Gadsden Tool, Inc.

National Labor Relations Board - Board Decisions

Nov 30, 1998

327 N.L.R.B. 164 (N.L.R.B. 1998)

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 164
Gadsden Tool, Inc. and Retail, Wholesale and De-
partment Store Union, AFL–CIO. Case 10–CA–
30005–2
November 30, 1998
DECISION AND ORDER
BY MEMBERS FOX, LIEBMAN, AND HURTGEN
On June 24, 1998, Administrative Law Judge Pargen
Robertson issued the attached decision. The Respondent
filed exceptions and a supporting brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and brief and has decided to
affirm the judge’s rulings, findings,1 and conclusions and
to adopt the recommended Order as modified and set
forth in full below.
1. Contrary to the dissent, we find that it is neither
“analytically difficult” nor “counterintuitive” to find that
the Respondent engaged in bad-faith surface bargaining
even though the parties reached a complete collective-
bargaining agreement on February 18, 1997. As ex-
plained by the judge, background evidence of statements
made prior to the Union’s certification as exclusive bar-
gaining representative of the Respondent’s employees
strongly indicates that the Respondent entered negotia-
tions with no intention of reaching agreement. Neverthe-
less, the credited evidence shows that on February 18,
1997, to the Respondent’s surprise, the Union abandoned
its position on several issues and accepted a comprehen-
sive bargaining proposal that, according to the Respon-
dent’s attorney, the Respondent was itself never fully
willing to approve. While the Respondent may have
made the proposal with the mistaken expectation that the
Union would never accept it, the Union had every right
to treat the proposal as a valid offer. That is what the
Union did, and at the point that the Union accepted the
offer an agreement was made. The Respondent’s refusal
to sign that agreement violated Section 8(a)(5) of the
Act.
Admittedly, if the Respondent had met its statutory ob-
ligation and signed the agreement reached on February
18, 1997, it would have had no further obligation to bar-
gain about issues specifically covered by the agreement.
That is not what happened. Instead, the Respondent
made manifest its intent not only to refuse to sign the
February 18 agreement but also not to reach agreement
on any terms. In this regard, the Respondent’s attorney
told the Union’s negotiator at the end of the February 18
bargaining session that “[y]ou realize that what you guys
have done is shut this company down, because Mr. Hill
is not going to sign a contract.” The Respondent’s attor-
ney faxed to the Union a contract proposal, 10 days’
later, that substantially altered the Respondent’s prior
wage proposal by establishing “absolute, uncontradict-
able management discretion” to determine wages.

1 The Respondent has excepted to some of the judge’s credibility
findings. The Board’s established policy is not to overrule an adminis-
trative law judge’s credibility resolutions unless the clear preponder-
ance of all the relevant evidence convinces us that they are incorrect.
Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362
(3d Cir. 1951). We have carefully examined the record and find no
basis for reversing the findings.
Bargaining with a bad faith intent not to reach an
agreement of any kind is as clearly violative of Section
8(a)(5) as a refusal to sign an agreement. The Respon-
dent’s course of conduct on and after February 18, 1997,
constituted bad-faith surface bargaining. Contrary to the
dissent, we find counterintuitive the notion that the
unlawful act of refusing to sign a specific bargaining
agreement insulates the Respondent from Board sanction
for its subsequent unlawful attempt to avoid reaching any
agreement. To remedy only the unlawful failure to sign
would leave unremedied the Respondent’s overall bad
faith that infected the parties’ bargaining. A violation
must be separately found and remedied to discourage the
repetition of such unlawful conduct in future contract
negotiations.
2. The judge recommended that the Respondent be re-
quired to execute a contract that will extend for a period
of 2 years and 9 months from the date of execution, con-
sistent with the duration agreed to by the parties. We
disagree. The record shows that the parties agreed at
their February 18, 1997 negotiating session to a complete
contract, giving the Respondent the right to define its
term. The Respondent later supplied a termination date
of November 24, 1999. The Board has no remedial au-
thority to change the substantive terms of the parties’
agreement by altering its effective dates. H. K. Porter
Co. v. NLRB, 397 U.S. 99 (1970). The recommended
remedy will be modified to provide that the contract will
run, not from the date of execution, but from the date of
agreement on February 18, 1997, to the termination date
of November 24, 1999.
We further note that the judge failed to provide any
make-whole relief for the Respondent’s failure to execute
and implement the contract. Accordingly, we shall order
the Respondent to execute the collective-bargaining
agreement reached on February 18, 1997, to give retroac-
tive effect to its terms and conditions of employment to
February 18, 1997, and to make unit employees whole
for any losses they may have suffered as a result of the
Respondent’s unlawful failure to execute the agreement.
Backpay shall be computed in accord with Ogle Protec-
tion Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502
(6th Cir. 1971); and Kraft Plumbing & Heating, 252
NLRB 891 (1980), enfd. mem. 661 F.2d 940 (9th Cir.
1981), with interest as set forth in New Horizons for the
Retarded, 283 NLRB 1173 (1987).
We shall further modify the judge’s recommended Or-
der in accord with our decisions in Indian Hills Care
327 NLRB No. 46
GADSDEN TOOL, INC. 165
Center, 321 NLRB 144 (1996); and Excel Container,
Inc., 325 NLRB 17 (1997).
ORDER
The National Labor Relations Board orders that the
Respondent, Gadsden Tool, Inc., Rainbow City, Ala-
bama, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Refusing to execute the collective-bargaining
agreement that was reached on February 18, 1997.
(b) Refusing to bargain in good faith with the Retail,
Wholesale and Department Store Union, AFL–CIO as
the exclusive collective-bargaining representative of em-
ployees in the following appropriate unit:

All production and maintenance employees employed
by the Respondent at its Rainbow City, Alabama facili-
ties, including machinists, welders, tool and die makers,
carpenters and grinders; but excluding all office clerical
employees, sales persons, professional employees,
guards and supervisors as defined in the Act.

(c) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of rights
guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Execute the collective-bargaining agreement
reached by the parties on February 18, 1997; give retro-
active effect to its terms and conditions of employment
to February 18, 1997; and make employees whole, with
interest, for any losses they may have suffered as a result
of the Respondent’s refusal to execute and abide by the
agreement.
(b) On request, bargain in good faith with the Union as
the exclusive collective-bargaining representative of unit
employees.
(c) Preserve and, within 14 days of a request, make
available to the Board or its agents for examination and
copying, all payroll records, social security payment re-
cords, timecards, personnel records and reports, and
other records necessary to analyze the amount of back-
pay due under the terms of this Order.
(d) Within 14 days of service by the Region, post at its
Rainbow City, Alabama, facilities copies of the attached
notice marked “Appendix.”2 Copies of the notice, on
forms provided by the Regional Director for Region 10,
after being signed by the Respondent’s authorized repre-
sentative, shall be posted by the Respondent and main-
tained for 60 consecutive days in conspicuous places
including all places where notices to employees are cus-
tomarily posted. Reasonable steps shall be taken by the

2 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 Na-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
Respondent to ensure that the notices are not altered,
defaced, or covered by any other material. In the event
that, during the pendency of these proceedings, the Re-
spondent has gone out of business or closed the facilities
involved in these proceedings, the Respondent shall du-
plicate and mail, at its own expense, a copy of the notice
to all current employees and former employees employed
by the Respondent at any time since February 18, 1997.
(e) Within 21 days after service by the Region, file
with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region at-
testing to the steps that the Respondent has taken to
comply.

MEMBER HURTGEN, dissenting in part.
I find it analytically difficult and counterintuitive to
find that: (1) the Respondent bargained in bad faith, i.e.,
sought to avoid reaching an agreement; and (2) the Re-
spondent reached an agreement. My colleagues seek to
avoid this contradiction by suggesting that the Respon-
dent intended not to reach an agreement, and was sur-
prised when the Union accepted the Respondent’s offer.
However, the objective facts belie that intention. The
objective and critical fact is that the Respondent tendered
an offer, and thereby made itself vulnerable to accep-
tance and a contract. It would seem obvious that a party
who wishes to avoid a contract would not make an offer
which makes it vulnerable to acceptance and contract.
With respect to the Respondent’s “surprise” when the
Union accepted the offer, that fact (if true) does not sup-
port my colleagues’ position. A party in bargaining may
make a “low-ball” offer, and may be surprised when it is
accepted. But, this does not mean that the party does not
want an agreement. It simply means that the party did
not expect the acceptance.
Concededly, the Respondent then sought to renege on
the agreement reached. However, that violation is
wholly remedied by the order that the Respondent sign
and honor the agreement. Adding the further violation
found by the majority adds nothing to the remedy, or to
be remedied, here. More generally, we should not look
for bad-faith “course-of-bargaining” violations where
agreement is actually reached. Bargaining takes strange
twists and turns occasionally and what may appear to be
bad faith at one point becomes wholly remedied by fur-
ther bargaining. Accordingly, I would not find a refusal
to bargain in bad faith. I would simply find a refusal to
sign and honor the agreement, and would order that the
agreement be signed and honored.

APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 166
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.

Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives
of their own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected
concerted activities.

WE WILL NOT refuse to execute the collective-
bargaining agreement that was reached on February 18,
1997.
WE WILL NOT refuse to bargain in good faith with
the Retail, Wholesale and Department Store Union,
AFL–CIO, as the exclusive collective-bargaining repre-
sentative of our employees in the following appropriate
unit:

All production and maintenance employees employed
by us at our Rainbow City, Alabama facilities, includ-
ing machinists, welders, tool and die makers, carpenters
and grinders; but excluding all office clerical employ-
ees, sales persons, professional employees, guards and
supervisors as defined in the Act.

WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
WE WILL execute the collective-bargaining agree-
ment that was reached on February 18, 1997, and WE
WILL give retroactive effect to the terms and conditions
of employment contained in the agreement to February
18, 1997.
WE WILL make our employees whole, with interest,
for any losses they may have suffered as a result of our
refusal to execute the agreement.
WE WILL, upon request, bargain in good faith with
the Union as the exclusive collective-bargaining repre-
sentative of our employees in the appropriate unit de-
scribed above.
GADSDEN TOOL, INC.

John Doyle, Esq., for the General Counsel.
R. Kent Henslee, Esq. and John H. Robertson, Esq., of Gads-
den, Alabama, for the Respondent.
John Whitaker, of Gaston, Alabama, for the Union.
DECISION
PARGEN ROBERTSON, Administrative Law Judge. This
hearing was held on April 13, 1998, in Birmingham, Alabama.
The charge was filed on February 28, 1997, and amended on
January 29, 1998. The complaint issued on January 30, 1998.
I. JURISDICTION
Respondent, is an Alabama corporation, with an office and
place of business in Rainbow City, Alabama, where it is en-
gaged in the operation of a tool and die shop. During the past
year, it purchased and received at its Rainbow City facilities
goods valued in excess of $50,000 directly from suppliers lo-
cated outside Alabama. Respondent admitted that at all times
material it has been an employer engaged in commerce as de-
fined in the National Labor Relations Act (the Act).
II. LABOR ORGANIZATION
Respondent admitted that Retail, Wholesale & Department
Store Union, AFL-CIO (the Union) is a labor organization
within the meaning of Section 2(5) of the National Labor Rela-
tions Act.
III. THE UNFAIR LABOR PRACTICE ALLEGATIONS
Respondent admitted that the following employees constitute
a unit appropriate for collective-bargaining and that the Union
was certified and has been the exclusive collective bargaining
representative of those employees since October 23, 1995:

All production and maintenance employees employed by the
Respondent at its Rainbow City, Alabama facilities, including
machinists, welders, tool and die makers, carpenters and
grinders; but excluding all office clerical employees, sales
persons, professional employees, guards and supervisors as
defined in the Act.

Former employee Ladon Wells recalled that Respondent
president Lillon Hill talked to the employees during the union
campaign. Hill held up a blank sheet of paper and said that was
what they would get if the Union tries to come in.
Lillon Hill admitted holding the meeting recalled by Wells
and he admitted that he held up a blank sheet of paper. He de-
nied telling the employees that if they got the Union in this is
all they would get. Instead, he testified, that he told the em-
ployees that a blank sheet was where negotiations started.
Union Staff Representative John Whitaker testified that he
met with Respondent President Lillon Hill before the Union
was certified in 1995. Hill told Whitaker that he had a lot of
other businesses, that he dealt in real estate and that money
wasn’t the issue but “that Gadsden Tool wasn’t going to be
Union.”
Lillon Hill admitted meeting with John Whitaker. He denied
telling Whitaker that Respondent would shut their plant down
rather than have a Union. Hill did not testify as to whether or
not, he told Whitaker that Respondent was not going to be Un-
ion.
The General Counsel alleged that Respondent has failed and
refused to sign a written agreement and has engaged in surface
bargaining since November 1995.
The Union presented Respondent with a complete collective-
bargaining contract proposal at a November 1995 negotiating
session (G.C. Exh. 6). The parties next met to negotiate in
January 1996. Respondent submitted a complete contract pro-
posal to the Union during that meeting (G.C. Exh. 7). In a Feb-
ruary 1996 meeting the Union made a second complete contract
proposal (G.C. Exh. 8). On February 28, 1996, Respondent
faxed to the Union a change in its proposal regarding grievance
procedure (G.C. Exh. 10). When the parties met in April 1996,
the Union made another complete contract proposal (G.C. Exh.
11). Respondent submitted a status report during that same
GADSDEN TOOL, INC. 167
meeting (G.C. Exh. 12). The status report referred to provisions
in Respondent's original collective bargaining contract pro-
posal.
Respondent made another collective-bargaining contract
proposal when the parties met to negotiate on June 4, 1996
(G.C. Exh. 13). The Union responded to Respondent’s proposal
by fax on June 17, 1996 (G.C. Exh. 14).
In August, the parties met along with a Federal mediator.
The parties next met on November 11, 1996. Respondent pre-
sented the Union with a negotiations status report (G.C. Exh.
16). On December 2, the parties agreed to settle unfair labor
practice allegations in Case 10–CA–29121.
The next negotiation session was on January 10, 1997. Re-
spondent wrote the Union on January 13 and outlined agree-
ments made during the January 10 meeting (G.C. Exh. 20).
Respondent also submitted another status report to the Union
on January 13 (G.C. Exh. 22). That report and all status reports
submitted by Respondent referred to Respondent’s original
contract proposal (G.C. Exh. 7).
James Sisson, John Whitaker, and former employee Ladon
Wells with the Union, and Jimmy Hill and Kent Henslee with
Respondent, testified about a February 18, 1997 negotiation
session. Sisson was the chief union spokesman at that session.
General Counsel’s Exhibit 23 was prepared by Respondent and
submitted as a collective-bargaining proposal. During negotia-
tions that day the Union brought up that the parties had also
agreed to provisions regarding Saturday work, in settlement of
unfair labor practice charges. Respondent’s attorney agreed that
those provisions had been inadvertently left out of the docu-
ment received as General Counsel’s Exhibit 23. The parties
agreed to some additional minor changes to General Counsel’s
Exhibit 23. Then the Union proposed that Respondent retain the
employees’ Blue Cross health insurance plan and pay the full
cost. Respondent rejected that proposal and proposed they
would continue to pay one-half the premiums and maintain the
current level of benefits but would reserve the right to change
their insurance carrier. The Union agreed to that proposal. Re-
spondent had previously proposed that it have the right to lay-
off employees for up to 30 days without regard to seniority.
The Union proposed limiting the number of layoff days to 15.
Respondent rejected that proposal and the Union agreed to
Respondent’s 30-day layoff proposal.
The parties returned to negotiations after lunch and Respon-
dent’s attorney, Kent Henslee, excused himself because of an-
other engagement. Both during and before the February 18
session, Respondent had proposed retention its current wage
rate system (see G.C. Exhs. 7 and 23). After Attorney Henslee
left the February 18 meeting the union negotiators asked Re-
spondent Vice President Jimmy Hill to explain Respondent’s
current wage system. Hill explained that they may hire an un-
skilled employee at $5.50 an hour and he would receive 15-
cent-an-hour increases until he reached $7.50 per hour. After
reaching $7.50 the employee would be evaluated every 3
months and receipt of a wage increase would depend of the
skills he had acquired, jobs he had learned, attendance, depend-
ability, and loyalty to the Company. After receiving that expla-
nation the Union made proposals on health insurance, a drug
card, a cafeteria plan, a holiday after Thanksgiving, and vaca-
tions. Respondent rejected all those proposals and Jimmy Hill
commented that Respondent would have instituted a cafeteria
plan several years earlier had it not been for the Union.
Ladon Wells testified that he did receive pay raises after Re-
spondent hired him in February 1992 until he reached $7.50 per
hour. Thereafter he received some pay increases after evalua-
tions.
James Sisson testified that when Respondent’s attorney,
Henslee, returned to the February 18 meeting, union spokes-
man, Sisson, reviewed the things the Union had discussed with
Jimmy Hill. Sisson told Respondent that the Union accepted
Respondent’s original contract proposal along with the agreed
to changes (G.C. Exh. 23) provided Respondent agree to a 50-
cent across-the-board pay increase. Respondent’s attorney
leaned back and said, “That’s interesting. We need to caucus.”
Respondent returned from their caucus and said they would not
give the 50-cent increase across the board. The Union then said
they agreed to accept Respondent’s proposal (G.C. Exh. 23)
with the changes agreed to early on February 18 and the current
wage rate system as explained by Jimmy Hill. Respondent’s
attorney said that he would clarify what Jimmy Hill had said
and send it to the Union by fax. The Union said it was not op-
posed to 1, 2, or 3 years’ duration on the contract and Respon-
dent could elect which it wanted.
Vice President Jimmy Hill’s testimony was in substantial
agreement with the testimony of James Sisson. Hill testified
that Respondent’s attorney did excuse himself from the meeting
for a time after lunch. Hill recalled that the Union did ask that
the employees be given drug cards, life insurance and another
holiday. Hill testified that he explained to the Union how Re-
spondent would pay a newly employed person with no experi-
ence.
Jimmy Hill admitted on cross-examination that James Sisson
did ask him to explain Respondent’s wage system during the
February 18 negotiation session. He admitted that he explained
to the Union that the lowest pay rate offered to new employees
is generally at least $6 an hour and that generally employees are
granted pay increases of at least 15 cents an hour each quarter
until they reach $7.50 an hour. Some employees are hired in at
higher pay than $7.50 an hour. Employees are evaluated if they
are paid at or above $7.50 an hour on the basis of “attendance,
tardiness, their skill level, how they’re progressing, if they’re,
I’d say, willing to work with us on schedules.”
Hill testified that Sisson recapped for Respondent’s attorney,
Henslee, what had been discussed during the attorney’s absence
from the meeting. Hill admitted that the Union made an offer,
which included a 50-cent-across-the-board pay increase, and
that Respondent rejected the Union’s offer after caucusing.
Jimmy Hill testified that the Union said they would accept what
Respondent was “doing with wages now, everything that’s
agreed to in the contract (the Union) accept. . . . Everything that
was agreed to, everything that was not agreed to they would
accept our proposal.” Hill admitted that he was surprised at the
Union’s acceptance but he denied saying, “[O]h, my God.”
Respondent Attorney Kent Henslee testified in agreement
with others at the February 18 negotiation session, that he left
that meeting for a time after lunch. At the time he left the meet-
ing the parties had not negotiated wages during that or during
earlier bargaining sessions. He testified that he “did not want
anyone but me to negotiate on behalf of the Union or the Com-
pany, and to negotiate language or Company procedure. That
was the understanding I thought that we all had when I left for
those few minutes.”
Henslee agreed that the Union eventually said, “[W]hatever
Jimmy Hill said is what we’ll agree to.”
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 168
Sisson and Whitaker testified about talking with Respon-
dent’s attorney at the end of the February 18 meeting. Sisson
testified that after everyone but Respondent’s attorney, Whi-
taker, and Sisson left the room, the attorney said to Whitaker
and Sisson:

You know, this is very interesting. I don’t think I’ve ever seen
this happen before. I said, what is that, that the Union would
agree totally to the Employer’s proposal? He said, well, that’s
a very—that’s a—you took a big risk, but I have a feeling that
was a very calculated risk. I said, certainly, we didn’t take it
without calculation. He made the statement to Johnny
(Whitaker) and I, well, - something to the effect that, well,
you realize you’re going to close this company down. . . .You
realize that what you guys have done is shut this company
down, because Mr. Hill is not going to sign a contract. . . . you
don’t understand, these people are entrepreneurs, they can
start another business, they could go to manufacturing other
things. So, I said, well, you know, you can relay for me that
that’s not going to stop us from making a contract.

Henslee admitted talking to Sisson and Whitaker at the close
of the February 18 meeting. He said to Sisson and Whitaker, “I
don’t believe you’re willing to do this to the employees.” Hen-
slee denied that he told anyone that a client of his is willing to
violate the law.
Respondent faxed the Union a February 28, 1997 letter. In
that letter Respondent’s attorney stated among other things:

As you will remember, I expressed a fear that there
was not a complete meeting of the minds in the last offer
made by the Union. In the words of Mr. Sisson, “nothing
relating to wages will change”. I do not believe that the
Union intends to leave absolute discretion to management
for the setting of wages, wage increases or reductions, or
other matters relating to the paying of employees. How-
ever that was the agreement expressed to management by
the Union at our last negotiations session.
If I am clear in my understanding of your proposal,
that the decision of what to pay an employee, when to pay
an employee, when or if an employee should be given an
increase or decrease, and all other matters relating to com-
pensation not specifically prohibited by the contract will
be left to the absolute and unequivocal discretion of man-
agement. If there are any reservations in your mind then
those reservations should be voiced now, articulated to the
point that we can address them, and negotiated to the ex-
tent that they become resolved.
As we left our meeting last week, I indicated to you
and Mr. Sisson that I would try to draft some language to
put into contract form the current wage practice of the em-
ployer. I have attempted to do so. However, you will note
that the language is not in the norm because I have no past
experience to guide me. I have never had a union come
into negotiations on an initial contract and be willing to
accept the absolute, uncontradictable management discre-
tion that was exercised by management before the Union
became the certified bargaining agent of the employees.
However I have attempted to do what you asked.
You will note that the enclosed language gives to man-
agement absolute, unequivocal, unchallenged and nonre-
course discretion. That is exactly what management had
exercised when we came to the table. If you are sincere in
your offer you have abdicated to management any voice in
wages paid to our employees. So be it. The attached lan-
guage binds you to that agreement.

On cross-examination Henslee testified that he did not know
whether Respondent would have agreed to a Union proposal to
accept the Respondent’s offer (G.C. Exh. 7). He testified that
the offer was merely presented as a starting point for negotia-
tions. That entire proposed contract was not agreeable to Re-
spondent even though Respondent made the proposal.
The parties did not meet in negotiations after February 28.
On January 14, 1998, the Union wrote Respondent and in-
cluded a document described as the wage proposal that was
agreed to and discussed at the negotiation on February 18,
1997. That document follows:

“WAGES”
MAINTAIN THE CURRENT WAGE SYSTEM
The current wage system is defined as:
The starting rate for all new employees will be a
minimum of $5.15 per hour* and will receive an increase
of $.15 per hour every three months until they reach $7.50
per hour.
After an employee reaches $7.50 per hour, the com-
pany will evaluate them every three months. Hourly wage
increases during this evaluation will be based on what jobs
the employee is doing and the “Market Value” of these
jobs (Market Value is defined as what this and other com-
panies pay employees to do the same type job) attendance,
dependability, productivity, efficiency and how they get
along with others and loyalty to the company.

*The minimum wage to reflect the current Federal Wage
Rate.

Respondent’s attorney wrote the Union on January 20, 1998,
stating that he would respond to their January 14 letter as early
the following week as possible. There was no further contact
between the parties.
Findings
Credibility
I was impressed with the demeanor of former employee
Ladon Wells and I credit his testimony regarding a meeting
held by Respondent’s president during the union organizing
campaign and regarding a negotiation session on February 18.
John Whitaker also testified about that negotiation session. I
found Whitaker demonstrated good demeanor and I credit his
testimony regarding a meeting he had with Respondent’s presi-
dent before the Union was certified. As to the February 18 ne-
gotiation session, I found that James Sisson demonstrated good
demeanor and a better recollection of the events than Wells,
Whitaker, Kent Henslee, or Jimmy Hill. To the extent there are
conflicts between what Hill, Henslee, Whitaker, Wells, and
Sisson recalled of that meeting, I credit Sisson.
One key credibility issue revolved around what occurred
during the February 18, 1997 negotiation session while Re-
spondent’s attorney was absent. Three of the four people pre-
sent at that time testified. As shown above, I was impressed
with the demeanor and the recollection of James Sisson. His
testimony did not materially differ from anything recalled by
John Whitaker or Ladon Wells. Moreover, the testimony of
Jimmy Hill illustrated that Sisson’s testimony was correct.
GADSDEN TOOL, INC. 169
Another key credibility issue involved the conversation at
the close of the February 18 meeting between Sisson, Whitaker,
and Respondent’s attorney. In view of my findings as shown
above and John Whitaker’s corroboration of Sisson’s account
of that conversation, I credit James Sisson’s testimony. I was
not persuaded that Kent Henslee was truthful in his testimony
that he only expressed concern that the Union may not be prop-
erly representing the unit employees. I am also concerned about
Henslee’s testimony that the parties had an understanding when
he left the February 18 meeting that no one but Henslee, would
negotiate on behalf of the Company. The undisputed testimony
of all others at that negotiation session, showed that the parties
continued to negotiate after Henslee left the meeting. The Un-
ion made numerous offers and Vice President Jimmy Hill re-
jected each of those offers. Hill also explained the Respon-
dent’s current wage rate system on request from the Union.
That evidence and the fact that Henslee’s testimony was not
supported by credited evidence illustrated that there was no
agreement between Respondent and the Union that no one
would negotiate on behalf of the Company while Henslee was
absent.
Conclusions
“In determining the existence of bad faith bargaining
[the Court examines] ‘the employer’s conduct in the total-
ity of the circumstances in which the bargaining took
place.’ [Citations omitted.] Moreover, [the Court has]
noted that ‘the Board not only looks to the employer’s be-
havior at the bargaining table but also to its conduct away
from the table that may affect the negotiations.’ Id. [The
Court has] recognized that ‘the question of good faith
bargaining is for the Board’s expertise more than ours.’
[Citations omitted.] Consequently, [the Court] will affirm
a finding by the Board of an employer’s bad faith bargain-
ing if it is supported by substantial evidence on the record
as a whole.
The Board based its finding that [the employer] failed
to bargain in good faith upon [the employer] engaging in
unfair labor practices ‘away from the table,’ and surface
bargaining during the sessions . . .. ” [Radisson Plaza
Minneapolis v. NLRB, 987 F.2d 1376 (1993).]

Respondent filed a motion to strike a section of counsel for
the General Counsel’s brief, as alleging matters not included in
the complaint. To the extent Respondent shows that it was nei-
ther alleged nor fully litigated that Respondent, through its
vice-president, dealt directly with bargaining unit employees
concerning their wages, I agree. I find that direct dealing was
not fully litigated and I find that the record does not support
the General Counsel’s argument that direct dealing should be
considered as a criteria for determining that Respondent en-
gaged in bad-faith bargaining.
However, the credited evidence did include several factors
that I have considered in determining whether Respondent en-
gaged in bad-faith bargaining. As shown above I credited the
testimony of Ladon Wells that Respondent’s president showed
the employees a blank sheet of paper and told them that is what
they would get if the Union tries to come in. I also credited the
testimony of John Whitaker that Respondent’s president told
him that Respondent wasn’t going to be Union.
When the parties met in collective-bargaining negotiations in
November 1995 the Union submitted a written collective-
bargaining proposal (G.C. Exh. 6). Respondent submitted a
complete contract proposal (G.C. Exh. 7) at the January 1996
negotiation session. That proposal included a preamble; a rec-
ognition provision; a nondiscriminatory policy; management
rights; union security; hours of work; overtime; seniority; holi-
days; vacations; discipline, suspensions and discharges; griev-
ance procedure and arbitration; no-strikes, no lockout; leaves of
absence; worker’s compensation; health insurance; wages;
health, safety and welfare; miscellaneous; duration, and effec-
tive date. Only the preamble, duration and effective date provi-
sions included blanks for later inclusion of the effective date
and duration. In all other regards the Respondent’s proposal
was complete. As shown herein, there was a dispute as to
whether the parties agreed to provisions on wages. That section
of the Respondent’s January 1996 proposal was as follows:
ARTICLE XVIII—WAGES
Section 1.The wage scale attached hereto and marked
Exhibit “A” shall be and become a part of the agreement.
Section 2.All employees shall receive their weekly
earnings, which will be based on the previous week’s
work, on Friday at the close of the workday.

Exhibit A read as follows:
WAGE SCALE
The Company agrees to continue in effect the current rate sys-
tem pertaining to production rates and hourly rates of em-
ployees during the term of this agreement.

Respondent submitted another complete contract proposal on
February 18, 1997 (G.C. Exh. 23). That proposal included a
preamble; a recognition provision; a nondiscriminatory policy;
management rights; union security; collective-bargaining pro-
cedure; notice to the Union; hours of work; overtime; seniority;
holidays; vacations; discipline, suspensions and discharges;
grievance procedure and arbitration; no-strikes, no lockout;
leaves of absence; worker’s compensation; wages; health,
safety and welfare; miscellaneous; duration, and effective date.
Only the preamble, duration and effective date provisions in-
cluded blanks for subsequent insertion of the effective date and
duration. That wages article of the Respondent’s February 1997
proposal was almost identical to the one in its January 1996
offer. The February 18 provision was:
ARTICLE XVIII—WAGES
Section 1.The wage scale attached hereto and marked
Exhibit “A” shall be and become a part of the agreement.

Exhibit A was as follows:

WAGE SCALE
The Company agrees to continue in effect the current rate sys-
tem pertaining to production rates and hourly rates of em-
ployees during the term of this agreement.

The parties agreed on February 18 that some matters were
inadvertently omitted from General Counsel’s Exhibit 23. Re-
spondent agreed to include their agreement in an unfair labor
practice case settlement, regarding Saturday work. During the
February 18 negotiations the Union asked Respondent’s vice
president to explain Respondent’s current rate system. As
shown above he explained that employees may be hired at rates
below $7.50 an hour. If so those employees received 15-cent
raises each quarter until the particular employee reached a rate
of $7.50. All employees at or over $7.50 an hour were subject
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 170
to quarterly evaluations. Those evaluations determined whether
the particular employee received a raise that quarter. Vice
President Jimmy Hill admitted that he told the Union that
evaluations were based on “attendance, tardiness, their skill
level, how they’re progressing, if they’re, I’d say, willing to
work with us on schedules.”
After making some offers that were rejected by Respondent,
the Union accepted Respondent’s latest contract proposal (G.C.
Exh. 23) as amended at the February 18 meeting and in keeping
with the wage scale explanation by Respondent’s vice presi-
dent.
Subsequently, Respondent’s attorney submitted a different
proposal (G.C. Exh. 25). He wrote that the Union had agreed to
permit Respondent to unilaterally change its wage system to
increase or decrease pay without negotiations and without re-
course through the grievance procedure.
Instead of the wage proposal included in both General Coun-
sel’s Exhibit 7 and General Counsel’s Exhibit 23 (above), Re-
spondent included the following wage provision in its February
28, 1997 letter:

WAGES
Section One: Present employees. The wage rates of all
present employees will be established at the current rate
received by the employee at the commencement of this
agreement.
Section Two: New Hires. New hires will be paid a
wage rate established by management at the time the em-
ployee is hired.
Section Three: Wage increases or decreases may be
made periodically during the term of this agreement when,
in the absolute discretion of management, it is determined
to be in the best interest of the company. The decision to
give a wage increase or decrease or the decision to refrain
from giving a wage increase or decrease shall not be sub-
ject to review or to the grievance procedure.
Section Four: The establishment of rates of pay and
changes therein are reserved to the absolute discretion of
management. Under any grievance permitted under this
Article the burden of proof shall be cast on the Union to a
reasonable satisfaction that the actions of management was
beyond the broad discretion intended in this article. Pro-
vided, however, that the language of this Section Five is
not intended to permit reviews or grievances prohibited by
Section Three.

I find that Respondent’s action was illustrative of bad-faith
negotiations. On February 18 the Union accepted Respondent’s
last contract offer (G.C. Exh. 23). That offer included a provi-
sion that Respondent would continue in effect the current wage
rate system. There was nothing in that offer to the effect that
Respondent had absolute discretion as to “what to pay an em-
ployee, when to pay an employee, when or if an employee
should be given an increase or decrease, and all other matters
relating to compensation.” (See Respondent’s February 28
letter (G.C. Exh. 25).) Respondent’s contract proposal, which
was accepted by the Union, clearly established that Respondent
would continue in effect its current rate system. Moreover, the
credited evidence also showed that Respondent, through Jimmy
Hill, had explained during negotiations that Respondent would
not decrease any employees’ wages.
Some of the key factors showing bad faith include the com-
ments by Respondent’s president to its employees during the
Union’s organizing efforts; his comments to John Whitaker
before the Union was certified; Respondent’s February 28,
1997 withdrawal of its collective-bargaining contract offer after
the Union had accepted that offer on February 18 (Auciello Iron
Works, Inc. v. NLRB, 517 U.S. 781 (1996); Atlanta Hilton &
Tower, 271 NLRB 1600 (1984); and Driftwood Convalescent
Hospital, 312 NLRB 247 (1993)); the comments by Respon-
dent’s attorney that Respondent would not sign a contract; its
attorney’s admission at the hearing that Respondent was never
fully agreeable to its own collective-bargaining proposals and
Respondent’s February 28 contention that the Union had agreed
to more onerous collective-bargaining proposal regarding
wages.
Respondent argued in its brief that the parties had not nego-
tiated wage rates. However, it is undisputed that Respondent
submitted a complete collective-bargaining proposal in January
1996. That proposal contained a wage rate provision. Respon-
dent continued to propose essentially the same wage provision
throughout negotiations. The February 18, 1997 proposal by
Respondent included as Exhibit A, a wage rate proposal that
was identical to the one proposed in January 1996. During Feb-
ruary 18, 1997 negotiations the parties agreed to some changes
to General Counsel’s Exhibit 23. They agreed to a correction of
Respondent’s address and to the inclusion of the parties’
agreement regarding Saturday work in settlement of unfair
labor practices. The Union accepted that contract proposal by
Respondent and informed Respondent it would agree to a dura-
tion of 1, 2, or 3 years. Respondent’s elected to make the con-
tract effective on the day of ratification and to extend through
November 24, 1999.
Respondent argued that it included a wage provision in its
January 1996 and February 1997 proposals only to remind the
parties that they were agreeing to negotiate the economic fac-
tors at the end of negotiations. Respondent cited as the only
evidence supporting its contention that Exhibit A was included
only as a reminder, Kent Henslee’s testimony at transcript
pages 162 and 163. There Henslee testified that he included
Exhibit A in the January 1996 and February 1997 as a re-
minder. Henslee then testified that “was discussed with the
Union at the time this agreement was distributed to them on the
second negotiation session (January 1996).”
In view of the full record, I find there was no agreement to
delay a wages agreement beyond February 18, 1997. As shown
above, I credit the testimony of John Whitaker. Whitaker testi-
fied as to the parties’ discussion after Respondent distributed
General Counsel’s Exhibit 7 to the Union during the January
1996 meeting. The Union questioned Henslee about General
Counsel’s Exhibit 7 including Respondent’s Exhibit A to Ex-
hibit 7. Henslee was asked about the meaning of “current rate
system”. “Mr. Lillon Hill responded and said that it was an
evaluation system.” As shown above, when the Respondent
again presented a contract proposal containing Respondent’s
Exhibit A on February 18, 1997, Vice President Jimmy Hill
was asked to explain Respondent’s “current rate system.” Hill
explained the wage system to the Union. When Attorney
Henslee returned to the meeting, he was told that Hill had ex-
plained the wage rate system. Henslee asked Hill if the Union’s
explanation was correct and Hill agreed that the Union’s expla-
nation of what he had said about the wage rate system, was
correct. Henslee said nothing during the February 18 negotia-
GADSDEN TOOL, INC. 171
tions, about any agreement to delay discussions about wages.
Henslee did not correct Jimmy Hill’s explanation of “current
wage rate system” and he did not say anything to the effect that
Respondent’s Exhibit A in the February 18 contract proposal,
was only a reminder to discuss wages in the future.
Respondent also argued that Jimmy Hill did not understand
that the Union was asking him on February 18 for full details
about all the parameters concerning the wage rate payment that
the company had in place. That argument misses the point at
issue. On February 18 Respondent, not the Union, proposed a
collective-bargaining agreement that included a provision re-
garding wages. Regardless of what Jimmy Hill understood of
the February 18 negotiation session, the Union stated that it was
satisfied with his explanation of Respondent’s wage proposal. It
was after that explanation that the Union accepted Respon-
dent’s offer as written in General Counsel’s Exhibit 23.
Respondent argued that its wage system was not fully de-
scribed in any proposal made by either party. That may be so.
However, there is nothing in the law that requires such a de-
scription and, as shown above, the Union was satisfied with
Respondent’s written proposal as explained by Jimmy Hill on
February 18. I am convinced that the parties had a meeting of
the minds on February 18, 1997. Respondent, as the party that
drafted the written agreement (G.C. Exh. 23), is in poor posi-
tion to now complain that its proposal failed to include an ade-
quate description of its wage rate system.
Specifically, the record shows that the Union agreed to Re-
spondent’s February 18 proposed written contract (G.C. Exh.
23) as amended by agreement of the parties during the February
18 negotiations. Those amendments included a change in Re-
spondent’s address and the inclusion of the parties’ settlement
agreement in Case 10–CA–29121, regarding Saturday work.
The Union advised Respondent on February 18, that it was
agreeable to a duration set by Respondent. Subsequently, on
February 28, 1997, Respondent notified the Union that the con-
tract would be effective through November 24, 1999. However,
Respondent has refused to execute that agreement since Febru-
ary 28, 1997, in violation of Section 8(a)(1) and (5) of the Act.
Until the Union accepted Respondent’s offer on February 18,
Respondent had never proposed that it be given absolute discre-
tion in the establishment and maintenance of wage rates. Its
written proposal on February 28, 1997, was substantially dif-
ferent from its February 18 proposal that was accepted by the
Union and unlike anything Respondent had proposed before
that time.
Respondent’s actions made a collective-bargaining contract
impossible. It is clear from the record evidence that the Union
could have done nothing which would have resulted in an
agreement. I find that Respondent engaged in unlawful conduct
in violation of Sections 8(a)(1) and (5) of the Act.
Finally, Respondent argued that to “the extent that the Union
charges Respondent with unfair labor practices occurring more
than 6 months before the filing of its charge the Respondent
raises a Section 10(b) defense of statute of limitations.” As
shown above, I find that Respondent engaged in unfair labor
practices in violation of Section 8(a)(1) and (5) of the Act. My
findings are that those unfair labor practices occurred on and
after February 18, 1997. Specifically, Respondent has refused
to sign a written collective-bargaining agreement since that date
and Respondent engaged in bad faith surface bargaining from
February 18, 1997. The Union filed the unfair labor charges on
February 28, 1997. Therefore, I find that no unfair labor prac-
tices were alleged or shown to occur more than 6 months before
the charge was filed. Respondent’s 10(b) defense is without
merit.
CONCLUSIONS OF LAW
1. Gadsden Tool, Inc. is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act?
2. Retail, Wholesale & Department Store Union, AFL–CIO
is a labor organization within the meaning of Section 2(5) of
the Act.
3. Respondent, by engaging in bad-faith negotiations with
the Union as exclusive collective-bargaining representative of
its below described employees, and by refusing to sign an
agreed to collective-bargaining agreement, has engaged in con-
duct in violation of Section 8(a)(1) and (5) of the Act:

All production and maintenance employees employed
by the Respondent at its Rainbow City, Alabama facilities,
including machinists, welders, tool and die makers, car-
penters and grinders; but excluding all office clerical em-
ployees, sales persons, professional employees, guards and
supervisors as defined in the Act.

4. The aforesaid unfair labor practices are unfair labor prac-
tices affecting commerce within the meaning of Section 2(6),
(7), and (8) of the Act.
THE REMEDY
Having found that Respondent has engaged in unfair labor
practices, I recommend that it be ordered to cease and desist
therefore and to take certain affirmative action designed to
effectuate the policies of the Act.
As I have found that Respondent has engaged in surface bar-
gaining and refusal to sign an ageed to collective-bargaining
agreement after acceptance by the Union, Respondent is or-
dered to restore conditions to status quo ante as of the end of
the negotiations on February 18, 1997, and upon request, to
sign the agreed to collective-bargaining agreement and to bar-
gain in good faith with the Union.
[Recommended Order omitted from publication.]