Hawaii Meat Co., Ltd.

National Labor Relations Board - Board Decisions

Nov 15, 1962

139 N.L.R.B. 966 (N.L.R.B. 1962)

966 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
affected by an agreement requiring membership in a labor organization as
authorized by the National Labor Relations Act.
O. N. JONAS Co., INC.,
Employer.
Dated------------------- By-------------------------------------------
(Representative) (Title)
This notice must remain posted for 60 consecutive days from the date of posting,
and must not be altered, defaced, or covered by any other material.
Employees may communicate directly with the Board's Regional Office, 528
Peachtree-Seventh Building, 50 Seventh Street, NE., Atlanta 23, Georgia, Telephone
Number, Trinity 6-3311, Extension 5357, if they have any question concerning this
notice or compliance with its provisions.
Hawaii Meat Company, Limited and Meat Cutters Union, Local
594 (AFL-CIO). Case No. 37-CA-3O2. November 15, 1962
DECISION AND ORDER
On August 9, 1961, Trial Examiner Martin S. Bennett issued his
Intermediate Report in the above-entitled proceeding, finding that
the Respondent had engaged in unfair labor practices in violation of
Section 8(a) (1), (3), and (5) of the Act, and recommending that it
cease and desist therefrom and take certain affirmative action, as set
forth in the attached Intermediate Report. Thereafter, the Respond-
ent filed exceptions to the Intermediate Report and a brief in support
thereof.'
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 Members
Leedom and Fanning].
The Board has reviewed the Trial Examiner's rulings and finds no
prejudicial error. The rulings are hereby affirmed. The Board has
considered the Intermediate Report, the exceptions and brief, and the
entire record in this case, and adopts the findings, conclusions,
and recommendations of the Trial Examiner with the following
modifications.
Meat Cutters Union, Local 594 (AFL-CIO), referred to here as the
Union, was certified in February 1960 as the exclusive bargaining
representative for a unit of the Employer's employees, including its
truckdrivers, helpers, and garage mechanics, referred to here as the
delivery department. Bargaining for an agreement continued until
July 1, 1960, when the Union struck for its economic demands.
About a month before bargaining broke down, the Respondent, con-
sidering that a strike was a possible eventuality, undertook negotia-
tions with an independent trucking company to subcontract its de-
1 The Respondent 's request for oral argument is hereby denied as the record , exceptions,
and brief adequately present the issues and the positions of the parties
139 NLRB No. 75.
HAWAII MEAT COMPANY, LIMITED 967
livery work in case a strike should occur. On the afternoon of July 1,
a few hours after the strike began, Respondent entered into an agree-
ment with Fukumoto, the trucking contractor, whereby the latter con-
tracted to deliver the Employer's products with his own employees
but with the Respondent's trucks which he leased at an agreed-upon
rental. Later the same afternoon, Respondent mailed a letter to all
the striking employees in which it advised them that it intended to
reopen its plant and to hire replacements for those strikers who did
not return. It also advised them that its delivery work had been sub-
contracted out so that no positions as drivers or helpers were any
longer available. This was the first notice either to the employees or
to the Union that Respondent had any intention of contracting out
its deliveries.
On Monday, July 4, the Union called a meeting to consider the Re-
spondent's letter. Although the Union first advised the strikers to
return to work on July 5, the next working day, the strikers decided
to continue their walkout when one of the delivery department em-
ployees pointed out that he had no job to return to. On July 5,
Fukumoto and the employees whom he had newly hired over the week-
end commenced operations under his contract with the Respondent.
On July 8, the Respondent unilaterally announced changes in wages,
holidays, sick leave, and medical insurance benefits, to which the Union
objected without avail. These changes were essentially those con-
tained in the Respondent's last offer to the Union prior to the strike.
A number of the strikers had returned to work by this time, and sub-
sequently replacements were hired for those who failed to return.
1. The Trial Examiner found that Respondent had violated Section
8(a) (5) by failing to fulfill its obligation to bargain in good faith
concerning the subcontracting of a portion of its operations, and that
its decision to subcontract was carried out as a retaliatory measure
against its employees for engaging in a strike. We agree with the
Trial Examiner that Respondent was obligated to bargain with the
Union about its decision to subcontract out its delivery work. Since
the issuance of the Intermediate Report, a majority of the Board has
held that an employer's decision to subcontract out part of its opera-
tions which were previously performed by its own employees is a
mandatory subject of bargaining even though the employer's deci-
sion may have been motivated by economic considerations rather than
by any opposition to the principles of collective bargaining? We
consider it unnecessary, therefore, to decide whether, as the Trial
Examiner found, the Respondent's action in subcontracting out its
delivery operations immediately after the strike began was also mo-
tivated by retaliatory considerations. The strike which began on
2 Town & Country Manufacturing Company, Inc., et as., 136 NLRB 1022; Adams Dairy,
Inc, 137 NLRB 815 ; and Fibreboard Paper Products Corporation, 138 NLRB 550
968 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
July 1, 1960, was caused by an impasse between the parties over the
economic issues which then separated them. At the inception of the
strike, the Respondent's intention to subcontract out its delivery work
was not an issue, since that had never been mentioned by the Re-
spondent and was not suspected by the Union. The decision to sub-
contract was a mandatory subject of bargaining, since it related to
the terms and conditions of employment of employees in the unit
for which the Union had been certified. The Respondent contends,
however, that it was not under a duty to bargain with the Union
over measures it considered itself obligated to take in order to keep
its plant operating, and that specifically, its right to replace these
economic strikers permanently includes the right to replace through
the utilization of a subcontractor and his employees. The Respond-
ent relies on the Supreme Court case, N.L.R.B. v. Mackay Radio &
Telegraph Co., 304 U.S. 333, and the Board's decision in Celanese
Corporation of America, 95 NLRB 664, footnote 11. We do not be-
lieve that the Mackay case is dispositive here, and to the extent that
our decision in Celanese is inconsistent with this decision, it is hereby
overruled.
Mackay holds that an employer is justified, in attempting to keep
his plant in operation, to hire new employees as replacements for
economic strikers. But the right to replace economic strikers perma-
nently is also affected by other prevailing principles of labor law.
Thus, as the Respondent admits, an employer is obligated to continue
bargaining with the representative of its employees even after they
go out on strike. Any unilateral change in wages and terms or con-
ditions of employment, which the employer makes while bargaining
negotiations are in progress, is itself a wrongful refusal to bargain.3
Nor is the employer's obligation to bargain limited by the issues which
may have precipitated the strike. N.L.R.B. v. United States Cold
Storage Corporation, 203 F. 2d 924, 928-929 (C.A. 5), cert. denied
346 U.S. 818, and cases there cited. The open conflict between the
parties manifested by the strike may itself bring other issues to the
fore and bargaining about such issues may also be required 4 Thus,
offering a higher wage to employees who return to work during a
strike than had been offered to the Union, or offering them super-
seniority, constitutes bad-faith bargaining even though the addi-
tional benefits offered for their return to work may have been prompted
by the employer's belief that he could not otherwise secure the replace-
ments which he needs to keep the plant in operation at its prestrike
3 N.L.R.B. v. Benne Katz, etc., d/b/a Williamsburg Steel Products Co , 369 U.S. 736
4 N.L.R B. v. Pecheur Lozenge Co ., Inc., 209 F. 2d 393, 403 ( C.A. 2) : "The incidence
of a strike does not suspend the obligation on the part of the employer to bargain . . . .
On the contrary , the need for carrying out that obligation when a strike is in progress 1s
all the greater in order that a peaceful settlement of the dispute may be reached
N.L.R.B v. J. H. Rutter-Rem Manufacturing Company, 245 F. 2d 594 (C.A. 5).
HAWAII MEAT COMPANY, LIMITED 969
level of activity.' The elimination of unit jobs (and the consequent
erosion of the bargaining representative's status) is, we are satisfied,
a mandatory subject for bargaining, even though the employer may
seek to justify his action in terms of the replacement of economic
strikers.
Our conclusion does not in any way infringe on the basic principle
of the Mackay case, since the replacement of strikers by other em-
ployees who remain within the unit does not impair the authority or
status of the bargaining representative to continue bargaining for all
the employees in the appropriate unit. In this case, individual strikers
are not being replaced by other employees, but instead, the positions
they held before the strike have been eliminated so that no replacement
is being substituted for the striker.
Our holding to the effect that the Respondent was obligated to ad-
vise and consult with the Union about its decision to replace certain
strikers through a subcontract does not, in our opinion, deprive the
Respondent of a potent tactic which it may be entitled to use during
a strike. We are not holding that before the strike ensues, an em-
ployer must reveal his intention to replace strikers on an individual
basis, nor do we imply that an employer must advise the union in
advance of the strike of his plans to counteract the impact of the
strike. All that we are holding in this case is that an employer fails
to bargain and violates Section 8(a) (5) if, after a strike begins, he
does not give the union an opportunity to bargain about his proposal
to change the existing terms and conditions of employment among
which, and not the least important, is the permanency of the job classi-
fications which were held by employees when the strike began.
After July 1, the date on which the strike began, the failure of the
Respondent to bargain with the Union about its decision to subcon-
tract out its delivery operations was clearly a factor in prolonging
the strike, since thereafter the very existence of the certified unit was
at stake. Accordingly, we find that the Employer's letter of July 1,
which it mailed to its employees after the strike was under way, con-
verted an economic strike into an unfair labor practice strike.
2. The Trial Examiner found that Respondent had discharged its
delivery department employees through its July 1 letter in which it
informed them that the delivery work had been subcontracted and that
they no longer had any jobs to return to. We find merit in the Re-
spondent's exception to this finding. It does not seem to us that the
July 1 letter served as a notice of discharge merely because it pre-
ceded the actual employment of Fukomoto's employees on July 5. In
accordance with our discussion in paragraph 1 above, we find that the
5 Erie Resistor Corporation, 132 NLRB 621 , enforcement denied 303 F 2d 359
( CA. 3), cert granted October 8, 1962; Swan Rubber Company, 133 NLRB 375, enfd.
303 F. 2d 668 (C.A. 6).
970 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
delivery department employees became unfair labor practice strikers
by the Employer's failure to bargain with the Union about its decision
to subcontract. This conversion, however, did not transform into a
discharge what was clearly intended merely as a notification that sub-
contracting arrangements had been entered into.' The delivery de-
partment employees and the other strikers were all in the same status
after the Employer's announcement of its subcontract. As unfair
labor practice strikers, they would be entitled to reinstatement upon
their unconditional application to return, even though the Employer
might thereby be required to discharge employees whom he hired after
the strike had been converted.
3. The Trial Examiner-found that the strikers, other than the de-
livery employees, were denied reinstatement no later than August 24,
1960, when the Respondent stated at a bargaining meeting that it
would not reinstate any of them even though agreement on a contract
was reached. After that date, the Trial Examiner found, any further
application for reinstatement would have been futile. As of August 24,
1960, the strike was still in effect and the Union had made no un-
conditional request for reinstatement. We do not agree with the Trial
Examiner that an application for reinstatement would have been
futile as of this date since it appears that the Union had not at that
time abandoned the economic demands over which the strike was
begun. The Board has on occasion made an exception to its general
rule that an unconditional application for reinstatement is a pre-
requisite for reinstatement and backpay during an unfair labor prac-
tice strike, but only when the strike had already been abandoned and
all the former strikers were immediately available for employment.'
Some months later, and while the strike was still in progress, the
Union sent the following letter to the Employer :
DEAR SIR : In several of our negotiating sessions, we indicated
to you that your last offer would be acceptable, providing you
put the strikers back to work. At those times, you refused to
take the strikers back.
We are again offering to have all of these strikers return to
work with or without a contract.
In view of his finding that an application for reinstatement would
have been futile after August 24, 1960, the Trial Examiner did not
consider the effect of the above letter. The Respondent argues that
it does not constitute an unconditional request for reinstatement be-
cause the use of the phrase "we are again offering" implicitly char-
acterizes it as equivalent to earlier offers to accept the Respondent's
9 Cf. Redwing Carriers , Inc. and Rockana Carriers, Inc., 137 NLRB 1545
7 Sea View Industries, Inc, 127 NLRB 1402 ; and Valley Die Cast Corp, 130 NLRB
508, enfd 303 F. 2d 64 (CA 6).
HAWAII MEAT COMPANY, LIMITED 971
terms. We do not believe this interpretation is valid. On the con-
trary, we construe the letter of March 14 as claiming that the Union
had at some undisclosed time agreed to accept a contract containing the
Employer's latest offer if the Employer would also reinstate the
strikers.' This construction is based on the fact that, for the first
time, the Union offered to have the strikers return to work even with-
out a contract, that is, upon any terms which the Employer would
unilaterally grant. In our opinion, this constitutes abandonment of
all the Union's economic demands and is, in effect, an unconditional
application for reinstatement. The fact that the strike continued
thereafter is explainable by the Respondent's failure to grant reinstate-
ment to the strikers. An unconditional request for reinstatement of
strikers must carry with it, as the instant request does, an under-
taking to abandon the strike, if the request is granted; it does not
require that the employees forfeit their right to continue the strike,
if the request is denied. All that is required is that the Union or
the employees unconditionally offer to return to the status they oc-
cupied before the strike began.'
THE REMEDY
We have found that the Respondent failed to fulfill its statutory
bargaining obligation within the meaning of Section 8(a) (5) and
(1) of the Act when it subcontracted its delivery work without prior
notice to, or consultation with, the Union. We have also found that
the Respondent unlawfully refused to reinstate its striking employees
upon their unconditional application for reinstatement. If the status
quo existing prior to its unlawful conduct is to be reestablished, and if
its unfair practices are to be fully remedied, it is evident that the Re-
spondent must be required to discontinue any arrangement involving
the contracting out of its delivery operations and to reestablish this
operation as it existed on July 1, 1960. We shall so order. We shall
also order the Respondent, if it has not already done so, to offer the
unfair labor practice strikers on whose behalf the Union made its un-
conditional request for reinstatement, full reinstatement to their
former or substantially equivalent positions, without prejudice to
their seniority or other rights and privileges, dismissing, if necessary,
employees hired to replace the strikers. We shall also order that Re-
spondent make them whole for any loss of earnings suffered by reason
of Respondent's discrimination with respect to them, by payment to
each of them of a sum of money equal to the amount they would nor-
8 There is no evidence in the record that the Union had, in fact, prior to march 34,
receded from all its economic demands.
O Marathon-Clark Cooperative Dairy Association, 137 NLRB 882, where the Board
ordered the reinstatement of strikers upon their unconditional request even though the
strike continued upon the employer's refusal to reinstate them.
972 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
mally have earned as wages between the date Respondent received
their unconditional applications for reinstatement and the date of
its offer to reinstate the employees, less net earnings during that period.
Such pay loss shall be computed with interest at the rate of 6 percent
per annum in the manner set forth in F. W. Woolworth Company, 90
NLRB 289, and in Isis Plumbing d Heating Co., 138 NLRB 716.
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, Hawaii Meat
Company, Limited, Honolulu, Hawaii, its officers, agents, successors,
and assigns, shall :
1. Cease and desist from :
(a) Failing and refusing to bargain collectively with Meat Cutters
Union, Local 594 (AFL-CIO), as the exclusive representative of all
its employees at its Middle Street plant, excluding office clerical and
professional employees, guards and/or watchmen, and supervisors, as
defined in the Act, with respect to wages, hours, and other terms and
conditions of employment; and from unilaterally contracting out the
delivery and allied operations formerly, performed by its own em-
ployees without prior bargaining with the above-named Union or
with any other union its employees may select as their exclusive
bargaining representative.
(b) Discouraging membership in the above-named Union, or any
other labor organization, by refusing to reinstate any of its employees
who are unfair labor practice strikers upon their unconditional re-
quests for reinstatement, or by discriminating in any other manner in
regard to their hire or tenure of employment or other terms and condi-
tions of employment, except to the extent permitted by Section 8 (a)
(3) of the Act, as modified by the Labor-Management Reporting and
Disclosure Act of 1959.
(c) In any other manner interfering with, restraining, or coercing
its employees in the exercise of their right to self-organization, to
form labor organizations, to join or assist Meat Cutters Union, Local
594 (AFL-CIO), or any other labor organization, to bargain col-
lectively through representatives of their own choosing, and to en-
gage in other concerted activities for the purpose of collective bargain-
ing or other mutual aid or protection as guaranteed by Section 7 of
the Act, or to refrain from any or all such activities, except to the
extent that such right may be affected by an agreement requiring
membership in a labor organization as a condition of employment as
authorized in Section 8(a) (3) of the Act, as modified by the Labor-
Management Reporting and Disclosure Act of 1959.
HAWAII MEAT COMPANY, LIMITED 973
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act :
(a) Terminate any arrangement for contracting out its delivery
and allied operations and reestablish such operations as they existed
on July 1, 1960.
(b) Bargain, upon request, with Meat Cutters Union, Local 594
(AFL-CIO), as the exclusive representative of all employees in the
aforementioned appropriate unit.
(c) Offer to the employees who were on strike on March 14, 1961,
reinstatement to their former or substantially equivalent positions,
without prejudice to their seniority or other rights and privileges,
and make them whole for any loss of pay they may have suffered in
the manner set forth in the section of this Decision and Order en-
titled "The Remedy."
(d) Preserve and, upon request, make available to the Board or
its agents, for examination and copying, all payroll records, social
security payment records, timecards, personnel records and reports,
and all other records in the Respondent's possession necessary for
computation of lost earnings due hereunder.
(e) Post at its plant in Honolulu, Hawaii, copies of the attached
notice marked "Appendix." 10 Copies of said notice, to be furnished
by the Regional Director for the Twentieth Region, shall, after being
duly signed by Respondent, be posted immediately upon receipt
thereof, and be maintained by it for 60 consecutive days thereafter, in
conspicuous places, including all places where notices to employees
are customarily posted. Respondent shall take reasonable steps to
insure that such notices are not altered, defaced, or covered by any
other material.
(f) Notify the said Regional Director for the Twentieth Region,
in writing, within 10 days from the date of this Order, what steps
Respondent has taken to comply herewith.
MEMBER LEEDOM, concurring in part and dissenting in part :
I concur insofar as my colleagues find an unlawful refusal to bar-
gain and unlawful discrimination in the denial of reinstatement to
the strikers, including the drivers, in March 1961. However, unlike
my colleagues, I find, as did the Trial Examiner and for the reasons
indicated in the Intermediate Report, that, in subcontracting the
delivery operations on a permanent basis on or about July 1, 1960,
the Respondent discharged its drivers in retaliation against their
striking in violation of Section 8 (a) (3) ; and, it is in this context
that I agree with my colleagues' finding that, by subcontracting its
delivery operations without consulting the Union, the Respondent
10In the event that this Order is enforced by a decree of a United States Court of
Appeals, there shall be substituted for the words "Pursuant to a Decision and Order" the
words "Pursuant to a Decree of the United States Court of Appeals, Enforcing an Order."
974 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
violated Section 8(a) (5), and with their remedial provision for the
unlawful refusal to bargain. See Town & Country Manufacturing
Company, 136 NLRB 1022, footnote 10; Adams Dairy, Inc., 137
NLRB 815, footnote 3. And, for the reasons stated in the dissenting
opinion in Isis Plumbing, supra, unlike my colleagues, I would not
grant interest on backpay to the discriminatees. In all other respects,
I concur.
APPENDIX
NOTICE TO ALL EiIPLOYEES
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 :
WE WILL terminate any arrangement for contracting out our
delivery operations and reestablish such operations as they existed
on July 1, 1960.
WE WILL, upon request, bargain with Meat Cutters Union, Local
594 (AFL-CIO), as the exclusive bargaining representative of
our plant and delivery employees in the appropriate unit.
WE WILL offer all our employees who were on strike on March 14,
1961, immediate and full reinstatement to their former or sub-
stantially equivalent positions and will make them whole for any
loss of pay each of them may have suffered as a result of our dis-
criminatory refusal to reinstate them on and after their uncon-
ditional requests for reinstatement.
WE WILL NOT unilaterally subcontract out our delivery and
allied operations formerly performed by our own employees with-
out first bargaining with the above-named Union or with any
other union our employees may select as their exclusive bargain-
ing representative.
WE WILL NOT discourage membership in Meat Cutters Union,
Local 594 (AFL-CIO), or any other labor organization, by re-
fusing to reinstate any of our employees who are unfair labor
practice strikers upon their unconditional request for reinstate-
ment, or by discriminating in any other manner in regard to their
hire or tenure of employment or other terms or conditions of em-
ployment, except to the extent permitted under Section 8(a) (3)
of the Act, as modified by the Labor-Management Reporting and
Disclosure Act of 1959.
WE WILL NOT in any other manner interfere with, restrain, or
coerce our employees in the exercise of their right to self-
organization, to form labor organizations, to join or assist Meat
Cutters Union, Local 594 (AFL-CIO), or any other labor organ-
ization, to bargain collectively through representatives of their
own choosing, and to engage in other concerted activities for the
HAWAII MEAT COMPANY, LIMITED 975
purpose of collective bargaining or other mutual aid or protection
as guaranteed in Section 7 of the Act, or to refrain from any or all
such activities, except to the extent that such right may be affected
by an agreement requiring membership in a labor organization as
a condition of employment, as authorized in Section 8(a) (3) of
the Act, as modified by the Labor-Management Reporting and
Disclosure Act of 1959.
WE WILL NOT discriminate in regard to hire or tenure of em-
ployment or any term or condition of employment against any
employee because of membership in or activity on behalf of any
such labor organization.
All our employees are free to become or remain, or to refrain from
becoming or remaining, members of Meat Cutters Union, Local 594
(AFL-CIO), or any other labor organization, except to the extent
that such right may be affected by an agreement requiring member-
ship in a labor organization as a condition of employment as author-
ized under Section 8 (a) (3) of the Act.
HAWAII MEAT COMPANY, LIMITED,
Employer.
Dated---------------- By-------------------------------------
(Representative ) ( Title)
NOTE.-We will notify any of the above-mentioned employees pres-
ently serving in the Armed Forces of the United States of their right
to full reinstatement upon application in accordance with the Selective
Service Act after discharge from the Armed Forces.
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 Subregional
Office, 680 Ala Moana Boulevard, Room 409, Honolulu, Hawaii, Tele-
phone Number, 5-8831, Local 408, if they have any question concerning
this notice or compliance with its provisions.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
This case was heard before Trial Examiner Martin S . Bennett at Honolulu,
Hawaii, on April 3, 4, 9, 6, 7, 10, and 11 , 1961. The complaint , in essence , alleges
that Respondent, Hawaii Meat Company, Limited, engaged in unfair labor practices
within the meaning of Section 8(a)(1), (3 ), and (5 ) of the Act by bargaining in
bad faith for a contract ; by replacing approximately 15 of its employees , a portion
of a certified unit represented by Meat Cutters Union , Local 594 (AFL-CIO),
herein called the Union, with an independent subcontractor ; by unilaterally chang-
ing conditions of employment ; and by refusing to meet to negotiate a contract. Oral
argument at the close of the hearing was waived; the period for submission of
briefs was extended to June 7 and briefs have been submitted only by the Charging
Party and by Respondent.
Upon the entire record in the case, and from my observation of the witnesses, I
make the following:
976 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
FINDINGS OF FACT
I. THE BUSINESS OF RESPONDENT
Hawaii Meat Company, Limited, is a Hawaii corporation engaged in the whole-
sale processing of meat at Honolulu. In connection therewith, cattle are slaughtered,
beef is sold, and meats are imported for resale. During the year 1960, Respondent
purchased meat and other materials valued in excess of $50,000 which were shipped
to Respondent from States of the United States other than the State of Hawaii.
I find that the operations of Respondent affect commerce and that it would effectuate
the purposes of the Act to assert jurisdiction herein.
II. THE LABOR ORGANIZATION INVOLVED
Meat Cutters Union , Local 594 (AFL-CIO), is a labor organization admitting
to membership the employees of Respondent.
III. THE UNFAIR LABOR PRACTICES
A. The issues; introduction
The Union was certified on February 17, 1960, as the representative of Respond-
ent's employees in a companywide unit excluding guards and/or watchmen, super-
visors, professional employees, and office clericals. The unit comprised approxi-
mately 73 employees in production and maintenance classifications. Included were
seven drivers, eight driver-helpers, and one auto mechanic helper. The driver-
helpers performed some laboring duties inside the plant in addition to assisting the
drivers. Thereafter, approximately 11 collective-bargaining sessions were held be-
tween May 20 and June 30, 1960. A strike commenced on July 1, but picketing
as such was not carried on until July 5, as described below.
The General Counsel variously contends that Respondent failed to bargain in
good faith on and after June 7, 1960, the Section 10(b) cutoff date; that because
of the strike Respondent unilaterally terminated the approximately 15 drivers and
driver-helpers and contracted with an independent contractor to handle its deliveries;
that the job of the auto mechanic helper was similarly abolished; that Respondent
unilaterally changed working conditions because of the strike; and that on or about
July 29, during the strike, Respondent refused to meet with the Union. The General
Counsel in effect concedes that the independent contractor was in no way an alter
ego of Respondent.
B. Majority representation in the appropriate unit
The complaint alleges, Respondent admits, and I find that all employees of Re-
spondent at its Middle Street plant exclusive of office clerical employees, guards
and/or watchmen, professional employees, and supervisors, constitute a unit ap-
propriate for the purposes of collective bargaining within the meaning of Section
9(b) of the Act. The complaint alleges, Respondent admits, and I find that on
February 17, 1960, and at all times material herein, the Union was and now is
the exclusive representative of the employees in the above described appropriate unit
for the purposes of collective bargaining within the meaning of Section 9(a) of the
Act. As will be apparent, a key issue in the case is the fact that, despite the fore-
going concession, Respondent challenges the Union's right to represent its delivery
employees, viz, the drivers, driver-helpers, and the auto mechanic helper, who were
ousted when Respondent contracted with an independent contractor to take over
its delivery operations.
C. Sequence of events
Following the certification, the Union submitted a proposed contract to Respond-
ent on May 2, 1960, and on May 24 Respondent submitted its counterproposal.
Ten or eleven meetings were held between May 2 and June 30 with discussion of
both proposals; as indicated, a strike commenced on July 1.
The General Counsel and Respondent have adduced evidence with respect to the
alleged failure of Respondent to approach the bargaining table in good faith in
the sense that Respondent failed to yield or make concessions with respect to con-
ditions of employment. In support thereof, the General Counsel has also adduced
evidence of a number of communications from Respondent to its employees where-
in they were kept posted, in part at least, as to the state of negotiations between
their designated bargaining representative and Respondent.
Inasmuch as primary emphasis was given to other facets of the case, which,
as will appear, are dispositive of the case, and, moreover, as I am convinced that the
HAWAII MEAT COMPANY, LIMITED 977
record will not support a finding of an unfair labor practice predicated upon the
above-stated theory, at least during the prestrike period, I believe that it would
greatly and unduly encumber this report to set forth the documentary and other
evidence with respect thereto and this in large measure has not been done.
The record discloses the following with respect to the sequence of events immedi-
ately preceding the strike. A meeting held on June 27, 1960, was attended, inter
alia, by Attorney David McClung in behalf of the Union and by Irving Baldwin,
a staff member of the Hawaii Employers Council which represents Respondent in
collective bargaining. Their respective versions differ slightly, McClung testifying
that Baldwin came forward with a modified proposal and stated Respondent could
offer no more, whereas Baldwin, as he testified, stated that there was little room for
bargaining and McClung responded that further discussions were pointless.
McClung did not recall the latter statement attributed to him but did not deny it.
Both agree that McClung announced that he would refer management's latest proposal
to the union membership and would recommend rejection thereof.
On the evening of June 29, Business Agent Ivan Naiwi sent a wire to Vice Presi-
dent James Greenwell of Respondent stating that "YOUR EMPLOYEES MEMBERS
OF OUR UNION ATTENDING STOP WORK MEETING AT PIER 8 TO DIS-
CUSS CONTRACT NEGOTIATIONS." This meeting was duly held for the pur-
pose of taking up the latest employer proposal and it is also undisputed that the
wire was not delivered to Respondent until approximately 11:30 a.m. on June 30.
It is also clear, and I find, that a number of employees appeared at the plant gate
that morning at the customary reporting hour but did not enter the plant premises.
Respondent's records disclose that substantially less than a majority of the em-
ployees in the bargaining unit worked that day.
The Union and Respondent met again on June 30 at approximately 5:30 p.m.
McClung informed the employer representatives that the Union had rejected manage-
ment's latest proposal.' Greenwell and Baldwin agree, and I find, that Baldwin
asked McClung if the Union was on strike. McClung replied that there was not a
strike as of that day, but that Respondent could consider it a strike if the men
were not back on the following morning.2
Later that night McClung and Naiwi decided to hold another union meeting on
July 1. As McClung testified, at approximately 5:30 a.m. on July 1, he and Naiwi
instructed the union-shop stewards to notify employees at the plant gate to attend
a union meeting. At 6 a.m., Naiwi sent a wire to Vice President Greenwell stating
that "MEETING WITH YOU YESTERDAY HAS NECESSITATED CALLING
A STOP WORK MEETING TODAY TO EXPLAIN STATUS OF NEGOTIA-
TIONS TO OUR MEMBERS." This wire was received at 9:30 a in. The meet-
ing was held at approximately 8 a.m. on July 1 and the membership was brought
up to date on the failure of negotiations with Respondent at the June 30 meeting.
As on the previous day, substantially less than a majority of the complement reported
for work.
Later that morning, Baldwin telephoned McClung at his office. According to the
latter, Baldwin asked if the strike was on; McClung replied that it was a stop work
meeting and Baldwin stated that if the men were not back by noon or 2 p.m.
Respondent would consider it a strike. According to Baldwin, it was McClung
who stated that it would be a strike if the men were not back after lunch. Green-
well was promptly notified by Baldwin that, according to McClung, it would be a
strike if the men were not back that afternoon.
It is clear in any event, and I find, inasmuch as the absentees were not back to
work by 2 p.m. on July 1, that at the very latest, as of that time, Respondent's
employees had commenced an economic strike against Respondent .3
Sometime during the morning of July 1, Vice President Greenwell asked Baldwin
to arrange a meeting of Respondent's officials with its industrial relations adviser
that afternoon. Baldwin did so and present at the Hawaii Employers Council at
2 or 2 : 30 p.m . were Greenwell , Baldwin , Respondent 's counsel , and other representa-
tives of Respondent and the Council.
'It appears that as of this date one of the chief items separating the parties was the
Union's proposal that most if not all of the 15 persons designated as supervisors be in-
cluded in the unit on the basis that their tasks were actually not supervisory in nature
2 McClung conceded that he might have told Baldwin, in response to the latter's query,
that if the men were not back on the following day Respondent could assume that they
were on strike
3 While it can well be argued that the strike had commenced on the morning of July 1,
if not on the morning of June 30 , such a conclusion would not affect the results that
follow herein.
978 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
As Baldwin testified, he initially reported to the assemblage about his talk earlier
that day with McClung, i.e., as to the existence or nonexistence of a strike. Re-
spondent stresses in its brief that the group then concluded that they were con-
fronted with a strike situation and, as indicated hereinabove, I have already so
found. They concluded that one, Fukumoto, should be immediately retained to
handle Respondent's meat deliveries to its customers in the Honolulu area. I shall
hereinafter set forth the history of negotiations with Fukumoto which had been
under way for some weeks.
Fukumoto, who had been alerted by Greenwell at approximately 8:30 that
morning, was then telephoned and appeared at the meeting at approximately 3 p.m.
He was asked if he would take on a contract to handle Respondent's deliveries and
agreed to do so. As also indicated below, he had previously made such an agree-
ment with Greenwell. Fukumoto then discussed details of his contract with Re-
spondent's counsel, and, after approximately one-half hour, left the premises. Dur-
ing the same period, Baldwin began to draft a letter for mailing to the employees
of Respondent. The letter was prepared, signed by Greenwell, and, at approxi-
mately 6 p.m., Baldwin proceeded to mail the letter to Respondent 's entire com-
plement of employees. The letter stated as follows:
AN IMPORTANT MESSAGE
To All Employees of Hawaii Meat Company:
Because many of our employees went on strike, we intend to begin hiring
replacements immediately. Unless you return to work immediately, you will
be permanently replaced.
Since we are dealing with a very perishable commodity, we must keep op-
erating. We know that you value your job, and that your family values your
job. You should think very carefully-and think for yourself-about just
what you are going to do. Talk this problem over with your family. Do you
really want to keep on working for Hawaii Meat, or don't you?
Employees who return to work will be accepted on a first-come-first served
basis. In other words, if your old job is still open, you will get it. If it is
filled by a new employee you may be offered other work that you can do. We
cannot promise that you will get your old job back, however, or any job.
For example, as of Tuesday, July 5, all of our delivery will be done by a
trucking company we have made a contract with . There are no longer any
delivery truck driver or driver helper jobs. [Emphasis supplied.]
From the beginning it has seemed to us that McClung, the union spokes-
man, had orders from his boss in Chicago (Max Osslo) about the kind of
contract he had to negotiate. We have, nevertheless, tried very hard to offer
a contract that would meet the needs of our employees and the needs of the
company. If some of you had attended the negotiation meetings, we know
you would have a clearer picture of the two sides of the question.
You certainly can understand that a number of ranchers depend on us for
income, and that many merchants depend on us for meat to sell. So you can
see the need for getting replacements if we are going to stay in business.
We repeat, if you want to continue as one of our employees you should
return to work . We must hire permanent replacements as soon as we can
because of the perishable nature of our product.
It is to be noted that Respondent had handled its own deliveries prior to the
strike with a total of eight trucks, six in normal usage plus two others for use when
business demanded. There were approximately seven drivers and eight driver-
helpers assigned thereto. Some of the trucks did not require the services of a
helper. At least some of the driver-helpers, in addition to working on the trucks,
had warehouse duties involving primarily the handling of merchandise destined to
and from the meat cooler or chiller. One other employee in this group, classified
as an auto mechanic helper, assisted the mechanic, ran errands, and washed trucks.
It is clear and I find that: (1) the reference in the letter was to this group of
drivers and driver-helpers; (2) Fukumoto did not commence his actual work in be-
half of Respondent until 7 a.m. on July 5, after the long holiday weekend; and
(3) Respondent had not utilized the services of an outside hauler or trucker during
1960. The record does disclose that such haulers had been used occasionally not
later than the latter half of 1959 and only when deliveries were unusually heavy.
They were used, it is clear, only as supplements to Respondent's regular delivery
crew.
I further find that as of 6 p.m. on July 1, 1960, Respondent had discharged its
drivers and driver-helpers, the majority of whom were on strike, and that this action
was taken prior to the actual utilization of Fukumoto personnel on July 5.
HAWAII MEAT COMPANY, LIMITED 979
As for the history surrounding the appearance of Fukumoto on the scene, the
record discloses the following . Baldwin of the Hawaii Employers Council testified,
and I find, that Greenwell asked him if he knew of any outside truckers who could
handle Respondent 's deliveries and that, pursuant to this query, he, Baldwin, sub-
sequent to a negotiating meeting with the Union on or about May 26 , 1960, put
another representative of the Council in touch with Greenwell.4
Greenwell testified that he contacted Fukumoto between May 31 and June 3 by
telephone and on June 1 and 2 also contacted another hauler. He met with both
men on June 4 and explained the possibility of a hauling contract . It may be noted
that Greenwell was contemporaneously holding bargaining meetings with the Union
on June 3 and 8, 1960.
Greenwell notified the other hauler on or about June 10 that Fukumoto's bid
was preferable and, on June 14 or 10 as he variously testified, Fukumoto having
lowered his price in the interim , told Fukumoto that if a strike resulted, Respondent
would concern itself only with his bid. The topic was not mentioned in any of
the negotiations with the Union for the reason, as Greenwell put it , that the subject
did not arise and he saw no need to bring it up. Greenwell further testified that
all but minor details had been worked out with Fukumoto prior to the strike and
that these were worked out after the commencement of the strike.
A meeting of Respondent 's board of directors was addressed by Baldwin on
June 24 and he informed them that a strike could be expected. The Board was
informed by company officials that they had been negotiating with an outside truck-
ing firm "and that it had reached tentative agreement with regard to the future
delivery of all products(s) to customers on a contract basis.. . . Authorization to
contract all delivery service at a time and on conditions to be worked out by
Management was . . . approved."
According to Greenwell , he held a telephone conversation with Fukumoto on
Tuesday, June 28, and discussed the substantial provisions of the contract to be
entered into if a strike occurred On the same date he sent Fukumoto a six-page
document, prepared on the previous day by Respondent's attorney, but bearing the
June 28 date , and stating as follows:
We are writing to confirm our agreement with you with regard to the trans-
portation by you of our products from our plant to our customers.
Hawaii Meat Company Limited (hereinafter called the "Company") hereby
engages you (hereinafter called the "Contractor"), or your permitted assigns,
to haul our products from our plant to our various customers in the City and
County of Honolulu. The Contractor, or any assignee who meets with our
approval will be required to perform the following:
1. To supply all the necessary personnel and equipment necessary to assist
in the loading of the trucks at the Company's plant, and to deliver merchandise
to all of the Company's customers in the City and County of Honolulu
2. To obtain receipts from all customers to whom merchandise is delivered
3. To make collections on c.o.d. orders and such other orders as requested
by the Company.
4 You will designate one of your employees to act as foreman who will
confer daily with our dispatcher in order to facilitate deliveries.
The Company will lease to Contractor four van type and two panel type
trucks (more specifically described in Schedule "A" attached to this letter),
at a lease rental of $500.00 per month for the six vehicles. Contractor will
man these vehicles with sufficient competent nersonnel and supervise their work.
It is understood that the lease rental of $500 00 per month represents the
Company's carrying charges and that in the event such charge increases or
decreases by reason of the purchase of new equipment or the writing down of
old equipment, the amount of compensation paid to the Contractor hereunder
will be adjusted to reflect such increase or decrease in cost to the Contractor.
The Contractor shall be entitled during the term of this agreement, or any
extended term, to the possession of the trucks. The Contractor agrees to pay
all operating costs and the cost of all repairs and maintenance during said
periods
The Contractor shall be responsible for the garaging and the care and
maintenance of these vehicles when not in use.
In addition to the trucks listed on Schedule "A," if in the Company's judgment
the vehicles under lease to the Contractor are insufficient in the Company's
opinion to meet the requirements of delivering the Company's products during
'Greenwell testified that the idea had originated with the Council.
672010-63-von 139-63
980 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
any period, the Company will make available to the Contractor two additional
trucks (specifically described in Schedule "B" attached) as supplemental units.
No rental charge will be made for the supplemental units at this time but if
their use, or the use of either, is more than anticipated at this time by the
Company, the Company may make a charge for rental.
The Contractor agrees at his expense to insure the six trucks against damage
or destruction for such coverages as are available with a deductible provision of
$250.00, such policy or policies to name the Company as the loss payee. In
the event of loss or destruction of any truck, the proceeds of said policy shall
be paid to the Company to be used to defray the cost of repairs to such vehicle.
If insurance coverage is not available, or if the insurance proceeds are insuffi-
cient to cover the loss or the cost of repairs, then in such event the Contractor
will upon demand pay over to the Company the amount of the loss or the
deficiency.
In the case of a total loss or where in the Company's judgment repairs are
not desirable, the Company shall have the option of furnishing you with a
substitute vehicle or vehicles and adjusting the rental as herembefore provided.
Nothing contained in this paragraph shall relieve the Contractor of the duty of
making repairs and if repairs satisfactory to the Company are made by the Con-
tractor, the Company will release to the Contractor the proceeds of any appli-
cable insurance policy which has been taken out by the Contractor
The Contractor agrees to carry Workmen's Compensation Insurance to insure
against injury or death to his employees while engaged in the performance of
the work required by this contract. The Contractor further agrees to indemnify
the Company and save it harmless from all claims, demands, costs, expense,
actions or judgments, which may at any time be brought, made, incurred or
entered against it by the Contractor's employees, or any third party, as a result
or or arising out of the Contractor's operations.
At the end of the term of this agreement or a sooner determination thereof,
the Contractor will deliver to the Company all of the equipment under lease
in as good condition, reasonable wear and tear excepted.
The Company will permit the Contractor's employees to make a daily wash-
down of the leased vehicles on the Company's premises. The Company will at
its expense provide edible white oil for the wipe down. In addition, the Com-
pany will provide the Contractor's truckers with wraparound frocks and beef
carrying clothes.
The Contractor will, if requested by the Company, make in addition to out-
side deliveries to the Company's customers, internal deliveries to the Company's
cut meat department. It is understood that such deliveries will be made at a
rate mutually to be agreed upon and that the rate hereinafter specified for de-
livery to the Company's customers is not applicable.
The Company agrees to pay to the Contractor for services rendered here-
under (save and except internal deliveries) the sum of 11/a cents per pound for
all goods of the Company delivered to its customers. Determination of the
amount of goods delivered is to be made daily on the day following delivery
on the basis of the previous day's delivery invoices. Payment of the compen-
sation will be made to the Contractor weekly, not later than the third business
day of the following week. The Company may withhold from all such pay-
ments a proportionate share of the monthly truck rental.
This agreement shall be for a term of six months subject to cancellation by
either party upon giving thirty (30) days prior written notice to the other.
Unless at least thirty (30) days prior to the expiration of said six month period
one party shall notify the other in writing of his or its intention not to con-
tinue, this agreement shall automatically continue for an additional six months
upon the same terms and conditions.5 [Emphasis supplied.]
The Contractor will during the term of this agreement, or any extensions or
renewals of the same, keep the equipment in a strictly clean and sanitary con-
dition and observe and perform all laws, ordinances, rules, regulations, whether
now or hereafter made by any Governmental or other authority for the time
being applicable to the Contractor's operations hereunder and will indemnify
and save the Company from all actions, suits, claims, damages, fines and penal-
ties by whomsoever brought, made or imposed by reason of the non-observance
or non-performance of said ordinances, laws, rules and regulations or of this
covenant.
During the term of this agreement the Company will not, so long as the Con-
tractor satisfactorily performs and is able to perform his obligations, contract
5 As appears below, this clause was changed on July 1.
HAWAII MEAT COMPANY, LIMITED 981
with third parties for the carriage of its products from its plant to its customers,
provided, however, that this provision shall not interfere with or prevent
customers from receiving merchandise directly from the Company and trans-
porting to their own establishments.
The Contractor may, subject to the Company's approval, assign this agree-
ment to a third party or corporation who will receive all of the benefits and
assume all of the obligations and liabilities imposed hereunder.
In the event that by reason of a labor dispute or disputes, or other causes
beyond your control, you are temporarily prevented from performing the haul-
ing required by this agreement, the Company, so often as this situation shall
occur, shall have the right to require the Contractor to surrender the trucks and
upon receipt of such equipment to hire or lease them to third parties at pre-
vailing rates for such length of time as the Contractor is unable to perform,
provided, however, that if in the judgment of the Company your inability to
perform on any given occasion is more than temporary, then the Company may
cancel this agreement. [Emphasis supplied.]
In the event that the Company shall decide to dispose of any of the trucks
leased to the Contractor under the terms of this agreement, it will give the
Contractor the first right to purchase such truck or trucks at the highest price
and upon the same terms which have been offered to the Company by a bona
fide buyer.
The Contractor will procure and keep in force during the term of this
agreement or any extended term hereof, a fidelity bond or an insurance policy
guaranteeing or insuring as the case may be the Company against all losses
of its money or products caused by any fraudulent, dishonest or criminal act
of Contractor's employees whether committed alone or in collusion with others.
The Contractor will, if requested by the Company, carry liability insurance
insuring the Contractor and the Company against legal liability for injuries or
death to persons other than employees of the parties hereto, arising out of the
operation of the trucks referred to in this agreement, and also out of any and
all other operations of the Contractor pursuant to the terms of this agreement,
with limits of not less than $100,000.00 applicable to the injury or death of
one person as the result of any one accident, and $300,000.00 with respect to
the injury or death of two or more persons as the result of any one accident.
The term "Company" shall include Hawaii Meat Company, Limited, its
successors and assigns, and the term "Contractor" shall include said Richard
Fukumoto, his heirs, administrators and permitted assigns. Whenever the
word "term" is used herein with respect to this agreement it shall include the
original six months term and any subsequent extension or renewal thereof.
Your approval of the terms and conditions set forth in this letter on a copy
hereof shall constitute acceptance of the same.
Fukumoto was called in on July 1, and a contract was signed at approximately
5:30 p.m. The agreement was identical with that previously sent to Fukumoto on
June 28, except that it bore the date of July 1, changed the term of the contract,6
and listed the contracting hauler as R.H. & R., Inc. This reflects the fact that
Fukumoto, an established hauler in the area, had formed a new corporation expressly
for the purpose of carrying on this hauling for Respondent. The articles of incor-
poration for the organization were received by the State treasurer at 4:23 pm. on
July 1, manifestly after Fukumoto had left the office of the Council, and prior to
the execution of the new contract at approximately 5:30 p in that day.
It may be noted that although the agreement states that it became effective on
July 1, it does not provide precisely when Fukumoto was to commence operations.
The record does disclose that R H. & R. hired new employees who started work at
7 a in. on July 5. In addition, according to Greenwell, Fukumoto disclosed dur-
ing negotiations that he had run an advertisement for another purpose and had ap-
proximately 150 applications on file; a copy of his advertisement of June 23, 24,
25, and 26 is in evidence. There is no evidence that Fukumoto had actually hired
anyone for this job prior to signing the contract with Respondent on July 1 at
approximately 5:30 p.m.
Late on July 1, and on July 2 as well, a number of employees who had received
the July 1 letter from Respondent, set forth above, contacted Business Agent Naiwi
who conferred with Union Counsel McClung and then decided to convene a special
e The original 6-month term clause was replaced by one reading: "This agreement shall
take effect as of July 1, 1960, and shall continue thereafter until terminated by either
party giving to the other thirty (30) days written notice of his intention to so terminate"
982 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
union meeting on July 4. Naiwi also contacted Vice President Osslo of the parent
International Union and obtained strike sanction, although, as found, a strike had
already commenced at the local level.
The special meeting was held on Monday, July 4, and approximately 21 em-
ployees attended. Naiwi, who impressed me as a straightforward and honest witness
testified, and I find, that the employees expressed concern over the letter from Re-
spondent. Naiwi explained to them that, according to the letter, there were no
longer any jobs available in the delivery department; as noted, the agreement
with Fukumoto had never been mentioned by Respondent during the contract
negotiations.
Naiwi expressed concern over the entire situation and advised the employees to
return to work on Tuesday, July 5. Then Shop Steward Ben Keliikuli, one of the
ousted drivers, arose and stated: "What do you mean, `go back to work'? We don't
have any jobs. And I'm one of the leaders who started this union and I want to-
let's go out on strike." He said, "Let's take a vote." So they did take a vote.
Two women among those present, Mattos and Enos, also called for a strike vote.
A vote was taken and it was unanimous in favor of a strike. Naiwi then instructed
the employees to report for picket duty at 6 a.m. on July 5 and, later in the day,
proceeded to fashion picket signs. Picketing commenced on July 5 and is still
being carried on.
Approximately one-half of those in the unit reported for work on July 5 and
Respondent commenced hiring new employees after 9:30 a.m. on that date. These
recruits were obtained by means of an advertisement placed by Respondent in the
morning newspaper of July 2. As noted, the drivers for R.H. & R. commenced their
duties on the morning of July 5 at approximately 7 a in.
On July 8, Vice President Greenwell sent the letter appearing below to Naiwi
and, on the following day, also sent copies to all the employees. It stated as
follows:
In view of the impasse which exists in our negotiations on a collective bar-
gaining agreement covering our employees whom you represent, we intend,
as stated to you in our last meeting on June 30, 1960, to put into effect the
wage increases and changes in benefit provisions as contained in our final
contract proposal. The effective dates will be:
Wages-----------------------------------------------July 10, 1960
Holidays --------------------------------------------- July 10, 1960
Sick Leave-------------------------------------------July 10, 1960
Medical Plan ---------------------------------------- August 1, 1960
We note that Schedule "A" of our written contract proposal inadvertently
omits the classification of Washer. In our last negotiation meeting with you,
we offer a hiring rate of $1.66 and a base rate of $1.91 for that job, and we
intend to put these rates into effect at the same time as the other wage in-
creases.
Inasmuch as the company has subcontracted all of its outside deliveries, we
no longer have any jobs in the classifications of Auto Mechanic Helper, Truck
Driver, and Truck Helper. However, all men required to do loading work
and/or cooler storage work will be classified as "Cooler and Platform Men,"
with a hiring rate of $1.66 and a base rate of $1.91. [Emphasis supplied.]
On July 13, the Union wrote to Respondent and protested the latter's plan to
put into effect the wage increases and changes in benefit provisions. There was
subsequent communication between the parties in the form of letters, but this was
unfruitful. It is clear that at a mediation meeting on August 24, Philip Maxwell
of the Hawaii Employers Council announced that Respondent would not take
back any strikers and would not release any of the replacements. I find that Max-
well's statement on August 24 amounted to a refusal to reinstate the strikers be-
cause he made it clear that applications would be futile. In fact, in a leaflet cir-
culated to its customers on August 1, 1960, Respondent advised them, in part, as
follows:
And right now it doesn't look like there are any jobs left for the employees
who went on strike. All of them have been replaced or their jobs have been
eliminated. Shortly after the strike began we informed all employees that
their jobs were available if they returned to work immediately. We told them
that if they did not return, we would have to hire permanent replacements.
We deal in a perishable commodity and operations have to keep going. Some
employees returned to their jobs, and we have now permanently replaced those
who did not. [Emphasis supplied.]
HAWAII MEAT COMPANY, LIMITED 983
D. Analysis and conclusions
To sum up, the newly certified Union and Respondent carried on negotiations for
an initial contract for several months and there was no agreement. In anticipa-
tion of the strike, Respondent made secret arrangements with an established hauler
in the area, one Fukumoto, to take over Respondent's delivery operations in the
event of a strike. These operations had normally been carried on by seven drivers
and eight driver-helpers in the unit, in part assisted by the auto mechanic helper.
The negotiations with Fukumoto had been carried on during June, he had been
advised no later than June 20 that his bid was acceptable; and Respondent sent a
full-scale contract to Fukumoto on June 28.
The Union commenced its strike against Respondent no later than 2 p.m. on
July 1. As a direct result thereof, Respondent called in Fukumoto and, at approxi-
mately 5:30 p.m. on July 1, executed the contract which was unchanged from the
June 28 document, except that it deleted the reference to the 6-month term and
made the agreement an indefinite one terminable on 30 days' notice. It also
reflected the fact that a new corporation, R.H. & R., Inc., apparently controlled by
Fukumoto, had been formed to handle the hauling. At no time prior to the execu-
tion of this contract, did Respondent even intimate to the Union that such a move
was under consideration.
Immediately upon the execution of this contract, Respondent sent a letter pre-
pared earlier that afternoon to its entire complement of employees. The letter
stated that Respondent intended to hire replacements for the stnkers and that em-
ployees who did not return immediately would be permanently replaced. It also
stated that "We cannot promise that you will get your old job back, however, or
any job. For example, as of Tuesday, July 5, all of our delivery will be done by
a trucking company we have made a contract with. There are no longer any
delivery truck driver or driver helper jobs." At the end of the letter Respondent also
stated, "We must hire permanent replacements as soon as we can because of the
perishable nature of our product."
On July 4, the Union held a meeting at which there was talk of abandoning the
strike but, after a protest had been made by one of the ousted drivers that he had
no job to return to and consequently advocated striking, this motion supported by
two female employees of Respondent who apparently were not drivers or driver-
helpers, the union members unanimously voted to continue the strike on a full-
fledged basis. They did so, preparing picket signs and commencing actual picket-
ing on July 5. R.H. & R. employees started work at 7 a.m. on July 5 and
Respondent commenced the hiring of replacements for the strikers in nondelivery
categories after 9:30 a.m. on July 5.
It has consistently been the position of Respondent that the arrangement with
R.H. & R. is not a temporary one. Thus, Greenwell admitted on the witness stand
that he had contracted out his delivery service on a permanent basis and that all
replacements were hired on a permanent basis. On August 1, Respondent sent a
circular to its customers and noted that some jobs "have been eliminated." As
noted, Maxwell, of the Hawaii Employers Council, speaking in behalf of Respond-
ent, flatly informed the Union at a mediation meeting on August 24 during the
strike, that Respondent would not take back any of the strikers and would not
release any of the permanent replacements, a statement which I find included the
drivers and helpers in its scope.
And, on August 25, Respondent sent a circular to all of its employees reporting
on the foregoing meeting and stating, in part, "We want you to know that the
Company made one fact quite clear to both the Mediator and the Union. The
fact is that, so far as we are concerned, the employees hired since the strike are
permanent employees."
On November 16, 41/2 months after the start of the strike, Respondent adhered
to this position at a meeting attended by Greenwell, Irving Baldwin of the Hawaii
Employers Council, and by Naiwi and McClung of the Union, with Baldwin and
McClung as the chief spokesmen. As Baldwin testified, and I so find, "Mr. McClung
asked us if we had any change in our position about hiring back the strikers. We
told them that we were fully staffed, that those employees whom we had hired
during the strike or taken back were permanent, and that we would consider any
applicant as the job opened up. He then asked us if we had any plan for restyling
the delivery service. I told him that it was working well, and the Company did not
contemplate any change at that time." On November 17, in a notice to employees,
Greenwell stated that Respondent had notified the Union at a meeting on the
previous day that it would not return to the former delivery system.
And, on March 7, 1961, Respondent sent a notice to employees wherein it com-
mented upon the approaching hearing and repeated that this delivery contract had
984 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
been made on a permanent basis. Indeed , as of the date of this hearing, Respondent
still continues to operate under its contract with R.H. & R. In view thereof, I must
reject the contention of Respondent , advanced in its brief, in reliance on the 30-day
cancellation clause in the contract , that the contract for hauling was purely a tem-
porary adjustment to meet the strike. The fact is that Respondent , in anticipation
of a strike , made arrangements to go out of the delivery end of its business and to
discharge its delivery employees and has proceeded to do precisely that.
Turning directly to the issue at hand, it is not whether an employer may enter
into a hauling subcontract in order to save perishable materials . Because, on this
record, this is a false premise. And Respondent 's right to enter into a hauling sub-
contract in order to move goods tied up by a strike is not in dispute . By the same
token , there is no evidence that its goods were tied up.
It is undisputed that on July 2, 3, and 4, Saturday through Monday of the holiday
weekend, Respondent anticipated no hauling and actually did none. It did have a
problem with respect to some live cattle on hand whose condition was such that it
was desirable to slaughter them forthwith . This was done by bringing in three or
four employees from Respondent's ranch operation.
It is true , as Respondent 's evidence discloses , that its chill or cooler room was
approaching capacity and that if chilled beef is retained for more than 2 weeks,
mold will set in. This, of course , is no different from a situation confronting any
dealer or manufacturer in perishables who is confronted with a concerted activity
and, more particularly , the record demonstrates that the problem of Respondent
was not immediate , but rather one that might come to a head in the days and weeks
to follow.
Against this background , one is not presented with the picture of an employer
making a temporary adjustment in its delivery service in order to cope with a
problem, but rather with a totally different set of facts . Initially, this was not a
temporary or hasty move , but rather a planned move dating back over 1 month
to permanently discharge the drivers and helpers if they struck , obviously a retalia-
tory measure for engaging in a protected concerted activity. Stated otherwise, Re-
spondent unilaterally wiped out 15 or 16 jobs upon hearing that the men were on
strike and did this several days before any of the subcontractor 's employees com-
menced their duties and before any crisis arose concerning perishable meat.
This is highlighted by the fact that Respondent at no time advised the certified
bargaining agent that it not only had such a move under consideration , but in fact
had already made the flat decision , and had so notified the contractor to take this
course of action. If I follow Board law correctly , this was a matter concerning
which Respondent was obligated to bargain with the Union , but to the contrary,
Respondent proceeded unilaterally on a long-planned course of action?
The picture thus is that the Union had a right under the Act to be heard on the
issue of the employees represented by it who were ousted from their jobs by the
subcontract This Respondent did not do . To the contrary, it covertly arranged
for the subcontract long before any strike threat was imminent . And, assuming
9 Respondent stresses the Board decision in Fibreboard Paper Products Corporation, 130
NLRB 1558. The Board there held that an employer had not violated Section 8(a) (3)
and (5) of the Act by unilaterally contracting out its maintenance work There are,
however, a number of significant distinctions between that case and the present one
Firstly, as the majority pointed out, the entire unit was contracted out and "no em-
ployees remained in the unit to be represented by the Union, and thus there necessarily
could be no impact on the employment conditions of employees remaining in the unit "
Secondly, the Board majority conceded, in distinguishing the Timken, Shamrock, and
Railroad Telegraphers cases (The Timken Roller Bearing Company, 70 NLRB 500:
Shamrock Dairy, Inc, at at, 124 NLRB 494; and Railroad Telegraphers v Chicago and
Northwestern Railroad, 302 U S. 330), that had employees remained in the bargaining
unit, the employer decision "might have an impact on the conditions of employment of
employees remaining in the unit. For that reason the employees' representative was
entitled to bargain with respect to such decisions "
In the present case, such was indeed the fact because some of the driver-helpers per-
formed cooler room tasks Indeed, after the subcontractor commenced operations, Re-
spondent unilaterally set up a new i lassification of "cooler and platform man," a topic
not raised by it in negotiations. There is also the uncontroverted testimony by Union
Repiesentative McClung that during negotiations the Union proposed the establishment
of the classification of "freezerman and platform man" which Respondent opposed because
the drivers and helpers performed these duties.
Thirdly, it will be noted that a Board majority did not pass upon this issue in Fibre-
board because, although it was a 3-to-1 decision (Member Fanning dissenting), Member
Rodgers concurred in the result on different grounds.
HAWAII MEAT COMPANY, LIMITED 985
for the purposes of this discussion that one may equate the replacement of strikers
by subcontract with a replacement of strikers by new hires, here there is much more.
Respondent made deliberate plans to replace a portion of the unit duly certified
by the Board within the certification year and thereby ousted the Union from its
status as representative of that portion of the unit. On this record, I must conclude
this was planned as a retaliatory move to punish the Union in the event of a strike,
particularly so because of the lack of substance to Respondent's claim with respect
to perishable goods.
This is highlighted by the fact that Respondent discharged its drivers and driver-
helpers by means of a previously prepared letter but one-half hour after Fukumoto
signed a subcontract and 4 days before his employees started upon their duties. As
is readily apparent, it was indeed futile for the discharged drivers and helpers to
apply for their jobs on July 2 subsequent to receipt of the discharge letter.
Actually, Respondent went so far as to deprive the striking drivers and driver-
helpers of their right to vote in future Board elections. An economic striker not
entitled to reinstatement is, under Section 9(c)(3) of the Act, given the right to
vote in Board elections for 12 months after the commencement of a strike. Pre-
sumably, under such a subcontract as this, with an employer having permanently
abandoned the delivery portion of its business and having unilaterally reduced the
certified unit, the strikers would be bereft of all tenable employee status and of the
right to vote. This is consistent with Respondent's contention that the certified unit
herein is not the only appropriate unit; it would follow that Respondent must then
contend that the new appropriate unit is one from which all drivers and driver-
helpers have been permanently excluded.
In essence then, I find that Respondent failed in its obligation to bargain in good
faith concerning the subcontracting of a portion of its operations. I further find
that the record warrants the conclusion that the decision to subcontract was carried
out as a retaliatory measure against its employees for engaging in a protected con-
certed activity. This conclusion is supported by the fact that the move was not under
consideration for economic reasons prior to the threat of the strike; was not under-
taken for efficiency purposes or for economic savings; and was carried out solely
because of the advent of a strike. Indeed, there is no evidence to demonstrate that
this has resulted in any economic savings to Respondent.
Respondent's unilateral action in reducing the size of the unit could only serve
to undermine the authority and legal position of the Union. It constituted an
assault on the Union's bargaining position thereafter, because Respondent refused
to recognize the Union's representative status with respect to the ousted delivery
employees.8
I find, in view of the foregoing, that Respondent has refused to bargain in good
faith with the Union as the representative of its employees in the above-described
appropriate unit by unilaterally subcontracting out its delivery operations on July 1,
1960, and that by terminating its drivers, driver-helpers, and the auto mechanic
helper on July 1, 1961, Respondent has discriminated with respect to the hire and
tenure of employees, thereby discouraging membership in a labor organization. I
further find that by the foregoing, Respondent has interfered with, restrained, and
coerced its employees in the exercise of the rights guaranteed by Section 7 of the
Act, thereby engaging in unfair labor practices within the meaning of Section 8(a) (1)
of the Act.
Turning to the strikers, it has been demonstrated that a discussion arose at the
special union meeting of July 4 concerning a recommended return to work. One
of the discharged drivers, Keliikuli, arose and pointed out that he was one of those
who had started the Union, that he had been discharged and had no job; and that
the strike should be carried on. He was supported in this motion by two women,
apparently not among the drivers and driver-helpers. A unanimous vote was then
cast in favor of a strike. The conclusion is warranted that Respondent's unilateral
discharge of the drivers and driver-helpers because they had engaged in a concerted
activity thus served to prolong the strike and therefore converted the strike to an
unfair labor practice strike at that point. Indeed, the reinstatement of this group
was a major point of difference in subsequent negotiations between the parties. By
its subsequent refusal to reinstate the strikers, to the extent not previously reinstated,
as described below, I find that Respondent has engaged in unfair labor practices
within the meaning of Section 8(a)(3) and (1) of the Act.
s Respondent has cited Packard Bell Electronics Corporation , 130 NLRB 1122. That
case is not in point because, as the Board there pointed out, the employer's conduct was
but a temporary expedient to protect its customers ' interests in the event of a strike.
Here, by contrast, the intention was not to protect customers' interests nor to protect
perishables in an emergency , as is shown by the permanent nature of the action
986 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of Respondent set forth in section III, above, occurring in con-
nection with its operations described in section I, above, have a close, intimate, and
substantial relation to trade, traffic, and commerce among the several States, and
tend to lead to labor disputes burdening and obstructing commerce and the free
flow thereof.
V. THE REMEDY
Having found that Respondent has engaged in unfair labor practices, I shall
recommend that it cease and desist therefrom and take certain affirmative action
designed to effectuate the policies of the Act. It has been found that Respondent
Company has discriminated with respect to the hire and tenure of employment of
the employees of its delivery department including drivers, driver-helpers, and the
auto mechanic helper.
The problem arises as to the appropriate affirmative relief for the discriminatorily
discharged employees. The delivery operation is still being carried on with Re-
spondent's own vehicles which are leased to the outside contractor at a monthly
rental, with the agreement terminable upon 30 days' notice. Under these circum-
stances, equity dictates the normal reinstatement order with backpay. Hence, it
will be recommended that Respondent resume direct operation of its delivery service
with its own employees and offer its drivers, driver-helpers, and the auto mechanic
helper who were unlawfully discharged immediate and full reinstatement to their
former positions without prejudice to seniority or other rights and privileges. See
The Chase National Bank of the City of New York, San Juan, Puerto Rico, Branch,
65 NLRB 827.
I shall further recommend that Respondent make them whole for any loss of pay
suffered by reason of the discrimination against them. Said loss of pay, based upon
earnings normally earned from the date of the discrimination to the date of the offer
of reinstatement, less net earnings, shall be computed in the manner established by
the Board in F. W. Woolworth Company, 90 NLRB 289. See N.L.R.B. v. Seven-Up
Bottling Company of Miami, Inc., 344 U.S. 344.
The record does not disclose to what extent the unfair labor practice strikers, other
than those persons in the delivery department treated above, have been reinstated
subsequent to the conversion of the strike to an unfair labor practice strike on
July 4, 1960.
At the August 24, 1960, meeting conducted by a Federal mediator, Maxwell did
state, as McClung and Baldwin testified, that even if agreement were reached on a
contract, Respondent would not reinstate any of the 37 or 38 unreinstated strikers.
This position was reaffirmed by representatives of Respondent at meetings on
October 21 and November 16, 1960. I find, accordingly, that it was quite futile for
any strikers to apply for reinstatement subsequent to August 24, 1960.
The record does not develop whether applications for reinstatement may have
been made by the strikers prior to August 24, 1960. It will be recommended that
Respondent forthwith reinstate all strikers, dismissing, if necessary, any persons
hired on or after July 4, 1960, and that Respondent make them whole for any loss of
pay dating from August 24, 1960, or from the earlier respective dates of applications
for reinstatement, as the case may be, in the manner provided above. See N.L.R.B.
v. Hugh Major, d/b/a Hugh Major Truck Service, 296 F. 2d 466 (CA. 7); and
N.L R B v. Giustina Bros. Lumber Co., 253 F. 2d 371 (C.A. 9).
The discharges as well as the refusal to reinstate the unfair labor practice strikers
warrant the conclusion that Respondent maintains an attitude of opposition to the
purposes of the Act with respect to the protection of employee rights in eeneral.
It will accordingly be recommended that Respondent cease and desist from infringing
in any other manner upon the rights guaranteed by Section 7 of the Act.
Upon the basis of the foregoing findings of fact, and upon the entire record in
the case, I make the following:
CONCLUSIONS OF LAW
1. Hawaii Meat Company, Limited, is an employer within the meaning of Section
2(2) of the Act and is engaged in operations affecting commerce within the meaning
of Section 2(6) and (7) of the Act.
2. Meat Cutters Union, Local 594 (AFL-CIO), is a labor organization within
the meaning of Section 2(5) of the Act.
3. All employees of Respondent at its Middle Street Plant, excluding office clerical
employees, guards and/or watchmen, professional employees, and supervisors consti-
tute a unit appropriate for the purposes of collective bargaining within the meaning
of Section 9(b) of the Act.
P-M PARKING SYSTEM 987
4. Meat Cutters Union, Local 594 (AFL-CIO), was on February 17, 1960, and
at all times thereafter has been and now is the exclusive representative of the em-
ployees in the above-described appropriate unit for the purposes of collective bar-
gaining within the meaning of Section 9(a) of the Act.
5. By terminating its drivers , driver-helpers, and the auto mechanic helper on
July 1, 1960, Respondent has discriminated with respect to the hire and tenure of
employees , thereby discouraging membership in a labor organization , and has engaged
in unfair labor practices within the meaning of Section 8(a) (3) of the Act.
6. By contracting out its delivery operations and by the foregoing conduct, Re-
spondent has refused to bargain with Meat Cutters Union, Local 594 (AFL-CIO),
as the representative of its employees in the above -described appropriate unit and
has engaged in unfair labor practices within the meaning of Section 8(a)(5) of
the Act.
7. By the aforesaid discrimination and refusal to bargain , Respondent has inter-
fered with, restrained , and coerced its employees in the exercise of the Tights guaran-
teed by Section 7 of the Act, thereby engaging in unfair labor practices within the
meaning of Section 8 ( a) (1) of the Act.
8. By its unfair labor practices as herein found, Respondent prolonged the strike
of its employees and converted it as of July 4, 1960, to an unfair labor practice
strike.
9. By its refusal to reinstate unfair labor practice strikers on or before August 24,
1960, Respondent has discriminated with respect to their hire and tenure of employ-
ment, has interfered with, restrained , and coerced employees in the exercise of the
right to engage in concerted activities protected by Section 7 of the Act, and has
thereby engaged in unfair labor practices within the meaning of Section 8(a)(3)
and (1 ) of the Act.
10. The unfair labor practices found above are unfair labor practices affecting
commerce within the meaning of Section 2(6) and (7) of the Act.
[Recommendations omitted from publication.]
P-M Garages , Inc.; Charmar Management Company, a corpora-
tion ; Jack Burton Management Company, a corporation ; Speed-
way Realty Company, a corporation ; Scruggs-Vandervoort-
Barney Garage Company, Inc.; Park-N-Shop , Inc.; Jefferson
Parking Company, Inc.; Charlotte Mandel and Marluel Pohrer,
a joint venture doing business as Chestnut Speedway ; Burton
Mandel , individually and as trustee for Stuart Mandel, M. H.
Mandel and Charlotte Mandel , as trustees for Alan Mandel,
and Harry J. Pohrer as trustee for Jack Pohrer , Gary Pohrer,
Patti Pohrer and Joy McNulty, a joint venture doing business
as Ten Ten Olive Company ; all doing business as P-M Park-
ing System and Automotive , Petroleum and Allied Industries
Employees Union , Local 618, affiliated with International
Brotherhood of Teamsters , Chauffeurs , Warehousemen and
Helpers of America . Case No. 14-CA-2741. November 15, 1962
DECISION AND ORDER
On August 16, 1962, Trial Examiner Abraham H. Mailer issued his
Intermediate Report in the above-entitled proceeding, finding that
the Respondent had not engaged in unfair labor practices as alleged
in the complaint and recommending that the complaint be dismissed
in its entirety, as set forth in the attached Intermediate Report.
139 NLRB No. 84.