Henry I. Siegel Co., Inc.

National Labor Relations Board - Board Decisions

Feb 18, 1963

140 N.L.R.B. 1292 (N.L.R.B. 1963)

1292 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
was therefore required to permit the Petitioner access to the employees
on its property. In refusing such access, the Employer unlawfully
interfered with the self-organization rights of such employees.' Ac-
cordingly, we shall set aside the election held on May 15, 1962, and
direct the holding of a new one.
[The Board set aside the election held on May 15, 1962, among the
employees of Joseph Bancroft and Sons Co. in the unit heretofore
found appropriate.]
[Text of Direction of Second Election omitted from publication.]
3 Cf General Dynamics /Telecommeinicataons , a division of General Dynamics Corpora-
tion, 137 NLRB 1725 ( Member Brown dissenting ), where a Board majority found that
an employer had not violated Section 8 ( a) (1) of the Act by prohibiting the distribution
of union campaign literature on a purportedly private road by nonemployee union orga-
nizers The majority found that the union organizers had other reasonable means of
communicating with employees The majority also said specifically that its holding in
that case did not apply to a company - town situation, the present case
Henry I. Siegel Co., Inc. and Amalgamated Clothing Workers
of America , AFL-CIO. Case No. 26-CAI-1179. February 18.
1963
DECISION AND ORDER
On May 17, 1962, Trial Examiner Harold X. Summers issued his
Intermediate Report, finding that the Respondent had engaged in
and was engaging in certain unfair labor practices and recommending
that it cease and desist therefrom and take certain affirmative action,
as set forth in the attached Intermediate Report. Thereafter, the
Respondent filed exceptions to the Intermediate Report and a sup-
porting brief.
Pursuant to the provisions of Section 3(b) of the Act, the Board
has delegated its powers in connection with this case to a three-member
panel [Chairman McCulloch and Members Rodgers and Leedom].
The Board has reviewed the rulings of the Trial Examiner made at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Inter-
mediate Report, the exceptions and brief, and the entire record in
this case, and finds merit in certain exceptions of the Respondent.
Accordingly, it hereby adopts the findings, conclusions, and recom-
mendations of the Trial Examiner to the extent that they are consistent
with our Decision herein.
The Trial Examiner upheld the essential allegation of the complaint
that Respondent violated Section 8(a) (5) by agreeing during its ne-
gotiations with the Union over their 1961 contract that it would in-
corporate into its piece rates a 121,1-percent incentive factor over the
140 NLRB No 129
HENRY I. SIEGEL CO., INC. 1293
agreed base rates for pressers and stitchers and then refusing to in-
clude such a provision in the contract which the parties thereafter
signed.
The facts upon which the complaint is based are substantially un-
disputed. As found by the Trial Examiner, previous contracts as well
as the 1961 contract, have set base rates and piece rates for pressers
and stitchers. The base rate is an hourly rate representing the lowest
amount which a pieceworker can earn without being considered an
unsatisfactory employee. Stitchers and pressers, who constitute the
bulk of the production workers at the two plants involved here, were
paid on a piece-rate basis and were usually able to earn more than
their base rates. In the 1961 contract, the base rates for stitchers and
pressers were set at $1.20 and $1.23 per hour, respectively. Piece rates
for each existing operation, of which there are almost 100, were also
agreed on by the parties and were listed in schedule A of the contract.
As noted above, base rates were negotiated by the parties directly, but
new piece rates were set by the Employer in accordance with its time
and motion techniques, subject to grievance and arbitration proce-
dures initiated by the Union.
Piece rates were set by management engineers by first timing an
operation or its component parts as performed by a number of "nor-
mal" operators. After reducing this to average time, they would
build in allowances for normal fatigue, personal needs, and machine
delays. In addition to these allowances they also used a factor to
provide an incentive for increased production which is referred to
uniformly in this case as the "121/2 percent incentive factor." The
resultant figure set the production quota for each piecework operation.
By combining the base rate for the job classification with the pro-
duction quota for each separate operation, the engineers fixed the
piece rate for that operation. Experience at these plants has demon-
strated that an efficient worker with a normally operative machine,
taking no more than normal time off for personal needs, would earn
more than his base rate although, as the Trial Examiner found, this
did not necessarily mean that an employee would earn exactly 121/2
percent more than his base rate.
The negotiations relating to the compensation of stitchers and
pressers were mainly over their base rates since these were, in effect,
their guaranteed wage. During the negotiations, the Union com-
plained that it was having trouble handling grievances of piecework
employees who thought that their earnings were too close to their base
rates. The TTnion asked whether the incentive factor was still being
used in setting piece rates and was told that it was. The Respondent
also assured the ITnion that no change in this respect was contem-
plated. In connection with its difficulty in explaining to employees
1294 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the relationship between base and piece rates, the Union first requested
that the following provision be included in the contract:
In the setting of rates on such new types of work and new or
changed operations, the employer shall set the rate to provide the
same opportunity for the operator to achieve their present earn-
ings as existed prior to the change in operation, new operation, or
introduction to new type of work.
The Trial Examiner found that this proposal dealt with an oper-
ator's opportunity to maintain previous earnings and not necessarily
with a differential of earnings attainable through the incentive factor,
and that Respondent's rejection of this proposed clause is unrelated
to the assurance it had already given that the incentive factor would
remain an element in setting piece rates. A few days later, the Union
proposed that the following clause be included in the contract to make
more definite the Respondent's agreement that the incentive factor
would continue to be used in setting piece rates :
It is understood that the base rate in the stitching room is [not
yet fixed ; to be filled in] per hour and that the base rate for press-
ers is [not yet fixed; to be filled in] per hour and that the rates
are engineered on the basis of a 121/2 percent incentive above the
base rate.
The Respondent rejected the inclusion of such a clause and refused
to incorporate any reference to the 121/2-percent incentive factor in the
contract, on the ground that any named percentage figure would be
construed by the employees as a guarantee of earnings amounting to
such percentage above base rates. The Trial Examiner held, however,
that since the Respondent had given oral assurance that the incentive
factor would be used in the setting of piece rates, it was obligated to
memorialize such assurance in written form in the contract. Thus, in
his opinion, Respondent's refusal to negotiate with the Union on the
wording of its assurance constituted a refusal to bargain.
There is an apparent difference between the parties as to what the
incentive factor was intended to accomplish since, as the Trial Ex-
aminer points out, the Union considered the use of the incentive factor
to be a means of providing opportunity to earn "121/2 percent above
base rates," while the Respondent considered it as not establishing
any guaranteed relationship between base and piece rates. We agree
with the Trial Examiner that there was no agreement between the
parties either as to maintenance of earnings or as to a guaranteed
relationship between base and piece rates, and that the only agreement,
in principle, was as to the continued use of the incentive factor in
computing piece rates. However, contrary to the Trial Examiner's
conclusion, we find that this agreement in principle was in fact sub-
stantially incorporated into the 1961 contract.
HENRY I. SIEGEL CO., INC. 1295
We rely for this finding on the following pertinent provisions of
the wage article of the 1961 contract, which the Trial Examiner failed
to consider:
Article V. SECTION 1. The Employer and the Union agree that
piece rates and time work rates shall be those set forth in the
separate schedule, annexed hereto as Schedule A to be initialed
by the parties hereto, the provisions of which are incorporated
herein.
SEC. 2. Adjustments in individual rates and rates for new or
changed operations shall be made by mutual agreement between
the parties hereto and shall be related to the rate schedules con-
tained in Schedule A. If the parties cannot agree upon such ad-
justments the question shall be referred to the Impartial Chair-
man for decision as provided in Article XI hereof.
Schedule A lists the rate for each piecework operation. It is ad-
mitted that the piece rates for the existing operations, listed in schedule
A, were set with an allowance for the incentive factor. It is apparent
then that the Union was satisfied that the Respondent's assurance as
to the continued use of the incentive factor had in fact been fully
carried out with respect to all piecework operations then being per-
formed. As to rates for new or changed operations, Section 2 provides
that they shall be reached by mutual agreement and that they shall
be related to the rates already established by schedule A. They could
be related to the present rates only if they were computed in the same
fashion, that is, through the use of the same allowances, including the
incentive factor, which entered into the schedule A rates. Since the
imposition of any new rate required the Union's agreement, it could
always satisfy itself as to whether the incentive factor had been used
or, if referral to the impartial chairman became necessary, it could at
that time examine the relationship of the proposed rate to an existing
rate.
The Respondent was unwilling to agree to any form of words which
it believed could be construed as guaranteeing to pieceworkers that
their earnings would amount to a specified percentage above base rates,
or as guaranteeing that past earnings for a certain operation would be
maintained for a related operation. It was entitled to resist the in-
clusion in the contract of language proposed by the Union which ap-
peared to go beyond what it had agreed to in principle. It was the
theory of the complaint, and the Trial Examiner so held, that the only
agreement with respect to the incentive factor was that the Respondent
would continue to use it in setting piece rates. In our opinion, article
1,T and schedule A of the contract, though they make no specific ref-
erence to the 12/2-percent incentive factor, embody the understanding
of the parties and their agreement, that the factor had been used in
the setting of all listed piece rates, and that it would continue to be
1296 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
used in setting all rates for new or changed piecework operations. It
follows that the conclusion of the Trial Examiner that Respondent
failed to bargain by refusing to include an explicit reference in the
contract to the incentive factor is erroneous.' As no other violations
were alleged or found, we shall dismiss the complaint.
[The Board dismissed the complaint.]
1 In view of our holding , it is unnecessary to pass on the Trial Examiner 's finding that
the Union had not waived its right to, negotiate further on this matter either by its
execution and acceptance of the contract or for other reasons
INTERMEDIATE REPORT
STATEMENT OF THE CASE
Upon unfair labor practice charges filed on November 17, 1961, by Amalgamated
Clothing Workers of America, AFL-CIO, against Henry I. Siegel Co., Inc., the
General Counsel of the National Labor Relations Board issued a complaint on
February 7, 1962, alleging that Respondent had engaged in unfair labor practices
in violation of Section 8 (a) (1) and (5) of the National Labor Relations Act, herein
called the Act. Respondent 's answer admitted some allegations of the complaint,
denied others, pleaded affirmative defenses , and denied the commission of any un-
fair labor practices. Pursuant to notice, a hearing was held before Trial Examiner
Harold X. Summers at Nashville, Tennessee , on March 12, 1962. At the hearing,
the complaint was amended in certain respects, and Respondent answered the com-
plaint as amended . All parties were afforded full opportunity to present evidence,
to examine and cross -examine witnesses , to argue orally, and to submit briefs. Briefs
have been filed by the General Counsel, by Respondent, and by the Charging Party,
which briefs have been fully considered.
Upon the entire record in the case ,' including my evaluation of the credibility of
the witnesses based upon the evidence and upon my observation of their demeanor,
I make the following:
FINDINGS OF FACT
1. COMMERCE
Henry I. Siegel Co., Inc., hereinafter called Respondent, a corporation existing
under the laws of the State of New York, operates plants, among others, at Dickson,
Tennessee , and Fulton, Kentucky , where it is engaged in the manufacture of men's
and boys' trousers . During the year ending March 12, 1962, Respondent manu-
factured , sold, and shipped from its Dickson, Tennessee , plant to points outside the
State of Tennessee finished products valued at in excess of $50,000, and from its
Fulton, Kentucky, plant to points outside the State of Kentucky, finished products
valued at in excess of $50,000.
The pleadings and stipulations of the parties establish , and I find , that Respondent
is engaged in commerce within the meaning of the Act.
II. THE UNION
Amalgamated Clothing Workers of America, AFL-CIO,a hereinafter called the
Union, is a labor organization within the meaning of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
In addition to the Dickson (Tennessee ) and Fulton (Kentucky) plants, Re-
spondent operates five plants in western Tennessee . All policy decisions for the
seven plants are made at the New York City offices of Respondent.
1 On April 17, 1962 , I issued an order to show cause why the transcript of the hearing
should not be corrected In a specified respect No good cause to the contrary having been
shown , the correction indicated in the order to show cause , which is received in evidence
as Trial Examiner 's Exhibit No. 1, Is hereby ordered made.
2 No local Is Involved.
HENRY I. SIEGEL CO., INC. 1297
The nonsupervisory production employees of the Dickson and Fulton plants were
organized by the Union in or about 1945 and 1946,3 at which time recognition as
their exclusivebargaining agent was granted the Union. Thereafter, Respondent and
the Union entered into a series of collective-bargaining contracts covering these
employees.
The number of employees represented by the Union at the Dickson and Fulton
plants are approximately 400 and 200, respectively. Of these, the great majority
are stitchers and pressers, who are paid on a piece-rate basis.
The last contract preceding the one here in question was dated October 19, 1959,
and was to be effective, by its terms, until November 1, 1962, subject to amendment,
under conditions not relevant here, at specified intervals during its term. During the
summer of 1961, in view of certain changes in statutory minimum wage require-
ments scheduled to go into effect on September 3, the parties agreed to reopen the
contract. Actual negotiations for "the revision of the contract" took place in late
September and early October 1961.4 A new contract was executed on October 13,
to be effective from September 25, 1961, to September 1, 1963, and thereafter from
year to year in the absence of specified action to be taken by one or another of the
parties.
B. Contentions and issues
The complaint alleges that, in the bargaining sessions leading up to the present
1961 contract, Respondent agreed to continue payment of a 121/2-percent incentive
over the agreed base rates for pressers and sewing machine operators but refused
and continues to refuse to incorporate this into the written contract, although the
Union requested and has continued to request its incorporation. Respondent's an-
swer concedes that the Union made the request for incorporation and that Respond-
ent rejected the request, pleading affirmatively, it points out that a contract was
signed, that the contract which was signed contained all terms and conditions of
work affecting the Dickson and Fulton employees, and that all of the negotiators'
claims and demands made during the negotiations had been merged in the contract
finally executed. Further explicating at the hearing, Respondent argued that, al-
though it stated at the negotiations that it would continue to utilize a rate fixing pro-
cedure which would include a 121/2-percent incentive factor, it had never "agreed
to" the provision; that it would not have signed and would not sign a contract con-
taining the provision and that the Union knew this when the contract was executed;
and that, in effect, the Union waived the right to press the subject further by enter-
ing into the contract which by its terms was a complete one.
The main issues, as they developed at the hearing, were whether Respondent had
"agreed" on the 121h-percent incentive payment; and whether, at any rate, the
actual execution of the contract, either by a merger of all matters previously dis-
cussed or by virtue of a waiver by the Union, discharged Respondent of any obliga-
tion to incorporate the provision.
A subsidiary question is the composition of the bargaining unit or units appropri-
ate for bargaining purposes. The original complaint described the appropriate unit
as composed of employees of both the Dickson and Fulton plants. In its answer
and position at the hearing, Respondent denied that this was an appropriate bar-
gaining unit, claimine instead that employees of each plant constitute a separate bar-
gaining unit.5 The General Counsel, urging that a finding of violation under these
circumstances was warranted even if Respondent's unit position should prevail,
amended the complaint at the hearing to provide , as an alternative to his original unit
allegation, that separate units consisting of the employees of the Dickson and the
Fulton plant, respectively, are appropriate for the purposes of collective bargaining.
Respondent, answering the complaint as amended , continued to deny the commission
of any unfair labor practices.
C. The appropriate bargaining unit
Operations of the Dickson and the Fulton plants, like those of Respondent's other
five plants, are directed, with respect to overall company policy, out of Respondent's
New York City office. Labor policies for all seven plants are determined at New
York, but this does not mean they need be identical to each other; the record is
3 The parties stipulated that they were organized at or about 1940 but a collective-
bargaining agreement in evidence indicates that the Dickson plant was organized at least
as early as November 1945
4 Unless the contrary is indicated, all dates mentioned hereinafter are for the year 1901
5 There is no issue here of majority representation by the Union whether one unit or
two, Respondent in its answer concedes that the Union represents the employees in-
volved herein
1298 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
bare, however, as to similarities in or differences between the personnel policies of
the various plants, except in the respects outlined below.
The Fulton and the Dickson plants are 110 miles apart. Both manufacture men's
and boys' trousers, although the work done is not identical; there is no interchange
of goods or materials and there is no integration of processes. While they are not
identical, job classifications are essentially the same. Each plant has its separate
local management, and each manager does his own hiring and firing. There is no
interchange of personnel.
The working conditions of the two plants-which are set by a single collective-
bargaining agreement-are identical except with respect to the union-security provi-
sion; at Fulton, union membership, after a prescribed period, is a condition of
employment, while, at Dickson, it is not 6 Both have the same dues checkoff
provisions, workday and workweek, holiday pay, vacation and leave provisions,
promotion and seniority conditions, no-strike clause, grievance and arbitration proce-
dure, and other miscellaneous working conditions. The general treatment of fixing
wage rates is identical, and, at both plants, the rates for timeworkers and the
"base rates" for piece-rate workers are the same.?
As earlier indicated, the Union was recognized as bargaining agent of the non-
supervisory production and maintenance employees at the Dickson and Fulton
plants-at different times-at or about 1945 and 1946. At all times since the
second (Fulton) recognition was accorded, negotiations for both plants have been
jointly conducted between Respondent ,and the Union, meeting either at Dickson or at
Fulton or at both. The employees have been represented by, in addition to union
representatives, separate committees from each plant; the resulting contract or con-
tracts-see below-have been separately ratified thereafter by the employees of
the respective plants.
Until 1959, the negotiations described above culminated in separate contracts for
the Dickson and the Fulton plants. I have spot-checked 8 a number of these contracts
which are exhibits in this matter. I find that, since at least June 1948, the separate
contracts for the two plants were alike in many relevant respects: for example, in
their provisions as to term of contract, dues checkoff, holiday pay, vacation privileges,
strike prohibition, and grievance and arbitration procedures. They differed with
respect to union security. In other words, the pre-1959 working conditions of the
two plants, fixed by separate contracts, differed no more than they do today, under
a single contract.
Since October 1959, utilizing the same system of negotiations, the parties have
executed single contracts 9 covering the employees of both plants. In neither of
these contracts 10 is there a detailed description of the bargaining unit as such, but
the terms "employee" or "employer" as used in the contract is defined as including
nonsupervisory production and maintenance employees working either at Dickson
or Fulton; and the current (1961) contract, in its preamble, refers to the bargaining
"unit" covered by the contract.
On the basis of the evidence before me, including the relevant bargaining history,
I find that the bargaining unit appropriate for bargaining herein consists of Respond-
ent's nonsupervisorv production and maintenance employees at its Dickson, Ten-
nessee, and Fulton, Kentucky, plants u
D The refusal to incorporate in writing
1. The facts
During or about 1954, Respondent installed certain methods of engineering
piece rates for the sewing room operators (or stitchers) and pressers at the Dickson
and Fulton plants. 12
6 Tennessee has a right-to-work law ; Kentucky does not
7 Since the patterns used at the two plants are not identical, separate piece-rate schedules
for the two plants are attached to the contract
8 Although I urged the parties specifically to point up relevant portions in their briefs,
none of them has done so.
9 One on October 19, 1959, its successor on October 13, 1961.
10 Nor in the earlier single-plant contracts.
11 It should be noted that, whether this be the appropriate bargaining unit or Respond-
ent be correct in its assertion that single-plant units are appropriate, the factual findings
and legal conclusions with respect to the alleged refusal to bargain , discussed below, would
be equally applicable.
zs Presumably, engineering methods were also applied to the fixing of timeworkers' wage
rates, but these are not at issue here.
HENRY I. SIEGEL CO., INC. 1299
At all times pertinent, there was a "base rate" for the stitchers and pressers. This
rate is not to be confused with the "minimum rate," established by law, or the "piece
rate," the compensation paid for a specific operation on a particular pattern. The
base rate is a figure which represents the lowest amount which an employee paid by
the piece can earn without being considered an unsatisfactory employee; and a
stitcher or presser, working on piece rates, can, and usually does, earn an amount in
excess of his base rate.
In fixing piece rates (post-1954), the following general procedures and principles
have been observed. Management engineers, on behalf of management, would,
by stopwatch, time an operation or its component parts as performed by a number
of "normal" operators. Having reduced this to "average" time, they would "build
in" certain allowances-for normal fatigue, personal needs, and machine delays.
Topping it all would be a factor providing an incentive for each unit of increased
production, called a "121/z percent incentive factor." Thus, the production quota
for any given operation was arrived at. Combining the employee's base rate and
this production quota, the engineers would arrive at a piece rate for the particular
operation. The piece rate thus set was adopted by Respondent, subject to any griev-
ance and arbitration procedures which might be initiated by the Union.
As indicated, the use of the 121/a-percent incentive factor permitted an employee
actually to earn an amount in excess of his base rate; and experience has demon-
strated that an efficient worker with a normally operative machine, taking no more
than normal time off for personal needs, could and did earn more than his base rate.
There is a dispute between the parties as to how much more. In the terminology of
the General Counsel and the Union, the amount should approximate 121/z percent
above the base rates. Respondent, through its engineers, demonstrated, and I find,
that a more correct description would be that the 121/2-percent incentive factor,
while included in the setting of any piece rate, did not necessarily mean "121h percent
above the base rates." For purposes of this proceeding, however, I find that the
difference of approach was immaterial-both parties at the bargaining table were
speaking of the same thing when they discussed the "121h percent incentive factor,"
and each was aware of what the other was referring to.
Prior to 1958, the subject of compensating stitchers and pressers, as discussed
between Respondent and the Union, concerned itself only with base rates. Although
the Union was aware that, under each contract, earnings under piece rates generally
exceeded base rates, it confined its efforts to achieving the highest base rates it was
able at each negotiation time.
The first occasion on which the incentive factor became the subject of discussion
between Respondent and Union was in some 1958 correspondence between company
and union representatives. It was not, however, a part of negotiations for any contract
and, since elaborative details were not presented at this hearing, I can attribute no
significance to this interchange.
The next-and first relevant-occasion on which the subject was raised was in
negotiations for the 1959 contract, the contract immediately preceding the one in
question. In bargaining for a higher base rate, the union negotiator expressed the
opinion that the base rate was too near the (statutory) minimum rate, a circumstance
which did not make for a contented employee. Jesse Siegel, Respondent's president
and its chief negotiator, explained the fixing of piece rates, including the insertion
of the incentive factor, and gave assurances that operators could earn more than
their base rates because of this factor. Apparently satisfied, the union representative
pursued the subject no further, and the contract then executed contained no reference
to the incentive factor.
The negotiations for the present (1961) contract took place on September 26, 29,
and 30 and October 2. Most of the discussions, as they involved stitchers and
pressers, were concerned with the new base rates, which were finally fixed at $1.20
and $1.23, respectively. Meanwhile, early in the negotiations (and before the new
base rates were settled upon), union representatives, complaining that they were
having trouble in handling grievances of employees who felt they were being under-
paid, raised the subject of the 121h-percent incentive factor. They asked whether the
factor was still being used in the fixing of piece rates, and they were told that it was.
They were further assured that no change in this respect was contemplated.
Union representatives then asked that this assurance be incorporated into the
contract there being negotiated. The specific wording originally (on September 26)
offered by the Union, was as follows:
In the setting of rates on such new types of work and new or changed opera-
tions, the employer shall set the rate to provide the same opportunity for the
681-492--63--vol. 140-88
I
1300 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
operator to achieve their present earnings as existed prior to the change in
operation , new operation , or introduction of new type of work.
In finding that such a proposal was made, I credit the testimony of General Counsel's
witnesses English and Goldberg. Respondent 's witnesses did not testify specifically
with respect to the receipt of this proposal.
On the other hand, I credit the contention implicit in Respondent 's arguments
made at the hearing-that the above proposal , if made, was not understood by
Respondent to be a request for inclusion of the 121h -percent incentive factor in
the contract . The provision, as thus worded , concerned itself with an operator's
opportunity to maintain previous earnings,13 and not necessarily with a differential
of earnings attainable through the incentive factor . I find that Respondent did not
interpret the Union 's request of September 26 to be a request for incorporation of
the assured continuation of the 121h-percent incentive factor . Therefore, in the
context of the allegations of this complaint, it becomes unnecessary to decide whether
Respondent agreed or did not agree to the proposal , or, if the former , whether there
was any obligation to incorporate it into a written contract.
In the bargaining session of September 29, however , the situation was clarified.
On that occasion , the Union proposed the inclusion , in the contract being negotiated,
of the following clause:
It is understood that the base rate in the stitching room is [not yet fixed; to
be filled in] per hour and that the base rate for pressers is [not yet fixed; to be
filled in ] per hour and that the rates are engineered on the basis of a 121h percent
incentive above the base rate.
This finding is based upon the credited testimony of witnesses English and Goldberg.
Respondent 's witness Gerakios , who had been present , did not testify on the point;
witness Siegel , Respondent 's chief negotiator, did not recollect the proposal as such;
and the "best recollection " of witness Abramson, present at the negotiations as
Respondent's counsel , was that the proposal was not made and that if it had been
he, as a lawyer , would have considered it as unacceptable "loose language."
Here again , we encounter the problem of terminology referred to earlier . Viewed
narrowly, the proposal speaks of "rates" ( not "piece rates") being engineered on
the basis of "121h percent incentive above the base rate ," a concept which Respond-
dent felt was an erroneous one. But-as I have earlier found-the difference in
approach loses significance in view of the fact that Respondent well knew what was
being proposed . At any rate, the pleadings and admissions at the hearing establish,
and I find, that , during the negotiations leading up to the execution of the 1961
contract , the Union did indeed request the inclusion of the assurance that the 12V2
-percent incentive factor would continue to be utilized by Respondent.
On this record , it is clear, and I find, that Respondent flatly refused to incorporate
any reference to the 121/percent incentive factor in the new contract . Its basic
reason , as stated by Respondent 's president , was that any reference to the 121h-
percent factor would be considered by employees to constitute a guarantee of earn-
ings amounting to 121h percent above base rate, which in turn would lead to dis-
satisfaction among the employees.
Having unsuccessfully pressed for written agreement on the incentive factor and
all other elements having been disposed of, union representatives went over the var-
ious agreed-upon clauses (other than the incentive factor ) with Respondent 's repre-
sentatives on October 2. At the session 's end , it was declared that agreement had
been reached. Counsel for the Union then prepared a contract for signature (with-
out an incentive factor clause ) and sent it to counsel for Respondent . In the ensuing
exchange of correspondence ,14 the following interchange took place:
[By counsel for the Union] ... At the possible cost of sounding like a broken
record I wish to state again my disappointment at the refusal of the company
to reduce to writing and to incorporate into the agreement the incentive factor
of 121h percent in the piece rates . The fact that this incentive factor is not
spelled out in the contract , does not in any way change our opinion that it be-
longs in the contract, as I feel strongly I should repeat my reservations about
your refusal to reduce to writing the incentive factor....
[By counsel for the Respondent] . . . With reference to your comment on the
refusal of the Company to incorporate an incentive factor of 121h percent, I
will not repeat the Company's objection to such inclusion . It is to be under-
I
is In fact , union representatives at the hearing referred to it as a "maintenance of
earnings" clause.
31 Several revisions , suggested by company counsel , were made in the "final draft" sent
for signature.
HENRY I. SIEGEL CO., INC. 1301
stood that the piece rates fixed in the schedule to be annexed in the agreement
will be controlling, and no representations, express or implied, by the Company
shall affect such piece rates.
[By counsel for the Union] ... There is no need, at this time, to continue the
fencing match concerning the incorporation of the incentive into the agreement
as we both fully understand each other's position....
The contract was signed by the Union on October 11, by Respondent on October 13,
and was subsequently ratified by the employees at Dickson and Fulton.15 Thereafter,
as called for by the contract, a schedule of current piece rates (which rates included
the 121h-percent incentive factor) was attached to the contract.
The instant charge was filed on November 17.
2. Conclusions
At the hearing, Respondent, in effect, denied that it had agreed with the Union
that the 12V2-percent incentive factor would continue to be used. Conceding that
it did intend to continue its use and that, upon inquiry by the Union, it gave repeated
assurances to this effect, it nevertheless urges that this cannot be equated with
"agreement." Counsel for Respondent, asked at the hearing whether his client had
in fact orally agreed that the engineering of any piece rate would include a 121h-
percent incentive, answered thus:
Mr. Trial Examiner, agree is a strong word. In discussing or negotiating
for the base rate naturally the course of the discussion concerned the probable
or possible earnings of the workers. We were arguing for one base rate. They
were arguing for another base rate. We said our experience shows over the
year that if we include, as we intend to include a 121h percent incentive factor
in the production quotas price rate, the earnings would be more than $1.20.
That is what we said.
So they say did we agree, we said it.
Repeatedly, during the negotiations, the Union (after being told that the incentive
factor was still being used) asked for and received assurances that it was and
would continue to be. In an atmosphere of bargaining over the terms of a collective-
bargaining contract, I regard the giving of an assurance upon a request for such
assurance to be "agreement." Put differently, on the basis of the evidence educed
at this hearing, I find that, upon appropriate request of the Union, Respondent agreed
that the practice in question would continue to be utilized. Its sole reservation was
its refusal, as noted earlier, to put its agreement on this point in writing.
In so finding, I do not hold that Respondent was agreeing to the exact wording of
the Union's proposal of September 29. Apart from the differences in approach-the
Union understood the plan to provide opportunity to earn "121h percent above base
rates"; Respondent regarded the "piece rates as containing the 1216 percent incentive
factor"-there never was a comprehensive discussion of the wording to be used.'°
I find that the parties, during the period of negotiations, agreed only on principle
that the continuation of the 121h-percent incentive factor would be assured during
the life of the new contract.
I have already found that Respondent refused to incorporate any reference to the
123/percent incentive factor in a written contract, for the stated reason that em-
ployees might misconstrue the clause as a guarantee of earnings 121h percent above
their base rates. To the extent that it becomes necessary that I evaluate Respondent's
reason for refusing to assure , in writing, the continued use of the 123h-percent
incentive factor, I make the following specific findings . However ineptly its original
proposal may have been worded, the Union did not then, and did not thereafter seek
a guaranteed level of wages; it sought only a guarantee of the opportunity to earn
wages higher than base rates, an opportunity created by the existence of the incentive
factor. Moreover, Respondent was aware of this. Finally, if Respondent honestly
believed that the written inclusion of an incentive clause would be subject to mis-
construction by employees, it had only to insist on the inclusion of proper safeguard
language.
Respondent, at the hearing, made it abundantly clear that, rather than sign a
collective-bargaining contract containing a provision assuring continuance of the
incentive factor, it would have refused to sign any contract whatsoever. Had
18 At the ratification meetings, no mention was made of the "omission" of an incentive
clause.
16A circumstance occasioned by Respondent's refusal to incorporate the -feature into a
written contract
1302 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the case come before me in this posture, it would have been clear, and I would have
found, that, by refusing to reduce a collective-bargaining agreement to writing,
Respondent was refusing to bargain collectively within the meaning of Section
8(a) (5).17 The question remains-did the actual execution of an agreement, minus
the incentive factor clause, extinguish any further obligation on Respondent's part?
I find that it did not.
The possible bases for the extinction of Respondent's duty-and Respondent has
raised each of these-is the parol evidence rule, a merger or integration of all issues
between the parties, or a waiver by the Union. Each of these defenses in turn is
based, in part or in whole, upon the negotiators' oral statements made at the last
negotiating session to the effect that an agreement had been reached, upon the fact
that union counsel prepared the document for execution and upon the actual execu-
tion of the contract.
The parol evidence rule-that the integration of an agreement makes inoperative
to vary the agreement all contemporaneous oral agreements relating to the same
subject matter; and, unless the integrated agreement is void, or voidable and avoided,
all prior or written agreements relating thereto la-his not a rule of evidence; it is a
rule of substantive law.19 I do not regard it as applicable where, as here, the sole
issue is whether there is a statutory obligation to put into writing that which has
been agreed upon 20 I note, in this connection, that the oral commitment as to the
incentive factor neither contradicts, varies, nor detracts from the terms of the agree-
ment as executed; it merely completes it.
What has been said with respect to the parol evidence rule is equally applicable
to the defense of integration or merger. Moreover, an agreement is fully "integrated"
only when the parties have adopted a writing or writings as the final and complete
expression of the agreement" The cases decided under this Act which have been
cited by Respondent on the question of merger and integration 22 are inapposite;
they are concerned with situations in which the dispute clauses were not the subject
of agreement between the parties; invariably, in these cases, a party sought to reopen,
after the execution of a contract, a subject which had been discussed but had not
been the subject of agreement.
Nor has the Union waived its right to press the subject further. Throughout the
negotiations and in correspondence surrounding the execution of the contract, the
Union persistently voiced its objections to Respondent's failure to reduce the incentive
clause to writing. Under these circumstances, I do not find an "unequivocal waiver"
by the Union 23 Nor does the execution of the contract constitute a waiver.24 What
ever might be the desirable approach with respect to items not agreed upon, it does
not appear that, where there is agreement on all points, a hiatus in a collective-
bargaining contractual relationship should be imposed as the price of getting the
entire agreement reduced to writing 2s
A number of the very cases cited in Respondent's brief 26 to show the sanctity
of written contracts are, to the extent they have bearing, supportive of the General
Counsel's case. For, in context, they support the proposition that a written, as
opposed to an oral, contract is the foundation of stable labor management relations.
1"H. J. Heinz Co. v. N.L.R.B., 311 U.S. 514; The Usadel Trophy Manufacturers, Inc,
131 NLRB 1347; Section 8(d) of the Act.
1s Restatement of the Law of Contracts, section 23'7.
10 Wigmore on Evidence, section 2400.
20 Compare this with suits for breach of contract, cited by Respondent, such as Lewis v.
Mearns, 168 Fed. Supp. 134 (D.C.N.D. W. Va.), affd. 268 F. 2d 427 (C.A. 4), and Lewis v.
Young & Perkins Coal Co., 190 Fed. Supp . 838 (D .C.W.D. Ky.).
21 Restatement of the Law of Contracts, section 228
22 E.g., N.L R B. v. Nash-Finch Co., 211 F. 2d 622 (C.A. 8) ; Intermountain Equipment
Company v. NL.R.B, 239 F. 2d 480 (C.A. 9).
23 Proctor Manufacturing Corporation, 131 NLRB 1166 ; California Portland Cement
Company, 101 NLRB 1436, 1439.
2{ See The Berkline Corporation, 123 NLRB 685, footnote 4, where, having found a
waiver by the union, the Board majority specifically noted that it did not rely on the
execution of the contract.
25 From the record, it appears that the reason the Union entered into the contract when
it did was that a "decertification petition" had been filed concerning the Fulton plant.
Respondent characterizes this as a "selfish purpose." I regard the Union 's motivation as
Irrelevant as long as it did not in fact waive the point in dispute . The basic issue is
vhether the Union must undergo a waiting period-without a contract-because Respond-
,at was unwilling to reduce the entire agreement to writing.
2e H. J. Heinz Co. v. N.L.R B., supra; Gatliff Coal Co. v. Cox, 152 F. 2d 52 (C.A. 6) ;
N.L R B. v. Grace Co., 184 F. 2d 126, 129 (C.A. 8).
HENRY I. SIEGEL CO.^ INC. 1303
Agreement having been reached, it should not be "exposed to the sport of fleeting
and biased recollection." 27 The fact that the parol evidence rule can and will be
urged to render meaningless an oral agreement which is an integral and uncon-
tradicting part of an otherwise written agreement makes it essential that , upon re-
quest, the oral agreement be reduced to writing.
As an example of the dangers inherent in acceptance of Respondent 's position, let
us look at one aspect of the instant unremedied situation. The Union, as one reason
for its insistence on the incorporation of the incentive factor in the contract, cited
to the Company the fact that it needed to use this in connection with processing
piece-rate grievances at the arbitration level. Respondent having agreed to con-
tinue to utilize the incentive factor system, the factor might, presumably, become
a relevant factor for consideration by an arbitrator. Yet, Respondent' s counsel,
asked if he would urge the aptness of the parol evidence rule at an arbitration
proceeding, said:
Well, before an arbitrator, I don't know whether we would or not. I can't
say. It is broader. We would never deny, Mr. Trial Examiner, before an
arbritrator or anywhere else that our rates were engineered with the idea of
creating a 121/2 percent incentive. We would never deny it under any circum-
stances under any occasion.
Does this mean that Respondent would admit the practice but, because it was not
part of the contract, deny to an arbitrator any consideration of the factor? It
seems to me that the possibility illustrates one of the evils of failing to memorandize
the subject.
Finally Respondent urges, presumably as an alternative to its main lines of
defense, that no further written agreement is necessary because the price rates
attached to the contract do, in fact, contain the 121/2-percent incentive factor. Leav-
ing aside the fact that, if this constitutes "agreement," it does not constitute the whole
agreement, it has no necessary application to any new price rates which might be
established during the life of the contract; there is no written assurance that they
would contain the incentive factor.
Upon the entire record, and on the basis of what I am convinced is a fair
preponderance of credible evidence, I conclude that Respondent, upon appropriate
request, agreed, on or about September 29 to October 2, 1961, to the continued
utilization of a 121/-percent incentive factor in the setting of piece rates at its
Dickson and Fulton plants but that it then refused and continues to refuse to put
said agreement in writing, in violation of Section 8(a) (5) of the Act 28
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of Respondent set forth in section III, above, occurring in connection
with its operations described in section I, above, have a close, intimate, and sub-
stantial 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 of
commerce.
V. THE REMEDY
Having found that Respondent has engaged in certain unfair labor practices, I
shall recommend that it be ordered to cease and desist therefrom and to take certain
affirmative action in order to effectuate the policies of the Act.
Having found that Respondent agreed in principle to the continued utilization
of the 121/2-percent incentive factor in its setting of piece rates, I shall recommend
that Respondent, upon request, bargain collectively with the Union with respect
to the wording which will implement such agreement, and, when an understanding
as to the wording is reached, embody such understanding in a signed agreement.
A narrow cease-and-desist order will be recommended in this case in view of the
facts that there is no evidence of past violation of the Act and that the nature
of the instant violation does not constitute that type of conduct for which a broad
order is necessary to effectuate the policies of the Act.
2' Judge Learned Hand, in Art Metals Construction Company v N.L R.B., 110 F. 2d
148, 150 (C.A. 2).
28 While I do not find that Respondent 's refusal to Incorporate an existing practice In a
collective-bargaining agreement Is of Itself a refusal to bargain, I note that this has been
held to be Indicative of bad-faith bargaining N L R B v Berkley Machine Works &
Foundry Company, Inc, 189 F. 2d 904, 906-907 (C.A 4) ; and see N L.R B. v. Knoxville
Publishing Co., 124 F 2d 875, 883 (C A. 6) ; Singer Manufacturing Company v N L R B ,
119 F 2d 131, 136 (C A. 7), cert. denied 313 U S. 595; and N.L R B v Montgomery
Ward and Company, 133 F. 2d 676, 6'85, 686 (CA. 9)
1304 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Upon the basis of the foregoing factual findings and conclusions , I make the
following:
CONCLUSIONS OF LAW
1. Henry I . Siegel Co ., Inc., is engaged in commerce within the meaning of Sec-
tion 2 (6) and (7) of the Act.
2. Amalgamated Clothing Workers of America, AFL-CIO, is a labor organization
within the meaning of Section 2(5) of the Act.
3. All nonsupervisory production and maintenance employees at Respondent's
Dickson , Tennessee , and Fulton , Kentucky, plants , constitute a unit appropriate for
collective bargaining within the meaning of Section 9(b) of the Act.
.4. The Union was on September 29, 1961, and has been at all times since, the
exclusive representative of all employees in the aforesaid appropriate unit for the
purposes of collective bargaining , within the meaning of Section 9(a) of the Act.
5. On and after September 29, 1961, by refusing to put into writing its agreement
that a 12 1/2 -percent incentive factor would continue to be utilized, Respondent has
engaged in and is engaging in unfair labor practices within the meaning of Section
8 (a) (5) of the Act.
6. By said refusal to bargain , Respondent has interfered with, restrained, and
coerced its employees in the exercise of rights guaranteed them in Section 7 of the
Act, and thereby has engaged in and is engaging in unfair labor Practices within
the meaning of Section 8 (a) (1) of the Act.
7. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2 ( 6) and (7) of the Act.
[Recommendations omitted from publication.]
Local 585 of the Brotherhood of Painters , Decorators and Paper-
hangers of America , AFL-CIO and Bishopric Products Com-
pany. Case No. V-CD-56. February 18, 1963
DECISION AND DETERMINATION OF DISPUTE
This is a proceeding under Section 10(k) of the Act, following a
charge filed on June 11, 1962, by the Bishopric Products Company,
herein called Bishopric, alleging that Local 585 of the Brotherhood
of Painters, Decorators and Paperhangers of America, AFL-CIO,
herein referred to as Painters, had violated Section 8(b) (4) (i) and
(ii) (D) of the Act. The charge alleges, in substance, that the Paint-
ers engaged in a strike or picketing at the Galveston, Texas, plant of
Falstaff Brewing Company, herein called Falstaff, where Bishopric
was performing work, with an object of forcing or requiring
Bishopric and/or Falstaff to assign certain work to members of the
Painters rather than to employees of Bishopric who were performing
the work.
A hearing was held before Kenneth L. Tilley, hearing officer, on
June 27, 1962, at Galveston, Texas. All parties participated in the
hearing and were afforded full opportunity to be heard, to examine
and cross-examine witnesses, and to adduce evidence bearing on the
issues.' The rulings of the hearing officer made at the hearing are
'Falstaff and International Union of United Brewery , Flour , Cereal, Soft Drink &
Distillery Workers of America, AFL-CIO, herein called the Brewery Workers and its
Local 12, were permitted to intervene and participate in this proceeding.
140 NLRB No. 125.