Burruss Transfer

National Labor Relations Board - Board Decisions

Apr 23, 1992

307 N.L.R.B. 226 (N.L.R.B. 1992)

226
307 NLRB No. 31
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The name of the Charging Party has been changed to reflect the
new official name of the International Union.
2 The Respondent has excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an admin-
istrative law judge’s credibility resolutions unless the clear prepon-
derance of all the relevant evidence convinces us that they are incor-
rect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188
F.2d 363 (3d Cir. 1951). We have carefully examined the record and
find no basis for reversing the findings.
The judge erroneously stated in his analysis of the refusal-to-pro-
vide-information allegation that Burruss spoke to employee
Kirchgraber in September 1989, rather than in September 1988. We
correct this inadvertent error.
3 Burruss testified that shortly after the election he learned that any
claim of inability to pay in bargaining would entitle the Union, on
request, to see the Respondent’s books.
4 All dates are in 1989 unless noted.
Burruss Transfer, Inc. and Local Union 65, affili-
ated with the International Brotherhood of
Teamsters, AFL–CIO.1 Case 3–CA–15525
April 23, 1992
DECISION AND ORDER
BY MEMBERS DEVANEY, OVIATT, AND
RAUDABAUGH
On May 6, 1991, Administrative Law Judge Steven
B. Fish issued the attached decision. The Respondent
filed exceptions and a supporting brief, and the Gen-
eral Counsel filed an answering brief.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and record in
light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings,2 and conclusions
only to the extent consistent with this decision.
I. BACKGROUND
The judge found that the Respondent violated Sec-
tion 8(a)(5) and (1) by refusing to provide the Union
with requested financial information, by dealing di-
rectly with a unit employee, and by unilaterally grant-
ing a wage increase to that employee. The Respondent
excepts only to the judge’s finding that it unlawfully
refused to provide the Union with the requested infor-
mation. For the following reasons, we find merit in
this exception and conclude that the Respondent did
not violate Section 8(a)(5) and (1) by refusing to pro-
vide the information to the Union.
II. FACTS
The Respondent is engaged in the interstate moving
and storage of household goods with a facility in
Ithaca, New York. On September 14, 1988, the Union
was certified as bargaining representative of the Re-
spondent’s drivers, helpers, packers, and warehouse
and related employees.
In late September or October 1988, the Respond-
ent’s vice president, Clay Burruss, told employee
Kirchgraber that he was no longer bitter about the
election. Burruss said that the employees probably ini-
tiated the union campaign because they saw the ware-
house the Company was constructing and assumed that
the Respondent had money. Burruss explained that
Cornell University was funding the construction and
stated that had the employees known about the Re-
spondent’s lack of profit, they would not have started
the ‘‘whole Union thing.’’ Burruss informed
Kirchgraber that he could not afford to pay the em-
ployees any more than they were making. Burruss said
that although he was willing to open his books to
prove this fact, his attorney recommended against it.
In December 1988, the Union provided the Re-
spondent with a proposed collective-bargaining agree-
ment. This proposal included provisions for increased
wages, insurance benefits, and payments to the
Union’s health and welfare and pension funds. When
Burruss and his attorney subsequently met to prepare
for negotiations, they decided the Respondent would
not claim an inability to pay during bargaining.3
The parties held eight bargaining sessions between
February and September 1989.4 During the June 2 ne-
gotiating session, the Respondent submitted economic
proposals to the Union. Burruss, the Respondent’s
chief spokesman in negotiations, explained that the Re-
spondent’s proposals—which largely mirrored existing
benefits—were necessary to remain competitive in the
area and the industry. Burruss explained that compa-
nies were coming into Ithaca and performing moving
services with little more than advertisements in the yel-
low pages and that it was difficult to compete with
them.
During the August 11 negotiations, the Union an-
nounced that it had a financial report showing that the
Respondent could meet the Union’s economic de-
mands. Burruss responded that the Union probably ob-
tained its information from Dun & Bradstreet. Burruss
said that the Respondent’s credit report would paint an
entirely different picture and show that it was not pay-
ing its bills on time. Burruss also told the Union that
although he liked its health and welfare proposal, he
did not feel he could afford to pay it. He pointed out
that he was already paying a 67-percent surcharge on
his workmen’s compensation insurance because of
high claims. Burruss also said that to remain competi-
tive, his proposal was the best he could do.
In the final bargaining session on September 8,
Burruss repeated that he had to stay with his current
plan to remain competitive. Burruss said that if he had
to pay $98 for equipment and a crew, and the competi-
tion paid only $95, he would not be able to survive.
227BURRUSS TRANSFER
5 The Respondent also argues that the judge erred in rejecting its
argument that this 8(a)(5) allegation was time-barred under Sec.
10(b) of the Act. Machinists Local 1424 (Bryan Mfg. v. NLRB), 362
U.S. 411, 416 (1960). In view of our analysis of the 8(a)(5) allega-
tion, discussed infra, we need not pass on the 10(b) issue.
During the June 2, August 11, and September 8 bar-
gaining sessions, Burruss repeatedly stated that the Re-
spondent needed to remain competitive. He said he
could not pay employees a higher hourly rate and
overtime and remain competitive. Burruss also ex-
plained that one of its competitors, Mayflower, was
coming to Ithaca and underbidding the Respondent.
Burruss said it was a cutthroat business and that he
could not understand how Mayflower could keep un-
derbidding the Respondent and remain in business.
Burruss also said that he was already paying the
same if not more than other area companies. Burruss
explained that if he raised the hourly rate he would
automatically have to charge customers more and
could not stay competitive. Burruss repeatedly said
during the final three negotiating sessions that there
were other companies with lower rates making it dif-
ficult for him to stay competitive. Burruss challenged
the Union to show him competitors who paid more
than the Respondent.
After the final bargaining session, the Union met
with the unit employees and decided it needed infor-
mation to substantiate Burruss’ claim that the Re-
spondent could not pay more than it was offering. On
September 19, the Union wrote Burruss asking that the
Respondent provide it or its accountant with full infor-
mation on the Company’s financial standing and prof-
its, including tax returns and supporting documentation
for the previous 3 years. The Union pledged to keep
the information confidential.
On September 27, the Respondent denied the
Union’s information request, stating that it was not
claiming a financial inability to pay. The Respondent
also stated that it did not believe its competitors were
paying comparable wages or benefits, or incurring
equal costs.
The Union did not request further bargaining, saying
it would be difficult to bargain without the requested
information. On September 25, the Respondent submit-
ted a revised contract proposal to the Union which it
described as its ‘‘firm and final offer.’’ The Respond-
ent, however, also offered to meet if the Union wished.
III. ANALYSIS AND ARGUMENTS
A. Judge’s Findings
On these facts, the judge found that the Respondent
had a duty to provide the Union with the requested in-
formation under NLRB v. Truitt Mfg. Co., 351 U.S.
149 (1956). The judge concluded that Burruss’ claims
of competitive disadvantage, and statements evidencing
the Respondent’s present and future financial distress,
amounted to a plea of an ‘‘inability to pay’’ the
Union’s economic demands.
In reaching this conclusion, the judge relied on
Burruss’ assertion that he would ‘‘not be able to sur-
vive’’ if he had to pay $98 for equipment and crew
when his competitors paid $95 for the same equipment
and crew. The judge also considered significant
Burruss’ comment about not being able to afford the
Union’s health and welfare proposal, and his repeated
statements that the Respondent’s economic proposal
was the best that it ‘‘could do.’’ Finally, the judge
found that Burruss’ August 11 statement that the Re-
spondent’s credit report would have painted a different
picture from the favorable Dun & Bradstreet rating put
in issue the present financial condition of the Respond-
ent’s operations.
Although the judge found that these comments by
Burruss independently established that the Respondent
was claiming an inability to pay in negotiations, he
also found probative Burruss’ September 1988 state-
ment to employee Kirchgraber that he could not afford
to pay employees any more than he was already pay-
ing. The judge concluded that the statement to
Kirchgraber clearly demonstrated an ‘‘inability to pay’’
position, and clarified any ambiguity in Burruss’ asser-
tions during bargaining.
B. Respondent’s Exceptions
The Respondent excepts to the judge’s decision, ar-
guing that it did not claim inability to pay during ne-
gotiations. The Respondent claims, inter alia, that it
never stated that it would go out of business or reduce
jobs if it acceded to the Union’s economic demands;
nor did Burruss ever state that it was operating at a
loss. Instead, according to the Respondent, Burruss
merely spoke ‘‘truisms’’ about the effect increases
would have on the Respondent’s competitive standing.
NLRB v. Harvstone Mfg. Corp., 785 F.2d 570, 576–
577 (7th Cir. 1986).
The Respondent also argues that Burruss’ comments
to employee Kirchgraber demonstrate only that the Re-
spondent knew prior to negotiations that it could not
claim an inability to pay in bargaining. Finally, the Re-
spondent contends that it is significant what was not
said in negotiations. Thus, Burruss never discussed the
Respondent’s profitability; the Union never asked the
Respondent if it could afford more; the Union did not
request financial information during bargaining; and
Burruss did not claim that the Respondent was losing
money. Based on these factors, the Respondent con-
tends that it was not required to provide the requested
financial information to the Union.5
C. Analysis
We agree with the Respondent that neither the Re-
spondent’s conduct during negotiations nor Burruss’
228 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
6 In the underlying decision, the Board initially found that the em-
ployer was required to provide the union with the requested financial
information. 279 NLRB 877 (1986). Following the employer’s peti-
tion for review of this decision, and the Board’s cross-petition for
enforcement, the Seventh Circuit Court of Appeals set aside the
Board’s Order and remanded the case to the Board for further pro-
ceedings consistent with its decision. Nielsen Lithographing Co. v.
NLRB, 854 F.2d 1063 (1988). The Board accepted the remand. After
considering the court’s opinion and the parties’ briefs, the Board re-
versed its previous decision and found that the employer had not
violated the Act by refusing to provide the information to the union.
7 See generally Concrete Pipe & Products Corp., 305 NLRB 152
(1991). (Duty to provide information not triggered where employer
claimed that to survive it had to remain competitive, and this meant
lowering wages and benefits.) See also NLRB v. Harvstone Mfg.
Corp., 785 F.2d 570 (7th Cir. 1986).
8 Although more than 1 year after the comment was made
Kirchgraber was appointed as an employee representative on the
Union’s bargaining committee and participated in the negotiation
sessions, it is clear that, at the time of the conversation with Burruss,
Kirchgraber had no official role or position with the Union.
statement to employee Kirchgraber triggered the duty
to provide information under Truitt, supra. In reaching
this result, we rely on Nielsen Lithographing Co., 305
NLRB 697 (1991),6 which issued after the judge’s de-
cision.
In Nielsen, the Board found that an ‘‘inability to
pay’’ under Truitt is not established by employer
claims of ‘‘competitive disadvantage’’ or arguments
that economic difficulties will result from agreements
on the unions’ terms. Rather, Nielsen makes clear that
the duty to provide financial information under Truitt
is triggered only where an employer claims it cannot
currently meet union bargaining demands or cannot
satisfy those demands during the term of the contract
being negotiated. As stated in Nielsen, Supra at 700
‘‘[A]n employer’s obligation to open its books does
not arise unless the employer has predicated its bar-
gaining stance on assertions about its inability to pay
during the term of the bargaining agreement under ne-
gotiation.’’ (Footnote omitted.)
Here, the Respondent’s assertions do not raise a
claim of present inability to pay. Throughout negotia-
tions, Burruss did not even assert that the Respondent
was losing money or claim that it was in imminent
danger of closing if it acceded to the Union’s bar-
gaining demands. Instead, Burruss repeatedly stressed
that the Respondent needed to remain competitive.
Burruss complained that the Respondent was being un-
dercut by competitors, that it had difficulty remaining
competitive, and that it could not pay employees more
and remain competitive. Under Nielsen, these claims of
competitive disadvantage do not trigger the duty to
provide the requested information.
Nor do the specific statements of Burruss on which
the judge relied establish that the Respondent was
claiming a present inability to pay. Thus, Burruss’ re-
peated statements that the Respondent’s economic
offer was the best it ‘‘could do’’ was entirely con-
sistent with the Respondent’s expressed need to remain
competitive. Additionally, Burruss’ reference to the
Respondent’s unfavorable credit report, made solely in
response to the Union’s claim that it had a favorable
financial report, was not tantamount to a claim that the
Respondent could not meet the Union’s economic de-
mands during the life of the new agreement. Similarly,
Burruss’ statement that he would not be able ‘‘to sur-
vive’’ if he had to pay $98 when his competitors paid
$95 for the same equipment and crew, was not a claim
of present inability to pay. Rather, as found by the
judge, this statement illustrated the effect the Union’s
proposal would have on the Respondent’s claimed
competitive standing.7
Burruss’ statement that he did not ‘‘feel that he
could afford’’ the Union’s health and welfare proposal
might suggest a present inability to pay. This statement
however, is subjective and, particularly when consid-
ered in the overall context of bargaining, did not trig-
ger a duty to provide information. Thus, throughout
the bargaining session at which Burruss made this
statement, he repeatedly stressed that the Respondent’s
proposal was the best it could do to remain competi-
tive. Indeed, even after Burruss said he did not ‘‘feel’’
he could afford the Union’s proposal, he again reiter-
ated that the Respondent needed its proposal to remain
competitive.
Finally, we do not find that the Respondent’s per-
sistent plea in negotiations of competitive disadvan-
tage—or the need to remain competitive—was under-
cut by Burruss’ statement the previous year to em-
ployee Kirchgraber that the Respondent could not af-
ford to pay employees more than they were currently
making. This informal comment was made to an em-
ployee rather than to the Union8 and it was made 4 to
6 months before negotiations commenced, and even
longer before the Respondent made an economic pro-
posal that it justified as necessary for it to compete. In
these circumstances, and noting particularly the Re-
spondent’s continual, limited claims of competitive dis-
advantage during bargaining, we do not find that this
single comment outside a bargaining context substan-
tially supports or triggered an obligation to provide re-
quested information.
In sum, we do not find that the statements on which
the judge relied or the record as a whole establish that
the Respondent was asserting a present inability to pay
during negotiations. Accordingly, we find that the Re-
spondent was not obligated to provide the information
the Union requested on September 19.
AMENDED REMEDY
Having found that the Respondent has engaged in
certain unfair labor practices, we shall order it to cease
229BURRUSS TRANSFER
9 If this Order is enforced by a judgment of a United States court
of appeals, the words in the notice reading ‘‘Posted by Order of the
National Labor Relations Board’’ shall read ‘‘Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
and desist and to take certain affirmative action de-
signed to effectuate the policies of the Act.
ORDER
The National Labor Relations Board orders that the
Respondent, Burruss Transfer, Inc., Ithaca, New York,
its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Refusing to bargain in good faith with the Union
by dealing directly with employees concerning terms
and conditions of employment.
(b) Refusing to bargain in good faith with the Union
by unilaterally granting wage increases or otherwise
changing terms or conditions of its employees, without
notifying, consulting, or bargaining with the Union as
the exclusive representative in the appropriate unit set
forth below.
(c) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) On request, bargain in good faith with Local
Union 65 as the exclusive representative of the em-
ployees in the following appropriate unit:
All full-time and regular part-time local drivers,
local driver helpers, short haul drivers’ helpers,
packers, warehousemen and any other employees
who perform such work, employed by the Em-
ployer at its Route 13 and Lower Creek Road,
Ithaca, New York location; excluding office cler-
ical employees, guards, supervisors and all other
employees excluded under the National Labor Re-
lations Act.
(b) Post at its facility in Ithaca, New York, copies
of the attached notice marked ‘‘Appendix.’’9 Copies of
the notice, on forms provided by the Regional Director
for Region 3, after being signed by the Respondent’s
authorized representative, shall be posted by the Re-
spondent immediately upon receipt and maintained for
60 consecutive days in conspicuous places including
all places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Re-
spondent to ensure that the notices are not altered, de-
faced, or covered by any other material.
(c) Notify the Regional Director in writing within 20
days from the date of this Order what steps have been
taken to comply with this Order.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relation Act and has or-
dered us to post and abide by this notice.
WE WILL NOT refuse to bargain collectively with
Local Union 65, affiliated with the International Broth-
erhood of Teamsters, AFL–CIO as the exclusive col-
lective-bargaining representative for employees in the
bargaining unit described below.
WE WILL NOT refuse to bargain in good faith with
the Union by dealing directly with our employees con-
cerning terms and conditions of employment.
WE WILL NOT refuse to bargain in good faith with
the Union by unilaterally granting wage increases or
otherwise changing terms and conditions of employ-
ment of our employees in the unit, without notifying,
consulting or bargaining with the Union as the exclu-
sive representative of our employees. Nothing here
shall require that we rescind any wage increase that we
have previously granted.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of the
rights guaranteed you by Section 7 of the Act.
WE WILL, on request, bargain in good faith with
Local Union 65 as the exclusive representative of our
employees in this appropriate unit:
All full-time and regular part-time local drivers,
local driver helpers, short haul drivers’ helpers,
packers, warehousemen and any other employees
who perform such work, employed by the Em-
ployer at its Route 13 and Lower Creek Road,
Ithaca, New York location; excluding office cler-
ical employees, guards, supervisors and all other
employees excluded under the National Labor Re-
lations Act.
BURRUSS TRANSFER, INC.
Michael J. Israel, Esq., for the General Counsel.
Jeffrey A. Tait, Esq. (O’Connor, Gacioch & Pope), of Bing-
hamton, New York, for the Respondent.
James N. McCauley, Esq., of Ithaca, New York, for the
Charging Party.
DECISION
STEVEN B. FISH, Administrative Law Judge. Pursuant to
charges filed on March 22, 1990, by Local Union 65, affili-
ated with the International Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America (the Union or
Local 65), the Regional Director for Region 3 issued a com-
plaint and notice of hearing on May 8, 1990, alleging in sub-
230 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The above is based on the unrefuted testimony of Kirchgraber.
stance that Burruss Transfer, Inc. (Respondent) violated Sec-
tion 8(a)(1) and (5) of the Act, by failing and refusing to
supply the Union with information, and by bypassing the
Union and offering and granting a wage increase to an em-
ployee in the bargaining unit without notice to or bargaining
with the Union concerning such increase.
The trial with respect to the allegations set forth in the
above complaint was held before me on June 12, 1990, in
Ithaca, New York. Briefs have been received from counsel
for the General Counsel and Respondent, and have been
carefully considered.
Based on the entire record, including my observation of
the demeanor of the witnesses, I make the following
FINDINGS OF FACT
I. JURISDICTION
Respondent, a New York corporation, with an office and
place of business in Ithaca, New York, is engaged in the
interstate transportation and storage of household goods. An-
nually, Respondent derives gross revenues in excess of
$50,000 from customers located outside the State of New
York for the interstate transportation of household goods. It
is admitted and I so find that Respondent is now, and has
been at all times material herein an employer engaged in
commerce within the meaning of Section 2(2), (6), and (7)
of the Act.
It is also admitted and I so find that the Union is and has
been at all times material herein a labor organization within
the meaning of Section 2(5) of the Act.
II. FACTS
On September 14, 1988, the Union was certified as the
collective-bargaining representative of Respondent’s employ-
ees in a unit consisting of drivers, helpers, packers, and
warehousemen employed by Respondent at its Route 13 and
Lower Creek Road location in Ithaca, New York.
In late September or early October 1988, Clay Burruss,
Respondent’s vice president, called employee Mark
Kirchgraber into Burruss’ office. Burruss told Kirchgraber
that he was over being bitter about the election results, and
there were no hard feelings. Burruss added that the employ-
ees probably initiated the union drive because Respondent
was building a new warehouse and were under the assump-
tion that it was company money. He informed Kirchgraber
that in fact Cornell University had paid for the warehouse,
and that the employees’ impression on that Respondent was
making a lot of money was false. Burruss then explained that
if Kirchgraber and the employees had known about Respond-
ent’s lack of profit, they would not have started the ‘‘whole
Union thing.’’
Burruss also informed Kirchgraber that Respondent could
not afford to pay the employees any more that it was paying
currently. Burruss added that he would be agreeable to open
his books and show the Union that he could not afford to
pay any more, but that his lawyer had recommended against
it.1
In December 1988, Union President and Business Agent
James Augst met with the bargaining unit employees and
prepared a list of initial proposals. Additionally, Augst ap-
pointed Kirchgraber to be the employee representative on the
bargaining committee, and to be a participant in negotiation
sessions.
On December 21, 1988, Augst sent Respondent a covering
letter, with a copy of a proposed collective-bargaining agree-
ment. The letter also indicates that the Union will be con-
tacting Respondent to set up dates for negotiations. The pro-
posed contract provided for a 15-percent wage increase in the
first year of the contract, and 5-percent raises in each of the
next 2 years, payments into the Union’s Health and Welfare
and Pension Fund, plus other increases in benefits. Accord-
ing to Clay Burruss, he met with his attorney to prepare for
negotiations, shortly thereafter. Burruss further asserts that
soon after the election, he had been informed by his attorney
that if he made statements at the bargaining table that he was
unable to pay more, the Union could successfully request to
see his books. Thus in December, Burruss claims that when
he and his attorney met, they decided that he would not
claim an inability to pay during the negotiations.
Between February and September 1989, the parties met
eight times at the Ramada Inn in Ithaca for negotiations.
Various individuals were present on behalf of both sides at
various sessions, but Burruss and Augst were the chief
spokespersons for their respective parties. During these ses-
sions, Respondent submitted counterproposals to the Union’s
demands, the parties discussed all issues, and agreements
were reached on some items, including union security,
checkoff, grievance procedure, funeral leave, holidays, and
sick days. However, in the major economic issues such as
wages, pension, and health and welfare plans, no agreements
were reached. Respondent essentially proposed maintaining
its existing wages and benefit programs.
In justifying Respondent’s adherence to its own proposals,
as well as its refusal to agree to the Union’s major economic
demands, Burruss consistently made reference to Respond-
ent’s need to remain ‘‘competitive.’’ Burruss would phrase
Respondent’s position in this regard in slightly different fash-
ions, but continually based its economic proposals and posi-
tions on its need to be ‘‘competitive.’’ Thus, Burruss would
state, ‘‘in order to remain competitive in the area and in the
industry, this was the economic proposal that was needed.’’
Burrusss would refer to other companies coming into Ithaca
and underbidding Respondent for jobs, and adding in order
to compete with these forms, this proposal was necessary for
Respondent. At times, Burruss told the union negotiators that
he couldn’t give the employees any more money or pay any
more hourly, plus pay overtime after 8 hours or 48 hours and
stay competitive.
Burruss also continued to insist throughout the negotia-
tions, that Respondent was already paying more money to its
employees than his competitors, and he did not see the need
to pay any more to the employees. Burruss also challenged
the Union to show him any of Respdonent’s competitors that
paid more to its employees. Burruss mentioned some specific
competitiors that were underbidding Respondent on jobs, and
commented that he ‘‘couldn’t understand how these compa-
nies’’ could afford to keep on doing that and stay in business
in Ithaca.’’ Burruss added that if he were to grant the wage
increases asked for by the Union, he would have raised his
rates for local moves, charge his customers’ work, and
‘‘wouldn’t be able to stay competitive.’’
231BURRUSS TRANSFER
At the August 11 negotiation session, Augst asserted that
a financial report prepared by the Union’s economic depart-
ment on Respondent demonstrated that Respondent could
meet the Union’s demands, because the report reflected that
Respondent was doing well and showed growth.
Burruss replied that ‘‘his proposal was the best that he
could do in order to remain competitive in the area.’’
Burruss added, however, that he felt that the Union had prob-
ably gotten its information from Dun & Bradstreet, but if the
Union had gotten Respondent’s credit report, ‘‘it would have
painted a different picture.’’
At that same meeting, the parties discussed the Union’s
Health and Welfare Plan. Burruss indicated to the Union that
he liked the Union’s plan, and thought it was a good plan,
but he ‘‘didn’t feel that he could afford to pay that.’’ Burruss
added that he was already paying a 67-percent surcharge on
his workmen’s compensation insurance. When wages were
mentioned at the August 11 meeting, Burruss again replied
that in order to remain competitive in the area, his proposal
was the best that they could do.
At the final session, on September 8, 1989, the parties
went over each and every item in their respective proposals,
and determined which issues had been tentatively agreed to,
and which areas were still in dispute. When the major eco-
nomic areas such as wages and benefits came up, once again
Burruss talked about the competitive nature of the industry,
and the problems Respondent was facing of being underbid
by companies coming in from outside Ithaca. Burruss at that
point gave an example of the effect of competition, vis a vis
the Union’s proposals. He related that if he had to pay $98
for equipment and a crew, when the competition was only
paying $95 for the same equipment and the same crew, he
‘‘would not be able to survive.’’
The meeting ended on that note, without any further
scheduling of any additional sessions. My findings with re-
spect to the discussions at the bargaining sessions is based
on a compilation of the credited testimony of Augst,
Kirchgraber, Burruss, and James McCauley, the Union’s at-
torney. I note that Burruss did not deny telling the Union
that Respondent ‘‘couldn’t afford to pay’’ the amounts nec-
essary to fund the Union’s medical plan, or that if the Union
had obtained a credit report on Respondent, ‘‘It would have
painted a different picture.’’ Burruss also did not deny fur-
nishing the Union with an example of the effect of competi-
tion on operations, including making the comment that ‘‘he
would not be able to survive,’’ in connection with describing
a situation where his Company would be constantly bidding
against other companies, with lower costs for equipment and
crew.
Shortly thereafter, the union representatives met with the
employees to discuss its next step. The Union decided as a
result of this meeting that it wanted some substantiation of
Respondent’s position that in order to remain competitive in
the area, it could not pay any more that it was offering. The
Union did not make the request sooner, because it felt that
Respondent would make some movement on the major eco-
nomic issues. Since Respondent had not done so, the Union
decided to request information from Respondent to support
its position. Thus, the Union sent the following letter to Re-
spondent:
September 19, 1989
Mr. Clay Burruss,
Vice President
Burruss Transfer, Inc.
Route 13 & Lower Creek Road
Ithaca, New York 14850
Dear Mr. Burruss:
During our negotiations, you stated that the Union’s
economic proposals, including its proposals regarding
wages, health and hospital benefits, and the establish-
ment of a pension plan, were financially onerous to the
Company. You have said that you were financially un-
able to provide wages and benefits in excess of what
you have offered and that doing so would render you
unable to remain competitive and to stay in business.
Neither the Union nor the employees want Burruss
Transfer to go out of business, but neither are the em-
ployees willing to accept an economic package such as
you have offered without a compelling reason to do so.
Accordingly, the Union requests that you make avail-
able to it, or to an accountant(s) selected by it, full and
complete information with respect to the Company’s fi-
nancial standing and profits, including the Company’s
income tax returns for the three most recent years with
all supporting documentation and records pertaining
thereto. This information is essential for us to make a
determination on how to proceed on these issues.
Recognizing the confidential nature of this informa-
tion, the Union agrees not to disclose it to outside third
parties, including competitors of the Company.
Please contact me at your earliest convenience so
that we can establish a mutually agreeable time and
work out the mechanics involved.
Respectfully,
James E. Augst
President & Business Agent
Teamsters Local 65
By letter from its attorney, dated September 27, Respond-
ent replied to the Union’s letter, as follows:
September 27, 1989
James E. Augst, President
Teamsters Local Union No. 65 CERTIFIED MAIL
701 West State Street P 067 23k6 446
Ithaca, New York 14850-3390
Re: Burruss Transfer, Inc.
Our file: 2771
Dear Jim:
I am writing in response to your letter of September
19, 1989.
Burruss Transfer, Inc., did not, and does not, claim
it is financially unable to pay wages and benefits in ex-
cess of its proposal. We believe that overall our pro-
posal, which includes increased benefits, both economic
and non-economic is a fair and reasonable one.
What we have repeatedly made clear during negotia-
tions is that we believe our competition is not paying
wages or benefits nor are they incurring costs equal to
those of Burruss Transfer, Inc. We have specifically re-
232 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
2 The actual proposal allows Respondent to pay more than the
amounts provided for in the agreement, provided that such amounts
are not paid to discriminate against any employee in violation of law
or by reason of union activity.
ferred to certain competitors who compete in the Ithaca
area without maintaining an office in the area. We have
specifically referred to employees who have returned to
work at Burruss Transfer, Inc., after working for other
trucking companies.
We will not, therefore, produce the data you request.
It is not pertinent to negotiations.
Very truly yours,
JEFFREY K. TAIT
JAT/mar
Additionally, on September 25, 1989, Respondent’s attor-
ney sent a letter to the Union’s attorney, along with a copy
of Respondent’s revised last proposal. The letter character-
ized this proposal as ‘‘the employer’s firm and final offer,’’
but offered to meet and negotiate further with the Union if
desired.
The Union did not seek any additional meetings, since it
did not wish to make any more concessions on economic
issues without some substantiation of Respondent’s claim
that it needed something less than what was being proposed
in order to remain competitive.
In mid-February 1990, Robert Spry, a driver employed by
Respondent, came to Burruss and asked for a raise. He in-
formed Burruss that he had been away from home a lot on
long hauls, and thought that he deserved more money.
Burruss replied that he would have to check with his lawyer
and the Union.
A few days later, Burruss spoke to Spry, again about the
raise, and they discussed whether Spry should wait for the
raise until June, or receive a raise immediately of slightly
less money. Spry opted for an immediate and smaller raise,
which Spry received a week later.
Burruss admitted that he did not contact the Union about
the raise, nor notify it about the fact that he had granted the
increase to Spry. According to Burruss, he did not do so be-
cause he had not heard from the Union in over 5 months,
and the parties had discussed during negotiations a clause
proposed by Respondent that permitted it to grant wage in-
creases higher than the contract rate.2
Burruss asserts that he relied on this proposal to grant the
wage increase, although there is no indication that the Union
agreed to this clause, much less to the terms of the overall
contract as submitted by Respondent.
II. ANALYSIS
A. The Refusal to Supply Information
Where an employer, either in response to bargaining de-
mands from the Union, or in support of its own proposals,
makes a claim of inability to pay, the duty to bargain in
good faith requires it to provide requested financial informa-
tion to substantiate its claim. NLRB v. Truitt Mfg. Co., 351
U.S. 149 (1956). In order to invoke the application of Truitt,
it is not required that the employer make an express plea of
poverty, nor that it use any magic words to convey its inabil-
ity to pay. Clemson Bros., 290 NLRB 944 (1988); Atlanta
Hilton & Tower, 271 NLRB 1600, 1602 (1984).
What is required, is that the Employer’s words and con-
duct specifically link its bargaining position to economic
hardship. E. I. du Pont & Co., 276 NLRB 335, 336 (1985);
Clemson Bros., supra. The critical distinction to be made is
whether the employer’s position is reasonably interpreted as
expressing an inability to pay or an unwillingness to do so.
New York Printing Pressmen v. NLRB, 496 F.2d 496, 500
(2d Cir. 1976); Advertisers Mfg. Co., 275 NLRB 100 (1985);
Atlanta Hilton, supra.
The Board has considered the question of whether an Em-
ployer’s assertion of competitive disadvantage, either singly
or in conjunction with other conduct, gives rise to an obliga-
tion under Truitt to supply information in numerous cases.
Unfortunately, an analysis of these decisions reveal that the
Board’s view of these assertions has not been a model of
consistency or clarity. Thus in Peerless Distributing, 144
NLRB 1510, 1514 (1963), the Board concluded that a plea
of competitive disadvantage is equivalent to a plea of inabil-
ity to pay.
We are in agreement with the Trial Examiner, how-
ever, that the Respondent violated Section 8(a)(5) of the
Act by its refusal to furnish the financial information
requested by the Union. The Respondent refused to
grant the Union any wage increase or other economic
benefits on the ground that it had to remain ‘‘competi-
tive,’’ and also refused all the Union’s requests for fi-
nancial information. As the Supreme Court has held,
‘‘bargaining lacks good faith when an employer me-
chanically repeats a claim of inability to pay without
making the slightest effort to substantiate the claim.’’
The Respondent contends that it was not claiming fi-
nancial inability to grant economic concessions, but
merely that it could not grant them and remain com-
petitive, and that it was therefore not obligated to give
the Union data as to its financial status. We do not
agree. The Respondent’s argument that it was not
pleading inability to pay, but only that it desired to re-
main competitive, is self-contradictory. Thus, if grant-
ing economic benefits would, according to the Re-
spondent, have the effect of reducing its competitive-
ness, it follows that the Respondent was asserting its fi-
nancial inability to grant economic benefits. Moreover,
if the Respondent had furnished the relevant data, the
Union might have been able to show that the Respond-
ent could grant a wage increase and still remain com-
petitive, or, in the alternative, the Union might willingly
have reduced its demands. Any such resolution of the
major economic issues was precluded by the Respond-
ent’s intransigence in this matter. Accordingly, we find
that, by refusing to furnish the Union with the pertinent
financial information requested, the Respondent violated
Section 8(a)(5) of the Act. [Fns. omitted. Id. at 514.]
This decision, which cited a previous Board holding in
Cincinnati Cordage & Paper Co., 141 NLRB 72, 77 (1963),
to the same effect, was followed in a number of subsequent
decisions, and affirmed by various courts of appeal. Coltex
Corp., 146 NLRB 48, 54 (1964), enfd. 364 F.2d 552, 554
(5th Cir. 1966); Palomar Corp., 192 NLRB 592 (1971),
233BURRUSS TRANSFER
3 See, however, United Fire Proof Warehouse v. NLRB, 356 F.2d
494, 498 (7th Cir. 1966), where that court reversed the Board’s deci-
sion in Boulevard Storage & Moving Co., 152 NLRB 539, 541
(1965), which had equated a plea of an inability to grant a wage in-
crease and remain competitive with an inability to pay under Truitt,
citing Peerless and Cincinnati Cordage, supra. The court found that
the employer had not pled inability to pay, and that ‘‘where the evi-
dence disclosed won’t, the Board found can’t.’’
4 I note that the Board reversed the decision of the administrative
law judge who had found a violation citing Peerless supra. The
Board made no attempt to distinguish Peerless nor did it overrule
that decision which appears to be clearly contrary to the Board’s ac-
tion in Honaker.
enfd. 465 F.2d 731, 734 (5th Cir. 1972). Goodyear Aero-
space Corp., 204 NLRB 831, 837 (1973); Stanley Building
Specialties Co., 166 NLRB 984, 985 (1967), enfd. 401 F.2d
434, 436 (D.C. Cir. 1968), where soon to be Chief Justice
Burger wrote as follows:
The Company asserts that a claim of inability to pay is
not shown when the Company claims that the increases
will prevent it from competing. But the inability to
compete is merely the explanation of the reason why
the Company could not afford an economic benefit.
. . . claims of the need to remain ‘‘competitive’’ have
been equated to claims of inability to pay for the pur-
poses of creating an obligation to provide economic
data.’’ [Fns. omitted. Id. at 436.]
See also Western Wirebound Box Co., 145 NLRB 1539,
1545 (1964), enfd. 356 F.2d. 28, 91 (9th Cir. 1966); and
International Telegraph & Telephone Co., 159 NLRB 1757,
1758 (1966), enfd. 382 F.2d 366 (3d Cir. 1967), where the
Board approved administrative law judge’s decisions which
held that even though a claim of competitive disadvantage,
may not be a claim of inability to pay, the rationale of Truitt,
supra, i.e., honest claims made during bargaining must be
supported, warrants disclosure of financial information. The
Ninth Circuit in enforcing Western Wirebound, supra, ob-
served, after discussing Truitt that, ‘‘We see no reason why,
under the same rationale, an employer who asserts that com-
petitive disadvantage precludes him from acquiescing in a
union wage demand, does not have a like duty to come for-
ward, on request, with some substantiation.’’ 356 F.2d at
91.3
Apart from and seemingly unconcerned with the above-
cited authority, the Board developed another line of cases
which appears to now represent the Board’s current position
with respect to statements of competitive disadvantage vis a
vis Truitt. Thus in Taylor Foundry Co., 141 NLRB 765,
766–767 (1963), enfd. 338 F.2d 1003 (5th Cir. 1964), the
employer asserted that it could not afford an increase in labor
costs and remain in a competitive position. The Board ob-
served as follows:
While it is readily understandable that an increase in
operating costs may place an employer in a disadvanta-
geous position with respect to his competitors and that
a mere assertion thereof is not necessarily a claim of
inability to pay calling for some substantiating proof
under N.L.R.B. v. Truitt Mfg. Co., we are satisfied that
Respondent went beyond asserting such a position. Re-
spondent’s situation, as testified to by his son, was that
‘‘if we so increased our labor costs that we would lose
a margin of profit that we have and we can’t exist.’’
[Emphasis supplied.] In our opinion, this assertion to
the effect that Respondent would have to go out of
business if he gave a wage increase amounts to a clear
claim of financial inability in the premises.
Admitting the possibility that its wage demand might
be excessive, the Union advised Respondent that the
Union would have to have some information from the
Respondent in support of his claim that he could not af-
ford to pay any wage increase if the Union were to re-
duce its wage demand. This information the Respondent
refused to furnish. All he offered was information com-
paring his own wage scales or prices with his competi-
tors, but this, without more, was scarcely sufficient to
satisfy the Union’s request for evidence bearing on the
Respondent’s asserted inability ‘‘to exist’’ if he granted
a wage increase. We find that, by refusing to furnish
the requested information on and after January 9, 1962,
the Respondent failed to bargain in good faith and thus
he violated Section 8(a)(5) and (1) of the Act. [Fns.
omitted. Id. at 767.]
Interestingly, the court of appeals in NLRB v. Western
Wirebound Box, supra, 356 F.2d at 91, in enforcing the
Board Order therein, opined that the Board had changed its
view since Taylor, and that the Board according to that
Court, was no longer following Taylor. While as noted above
there was considerable support for the court’s view in its as-
sessment of the continuing viability of Taylor, subsequent
cases reveal as will be demonstrated that the position taken
in Taylor represents the current Board position in this area.
In Charles E. Honaker, 147 NLRB 1184, 1187–1188
(1964), the Board again considered an assertion by an em-
ployer that no wage increase was warranted, because it in-
tended to ‘‘remain competitive.’’ The Board concluded that
the employer had not pled inability to pay, and was under
no obligation under Truitt to provide financial data to the
Union.4 However, the Decision also stated: ‘‘if, for example
Respondent meant by its use of the phrase to remain com-
petitive that a wage increase would force it to raise its prices
over those of its competitors and hence result in a loss of
business, we would agree with the Trial Examiner that, in ef-
fect, Respondent was pleading inability to pay.’’ Id. at 1188.
In Empire Terminal Warehouse Co., 152 NLRB 1356,
1360–1361 (1965), affd. 355 F.2d 842, 845 (D.C. Cir. 1966),
the Board affirmed an administrative law judge’s rec-
ommendation that an employer’s position on wage increases,
that it was placed at a competitive disadvantage and was
therefore unable to get more business, because it was paying
substantially more in wages than its competitiors, was not a
plea of inability to pay under Truitt. I would note that the
administrative law judge cited Taylor, but that neither the
judge nor the Board made any reference to Peerless, al-
though the administrative law judge did attempt to distin-
guish Cincinnati Cordage, supra.
While some subsequent cases continued to adhere to the
view expressed in the Peerless line of cases that a plea of
noncompetiveness is equivalent to plea of inability of pay,
Hiney Printing Co., 262 NLRB 157, 162 (1982); American
Model & Pattern, 277 NLRB 176, 184, (1985), I note that
234 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
5 I note, however, that later on in the decision, the court pointed
out that the Board’s counsel cited Judge Burger’s opinion cited
above in United Steelworkers enfg. Stanley Building, supra, for the
proposition that a claim of competitive disadvantage was necessarily
a claim of inability to pay. Id. at 575.
these cases also included other conduct and statements by the
employers as in Taylor that indicated a plea of poverty. (In
Hiney the Employer stated that it might close if it did not
obtain contract relief.) (In American Model the Employer
stated that it could not afford to pay existing wages and it
was in a bad financial position).
In Harvstone Mfg. Corp., 272 NLRB 939 (1984), the
Board affirmed without comment an administrative law
judge’s decision that a Truitt obligation arose in the context
of a plea by the employer of a need to remain competitive.
The administrative law judge’s did make reference to other
remarks by the employers concerning the possibility of going
out of business and the loss of jobs, and cited both Taylor
and Peerless as well as many of the other cases cited above,
in finding that the employers were pleading inability to pay.
The Seventh Circuit reversed the Board in NLRB v.
Harvstone Mfg., 785 F.2d 570, 575–577 (7th Cir. 1986) (re-
hearing and rehearing en banc denied April 10, 1986). The
circuit court’s opinion refers to the fact that the Board’s
counsel conceded in oral argument that the Board apparently
no longer subscribes to the view expressed in Peerless and
Cincinnati Cordage that a claim of competitive disadvantage
was itself a plea of inability to pay.5
The court dismissed the Board’s reliance on statements
made by the employers concerning the possibility of going
out of business as ‘‘nothing more than a truism.’’ The court
majority concluded that the relevant time period for consider-
ation is the term of the new collective-bargaining agreement,
and such statements by employers do not preclude an em-
ployer from asserting that it could afford the increased wages
at that time. Thus it was felt that the employers were ex-
pressing an unwillingness rather than an inability to pay, by
claiming competitive disadvantage.
Subsequent to the court’s Harvstone opinion, the Board
has been careful not to adhere to the per se approach of
Peerless and its progeny, and although the Board has not
overruled Peerless or any of the numerous cases which fol-
lowed the rationale therein, it is apparent that the Board no
longer subscribes to that view. Buffalo Concrete, 276 NLRB
839, 841 (1985), enfd. in relevant part 803 F.2d 1333, 1339
(9th Cir. 1986), E. I. du Pont, supra at 336; Armored Trans-
port of California, 288 NLRB 574, 575 (1988).
Thus the Board will consider claims of competitive dis-
advantage made by an employer, in the context of other con-
duct and statements of the employers, to determine whether
such employer is asserting an inability or mere unwillingness
to pay. In this connection, the following examples of em-
ployer statements has been deemed sufficient, to transform a
claim of competitive disadvantage into a claim of inability to
pay. Nielsen Lithographic Co., 279 NLRB 877, 879 (1985),
revd. and remanded 854 F.2d 1063 (7th Cir. 1988) (state-
ments made during negotiations and in letter to employees
by employer, ‘‘that business was being lost to competitors;’’
‘‘they would have a worse problem in the future’’: ‘‘to sur-
vive, we must be able to compete. Our business and our jobs
are at stake if we cannot’’; jobs our employees now have
will be lost’’), Cowin & Co., 277 NLRB 802 (1985) (state-
ment at outset of negotiations by Employer,’’ a real question
of whether we shall be in business at the termination of this
contract unless prior contractual concepts are radically
changed’’). Coast Engraving Co., 282 NLRB 1236 (1987)
(statement by negotiator that if needed a wage freeze, ‘‘in
order to stay in business and recoup some bad losses they
had [in] the first few months of the year)’’; Armored Trans-
port, supra (letter from employer to employees that it ‘‘can
no longer pay its employees from two to seven dollars more
per hour than the competitors who are taking our business
and your jobs.’’) American Model, supra (can’t afford to pay
existing wages and benefits); Facet Enterprises, 290 NLRB
152 (1988) (plants might not survive without concessions
from Union); Gas Spring Co., 296 NLRB 84 (1989) (em-
ployer claimed profits were declining, ‘‘the bottom line is
red,’’ could not afford increases, jobs would be lost); Taylor,
supra at 205 (statement by employer, ‘‘if we so increased our
labor costs that we would lose a margin of profit that we
have and we can’t exist’’). See also Celotex, supra, 364 F.2d
at 553–554 (statement by employer that concessions were
necessary to make the plant competitive and ensure the
plant’s survival). See also Judge Burger’s opinion in Stanley
Building, supra, where in observing that claims of the need
to be competitive have been equated to claims of inability to
pay, also relied on claims by the employer ‘‘that the money
to pay for the union’s proposal just wasn’t there.’’ 401 F.2d
at 436.
On the other hand, in a number of other cases, the Board
has found that the statements of employers, in the context of
claims of competitive disadvantage, were not sufficient to
amount to an inability to pay. Craig & Hamilton Meat Co.,
271 NLRB 853, 856 (1984) (assertion by employer that its
competitors would force it to change its operations from
processor to jobber, thereby changing its labor needs. More-
over, Employer claimed that it would not ‘‘be another of
800,000 business casualties,’’ but the Board viewed this re-
mark as not putting its general financial condition in issue,
but only referring to the potential redirection of its resources
from processing to jobbing); E. I. du Pont, supra (concerns
expressed during negotiations that certain departments were
economically unhealthy, but these remarks not tied to job re-
structuring proposed by employer which it claims would
‘‘strengthen competitiveness’’); Buffalo Concrete, supra (ref-
erences by employer to general loss of jobs in the unionized
section of the industry); Gilberton Coal Co., 291 NLRB 344
(1988) (statements by employer that coal market was shrink-
ing, it needed greater flexibility, and that without changes ‘‘it
would waste away’’); Robinson Bus Service Co., 292 NLRB
70 (1988) (employer had lost previous contract by being un-
derbid; needed wage cuts to cut costs in order to bid success-
fully for routes in the upcoming school year.)
In NLRB v. Nielsen Lithographers Co., 854 F.2d 1063.
1065 (7th Cir. 1980), Judge Posner’s opinion, while refusing
to enforce the Board’s Order in that case, supplied in my
view an excellent analysis of the rationale for consideration
of the need to be competitive vis a vis Truitt obligations,
which underlines the Board’s current position.
In NLRB v. Truitt Mfg. Co., 351 U.S. 149, 76 S.CT.
753, 100 L.ED. 1027 (1956), the Supreme Court held
that it is an unfair labor practice for an employer who
235BURRUSS TRANSFER
6 Note that as described below, and as conceded in Nielsen by the
Seventh Circuit, most other circuits have agreed with the Board’s
view in this area.
claims to be financially incapable of paying a wage in-
crease requested by a union to refuse to let the union
see the employer’s books for purposes of verifying its
claim. Otherwise labor negotiations would involve an
even greater element of bluff, guesswork, and sheer
gambling than they inevitably do, because the union
would be put to the Hobson’s choice of acceding to a
quite possibly exaggerated claim of poverty or risking
its members’ jobs. The Court didn’t think that forcing
the union to play Russian roulette was the epitome of
good faith bargaining.
Nielsen, however, never claimed that it was unable
to pay the existing scale of wages and benefits. It ad-
mitted to being profitable but said it wanted to bring its
wage bill into line with the wages paid by competitors
to whom it was losing sales. A company can survive,
certainly in the short run and often in the long run,
even though it is paying higher wages than its competi-
tors. The company may have some other cost advan-
tage; its competitors may price above their costs; the
market may be expanding rapidly. The company will
grow less rapidly than if its costs were lower and may
stagnate or decline, but it need not die. There is thus
no contradiction in a company’s stating on the one
hand that its costs costs are higher than its competitors’
and it wants to reduce them. The Board concedes that
if this is all Nielsen said, Nielsen had no duty to open
its books to the union. See Washington Materials, Inc.
v. NLRB, 803 F.2d 1333, 1338–39 (4th Cir. 1986) (but
see NLRB v. Western Wirebound Box Co., 356 F.2d 88,
91 (9th Cir. 1966), which held that an employer’s claim
of competitive disadvantage required the employer, on
the union’s demand, to present substantiating data). A
need is objective; it can be substantiated. But how do
you substantiate a want? If a company says it wants to
make higher profits by reducing its labor costs, what
data would falsify its statement?
The Board found, however, that Nielsen had done
more than express a desire for lower costs and higher
profits; that it had said the wage cuts were necessary
if the company was to remain competitive and reverse
a trend of losing business to lower cost competitors.
The company’s president had told the workers that ‘‘to
survive we must be able to compete. Our business . . .
and jobs are at stake if we can not . . . if we don’t
[compete] the recent trend of losing even greater
amounts of work to other companies will continue and
the jobs of our employees will be lost.’’ The Board
held that this statement, and others like it, were suffi-
cient under Truitt to create a duty of substantiation. Cf.
Armored Transport of Calif., Inc., 288 NLRB No. 70
(2988) [sic].
This is not an irrational extension of Truitt. A ration-
al businessman is concerned with the long run as well
as the short run. He wants to maximize the present
value of his company’s earnings; and if the company
has a dismal future, its expected further earnings, and
hence its present value, will be depressed as a result.
An employer that in negotiations with its union claims
that its wages are out of line with those of its competi-
tors and as a result its future is bleak-however rosy the
present may seem-makes a serious and factual claim,
one that if true must cause the union to give serious
consideration to making the concessions the employer
is demanding, or at least making some concessions. In-
formed bargaining over the issue requires that the union
have access to the data from which the company has
projected its bleak future.
Thus while seeming to approve the Board’s reasoning in
Nielsen, supra, the court nonetheless refused to enforce the
Board’s Order in view of the intervening Seventh Circuit
opinion in Harvstone, supra. That decision (785 F.2d 570) in
a case similar to Nielsen, as noted, held contrary to the
Board’s view, that predictions that a business will falter are
nothing more than ‘‘truisms’’ and do not trigger a duty of
disclosure under Truitt, since it did not necessarily in the
Court’s view plead an inability to pay during the term (ordi-
narily 3 years) of the new collective-bargaining agreement
being negotiated. Judge Posner’s opinion, criticized the
Board for its failure to discuss Harvstone and its implications
to Nielsen, supra, notwithstanding a request by Nielsen for
reconsideration based on the Harvstone reversal by the cir-
cuit.
Accordingly, the court refused to enforce the Nielsen
order, but interestingly remanded the case to the Board, so
that it could either distinguish Harvstone, state that it dis-
agreed with Harvstone and was adhering to its own view,6
or perhaps convince the court to reexamine Harvstone. In-
deed, my reading of Judge Posner’s opinion, as reflected par-
ticularly in the above-cited quotation appears to suggest that
he would be receptive to reexamining the court’s Harvstone
decision.
As of this date, the Board has not as yet issued its deci-
sion on the Nielsen remand, so it cannot be determined
which of the options, if any, Judge Posner outlined, the
Board will choose. In any event, since my decision is con-
trolled by Board precedent, unless overruled by the Supreme
Court, Gas Spring Co., supra, and cases cited therein, I am
not bound by the Harvstone rationale nor the Nielsen refusal
to enforce the Board’s Order. Thus, the Board decisions in
Harvstone and Nielsen which reflect the Board’s view that
a claim of competitive disadvantage coupled with predictions
that such lack of competitiveness would or will result in fi-
nancial distress for the employer is the type of assertion that
Truitt requires be substantiated; and is the standard that I
must apply in assessing the Respondent’s position herein.
See Facet, supra; Gas Springs, supra; Armored Transport,
supra.
The key factor in evaluating claims made in this regard is
whether the Employer is merely asserting generalized claims
about the economy and/or its relationship to its competitors,
in which case, an unwillingness rather than an inability to
pay is established, and no violation is warranted. Robinson
Bus, supra; Buffalo Concrete, supra, Atlantic Hilton, supra.
On the other hand, where an employer in asserting its need
to be competitive, also relies upon its own financial condi-
tion and/or its projection of economic hardship, then it is
pleading an inability to pay, and must produce financial in-
236 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
7 This assumption by Burruss was borne out by subsequent events,
since Kirchgraber was eventually selected as the sole employer bar-
gaining committee member.
formation to support its claim. Gas Springs, supra; Facet,
supra, Clemson Bros., supra.
Turning to the facts of the instant case, I am persuaded
that Respondent has coupled its asssertion of competitive dis-
advantage with sufficient additional statements referring to
its own present and future financial distress to warrant an ob-
ligation under Truitt to support its claims by disclosing fi-
nancial information to the Union.
Most significantly, I note the statement made by Burruss
at the last negotiation session, and incidentially the session
prior to the Union’s request for financial information. In ex-
plaining Respondent’s need to be competitive as justification
for its refusal to agree to any increases in wages or benefits,
Burruss explained that if he had to pay $98 for equipment
and crew, while his competition paid only $95 for the same
equipment and crew, he would ‘‘not be able to survive.’’
This type of statement by employers has long been consid-
ered a projection of economic distress as a result of being
noncompetitive, which amounts to a plea of inability to pay.
Facet, supra; Gas Springs, supra; Nielsen, supra; Corwin,
supra; Taylor, supra; see also Mashkin Freight Lines, 272
NLRB 427, 435 (1984), where an assertion that an employer
needed reductions if it was to survive, was sufficient, even
absent a claim of noncompetitiveness, to require disclosure
of financial information under Truitt.
Second, at the August 11 negotiation session, the parties
were discussing the Union’s Health and Welfare Plan.
Burruss indicated that he liked the Union’s plan and thought
it was a good plan, but he ‘‘didn’t feel that he could afford
to pay that,’’ adding that he was already paying a 67-percent
surcharge for Workmen’s Compensation Insurance. This re-
mark of Burruss is also a strong indication of Respondent’s
inability rather than an unwillingness to agree to the Union’s
proposed Health Benefits. Cf. Atlanta Hilton, supra; and fur-
ther demonstrative of a plea of inability to pay under Truitt.
Celotex, supra at 54; American Model, supra at 184; Gas
Spring, supra; Stamco Division, 227 NLRB 1265, 1267–1268
(1977).
Additionally, Burruss in justifying his refusal to meet the
Union’s wage demands, repeatedly stated that in order to re-
main competitive, his proposal was the best that they ‘‘could
do.’’ This remark is another indication of an inability rather
than an unwillingness to pay. See New York Printing Press-
man, supra, 538 F.2d 500, where the Second Circuit con-
cluded that a statement by an employer that he ‘‘couldn’t
reach’’ the Union’s wage proposals was a sufficient indica-
tion of financial inability rather than an unwillingness to
meet the Union’s demands.
During that same meeting, Augst asserted that a financial
report prepared by the Union’s economics department on Re-
spondent, demonstrated that Respondent could meet the
Union’s demands, because the report reflected that Respond-
ent was doing well and showed growth. In reply, Burruss re-
peated his assertion that his proposal was the best he could
do in order to remain competitive in the area. Burruss, how-
ever, added that he felt that the Union had probably gotten
its information from Dun & Bradstreet, because if the Union
had gotten Respondent’s credit report, ‘‘it would have paint-
ed a different picture.’’ In my view, Respondent by this
statement of Burruss is putting in issue the present financial
condition of Respondent’s operations, an assertion that must
be substantiated under Truitt, Clemson, supra. See American
Model, supra at 184; see also NLRB v. Unoco Apparel, Inc.,
508 F.2d 1369, 1370 (5th Cir. 1975) (statement by employer
‘‘the employees came to the wrong well . . . . the well is
dry’’).
Accordingly, based on the above analysis and authorities,
I conclude that Respondent has asserted an inability rather
than an unwillingness to meet the Union’s demands, and is
obligated under Truitt to supply the information requested by
the Union, in order to document and support these assertions.
The General Counsel also relies on the conversation be-
tween Burruss and Kirchgraber in September 1989 to support
the claim that Respondent was pleading an inability to pay,
during the subsequent bargaining. Respondent asserts that
this conversation is irrelevant and should not be considered,
since it occurred months before the negotiations commenced,
and Kirchgraber was not at the time an agent of the Union.
Although, as I have noted above, I conclude that even ab-
sent consideration of this conversation, Respondent has pled
an inability to pay, I am in agreement with the General
Counsel that it is appropriate to consider the statements made
by Barruss to Kirchgraber in assessing what Respondent
meant by its positions stated during bargaining. The Board
has consistently relied upon communications between em-
ployers and employees, outside the negotiations, in order to
evaluate positions taken by employers at the table. Facet,
supra; Armored Transport, supra at 575–576; Nielsen, supra
at 879; Stanley Building, supra at 985–986. Although the ne-
gotiations had not started at the time of the conversation, the
Board has specifically held, ‘‘we do not read the Supreme
Court’s holding in NLRB v. Truitt Mfg., 351 U.S. 149, as
precluding an inquiry into Respondent’s conduct before ne-
gotiations have commenced or before the Union has had its
complete economic proposals on the bargaining table.’’ Stan-
ley Building, supra at 985–986.
Therefore, I find that it is appropriate to evaluate Burruss’
remarks to Kirchgraber, insofar as they reflect on any ambi-
guity as to Respondent’s bargaining position expressed at the
table. These statements, emphasizing Respondent’s lack of
profit, and emphatically asserting that it could not afford to
pay employees more than it was currently stating, clearly
demonstrated an inability to pay position. Moreover, the as-
sertion that Respondent would be agreeable to open its books
and show the Union that it could not afford to pay any more,
but that its lawyer recommended against it, further under-
scores such a conclusion. Respondent’s position is akin to an
attempt to have ‘‘its cake and eat it.’’
Thus, Burruss after speaking to his attorney about bar-
gaining strategy, seeks out an employee, clearly one who he
perceives to be a leader of the union drive,7 and tells the em-
ployee that Respondent cannot afford to pay any more than
it was currently paying. Burruss also tells the employee not
to tell the Union about the conversation, suspecting and in
my mind, hoping, that the employee probably will do so.
Then Burruss adds that he would be willing to show his
books to the Union, to support this assertion, but his attorney
advises against it. Thus, Respondent is attempting to get the
message across to the Union indirectly that it cannot afford
to pay any more, while trying to avoid making such a claim
237BURRUSS TRANSFER
8 Indeed, Burruss’ conversation with Kirchgraber could be con-
strued as unlawful direct bargaining in derogation of the Union’s sta-
tus. I make no such finding, however, since it has not been alleged,
and in any event would be barred by Sec. 10(b) of the Act.
at the bargaining table, so as to avoid the obligation to open
up his books.8 This disingenuous position is not good-faith
bargaining. Therefore, I conclude that it is appropriate to
consider the statements made by Burruss to Kirchgraber,
which serve to reinforce and clarify the position taken by Re-
spondent at the table that it was unable to pay the increases
and benefits demanded by the Union.
Respondent alleges as an affirmative defense that the com-
plaint allegation is barred by Section 10(b) of the Act. Re-
spondent relies on Machinists Local 1424 (Bryan Mfg. Co.)
v. NLRB, 362 U.S. 411, 416 (1960), and argues that since
only the refusal to supply the information herein, occurred
within the 10(b) period, the violation cannot be proved with-
out reliance on pre 10(b) events. Thus, Respondent contends
that the refusal to supply the information itself is made un-
lawful only by reference to the pleas of inability of pay,
which were all outside the 10(b) period. Therefore, Respond-
ent cites that portion of Bryan which holds that in such cir-
cumstances, the pre-10(b) evidence ‘‘serves to cloak with il-
legality that which was otherwise lawful.’’ I do not agree.
In request for information cases, the 10(b) period begins
to run form the date of the employer’s refusal to provide the
information. New Jersey Bell Telephone Co., 289 NLRB 318
(1988); Borden Chemical, 261 NLRB 64, 74 (1982). The
opinion of Bryan, supra, which provides that earlier events
may be utilized to shed light on the character of matters oc-
curring within the limitation period is clearly applicable to
this situation. Indeed, frequently the Board considers events
over a long period of time, well outside the 10(b) period,
during the bargaining process to evaluate whether a refusal
to supply information, inside the 10(b) period, is unlawful.
See, e.g., Armored Transport, supra.
Therefore, I reject Respondent’s argument that the com-
plaint is time barred by Section 10(b) of the Act.
Accordingly, based on the foregoing analysis and citation
of authorities, I conclude that Respondent has violated Sec-
tion 8(a)(1) and (5) of the Act by refusing on and after Feb-
ruary 27, 1989, to supply the Union with the information re-
quested in its September 19 letter.
B. The Alleged Bypassing of the Union and Unilateral
Grant of a Wage Increase
It is undisputed that in February 1990, employee Robert
Spry and Burruss discussed Spry’s request for a wage in-
crease, and Respondent without notifying or bargaining with
the Union, granted Spry a raise shortly thereafter.
Since the Union was still the collective-bargaining rep-
resentative of Respondent’s employees at the time, Respond-
ent was not free to discuss wages directly with its employ-
ees, and its action in this regard violates Section 8(a)(1) and
(5) of the Act. Medo Photo Supply Co. v. NLRB, 321 U.S.
678 (1944); Billion Oldsmobile Toyota, 260 NLRB 745, 754
(1982).
Turning to the granting of a raise to Spry, it is well settled
that an employer violates Section 8(a)(1) and (5) of the Act,
when it unilaterally changes terms and conditions of employ-
ment, such as granting a wage increase, without providing
the collective-bargaining representative a meaningful oppor-
tunity to bargain about such changes. NLRB v. Katz, 369
U.S. 736, 741–743, 747 (1962); Alamo Cement Co., 281
NLRB 737, 738 (1986).
Respondent is permitted to grant such an increase if an im-
passe existed, or if the Union has waived its right to bargain
about the action. Cliffside Health Center, 279 NLRB 1126,
1127 (1986).
In order to establish a waiver of the Union’s rights to no-
tice and bargaining about the wage increases, Respondent
must demonstrate by clear and unmistakable evidence that
the Union either by contract or during negotiations has ex-
pressly waived its rights. Statler Hilton Hotel, 191 NLRB
283, 288 (1971), and cases cited therein.
Respondent does not contend, nor does the evidence estab-
lish the existence of an impasse when Respondent granted
the increase. However, Respondent does contend that Spry
received the increase in light of his positive record and his
many out of town trips, and that Respondent was privileged
to give Spry the raise because of the proposed contract
clause allowing such an increase. Johnson Bateman Co., 295
NLRB 180 (1988). Respondent’s contentions are without
merit.
As for the assertion that Spry’s increase was in effect well
deserved or based on legitimate considerations, this is no de-
fense, since good faith is irrelevant to this allegation. Amer-
ican Chain & Link Fence Co., 255 NLRB 692, 699 (1981).
Respondent’s second argument, in effect contending that
the Union waived its right to bargain because of the pro-
posed contract clause, has not been substantiated, and his re-
liance on Johnson Bateman, supra, in that regard is mis-
placed. While it is true that the clause in Johnson Bateman
considered to have waived the Union’s rights therein, is simi-
lar to the clause in this case, Respondent conveniently ig-
nores one crucial difference. That is in Johnson Bateman the
clause had been agreed to by the Union and was incorporated
in the collective-bargaining agreement between the parties.
Here no contract was ever agreed to between the parties, and
no evidence was adduced that the clause was even tentatively
agreed to by the Union during negotiations. Indeed, even had
the Union tentatively agreed to the clause during negotia-
tions, in the absence of an overall agreement on all terms of
the contract, such agreement on the clause in question would
not be sufficient to meet the stringent test of establishing a
‘‘clear and unmistakable waiver.’’
Accordingly, having rejected all of Respondent’s defenses,
it follows that Respondent has violated Section 8(a)(1) and
(5) of the Act by granting a wage increase to Spry. I so find.
REMEDY
Having found that Respondent has violated Section 8(a)(1)
and (5) of the Act, I shall recommend that it cease and desist
therefrom, and take certain affirmative action necessary to ef-
fectuate the purposes and policies of the Act. I shall rec-
ommend that it be ordered to furnish the Union the informa-
tion requested in its letter of September 19, 1989.
CONCLUSIONS OF LAW
1. Respondent, Burruss Transfer, Inc. is an employer en-
gaged in commerce within the meaning of Section 2(2), (6),
and (7) of the Act.
238 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
2. Local Union 65, affiliated with the International Broth-
erhood of Teamsters, AFL–CIO is a labor organization with-
in the meaning of Section 2(5) of the Act.
3. Since on or about September 14, 1988, the Union has
been and continues to be at all times material herein, the ex-
clusive representative of the employees of Respondent for the
purposes of collective bargaining under Section 9(a) of the
Act, in the following appropriate unit:
All full-time and regular part-time local drivers, local
driver helpers, short haul drivers, short haul drivers
helpers, packers, warehousemen, and any other employ-
ees who perform such work, employed by the Respond-
ent at its Route 13 and Lower Creek Road, Ithaca, New
York location, excluding office clerical employees, con-
fidential employees, the dispatcher, mechanics, casual
employees, guards, supervisors and all other employees
excluded under the National Labor Relations Act.
4. By refusing on and after September 27, 1989, to furnish
the Union with the information requested in the Union’s let-
ter of September 19, 1989, Respondent has violated Section
8(a)(1) and (5) of the Act.
5. By bargaining directly with and granting a wage in-
crease to employee Robert Spry in February 1990, Respond-
ent has violated Section 8(a)(1) and (5) of the Act.
6. The aforementioned unfair labor practices affect com-
merce within the meaning of Section 2(6) and (7) of the Act.
[Recommended Order omitted from publication.]