Detroit Edison Co.

National Labor Relations Board - Board Decisions

Sep 26, 1994

314 N.L.R.B. 1273 (N.L.R.B. 1994)

1273
314 NLRB No. 207
DETROIT EDISON CO.
1 The Respondent requested oral argument. This request is denied
as the record, the exceptions, and the briefs adequately present the
positions of the parties.
2 The agreement was effective from June 12, 1989, through June
1, 1992.
3 The Meese letter sets forth the existing policy of management on
the use of outside contractors. It ends with:
Within the framework of . . . [specified] factors, the work
should be performed by our own employees or by an outside
contractor on the basis of least cost. In each case we must exer-
cise prudent judgment before reaching a decision to utilize [con-
tractors].
The parties disagree about whether the Meese letter, dated June
19, 1969, is in fact part of the contract. The Respondent introduced
an arbitrator’s ruling, dated July 2, 1976, to support its contention
that it is not part of the contract, i.e., that it is part of the Respond-
ent’s policy but not a contractual commitment. The General Counsel
has submitted the letter but no specific testimony or document that
establishes that it is part of the contract. The judge described the
document but made no specific finding that it is part of the contract.
In view of our finding below, we find it unnecessary to pass on this
issue.
4 These meetings were held in December 1989 and in June and
September 1990. A fourth meeting was held on March 5, 1991, the
day before the charge was filed.
The Detroit Edison Company and Local Union No.
223, Utility Workers of America, AFL–CIO.
Case 7–CA–31623
September 26, 1994
DECISION AND ORDER
BY CHAIRMAN GOULD AND MEMBERS STEPHENS
AND DEVANEY
On March 31, 1992, Administrative Law Judge John
H. West issued the attached decision. The Respondent
filed exceptions and a supporting brief. The General
Counsel filed an answering brief to the Respondent’s
exceptions.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has de-
cided to affirm the judge’s rulings, findings,1 and con-
clusions only to the extent consistent with this Deci-
sion and Order.
The sole issue in this case is whether the Respond-
ent violated Section 8(a)(5) and (1) of the Act by re-
fusing to provide specified information requested by
the Union dealing with the cost of the Respondent’s
use of outside contractors. The judge found that the
Respondent violated the Act and ordered it to promptly
furnish the information. For reasons described below,
we disagree with the judge and dismiss the complaint
in its entirety.
Background
The following facts, more fully described in the
judge’s decision, are not substantially in dispute. The
Respondent and the Union have had collective-bar-
gaining agreements since the 1940s. Article VIII, sec-
tion 5 of the relevant collective-bargaining agreement2
reads:
Section 5. Outside contractors.
a. If Management proposes to contract work
which is regularly and customarily done by the
employees in a bargaining unit, and such con-
tracting appears to threaten their security of em-
ployment, the chairman or chief steward of the di-
vision will be given prior notice thereof.
b. Work will not be contracted out for the pur-
pose of laying off or reducing in classification
employees who regularly and customarily do such
work. (Reference: Letter by William G. Meese
dated June 19, 1969.)3
Over the years, the Union has sought by various
means to limit the Respondent’s contractual use of out-
side contractors, including by the filing of grievances.
In 1988 the parties entered into a settlement agreement
which provided that the Respondent would give quar-
terly reports to the Union on all agreements with out-
side contractors that exceeded more than $1000. The
Respondent began providing these reports in the third
quarter of 1988.
During the 1989 contract negotiations, the Union
and the Respondent entered into two side-bar agree-
ments covering outside contractors. One agreement
created a joint union-management committee to meet
on a semiannual basis to review the use of outside
contractors. The other provided, inter alia, that the Re-
spondent ‘‘will maintain employment levels in Local
223 represented jobs at no less than a total of 3,000
employees for the period beginning June 5, 1989 and
expiring on May 31, 1992.’’
The joint committee met three times before the re-
quest for information here was made.4 According to
the minutes of these meetings, management pointed
out at the first meeting that requesting information as
an extension of contract negotiations is different from
requesting information as a subcommittee. Manage-
ment also indicated its concern that information pro-
vided in response to numerous requests had never been
used by the Union and asked why the Union wanted
the information and how it would be used. A union
representative stated at that same first meeting that the
Union did not ask for information until management
claimed that union members were too expensive to use
and also expressed concern about management’s book-
keeping practices. The parties continued, at subsequent
meetings, to discuss the need to know the true costs
of using outside contractors.
1274 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
5 The Union’s letter is reproduced in App. F of the judge’s deci-
sion. In addition to requesting data for various categories of costs
relating to subcontracting, it also requested any in-house studies of
costs of subcontracting and disclosure of which corporate groups
were paying for such studies.
6 The judge’s view of the standard was quoted from Westinghouse
Electric Corp., 239 NLRB 106, 107 (1978).
The Respondent points out that Westinghouse, supra at 109, also
provides, in addition to the language quoted by the judge, that:
With respect to the information requested in items 1 through
6, insofar as it covers nonunit personnel, we agree with the Ad-
ministrative Law Judge that the Union is not entitled to such in-
formation. We note that an employer is not relieved of its obli-
gation to supply information to the exclusive bargaining agent
merely because the information relates to nonunit employees.
However, although a union need not make a special showing of
relevance to obtain information about employment of employees
within the bargaining unit, where the request for information
concerns matters outside the bargaining unit the union must or-
dinarily demonstrate more precisely the relevance of the date re-
quested. [Emphasis added.]
7 In settlement of that charge, the Respondent agreed to provide
quarterly reports on the use of outside contractors for any contract
that exceeded $1000 in value. Breen conceded that all of the reports
required by the 1988 settlement agreement were furnished and that
if the Union had any ‘‘problems’’ with any of the reports, those had
been taken care of to its satisfaction ‘‘so far.’’
In late December 1990, the Union forwarded a let-
ter, dated December 13, 1990, to the Respondent re-
questing the information at issue. In essence, the
Union’s letter, noting remarks by the Respondent that
union members were going to have to compete with
outside contractors, stated that the Union needed the
19 items of information related to cost analysis, speci-
fied in the letter, in order to assess its ability to com-
pete and to represent its members.5
By letter dated February 13, 1991, the Respondent
denied the Union’s request. The Respondent’s reply,
inter alia, cited the information on contracting that had
been supplied to the Union on a timely basis since
1988, claimed that the 19 categories of information re-
quested related to nonarbitrable nonbargaining unit ac-
tivity, and stated that management had no obligation to
justify its business decisions to the Union, particularly
since the Union’s letter acknowledged that manage-
ment had not used cost as a justification to contract.
The Judge’s Decision
In concluding that the Respondent violated the Act
by failing to provide the requested information, the
judge acknowledged that the information was not pre-
sumptively relevant because it related to the cost of
outside contractors but nevertheless found that the
Union has demonstrated that the information is of
probable or potential relevance.6 In arriving at this
conclusion, he found that the Respondent itself made
the cost of using outside contractors an issue, citing
the Meese letter, the Respondent’s agreement to make
quarterly reports in 1988, and the side-bar agreement
of 1989 that established a joint committee to review
the use of outside contractors.
The judge also found that the Respondent made the
union members’ wages and benefits a midterm collec-
tive-bargaining agreement issue by telling union mem-
bers that they had to get more competitive with outside
contractors and that they could be replaced by $10-an-
hour contractors. Thus, he found that the information
is relevant because it relates to the preservation of unit
work, citing testimony by employee John Breen, the
union chairman of the substation division of the unit
and a union trustee, that if the Respondent could dem-
onstrate that the Union’s costs were higher, the Union
would have to reassess its position on wages and bene-
fits, including a possible midterm modification of the
collective-bargaining agreement.
Discussion
We disagree with the judge’s ultimate conclusion,
because in our view, he failed to take adequate account
of admissions by Union Representative John Breen, in
his testimony at the hearing. Those admissions negate
the judge’s finding that the requested information was
relevant to administration of the current contract, bar-
gaining for possible contract modifications, or any
other representative function.
As an initial matter, Breen essentially conceded that
the contractual provisions on subcontracting—read in
the light of the parties’ dealings on the subject over a
number of years—permitted the Respondent freely to
contract out unit work subject only to the conditions
stated in article VIII, section 5 of the agreement. Those
were that the Respondent would not contract out unit
work ‘‘for the purpose of laying off or reducing in
classification’’ any unit employees and that if the Re-
spondent proposed any instance of contracting out that
even ‘‘appear[ed] to threaten’’ the unit employees’
‘‘security of employment,’’ it would give ‘‘prior no-
tice’’ of that proposed subcontracting to the Union.
The subcontractor cost data that the Union sought had
no apparent connection to either of those provisions,
and Breen conceded that the Union was not in the
process of formulating any ‘‘particular grievance’’
when it made the information request. He further con-
ceded, under cross-examination, that even if the Union
obtained data suggesting that the Respondent was pay-
ing more to its subcontractors than it would cost to
keep the work in-house, the Union would have no
basis for claiming a contract breach. Finally, Breen
conceded that the Respondent had not breached either
the 1988 agreement settling an unfair labor practice
charge alleging unlawful refusal to furnish subcontract-
ing information7 or the 1989 side-bar agreements per-
taining to the subcontracting, and he did not claim that
the Union even suspected the Respondent of breaching
those agreements. Thus, the cost data lacked even po-
1275DETROIT EDISON CO.
8 The General Counsel cites Colgate-Palmolive Co., 261 NLRB
90, 92 fn. 12, 100–101 (1982), for the proposition that a union’s
right to information need not be premised on a particular con-
troversy. There, the information sought by the Union was related to
a health and safety clause in the effective contract. The Board spe-
cifically found that the contract ‘‘commits the parties to, inter alia,
mutual cooperation ‘in eliminating unsafe conditions and unhealthy
practices.’’’ Id. at fn. 11.
The record here does not show that the parties have committed
themselves to a comparable broad ‘‘mutual cooperation’’ in connec-
tion with the Respondent’s right to subcontract.
9 These facts distinguish this case from the situation in General
Electric Co., 294 NLRB 146 (1989), enf. denied 916 F.2d 1163 (7th
Cir. 1990). In that case, the Board found that the respondent violated
Sec. 8(a)(5) and (1) of the Act by refusing to furnish the union with
requested information concerning the costs of maintenance work
subcontracts, because the information was relevant to the negotiation
of a successor agreement and the union had specifically referred to
this use of the information in its request.
10 Our holding does not foreclose the Union from establishing the
relevance of the subcontractor cost data on some future occastion,
if timing and circumstances link it to the formulation of contract
proposals.
tential relevance to grievances over breach of any of
the written agreements between the parties.8
Breen’s testimony is also fatal to the judge’s finding
that the requested information was relevant to possible
modifications of the subcontracting provisions of the
collective-bargaining agreement. No midterm reopener
provision was in evidence; neither party had an-
nounced any intention of asking for midterm negotia-
tions; negotiations for a successor agreement were not
due to occur soon, since the contract did not expire
until 18 months later—in June 1992. It is therefore un-
derstandable why Breen conceded at the hearing that
it was ‘‘correct’’ to say that the information request
had ‘‘nothing to do with contract negotiations.’’9 In
sum, the timing of the request and Breen’s testimony
makes the finding of relevance on the basis of possible
contract modifications insupportable.10
Finally, we disagree with the judge’s finding that the
Respondent’s conduct in connection with the two 1989
side-bar agreements pertaining to the use of outside
subcontractors effectively made the Union’s informa-
tion requests relevant to ‘‘preservation of unit work.’’
As noted above, in 1989 the Respondent agreed to
‘‘maintain employment levels of employees in Local
223 represented jobs at no less than a total of 3000
employees’’ until expiration of the 1989–1992 collec-
tive-bargaining agreement, and it also agreed to estab-
lish a joint labor-management committee to review the
use of outside contractors, with twice-yearly meetings
for this purpose. Breen testified that, during meetings
of that committee, representatives of the Respondent
commented that it cost less to use outside contractors
than to use unit employees and that unit employees
needed to ‘‘get competitive with the contractors.’’ It is
understandable that these remarks stimulated a desire
on the part of the union representatives to attempt to
prove that unit employees were ‘‘competitive,’’ and
contractor cost data would be relevant to such an at-
tempt. The fact remains, however, that, given the
agreements on maintenance of unit employment levels
and the Respondent’s acknowledged freedom to make
unilateral subcontracting decisions—subject only to the
contractual conditions mentioned above—the requested
subcontractor cost data simply had no potential linkage
to any bargaining which the Union could demand on
behalf of the unit employees at or near the time of its
information request. Thus, even though Breen testified
that the requests were motivated by ‘‘our concern’’ for
‘‘the threat to our members’ employment security,’’ he
conceded that no unit member had been laid off or re-
duced in classification; and he did not identify any
basis for suspecting either that the Respondent might
be in breach of the 3000-job-level requirement or that
any unit employee might suffer a job loss.
In sum, we do not disagree with our dissenting col-
league’s view that a union’s representational respon-
sibilities go beyond the formulation of contract pro-
posals; they also encompass, among other things, ad-
ministration of the current contract and continual mon-
itoring of any threatened incursions on the work being
performed by bargaining unit members. But, as shown
above, the testimony of Breen, cited by our colleague,
concerning fears about reduction of unit employment
through attrition and the introduction of subcontracting
into ‘‘new areas’’ was shown to have no substance by
Breen’s own admissions on cross-examination. By con-
ceding that he had no basis for even suspecting that
the Respondent might be in breach of any of the var-
ious agreements related to subcontracting—including
the agreement to maintain union-represented employ-
ment at the 3000-job level—the Union’s agent essen-
tially admitted that his alleged concerns had no objec-
tive basis beyond the management representative’s
baiting about ‘‘cost-competitiveness.’’ The union rep-
resentatives were legitimately annoyed by the implica-
tion that the employees they represented were over-
paid, but a ground for annoyance does not necessarily
meet the relevancy standard by which the Board judges
a bargaining representative’s requests for information.
For all the foregoing reasons, we find that the Re-
spondent did not violate Section 8(a)(5) and (1)
through its refusal to furnish the requested information,
and we shall dismiss the complaint in its entirety.
Accordingly, we shall dismiss the complaint in its
entirety.
ORDER
The complaint is dismissed in its entirety.
MEMBER DEVANEY, dissenting.
Contrary to my colleagues, I would affirm the
judge’s finding that the Respondent violated Section
8(a)(5) and (1) of the Act by refusing the Union’s re-
1276 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The Respondent separately agreed to retain no fewer than 3000
unit employees until May 31, 1992.
quest for information about the costs of the Respond-
ent’s use of outside contractors.
The Respondent’s use of outside contractors has
long been a subject of controversy between the parties.
The Respondent’s policy of assigning work to be per-
formed by its own employees or to an outside con-
tractor ‘‘on the basis of least cost’’ was first set forth
in a 1969 letter signed by a management official. This
letter was specifically cited in the parties’ collective-
bargaining agreement effective June 12, 1989, through
June 1, 1992. The collective-bargaining agreement also
provided that the Respondent would give the Union
notice prior to contracting out work if unit employees’
job security was threatened and that work would not
be contracted out for the purpose of laying off employ-
ees.1 In settlement of a charge over the Respondent’s
refusal to provide information to the Union about use
of outside contractors, the Respondent in 1989 agreed
to provide the Union quarterly reports concerning the
Respondent’s agreements with outside contractors.
In 1989 the parties established a joint committee to
review the use of contractors semiannually. At com-
mittee meetings, in response to the Respondent’s ob-
jections to the Union’s information requests about out-
side contracting, the Union stated that it sought such
information only after the Respondent claimed it was
too expensive to use the Union’s members. The Union
stated that it was interested in the information simply
to prove that it was more economical to use unit em-
ployees than contractors.
In various employee meetings during 1989–1991,
the Respondent’s supervisors stated that the employees
had to get competitive with contractors; that contrac-
tors cost less; and that the Respondent would contract
out its employees’ work if their productivity did not
increase. In November 1990, the Respondent informed
the Union that it was going to contract out the inspec-
tion of certain circuit breakers, and in February 1991
an outside contractor performed circuit breaker inspec-
tions. In July or August 1991, the Union was informed
that the Respondent expected to contract out inspection
of certain transformers.
In December 1990, the Union made the information
request at issue here. Citing the Respondent’s state-
ments that its employees would have to compete with
outside contractors and the Respondent’s plans to have
outside contractors do work that the Respondent’s em-
ployees had always performed, the Union stated its
need for information had increased and broadened
since the settlement agreement of the last NLRB com-
plaint, as ‘‘cost analysis is the linchpin of the Union’s
ability to compete.’’ The Union’s request sought infor-
mation concerning the costs of having work performed
by employees and by outside contractors, including in-
direct costs, and the way in which the Respondent cal-
culated and allocated these costs. The letters stated that
the Union’s concern was to provide the most cost ef-
fective in-house work force possible. Employee Breen,
who was chairman of a substation division of the bar-
gaining unit, testified that the Respondent’s increase in
use of outside contracting had reduced the number of
unit employees through attrition and that the Respond-
ent’s contracting had moved into new areas.
I agree with the judge that the information the
Union sought was relevant to the Union’s role as col-
lective-bargaining representative. The Respondent itself
had made the cost of unit employees versus outside
contractors an issue. The only means for the Union to
rebut the Respondent’s contentions that using outside
contractors was less costly was to have the information
showing actual costs. If the information showed that
the cost of using unit employees was no greater than
that of using outside contractors, the Union would be
able to refute the Respondent’s persistent claims that
unit employees were more costly than outside contrac-
tors. Given the Respondent’s statements in committee
meetings that it would not use contractors if it was
more economical to use its own employees, the
Union’s effective demonstration that use of unit em-
ployees is less costly would affect the Respondent’s
decisions regarding use of outside contractors. On the
other hand, if the information showed that the unit em-
ployees’ cost were out of line, the Union could decide
whether to propose contract changes, either at that time
or during bargaining over a successor contract, to re-
duce costs associated with utilization of unit employ-
ees. Employee Breen’s statement, on which my col-
leagues rely, that the information requested was not re-
lated to formulation of a bargaining position, conceives
of bargaining only in the narrowest sense of the term
and does not dispose of the Respondent’s obligation to
provide the information. Contrary to my colleagues, I
do not view Breen’s statement as negating the obvious
relevance of the requested information.
Moreover, my colleagues’ assertion that there was
no substance to Breen’s fears about reduction of unit
employment through attrition and the introduction of
subcontracting into new areas is not supported in the
record. In fact, the Respondent continually browbeat
the Union with threats to contract out additional work
and in late 1990 and early 1991 carried out its threats
to contract out additional work. Although the Respond-
ent had agreed to retain a specified minimum number
of unit employees, it was still possible that there would
be an attrition of unit positions above that minimum.
Further, the Respondent’s agreement to maintain this
minimum number of positions was not permanent but
rather was to expire May 31, 1992.
The entire course of the parties’ dealings reflects an
ongoing debate between the parties over whether it
1277DETROIT EDISON CO.
2 The message of the Respondent’s statements to the Union was
not merely that the unit employees were overpaid, as my colleagues
state, but, more importantly, that the unit employees were in danger
of losing their work. By characterizing the Respondent’s conduct
merely as ‘‘baiting’’ which was cause for annoyance but nothing
more, my colleagues trivialize the parties’ dispute.
1 General Counsel’s unopposed motion to correct the official
record is granted. The corrections are attached as App. A (omitted
from publication). Also, pursuant to an agreement of the parties and
with my expressed permission, General Counsel forwarded an ex-
hibit for filing after the record was closed. The late-filed exhibit is
received as G.C. Exh. 28.
2 The quarterly reports list the name of the contractor, the work
or function, the quarterly amount paid, the total man-hours, and the
geographic area involved.
3 The proposal was made because, as indicated by the Union, it
believed that there was a way to make more use of the Union’s per-
Continued
was more economical to have work performed by the
Respondent’s own employees or by outside contrac-
tors. Both parties understood that the Respondent’s de-
cisions as to whether to contract out unit work were
largely governed by this determination.2 In attempting
to retain work for the employees that it represented,
the Union had an enormous stake in this debate. I
agree with the judge that the information sought was
highly relevant, as it related to preservation of unit
work. Accordingly, I would adopt his conclusion that
the Respondent’s refusal to provide this information
violated Section 8(a)(5) and (1) of the Act.
Richard Whiteman, Esq., of Detroit, Michigan, for the Gen-
eral Counsel.
Alex J. McLeod, Esq., of Detroit, Michigan, for the Respond-
ent.
John Breen, of Detroit, Michigan, for the Charging Party.
DECISION
STATEMENT OF THE CASE
JOHN H. WEST, Administrative Law Judge. Upon a charge
and amended charge filed March 6 and 13, 1991, respec-
tively, by Local Union No. 223, Utility Workers Union of
America, AFL–CIO (Union), a complaint was issued April 4,
1991, alleging that Detroit Edison Company (Respondent or
Edison) violated Section 8(a)(1) and (5) of the National
Labor Relations Act (the Act), by refusing to provide speci-
fied information requested by the Union dealing with the cost
of Respondent’s use of outside contractors. Respondent de-
nies that it violated the Act.
A hearing was held in Detroit, Michigan, on September 9
and 10, 1991. Upon the entire record in this case,1 including
my observation of the demeanor of the witnesses and consid-
eration of the briefs filed by General Counsel and the Re-
spondent, I make the following
FINDINGS OF FACT
I. JURISDICTION
Respondent, a Michigan corporation, is a public utility en-
gaged in the production and sale of electrical power. The
complaint alleges, the Respondent admits, and I find that at
all times material, Respondent has been an employer engaged
in commerce within the meaning of Section 2(2), (6), and (7)
of the Act and that the Union has been a labor organization
within the meaning of Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICE
A. The Facts
The Respondent is headquartered in Detroit and it serves
southeastern Michigan. The Union represents about 3100 of
Respondent’s employees. Respondent and the Union have
had collective-bargaining agreements since the 1940s. The
current collective-bargaining agreement (CBA) is effective
from June 12, 1989, through June 1, 1992. General Counsel’s
Exhibit 2. Article VIII, section 5, reads:
Section 5. Outside Contractors. a. If management
proposes to contract work which is regularly and cus-
tomarily done by the employees in a bargaining unit,
and such contracting appears to threaten their security
of employment, the chairman or chief steward of the di-
vision will be given prior notice thereof.
b. Work will not be contracted out for the purpose
of laying off or reducing in classification employees
who regularly and customarily do such work. (Ref-
erence: Letter by William G. Meese dated June 19,
1969.)
The Meese letter, General Counsel’s Exhibit 3, sets forth
the existing policy of management regarding the use of out-
side contractors. The letter is set forth in Appendix B hereto.
It ends with:
Within the framework of . . . [specified] factors, the
work should be performed by our own employees or by
an outside contractor on the basis of the least cost. In
each case we must exercise prudent judgment before
reaching a decision to utilize outside contracting.
Over the years, the Union has sought to limit Respond-
ent’s contractual right to use outside contractors. And a num-
ber of grievances have ben filed by the Union regarding Re-
spondent’s use of outside contractors.
In 1987, the Union requested information from the Re-
spondent with respect to the use of outside contractors. The
Union filed charges with the National Labor Relations Board
(Board) when the Respondent refused to provide the infor-
mation. General Counsel’s Exhibit 4(a). In 1989 the pro-
ceeding was terminated after the parties entered into a settle-
ment agreement which provided that Respondent would give
quarterly reports to the Union setting forth certain of the spe-
cifics of all agreements with outside contractors involving
more than $1000.2 Respondent provided quarterly reports be-
ginning with the third quarter of 1988. General Counsel’s
Exhibit 5.
During the 1989 contract negotiations, the Union and the
Respondent entered into two side-bar agreements. General
Counsel’s Exhibit 6. One, in response to a union proposal,3
1278 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
sonnel, minimize the use of contracting, and save money for the Re-
spondent.
4 As used therein ‘‘M’’ refers to management representatives and
‘‘U’’ refers to union representatives.
created a joint union and management committee to meet on
a semiannual basis to review the use of contractors. The
other, as here pertinent, reads as follows:
Throughout these negotiations, a major element of
discussion has been the Union’s concern that some
Local 223 represented jobs are being eliminated and,
thus, employment levels of Union represented employ-
ees are in decline.
The Company maintains that genuine job security
depends on the Company’s ability to produce and sell
quality electric power at a profit.
At the same time, the company and the Union recog-
nize that existing utility industry economic and com-
petitive realities demonstrate the continuing need for
improved efficiency and increased productivity to con-
trol costs if a high level of customer service is to be
maintained and shareholder value preserved.
Long term job security requires that the Company
become a low cost quality producer. Failure to meet the
competitive challenge can only result in reduced job se-
curity and thus, fewer jobs.
Although the level of employment (i.e., numbers of
223 represented employees employed) is otherwise a
subject matter covered by the Management Rights
Clause of Article III of the Agreement, the parties agree
that the Company will maintain employment levels of
employees in Local 223 represented jobs at no less than
a total of 3,000 employees for the period beginning
June 5, 1989 and expiring 11:59 p.m. May 31, 1992.
At the time of the hearing, the joint subcommittee on out-
side contracting had met four times, namely, December 8,
1989, June 26 and September 13, 1990, and March 5, 1991.
The Respondent was represented by up to three of its offi-
cials at these meetings and the Union was represented by up
to three of its officials. The Company kept minutes of the
meetings, General Counsel’s Exhibits 7 through 10, respec-
tively. At the first meeting a management representative stat-
ed:
The Union’s request for information as an extension
of contract negotiations is different than requesting in-
formation as a Subcommittee. In this regard, during the
terms of the Agreement, there has been numerous re-
quests for information regarding outside contracting
which when supplied, the Union has not ever utilized.
We need to know why the Union is asking for this in-
formation and what will be accomplished as a result of
the Union being provided this information. Management
is concerned about these numerous requests for such in-
formation which the Union has never utilized. There are
some individuals in Management who view the Union’s
request for information as a form of harassment. There-
fore, we need to know why the Union wants this infor-
mation and how it will be utilized.
We would prefer to provide contractor information
after the fact although it appears that the Union would
prefer the information before the fact. For example, in
Maintenance contracts for services, the Union has re-
quested the information prior to the start of the in-
volved work.
A union representative subsequently stated:
In this regard, we did not ask for the information
until our area came under attack by Management claim-
ing that our members were too expensive to utilize. We
strongly feel that it is more economical to utilize our
members than outside contractors. Furthermore, the
Union is not interested in what the Company is paying
for materials but is interested in what the Company is
paying for contract labor. Our interest only resulted as
a matter of proving that we are more economical to uti-
lize than contractors.
It is our belief that Management does not maintain
good work records. In this regard, there have been
times when the Bricklayers have been sent out for four
hours to do a job which shorts the entire day. Then
there are cases where employees are sent out to do a
job without the proper materials and, therefore, must
wait one or two days. We understand that under Article
III of the Agreement Management has the right to make
the determination of the materials and equipment need-
ed for work. However, we are concerned about Man-
agement’s bookkeeping practices and wastes.
The Union is not interested in grieving the use of
contractors through arbitration. In this regard, we would
like to discuss Management’s utilization of our mem-
bers versus outside contractors.
In Underground Lines, there are stacks of go-backs
involving the work done by contractors. In other words,
our members have been sent out to go over work per-
formed by the contractors. We have an agreement with
the Management of Macomb Division to maintain sepa-
rate work orders.
The Union would like to know Management’s long
range plans on utilizing outside contractors.
And subsequently a management representative stated:
If [Respondent’s] Monroe Power Plant is paying
more for a job by using a contractor, then shame on
them. In the Company, there probably exists a few
cases where it costs more to utilize outside contractors.
The Company should be getting the most for its money.
Management as a whole should be looking at these
cost wastes. In Power Generation, Management is look-
ing to reduce costs as well as incurring no increases in
operations and maintenance.
The minutes of the second, third, and fourth subcommittee
meetings are set forth in Appendices C, D, and E, respec-
tively.4 As can be seen, the union and management rep-
resentatives continued to discuss the need to know the true
costs of using outside contractors, with management specifi-
cally indicating at least once that Respondent should not uti-
lize contractors if it is more economical and efficient to use
its own employees. The Respondent did share certain infor-
mation with the Union regarding costs of the unit employees
1279DETROIT EDISON CO.
5 Respondent’s letter referred to the Union’s January 17, 1991 let-
ter which was the cover letter for the alleged second mailing of the
above-described December 13, 1990 letter. G.C. Exh. 20 assertedly
is a copy of a receipt, dated January 2, 1991, for the December 13,
1990 letter.
6 Breen testified that the Union received 8 or 9 notices of subcon-
tracting from Respondent in 1987, about the same number in 1988,
about 55 in 1989, and about 60 in 1990.
7 Breen and three other of Respondent’s employees who are union
members testified, collectively, that Edison employees deliver Edison
tools, equipment, and materials to contractors; that Edison employees
repair contractors work which is not done to standards; and that Edi-
son supervisors monitor the outside contractors work for extended
periods.
and outside contractors. General Counsel’s Exhibits 11 and
12.
In late 1989 and in 1990 Respondent’s supervisors told
members of the Union at employee meetings that they had
to get competitive with contractors; that it cost less to use
contractors than Respondent’s own employees; and that if
their employees did not increase productivity, Respondent
would contract their work.
On May 29, 1990, at a division meeting a union represent-
ative told management representatives that Respondent’s
bookkeeping practices were questionable in that union mem-
bers performed work on behalf of contractors and yet costs
were not allocated to the contractor. General Counsel’s Ex-
hibit 13.
In November 1990, Respondent informed the Union that
it was going to contract out the inspection of specified circuit
breakers. It is asserted that this was the first time outside
contractors were used to do this work. A management rep-
resentative told a union representative that Respondent was
using an outside contractor to see how it would do the in-
spection.
In late December 1990, the Union forwarded a three-page
letter, which letter was dated December 13, 1990, to the Re-
spondent. General Counsel’s Exhibit 19. It is set forth as Ap-
pendix F. Basically, the letter indicates that Respondent has
told union members that they are going to have to compete
with outside contractors; and that since cost analysis is the
linchpin of the Union’s ability to compete, the union needs
specified information to discharge its responsibility to rep-
resent its membership. The information sought is listed in 19
separately numbered paragraphs. In the concluding paragraph
of the letter, the Union indicates that it will accept the re-
quested information in any convenient form that will serve
the needs of the Union.
By letter dated January 25, 1991, Respondent indicated
that the Union’s request was being reviewed.5 General Coun-
sel’s Exhibit 23.
By letter dated February 13, 1991, General Counsel’s Ex-
hibit 24, Respondent advised the Union, as here pertinent, as
follows:
Since . . . [1988], Management has honored its
committment and agreement to provide the agreed to
[contracting] information to the Union on a timely
basis. I feel . . . [the Union’s December 13, 1990] re-
quest is bad faith bargaining on the Union’s part and
a breach of the agreement reached between the Com-
pany and the Union regarding contracting information.
If the Union formally pursues the issue, Management
will review the information currently supplied and de-
termine our obligation, if any, to continue to do so.
. . . .
The 19 categories of information and all the sub-
parts in the . . . letter dated December 13, 1990, are
related to non-arbitrable, non-bargaining unit activity.
Management has no obligation to justify its business
decisions to the Union. [The Union] . . . acknowledges
in . . . [its] letter that Management has not used cost
as a justification to contract. Management simply has
the right and will continue to do so.
I am denying . . . [the Union’s] unreasonable re-
quest and hope this ends the matter.
On February 20 and 21, 1991, Respondent did use an out-
side contractor to do circuit breaker routine inspections. The
Union filed a grievance on March 11, 1991, General Coun-
sel’s Exhibit 26, alleging that the inspections were a viola-
tion of article VIII, sections 5 and 6 of the involved CBA
and that the inspections conducted by the outside contractor
do not meet the standards required of unit members and,
therefore, the equipment was left in questionable condition.
On or about March 20, 1991, management informed union
members at a safety meeting that Respondent could replace
all the union members with $10-an-hour contractors.
On May 10, 1991, Respondent filed a first step answer to
the March 11, 1991 grievance, General Counsel’s Exhibit 27,
asserting that there was no violation of the CBA and denying
the grievance. The matter was still pending at the time of the
hearing.
In either July or August 1991, the Union was informed
that Respondent expects to contract out the inspection of
some load tap changing transformers.
John Breen, an employee of the Respondent who is also
chairman of the substation division of the bargaining unit and
the trustee of the Local Union, testified that Respondent’s
use of outside contracting had increased which, in turn, had
reduced, through attrition, the number of unit employees;6
that contracting had moved into new areas, such as inspec-
tion; that the information sought was relevant to determine
how Respondent is calculating costs and whether it is prop-
erly allocating costs;7 that Edison agreed to provide most of
the information that the Union sought back in 1988; that pur-
suant to the aforementioned side-bar agreements and the sub-
committee meetings, the Respondent has provided additional
information to the Union on occassion; and that if it is dem-
onstrated that the Union’s costs are higher then the Union
probably would have to go back and reassess its position. On
cross-examination, Breen testified that the information re-
quested in the above-described December 13, 1990 letter is
not connected to any particular grievance; and that the infor-
mation requested was not in any way related to the formula-
tion of a bargaining position by the Union.
B. Contentions
General Counsel contends that the information provided to
the Union in the aforementioned quarterly reports is most of
the information that has been sought by the substation divi-
sion unit; that the examples cited by General Counsel’s wit-
nesses evidenced extensive hidden costs of subcontracting,
i.e., use of Respondent’s tools, materials, and facilities, hav-
1280 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
8 General Counsel also points out that in General Electric the
Board did not conclude that the employer could refuse to provide
the information because the union there had been largely unsuccess-
ful in negotiations in its attempts to further limit contracting and that
contracting had caused the layoff of unit employees.
9 Respondent’s Br. at p. 12. The involved information request was
dated December 13, 1990. This means that all but one of the afore-
mentioned subcommittee meetings took place before the informa-
tional request was made.
ing union members deliver tools and materials to contractors,
having Respondent’s supervisors monitor the contractors
work, and having union members repair and modify contrac-
tor’s work; that when a union seeks nonunit information it
has the burden to prove that the information is relevant but
that burden is not exceptionally heavy; that here the Union
has clearly established the relevancy of the subcontracting in-
formation sought; that as evidenced by the Meese letter, cost
is an important factor in subcontracting decisions; that state-
ments made by Respondent’s officials at the above-described
subcommittee meetings and at other meetings with the union
members confirm the importance of cost; that the Union in
its December 13, 1990 request did not acknowledge that Re-
spondent had not used cost as a justification to contract work
but rather the Union merely noted that while Respondent had
stated that per hour labor costs for union employees was less
than contractors, Respondent was also telling the employees
they had to compete with contractors and was subcontracting
bargaining unit work; that it is well established that the rel-
evance of an information request can be demonstrated at the
hearing and it was here; that in the Southwestern Bell Tele-
phone Co. cases, 173 NLRB 172 (1968), and 262 NLRB 928
(1982), where the Board held that the employer did not have
to provide certain information relating to the costs of con-
tracting, (1) the employer, unlike here, had never claimed to
subcontract work on the basis of cost, (2) the subcontracted
work, unlike here, was not recurring, and (3) the union, un-
like here, had not expressed concerns regarding the loss of
unit jobs through attrition; that in the second Southwestern
Bell case, it was specifically noted that if cost had been as-
serted as a reason for the subcontracting action, it was clear
that the union would have been entitled to the information;
that in General Electric Co., 294 NLRB 146 (1989), enf. de-
nied 916 F.2d 1163 (7th Cir. 1990), it was noted that the em-
ployer had informed the union that cost was a factor in sub-
contracting, the union had informed the employer of the rel-
evancy of the information, the subcontracted work was not
shown to be nonrecurring, and the union expressed concern
that subcontracting could cost unit jobs through attrition; that
all the above-described factors in General Electric Co. are
present in this case; that here cost, as a factor, has been
stressed even more than there; that here the contracting re-
curred more than there; that while there the company was
permitted by the involved collective-bargaining agreement to
subcontract without restriction, here there are contractual and
side-bar restrictions, including cost factors, on subcontract-
ing; that the Seventh Circuit in General Electric stated that
if the evidence had established a set of reasons relied upon
for subcontracting and the Board had picked cost as an oper-
ative reason, the court would have deferred to the Board’s
decision; that here cost is obviously an operative reason for
Respondent’s subcontracting;8 that while Respondent appears
to stress that the information was not sought in connection
with a particular grievance or the formulation of contract de-
mands, the Board has held that a union’s right to information
need not be premised on a particular controversy, e.g.,
Colgate-Palmolive Co., 261 NLRB 90, 92, fn. 12, 100–101
(1982); and that the Union has established the relevance of
all the requested cost information and is entitled to it.
Respondent, on brief, argues that while information which
is directly related to the employees in the bargaining unit is
presumptively relevant, the relevance of information which
pertains to nonunit employees such as outside contractors is
not assumed and the Union has the burden to show why the
information is necessary; that as pointed out by the Supreme
Court in Detroit Edison Co. v. NLRB, 440 U.S. 301, 314
(1979), ‘‘[a] Union’s bare assertion that it needs information
. . . does not automatically oblige the employer to supply all
the information in the manner requested’’; that
[a]ny argument brought forth by the general counsel’s
office regarding comments made during the course of
these informal [subcommittee] meetings should not and
cannot be the basis for granting . . . [the Union’s] in-
formational request which was made in December,
1989 . . . [and] [a]ll but one of these meetings took
place after . . . [the Union] demanded . . . 19 cat-
egories of information . . . [;]9
the isolated comments regarding costs, productivity, and gen-
erally the use of subcontractors were on their face generic,
harmless, and in no way intended to bind the entire Com-
pany to any specific position or course of action; that as
pointed out in San Diego Newspaper Guild v. NLRB, 548
F.2d 863 (9th Cir. 1977), if a union is not engaged in any
contract negotiations at the time of the informational request,
the information could only be relevant to the union for pur-
poses of determining if the company has violated the collec-
tive-bargaining agreement; that here no contract negotiations
were in progress or scheduled at the time of the informa-
tional request and the current CBA does not expire until June
1992; that Breen admitted the request was not related to any
contract negotiations; that the costs associated with Edison
subcontractors no matter what they are or how they are allo-
cated could never constitute the basis of an alleged breach
of contract between Respondent and the Union; that the Sev-
enth Circuit in General Electric, supra, held that the informa-
tion sought must be relevant to the Union’s performance of
its duties to administer and police the CBA or to negotiate
a new CBA; that here the Union never claimed the requested
information was necessary to process or administer any pend-
ing grievance or to determine if a contract violation has oc-
curred so that a grievance could be filed; and that under
General Electric, supra at 1173, even if an employer makes
statements that cost plays a part or is a factor in its decision
to employ outside contractors this does not require an em-
ployer to provide subcontracting costs to a union.
Analysis
As pointed out by the Board in Westinghouse Electric
Corp., 239 NLRB 106, 107 (1978):
It is well established that a labor organization, obli-
gated to represent employees in a bargaining unit with
1281DETROIT EDISON CO.
respect to their terms and conditions of employment, is
entitled to such information from the employer as may
be relevant and reasonably necessary to the proper exe-
cution of that obligation.6 The right to such information
exists not only for the purpose of negotiating a contract,
but also for the purpose of administering a collective-
bargaining agreement. The employer’s obligation, in ei-
ther instance, is predicated upon the need of the union
for such information in order to provide intelligent rep-
resentation of the employees.7 The test of the union’s
need for such information is simply a showing of
‘‘probability that the desired information was relevant,
and that it would be of use to the union in carrying out
its statutory duties and responsibilities.’’8 The union
need not demonstrate that the information sought is cer-
tainly relevant or clearly dispositive of the basic negoti-
ating or arbitration issues between the parties. The fact
that the information is of probable or potential rel-
evance is sufficient to give rise to an obligation on the
part of an employer to provide it.9 The appropriate
standard in determining the relevance of the informa-
tion sought in aid of the bargaining agent’s responsi-
bility is a liberal discovery-type standard.10
6 Vertol Division, Boeing Company, 182 NLRB 421 (1970); N.L.R.B.
v. Whitin Machine Works, 217 F.2d 593 (4th Cir. 1954), cert. denied
349 U.S. 905 (1955).
7 F. W. Woolworth Co., 109 NLRB 196, 197 (1954), enfd. 352 U.S.
398 (1956).
8 N.L.R.B. v. Acme Industrial Co., 385 U.S. 432, 437 1967).
9 The Brooklyn Union Gas Company, 220 NLRB 189 (1975).
10 Acme Industrial Co., supra.
In my opinion the information sought is relevant to the
Union’s role as collective-bargaining representative. While
the information sought is not presumptively relevant because
it relates to the costs of outside contractors, the Union, which
has the burden of showing relevance, has demonstrated that
the information is of probable or potential relevance.
Respondent itself has made the cost of using outside con-
tractors an issue. It began with the above-described Meese
letter. Then to settle an unfair labor practice charge in 1988
Edison agreed to provide to the Union quarterly reports
which, among other things, spoke to some of the costs of
outside contractors. As noted above, General Counsel sub-
mits that most of the involved information is already pro-
vided by the Respondent to the Union. Subsequently, Edison
entered into a side-bar agreement with the Union during the
1989 CBA negotiations, pursuant to which Edison agreed to
hold joint subcommittee meetings with the Union to review
the use of outside contractors. As noted above, the Union’s
need to know actual costs of using outside contractors was
discussed extensively at these subcommittee meetings and a
management representative in attendance stated that Edison
should not utilize contractors if it is more economical and ef-
ficient to use its own employees. Additionally, Edison gave
the Union information regarding costs of outside contractors
over and above what it previously agreed to provide. All the
while Edison increased its use of outside contractors and it
began to use them in new classification areas. The use has
become a recurring and increasing use. And all the while
Edison made the union members’ wages and benefits a mid-
term CBA issue by telling union members that they had to
get more competitive with outside contractors and they could
be replaced by $10-an-hour contractors. As indicated above,
a grievance was filed over the use of outside contractors to
inspect circuit breakers. Since the outside contractor did not
meet Edison’s inspection standards, it was alleged that the
equipment is questionable. Notwithstanding Breen’s testi-
mony that the requested information was not connected to
any particular grievance and was not related to the formula-
tion of a bargaining position, it is my opinion that the infor-
mation is relevant because it relates to the preservation of
unit work and Breen indicated that if Edison could dem-
onstrate that the Union’s costs are higher then it probably
would have to go back and reassess its position. Clearly
there were no negotiations of midterm modifications of the
CBA pending when the involved information was requested.
Nonetheless, and notwithstanding the fact that Edison entered
into a side-bar agreement not to reduce the level of the in-
volved units below 3000 employees during the term of the
CBA in effect, the information sought has been shown to be
relevant because Edison made the cost of unit employees
versus outside contractors an issue, and the only way for the
Union to rebut the position Edison has taken is for the Union
to have the information showing actual costs or, in the words
of a management representative at one of the subcommittee
meetings, be in a position to compare apples to apples. At
that point if union members costs are out of line, then the
Union would have to decide whether to indicate to Edison
that the Union wanted to investigate the possibility of having
a midterm modification of the CBA.
In my opinion, Edison is playing a game. On the one
hand, it is, in effect, telling the Union ‘‘you better compete,’’
knowing that the Union would need all of the involved infor-
mation in order to know what it would take to compete. On
the other hand, while urging the Union by telling union
members they had better compete and they could be replaced
by $10-an-hour contractors, Edison refuses to give the Union
the information it needs. Does Edison expect that the Union,
to preserve unit jobs, would take action which would result
in a reduction of pay and/or benefits of union members with-
out knowing all the particulars? Edison knew exactly why
the Union needed this information. And Edison knew that the
information sought was relevant. Edison had made it rel-
evant. Edison created this situation. Now, as evidenced by
Respondent’s assertions on brief that the comments of man-
agement representatives at the subcommittee meetings were
not intended to bind the entire Company to any specific posi-
tion or course of action, Respondent apparently wants to take
the position that it should be allowed to walk away from the
results of a situation it created. The situation, for obvious
reasons, is quite different than those which existed in the
Southwestern Bell Telephone Co. and General Electric Co.
cases, supra. All the information sought by the Union has
been shown to be relevant. Accordingly, I find that Respond-
ent, by not providing the requested information, has violated
the Act as alleged.
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. All employees employed by Respondent in its electrical
systems substation department; but excluding all student en-
1282 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
10 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
11 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.’’
gineers, training personnel, technical employees, clerical em-
ployees, part-time employees, temporary employees, seasonal
employees, guards, assistant foremen, foremen, and all other
supervisors as defined in the Act (the unit), constitute a unit
of employees appropriate for the purposes of collective bar-
gaining within the meaning of Section 9(b) of the Act.
4. Respondent has violated Section 8(a)(5) and (1) of the
Act by failing and refusing to furnish the Union with certain
information which is relevant to the Union’s performance of
its representative responsibilities on behalf of unit employees.
THE REMEDY
Having found that Respondent has engaged in certain un-
fair labor practices, I shall recommend that it be ordered to
cease and desist therefrom, that it furnish the Union with the
requested information specified above, and that it post an ap-
propriate notice to employees.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended10
ORDER
The Respondent, Detroit Edison Company, its officers,
agents, successors, and assigns, shall
1. Cease and desist from
(a) Failing and refusing to bargain collectively and in good
faith with Local Union No. 223, Utility Workers Union of
America, AFL–CIO by refusing to provide it with the infor-
mation it requested in the letter set forth in Appendix F to
this decision.
(b) In any like or related manner interfering with, restrain-
ing, or coercing employees in the exercise of their rights
guaranteed in Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) Promptly furnish the Union the information requested
in its letter set forth in Appendix F.
(b) Post at its facility at Detroit, Michigan, copies of the
attached notice marked ‘‘Appendix G.’’11 Copies of the no-
tice, on forms provided by the Regional Director for Region
7, after being signed by a representative of the Respondent,
shall be maintained by the Respondent for 60 consecutive
days in conspicuous places, including all places where no-
tices to employees are customarily posted. Reasonable steps
shall be taken by the Respondent to ensure that the notices
are not altered, defaced, or covered by any other material.
(c) Notify the Regional Director in writing within 20 days
from the date of this Order what steps the Respondent has
taken to comply.
APPENDIX B
THE DETROIT EDISON COMPANY
INTERDEPARTMENT CORRESPONDENCE
June 19, 1969
It is the policy of the Management to operate the Com-
pany in an efficient and economic manner. Since this applies
to work which may be given to outside contractors, I wish
to point out some of the factors to be considered.
It is usually more desirable to use our own employees than
to employ outside contractors. However, the use of outside
contractors is necessary in the following situations:
1. At times of heavy construction and maintenance re-
quirements.
2. When the necessary skills are not available among
Detroit Edison employees.
3. When Detroit Edison does not have the special equip-
ment for the work.
4. When Detroit Edison Company does not have a suffi-
cient number of qualified employees available to fin-
ish the work on time.
5. When certain specialized work, such as car washing,
window cleaning, carburetor cleaning, janitorial serv-
ices, painting, etc., where a specialized contractor can
perform the services demonstrably cheaper than can
be done by the Company with its own employees.
6. On major construction projects.
In all other situations, before a decision is made to con-
tract out work, either on a fixed-price or a time-and-material
basis, a careful analysis should be made, taking into consid-
eration:
A. The availability of present or additional Edison em-
ployees to perform the work.
B. The availability of Edison equipment.
C. The availability of contract forces, both men and
equipment.
D. The cost of performing the work with Edison people
and equipment (including the cost of reasonable over-
time) compared to the cost of outside contracting.
E. The unfavorable effects that result from working ex-
cessive overtime by our own employees or contrac-
tors’ employees.
Within the framework of the above factors, the work
should be performed by our own employees or by an outside
contractor on the basis of least cost. In each case we must
exercise prudent judgment before reaching a decision to uti-
lize outside contracting.
/s/W. G. Meese
W. G. Meese
Executive Vice President
for Production
WGM/erh
cc: Mr. L. Franklin
Mr. H. A. Wagner
1283DETROIT EDISON CO.
APPENDIX C
Second Meeting Minutes of Subcommittee on Outside
Contracting Between the Company and Local Union
No. 223, UWUA, AFL–CIO
Tuesday, June 26, 1990
Representing Electrical Systems
Substations Bargaining Unit—Mr. Breen
Representing Local Union 223—Mr. Manoogian
Representing Maintenance
Bargaining Unit—Mr. Renick
Representing Underground Lines
Bargaining Unit—Mr. Kulik
Representing Power Generation—Mr. Smolinski
Representing Stores
and Transportation—Mr. Bintinger
Representing Union Relations—Mr. Martin and Ms. Mil-
ton
M – The President of Local Union 223—Mr. Manoogian is
present today for some reason. It is our understanding that
he would 1ike to address the committee. Is that correct?
U – Yes, after the first minutes were published Mr.
Manoogian was very upset. In this regard, on page 2 of the
first meeting minutes Management states:
‘‘The Union’s request for information as an extension
of contract negotiations is different than requesting in-
formation as a Subcommittee. In this regard, during the
terms of the Agreement, there has been numerous re-
quests for information regarding outside contracting
which when supplied, the Union has not ever utilized.’’
‘‘Therefore, we need to know why the Union wants this
information and how it will be utilized.’’
This Subcommittee was established to work out problems in
the area of contractors. It appears that Management is unwill-
ing to provide the Union with contracting information espe-
cially when considering that the NLRB has required the
Company to do so.
The Union requests information which is needed to properly
represent its membership. It is not necessary for Management
to know the reasons why we request certain information re-
garding contractors. Once we receive the information, if it
substantiates Management’s claim it may not be necessary to
use the information in a complaint.
However, if it does not substantiate Management’s claim, the
information may be utilized to air a complaint. Management
cannot state that the Union does not utilize the information
which it is provided.
M – We have made a concerted effort to provide the Union
with the information which we are required to provide by the
NLR Act. There is considerable effort and manpower which
goes into segregating out this information for the Union.
U – We are not requesting information which we do not
plan to utilize. Because we request information which we be-
lieve may have merit or may be intertwined with a case does
not mean that the information will not be utilized.
M – During the first meeting of the Subcommittee, our dis-
cussion and intent was to minimize the amount of work in-
volved in providing the Union with information on contrac-
tors.
U – We have no problems with that.
M – Your thoughts are well taken and received. However,
we have been concerned about divulging specialty type infor-
mation and firm price bids.
U – Although there could be times when the Union may
need this type of information, we do not want to get into
wage wars with the contractors. Our interest is to only show
in facts and figures that it is more economical to utilize our
members rather than contractors. On numerous occasions we
have stated that our members can perform a job more effi-
ciently and economically. However, many Supervisors still
show a preference toward contractors.
In the past, Management has supplied the Local Union Presi-
dents with reports specifying the work which has been per-
formed by contractors.
M – We have no knowledge of that being done. It could
have been that certain contractor information sent to the Bar-
gaining Unit Chairmen was also forwarded to the President
of the Union.
U – Previously on a quarterly basis, Management has pro-
vided the Union with information on contractors such as the
type of work which has been performed and the dollar costs.
Nevertheless, this Subcommittee has not been established for
determining how information will be furnished to the Union.
Additionally, this Subcommittee should not be looking for
new ways of requesting and disseminating information. In
System Maintenance at the end of each month following a
quarter, the Union is provided notification of the work the
contractors are to perform. This is in accordance with Article
VIII, Section 5 of the Agreement.
M – The Senior Vice President of Power Supply—Mr.
Agosti is very concerned about the contractor information
being supplied to the Union.
U – The General Director of Union Relations—Mr. Mulrenin
needs to advise Mr. Agosti that the contractor information
being supplied to System Maintenance was a result of a
NLRB charge. It should be further stated that contractor in-
formation which we are supplied does not leave our office.
M – Although Power Generation can produce a report listing
all the contractors, it would only detail the blanket informa-
tion on the dollars spent per week.
Providing the Union with information regarding contractor
bids does not address the Union’s concerns about its mem-
bers performing work instead of contractors. Receiving quar-
terly reports is after the fact. What does this accomplish?
U – It is true that this would be after the fact information
but it could be useful in making the Union’s point that it is
more economical to utilize our members rather than contrac-
tors. It should be noted that in the Maintenance Division,
there are pre-outage meetings prior to the contractors work-
ing on the property.
M – Once you are provided this information, what would
you do with it?
1284 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
U – Who knows, maybe we would utilize it in our archives,
or to show that historically it is more economical to utilize
our members.
M – In Stores and Transportation, Management compares the
wage rates of Edison employees with that of the contractors.
U – It is understood that there will be peaks and valleys.
However, under Article VIII, Sections 4 and 5 of the Agree-
ment, Management must give prior notification before uti-
lizing contractors.
M – Only Article VIII, Section 5 of the Agreement addresses
outside contractors. That notwithstanding, Management
would be receptive to a Bargaining Unit Chairman showing
that it would be cheaper for his members to perform work
than a contractor.
U – How could we show that our members can do a job
cheaper if the parties do not sit down and discuss allocations
of work prior to the work being performed?
We must reaffirm that by no stretch of the imagination are
we arguing contractor issues but only a better way of uti-
lizing Edison employees. The Union is not arguing about
true peaks and specialty areas. We are only talking about the
day to day workload. It is the Union’s belief that the quar-
terly statements will show that Management has a higher re-
liance on contractors than its own employes. We believe that
Management is increasingly utilizing contractors.
M – By supplying the Union with contractor information,
how would you show us that it is cheaper to utilize Edison
employees?
U – By the number of contractors, the jobs, and the costs.
However, we would need the loaded values which Manage-
ment utilizes. Furthermore, the Union is concerned about the
Supervisors who are making the decisions to utilize contrac-
tors. There needs to be discussions and informational meet-
ings with these Supervisors.
M – Are you asking to be a part of the decision making
process?
U – No, but we would like to give you input.
M – Are you stating that the Union would like the oppor-
tunity to show Management that its members are more com-
petitive?
U – Yes, there are many ways which we could show that
it would be more economical to utilize our members. One
way would be to show that our benefits remain constant
whether or not we work overtime.
M – Benefits are fine but do not contain the costs associated
with tools, supervision, and etc. We are trying to identify the
true costs.
U – When will this be done?
M – We do not know but believe that the cost figures are
decreasing. Right now it is hard to get a handle on the costs
because of the spread of all these costs. No one has decided
which costs to allocate for items such as facilities, taxes, and
etc.
U – It is our understanding that the dollar costs per person
ranges from $28, $33, and $38 per hour. We wonder why
the dollar costs are more in one area than in another?
M – In Central Motor Transportation, Management has fig-
ured that the dollar cost for a Mechanic is $35 per hour. This
is a loaded rate which includes the basic wage rates, fringes,
and departmental overhead.
U – Is this loaded rate built into the contractors’ rates?
M – Yes, this would be the same as including loaded rates
in the cost of operating a business or a Union hall. Although
we could, we do not include such items as heating and light-
ing.
U – We feel that Management has a problem in properly ad-
ministering jobs. In this regard, many times our crews are
sent out to jobs without having available the proper tools and
materials necessary for the jobs. As a matter of fact, Man-
agement has been using EMJs (Grade T-16) to deliver tools
to the contractors.
M – Are you stating that you want to be on equal footing
with the contractors?
U – Yes because we have found that many times the Super-
visors make equipment and materials more accessible to the
contractors. By not having the required materials and equip-
ment at the onset of a job, this causes delays and unneces-
sarily lengthens the job. As a result, our members look like
a bunch of smucks.
We have suggested ways to more economically utilize our
members. For example, when the Construction Field Bar-
gaining Unit merged with Electrical System Substations, the
Union brought to Management’s attention that the Carpenters
were being stepped-up to Foremen. As a result of our discus-
sions with Management, the Carpenters are now being
stepped-up to Leaders instead of Foremen. This has been
very positive and beneficial to all. We also proposed that the
Handymen (Grade T-7) should be stepped-up to Grade T-9
for operating the backhoe. This would be a cost of about 63
per hour thereby eliminating the need to utilize the contractor
at a cost of $450 per day. At one time, the Equipment Oper-
ator classification (Grade T-8) performed this job which
Management has not filled. However, Management has been
reluctant to agree to this Union proposal.
Like Management, we have a vested interest in making this
Company more efficient. The Union has a real concern about
Management allowing contractors to perform shoddy work.
In Underground Lines, a committee was formed to discuss
the Union’s concern regarding the shoddy work being per-
formed by contractors. Accordingly, Management agreed to
assign work orders on jobs which our members had to go
back and correct the work done by contractors. However,
nothing has been resolved.
At Belle River Power Plant, Management believed that it
would be more economical to utilize the contractor—Metro
Boiler instead of Edison employees. However, the Company
ended up paying for Metro Boiler workers to take their boiler
certification.
What we are saying is that there needs to be better commu-
nication prior to a job being given to a contractor.
M – In Central Motor Transportation for our Mechanics, we
bid Company-wide on jobs. In our bids, we show our loaded
rate versus an outside contractor’s loaded rate. Since our
rates are very competitive, we almost always get the job.
1285DETROIT EDISON CO.
U – We are referring to the other organizations which do not
properly evaluate the costs in utilizing Edison employees
versus contractors.
M – In Power Generation, at Monroe Power Plant there has
been a $3.6 million cut in the budget. Therefore, we are
looking to have work performed at the best price possible.
In terms of the loaded rates, no one has established clear cut
values.
U – Is there anyone in the Company who could sit down and
talk about this with the Union?
M – Well in talking with the accountants, you would become
just as confused as we are with them. Nonetheless, on July
6, 1990 we will reconvene the negotiating committee from
the 1989 contract negotiations. We are going to review the
costs of the different items which were negotiated with the
Union, the good ones and bad ones. Management is inter-
ested in determining if the costs are being charged to the
proper areas and whether the charges are correct.
U – Are you doing all of this for Fermi 2?
M – It is recognized that next year there will be a very large
and expensive outage at Fermi 2. That notwithstanding, the
Company is moving toward being more cost efficient. The
Management Control System will be placing us in a better
position economically by forcing us to be more cost efficient.
On June 28 and 29, 1990, the CEO and President—Mr.
Lobbia will be informing top Management employees of the
plan and where this Company is heading in being more cost
effective and efficient. Management is tightening its belt.
U – We want our members to be utilized in the best possible
manner. However, Management utilizes contractors without
evaluating the costs in utilizing its own employees. Tight-
ening the belt will be the key for the Company.
M – It should be noted that the Monroe Power Plant, the
hours of overtime worked by the Maintenance group has in-
creased. At Fermi 2, employees have been forced to work
overtime. Overtime is only one factor in all of these costs.
To digress for a moment, are you stating that you feel the
Management in Energy Marketing and Distribution is shoot-
ing itself in the foot by preventing the bargaining unit from
being cost effective?
U – We feel that Management could better utilize its em-
ployees.
M – We believe that Management’s goals should be to uti-
lize employees to the fullest.
U – We agree.
M – We should not utilize contractors if it is more economi-
cal and efficient to utilize our own employees.
U – Our members are concerned that their work is being as-
signed away to the contractors. Nevertheless, can anyone ex-
plain the loaded values?
M – Mr. Defauw does the loaded values for Stores and
Transportation while Mr. Adler does the loaded values for
Power Generation. We need to find out what are the loaded
values.
U – We need to know the components of the loaded values.
M – Management will do some work on these values and
discuss the Union’s request for information.
U – If we can discuss these jobs in advance, we would also
like to have the opportunity to expound on the jobs. Addi-
tionally, we would like to see workload projections for peri-
ods of at least one year.
M – We are interested in making this Company a success
just as we believe you are. Things are changing in this Com-
pany and Management is having a hard time defining where
everything is at.
In Central Motor Transportation, Management has a zero
dollar budget. Therefore, we bid Company-wide in order to
bring in dollars.
Management’s ranks are continually shrinking in the Com-
pany’s effort to get leaner and leaner. All departments are
being set up like little companies and will have to compete
for work.
U – Our members have the cheapest hands with the most
skills.
M – We have listened to the Union. We will discuss your
concerns at the July 6, 1990 meeting.
U – Can you have someone talk to us about these loaded
values within the next three to four weeks?
M – Within three to four weeks, we will have someone ex-
plain these costs to you as well as their components.
We believe that this Subcommittee is making some progress.
We will take a look at providing the Union with some infor-
mation. However, we are unsure as to the power of this Sub-
committee.
U – We want to find out where we stand and stack up to
the contractors. The Union wants to be as competitive as
possible. This especially holds true for all bargaining units
where contractors are being utilized.
M – Mr. Lobbia has stated that the Company will be doing
business with only a few good contractors. This is due to the
fact that we have been burned by a number of contractors.
As a result, the Purchasing Department has established a
Contractor Review Board.
/s/Angela L. Milton
Angela L. Milton
Union Relations Coordinator
APPENDIX D
Third Meeting Minutes of Subcommittee on Outside
Contracting Between The Company and Local Union
No. 223, UWUA, AFL–CIO
Thursday, September 13, 1990
Representing Electrical Systems Substations Bargaining
Unit—Mr. Breen
Representing Maintenance Bargaining Unit—Mr. Renick
Representing Underground Lines Bargaining Unit–Mr. Kulik
Representing Power Generation—Mr. Smolinski
Representing Union Relations—Mr. Martin and Ms. Milton
1286 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
M – On July 6, 1990, a meeting was held at which Manage-
ment reviewed the changes to the 1989 Agreement and the
impact of these changes on the Company, for example, rock-
ing chair money. There was discussion regarding this Sub-
committee and afterwards, a group was formed which dis-
cussed the issue of contractors. Namely, the kind of informa-
tion that should be provided to the Union either corporately
or by bargaining unit. Everyone left the meeting feeling sat-
isfied with the information which Management has been pro-
viding the Union on outside contractors. However, there was
still concern that a lot of information provided to the Union
is never utilized.
In Underground Lines, Management provides the dollars paid
to the contractors on a quarterly basis.
U – The Underground Lines Bargaining Unit does not re-
ceive this information anymore.
M – Somewhere you are receiving this information.
U – You will find that there is a difference between what
we are receiving and what you are being told that we are re-
ceiving. We have not received any information on contrac-
tors within the last two years. At one time, Mr. Ellero in Op-
erations Resources provided us with this information.
M – It is still our understanding that your Management has
been supplying the Underground Lines Bargaining Unit with
the dollars paid to the contractors on a quarterly basis. Nev-
ertheless, in Power Supply, Management supplies the Union
with information on contractors by each job, who, where,
when, and what, but dollar summary reports are not pro-
vided.
In Buildings & Properties, Management supplies the Union
with the who, where, when, and what for dollar amounts
greater than $1,000.
U – In Power Generation Maintenance we are living within
the Step 3 Answer to Grievance No. MD-699 and have no
problems with the information provided to us. However, we
are finding in Electrical Systems Substations that the infor-
mation we are provided is not a true picture of the costs of
the contracts. In this regard, we believe there exists ample
room for the parties to get the work done much cheaper by
utilizing our members especially when considering man
hours, location, and et cetera. We truly do not feel that we
are being provided the true costs. The Local is concerned
that Management has not honored a request for information
on contractors as requested in Grievance Nos. MT-574 and
MT-577. We do not want to get into the habit of requesting
contractor information through the grievance procedure.
M – We will respond to your request for this information in
writing.
In regards to the estimate of the overhead costs associated
with Maintenance T-grade (GMJs) dated September 9, 1990,
Mr. Smolinski will go back and discuss these figures in de-
tail with Mr. Jenkins.
U – But let’s briefly discuss these figures in order that you
will know our comments, questions, and concerns.
According to your data, the costs during the first 40 hour
week for a Maintenance T-grade is $44.56 per hour while we
have figures showing the cost for a contract Boilermaker to
be at $51.87 per hour. Additionally, our cost figure for a
Pipefitter is $38.96 per hour, a Millwright is $41.95 per hour,
and a Boilermaker is $37.19 per hour. In regards to your
Edison manpower totals, we believe that the figures do not
include such items as Contract Coordinators, Foremen, and
full-time Edison Supervisors overseeing contractors’ work.
M – The Chairman of the Board, President, and Chief Exec-
utive Officer of the Detroit Edison Company—Mr. Lobbia
wanted us to be as economically efficient as possible. Mr.
Renick asked us for an estimate of the costs per hour for the
GMJs. That is what we are providing here.
U – Management should be aware that in many instances, we
have to go back and correct the work done by contractors.
M – This committee cannot resolve this type of problem be-
cause it must be addressed by the particular department.
There are also times when work done by represented em-
ployees must also be corrected. There will always be a small
percentage of re-work.
U – At Tuscola Substation, we had to redo the work done
by contractors. This caused a problem because the Electrical
Maintenance Journeymen were needed to do work elsewhere.
M – Mr. Smolinski will discuss these figures in detail with
Mr. Jenkins. We want to know where Management stands.
U – Can the Union get in touch with Mr. Jenkins also?
M – We do not know what benefit it would serve. Once Mr.
Smolinski speaks with Mr. Jenkins, he will talk with the
Union.
We have not talked about the issue of productivity. Many
people in Management believe that contractors are frequently
more productive than Edison employees.
U – You must realize that in such areas as Underground
Lines, the General Foremen do not want any lost time to be
reported. That could be the reason why some people prefer
to use contractors.
M – We are glad that you shared this with us. This is some-
thing that the MIT process (Maintenance Improvement
Team) has been studying. For the average job, it takes 22%
of the time for actual execution of the job.
U – In Power Generation, we have preventive maintenance
fifty-two weeks per year. During an outage, a contractor per-
forms a certain job. If the job is performed early, the con-
tractor is compensate for doing so. It should be further noted
that the contractors bid a firm price bid. However, Edison
employees are dependent upon supervision to order the mate-
rials and many times we have to wait for the materials to
be delivered before starting a job.
In regards to the estimate of the overhead costs associated
with Maintenance T-grades, we have nothing to do with the
costs which are beyond our control, namely, such as the
costs for clubs and recreation, telephone expense, super-
vision, and et cetera.
M – These items will never be under the Union’s control.
That notwithstanding, they are still costs.
Although the figures are not 100% correct, we know that
they are in the ballpark.
U – We still maintain that it is cheaper and more economical
to utilize Edison employees.
1287DETROIT EDISON CO.
In Power Generation, there is a unique situation in that all
of our jobs are performed under the same roof. In this re-
gard, if we cannot perform a particular job, then we can go
and perform another job. Additionally, the majority of our
supplies and equipment are under the same roof.
In Underground Lines, Management has utilized Journeymen
from the Motor City Electric Company at a cost of $34.31
per hour along with a Foreman, Contract Coordinator, Serv-
ice Planner, and Stores personnel. However, these associated
costs for Edison personnel are not included in the contrac-
tor’s cost for labor.
M – Probably not, someone would have to study your area.
That is a good point which is well taken.
U – As a result, in Underground Lines we add on another
2% to the contractor’s cost.
There is another problem in that occasionally when our
members go to a job, the materials and equipment are not
readily available which are necessary for performing the job.
This adds to our costs instead of the contractors’ costs. We
find that materials and equipment are readily available to the
contractors.
M – These are the items that the Company is trying to im-
prove as well as productivity.
U – Across the board, we feel that the day-to-day costs to
utilize contractors do not adequately reflect the true costs.
M – What we have here is a parody. In this regard, when
a contractor is utilized, they have able bodied people, where-
as we carry a number of restricted duty or incapacitated em-
ployees.
U – We have also found problems with productivity. In this
regard, the contractors do not pay the same attention to detail
as our members. When we have to go back and perform
work which has been done by a contractor, this doubles the
cost for a job. Furthermore, the Company wastes money on
projects which are never done. If productivity is the issue,
we know that we have the most skilled people.
M – We have listened to your concerns and have been open
to your ideas. For example, Mr. Renick has suggested shift
work by seniority.
In the end, if the employees are happy performing a job, then
they will be more productive.
U – There are people in supervision who are distracting our
members from performing their jobs in a timely manner, es-
pecially in the Electrical Systems Substations and Under-
ground Lines Bargaining Units.
M – We have selection tests for different skilled trade jobs.
It is our belief that the caliber of people we are getting into
these jobs are better with these tests which, in turn, helps
productivity. However, anytime we implement a validated
test, the Union files a grievance.
U – Our members can bid on any job although the Company
states that because of their failure on a test they cannot per-
form the job. As a Union, we have a responsibility to rep-
resent our members in all regards.
M – We understand the Union’s concerns in the area of costs
and will get back to you. We believe that we have enough
information now. In keeping with Mr. Lobbia, we are not
here just to cut costs but to be innovative.
/s/ Angela L. Milton
Angela L. Milton
Union Relations Coordinator
APPENDIX E
Fourth Meeting Minutes of Subcommittee on Outside
Contracting Between The Company and Local Union
No. 223, UWUA, AFL–CIO
Tuesday, March 5, 1991
Representing the Union—Messrs. Breen, Kulik, and
Westaway
Representing Management—Messrs. Bintinger, Martin,
Smolinski, and Ms. Milton
M – We do not have a lot to discuss today but would like
to listen to the Union’s concerns regarding outside contrac-
tors. We will discuss how we view what is going on in the
Company as well as how it affects us.
On September 13, 1990, the previous Chairman of the Main-
tenance Bargaining Unit Chairman—Mr. Renick was given
the estimate of the overhead costs associated with Mainte-
nance T-Grades. The cost during the first 40 hour week for
a Maintenance T-Grade is approximately $44.56 per hour.
Mr. Renick asked about the overhead costs charged to the
contractors. Mr. Smolinski stated that he would go back and
discuss these figures in detail with Mr. Jenkins. However,
since that point in time there has not been much movement
in this regard. The reason being is that the overhead costs
are continuously shrinking. Everyone in the Company is
under budget constraints and we do not know where the lev-
eling off will be in regards to overhead costs. The right-
sizing in the Company is happening at a fast pace which is
affecting all jobs in the Company. It is an ever changing sit-
uation. For example, at Monroe Power Plant the budget has
been cut five million dollars for this year. Additionally, in
1990, there were 711 employees, now there is only 680 em-
ployees. It should be noted that the Voluntary Separation
Bonus which has been offered to employees will cease on
April 12, 1991.
U – We feel that you are talking apples and oranges. In this
regard, the costs to utilize contractors has increased the
O&M budgets.
M – There has not been an increase in Power Generation.
We are doing the work for less dollars and with less contrac-
tors.
U – In System Maintenance we have discovered that there
is an increase in the hours billed by the contractors; their
work standards are less than as for our members; and there
is an overstaffing on projects. For example, the Electrical
Maintenance Journeymen were performing the asbestos seal-
ing. However, Management chose to utilize a contractor to
perform this function at a cost of $54 per hour. Management
is paying too much money to the contractors to perform
work which can and should be performed by our members
an at lesser costs.
1288 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
There are many places where Management could utilize our
members for significantly less dollars than the contractors.
Management is not making a coherent effort to assess the
costs involved in utilizing our members versus the contrac-
tors. It appears that Management is not aware of what it is
doing.
M – Management is aware of what it is doing in Power Gen-
eration. In this regard, we have all the cost comparisons that
we need.
U – We are also seeing more and more violations of Article
VIII, Section 4 of the Agreement.
M – As we look around the Company for ways to become
more efficient, we are also looking at ways to more effi-
ciently utilize all manpower. Management is looking to as-
sure that the right people are performing the proper work.
There will be an increase in discussions regarding Article
VIII, Section 4 of the Agreement. Management is looking to
work sharing for improving the efficiency in completing
jobs.
U –The problem as we view it is that Management never
comes to the Union with their plans until the 12th hour.
Management should sit down and discuss work allocations
with the Union. We believe that the workers should have
more input in this regard.
As a matter of fact, in System Maintenance we tried to meet
with the Management on four different occasions. However,
Management has not been interested in what we have to say.
We have six projects with a cost savings of at least $100,000
to the Company. However, we can never get past the open-
ing stages with the Management of System Maintenance.
M – We should note that as with the nonrepresented popu-
lation, there will be a decrease in the T-Grade population.
U – During the September 13, 1990 meeting of this Sub-
committee, Mr. Smolinski stated he would go back and dis-
cuss with Mr. Jenkins the overhead figures in detail.
M – That is what we were saying earlier in regards the over-
head costs. The overhead is continuously shrinking and we
believe that it is to your advantage.
U – We are looking for the overhead costs in order to make
true comparisons. There are some hidden costs which are
missing in your overhead costs. Therefore, we are looking at
inflated costs in regards to T-Grade labor. For our labor costs
you throw in everything but the kitchen sink.
M – If you would take off your Union shoes and put on the
Supervisor’s or Foreman’s shoes for a minute in regards to
getting the job done, you would realize that we have budget
constraints.
Would you look at costs?
U – Yes, and we hope that you would look at costs.
M – What do you think motivates supervisors to utilize con-
tractors?
U – The Supervisors probably utilize outside contractors be-
cause they do not have the required equipment and the avail-
able manpower. However, the Supervisors do not have the
real costs involved in utilizing outside contractors.
M – We can go back and revisit Mr. Jenkins in regards to
the overhead costs associated with the Maintenance T-Grades
for last year as well as for this year to compare any dif-
ferences between the two.
U – As previously stated, we need the hidden costs involved
in utilizing contractors. One of the hidden costs would be
Edison supervision monitoring the contractors’ work. If Mr.
Jenkins does an estimate of the overhead costs associated
with the Maintenance T-Grades in the same manner which
he did last year, the numbers will be the same.
M – You must look at each job individually.
You are saying that it costs more to utilize contractors than
your members. Why do you think so?
U – We have examples of where Management could have
utilized our members to perform work at lesser costs than
charged by the contractors.
M – Daily we hear about the lack of employe productivity
from Supervisors throughout the Company. Many times it is
felt by supervision that is more productive and cost efficient
to utilize contractors to perform certain work, even if the
hourly wage rates may be higher.
U – Can you prove that?
M – We must reiterate that you must look at the jobs on an
individual basis. For a long time throughout the Company,
Departments have charged whatever they wanted but may
not have needed. Now there is a right-sizing in all ranks
throughout the Company.
U – If we could show in actual costs that our members can
perform jobs more quickly and at lesser costs would you stop
utilizing contractors?
M – What we are saying is that our employees will continue
to perform the base line work. However, there will be times
when we must utilize the contractors to perform other work.
U – We recognize that the peak work is sometimes per-
formed by contractors. However, the base line and valley
work should be performed by our members.
M – First you must establish a base line. Outside of that base
line, we utilize contractors to come in and perform work and
then they are gone. However, the base line floats thereby
making it difficult to say when there are true peaks and val-
leys.
U – Management continues to utilize contractors to perform
base line work. For example, in Underground Lines, contrac-
tors are performing the Conduit Workers’ base line work. It
appears that Management does not want to layoff the con-
tractors because it feels that there is difficulty in getting them
back. As a result, our guys are stuck between a rock and a
hard place.
M – That notwithstanding, during 1991 we have a decrease
in revenues. How do you expect the Company to address this
decrease in revenues?
U – By not paying the exorbitant rates which you are paying
the contractors. As stated earlier, in System Maintenance the
Management is utilizing the contractors to perform asbestos
sealing at a cost of $54 per hour. It would be more cost effi-
cient to utilize the Electrical Maintenance Journeymen.
M – Are you saying that Management is utilizing contractors
to perform work which falls within the base line area?
1289DETROIT EDISON CO.
U – Yes.
M – So you want our base line costs as well as the contrac-
tors’ base line costs.
U – Yes. If you realistically look at the contractors’ loaded
wages and include the hidden costs, you will find that we
are more economical.
M – We have to look at the productivity as well as the dol-
lars.
U – That is not to say there is a problem of productivity with
all of our members.
M – We feel that fixed bids will be the equalizer because
of the changing times in the Company. As a matter of fact,
we are preplanning jobs.
U – You do not hold us to the same standards by which you
hold the contractors. Furthermore, supervision does not give
the clear parameters of a job to our members. We do not see
Management coming to the table and sitting down with the
Union. If Management only would, we could talk about the
overlapping work between the various bargaining units. As
long as we can have input, there can be discussions about
trading work between the bargaining units.
M – Management is looking for the best and least expensive
way to perform the work. As a matter of fact at Monroe
Power Plant, Management no longer utilizes outside contrac-
tors to perform carpentry work. Our Carpenters along with
Handymen are performing this work.
U – We like the idea of getting the Union more involved in
these jobs.
M – We think you are looking in the right direction and are
on the right track.
U – All we want to do is to work together for the betterment
of the Company. If it is in the Company’s best interest to
trade work between the bargaining units, then Management
needs to talk about this with the Union. However, Manage-
ment remains unwilling to talk to us.
M – Throughout the Company, we are asking employees to
be more productive. Additionally, we are looking at ways to
motivate everyone.
U – We need an honest to goodness accounting for the dol-
lars spent.
M – Once again, we must look at jobs on an individual
basis. You cannot really draw a distinguisher. In regards to
the contractors’ rates, it is true that we provide the facility,
heat, electricity, and et cetera without charging them.
U – Could you look at charging the contractors for all of
these hidden costs?
M – Yes, we could look at these hidden costs. You are say-
ing that you want the comparison to be like an apple to
apple?
U – Yes, we think when Management provides the true ac-
counting figures, the figures will show that it is more eco-
nomical to utilize our members versus the contractors.
M – We recognize that there are some hidden costs which
are not charged to the contractors but are charged in the
costs to utilize your members.
How can we motivate your members?
U – If we get the same type of support which is given to
the contractors, you will not have to motivate our members.
M – We are willing to look at the involved hidden costs al-
though they are probably far less than 10% of the total costs.
Additionally, we are willing to look at (on an hourly basis)
the costs for your members and the contractors to perform
the same job.
Mr. Bintinger will talk to Energy Marketing Distribution in
regards to utilizing the Union in the planning stages. Power
Generation has been utilizing the Union in the planning
stages.
U – It cannot hurt if you get the people involved.
M – The people must be involved in a job especially when
considering safety.
U – We should all be sharing and on-line together. However,
we do not know how to get to that point. Things are hap-
pening very fast in the Company.
M – Why don’t you come up with some proposals?
Do you have anything else which you would like to discuss?
U – Only that our members are ready to be involved in the
process.
M – You made a good point in that things are happening
quickly in the Company. We are trying to keep up with these
fast changes. Every area of the Company is striving to be
more efficient.
Would you be interested in broad feedback from Supervisors
on why they prefer to utilize contractors instead of your
members?
U – If you come up with your list and we come up with
our list, the results of both lists probably would be within
95%. We believe the Supervisors feel that it is easier to uti-
lize contractors. Since you are paying our members to work,
you might as well utilize them.
Would you explain to us the blanket contracts and how they
are utilized in Power Generation?
M – Purchasing has been pushing for three year blanket con-
tracts. In a blanket contract there is the pricing, terms, and
conditions. There is a total amount for each blanket contract.
As the contractors perform work, suborders are written on
the blanket order. When the work goes over the blanket
order amount, Management must request supplemental dol-
lars. Normally the contractor does not know the blanket con-
tract amount.
U – We are convinced that we can beat the prices charged
by the contractors. However, we must be given the real costs
instead of conflicting information. The total involvement of
everyone is necessary in order for us all to perform good
work.
M – Do you feel you are working at full productivity?
1290 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
U – No. However, with better planning we find that our
members would be more productive.
/s/Angela L. Milton
Angela L. Milton
Union Relations Coordinator
ALM/lgd
APPENDIX F
LOCAL NO. 223
UTILITY WORKERS UNION OF AMERICA, AFL–
CIO
SUBSTATION DIVISION
December 13, 1990
Mr. H. Leon Ellis
Superintendent
System Maintenance & Modification
A-300
Warren Service Center
Re: SM&M Contractor usage and costs.
Recently System Maintenance and Modification has begun to
stress the competitiveness of Substation Division members.
Management has stated that even though the cost-per-hour
labor expense of Edison Electrical Maintenance Journeymen
is less than outside contractors, management still intends to
contract some bargaining unit work. Field supervisors have
told Edison personnel that they are now going to have to
compete with outside contractors.
Outside contractors, to my knowledge (1968 to present),
have never performed maintenance work on high-voltage,
high current, electrical distribution equipment in substations
or power plants. Management has stated on a number of oc-
casions that the wage cost per hour for contractors is about
30% higher than Edison workers. Maintenance of electrical
distribution equipment has an enormous variation of oper-
ations essential to ensure proper inspection and repair. Tasks
performed from one project to another may vary making cost
analysis extremely difficult. Since cost analysis is the
lynchpin of the Union’s ability to compete, the needs of the
Union for information have been increased and broadened
since our settlement agreement of the last NLRB complaint
issued regarding information on System Maintenance con-
tracting costs.
In order for the Union to discharge it’s responsibility to rep-
resent its membership, please provide the following informa-
tion:
1. Any in-house cost studies of SM&M operations;
including any SM&M/contractor cost analysis compari-
sons.
2. Overhead costs for SM&M including supervision,
clerical services, rent, facilities costs, equipment costs
and maintenance costs allocated to SM&M operations.
3. Total training costs for all SM&M employees, in-
cluding all items in #2 of this request.
4. Total costs for training outside contractors, includ-
ing all items in #2 of this request.
5. Annual costs and amounts of supplies, services,
maintenance and equipment.
6. Capital costs: equipment, facilities and other long
term investments required to do the work by SM&M
and any and all costs of providing outside contractors
with any items necessary for the contractor to perform
work for SM&M.
7. Incidental costs: equipment, facilities and other in-
vestments or expenditures incurred by SM&M, includ-
ing all in-house labor hours and equipment usage ex-
penditures used in supplying outside contractors work-
ing for SM&M.
8. Labor costs: the number of employees in SM&M;
titles and classifications; wage and fringe benefits, pay
grade by pay grade.
9. Contractor contract administration costs: contract
preparation, negotiation, and activity monitoring, in-
cluding all travel and other expenses involved for the
year 1990.
10. Any contracting cost studies done by Detroit Edi-
son for SM&M or by SM&M.
11. Total contracting costs for SM&M for the year
1990.
12. Projected contracting costs of Substation Division
Bargaining Unit work for the year 1991 by any of the
Detroit Edison groups served by the Bargaining Unit.
13. Projected contract administration costs of any
Substation Division Bargaining Unit work for the year
1991 by Detroit Edison.
14. Copies of all 1990 contractor evaluations.
15. Specifications and performance requirements
given to outside contractors regarding Bargaining Unit
work; including any engineering studies or other associ-
ated studies.
16. Disclosure of which corporate groups are paying
fo engineering or other necessary studies for SM&M
projects. Are these studies included in SM&M over-
head? Do these studies impact on the Substation Divi-
sion Bargaining Unit cost-per-hour analysis? Do outside
contractors perform any of these studies and if so who
pays for the studies?
17. Copies of any and all pertinent documents which
will disclose the costs to SM&M or the Detroit Edison
Company of the individual contracts to be done in 1991
or done in 1990, such as purchase agreements, equip-
ment requisitions, copies of the contract . . . etc.
18. Costs of repairs and modifications that were nec-
essary subsequent to completion of work by contractors
and paid for by Detroit Edison; including which occu-
pational groups were used for this follow-up work; the
work order number used, the materials and equipment
used; and the total man hours consumed, including trav-
el time, in order to complete the repair or modification.
19. The total price of the contract as accepted by
SM&M; the actual contract cost paid by SM&M at
completion of work or the difference between the price
bid accepted by SM&M and the total amount of money
paid to the contractor throughout the term of the con-
tract to bring the Work to completion.
1291DETROIT EDISON CO.
The Union will accept the requested information in any con-
venient form that will serve the needs of the Union. We are
aware that some alterations might be necessary where this re-
quest is concerned. It is the concern of the Union to provide
the most cost effective in-house work force possible, com-
mensurate with our obligation to maintain a good standard of
living for our membership. Without the requested informa-
tion we cannot discharge our responsibilities under the col-
lective bargaining agreement.
This request is not all inclusive.
Yours Truly
/s/Hal Nixon
Hal Nixon
Vice-Chairman
Substation Division
Local 223, UWUA, AFL–CIO
cc: G. Manoogian
Union Relations
File
APPENDIX G
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 vio-
lated the National Labor Relations Act and has ordered us
to post and abide by this notice.
WE WILL NOT refuse to bargain collectively with Local
Union No. 223, Utility Workers Union of America, AFL–
CIO as the exclusive representative of our employees in the
appropriate unit, by failing and refusing, upon request, to
timely furnish the information Local Union No. 223, Utility
Workers Union of America, AFL–CIO requested in its De-
cember 13, 1990 letter.
WE WILL NOT in any like or related manner interfere with,
restrain, or coerce our employees in the exercise of their
rights guaranteed by Section 7 of the Act.
WE WILL, promptly furnish Local Union No. 223, Utility
Workers Union of America, AFL–CIO, on request, the pre-
viously requested information.
DETROIT EDISON COMPANY