Hess Oil and Chemical Corp.

National Labor Relations Board - Board Decisions

Sep 16, 1964

148 N.L.R.B. 1080 (N.L.R.B. 1964)

1080 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Employees may communicate directly with the Board 's Regional Office, 720 Bulkley
Building, 1501 Euclid Avenue , Cleveland Ohio , Telephone No. Main 1 -4465, if they
have any question concerning this notice or compliance with its provisions.
Delhi-Taylor Refining Division , Hess Oil and Chemical Corpora-
tion and Oil, Chemical and Atomic Workers International
Union, AFL-CIO. Case No. 23-CA-1596. September 16, 1964
DECISION AND ORDER
On November 18, 1963, Trial Examiner Ramey Donovan issued his
Decision in the above-entitled proceeding, 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 Decision. Thereafter
the Respondent filed exceptions to the Trial Examiner's Decision, a
supporting brief, and a motion to reopen the record.' The Union filed
exceptions to the Trial Examiner's Decision, a supporting brief, and a
motion in opposition to the Respondent's motion to reopen the record.
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 pane] [Chairman McCulloch and Members
Fanning and Jenkins].
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 Trial Ex-
aminer's Decision, the exceptions and briefs, and the entire record in
this case, and hereby adopts the findings, conclusions, and recom-
mendations of the Trial Examiner with modifications noted below.
ORDER
Pursuant to Section 10(c) of the National Labor Relations Act, as
amended, the Board hereby adopts, as its Order, the Order recom-
mended by the Trial Examiner, and orders that the Respondent,
Delhi-Taylor Refining Division, Hess Oil and Chemical Corporation,
its officers, agents, successors, and assigns, shall take the action set
forth in the Trial Examiner's Recommended Order, with the following
modifications :
I The Respondent 's motion to reopen is hereby denied . The Respondent seeks to intro-
duce subsequent operating statements to confirm the accuracy of its projection of operat-
ing expenses As the Trial Examiner found, and we agree, that these expenses were not
the motivating factor for the April 1 shutdown, we deny the motion.
148 NLRB No. 117.
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC. 1081
1. Add as paragraph 1(a) the following :
Refusing to bargain -collectively in good faith with Oil, Chemi-
cal and Atomic Workers International Union, AFL-CIO, as the
exclusive representative of all of Respondent's employees in the
following appropriate unit :
All production and maintenance employees, including labora-
tory and warehouse employees employed at its Corpus Christi re-
finery, but excluding clerical employees, draftsmen, engineers,
guards, foremen, assistant foremen, and other supervisors as de-
fined in the Act.
2. Add as paragraph 1(b) the following:
Discouraging membership in Oil, Chemical and Atomic Work-
ers International Union, AFL-CIO, or any other labor organiza-
tion, by the discharge of employees, or by discrimination in any
other manner with respect to hire and tenure of employment, or,
any term or condition of their employment.
3. The Trial Examiner's recommended paragraphs 1(a) and 1(b)
shall accordingly be relettered as 1(c) and 1(d) .
4. Delete paragraph 2(a) and substitute therefor the following:
Upon request, bargain collectively with the above-named Union
as the exclusive representative of all the employees in the
above-described appropriate unit and embody any understanding
reached in a signed agreement.
5. The notice shall be amended by deleting therefrom the paragraph
which began "WE WILL, upon request ...." and substituting therefor
the following :
WE WILL, upon request, bargain collectively with the said Union
as the exclusive bargaining representative of all production and
maintenance employees, including laboratory and warehouse em-
ployees at the Corpus Christi refinery, excluding clerical em-
ployees, draftsmen, engineers, guards, foremen, assistant foremen,
and other supervisors as defined in the Act, with respect to wages,
hours, and conditions of employment, and, if an understanding is
reached, embody such understanding in a signed agreement.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
Oil, Chemical and Atomic Workers International Union, AFL-CIO , herein called
the Union , on April 2 and 29, 1963, filed a charge and an amended charge, respec-
tively, against the Respondent , Delhi-Taylor Refining Division , Hess Oil and Chemical
Corporation , herein called Hess . The complaint issued on May 15, 1963 , and was
amended on June 18, 1963. The hearing was held before Trial Examiner Ramey
Donovan at Corpus Christi , Texas, on July 18, 19 , and 20 , 1963, and at Houston,
Texas, on July 30, 1963 . All parties filed briefs on October 1, 1963.
1082 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The complaint , as amended , alleges, violations of Section 8(a)(1), (3 ), and (5)
of the Act. The crux of the complaint is an alleged refusal to bargain and a
lockout of over 200 named employees . Respondent , in its answer , denies the com-
mission of the alleged unfair practices and sets forth affirmative defenses to the
complaint allegations.
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
Respondent Hess is a New Jersey corporation that manufactures, sells, and ships
petroleum products in interstate commerce of an annual value in excess of $50,000.
All its activities are related to the petroleum and chemical industry. Hess and
its subsidiaries have holdings and assets of a value exceeding $175,000,000. Among
these holdings are oil tankers, deep-water oil storage facilities, service stations,
petroleum pipelines, and oil refineries. Hess markets its products from Boston,
Massachusetts, to Florida, and around the gulf coast to Corpus Christi and Browns-
ville, Texas. It owns outright or has an interest in 700 service stations on the east
coast and has approximately 40 terminals throughout the eastern seaboard and
gulf coast. It is found that Hess is engaged in commerce within the meaning of
the Act.'
H. THE LABOR ORGANIZATION
The Union is a labor organization within the meaning of the Act.
HI. THE ALLEGED UNFAIR LABOR PRACTICES
Background
Prior to the sale of certain of its properties to Hess and other purchasers, Delhi
was engaged in oil and gas exploration and production in the United States and in
other countries, i.e., it explored for and drilled oil and gas wells to obtain those
raw materials in their natural state and it transported and sold natural gas through
its pipeline subsidiary; Delhi also engaged in manufacturing operations, i.e., it oper-
ated two refineries, one at Corpus Christi and the other at Port Isabel, Texas, where
gasoline and various oils and petrochemicals were manufactured; marketing opera-
tions were also conducted by Delhi, i.e., it owned or leased terminal storage facilities
for its refined products in the Southeastern United States, New York, and Chicago;
it owned 15 service stations for marketing some of its refined products in Virginia,
Georgia, and South Carolina; through 5 directly and indirectly owned subsidiaries
Delhi owned or leased 109 service stations in Florida, Alabama, and Georgia; it
also owned 45 percent of the capital stock of Billups Eastern Petroleum Company,
a private brand chain-gasoline marketing corporation operating approximately 170
service stations from Virginia to Florida.
In its 1962 annual report to stockholders, transmitted by Delhi President Sewell
in March 1963, Delhi stated that "the profitability of the manufacturing, market-
ing and petrochemical division was adversely affected by the extremely competitive
pricing of gasoline and petrochemicals during 1962 and the gas pipelines appear to
have limited possibilities for growth ." 2 The report announced the sale of
the manufacturing, marketing, and petrochemical facilities to Hess on April 1, 1963,
and the sale of the gas pipelines to named companies. It was also stated that
Delhi would investigate what market value its other properties would have to
potential purchasers. The monetary figures show an overall loss of $110,309 for
1962 as compared to a profit of $3,721,460 for 1961.
Delhi is not a Respondent in the instant case nor is its financial condition of
concern to us. Our limited interest in Delhi arises somewhat indirectly by reasons
of certain testimony of McCollum, senior vice president of Hess and Respond-
ent's principal witness. McCollum testified that in his first meeting with the union
representatives he informed them that the Delhi properties being purchased by
Hess "were presently losing money . . . and that we felt that if we had an economi-
cal operation, a streamlined operation at Corpus [Christi] that we would probably
1 Delhi-Taylor Oil Corporation, herein called Delhi, is not a Respondent herein. Its
business , to the extent relevant to this proceeding, is described hereinafter.
2 This statement is to be found in the president's transmittal letter. Elsewhere In the
financial report it is stated, "Gasoline price wars were prevalent during the year [1962]
in many areas of your company's operation, and this condition had the inevitable effect
of materially reducing marketing and manufacturing profits."
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC. 1083
turn this into a profitable operation." 3 McCollum testified that his statement afore-
mentioned about the Delhi properties was based on the 1962 annual report of
Delhi and advice by the "Delhi management to us [Hess]." Since McCollum did
not identify who in Delhi management so advised him nor did he state what, if
any, specifics were given him, it is apparent that the only tangible evidence in the
record, regarding the state of Delhi's business, is the 1962 annual report. Indeed,
this appears to have been Respondent's position since it introduced the report into
evidence in conjunction with McCollum's testimony .4
There is no question regarding the fact that the Delhi report shows a loss for 1962.
However, the financial statement is a consolidated one reflecting all Delhi's opera-
tions as previously described in this Decision .5 It further appears that even this
consolidated picture indicates that the major problem was a decline in operating
revenues Operating charges or expenses declined in 1962 as compared to 1961?
While it is impossible to ascertain from the consolidated financial statement what
the financial picture of the Corpus Christi refinery operation was, it is apparent that
the wages, hours, and working conditions covered by the union contract at that re-
finery would be included under the heading of "operating expenses." Here again, the
consolidated nature of the figures prevents a pin-pointing of the refinery operating
expenses and the only fact we do know is that all "operating expenses" declined in
1962 in an amount of over $4,000,000. These operating charges that increased in
1962 do not appear to have been of such a nature that they were affected by the
union contract.8
The conclusions warranted by the evidence in the record regarding Delhi's busi-
ness operations, at least up to this point, are of a very limited nature. Indeed, the
only valid conclusion is that the Delhi consolidated operations show a loss of $110,309
in 1962. If we accept the Delhi comment in its financial report, not otherwise illus-
trated by specific monetary financial statements therein, the petroleum manufactur-
ing and marketing operations were unsatisfactory because of marketing and sales
difficulties and, more specifically, because of gasoline price wars. It is a reasonable
premise, however, that such price wars are, to a major extent, endemic to that phase
of the industry. Indeed, such price wars are an aspect of competitive free enterprise
and can be considered a normal operational risk incurred by those in the industry .9
In any event, all we know about Delhi is that it decided to sell its petroleum manu-
facturing and marketing facilities to Hess, apparently because of pronounced compe-
tition in selling gasoline products. We do not know, on the evidence thus far
3Details of the purchase and the meetings between Hess and the Uni-a are described
hereinafter. The only part of the purchase that affected the Union was the Corpus
Christi refinery where the Union had a contract with Delhi
4 Counsel for Respondent stated that the report was an "official document . . . which
is required to be filed with the Securities and Exchange Commission."
5 When McCollum was speaking to the Union about Delhi losing money he was evi-
dently referring to the operation and products of the Corpus Christi refinery, the em-
ployees of which were covered by a union contract. Other aspects of Delhi operations
would not be relevant to the Union at Corpus Christi.
61n 1962-$107,364,094; in 1961-$113,133,456. The term, "operating
pears to be synonymous with "operating gross income."
revenue," ap-
a Operating charges: 1962 1961
Cost of sales and operating expenses----------- $89,385,250 $93,811,358
Depreciation and depletion_____________________ 5,250,020 4,653,840
Taxes, other than an income-------------------- 1,702,861 1,492,032
General, administrative, and selling expenses--___ 4,125,247 3,658,819
100, 465, 378 103, 616, 049
8E.g, taxes and depreciation and depletion, general and administrative expenses. Ex-
ploration and development expenses increased in 1962 but these are not refinery manu-
facturing expenses.
O The degree of commitment of investors, particularly stockholders possessing a con-
trolling interest in a corporation, to a particular type of operation, varies. The Delhi
financial report refers to "maximum profitability on employed capital as our objective "
In general , all investors espouse this maxim, and no investor is interested in a losing
situation, except possibly, under particular circumstances, for tax purposes. However,
the maxim of maximum profitability may also apply to circumstances where a particular
operation is not necessarily unprofitable but is not as profitable as some other investment
to the particular investors. By the same token, another corporation may, because of its
own specialization or orientation, have a different view of the same situation.
1084 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
considered, that one phase, the Corpus Christi refinery, of Delhi's rather wide manu-
facturing and marketing facilities, all of which were purchased by Hess, was in-
efficient and an excessively high-cost operation or that such a condition, if it existed,
was attributable to the terms of the existing union contract. Initially, therefore, Re-
spondent has not established at this point its premise that Delhi was losing money
because of is Corpus Christi refinery. This does not mean, however, that Hess,
through McCollum, could not decide, as it did, not to adopt the Delhi-Union con-
tract and to propose terms to the Union that it considered to be desirable or essen-
tial. An employer may of course decide that it must convert an unprofitable opera-
tion to a profitable one. But an employer may also decide that instead of an 8- or
10-percent profit it requires a 12- or 15-percent profit 10 Since at this point we do
not know the exact picture of the Corpus Christi refinery and since that picture, what-
ever it was, would not be determinative as to Hess' objectives for its own business,
we simply note that McCollum asserted that Delhi had been losing money in operat-
ing the Corpus Christi refinery.li
The sale and purchase agreement between Delhi and Hess was entered into on
January 22, 1963. It covered Delhi's petroleum manufacturing and marketing prop-
erties, described in detail earlier in this Decision, including the Corpus Christi re-
finery. The effective date for the acquisition of the properties was 11 a.m., April 1,
1963. In the complaint it is alleged that on January 22, 1963, Respondent became
either the employer or a joint employer with Delhi of the employees at the Corpus
Christi refinery. Evidence was adduced at the hearing which the General Counsel
and the Union apparently believe bears out the aforementioned allegation since it
shows some control over the refinery by Hess prior to April 1. I am satisfied, how-
ever, that Delhi remained the employer of the Corpus Christi refinery employees
until April 1. Such control as Hess exercised prior to April 1 was the normal con-
trol that a purchaser would exercise in circumstances of this nature and various acts
of comity between seller and purchaser and relations between purchaser and some
key personnel of the seller do not alter our conclusion.13 The matter of the Corpus
Christi refinery shutdown on April 1 is discussed hereinafter as well as statements
made regarding a shutdown prior to April 1.
The Union had represented the employees at the Corpus Christi refinery since
1941.13 The contract in effect at the time of the instant events was for the pe-
riod of March 12, 1962, to March 12, 1964. Respondent admits that the Union
was the representative of a majority of the employees in the appropriate unit and
admits the appropriateness of the unit.14 Respondent took the initiative in deal-
ing with the Union as the collective-bargaining agent in the appropriate unit and at
no time in the negotiations did Respondent challenge the Unions status. There
is also independent evidence in the record of the Unions majority status and of the
appropriateness of the unit. Dues deduction authorizations were introduced from
a majority of the employees. It appears that the contract unit is the same as that
in existence since the Union became the bargaining agent and that the unit has
10 The figures are taken at random for illustrative purposes only.
11 More details of this aspect and of other matters referred to by McCollum are herein-
after considered.
zs Delhi agreed that between January 22 and April 1, 1963, it would not, except with
the written consent of Hess, "A. Incur any obligation or liability in connection with the
properties and their operation . . . except ( 1) current liabilities . and obligations
under contracts . . . (11) liabilities and obligations not to exceed 30 days . .. or a
maximum capital expenditure by Delhi of $10,000, such liabilities and obligations having
been entered into in the ordinary course of business . . . . B. Change or agree to
change any terms of employment, including salary or wage rates of any officers or em-
ployee of Delhi .
'
Prior to April 1, work preparatory to the installation of a
desalter in the refinery was undertaken by Delhi at Hess' request, with the cost thereof
borne by Hess. Also some alterations in office space was undertaken. Hess likewise
made some arrangements regarding the retention of Delhi's vice president of manufactur-
ing, Maurer, and required him to move from Dallas to Corpus Christi, and had made
plans to retain Warnke, the refinery plant manager, as well as other supervisory and
office personnel. Hess sent some foremen in this category to a Hess plant, apparently to
observe Hess operations. All these people were on the Delhi payroll prior to April 1,
1963, although it seems possible that the foremen who visited other Hess plants may
have been paid by Hess during such period. There is no evidence either way on this
last-mentioned aspect.
"The Union was recognized by the Employer without Board certification.
1s Respondent so stated at the hearing. The matter of alleged racial discrimination, a
special defense raised by Respondent against the Union, will be discussed at a later point.
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC. 1085
traditionally included warehousemen and laboratory employees as well as other
employees. The appropriate unit above mentioned is: all production and main-
tenance employees at the Corpus Christi refinery, excluding clerical employees,
draftsmen, engineers, guards, foremen, assistant foremen, and other supervisors as
defined by the Act. Regarding warehousemen and laboratory employees who are
and have been part of the appropriate unit, the following appears in the record: 15
as mentioned, these categories of employees have at all times been part of the
Corpus Christi unit; according to the uncontroverted testimony of Brown, an In-
ternational representative of the Union who serviced the local union at the Corpus
Christi refinery, there were approximately 26 laboratory employees at the plant; they
take samples of charge stock and of products processed and produced at the
refinery; they are not chemical engineers and they run routine tests in accordance
with specifications of the American Petroleum Institute; they are hourly paid and
come up through the ranks; the testimony of Brown and McCollum indicates that
there were 4 to 6 warehousemen; this record indicates that the warehousemen are
hourly paid and do work in connection with supplies, tools, and equipment stored
in the refinery warehouse or supply room; they check out tools and other equip-
ment as needed by other employees at the refinery.
The Negotiations
Based on the testimony of Union Representative Brown and McCollum of Hess,
I find that the following transpired in the meetings between the parties: 16
McCollum arranged a meeting for March 8, 1963, with Forrester, district direc-
tor of the Union, and with Brown, the union representative with whom McCollum
had conducted contract negotiations in the past regarding other Hess plants.17 At
the meeting, McCollum explained that Hess was purchasing various Delhi proper-
ties, including the Corpus Christi refinery. He stated that the refinery had been
losing money and that certain changes would be necessary to effectuate economies
and to make it a profitable operation; that Delhi had been paying too much for raw
material, crude oil; that Hess wanted to be assured of a continuing operating force
of employees and also wanted to secure crude oil on a reasonable long-term basis
inasmuch as more favorable terms were available from oil producers if a long-term
purchase contract existed; that the two factors were interrelated since Hess did
not want to make crude oil and sales contracts without knowing that it could oper-
ate the plant and that if a contract could be reached with the Union Hess could
then line up its crude oil contracts; is that it was necessary for Hess to secure a
2-, 3-, or 5-year contract from the Union; that Hess did not want laboratory or
warehouse employees included in the contract unit; that the contract would have
no provision regarding contracting out work; 19 that Hess wanted to reduce the
existing 72 classifications of employees to 11 and wanted to reduce the 15 lines of
promotion for employees to 4 but that he did not feel strongly about having 2 lines
of promotion in the process department; that Hess did not intend to recognize the
seniority of the employees but that, after various changes in personnel had been
made, Hess would give the retained employees a numerical placement in its plant
in accordance with their previous standing on the Delhi seniority list; McCollum
also stated that Hess would give up to 2 weeks' vacation in 1963 if an employee
had not taken his vacation and that paid sick leave would also be provided; that the
contract would be effective beginning June 1, 1963, and, in the interim, from
April 1, when Hess took over the refinery, to June 1, all employees would be on
probation and Hess could terminate employees without any right to file grievances
on the Union's part during this period; that McCollum would have to have the
Union's agreement by March 25 to the contract terms that he had outlined in order
15 The relevancy of our discussion of these two categories of employees will appear when
we discuss the bargaining negotiations.
1e With some exceptions that have been resolved by me, there is not too much conflict
between the two versions and the description herein, for the most part , represents a syn-
thesis of the testimony of the witnesses.
17 Hess has had contracts with the Union at Houston for about 12 years and for 6 years
at New Orleans.
iS The existing Delhi-Union contract contained a no-strike , no-lockout clause It also
provided for wage reopenings by either party.
19 The existing contract , article XIV , provided that maintenance work would not be
contracted out as long as the Company had the necessary equipment and qualified em-
ployees available.
1086 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
for Hess to continue the plant's operation; 20 and that with the exceptions described
above by McCollum to the Union, Hess was willing to adopt the other terms of the
Delhi contract but Hess was not willing to take over the Delhi contract as it was and
to operate under that contract.
The parties agreed that they would meet again in Corpus Christi on March 12
and that Brown would in the meantime discuss the proposals with the union com-
mittee at a union meeting scheduled for March 11.
By chance, on the morning of March 11, Brown and McCollum encountered each
other in a hotel coffee shop. McCollum stated that the terms he had described on
March 8 were not just a bargaining position but that he had to have the terms he
had set forth. McCollum said that his Company was not "sticky" about wages.
Brown testified that he, Brown, said, yes, the employees had already received a
5-percent wage increase, and that McCollum said that he had authorized the in-
crease by Delhi. McCollum denies having made the last mentioned statement but
states that he had opposed the increase when Sewell, president of Delhi, advised him
of the proposed action. McCollum states that he wished to save the potential wage
increase for his own bargaining with the Union. It is not clear from the record
exactly when the increase was given but I am inclined to believe that it was after
January 22, 1963, and before March 11. By the terms of the purchase agreement
it would appear that Hess' approval was required. McCollum may well have op-
posed the action as he states but in view of Sewell's determination to proceed there
may have been ultimate acquiescence by McCollum or at least he did not bring
the issue to a head. Once the matter was a fait accompli, I believe that when Brown
mentioned the increase to McCollum on March 11 the latter probably indicated
his awareness of the fact, with the implication at least that he had approved or
authorized the action.
At the meeting on March 12, Brown and the union workmen's committee were
present, as well as McCollum, Maurer, and Warnke. Brown asked McCollum to
again state his proposals. McCollum said substantially what he had said on March 8.
He also said that he did not intend to cut any employee's wage rate except leadermen
and that he did not intend to have a leadermen category. In the case of leadermen
and anyone else who was placed in a lower classification he would maintain their
wage rates until other rates had caught up and then they would be treated equally
thereafter. He said that Hess would have a pension plan in 1963. McCollum sub-
mitted copies of a document and said that everything not in that document would be
carried over from the Delhi-Union contract into the new contract with Hess. As of
April 1, when Hess took over the operation of the refinery, McCollum said, the old
contract died. The instrument submitted by McCollum was entitled "Articles of
Agreement." The preamble stated that Hess recognized the Union as the collective-
bargaining agent of all operating and maintenance employees at the refinery, exclud-
ing office, laboratory, warehouse, technical, guard, clerical, and supervisory em-
ployees. Article I stated that the term of the agreement was June 1963, to June 1,
1965. The next article was article IV, section 5. It provided for shift differential
pay.21 Then followed article XIV, eliminate, which was a deletion of the contracting
out-of-work provision in the Delhi contract. There were 2 appendixes, one, a job
progression chart, starting at "yardman " and advancing upward , and, the second, a
list of 11 job titles with basic wage rates 22 McCollum said he would have to have
an answer by March 25 or the plant would be shut down on April 1.
20 The exact phraseology used on the last mentioned point is not clear. The evidence
indicates that McCollum may have said that the plant would be shut down on April 1
unless he had agreement by the Union to his terms by March 25. However expressed,
the basic idea was the same
21This was apparently in reference to McCollum's position to eliminate a provision for
"walking time" in the Delhi contract and substitute a differential in lieu thereof. Sub-
sequently, the union representatives said that they would recommend acceptance of this
provision to the union membership.
z Wage rates as such did not figure prominently, if at all, in the negotiations. The
reduction of classifications from 72, in the Delhi contract, to 11 was one of the main
topics. Thus McCollum's proposal, to take one example, was, operator A, $3 08, opera-
tor B, $3.40, and process helper, $3 13 ; the Delhi contract had operators A, B, C, and D
at $3 50, $3 24, $3.10, and $2.00, respectively. Numerous craft classifications, such as
four grades of machinists, three grades of electricians, as well as various classifications
of welders, boilermakers, painters, pipefitters, and carpenters were reduced to mechanic A
and mechanic B in McCollum's proposal. McCollum testified that his proposal contem-
plated that in consolidating the classifications to 11 there would be no reduction in any
individual employee's hourly rate of pay.
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC. 1087
Regarding McCollum's proposals on March 8 and 12, and also at subsequent meet-
ings, the Union asked various questions to clarify the meaning of the proposals.
There was at no time any mention or threat of a strike by the Union. On March 12
the Union asked about severance pay to which it said it felt the employees were en-
titled; 23 also, the Union asked about vacation pay that they felt was due, and about
pensions, insurance, and hospitalization. McCollum said that anything that the
Union and the employees felt was due to them under the Delhi contract would have
to be discussed with Delhi. Arrangements were then made for a meeting on
March 14 on the Delhi aspect.
Before coming to March 14, there is one other matter that occurred on March 12
that should be mentioned. McCollum gave the Union a letter to sign in conjunction
with its acceptance of McCollum's contract proposals. The letter confirmed that the
Union had been advised that Hess was not assuming the Delhi contract; it stated,
inter alia, that in consideration for the Union's agreement to enter into a contract
with Hess the latter had agreed to recognize the Union as bargaining agent for a unit
excluding laboratory and warehouse employees; it also acknowledged that all em-
ployees would be probationary for a period of days, "during which time
any such employee may be terminated by you [Hess] with or without cause and
without right of grievance."
Present at the March 14 meeting with the Union were Maurer, Warnke, and Vick,
all employees of Delhi 24 The Union asked whether Delhi was going to terminate all
employees. Maurer said no. The Union said that this was contrary to McCollum's
statement and Maurer said that he realized that was true. The Union asked if Delhi
was going to pay termination pay and the answer was no. In reply to questions, the
company people stated that Delhi would pay the difference in vacation pay between
what the employees got from Hess and that to which they were entitled under the
Delhi contract; that Delhi's obligation on sick pay ended on April 1 when Hess took
over, except for disability occurring prior thereto; that Hess had an insurance plan;
and that Hess had agreed to have a pension plan and to take over funds from the
Delhi plan to fund past credits for employees. The Union stated that, if there were
to be terminations, termination pay was owed under the contract. The Union wanted
more information on the pension rights and the new plan but apparently the com-
pany people were unable to give further information. The Union said that it wanted
to discuss the status of the employees' pensions with someone who was knowledge-
able on the subject.
March 18, at 9 a.m ., the Union met with the same Delhi people as on March 14.
The company people said that it was not their intention to terminate employees who
went over to Hess and that such employees would be transferred and not terminated,
assuming that Hess was taking such employees; that if the Union and Hess reached
agreement the employees wanted by Hess would be transferred and employees not
wanted by Hess would be terminated in accordance with the Delhi contract (which
provided for termination pay); that they would probably shut down the refinery and
lay off the employees for lack of work if Hess and the Union reached no agree-
ment; that Delhi would pay termination pay only to employees terminated by April 1
and that thereafter it was up to Hess . Vacations were discussed. The Union pro-
posed arbitration on termination pay and vacations. The Company said that it would
consult its attorneys. The Union requested the pension reports made to the Govern-
ment. The Company said it did not have the reports available and that it was not
intended that the pension plan be terminated. The Union asked that the administra-
tor of the Delhi pension plan be made available. In reply to a question, the Com-
pany said that the matter of the exclusion of laboratory and warehouse employees,
shift differential in lieu of walking time, contracting out work, and other matters,
were McCollum's ideas. The Company said it did not have a list of employees that
Hess would take over. The Union requested an individual accounting of all pension
moneys, including individual contributions and company contributions.
That same afternoon, March 18, at 2:15 o'clock, the Union met with McCollum,
Maurer, and Warnke. McCollum said that it was a Hess meeting. The Union told
Hess substantially of the contentions and requests that it had made to Delhi regard-
ing termination pay, vacations, and pensions . McCollum said that Hess was gaming
to institute a pension plan and would fund the past credits of Delhi employees that
it took over.
23 The Delhi contract contained a provision for termination pay as well as vacation
provisions and hospitalization Delhi also had a pension program
24 After FIess took over the refinery these people were employed by Hess
1088 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The next meeting between the same people was on March 19. The Union asked
McCollum when Hess had purchased the Delhi plant and was told that it was in
January 1963. The Union "again" said that Delhi must pay termination pay and
accumulated vacations regardless of what Hess did insofar as taking over employees
and that even employees who were taken over were entitled to termination and vaca-
tion pay from Delhi. The Union said that it would have to represent warehouse
and laboratory employees and that the contract would have to protect the employees
against work being contracted out. It proposed a 1-year term for any contract.
McCollum said that he was adhering to his proposals. The Union proposed one line
of promotion and McCollum said he did not feel strongly on this and would con-
sider it. It was also stated by the Union that it should have the right to file griev-
ances regarding employees who were termination during McCollum's proposed pro-
bationary period. The Union proposed that McCollum simply assume the Delhi
contract for the balance of its term or for a shorter period. McCollum indicated no
willingness to do so. He said that the employees would have security of employ-
ment with Hess because the Company would be operating at a profit. The Union
said that it would like such security and that it did not think that the employees should
be blamed any for losses Delhi may have suffered. The Union said that the em-
ployees wanted to work and to demonstrate their willingness to perform a full day's
work and would be willing to make suggestions for economical operation of the plant.
After the meeting McCollum contacted Sewell, president of Delhi, and told him
about the Union's request for pension information. McCollum said that the Union's
request was reasonable and at his behest Sewell arranged to have Mr. St. Peter,
administrator of the Delhi pension plan, come to Corpus Christi. McCollum ad-
vised Brown of the arrangement on March 19. On March 20 the Union met with
Maurer, Warnke, and St. Peter. Pensions were discussed. After St. Peter left the
meeting those remaining continued their discussion. Maurer said that they would
not arbitrate termination and vacation pay.
Brown wrote to McCollum on March 23 and told him of the contents of the
letter on the same day by telephone 25 The letter said that the Union was con-
sidering McCollums proposals; it referred to the vested rights regarding pensions,
seniority, and termination, vacation, and sick pay that the employees had under
the Delhi contract and that these were serious problems to the employees; it re-
ferred to a provision in the Delhi contract, adopted after the announcement of the
sale to Hess, whereby the contract could be assigned to the purchaser; it urged
further negotiations "if" Hess was not bound by the Delhi contract and "if" it was
not assuming the contract; mention was made of union proposals regarding lines
of promotion and the assumption by Hess of the Delhi pension plan without change;
it requested a copy of the Delhi-Hess purchase agreement; it requested Hess, "in
view of the effective control Hess is now exercising" over Delhi, to effectuate Delhi's
production of the pension information requested by the Union from Delhi; it urged
reconsideration of McCollums intention "to shut down the refinery by April 1 if
your proposals are not accepted by the Union"; further negotiations were urged and
the Union said that it was agreeable to extending "the existing contract past April 1,"
and urged that in any event the refinery be kept open during further negotiations.
On March 25 the Union met with McCollum, Maurer, and Warnke. They dis-
cussed seniority. McCollum said that he did not plan to hurt anyone by his pro-
posal, and, after the 60-day probationary period, during which he would have a
free hand regarding terminations and changes, he was willing to use the Delhi
numerical seniority standings but not years of service since no one would have Hess
seniority prior to April 1, 1963. In answer to a question, McCollum said that he
was not willing to use as a job classification, craftsman A instead of mechanic A,
since he did not want to preserve craft identification.26 The Union asked about
early retirement and voluntary termination. McCollum said that he did not want
to get into such things at that time but would do so later. McCollum reiterated
his vacation, sick leave, and leave-of-absence proposals. He said he would give
2 weeks' termination pay for terminations between June 1, 1963, and April 1, 1964.
The Union asked if the laboratory and warehouse employees would receive the
same treatment. McCollum said that he would not bargain with the Union on,
these categories and that they must be excluded from the contract. He said that
he would agree to the union proposal for a single line of promotion and would
carry over the Delhi pension plan if Delhi transferred the money to fund back
service credits, and would install a Hess pension plan in 1963. McCollum sub-
25 McCollum had his secretary take down the letter from Brown's dictation
25 The record indicates that in McCollum's opinion there was too much craft identifica-
tion and segmentation of work by reason of the 72 Delhi -Union contract j ob titles.
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC. 1089
mitted a complete written contract to the Union and also a letter for the Union's
signature, addressed to Hess. McCollum said that he had to have the Union's
answer by 8:30 p.m. that night or the refinery would start down (shutting down).
Many provisions of the March 25 contract instrument submitted by McCollum
were the same as those in the Delhi contract. The differences were principally the
provisions previously proposed and discussed by McCollum with the Union in
earlier meetings. Briefly stated, the contract term was June 1, 1963, to June 1,
1965; warehouse and laboratory employees were expressly excluded from the de-
scribed unit; there were dues checkoff and vacation provisions; the "changes in
classification work" provisions in the two contracts were identical although the
appendix was in contrast with the Delhi appendix as to classifications, i.e., McCol-
lum's contract had 11 classifications with basic rates as compared with the 72
Delhi classifications and rates. This change was the same as McCollum had earlier
proposed to the Union. The termination pay provisions were identical, with one
minor addition regarding recipients of such pay who were rehired and then later
terminated. The no-strike and wage reopening provisions were the same. The se-
niority article of Delhi was in the McCollum contract, plus a good deal more
which was not. The most pertinent part of the last mentioned aspect is the pro-
vision that for the first 4 months of employment an employee was to be considered
a temporary employee. This appears to be in addition to the fact that there would
be a temporary or probationary status for former Delhi employees by reason of
the fact that if the contract was accepted, and the refinery therefore did not shut
down on April 1, 1963, the contract would not go into effect until June 1, in accord-
ance with McCollum's desire to have a free hand during the probationary period 27
Following the above meeting with McCollum, the Union held a meeting of its
own people. A telegram was sent to McCollum by the Union on the evening
of March 25.28 It was stated therein that the employees "have voted overwhelm-
ingly not to accept the proposal . ."; the Union urged further bargaining; stated
that it "pledges not to strike and urges that the Company not resort to lockout";
stated that it was prepared to make "further concessions in order to reach agree-
ment"; and asked that "you submit to the Union the information previously re-
quested of both companies."
McCollum telephoned Brown on March 26 after learning that the Union had
rejected his proposed contract. It is found that, in substance, McCollum said
to Brown that he was puzzled as to what was causing the problem between'Hess
and the Union since he had felt that they had been getting along quite well in their
negotiations; he asked what it was that the Union had failed to get and what it was
that the Union needed. Brown said that the Union had requested and had failed to
receive a copy of the pension report that Delhi had filed with the Secretary of Labor;
also, a copy of the pension trust agreement and an individual accounting as to the
pension of each employee; further, the Union wanted a copy of the purchase agree-
ment. McCollum said that the Union could not get a copy of the purchase agree-
ment at that time and that Delhi had advised him that the individual pension accounts
could be furnished only to the individuals themselves. Brown said that if McCollum
could "get those thieves off his back" and get them straightened out so that they would
pay the employees that to which they were entitled, he felt that there would be no
problem in reaching a contract with Hess.29 Brown said in substance that these mat-
ters would have to be straightened out before there was a contract with Hess 30
McCollum stated that he was "very anxious not to shut the refinery down" and, even
though time was running out, Hess wanted to operate the refinery when Hess took it
over; that Hess had some options on crude oil and might be able to pull the thing to-
gether and that McCollum had an appointment with Sewell the next morning and
he would see what he could do. Brown said that was what the Union wanted.
21 General Counsel's exhibit No. 5, article I ; article XIII, section 2.
Is The addressee was Delhi "and or" Delhi Division of Hess, Corpus Christi, Texas.
29 Brown's reference aforementioned was to Delhi, as he admits, and he and McCollum
both understood this Brown considered that Delhi was withholding termination and
vacation pay to which the employees were entitled.
10 McCollum testified that Brown told him that if the Delhi aspect was taken care of
there would be no problem In reaching a contract with Hess. McCollum interpreted this
as a statement that if the Delhi issues were disposed of the Union would sign McCollum's
proposed contract. Brown states that he did not make such a flat statement and that
what he said and meant was that if the Delhi matters were disposed of he was con-
fident that the Union and Hess, through collective bargaining, could arrive at mutually
agreeable contract terms.
760-577-65-vol. 148-70
1090 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
On the following day, March 27, McCollum met with Sewell in New York. He
told Sewell of his conversation with Brown and said that time was short. McCol-
lum told Sewell that if the latter terminated the employees Delhi would have to
give them termination and vacation pay, and that if Sewell terminated the pension
plan Delhi would have to settle up in accordance with the legal requirements in
such a situation. McCollum, therefore, urged Sewell to agree to do the foregoing
voluntarily and clear up the entire matter. Sewell refused. He said that he was
not doing the foregoing things for the salaried employees and he was not going
to do it for the union employees. It appeared that the amount of money involved
was approximately $100,000. After a lengthy discussion, McCollum then said
to Sewell that if Delhi would do what was proposed and if it would furnish
the Union with the data requested, Hess would pay half the termination and vaca-
tion pay. Sewell agreed and said he would invoice Hess for half the moneys due 31
McCollum testified that the reason he offered to pay half the termination pay
was the fact that Hess wanted to operate the plant and wanted to have the employ-
ees on hand. He said that he had been generally well impressed by the caliber of
the employees at the refinery; he also said that Hess had marketing obligations that
he wanted to be carried on; that Hess had pursued negotiations for crude oil to a
point where it did not wish to drop them but desired to carry them on at least to an
option point or a point of consummation; that considerable work had been devoted
to these aforementioned matters and that Hess felt that it was worthwhile to Hess
to have an uninterrupted operation at the Corpus Christi refinery; and that McCollum
felt that, in view of what Brown had told him on March 26, the Delhi matters were
the only obstacle to getting a contract between Hess and the Union.
On March 27, at Corpus Christi, Maurer, Warnke, Vick, and Maxwell met briefly
with the Union.32 They gave the Union a copy of the purchase and sale agreement
and said that they would show the attachments that were part of the agreement
to the Union on the following day. The company people also said they would sub-
mit the individual pension accounts to the Union and a copy of the pension trust
agreement to the Union on the following day.
The morning of March 28 a meeting was held. Present for Delhi were Sewell,
Maurer, Warnke, and Maxwell. McCollum was there and said that he was sitting in
as an observer. The union representatives and committee were present. Sewell told
Maxwell to give the Union the trust agreement, the report to the Secretary of Labor,
and the individual pension accounts. This was done. While the others left the room
Maxwell stayed with the union representatives and gave them the attachments to the
purchase contract. These were examined by the union representatives in Maxwell's
presence but were not given to the Union to keep nor were copies furnished for
keeping.33
During the meeting Sewell was the spokesman for Delhi. McCollum did not par-
ticipate but was present. Sewell said that Delhi would pay termination pay and
accumulated vacation pay to all employees; that it would transfer pension fund
.credits to Hess for all employees of Delhi hired by Hess. The Union said that it was
satisfactory to it if Delhi paid termination.and vacation to all employees regardless
of whether they were hired by Hess. Regarding pensions, the Union said that it had
to have an actuarial accounting as to each employee. The Union said that if it had
a contract with Hess it would not try to hold Delhi to its contract. Sewell said that
he did not care whether or not the Union had a contract with Hess; that he wanted
a release from the Delhi contract with the Union; and that he wanted an answer.
After lunch, the Union said it could only recommend rejection of Sewell's request
for a termination of the contract; that the union committee would recommend termi-
nation of the contract only if Sewell did what he had stated regarding termination
31 The approximately $50,000 which Hess undertook to pay involved no adjustment in
the purchase price of the Delhi properties.
32 Maxwell was an attorney for Delhi who had participated in the agreement for the
sale of the Delhi property to Hess.
as It appears that the attachments to the purchase agreement were certain leases, con-
tracts, and agreements of Delhi that were assumed by Hess pursuant to its purchase of
the Delhi properties. At the hearing, counsel for the Union made a formal demand upon
Respondent for the production of the said attachments Respondent refused to produce.
Respondent's counsel said that the documents were confidential contracts, dealing with
sales and purchase matters that Respondent was unwilling to have "bandied about the
United States" and that the documents had been shown to the Union on March 28. No
secondary evidence was offered or sought to be offered regarding the attachments. The
parties were aware of the possibility that an adverse inference could be drawn from a
failure to produce.
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC. 1091
and vacation pay, plus protecting each individual under the pension plan, and pro-
vided that the Union was able to get a contract with Hess. Sewell said that regard-
less of what the union committee recommended to its members Delhi was going to
start shutting down the refinery tomorrow and would have the termination checks
for the employees. He said he would give the Union a contract release agreement
for the Union to sign before the union meeting that same evening and if the Union
did not release Delhi from the contract Delhi would terminate the employees, pay
them termination and vacation pay, and would terminate the pension plan for all
employees 34 The management people then left, with the exception of McCollum
and Maurer. McCollum said to the Union that he was concerned about the pensions;
that he felt that Delhi had offered everything possible to the Union and that he had
believed that these termination pay and pension plan matters were the key to his
securing a contract with the Union. There was some further discussion during which
the Union referred to laboratory and warehouse employees. McCollum said that in
none of the Hess plants were such employees in the Union (unit?) and he did not
want it to be different at the Corpus Christi refinery. Brown proposed that Hess
take over all the Delhi employees with their seniority and that he would recommend
that the employees pay over to Hess what they had received in termination, vacation,
and pension payments from Delhi, and Hess would then follow the vacation and
pension provisions of the old contract. McCollum refused and said that he had no
further changes in his position and had made his last effort with the Union in his
proposal on March 25. He pointed out that Hess was a young progressive company
with a good future and that the employees would have much more security with Hess
than they had had in the past.35
McCollum sent a telegram to the Union on March 29 confirming that Hess was
not assuming the Delhi contract and stating that Hess had bargained with the Union
in an effort to arrive at a contract and that it would continue to do so. The tele-
gram advised where McCollum could be contacted and stated that Hess would re-
ceive applications for employment from employees to operate the refinery, commenc-
ing on April 1, 1963. Later, in response to the Union's request, McCollum agreed to
meet with the Union on April 1. On April 1 the employees were terminated. They
then had received Hess employment applications and had filled them out. Beginning
on April 1, they submitted the applications together with letters stating that the
individual signatory requested that the letter be considered as his "unconditional
application for employment . in either my former job at your Corpus Christi
refinery or in any available job at the refinery. This is an unqualified, continuing
application. .
At the meeting on April 1, Brown offered the employees for employment at the
refinery. McCollum said that the Union had not kept its word that Hess would get
a contract and that Brown had personally told him that if McCollum could clear up
the matters between Delhi and the Union the Union would sign the contract last
submitted by McCollum. McCollum said that he had picked up a $50,000 tab for
termination pay on this assumption. Brown denied having assured McCollum that
the contract would be signed. Brown said that if he had led McCollum to believe
that he would get a contract it was because Brown believed in the effectiveness of
collective bargaining that would result in an agreement . McCollum said that he had
no crude oil 36 scheduled for the refinery and that he was now withdrawing his last
contract proposal. He stated that there were many things in that proposal that were
not what he wanted but were concessions made in an effort to avoid closing the
plant . Since agreement had not been reached he was withdrawing his proposal and
would submit a new proposal later . He said that he would give consideration to
m The release, which the Union did not sign, referred to the sale of the refinery to
Hess, effective April 1, 1963,; that Delhi was terminating the employees in accordance
with the terms of the Delhi contract ; it referred to the payments of termination and
vacation pay by Delhi and the arrangement regarding pensions and sick leave and stated
that no grievances were to be instituted against Delhi after 6 a.m., April 1 ; and the
release stated that the Union agreed to the cancellation of the Delhi contract as of
April 1. After the union meeting on March 28, Delhi was advised by the Union that it
had rejected the request for contract termination
85 McCollum also gave the Union a letter and asked that it be signed. It was dated
March 25, 1963 The letter reiterated, in substance, the terms previously proposed by
McCollum, including some details of various items that possibly were not theretofore in
written form.
16 The raw material for the refinery.
1092 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
any union proposals. The Union said that it would work on one for presentation to
McCollum 37 Brown said that the men desired to work for the Company. McCollum
said he was leaving and did not know when he would be back in Corpus Christi.38
On April 5 Brown wrote to McCollum. He referred to the "lockout" of the em-
ployees; he referred to the Company's statements about willingness to continue
negotiations; he offered a written no-strike pledge for 90 days to insure uninter-
rupted .production during further negotiations; he urged that the refinery be reopened
and 'that the employees be hired or reemployed on jobs available or which become
available; he asked that the Company bargain regarding any contemplated con-
tracting-out of work, but stated that this did not limit the above-mentioned uncon-
ditional tender of the employees; he stated that the Union was ready to meet and
bargain at any time.
The parties met on April 12. The Union reaffirmed the contents of its April 5
letter. It asked McCollum if he would reconsider the Union's offer of a 90-day no-
strike pledge and reemployment of the employees. He said that he would not.
At the meeting McCollum had a letter, dated April 12, that was his reply to the
Union's letter of April 5. The letter denied the allegations of a lockout; it said that
the Union was apparently trying to put the Company in the position whereby the
latter became obligated for large sums of money for products and in marketing
arrangements, with at best a temporary labor agreement; the letter referred to the
assurance from Brown about getting a contract if the Delhi matters were disposed
of and of the $50,000 expenditure of Hess in connection therewith; it stated that
the writer had repeatedly told the Union that the Company could not secure crude
oil at favorable prices on a short-term basis and that i year was the minimum
needed; reference was made to the company offer to employ all employees at the
Delhi plant, subject to a 60-day probationary period; it was stated that gasoline
could be purchased in the Corpus Christi area at a price cheaper than the Company
could manufacture gasoline; and a meeting was proposed.
At the April 12 meeting the Union asked McCollum if he was willing to drop his
demand for the exclusion of laboratory and warehouse employees. He said no.
The Union inquired as to which employees would be hired by Hess. McCollum
said that he did not know at that time. McCollum said that he had a new offer
to make to the Union and submitted a proposed contract. The Union said that
it would consider the proposal.
The parties met again on April 23 and went over the proposal submitted by
McCollum on April 12 39 In reply to a question, McCollum said that on labora-
tory and warehouse employees he would only bargain as to whether they would
be represented by the Union.40 McCollum said he would insist on the 4-month
probationary period. He was asked whether he would recognize stewards and he
said no, that he would recognize union representatives as set out in the contract
proposed. McCollum said that he would not now agree to a single line of progress
in the process department. He stated that seniority would depend on the date he
87 So far as appears, the Union did not present any proposed contract instrument to
McCollum.
3 Hess' and McCollum's offices were in Perth Amboy, New Jersey.
89 The proposal was a complete contract instrument that was in some respects not un-
like the earlier March 25 proposal. The April 12 instrument, as to contract term, read:
"This agreement shall be effective from midnight-1963 to midnight-1965 . .. "; it ex-,
eluded laboratory and warehouse employees ; it provided for the preparation of com-
plaint and grievances by an employee or employees or by a member of the workmen's
committee, whereas the Delhi contract and the March 25 proposal provided for the presen-
tation of the grievances or complaint through the shop steward (the workmen's committee
existed under all three contracts aforementioned and it was a union committee of em-
ployee members) ; it provided a 4-month probationary period for all employees; it pro-
vided the same classifications as the March 25 proposal ; the progress chart showed two
lines' of promotion for the process department and this was the same as the March 12
proposal, as contrasted with that of March 25 which showed only one line of promotion
in the process department ; unlike the earlier proposals, that of April 12 did have a
provision dealing with contracting out of work and provided that the Company could
contract out "if such contracting out is not for the purpose of depriving regular em-
ployees of work" ; the wage reopening provision did not exclude the wage reopening situa-
tion from the application of the contract's general no-strike clause ; and wage increases
were to be in accordance with increases given by five other companies in the area.
au Apparently, whether such employees would be covered by the contract and thus rep-
resented by the Union.
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC. 1093
hired the employees. The Union asked if McCollum would return to his March 25
proposal and bargain on that rather than on the April 12 demands, which the
Union characterized as punitive. McCollum refused. Other items were discussed.
In this and in earlier company proposals the lowest classification was "yardman."
,On April 23 the Union asked if the janitors would be returned as yardmen. McCol-
lum said that the janitors would be classified as office or clerical employees. The
Union asked about pensions for employees. McCollum said that he was not con-
•cerned with pensions and knew nothing about them. The contract said nothing
about pensions and there is no evidence of a separate pension trust agreement as
was evidently the case under Delhi.
On April 26 the Union answered the Company's April 12 letter, made various
accusations, and, in substance, stated that it became apparent that the lockout was
being used to compel the Union to sign a contract giving the Company virtual
unilateral control 41
Evidently, on about May 1 there was a meeting in Houston in which counsel
for both parties participated as well as- Forrester, regional director of the Union,
and McCollum. Brown and the union plant committee did not participate. There
was considerable discussion about McCollum's proposed probationary period. For-
rester expressed the view that it was not needed but conceded that McCollum could
get rid of any "goof-offs"; he said the Company did not need 60 days nor a com-
pletely free hand since under the latter it might let all the employees go. Forrester
asked McCollum for the number of people he planned to let go and that maybe
they could work out some understanding. McCollum testified that although he
had such a number in mind at the time he did not tell Forrester but said that it was
possible that something could be worked out along those lines and that he wanted
to secure some more information and then would give the Union a number.
McCollum telephoned Brown on May 6, 1963, and asked him to come to his office.
Brown and McCollum met on that day. McCollum said that he was not meeting
with Brown for collective-bargaining purposes but that he had some information to
give Brown personally. McCollum said that he was going to put the refinery back
in operation and that the employees would be used initially for a turnaround pri-
marily.42 McCollum said that there were nine named employees who were not going
to be taken back.43 One of these, referred to by McCollum, had reached retirement
age and would be retired under the Delhi pension plan. The other eight had physical
defects revealed by medical examinations. McCollum showed Brown a kit that con-
tained a set of working rules and conditions of employment in which there was no
reference to the Union.44 McCollum said that the kit would be given to the return-
ing employees. The kit likewise contained a copy of the insurance plans of Hess,
for which the employees would be eligible, and an authorization blank authorizing
payroll deduction for the insurance if the employee wished. Brown said that he had
no question about the retirement action regarding one of the nine employees who
were not being taken back but he had some question regarding two of the eight
others. McCollum said that he personally was not familiar with the cases but if the
men went to another doctor and secured favorable reports the Company would take
another look at the matter.
By May 7 the former Delhi employees received letters from Hess requesting them
to report for work 45 Most of the employees were hired on May 7, according to
Brown, and some, who could not report immediately, were hired a little later, except-
41 On April 2 the Union had filed its unfair labor practice charge against the Company.
An amended charge was filed on April 29 and the complaint issued May 15
42 Refinery equipment from time to time requires overhauling Corrosion and other
factors affect the various units. The process of overhauling is referred to as a turn=
around and the unit is not operational during this period. If the turnaround is not
made seriatim on units one at a time, it may be general, i.e , all units are turned around
in the same period. A turnaround is over and above day-to-day maintenance.
43 The complement of the refinery unit on March 31, 1963, was slightly over 200.
44 The topics covered in the rules and conditions were: hours, wages, %acations, changes
in classification of work, benefits, physical examination, termination notice, seniority and
promotion, contract work, a list of 11 job titles and basic wage rates, a progression
chart. The various items in the rules and conditions were substantially those that had
been in earlier contract proposals made by McCollum to the Union The rules and con-
ditions had no reference to union recognition, unit, grievance procedure, arbitration, and
other matters directly involved in a union-employer contract
s5 These, of course, were the employees who had been terminated on April 1 and who
had received termination and vacation pay.
1094 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ing the nine persons that McCollum had mentioned to Brown 46 Since May 7, Hess
apparently has been operating the refinery, with respect to wages, hours, and condi-
tions of employment, in accordance with its working rules and policy47
There was a meeting of the parties on May 22. McCollum asked Brown for a list
of the points on which they did not agree. Brown said that he would do so, subject
to the qualification that if the Union did not secure what it wanted on the enumerated
points it would have the right to renegotiate additional points. Brown then named
the disputed issues as: 60-day probationary period; laboratory and warehouse exclu-
sion; the term of the contract; wage reopener clause; classifications; contracting out
work; seniority; vacations; sick leave; staffing of the plant, i.e., the number of em-
ployees. As to the probationary period, McCollum's testimony on this point sheds
no light on what he told Brown on May 22. The indication is that McCollum prob-
ably adhered to his prior position. It was on June 18, 1963, that McCollum told
Brown that he no longer wanted the 4-month probationary period. At the hearing,
McCollum testified, regarding his position on May 22 with respect to the probationary
period, "We have accomplished pretty much what we wanted to accomplish with the
60-day probationary period because we have now been operating between five and
six weeks . as far as I am concerned ... that is behind [me] " As men-
tioned, this does not show McCollum's position on May 22. On laboratory and
warehouse employee exclusion both parties apparently held to their respective posi-
tions although they again discussed the matter. With respect to contract term, the
union position was for a 1-year contract, Brown saying that this was the policy of the
International Union and he did not know that he could get an exception. Apparently
McCollum was not agreeable to a 1-year period. On wage reopener the Union
wanted the clause in the Delhi contract or a similar one. McCollum felt that his
offer of guaranteed increases based on the industry pattern was adequate since- Hess
had such provisions in its Houston and New Orleans contracts. The parties dis-
cussed classifications but did not alter their respective positions, with the Union being
opposed to the change proposed by the Company. On contracting out work no
agreement was reached. McCollum stated that the only proposal ever made by the
Union with respect to the Company's proposal on contract work was that the Com-
pany would agree to require any contractor to pay the same rates to its personnel as
were paid under the union contract with the Company or to engage a contractor who
paid the Union's rates. On seniority, with respect to progression, the Union wanted
one line and the Company at one time agreed but then went back to two lines of
progression. Apparently, on May 22, McCollum agreed to one line in the process
department. On vacations, McCollum testified, the Union wanted a full vacation in
1964. No agreement was reached on this. According to McCollum, "In the original
proposal we had offered two weeks pay this year and two weeks' vacation in 1964.
Under our new, our latest proposal, we had offered a prorated vacation in 1964 to
be accumulated from the date of any contract we entered into until January 1, 1964.
So if it was June 1, they would have half a vacation coming. Sick leave . we
had offered ten days in our original proposal . from April 1 to December 31
[1963] . . . we eliminated that in our last proposal and said that we would not give
sick leave until after one year's service. We had eliminated a proposal from the old
contract that would cover six months at full pay for industrial accidents . at this
meeting [May 22] we agreed to compromise the six months to three months . .
In response to the Union's request as to the complement of the plant, McCollum said
that ". . . if it was understood that I would not be held to these figures, I would give
them what I thought, and at that meeting I gave them some approximate figures."
s" One aspect of the hiring of May 7 is referred to in Respondent's Exhibit No. 3, a
letter dated May 7, 1963; from Brown to McCollum . Inter alia, it was stated therein :
In our April 22, 1963 negotiations, you explained . . . that the omission of the
classification of "Janitor" in your April 12 proposal meant that your company pro-
posed to reclassify these Negro Employees as office personnel. As you remember,
we opposed this action, which would have resulted in removing them from the
recognized bargaining unit. We requested that they be reinstated in your proposed
higher paying classification of "Yardman," along with white employees In that
classification. We are glad that you granted our request and today reinstated the
Janitors as Yardman. .. .
e7 P,rown testified without contradiction that, during a recess of the first day of hear-
ing, June 18, 1963, McCollum told him that he no longer wanted the 4-month proba-
tionary period.
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC. 1095
On May 28 , 1963, the Union wrote to McCollum , referring to the May 22 meet-
ing, "wherein you reiterated the demands you have heretofore made on the Union
except that you indicated that you might agree to lay off no more than twenty (20)
employees without regard to their length of service in this same plant . For your in-
formation, the Union cannot agree to your demands . The Union further believes
that your employees are entitled to work under a contract that more nearly meets the
standards that these same employees enjoyed under the contract between Delhi-
Taylor Oil Corporation and this Union and contract standards that more nearly equal
the standards enjoyed by employees of other Refining Companies in the Gulf Coast
area . . . . Please let us hope that you will reconsider your demands and that we
may come to some agreement."
The Janitors
Although the matter of the janitors has been heretofore mentioned , we will con-
sider it more fully at this point . For many years there has been a janitor classifica-
tion at the Corpus Christi refinery . The janitors , about six in number , have always
been Negroes 48 Since the inception of the Union at the refinery , the bargaining unit
has included janitors and the Union has negotiated on their behalf.49 The job pro-
gression chart in the Delhi contract , as well as in prior contracts , starts at laborer
and progresses to yardman and thence to higher classifications . Janitors do not
appear on the progression chart.
Respondent called two janitors , Johnson and Jones , as witnesses, and it was stipu-
lated that two other janitors, Tilley and Ray , would testify to the same effect. John-
son joined the Union at its inception in 1941. He attended meetings . At various
times in the 1940's and 1950's he spoke to union committeemen about advancing his
wages and progressing in classification. Apparently Johnson did not receive any de-
finitive answers but one of the committeemen said that he was sorry that Johnson
was caught "in the minority side" but advised Johnson to stay in the Union for pro-
tection against discharge . Another committeeman, when asked by Johnson whether
it was the Company or the Union that was discriminating against him , said that he
did not know. Although he testified that the Union did nothing about his inquiries,
Johnson remained in the Union until 1958 or 1959 . He testified that he dropped out
of the Union when all dues were raised in 1958 or 1959 . He stated that he had never
filed a grievance nor had he bid on a higher job.
Jones had worked at the refinery since 1952. He was a member of the Union
about 7 years and he attended one meeting . He believed that he left the Union in
1961. Jones stated that in 1961 he had informed a union committeeman , Fawcett,
that he had performed pipefitting work for 8 years at the naval base and asked
Fawcett about being promoted . What , if any, answer Fawcett gave at the time is not
clear. Apparently shortly thereafter, Fawcett advised Jones to get out of the Union
since it was not doing him any good . Jones said he was paying dues and would like
to stay in. Fawcett said that he would take Jones over to the company office so he
could get out of the Union . He did so, and Vick , an office employee of Delhi, pre-
pared a letter for Jones ' signature whereby Jones advised the Company that he was
thereby withdrawing his membership from the Union 50 Jones states that subse-
quently another union official had tried to persuade him to rejoin the Union but he
had declined because he did not think that he had received a fair deal. The witness
said that he had never spoken to the Company about securing a higher job and that
he had never put in a bid for such a job nor had he filed a grievance . 51 Jones was
hired by Hess, in May 1963, as a yardman.
In its answer to the instant complaint Respondent states that the Union has not
represented all employees in the unit for purposes of collective bargaining but has
discriminated against certain employees as to job classification , progression , wages,
" Johnson , a janitor who testified at the hearing , has worked at the refinery since
June 1940 . He was No. 6 on the Delhi seniority list
46 The basic wage rate for the three lowest paid classifications in the Delhi contract
were. Laborer , $2.04 ; janitor , $2.10-$2.32 ; yardmen , $ 2.41. Johnson testified that when
he started at the refinery he earned $0 30 per hour was receiving $2.61 at the time of
the hearing He had received wage increases in the course of his employment. He was
employed by Hess on May 7, 1963 , as a yardman Hess did not have a janitor classifi-
cation under its operating plan
° Evidently the communication , addressed to the Company , would stop the checkoff of
dues from Jones' pay
m There is no evidence that Johnson or the others had spoken to the Employer about
promotions
1096 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and other conditions; that the Union in negotiating with Hess has requested Hess to
enter into a contract identical to its prior discriminatory contracts and that such a
contract would be violative of the Act and of Executive Order No. 10925.
McCollum testified that sometime between March 20 and 25, 1963, he decided
that it was impossible for Hess to adopt the Delhi contract with the Union and that
the janitor situation was a factor in this determination. He states that he realized
that the janitor classification did not appear on the contract's job progression chart
and that the janitors were Negroes. McCollum asserts that he was mindful of Execu-
tive Order 10925 since Hess had Federal contracts.52
Admittedly, McCollum at no time called the matter of the janitor exclusion from
the job progression chart to the attention of the Union during the series of bargain-
ing meetings. The matter was not discussed at these meetings and had never been
raised as an issue by either party. McCollum testified that he did not want to stir
up the situation and had decided that the best thing was to correct the situation and
have no discussion thereon. The record shows that in all McCollum's written con-
tract proposals to the Union the job progression chart started at the "yardman"
classification and progressed upward. The "laborer" and "janitor" classifications in
the Delhi contract did not appear at all in McCollum's proposed charts. The
Union did not take issue with McCollum about the charts because of the disappear-
ance of the laborer and janitor classifications although the most logical interpreta-
tion for anyone viewing McCollum's charts was that he was eliminating laborer
and janitor classifications and apparently having one bottom classification, yard-
man, and that classification was on the chart.53 The first mention of janitors in
the negotiations was on April 23, 1963, when the Union asked whether the janitors
would be returned to work as yardmen. McCollum at that time said that they
would be returned as office or clerical employees. The Union evidently opposed
this action since it would remove janitors from the unit, and apparently urged that
the janitors be employed as yardmen. Subsequently, on May 7, the janitors were
employed by Hess as yardmen.54
As far as appears the only other time that the janitor matter was raised was in
a meeting between counsel for the two parties sometime around the middle or latter
part of April 1963 or possibly May. The evidence regarding this discussion is so
slight that it is probably fair to say that Respondent's counsel made basically the
same assertions made herein regarding discrimination, as described above, and that
the union attorney denied the allegations. At the time of filing its answer in the
instant case Respondent filed an unfair labor practice charge against the Union that
apparently was based substantially on the matters used as part of the defense in
the instant case, namely, union discrimination and refusal to bargain.55
In its letter to McCollum on May 7, 1963, referred to above, the Union also
stated that the Union, International and local, had a policy of nondiscrimination on
the ground of race, color, creed, or national original.
We now propose that this policy be included as a provision in any collective-
bargaining agreement we sign with your company. In addition, this Union
further proposes that your Company promote, in accordance with seniority,
all Negro employees in the bargaining unit to whatever bargaining unit jobs
they are qualified to perform.
Furthermore, this Union stands ready to affirmatively cooperate in the
implementation of policies and provisions of Executive Order #10925, and
we agree that recruitment, employment, and the terms and conditions of em-
ployment of employees of the Company shall be in accordance with the pur-
pose and provisions of that Order.
The foregoing is in the record and at the hearing officials of the the Union affirmed
a policy of no discrimination. I find no reason why I should not accept such
declarations of policy as valid. Since, as will appear hereinafter, I am of the
opinion that the Delhi contract was not assumed by Hess and that Hess was not
6' Respondent's answer to the instant complaint states that Respondent did not become
aware of the alleged discriminatory aspect of the Delhi contract with the Union "until
shortly after April 1, 1963."
53 The issues between the Union and McCollum on the job progression charts proposed
by McCollum were the questions as to the number of lines of promotion thereon, includ-
ing whether there should be one or two lines of promotion in the process department.
In the foregoing connections, see the union letter of May 7, 1963, Respondent's Ex-
hibit No. 3, and McCollum's reply of May 10, Respondent's Exhibit No. 4.
m This charge by the Employer was under investigation by the Regional Office of the
Board, according to the General Counsel.
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC . 1097
legally obligated to assume that contract, the rights and wrongs that may have
arisen by reason of that contract and that may or may not still exist because of
past factors are matters of contract law or otherwise, and are for some authority
other than me to adjudicate. As far as the issues in the instant case are concerned,
I am of the view that the treatment of the janitors or their inclusions or exclusion
from the job progression chart were not collective-bargaining issues between the
Union and Hess and they were not the issues that separated them. If the exclu-
sion of the janitors from the progression chart in the Delhi contract was one of the
reasons why Hess would not assume that contract, it was not the principal reason.
Indeed, it was never stated as a reason to the Union during the bargaining meetings
nor is there any basis for concluding that, if the matter was an issue preventing
agreement, either with respect to provisions of the old contract or with respect to
the provisions of a new contract, it would not have been speedily resolved by both
parties. Both parties appear to be committed to nondiscriminatory principles and
if past situations call for attention, the jurisdiction thereof does not rest in me, if
for no other reason than the fact that neither the Union nor Delhi, the former
employer, are Respondents before me.
Conclusions
As mentioned heretofore, I am of the opinion that the Delhi contract was not
binding upon Hess and am further of the opinion that Respondent was within its
legal rights in refusing to assume the obligations of that contract. As of April 1,
1963, when Respondent became the owner of the Corpus Christi refinery, the wages,
hours, and working conditions, as well as the other attributes of ownership, that
were to prevail at or with respect to the refinery, were within Respondent's control.
This control that rested in Respondent was subject to the provisions of the ap-
plicable sections of the Act, principally Section 8(a)(1), (3), and (5) thereof.
The Union was the collective-bargaining agent of the employees in an appropriate
unit. The terms on which the refinery would operate with respect to the employees
were subject to bargaining between the Union and Respondent. If the bargaining
obligation was fulfilled, the terms on which the refinery would be operated would
either be the terms of a contract on which the parties had mutually agreed or the
terms and conditions would be those that Respondent had proposed. If the parties
were unable to reach agreement after bargaining in good faith, the terms proposed
by the Union would prevail, if at all, only by the threat of the use of, or the actual
use of, whatever economic power that the Union possessed.
Without repeating here the details of the negotiations between the parties, I am
of the opinion that both parties wanted to negotiate a contract. Their problem
was that they differed substantially as to major items in the contract. They were
firm in their major positions and the bargaining can be described as hard bargain-
ing. The Union rejected the Respondent's contract proposals and Respondent
would not agree to what the.Union desired. In the last mentioned connection, the
evidence persuades me that the Union basically wanted the Respondent to adopt
the terms of the Delhi contract or the provisions of that contract that the Union
considered essential to protect its employee members. On major issues the parties
were discernibly apart and as far as appears they never came close to agreement.
I have considered the various facets of the negotiations, including the fact that
some of Respondent's later proposals were less favorable, from the Union's stand-
point, than earlier proposals. This might have been of significance if the Union had
given any indication that it was at any time prepared to accept any of the original
major proposals of Respondent but at no time was this the fact. Nor were meaning-
ful counterproposals made by either party on important issues to indicate that each
or one of them was prepared to depart from its position to a point somewhat ap-
proximate to the opposing position. It is not my function to pass upon the
quality of the substantive terms proposed by the parties in their contract negotiations
or to express my judgment as to the fairness or unfairness of their positions or to
conclude that either or both parties should be more yielding as to their requirements 56
The negotiations were no doubt complicated by the presence of two employers on
the scene until April 1, 1963. The Union was understandably concerned with the
pension and other rights of the employees under the Delhi contract. Initially, at
least, the relationship of Delhi and Hess was not clear to the Union. I believe that
there was a misunderstanding between Brown and McCollum on the matter of
whether the only thing standing in the way of agreement on Respondent's proposed
contract was the settlement of the Union's claims against Delhi. But these various
11 N.L.R.B. v. American National Insurance Co., 343 U.S. 395.
1098 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
factors do not alter the fact, previously mentioned, that whatever were the Union's
contractual rights against Delhi, the terms that would govern the relationship be-
tween Respondent and the Union had to be arrived at through the bargaining process.
I am of the opinion that on the record made in this case the appropriate bargain-
ing unit, previously referred to in this Decision, included laboratory and warehouse
employees. If the Union had agreed with Respondent's demand for the exclusion of
laboratory and warehouse employees from the unit, there would never have been an
issue as to the matter, at least between the contracting parties, and quite probably
the issue would not otherwise have arisen.57 However, when the Union refused to
agree to the exclusions, Respondent insisted on its position that the categories afore-
mentioned be excluded. An impasse was reached on this as well as on other issues.
I believe that Respondent's insistence, to the point of impasse, on exclusion of em-
ployees from an admittedly appropriate unit, placed Respondent in an untenable
legal position and that such conduct was violative of Section 8(a)(1) and (5) of
the Act.58
We come now to the shutdown of the refinery from April 1 to May 7, 1963. As
I view the evidence, the refinery was shut down and the employees were terminated
on April 1 by Delhi. Delhi took this action for a very evident reason, to wit, Delhi
ceased to be the owner of the refinery on April 1 and had no right to operate the
plant and had no work for the refinery employees. It is equally clear to me that if
Respondent had said to Delhi, terminate the employees on your records or show
them as transferred to Hess as of April 1, and let Hess take over the plant on April 1
in an operating condition, this would have been done. The original contemplation
of Delhi was that Hess would not only take over the refinery in an operating condi-
tion but would also take over all or most of the employees, as well as assume the
union contract. Hess, however, made it clear that it was not assuming the existing
contract. With this exception, however, Hess was planning to, and was prepared to,
operate the refinery on April 1. Hess had retained for the purpose, Maurer, the
vice president of manufacturing of Delhi, as well as Warnke, the plant manager
under Delhi. Various foremen and other office personnel were also retained. The
evidence leaves no doubt in my mind that if the Union had accepted the contract
proposals of Hess at any time up to March 25 or even March 28, 1963, Hess would
have operated the refinery with the former Delhi employees, subject to provisions of
the Hess contract with the Union. Indeed, Respondent had admonished the Union
that if it did not accept the Respondent's contract proposals the refinery would be
shut down on April 1.
In the light of the foregoing, the basic fact with which we must deal, is that the
refinery did not operate from April i to May 7, 1963, and the employees constituting
the normal work force of the refinery did not work during this period, because of a
decision made by Respondent. Respondent made the aforementioned decision not to
operate because the Union had rejected its contract proposals.
It is Respondent's position that Delhi had operated the refinery at a loss and that
if Respondent had operated the plant from April 1, 1963, on the same basis as had
Delhi, Respondent would have lost substantial sums of money, about $101,920 a
month. Respondent asserts that in order to operate the refinery on a profitable basis
57 Possibly remote, but at least potential, would be a situation where a rival union
.sought to represent the refinery employees and filed a representation petition with the
Board The incumbent union and the employer might claim that their contract barred
the petition. The petitioning union might counter with the contention that the contract
unit was inappropriate because of the aforementioned exclusions and hence the contract
was no bar. The outcome would depend on the evidence presented on the issue, quite
possibly in a Board hearing Another factor would be the possibility of a Section
8(b)(1)(A) unfair labor practice charge against the union and a Section 8(a)(1) charge
against the employer by individuals affected by the exclusion of warehouse and laboratory
employees from the contract unit. Here again, the evidence would determine the outcome.
"Respondent's reasons for wanting the exclusions were the fact that such employees
were not covered by its other'union contracts elsewhere; also, Respondent, while basing
the laboratory employees at the Corpus Christi refinery, stated that it planned to detail
them to other locations from time to time and that it would remunerate the laboratory
people accordingly; as to the warehouse, Respondent said that it planned to reduce the
number of such employees and give the warehouseman more recordkeeping duties. Re-
spondent, of course, could have filed a representation petition with the Board in order to
have the unit issue resolved (Section 9(c) (1) of the Act) or it could have proposed that
the Union file such a petition ; or the employees affected could have filed a petition al-
though there is not the slightest evidence that the employees in question desired ex-
elusion from the bargaining unit or that they did not wish to be represented by the Union.
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC. 1099
it had determined that certain purchasing policies regarding raw material, crude oil,
and certain other operating economies had to be effectuated. In order to accomplish
the foregoing objectives, Respondent asserts that it prepared contract proposals for
the Union and had warned the Union that unless the contract was accepted by
March 25, 1963, the refinery would cease operations on April 1, or, otherwise de-
scribed, Hess would not operate the refinery beginning on April 1. Since the Union
rejected the contract proposed by Respondent, the predicted shutdown or non-
operation of the refinery ensued.
To support its assertions that Delhi had been losing money in operating the re-
finery, Respondent relies on the Delhi financial report to the stockholders in 1962,
which has been previously discussed in this Decision, as well as Respondent's Exhibit
No. 9, Earnings Forecast for Second Quarter, 1963.59 This exhibit No. 9 is a pro-
jection prepared by Respondent to show the losses that would have been incurred
from April 1 to June 30, 1963, if Respondent had operated the refinery on the Delhi
basis.
Respondent's position, further amplified, was that with a 2-year term for its pro-
posed contract it could make long-term contracts for the purchase of crude oil and
could thereby secure the crude oil at lower cost than would be the case with short-
term purchase contracts. The 2-year contract term would also insure continuity in
refinery operation not only because the Union would be bound to the term of the
contract but also because the contract contained a no-strike clause. Additional
economies would be accomplished by reason of other provisions or conditions of
Respondent's proposed contract, such as a free hand in weeding out undesirable em-
ployees, reducing the number of classifications, and so forth. With the rejection of
the contract by the Union, according to Respondent, it was obliged not to operate the
refinery if it was to avoid the Delhi type losses as shown in the Delhi financial report
and in exhibit No. 9.
We will assume, arguendo, at this point that Respondent's contentions afore-
mentioned concerning losses and the economics of the situation are correct, and that
the refinery could not be operated profitably except in accordance with Respondent's
proposed terms. I am of the opinion, however, based on the evidence and the cir-
cumstances in this case, that the Union and Respondent had reached an impasse on
March 28, 1963. A point of impasse is not determined by the quantity or number of
meetings between the parties but by the quality or contents of the negotiations, the
surrounding circumstances, and by the approach of the parties to the bargaining
issues. By March 28, Respondent had submitted its contract proposals to the
Union, orally and in writing. The proposals had been discussed and explained. Re-
spondent had expressly stated to the Union that its proposals were not simply bar-
gaining positions but that it had to have exactly that for which it was asking. Re-
spondent expressly told the Union that if its proposed contract was not accepted by
March 25 the refinery would shut down on April 1 and would not operate. The
Union did not accept any of Respondent's major proposals and manifested its rejec-
tion thereof. For instance, on March 18, the Union took the position, inter alia, that
it would have to represent warehouse and laboratory employees; that the contract
would have to protect the employees against the contracting out of work; that there
should not be a probationary period for employees during which grievances could
not be filed; and that the contract should be for a 1-year term. At none of the meet-
ings was agreement manifested or was agreement approximated on the foregoing or
other major issues. Respondent adhered to its basic proposals. On March 18 and
at other times the Union proposed that Respondent assume the Delhi contract. Re-
spondent submitted a complete contract to the Union and despite warnings of the
shutdown of the refinery as a consequence, the Union, after consideration by its
committee and a vote of the membership, advised Respondent in writing that the
members "have voted overwhelmingly not to accept the proposal . . Further
efforts to reach agreement, including Respondent's assumption of half of the Delhi
termination and vacation pay obligations under the Delhi contract, were unavailing.
If there was any doubt of the deadlocked nature of the bargaining, it is dispelled by
additional events. On March 28, the positions of the parties were fundamentally un-
altered. The Union was not prepared to accept the basic proposals of Respondent
and Respondent was not prepared to drop its requirements. Respondent stated that
it had made its last and, apparently from Respondent's standpoint, its best effort in
its March 25 contract proposal that the Union had rejected and still rejected.60 The
5P Hereinafter referred to as exhibit No. 9.
GO All subsequent contract proposals by Respondent were less favorable to the Union
than the March 25 proposal and Respondent subsequently refused to return to the
March 25 proposal as a basis for negotiations.
1100 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
impasse and deadlock is underscored by the fact that with the closing of the refinery
all the employees represented by the Union were out of work and Respondent, in-
stead of operating a refinery as it had planned and had intended, had a closed plant.
These events brought no changes in the respective positions regarding the terms of a
contract. Subsequent negotiations simply confirmed the fact of the March 28 im-
passe. The fact that both parties, after March 28 and April 1, were prepared to con-
tinue and did continue negotiations in an effort to break the impasse that was reached
earlier, does not alter the validity of the conclusion that there was an impasse in
bargaining at least by March 28.
Since we have adopted, arguendo, Respondent's contentions that it could not
operate the refinery profitably on the basis on which Delhi had operated, but that
Respondent could operate profitably on its own proposed terms and was prepared to
do so if the Union had accepted those terms, there was no legal justification for the
nonoperation of the refinery from April 1 to May 7, 1963. When the parties reached
an impasse in bargaining by March 28, 1963, the law did not require that an em-
ployer in such circumstances should close its plant or that it was required to operate
on the terms espoused by the Union. An employer, such as Respondent, in the cir-
cumstances described, could properly operate its plant under the terms proposed to
and rejected by the Union.61 Indeed, this is precisely what Respondent did, com-
mencing on May 7, 1963. Admittedly, Respondent would have operated its plant on
April 1 if the Union had accepted its proposals at any time by March 28. In the
circumstances described, Respondent could have operated by placing into effect on
April 1 its own terms and proposals. The agreement by the Union was no more
essential to the operation than it was for the operation since May 7. There was no
threat of a strike in this case. In fact, the Union repeatedly urged that Respondent
keep the plant in operation and not close down on April 1 as Respondent had warned
that it would do. On March 25, although it had rejected Respondent's contract pro-
posals, the Union, in the same written message of rejection, stated that "The Union
pledges not to strike and urges the Company not resort to lockout." During negotia-
tions the Union never focused either its fire or even its attention upon the no-strike
clause of Respondent's proposals. The Delhi contract had the same no-strike pro-
posal as was contained in Respondent's contract proposals. Respondent itself did
not focus attention during negotiations upon the no-strike clause. This was the
situation on April 1 when Respondent refused to operate its plant on its own terms.62
The evidence persuades me that Respondent resorted to and used the nonoperation
of its plant from April 1 as a means of compelling agreement by the Union to its
contract terms. Respondent had first warned or threatened the Union that the plant
would not operate on April 1 if agreement on the proposed contract was not forth-
coming by March 25. The desire, on Respondent's part, for such an agreement is
clear. When the warning and an expenditure of some $50,000 by Respondent re-
garding Delhi obligations to the Union did not accomplish the contract, then the
nonoperation of the plant was placed in effect. I am of the opinion that it is likely
that a long shutdown was not contemplated but that it was believed that the shut-
down would speedily accomplish its purpose. In this case, I am convinced that Re-
spondent wanted a contract with the Union on Respondent's terms. Respondent had
taken the initiative to secure such a contract and it exerted considerable effort to se-
cure that contract. In many, if not in most employer-union situations, the Union
takes the initiative to propose a contract and the employer, if the parties do not agree,
is then quite ready to continue to operate without any contract. Because of the cir-
cumstances in this case it is my opinion that from March 8 to April 1 and for some
time thereafter Respondent was intent upon securing union agreement to its proposed
61W. W. Cross and Company, Inc., 77 NLRB 1162, 1165-1166, enfd. 174 F. 2d 876
(C.A. 1) ; N.L.R.B. v. Intracoastal Terminal, Inc, et al., 286 F. 2d 954, 958 (C.A. 5) ;
N.L.R.B v. U.S. Sonics Corp., 312 F 2d 610, 615 (CA. 1) ; N.L.R.B. v. Crompton-
Hsghland Mills, 337 U.S. 217, 224-225.
"Occurrences subsequent to the shutdown on April 1 are not determinative of the
facts and circumstances as they existed prior to, or on, April 1. After the shutdown, the
Union, on April 5, proposed a written commitment of a 90-day no-strike pledge pending
further negotiations. There was, however, no threat of a strike made and on April 1,
after the shutdown, the employees, with the active support of the Union, made known
their continued desire to work at the refinery. Since May 7, 1963, Respondent has of
course had no trouble in operating although it has no contract and has no no-strike
commitment from the Union for any period. As far as appears, Respondent not only had
no trouble with the Union as aforedescribed, but Respondent had no problem in its own
mind about starting to operate without a contract in May 1963.
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC. 1101
contract and that the nonoperation of the plant was part of this effort. It was only
later, when it became apparent that the closed condition of the plant had not accom-
plished its objective, that Respondent decided to operate the plant without a contract.
This it did, beginning on May 7, 1963, and it operated along the lines proposed to
the Union. The terms of the plant operation were Respondent's terms, which were
as available to Respondent on April 1 as on May 7. The significant difference was
that from March 8 to April 1 Respondent believed and hoped that it could secure,
and strongly wanted, the Union's agreement to Respondent's proposed contract.
When none of Respondent's efforts accomplished this objective, the plant was oper-
ated as it could have been operated on April 1.
Since Respondent was in a position to operate the plant on the terms that it had
decided would avoid and cure the uneconomic type of operation under Delhi, it is
actually unnecessary to become involved in the economics of the Delhi-type opera-
tion or in what would have happened economically (as projected in exhibit No. 9) if
Respondent had operated in the manner in which it never intended to operate, and in
which it was not required to operate, and in which it never did operate. Further,
Respondent was not faced with any type of a strike threat but was proffered assur-
ances against a strike. Respondent's refusal to operate its plant in order to compel
union agreement to Respondent's contract, was, under the circumstances, not a de-
fensive but an offensive course of action. The Board has not accepted the proposi-
tion that the shutdown or the lockout is the counterpart to the right to strike or the
strike, and has limited its acceptance of the weapon to defensive situations.63 I am
governed accordingly.
In the light of the foregoing findings and legal precedents, it is found that the Re-
spondent's refusal to operate its plant from April 1 to May 7, 1963, constituted a
violation of Section 8(a) (1), (3), and (5) of the Act.64
My conclusions that (1) Respondent would have operated the plant on April 1
if the Union had agreed to Respondent's March 1963 contract proposals; and (2)
under the circumstances, Respondent could have placed its proposals in effect on
April 1 without union agreement, substantially affects the significance of some of
Respondent's assertions regarding the economics of the plant operation. However,
we have carefully considered the entire record, and have made certain observations
on the economic aspects.
e3 Duluth Bottling Association, et at., 48 NLRB 1335; Betts Cadillac Olds, Inc, et at.,
96 NLRB 268; International Shoe Company, 93 NLRB 907; Somerset Classics, Inc. and
Modern Mfg Co , Inc., 90 NLRB 1676, enfd. 193 F 2d 613 (C.A. 2) ; Sam Wallick, et al.
d/b/a Wallick and Schwalm Corp., 95 NLRB 1262, enfg. 198 F. 2d 477 (C.A. 3) ; Cen-
tral California Chapter, Associated General Contractors of America, Inc., et al, 105
NLRB 767; Quaker State Oil Refining Corporation, 121 NLRB 334, enfg. 270 F. 2d 40
(C.A. 3), cert. denied 361 U.S. 917 ; Building Contractors Association of Rockford, Inc.,
138 NLRB 1405; Publishers' Association of New York City, 139 NLRB 1092; Utah
Plumbing and Heating Contractors Association, 126 NLRB 973, enfg. 294 F. 2d 165
(C.A. 10) ; Buffalo Linen Supply Company; at al., 109 NLRB 447, enfd. sub nom.
N.L.R.B. v. Truck Drivers Local Union No. 449, International Brotherhood of Teamsters,
etc., 353 U.S. 87; Albert Leonard, at al., d/b /a Davis Furniture Co v. N.L.R.B., 205
F. 2d 335 (C.A. 9) ; Sidele Fashions, Inc., at al ., 133 NLRB 547, enfd. sub nom. N.L.R.B.
v. Philadelphia Dress Joint Board, International Ladies' Garment Workers' Union, AFL-
CIO, 305 F. 2d 825 (C.A. 3) ; American Brake Shoe Company, Ramapo Alas; Division,
116 NLRB 820, setting aside 244 F. 2d 489 (C.A. 7).
84 The expressed views in the Dalton Brick case, infra; N.L R B. v Insurance Agents'
International Union, 361 U.S. 477; the Supreme Court's decision in the Buffalo Linen
case, supra ; and N.L.R.B. v. Erie Resistor Corp., 373 U.S. 221, present at least some
challenge to the forces of reconciliation. In the present state of these decisions I would
be inclined to confine my finding of a violation, with respect to the Respondent' s refusal
to operate, to Section 8(a) (1) of the Act although for all practical purposes the remedy
thereof would be the same. Section 8(a) (1) proscribes interference with the rights
granted by Section 7. We encounter "motive" and "good faith" in Section 8(a) (3
and (5), respectively. It is axiomatic that under Section 8(a) (1) an employer may not
state to its employees that he will not operate his plant or that he will close the plant
if the employees join a union. We submit that there is an inconsistency in proscribing
such conduct, but, then when the employees join the union and bargain through the
union as agent, the very purpose of joining a union, sanction the right of the employer to
refuse to operate the plant unless the (employees) union relinquishes its bargaining
demands and accepts those of the employer, absent special defensive circumstances. Cf.
N.L.R.B. v. Dalton Brick & Tile Corp., 301 F. 2d 886 (C.A. 5).
1102 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In its answer to the complaint, Respondent states:
that the shutdown of the Corupus Christi refinery was due purely to
taking over the refinery for a turnaround and because of economics and that
the Union was advised of such fact prior to the time the plant was shut
down . . . when it [Respondent] commenced the turnaround, all employees
of the former employer were employed who would accept such employment... .
The turnaround began on May 7, 1963, and there is no claim or evidence to show
that it could not have commenced on April 1, 1963, and that the plant complement
would not have been substantially what it was on May 7, when Respondent em-
ployed substantially all the former Delhi employees. The persons who would be
best informed as to the condition of the refinery units and the need of a turnaround
were Maurer, vice president in charge of manufacturing (refinery operation) for'
Delhi, and Plant Manager Warnke, plus the various foremen and the operating and
maintenance employees. Prior to April 1, the relationship between Maurer,
Warnke, and McCollum on matters pertaining to the plant was a close one. At
some meetings with the Union Maurer and Warnke wore a Delhi hat and at other
times, together with McCollum, they wore a Hess hat. They were being retained
to run the refinery under Respondent, so their judgment and capability was evidently
acceptable. Respondent had equal access to the Delhi foremen that it was retain-
ing and to the employees. Respondent's policy in its other plants was to have
complete turnarounds of the same type as it had on May 7 at Corpus Christi.
Respondent offered testimony that sometime between April 1 and May 7 gaso-
line prices had advanced. But this would appear to be a normal aspect of the oil
business and something to be anticipated from time to time. Gasoline prices move
in both directions at various irregular intervals. The movement of the gasoline
price after the shutdown did not cause the shutdown, and, had the plant been in
operation, the advance in price would have had no material significance. Respond-
ent was aware of the state of the gasoline market when it purchased the refinery
and its clear intention was to operate the plant before and without regard to any
advance in gasoline prices after April 1. If the price of gasoline had advanced
on April 2 or 3 after the shutdown, it is very doubtful, in view of the evidence in
this case, that the plant would have reopened on these dates. I am not persuaded
that the price of gasoline was the determining factor why the plant did not open on
April 1 but did open on May 7.
The principal witness for Respondent, McCollum, at one point was explaining
how the crude oil prices used in Respondent's projection of earnings for the sec-
ond quarter, 1963, Respondent's Exhibit No. 9, were arrived at and why particular
prices of crude were projected. He stated: "Crude oil postings change very
seldom. So these postings were the postings in effect back in March [1963] when
this [the projection] was made up." 65 In a later portion of his testimony, the
witness, in stating that the economics of the situation had changed between April 1
when Respondent shut down the plant and May 7 when it reopened it, testified that
a company had reduced its crude oil posted price so that Respondent was buying
one type of its crude oil at 12 cents a barrel less than the March posted price.
The posting aforementioned was reduced about April 4 or 5, retroactive to April 1.
The signing of the contract by the Union on March 25 or 28 or earlier, to avoid
the threatened shutdown on April 1, however, would have kept the plant operating
before any drop in prices and the subsequent market conditions, whether up or
down, would have been the normal conditions of the business. Further, it is not
clear why, prescinding from the March bargaining, if the drop in price of one type
of crude oil was a significant factor in reopening the plant, the reopening was delayed
for about a month after the price drop.
The witness, McCollum, testified at another point that "During this period of this
projection, of course, we . . have been shut down most of the time up to now,
and we were able to buy [and did buy, as the witness later stated] 850,000 barrels
of gasoline in the Corpus Christi area at ten cents a barrel less than we figure our
costs if we make it at our plant." It is apparent from the above testimony, that
the purchase situation mentioned occurred after the April 1 shutdown and even
65 The projection was made under McCollum's direction by Buckley, products coordina-
tor for Delhi, and two other men, at least one of whom came from Respondent's Perth
Amboy plant Buckley testified that the exhibit, the projection, was prepared during the
last week of March.
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC. 1103.
after the projection itself was prepared. Consequently, it would not have motivated
the shutdown. Moreover, the purchase situation regarding gasoline occurred prior
to May 7 when the plant reopened and commenced the turnaround preparatory
to production 66
Other than as stated, there are no details in the record regarding the 850,000•
barrels of gasoline referred to by McCollum. Apparently, since Respondent was
not going to and did not operate under the Delhi standards but was going to and
did operate according to its own economized purchasing, production, and market-
ing policies, and with lower crude oil prices, its cost of production were higher
than gasoline that it purchased from a seller or sellers who presumably produced
and sold their product at a profit. This, too, occurred when gasoline prices were
advancing or had advanced, a condition that, at least according to classical free
competitive market principles, would indicate rising or increased demand for gaso-
line in a seller's market. Perhaps it is better to buy gasoline at wholesale than,
to manufacture it. Whatever the foregoing indicates, I do not conclude that, in
the circumstances of the case before me, it supports Respondent's defense as to
the shutdown on April 1 and the reopening on May 7.
With reference to Respondent's Exhibits Nos. 9, 11, and 12, the projection ex-
hibits, they are principally based on Delhi's operation but plus some Hess elements.
Under operating costs, a higher Hess depreciation figure is used on the same equip-
ment than was used by Delhi. Apparently this is justified on the basis that Delhi
was depreciating the equipment over a long period and Hess could then show a
higher depreciation for the last period. But on operating expense, which would in-
clude wages, the Delhi figures are used although Hess reduced salaried personnel
from 72 to 42 and contemplated other economies in operating expense. In fact,
Respondent was requiring 2 to 4 months to weed out personnel from the production
and maintenance force. A more accurate projection for the second quarter would
reflect these economies. Respondent shows the various crude oils and their cost,
plus a large volume of McComb crude that was not used by nor was it available to
Delhi. The producers of McComb are three companies, one of which is Hess. The-
price shown on exhibit No. 9 for the McComb crude is the highest price of all the
crudes so shown. In effect, this is a cost of raw material reflecting a sale by Hess to,
itself at a relatively high price. On finished products, the exhibit shows that the
largest amount of gasoline went to Hess' own brand, and this gasoline shows the
highest octane rating and the-lowest price of the gasoline to be sold.67 If the price
on this gasoline was further lowered the net loss shown by the exhibit would be-
higher, of course, and the reverse would also be true. Prices that may be responsive
to a gasoline price war would not be normal prices over a long period. A lower
price to Hess than to the other customer for No. 2 oil is also shown and this product
iE not, as far as appears, a party to a price war.
If some of the less persuasive aspects of Respondent's projection for the second
quarter are passed over, the projection is at most an argument for operating the
plant on a somewhat different basis than did Delhi. But I, as previously mentioned,
do not believe that Respondent was obliged to follow the Delhi modus operandi or
to adopt the union contract or to prove by means of a projection that if it used the
Delhi figures, a loss would ensue.
Although Respondent has emphasized its departure from the Delhi past, it also
appears that Respondent took over and assumed a number of Delhi contracts with
third parties, both with respect to the purchase of raw materials from such parties
and the supplying of manufactured products to such parties. The record indicates
the nature of and the details of some of these contracts but regarding other such
contracts the record shows only that they were purchased and sale contracts assumed
by Respondent in its agreement with Delhi. The paucity of information regarding
certain of the aforementioned contracts arose in the first instance from Respondent's
refusal to produce the same at the hearing.
The Respondent, as previously stated, has stressed the necessity of making long-
term 2-year oil purchase contracts and has coupled with this the requirement for
equal stability of labor relations during the 2-year period. The picture conveyed
ee McCollum referred to the fact that it could buy gasoline cheaper than it could make
it in its April 12 letter to the Union.
e7Tetraethyl lead is a salient factor in the octane rating of gasoline. The projection
shows a Delhi figure for such lead as $144,222 which Hess shows as increased for the
second quarter to $154,700.
1104 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
was that Respondent could not commit itself to a 2-year purchase contract if its plant
could,not be depended upon to operate without interruption for 2 years. It is to be
noted, however, that on March 8, 12, and 25, 1963, the contracts proposed by Re-
spondent to the Union included article I of the Delhi contract. The change in the
article was limited to changing the date of the contract term from March 12, 1962,
to March 12, 1964, to June 1, 1963, to June 1, 1965. Article I, however, provides
for two wage reopenings, one, on 60 days' notice, "prior to the end of one year from
date of this agreement," and the second, on 60 days' notice, "at or after one year
from the date of this agreement and prior to the end of the second year." It is fur-
ther provided in the same article that if the parties do not reach agreement on the
matter of a general wage adjustment, within 60 days of the above wage reopenings,
the no-strike provision of the contract is not applicable and the Union shall be free
to strike. If the Union had accepted the proposed contract on March 8, 12, or 25 it
could have given a 60-day notice of wage reopening on June 2, 1963, and if agree-
ment was not reached within 60 days of its notice, it could have struck. The guar-
anteed stability for 2 years which Respondent states was necessary could therefore
have been as little as 4 months under Respondent's own original contract proposals.
The contractual commitments for the purchase of raw materials and the sale of
finished products, which Respondent asserts it was unwilling to undertake without
absolute assurance of labor stability in its own plant, do not appear to have been as
drastic as McCollum's testimony implied. A provision of a contract that Respondent
took over from Delhi regarding Kyso Sweden crude oil,68 refers to prevention of
performance. It reads:
Neither party shall be liable for loss, damage, claims or demands of any na-
ture . . . suffered by the other party due to defaults in performance . . . when-
ever performance in the customary manner is prevented by fires; war ... ;
labor difficulties (whether or not involving a party's employees) . . . ; or any
cause reasonably beyond its control . . .
The requirement that any cause be remedied with all reasonable dispatch shall
not require the settlement of labor difficulties by acceding to the demands of the
opposing party or parties... .
Buckley, products coordinator for Delhi and then for Respondent, was one of Re-
spondent's witnesses. He testified after the aforementioned provisions were read
into the record, that the performance clause was standard in all the contracts he had
seen.
There are other indications in the record that Respondent was not in the rigid
position that it claimed elsewhere in the record. Buckley testified:
I understand that the crude swaps that Mr. McCollum testified to, that he was
anticipating making, the long range crude contracts, that several of these were
done, and that this laid this crude in during the month of June, that we did take
it at a much more advantageous price.
Earlier testimony by McCollum regarding swaps and other matters in the oil business
confirm the flexible and nonrigid aspect of matters of purchase, sale, and trade in
that industry. Thus,
. most refining companies are buying crudes and sometimes they find them-
selves with crudes on a contract basis that through market changes or other
things are not the most attractive crudes that they can find. But they are stuck
with it on a contract.
So, many times the crude trader for an oil company will be able to go out and
trade that crude off to somebody else that has a plant where it fits a little bit
better and get another crude in to fit the equipment we have to run the crude
through out here, where you can make more money out of it .
So that we have been working on trades, of trading off crude oil as one'
crude against another . . . [The witness also explained that trades are made
to save transportation costs. A refinery in Corpus Christi is, for instance,
selling in Texas City and a Texas City refinery is selling in Corpus Christi. If
each company was paying 12 cents a barrel transportation cost they might work
out a trade, ". . . you trade the crudes and split the saving . . . so each com-
pany has made six cents a barrel by making a trade like this . ..."I
With respect to Respondent's contention that the employees' and the Union's
request for reinstatement of the employees on April 1, 1963 after they were ter-
68 Kyso is Standard Oil Co. of Kentucky . Sweden is a type of crude oil. Kyso Sweden
is listed on Respondent 's Exhibit No. 9, the projection.
DELHI-TAYLOR REFINING DIVISION, HESS OIL, ETC. 1105
minated earlier on the same date was not unconditional , I do not agree . The evidence
previously set forth persuades me that the request was unconditional and that the
employees and the Union wanted the employees to work as much on April 1 as
on May 7 when they were given the opportunity to return. There never was a
strike and no threat of a strike. -
THE REMEDY
Having found that Respondent has engaged in certain unfair labor practices, it
will be recommended that it cease and desist therefrom and take certain affirmative
action to effectuate the policies of the Act.
With respect to -the unlawful refusal to bargain, it is recommended that Respond-
ent, upon request, bargain collectively with the Union and, if an understanding is
reached, that such understanding be embodied in a signed agreement.
Since it has been _found that the failure to operate the plant from April 1 to
May 7, 1963, and the threat thereof, constituted interference with the rights of em-
ployees under Section 8(a)(1) of the Act and that the same conduct constituted
a violation of Section 8(a)(3) and (5) of the Act, it will be recommended that
Respondent make whole the employees for any loss of earnings they may have in-
curred by reason of Respondent's unfair labor practices. The payment to each
of the employees will be of a sum of money equal to the amount he normally would
have earned as wages from April 1, 1963, to the date of the offer of hiring, which
was apparently on May 7, 1963, less his net earnings during the said period, with
the computation on a quarterly basis,69 and with interest as prescribed in Isis Plumb-
ing & Heating Co., 138 NLRB 716. It is also recommended that in the foregoing
matters, suitable account is to be taken for the exclusion from the computation, in
whole or in part, of any employee who by reason- of age, physical condition, or
other legitimate factor, would not have been employed from April 1 to May 7,
1963, even if Respondent had operated the plant during that period.
CONCLUSIONS OF LAW
1. Respondent is engaged in commerce within the meaning of the Act.
2. By failure and refusal to hire the employees of the Corpus Christi refinery and
to operate the refinery from April 1 to. May 7, 1963, and by threatening to do the
foregoing unless the Union agreed to Respondent's contract proposals or because
the Union failed to so agree, Respondent has interfered with, restrained, and
coerced the employees in violation of Section 8 (a) (1) of the Act, has discriminated
against employees in violation of Section 8(a)(3) of the Act, and has refused to
bargain in violation of Section 8(a) (5) of the Act.
3. The unfair labor practices affect commerce within the meaning of the Act.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact , conclusions , and conclusions of
law, and upon the entire record, it is recommended that the Respondent, its officers,
agents, successors , and asigns, shall:
1. Cease and desist from:
(a) Threatening not to operate or refusing to operate its plant unless the Union
signs a contract embodying Respondent 's contract terms but without prejudice to
Respondent's rights in accordance with legitimate business considerations.
(b) In any like or related manner interfering with , restraining , or coercing its
employees , or discriminating against them , in the exercise of their rights under
Section 7 of the Act.
2. -Take the following affirmative action to effectuate the policies of the Act:
(a) Upon request , bargain collectively with Oil, Chemical and Atomic Workers
International Union , AFL-CIO, as the exclusive bargaining representative of all
production and maintenance employees at the Corpus Christi refinery , excluding
clerical employees , draftsmen , engineers , guards, foremen , assistant foremen, and
other supervisors as defined by the Act, with respect to wages, hours, and other con-
ditions of employment , and, if an understanding is reached , embody such under-
standing in a signed agreement 7° - , - - -
69F. W. Woolworth Company, 98 NLRB 289, 291-294.
70 It is expressly noted that the Union professes and undertakes that its policy Is to
represent all employees fairly and equally without regard to race, creed , color, religion,
or national origin.
760-577-65-vol . 148-71
1106 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(b) Make whole each of the employees deprived of employment from April 1
to May 7, 1963, in accordance with the standards set forth in this Decision under
the section entitled "The Remedy."
(c) Preserve and, upon request, make available to the Board or its agents, for
examination and copying, all payroll records, social security payment records, time-
cards, personnel records and reports, and all other data necessary to analyze and
compute the amount of backpay.
(d) Post at is refinery in Corpus Christi, Texas, copies of the attached notice
marked "Appendix." 71 Copies of said notice, to be furnished by the Regional
Director for Region 23 shall, after being duly signed by Respondent or his duly
authorized representative, be posted immediately upon receipt thereof, and be main-
tained for a period of 60 days from the date of posting, in conspicuous places, in-
cluding all places where notices to employees are customarily posted. Reasonable
steps shall be taken to insure that such notices are not altered, defaced, or, covered
by other material.
(e) Notify the said Regional Director, in writing, within 20 days from the date
of sei vice of this Decision, what steps Respondent has taken to comply herewith.72
71 In the event that this Recommended Order be adopted by the Board, the words "a
Decision and Order" shall be substituted for the words "the Recommended Order of a
Trial Examiner" in the notice. In the further event that the Board's Order be enforced
by a decree of a United States Court of Appeals, the words "a Decree of the United
States Court of Appeals, Enforcing an Order" shall be substituted for the words "a Deci-
sion and Order."
72In the event that this Recommended Order be adopted by the Board, this provision
shall be modified to read: "Notify 'the said Regional Director, in writing, within 10 days
from the date of this Order, what steps it has taken to comply herewith."
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor Rela-
tions Act, we hereby notify our employees that:
WE WILL NOT threaten not to operate the Corpus Christi refinery nor will
we refuse to operate the refinery if Oil, Chemical and Atomic Workers Inter-
national Union, AFL-CIO, refuses to agree to and sign our contract proposals.
WE WILL, upon request, bargain collectively with the said Union as the ex-
clusive bargaining representative of all production and maintenance employees
at the Corpus Christi refinery, excluding clerical employees, draftsmen, engi-
neers, guards, foremen, assistant foremen, and other supervisors as defined in
the Act, with respect to wages, hours, and conditions of employment, and, if
an understanding is reached, embody such understanding in a signed agreement.
WE WILL make whole each of the employees deprived of employment from
April 1 to May 7, 1963, by payment to each of a sum of money computed in
accordance with that portion of the Trial Examiner's Decision entitled "The
Remedy."
DELHI-TAYLOR REFINING DIVISION, HESS OIL
AND CHEMICAL CORPORATION,
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; 6617
Federal Office Building, 515 Rusk Avenue, Houston, Texas, Telephone No. Capitol
8-0611, Extension 296, if they have any question concerning this notice or com-
pliance with its provisions.