exclusive bargaining repre-
sentative of our production employees and will sign the contract containing the
agreement reached by us with the aforesaid Union on October 31, 1961.
WE WILL NOT in any like or related manner interfere with, restrain , or coerce
our employees in the exercise of their right to self-organization , to form, join,
or assist the said International Ladies Garment Workers' Union, AFL-CIO,
Local No. 415 , or any other labor organization , to bargain collectively through
984 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
representatives of their own choosing , and to engage in concerted activities for
the purpose of collective bargaining or other mutual aid or protection or to re-
frain from any and all such activities.
All our employees are free to become or remain or to refrain from becoming or
remaining members of the above -named or any other labor organization or union.
ARTISTIC EMBROIDERY, INC.,
Employer.
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 directly with the Board 's Regional Office, 112 East
Cass Street , Tampa, Florida , 33602, Telephone No. 223-4623, if they have any
question concerning this notice or compliance with its provisions.
Hayes Freight Lines, Inc. and James W. Flannigan . Case No.
7-CA-3819. June 7, 1963
DECISION AND ORDER
On March 27, 1963, Trial Examiner Thomas N . Kessel issued his
Intermediate Report in the above-entitled proceeding , finding that the
Respondent had not engaged in the unfair labor practices alleged
in the complaint and recommending that the complaint be dismissed
in its entirety , as set forth in the attached Intermediate Report. There-
after, the General Counsel filed exceptions to the Intermediate Report
and a supporting brief.
Pursuant to the provisions of Section 3(b) of the Act , the Board
has delegated its powers in connection with this case to a three-
member panel [Chairman McCulloch and Members Rodgers and
Leedom].
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 Inter-
mediate Report, and the entire record in this case , including the excep-
tions and the brief, and hereby adopts the findings, conclusions, and
recommendations of the Trial Examiner.
ORDER
Upon the entire record in this case, and pursuant to Section 10 (c)
of the National Labor Relations Act, as amended, the National Labor
Relations Board hereby orders that the complaint herein be, and it
hereby is, dismissed.
INTERMEDIATE REPORT
STATEMENT OF THE CASE
Upon a charge filed July 18, 1962, and an amended charge filed September 4,
1962, by James W. Flannigan , an individual , against Hayes Freight Lines, Inc.,
142 NLRB No. 110.