General Telephone Co. of Florida

National Labor Relations Board - Board Decisions

Aug 30, 1963

144 N.L.R.B. 311 (N.L.R.B. 1963)

GENERAL TELEPHONE COMPANY OF FLORIDA 311
tiguous to the bakery sales counter. The sales clerks in these depart-
ments regularly help out at the bakery sales counter and snackbar'a
which indicates that there is no difference between the sales clerks
in departments 010 and 020 and the sales clerks included in the unit
found appropriate by our colleagues.
Based on the above, we would find that the unit sought by the Peti-
tioner is inappropriate and, accordingly, would dismiss the petition.13
12 The record shows that employees from nearby departments, including 010, 020, 017
(notions), and 140 (jewehy), help out at the snackbar and bakery sales counter when-
ever those counters are busy or short of help, which occurs on the average of four or
five times a week, and similarly, that employees from the snackbai and bakery sales
counter wait on customers at the above-mentioned departments whenever the need arises.
13 Walgreen Company of New York, Inc , supra; Peoples Drug Stores, Inc, supra;
P W Woolworth Company, 119 NLRB 480 In a recent case, Fi ostco Super Save Stores,
Inc, 138 NLRB 125, our colleagues found that a unit of cooks, counter employees, busboys,
and employees operating a popcorn concession was not appropriate , in the context of a
discount department store, as such employees "do not comprise a group with sufficiently
disparate employment interests . " In each of the cited cases, the Board found in-
appropriate for the purposes of collective bargaining , units of lunch counter-soda
fountain employees similar to the unit sought by the Petitioner herein
General Telephone Company of Florida and System Council T-2,
International Brotherhood of Electrical Workers, AFL-CIO.'
Case No. 12-CA-.331. August 30, 1963
DECISION AND ORDER
On April 3, 1963, Trial Examiner George L. Powell issued his
Intermediate Report in the above-entitled proceeding, finding that
the Respondent had not engaged in the tulfair labor practices al-
leged in the complaint and recommending that the complaint be
dismissed in its entirety, as set forth in the attached Intermediate
Report. The General Counsel and Union filed exceptions to the
Intermediate Report and the General Counsel filed a supporting
brief. The Respondent filed a reply brief in opposition to those
exceptions and in support of the Trial Examiner's Intermediate
Report and Recommended Order.
Pursuant to the provisions of Section 3(b) of the National Labor
Relations Act, the Board has delegated its powers in connection with
this case to a three-member panel [Chairman McCulloch and Mem-
bers Leedom and Fanning].
The Board has reviewed the rulings made by the Trial Examiner
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the In-
termediate Report, the exceptions and briefs, and the entire record
1 System Council T-2 was described at the hearing as a committee consisting of repre-
sentatives elected by various IBEW local unions representing the Respondent 's employees.
144 NLRB No. 28.
312 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in the case, and hereby adopts the findings, conclusions, and recom-
mendations of the Trial Examiner with the following modifications :
The principal issues in this case are (1) whether a "Christmas
check'' for $10 amounted to wages and as such could not be uni-
laterally discontinued by Respondent; and (2) if so, whether Re-
spondent should be ordered to pay $10 to each qualified employee
for the discontinued Christmas checks of 1961 and 1962.
For a period of some 35 years prior to Christmas 1961, it had been
the Respondent's custom to give a Christmas check to its employees.
The president of Respondent decided each year whether such checks
would be issued. From 1925 until 1945, with the exception of the
1932-35 depression period when no checks were issued, the checks
were in the amount of $5. Thereafter, through Christmas 1960, the
checks were for $10. The checks were enclosed with Christmas cards
and hand-distributed to the hourly paid employees by their super-
visors. Checks were also issued to all management employees, in-
cluding the company president, all employees on military leave, and
all retired employees.
The employees were first represented by International Brotherhood
of Electrical Workers, AFL-CIO, in 1941, and the first contract exe-
cuted in 1942 contained an "Existing Benefits" clause that was con-
tained in all subsequent agreements up until the present agreement
which became effective on September 17, 1961. The Respondent was
known as "The Peninsular Telephone Company" until 1958 when
its corporate name was changed. The year 1961 marked the first
negotiations between Respondent under its present name and the
Union, and each party submitted extensive new proposals but did
not include an "Existing Benefits" clause.
It does not appear that the Union made any demand during the
1961 negotiations for a continuation of the existing benefits clause
in the new contract. However, during bargaining negotiations, an
official of Respondent indicated to the union negotiators that the
Company had no intention of diminshing those benefits that had ac-
crued by way of fringes or extra benefits. The Trial Examiner did
not mention this uncontradicted testimony, although he found that
the checks were not considered part of "existing benefits." Further,
in a special news bulletin distributed to employees by Respondent
on July 11, 1961-during the midst of negotiations-entitled "THIS
IS YOUR EXTRA PAYCHECK," the Company pointed out cer-
tain extra benefits, including Christmas checks, that employees
received.
Only 1 month after agreement was reached on a contract, and on
the very same day that it was signed by the parties, October 18, 1961,
Respondent made its decision to discontinue Christmas checks. This
was done at a meeting of all company officers and department heads.
GENERAL TELEPHONE COMPANY OF FLORIDA 313
One reason, later advanced for the decision, was Respondent's pend-
ing application before the Florida Railroad and Public Utilities
Commission for a rate increase. It was felt that no public sympathy
could be expected in favor of a rate increase while employees were
receiving Christmas checks totaling more than $40,000 each year.
No notice of the above action was communicated by Respondent to
either the Union or the employees, and not until December 12 or 13
did the president of the System Council, Robert Mount, hear through
"the grapevine" that the Christmas checks might not be forthcoming.
Upon inquiry by Mount, Respondent's director of personnel, Robert
Jones, confirmed the rumor and agreed to speak to the Company's
president about the matter. Christmas checks were not distributed
in December 1961 and Mount called Jones on January 4, 1962, to
schedule a meeting for January 16. The matter was discussed then
and at a later meeting in the month when Respondent refused. to re-
treat from its position that the Christmas check situation was not
a grievable or contractual matter and that it had the right uni-
laterally to discontinue payment of the check. The Union advised
the Respondent that it would pursue the matter in the courts. The
Union then filed its charge.
The General Counsel contends that the Christmas checks are part
of the employees' wages and, as such, they could not be unilaterally
discontinued without bargaining between Respondent and the Union.
General Counsel further contends that the Union's failure to secure
inclusion of the "existing benefits" clause in the latest contract can-
not be taken as a waiver of the employees' right to receive the existing
benefits. Respondent took the position that the Christmas checks
were pure gratuities that could be unilaterally discontinued by the
Company in its discretion, because the Union, by its failure to in-
clude them in its most recent bargaining proposals and by its acqui-
escence over the years in Respondent's unilateral granting of the
Christmas checks, is now equitably estopped to contest their
discontinuance.
We are persuaded, contrary to Respondent's contention, that the
checks were not mere gifts or gratuities, but were wages, and could
not be unilaterally discontinued without first being made subject to
bargaining. We reach this conclusion not only because Respondent's
annual practice was of long duration, well over 30 years, but also be-
cause Respondent's conduct during negotiations made it appear to the
Union and the employees that continuation of the Christmas checks
was not in issue. The fact that Christmas checks were paid regularly
over a long period of time is sufficient to justify the expectation of
employees that, absent a change in circumstances, they would con-
tinue to receive a Christmas check which they might rely on as part
314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of their wages.2 Here, the only change in circumstances--change in
ownership of Respondent during the term of the prior collective-
bargaining agreement-which might have put in doubt the continua-
tion of the Christmas check distribution, did not lead to that result
during the term of the agreement, and the Respondent's assurances
to the employees' bargaining representative during negotiations of
a new agreement that it did not intend to diminish "fringes or extra
benefits," and its "Extra Paycheck" bulletin to employees, could serve
only to reinforce their expectation of continuation of the practice.
Finally, Respondent concedes that future payments of the Christmas
checks is a mandatory subject of bargaining, and alleges that it is
ready and willing to bargain over payment of future checks upon the
request of the Union.
Although thus conceding, in effect, that the "Christmas checks,"
constitute wages, Respondent contends that the Union is equitably
estopped from protesting Respondent's unilateral decision not to dis-
tribute the checks in 1961 because the Union had acquiesced over the
years in Respondent's unilateral decision to give the checks to em-
ployees, and in its unilateral determination to increase the amount
from $5 to $10 in 1946, and had not requested bargaining over the
matter during the 1961 negotiations. We find no merit in this conten-
tion. This case is distinguishable from Tucker Steel Corporation,
and Steel Supply Company 8 relied upon by Respondent. In that case,
it was not merely the fact that the employer had had a free hand in
dealing with a bonus over a long period of time, without any demand
from the employees' bargaining representative as to the amount of
the bonus, the manner of its computation, or mode of payment, that
persuaded the Board to find an equitable estoppel. There, the subject
matter of the bonus was brought up specifically during bargaining
negotiations, and the employer indicated the possibility of its uni-
lateral termination of the bonus if the union's increased vacation de-
mands were met; and the employees, including the union's stewards
thereafter were apprised that the bonus would be discontinued. Never-
theless, the union remained silent in the face of those statements and
signed a collective-bargaining agreement after the employer had uni-
laterally terminated the bonus. In contrast here, the Respondent
2 Niles-Bement -Pond Company , 97 NLRB 165 , enfd 199 F . 2d 713 ( C.A. 2). The fact
that the amount of the Christmas checks was not related directly to employees ' earnings
does not warrant a different result. A direct or indirect relationship to other wages may,
of course , serve to strengthen employees ' reliance on continuation of the practice and their
treatment of the checks or bonus as wages However, this factor is not controlling See
Singer Manufacturing Company, 24 NLRB 444 , 459, 460 , 470, enfd. 119 F. 2d 131
(C A. 7), cert denied 313 U S . 595 ; cited with approval in Al L .R.B. v. Niles -Bement-Pond
Company, supra. See also W. W. Cross and Company, Inc. v. N.L R B ., 174 F. 2d 875
(CA 1), wherein it was stated that the statutory term "wages " was intended to embrace
at least those "amounts resulting from employment in addition or supplemental to, 'actual
rates of pay ' " which are in the nature of "direct and immediate benefits flowing from
the employment relationship
3134 NLRB 323.
GENERAL TELEPHONE COMPANY OF FLORIDA 315
assured the Union that it had no intention of diminishing "fringes or
extra benefits," and notified the employees that Christmas checks were
one of the extra benefits of their employment relationship. In these
circumstances, we can find no equitable estoppel running against the
Union. The Respondent's long-standing custom of paying the Christ-
mas checks "unilaterally" gave it no reason to expect that the Union
would not object if it discontinued the checks, for the Union had no
apparent reason to disturb an agreeable payment. The most that can
be assumed from past history is that the Union had no desire to obtain
a larger Christmas check for the employees it represented. This is
as reasonably attributable to a preference for obtaining wage increases
in other ways, as it is to a relinquishment of any rights with respect
to the matter of Christmas checks. Respondent's own assurances to
the Union and to employees during negotiations effectively preclude
it from relying on the Union's failure to request bargaining on the
subject as justification for its unilateral action. Accordingly, we find
that Respondent had no right unilaterally to discontinue the checks.4
We conclude, therefore, contrary to the Trial Examiner, that the
General Counsel has established by a preponderance of the evidence
that Respondent violated Section 8(a) (5) and (1) of the Act by its
unilateral conduct in discontinuing the annual Christmas checks with-
out appropriate notice to, and consultation with, the employees' certi-
fied bargaining representative. This matter, relating as it did to
wages, is a mandatory bargaining subject concerning which Respond-
ent could not, with impunity, act unilaterally in derogation of its
statutory obligation to bargain thereon.5
The parties do not dispute and we find that the following employees
constitute a unit appropriate for the purposes of collective bargaining
within the meaning of Section 9 (b) of the Act :
All nonsupervisory employees in the plant, traffic, engineering,
general, commercial, accounting, and marketing and sales (cleri-
cal only) departments at Respondent's Florida operations.
THE REMEDY
Having found that the Respondent has engaged in unfair labor
practices within the meaning of Section 8(a) (5) and (1) of the Act,
we shall order that it cease and desist therefrom and, upon request,
bargain collectively concerning the payment of Christmas checks with
the Union as the exclusive representative of all employees in the
appropriate unit.
4 The Respondent does not contend, and the record would not support a contention, that
the Union has bargained away or waived its right to be consulted about the payment or
nonpayment of Christmas checks.
5 See N L R.B. v. Benne Katz, etc, d/ b/a Williamsburg Steel Products Co, 369 U.S 736.
316 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Since it has been found that the Christmas checks constitute wages
within the meaning of the Act, and since as wages and, indeed by their
very nature, the Christmas checks were a benefit enjoyed by the em-
ployees, their elimination was a detriment to the employees. It is the
Board's customary policy to direct a respondent to restore the status
quo where respondent has taken unlawful unilateral action to the
detriment of its employees.' Accordingly, we shall order Respondent
to make whole all employees in the unit by paying them an amount
equivalent to the Christmas checks unlawfully denied them in 1961
and 1962. We include 1962 because the record discloses that the Re-
spondent also did not distribute Christmas checks that year, and we
find that its failure to do so was a continuation and result of its unlaw-
ful unilateral decision in 1961 to terminate distribution of the checks.
In accordance with our normal practice, we shall order that the
backpay awards be paid with interest at 6 percent per annum, to be
computed in the manner set forth in Isis Plumbing c Heating Co.,
138 NLRB 716.
CONCLUSIONS OF LAW
1. System Council T-2, International Brotherhood of Electrical
Workers, AFL-CIO, is a labor organization as defined in Section 2(5)
of the Act.
2. All nonsupervisory employees in the plant, traffic, engineering,
general, commercial, accounting, and marketing and sales (clerical
only) departments at Respondent's Florida operations, constitute a
unit appropriate for the purposes of collective bargaining within the
meaning of Section 9 (b) of the Act.
3. The above-named labor organization was on October 11, 1961,
and at all times thereafter, the exclusive representative of all em-
ployees in the aforesaid appropriate unit for purposes of collective
bargaining within the meaning of Section 9 (a) of the Act.
4. By unilaterally discontinuing payment of Christmas checks to
its employees without bargaining collectively with the above-named
labor organization as the exclusive representative of its employees in
the aforesaid appropriate unit, the Respondent has engaged in and is
engaging in unfair labor practices within the meaning of Section
8(a) (5) and (1) of the Act.
5. The aforesaid unfair labor practices are unfair labor practices
affecting commerce within the meaning of Section 2(6) and (7) of the
Act.
9 See John W Bolton & Sons, Inc., 91 NLRB 989, 991. We find this case to be dis-
tinguishable from Niles-Bement-Pond Company, supra, where the Board did not order the
employer to pay the discontinued bonus to its employees . Here, Respondent assured the
Union and employees during negotiations for a new contract that the bargain reached
would not result in diminishing "fringes or extra benefits ." Yet, upon execution of the
agreement, Respondent, over protest of the union , unlawfully did diminish those "extra
benefits "
GENERAL TELEPHONE COMPANY OF FLORIDA 317
ORDER
Upon the entire record in this case, and pursuant to Section 10 (c) of
the National Labor Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent, General Tele-
phone Company of Florida, its officers, agents, successors, and assigns,
shall :
1. Cease and desist from :
(a) Refusing or failing to bargain collectively with the Union con-
cerning the payment of Christmas checks to their employees within
the appropriate unit represented by the Union.
(b) Unilaterally terminating the Christmas checks of their em-
ployees within the appropriate unit represented by the Union.
(c) In any like or related manner interfering with the efforts of
the Union to bargain collectively.
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act :
(a) Upon request, bargain collectively with the Union concerning
the payment of Christmas checks to employees within the appropriate
unit represented by the Union.
(b) Make whole the eligible employees in the appropriate unit in
1961 and 1962 for any loss they may have suffered by reason of
Respondent's unilateral termination of the Christmas checks, in the
manner set forth in the section of this Decision and Order, entitled
"The Remedy."
(c) Post at its Florida operations, copies of the attached notice
marked "Appendix." 7 Copies of said notice, to be furnished by the
Regional Director for the Twelfth Region, shall, after being duly
signed by the Respondent's authorized representative, be posted by
the Respondent immediately upon receipt thereof, and be maintained
by it for 60 consecutive days thereafter, in conspicuous places, includ-
ing all places where notices to its employees are customarily posted.
Reasonable steps shall be taken by the Respondent to insure that said
notices are not altered, defaced, or covered by any other material.
(d) Notify the Regional Director for the Twelfth Region, in writ-
ing, within 10 days from the date of this Order, what steps the Re-
spondent has taken to comply herewith.
7In the event that this Order is enforced by a decree of a United States Court of
Appeals, there shall be substituted for the words "A Decision and Order" the words "A
Decree of the United States Court of Appeals , Enforcing an Order."
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to a Decision and Order of the National Labor Relations
Board, and in order to effectuate the policies of the National Labor
Relations Act, as amended, we hereby notify our employees that:
318 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL, upon request, bargain with System Council T-2,
International Brotherhood of Electrical Workers, AFL-CIO, as
the exclusive representative of all the employees in the bargaining
unit described below with respect to the payment of Christmas
checks to employees within the appropriate unit, consisting of
all nonsupervisory employees in the plant, traffic, engineering,
general , commercial, accounting, and marketing and sales (cleri-
cal only) departments at our Florida operations.
WE WILL make whole the eligible employees in the appropriate
unit for any loss they may have suffered by reason of our uni-
lateral termination of the practice of distributing Christmas
checks in 1961 and 1962.
WE WILL NOT in any like or related manner interfere with our
employees' rights as guaranteed in the Act.
GENERAL TELEPIIONE COMPANY OF FLORIDA,
Employer.
Dated---------------- By-------------------------------------
(Representative ) ( Title)
This notice must remain posted for 60 consecutive days from the
date of posting, and must not be altered, defaced, or covered by any
other material.
Employees may communicate directly with the Board' s Regional
Office, Ross Building, 112 East Cass Street, Tampa, Florida, Tele-
phone No. 223-4623, if they have any question concerning this notice
or compliance with its provisions.
INTERMEDIATE REPORT
STATEMENT OF THE CASE
Upon a charge filed on April 11, 1962, by System Council T-2, International
Brotherhood of Electrical Workers, AFL-CIO,' hereafter referred to as the Union,
the Regional Director for the Twelfth Region of the National Labor Relations
Board, herein called the Board , issued a complaint on behalf of the General Counsel
of the Board against General Telephone Company of Florida , Respondent herein,
on November 9, 1962 , alleging violations of Section 8(a)(1) and ( 5) of the Na-
tional Labor Relations Act, as amended (29 U.S.C., Sec. 151, et seq.), herein called
the Act. In its duly filed answer Respondent, while admitting certain allegations
of the complaint , denied the commission of any unfair labor practice.
Pursuant to notice , a hearing was held before Trial Examiner George L. Powell
in Tampa, Florida , on January 22 and 23, 1963. All parties were represented and
were afforded full opportunity to be heard, to introduce relevant evidence, to present
oral argument , and to file briefs . The General Counsel gave oral argument at the
conclusion of the case in lieu of a brief, and the brief of the Respondent was received
on February 18, 1963.
Upon consideration of the entire record in this case , including the oral argument
and brief of the parties, and upon my observation of each of the witnesses testifying
before me, I make the following:
1 During the course of the hearing , System Council T-2 was described as a committee
consisting of representatives elected by the various IBEW local unions representing the
Respondent ' s employees.
GENERAL TELEPHONE COMPANY OF FLORIDA
FINDINGS OF FACT AND CONCLUSIONS OF LAW
I. THE BUSINESS OF RESPONDENT
319
General Telephone Company of Florida is a Florida corporation with its principal
place of business in Tampa, Florida , where it is engaged in the business of providing
local and long-distance telephone services to customers in the State of Florida.
Respondent 's annual gross income is in excess of $1 million. It provides toll call
services valued in excess of $50,000 annually to points outside the State of Florida.
The parties admit and concede the foregoing facts and I find and conclude that
Respondent is engaged in interstate commerce within the meaning of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The Union is conceded to be a labor organization within the meaning of the Act
and I so find.
III. THE UNFAIR LABOR PRACTICES
The issues in the case are: (a ) Whether a "Christmas check" amounts to a
"Christmas bonus" and as such could not be unilaterally changed by Respondent
without being guilty of a refusal to bargain in good faith in violation of the Act;
and (b ) if so, should Respondent be ordered to pay $10 to each qualified employee
for the Christmas periods of 1961 and 1962.
Background
Prior to 1958, Respondent was known as "The Peninsular Telephone Company."
Respondent purchased a controlling interest in the summer of 1957, however, and
the corporate name was changed during the following year.2
Respondent first began issuing "Christmas checks" in 1925. These checks were
issued each year in the amount of $5 through Christmas 1945, except for a 4-year
period of 1932-35 during which they were not granted due to the depression. In
1946 the amount of the checks was increased to $10, and they were issued each year
thereafter in that amount through 1960 but were suspended in 1961.3
Charles B. Jones credibly testified that the president of Respondent decided each
year whether or not the checks would be issued , and designated a payroll record
date in December so that the accounting department could prepare a list of qualified
employee recipients . Once it was determined that the checks would be issued, the
accounting department ordered special Christmas check forms 4 and opened a sep-
arate "Christmas Fund" bank account in the First National Bank of Tampa. In
1959 and 1960 the checks were drawn on a "Special Payroll Fund" rather than a
"Christmas Fund."
The checks themselves , each in the amount of $10, were then issued to every hourly
paid employee and to all management or supervisory personnel up to the president
himself In addition , identical checks were issued to employees on military leave
of absence , to all retired employees , and some were even issued to certain non-
employees such as a snackbar operator and a consultant engineer who are not on
the payroll . The checks given to the military absentees and retired employees were
the only checks issued to those groups by the Respondent during the year. These
checks, being in the arbitrary amount of $10 after 1946, were in no way related
to the rate of pay nor the length of service of employees nor were they a part
of any incentive program.
Employees Gladys Harsin and Robert E . Mount credibly testified that the checks
were folded in Christmas greeting cards, enclosed in hand-addressed envelopes, and
were personally distributed to the employees by their first-lme supervisors. Both
by Harsin 's testimony and by stipulation of the parties it was learned that the
Union was organized and first began to represent the Respondent 's employees in
December 1941 . The first collective-bargaining agreement was executed in 1942,
and it contained an "Existing Benefits" clause that was carried over into all subse-
quent agreements up to but not including the current contract effective in 1961.
Neither the clause itself nor the subject of Christmas checks were specifically dis-
cussed during the 1942 negotiations.
2 By stipulation of the parties.
3 From the credited testimony of Charles B. Jones , assistant comptroller and assistant
treasurer.
4 The checks were made up in the form of a Christmas card with the words "Christmas
Greetings " in large red letters across its face and with an endless chain of green holly
leaves and ied berries wound around the edges ( Respondent 's exhibits )
320 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
According to the credited testimony of Robert L. Jones, director of personnel for
Respondent , neither the "Existing Benefits" clause nor any other provision in any
of the collective-bargaining agreements makes any mention of the Christmas checks.
Furthermore , every Respondent and union witness having any negotiating experience,
except Harsin , testified that Christmas checks were never mentioned in any bargain-
ing session over the years . She, on the contrary , said "Christmas checks" were
"always classed as Christmas bonus and discussed as that." Although she testified on
direct examination that the former president of Respondent had stated on occasion
and during negotiations that the "Existing Benefits" clause "covered such things
as our Christmas bonus, our pension and our insurance," she further stated on direct
examination that she did not know "just what year" those statements had been made.
Based entirely upon the testimony of union witnesses , the statements attributed
to Respondent 's president by Harsin must have been made , if at all , between 1950
and 1957. However , Benjamin N. Darlington credibly testified that he was a ne-
gotiator for Respondent from January 1945 through June 19, 1960, and he attended
all negotiating meetings during those years and no mention was ever made of
Christmas checks, yet fringe benefits were discussed .5 Hugh MacFarlane testified
that he was council for Respondent , that he kept "a very close log of what went on in"
all negotiating meetings from 1948 through 1960 , and that no mention was ever
made of "Christmas checks" or "Christmas bonus." Robert L. Jones testified that
there had been no discussion of Christmas checks in any meetings since he began
attending in 1954. Finally both Robert E. Mount, president of System Council
from March 1961 to July 1962 , and M. D. Murphy , director of telephone operations
of IBEW , AFL-CIO, and participant in negotiations beginning in 1957 with Re-
spondent , testified that Christmas checks were not discussed during the more recent
negotiations.
Employees Harsin and Mount admitted that the Union never objected to the
issuance of the Christmas checks nor was any complaint made when the Respond-
ent unilaterally increased the amount of the grant from $5 to $10 in 1946.
I find that in the past history of negotiations that Christmas checks were never
mentioned in any negotiating session , crediting witnesses other than Harsin on this
point.
Christmas 1961
Respondent maintained that these Christmas checks were "gifts" to the employees.
As proof of this it introduced into evidence copies of two company newspapers. In
the one dated January 1954 it ran the following under a paragraph heading "More
Christmas Cheer." It said "Most of think [sic] our Christmas present bill ran into
a lot of money. HELLO [the name of the company paper] stopped to consider for
a moment that Peninsular's gift list came to more than 2,000 names , certainly one
most difficult for Santa Claus-in this case the company auditing department-to
provide for." Then in its paper entitled "Florida General News" dated November 16,
1960, under the heading "Company Announces Holiday Schedule, Christmas
Checks," the following was reported.
In recent letters to department heads and division managers , President Brorein
announced schedules for the Christmas and New Year's holidays, and the
issuance of traditional Christmas checks.
The president said that since Christmas falls on a Sunday this year , the Mon-
day following Christmas day (December 26th) will be a holiday. The an-
nouncement added that in departments in which Christmas gifts will be ex-
changed , it should be done after 4 p.m. on Friday afternoon.
It is significant that the evidence discloses that Respondent considered these Christmas
checks to be "gifts." The Christmas checks in the first publication were tied in with
"a gift list" and with "Santa Claus ." In the second announcement the Christmas
checks were tied in with the employees exchanging Christmas gifts among themselves.
The negotiations leading up to the current agreement , effective September 17,
1961, were unusual in that both parties submitted entirely new contracts , each to
the other. The Respondent's proposal did not contain the "existing benefits" clause
and neither did that of the Union nor did the Union demand continuation of the
clause. This is through the credited testimony of Robert L. Jones and M. D. Murphy.
Further, according to the credited testimony of Robert L. Jones, Respondent made
a decision to discontinue the issuance of Christmas checks at a staff meeting of all
8 Some of the fringe benefits discussed were: holidays, insurance benefits, pensions, bad
weather pay, callout pay, and unemployment compensation "Just about every conceivable
benefit that employees received" was discussed . But there was no discussion of the
Christmas check.
GENERAL TELEPHONE COMPANY OF FLORIDA 321
company officers and department heads on October 18, 1961 . Apparently this de-
cision was motivated by the pendency at that time of two proceedings before the
Florida Railroad and Public Utilities Commission which regulates telephone rates
and otherwise supervised the Respondent 's operation . The first proceeding involved
an application made by Respondent for a rate increase and the second involved a
service complaint against Respondent (allegedly the first in its history ) by the Public
Utilities Commission itself. It was felt that no public sympathy could be mustered
in favor of a rate increase for a telephone company which made Christmas gifts to
its employees amounting to more than $40,000 each year (some 4,000 employees
involved). Robert L. Jones also credibly testified, and there was no contravailing
evidence , that no other telephone company in the United States had such a practice.
Mount heard through "the grapevine," on December 12 or 13, 1961,6 that checks
might not be forthcoming for that Christmas , and he called Robert L. Jones to inquire
about this information . Jones confirmed the rumor and explained why the checks
would not be paid that year, and at Mount 's request , agreed to speak to Respondent's
president about the matter. Mount at that time did not ask that the mater be nego-
tiated or that a meeting be held with respect to it.
The Christmas checks were not distributed in December 1961.
On January 4, 1962, Mount telephoned Jones again stating that the Union intended
to file a grievance concerning nonpayment of the Christmas checks and requested a
meeting in accordance with their practice of holding meetings to discuss current
problems. Such a conference was scheduled for January 16 for the purpose of dis-
cussing Christmas checks and other matters. According to the credited testimony
of Robert L. Jones, together with that of Mount , Mount wanted Respondent to accept
a grievance on the Christmas checks which was refused by Jones on the ground that
Respondent did not consider the Christmas check situation to be a grievable or a
contractual item , not being in the current contract . Further meetings at the request
of Respondent were held on January 29 and 30, 1962. Various matters were dis-
cussed at these meetings . Christmas checks were discussed once and when Re-
spondent refused to retract from its position Murphy mentioned that the Union
would pursue the matter in the courts . No formal grievance was filed by the Union
and no further meetings were held although Jones advised the Union that Re-
spondent would meet at any time to further discuss the subject . The next action
taken by the Union was the filing of the charge in April 1962.
As noted above, with the exception of the one contested piece of evidence having
to do with whether Christmas checks were ever mentioned at negotiations , the facts
are not in dispute . I find that at no time during negotiation were Christmas checks
mentioned , nor were they considered part of "existing benefits." And I also find
that at no time had Respondent ever called the Christmas checks a "Christmas
bonus."
The General Counsel put in evidence a special news bulletin distributed by Re-
spondent on July 11, 1961, entitled "THIS IS YOUR EXTRA PAYCHECK!" Re-
spondent pointed out in the bulletin that each employee actually received an extra
51 cents pay each hour of the workday or $1,069 , for the ygar 1960 , for certain
benefits. The Respondent had three categories set out as follows:
Time paid for but not worked such as Vacations , Sickness, Holi-
days, Excused Absences , On-the-Job Accidents , Sickness Disability,
Bad Weather , Short Tour , Call Out , Rest Periods---------------- $2,552,564
Legally required Employee Benefits such as F.O.A.B., Unemploy-
ment Compensation , Workmen's Compensation----------------- 538,015
Voluntary Employee Benefit Payments such as Pensions, Group
Life Insurance, Concession, Christmas Checks, Group Hospitalization
and Surgical Insurance--------------------------------------- 718,230
Total ----------------------------------------------- 3,808,809
This is equal to an average of 51 cents per hour for each hourly employee.
You receive this extra 51 cents pay each hour of the work day.
It is noted that "Christmas Checks" appears in the third category under voluntary
employee benefit payments. The General Counsel argues in its brief that this clearly
indicated that Respondent considered the Christmas checks to be one of the benefits
the employees were receiving and that as the employees voted to ratify or reject the
a Although Mount testified that he called about December 20, he admitted that the call
could have been made several days earlier and Jones credibly testified that the conversa-
tion occurred on December 12 or 13, because it was just before one of the rate hearings
held on December 14.
322 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
final proposals during negotiations that this was to make employees aware that they
were receiving and would continue to receive these benefits. Further that the
Union's failure to secure inclusion of the "existing benefits" clause in the 1961
contract was only by inadvertence and that it at no time during the negotiations
signified in any manner that it intended to waive the employees' right to receive
those existing benefits. Accordingly, the General Counsel urged that the Christmas
checks became part of the employees' "wages" or a "term or condition" of their
employment. And as such it was a mandatory subject to bargaining which could
not be altered or discontinued unilaterally by Respondent without violating Section
8(a) (5) of the Act.
Respondent on the other hand, argued in its brief that the Christmas checks were
pure gratuities that could therefore be unilaterally terminated by the Company in
its discretion and that the Union acquiesced in the Company's unilateral action
over the years concerning these gifts, thereby becoming equitably estopped to contest
the discontinuance of the checks. Respondent agreed that the Christmas checks
was a bargainable item and that once the Union requested negotiation relating to
them the Company was obligated by statute to bargain in good faith and the evi-
dence is that it did bargain in good faith at all times when requested to do so. But
it argued that it was not legally obligated to pay the Christmas checks and hence
should not be required to do so in any Board order.
Analysis and Conclusions
I find merit in the Respondent's argument in its brief in which it points out that
the facts of the instant case are substantially different from the facts involved in
the cases cited by the General Counsel. In the case of Nash-Finch Company, 103
NLRB 1695 (1953), the Christmas bonus paid by the company was based upon
company earnings and was paid to the company's hourly employees and some
individual contracts specifically provided for the bonus. Violation of Section 8(a) (3 )
alleged and found. In The American Lubricants Company, 136 NLRB 946 (1962),
the company's bonus was based upon the length of service of its employees. Again
8(a)(3) violations alleged yet not passed on. In Electric Steam Radiator Corpor-
ation, a Subsidiary of Landers, Frary and Clark, 136 NLRB 923 (1962), the com-
pany paid a Christmas bonus for 10 years and then refused to pay it as a reprisal
"for voting for the DAMN Union." In that case the company was found to have
violated Section 8(a) (1) and (3). Section 8(a) (5) was not involved. In Toffenetti
Restaurant Company, Inc., 136 NLRB 1156 (1962) (in a case not cited by General
Counsel), the employer was held to have violated Section 8(a)(1), (3), and (5)
by not giving a bonus to the bargaining unit whereas during the negotiations fol-
lowing a successful unionization it had promised specifically that if any bonus was
paid it would be paid to all employees. Finally in Citizens Hotel Company d/b/a
Hotel Texas, 138 NLRB 706 (1962), respondent based its Christmas bonus on the
percentage of annual income, and following the certification of the union announced
that the Christmas bonus would not be paid despite the fact that the union there
had already demandbd negotiation and had submitted a "maintenance of existing
privileges" clause. The company under those facts was found to have violated
Section 8(a)(3) and (5) of the Act. Respondent points out and I agree that in
each of the foregoing decisions cited by the General Counsel the bonuses involved
were substantial in amount and were directly related to or based upon the employee's
length of service or annual income, and were discontinued in such a way as to
raise the question of a violation of Section 8 (a) (3) of the Act.
In Niles-Bement-Pond Company, 97 NLRB 165, enfd. 199 F. 2d 713 (C.A. 2),
the Board and the court of appeals emphasized the importance of the above-
mentioned factors. In that case the company paid a yearend or Christmas bonus
to its employees from 1938 to 1950, except for 1946 when the employees were on
strike. The amount of the bonus was 1 week's pay during some years, and 5 percent
of earnings during others. In 1950, the company unilaterally reduced the bonus
to $1 for each year of service with a minimum of $5. The action was taken, ac-
cording to the company, because of the increased cost of a new retirement plan
just negotiated with the Union. The bonus itself was not mentioned during the
negotiations. The question, according to the Board, was "whether the bonus paid
... was a gift ... or wages...." The Board, with Member Murdock dissenting,
defined "bonus" as "a sum paid for service, or upon a consideration in addition to
or in excess of that which would ordinarily be given" (citing Kenicott v. Wayne
County, 16 Wall. 452, 471), and held that the payment by the Company was a bonus
and part of the wage structure since it constituted "compensation directly related
in amount and supplementary to their wages or earnings."
GENERAL TELEPHONE COMPANY OF FLORIDA 323
The Respondent pointed out that in the Niles case the Board affirmed Trial Exam-
iner Sidney Lindner's conclusion that the employer should not be ordered to pay
the 1950 bonus, but rather only should be required to bargain with the Union.
There the Trial Examiner found the "bonus" to be part of wages but rejected a
request by the Union for the Board to order the company to pay the 1950 bonus
on the ground, as stated by the Trial Examiner, that "the order to be recommended
will effectively insure to the Union the full enjoyment of its rights in the future to
use the bargaining processes for the purpose of presenting to the Respondent its
demands regarding the Christmas bonus or for the restitution of monies to the
employees allegedly adversely affected by the 1950 distribution of the Christmas
bonus," and that "Under these circumstances, an order of the type requested by
the Union, would appear to represent an unnecessary economic determination of
the merit of the union's bargaining position with regard to the Christmas bonus
[citing cases]."
The court of appeals in the Niles case, in enforcing the order, held at 198 F. 2d
713, 714-715:
Where, as here, the so-called gifts have been made over a substantial period
of time and in amount have been based on the respective wages earned by the
recipients, the Board was free to treat them as bonuses not economically different
from other special kinds of remuneration like pensions, retirement plans or
group insurance, to name but a few, which have been held within the scope
of the statutory bargaining requirement. [Citing cases.]
Nothing we have said, however, should be construed to mean that an em-
ployer may not make a bona fide gift to an employee-i.e. one in fact not com-
pensation-without previously bargaining about it. Nor, of course, does the
requirement to bargain in good faith, which we hold the statute imposes upon
this respondent, create any legal duty to agree to any terms in respect to the
payment of bonuses which it may decide in good faith to be incompatible with
good business judgment.
Finally, in Tucker Steel Corporation, and Steel Supply Company, 134 NLRB 323
(1961), the company there had paid an annual bonus equal to 1 week's pay each
year since 1956. Prior to that time the bonus had been paid in variable but sub-
stantial amounts. The union never sought to bargain with respect to the bonus
and no provision relative thereto had ever been included in a collective-bargaining
agreement. The company unilaterally discontinued the bonus in 1960 and on
January 7, 1961, the union demanded negotiation. The company refused to reopen
the contract and to bargain. The Board there approved Trial Examiner Ramey
Donovan's excellent reasoning and recommendation that the company's unilateral
discontinuance of the bonus was not a violation of Section 8(a)(5) of the Act,
since for 12 years the union had allowed the company to act unilaterally in paying
the same without objection or any attempt at negotiation, and by its silence the
union was equitably estopped. However, the Board and the Trial Examiner also
held that the company could not escape its duty to bargain upon request subsequent
to the termination, and ordered the company to bargain as it had refused to bargain
at the request made by the union on January 7, 1961, thus illustrating the distinction
made earlier.
The General Counsel urged that although the Union here failed to insure payment
of the Christmas check by contract, it did not waive the employees' right to the
benefit because the matter was not "fully discussed" or "consciously explored" during
negotiations and the Union clearly did not yield or waive its interest in the matter
during negotiations. The Press Company, Incorporated, 121 NLRB 976. I find
no merit to this position under the facts of this case. Assuming, arguendo, that
"Christmas Checks" were part of the "existing benefits" clause here for years, the
Christmas check was never discussed and both parties dropped the "existing benefits"
clause in negotiating for the 1961 contract. I cannot assume that this was mere
"inadvertence." The evidence showed that each party specifically urged contract
terms to be put in the agreement and the agreement was written excluding the
"existing benefits."
In summary I find that the Respondent did not violate Section 8(a)(5) of the
Act by unilaterally terminating the payment of Christmas checks in 1961 and 1962.
As in the Tucker Steel case, supra, the Respondent could rely on the long period of
inactivity by the Union to conclude it was not concerned with the Christmas checks
and hence its business judgment need not first be cleared with the Union. The Union
is estopped by its actions in urging this unilateral action is a refusal to bargain in
good faith with it. Actually the Respondent had even taken unilateral action in
727-083-64-vol. 144-22
324 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
1946 in raising the Christmas checks from $5 to $10 . The evidence shows that Re-
spondent is perfectly willing to bargain with the Union with respect to the Christmas
check for the future. Thus it is clear that the Union in the instant case desires the
Board to make an award payable by Respondent to the employees of a sum of money
which the Union up until the present time has never been interested in bargaining
about. Thus it is unnecessary to decide that the Christmas checks are "gifts" as
distinguished from a "bonus." I do add , however , that the evidence here tends to
show these Christmas checks are "bona fide" gifts as the circuit discussed in the
Niles case, supra. The Respondent has always considered them to have been gifts.
Accordingly , I will recommend that the complaint be dismissed in its entirety.
Even if it were determined that the unilateral termination of the Christmas checks
were a refusal to bargain in good faith, I would not order Respondent to pay the
1961 and 1962 checks as urged by the General Counsel . A "make whole" remedy
is usually associated with a violation of Section 8(a) (3) of the Act wherein a Re-
spondent would discriminate against an employee with respect to his terms or con-
ditions of employment for purposes of discouraging or encouraging membership in a
labor organization . As this record is wholly devoid of any evidence or any motive
of such discrimination , such a "reimbursement" remedy would not be recommended.
The policies of the Act will be and are being effectuated by future bargaining. All
evidence points to a willingness to do this.
CONCLUSIONS OF LAW
1. Respondent General Telephone Company of Florida is an Employer engaged
in commerce within the meaning of Section 2( 6) and (7) of the Act.
2. System Council T-2, International Brotherhood of Electrical Workers, AFL-
CIO, is a labor organization within the meaning of Section 2 (5) of the Act.
3. The General Counsel has failed to establish by the preponderance of the evi-
dence that Respondent has refused to bargain in good faith and, accordingly, there
is no violation of Section 8 (a) (5) and (1) of the Act.
4. There is no evidence of an independent violation of Section 8 (a) (1) of the Act.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact and conclusions of law , and upon
the entire record in the case , I recommend that the complaint be dismissed in its
entirety.
Consolidated Ventilation and Duct Co., Inc. and Joseph A.
Cinanni
Local Union No. 28, Sheet Metal Workers International Asso-
ciation , AFL-CIO and Joseph A. Cinanni . Cases Nos. 2-CA-
9068 and 2-CB-3627. September 3, 1963
DECISION AND ORDER
On May 28, 1963, Trial Examiner Jerry B. Stone issued his Inter-
mediate Report in the above-entitled proceeding, finding that the
Respondent had engaged in and was engaging in certain unfair labor
pra(:*.ces and recommending that it cease and desist therefrom and
take certain affirmative action, as set forth in the attached Intermediate
Report. Thereafter, the General Counsel and the Respondent Union
filed exceptions to the Intermediate Report. The Respondent Em-
ployer also filed a brief.
Pursuant to the provisions of Section 3(b) of the Act, the Board
has delegated its powers in connection with these cases to a three-
member panel [Members Leedom, Fanning, and Brown].
144 NLRB No. 41.