Hondo Drilling Co.

National Labor Relations Board - Board Decisions

Sep 11, 1974

213 N.L.R.B. 229 (N.L.R.B. 1974)

HONDO DRILLING COMPANY, N.S.L.
Hondo Drilling Company , N.S.L. and Local 826, Inter-
national Union of Operating Engineers , AFL-CIO.
Case 16-CA-5350
September 11, 1974
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS JENKINS
AND KENNEDY
On May 20, 1974, Administrative Law Judge Paul
Bisgyer issued the attached Decision in this proceed-
ing. Thereafter, General Counsel filed exceptions and
a supporting brief, and Respondent filed exceptions.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and brief
and has decided to affirm the rulings, findings,' and
conclusions 2 of the Administrative Law Judge and to
adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board adopts as its Order the recommended
Order of the Administrative Law Judge and hereby
orders that the Respondent, Hondo Drilling Compa-
ny, N.S.L., Midland, Texas, its officers, agents, suc-
cessors, and assigns, shall take the action set forth in
the said recommended Order.
1 The Respondent and General Counsel have excepted to certain credibili-
ty findings made by the Administrative Law Judge . It is the Board 's estab-
lished policy not to overrule an Administrative Law Judge 's resolutions with
respect to credibility unless the clear preponderance of all of the relevant
evidence convinces us that the resolutions are incorrect . Standard Dry Wall
Products, Inc., 91 NLRB 544 (1950), enfd . 188 F.2d 362 (C.A. 3, 1951). We
have carefully examined the record and find no basis for reversing his find-
ings.
Additionally, we are satisfied that the Respondent's exception that the
Administrative Law Judge was biased is without merit . In our opinion there
is nothing in the record to suggest that his conduct of the hearing, his
resolutions of credibility, or the inferences he drew were either based on bias
or?rejudice.
We have considered the Respondent 's asserted reasons for doubting the
Union 's majority status in their totality and find , in agreement with the
Administrative Law Judge, that all the circumstances pointed to by Respon-
dent, considered together , do not establish reasonable grounds for believing
that the Union had lost its majority status since its certification.
DECISION
STATEMENT OF THE CASE
229
PAUL BISOYER , Administrative Law Judge: This proceed-
ing with all the parties represented, was heard on February
12 and 13, 1974, in Odessa, Texas, on the complaint of the
General Counsel issued on January 3, 1974, as subsequently
amended,' and the amended answer of Hondo Drilling
Company, N.S.L., herein called the Respondent or the
Company. In issue are the questions whether the Respon-
dent since May 19, 1973,2 bargained in bad faith with Local
826, International Union of Operating Engineers, AFL_
CIO, herein called the Union, as the certified representative
of the Company's employees; whether the Respondent on
three occasions unilaterally changed existing wage rates and
other terms and conditions of employment; and whether the
Respondent on and after November 14, 1973, withdrew
recognition and refused to resume bargaining with the
Union-all in violation of Section 8(a)(5) and (1) of the
National Labor Relations Act, as amended.3
At the close of the hearing, all the parties waived oral
argument . Thereafter, briefs were filed by the General
Counsel and the Respondent.
Upon the entire record, and from my observation of the
demeanor of the witnesses, and with due consideration
being given to the arguments advanced by the parties, I
make the following:
FINDINGS AND CONCLUSIONS
1. THE BUSINESS OF THE RESPONDENT
The Respondent,_ a New Mexico corporation with its
principal office and place of business in Midland, Texas, is
engaged in the business of drilling oil and gas wells in the
Permian Basin area in Texas and New Mexico. During the
12-month period immediately preceding the issuance of the
complaint, the Respondent in the regular course of its busi-
ness performed services valued in excess of $50,000 for cus-
tomers located outside Texas. During the same period, it
1 The amended complaint is based on an original and first and second
amended charges filed by Local 826, International Union of Operating Engi-
neers, AFL-CIO, on November 19 and December 12, 1973, and January 24,
1974, respectively, copies of which were duly served on the Respondent by
registered mail on the respective filing dates.
The 6-month limitation period prescribed in Section 10(b) of the Act bars
the finding of unfair labor practices committed before this date.
3 Section 8(a)(1) of the Act makes it an unfair labor practice for an employ-
er "to interfere with , restrain , or coerce employees in the exercise of the rights
guaranteed in section 7." Insofar as pertinent , Section 7 provides that "[e]m-
ployees shall have the right to self-organization , to form, join, or assist labor
organizations , to bargain collectively through representatives of their own
choosing, and to engage in other concerted activities for the purpose of
collective bargaining or other mutual aid or protection."
Section 8(a)(5) makes it an unfair labor practice for an employer " to refuse
to bargain collectively with the representatives of his employees" designated
by a majority of the employees in an appropriate unit.
As no evidence was adduced to substantiate the allegation of the amended
complaint that on or about November 14, 1973, Drilling Superintendent
Walter Frederickson threatened employees that the Company "would stack
the rigs" (meaning remove from service) if the employees did not accept, and
if the Union did not approve, a 40-cent hourly wage increase , the allegation
is dismissed.
230 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
also purchased materials valued in excess of $50,000 directly
from sources located outside the State.
It is conceded, and I find, that the Respondent is an
employer engaged in commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
If. THE LABOR ORGANIZATION INVOLVED
I find, in agreement with the parties , that the Union is a
labor organization within the meaning of Section 2 (5) of the
Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Introduction; the Union's Certifications; Issues
The Respondent is one of the smaller drilling contractors
in the Permian Basin area covering approximately 160,000
square miles in West Texas and New Mexico where some
250 drilling rigs owned by various companies have been in
daily operation during the past year. The Respondent has
six rigs whose use depends on the number of drilling con-
tracts it has at a particular time . When all six are in service,
a maximum of 66 roughnecks 4 are employed to run them.
In charge of each rig is a toolpusher who is directly responsi-
ble and reports to Drilling Superintendent Walter Freder-
ickson. The rig is operated around the clock by three crews,
with each working an 8-hour shift, until the well is complet-
ed.5 A crew consists of three or four roughnecks and a driller
who hires and supervises them and whose job it is to see that
the rig functions properly. Upon completion of a well, the
men are transferred to other drilling jobs, if work is avail-
able and they want to go there; otherwise, the men are
placed on the out-of-work list. According to Frederickson,
very few roughnecks remain in the Respondent's continu-
ous employ. It appears that until a year or a year and a half
ago, roughnecks were unemployed for 30 to 90 days a year
but that since then there has been a shortage of help in the
oil fields and consequently less slack in employment.
In 1967, the Union filed a petition with the Board to
represent the Respondent's roughnecks. Because of the un-
usual high turnover among these employees and the rela-
tively short periods of their employment with the
Respondent, which is apparently common in the oil drilling
industry in the Permian Basin area, the Board devised what
has come to be known as the Hondo formula for determin-
ing eligibility to vote in a directed representation election.b
Having won the subsequent election held in accordance
4 Derrickmen , motormen , and floormen , who are the rank -and-file em-
ployees of a drilling crew , are generally referred to in the trade as roughnecks.
On occasions , drillers , who are their immediate supervisors , might also be
included in the roughneck terminology.
$ According to figures furnished by the Respondent for the period of
January 1, 1973, through November 14, 1973, it took its rigs from 18 to 59
days to complete a well and some as long as 96 days on infrequent occasions.
164 NLRB 416, 418 (1967). This formula, which has been subsequently
applied in Board-conducted elections involving roughnecks employed by
other drilling companies in the area , limits eligibility to vote
... to all roughnecks who have been employed by the Employer for a
minimum of 10 working days during the 90-calendar-day period preced-
ing the issuance of our Decision and Direction of Election herein, and
who have not been terminated for cause or quit voluntarily prior to the
with this eligibility rule by a vote of 26 to 6 with 5 chal-
lenges, the Union was certified by the Board on September
8, 1967 as the exclusive representative of the Respondent's
employees in an appropriate unit.' To test the certification
and the Hondo rule, the Respondent refused to bargain with
the Union. This resulted in a Board order finding the Re-
spondent in violation of Section 8(a)(5) and (1) of the Act 8
and directing it to bargain with the Union. The Court of
Appeals for the Fifth Circuit sustained the reasonableness
of the Hondo rule and bargaining order.
Following enforcement of the Board's bargaining order,
the Respondent and the Union engaged in contract negotia-
tions which extended well beyond a year. However, no
agreement resulted from these efforts and the Respondent
filed an election petition with the Board (Case 16-RM-448).
An election was held which the Union also won by a vote
of 28 in favor of representation and 2 against with 2 votes
being challenged. Evidently, the Hondo formula was utilized
to determine eligibility. On March 3, 1972, the Union was
again certified as the exclusive representative of the
Respondent's roughnecks.
As will be discussed below, further negotiations between
the parties ensued 10 until the Respondent, by letter dated
November 14, 1973, notified the Union that it questioned
the Union's majority status and that it accordingly with-
drew recognition. It is the General Counsel's position that
the Respondent did not bargain in good faith; that both
before and after its withdrawal of recognition the Respon-
dent unlawfully raised wages and changed a term of em-
ployment without consulting the Union; that, in the context
of these unfair labor practices, the Respondent was preclud-
ed from questioning the Union's majority status; and that,
in any event, the Respondent failed to demonstrate that its
withdrawal of recognition was based on objective consider-
ations justifying a good-faith doubt that the Union no lon-
ger represented the Respondent's roughnecks. The
Respondent, however, insists that it had reasonable grounds
for believing that 20 months after the Union's second certi-
fication the Union had lost its majority status and that the
Respondent did not raise the question of the Union's major-
ity in the context of bad-faith bargaining or other unfair
labor practices. We turn to the evidence.
completion of the last job for which they were employed, as well as all
roughnecks whose names appear on the Employer 's payroll list immedi-
ately preceding the issuance of the Regional Director's Notice of Elec-
tion in this proceeding.
r This unit, which the parties concede to be appropriate for collective
bargaining purposes, consists of:
All derrickmen, motormen and floorhands, otherwise referred to as
roughnecks, employed by the Employer in drilling operations in the area
generally known as the Permian Basin , but excluding all toolpushers,
drillers, office employees , technical employees , guards, professional em-
ployees and all supervisors as defined in the Act.
171 NLRB 1399 (1968).
9 428 F.2d 943; see also N.L.R.B. v. Rod-Ric Corporation, 428 F.2d 948
(C.A. 5), enfg. 171 NLRB 922 (1968); N.L.R.B. v. Brahaney Drilling Compa-
ny, 432 F.2d 1271 (C.A. 5), enfg. 176 NLRB 289 (1969).
10 It appears that while these negotiations were in progress the Union was
also involved in representing the roughnecks of 12 other drilling contractors
in the Permian Basin area on an individual employer basis . It further appears
that the Respondent's attorney represents most of these employers in their
dealings with the Union and that a member of his law firm acts on behalf
of two drilling contractors.
HONDO DRILLING COMPANY, N.S.L. 231
B. The Evidence
1. Contract negotiations and related events preceding
May 19, 1973 11
Following the Union's second certification, the Union
and the Respondent held four bargaining sessions before
May 19, 1973. The Union's negotiator at these meetings was
Senior Business Representative J. D. Fortenberry, while
the Respondent was represented by its attorney, Brooks L.
Harman and Drilling Superintendent Walter Freder-
ickson.12 At the opening of their first meeting on March 28,
1972, Harman rejected Fortenberry's suggestion that they
begin their bargaining from the point they had left off when
the Respondent filed its above-mentioned election petition.
This led to a discussion of various matters, including holi-
days, vacations, overtime, and a referral hall. Nothing sig-
nificant developed from this meeting except that Harman
stated that the Company would consider some type of a
vacation plan and Fortenberry agreed to send Harman the
Union's written proposal of a hiring hall procedure. Two
days later, the Union mailed its referral hall proposal to
Harman.
The next meeting took place on July 18, 1972.13 The
Union's hiring hall proposal came up for discussion. As it
was not entirely satisfactory to the Respondent, Fortenber-
ry agreed to submit a modified proposal. Also considered
at this time was the duration of a contract. The Respondent
asked for a 1-year term with a wage reopener clause while
the Union indicated preference for a longer period. Finally,
the Respondent accepted the idea of a 1-week vacation after
a year's employment. However, the Respondent would limit
this right to employees whose service was interrupted during
the year by a total of less than 60 days. The Union, on the
other hand, would enlarge this period to 90 days and Har-
man undertook to draft a vacation provision satisfactory to
both parties. The meeting ended without any definite agree-
ment reached on any subject. Later in the day Fortenberry
mailed to Harman a modified hiring hall proposal as he had
promised to do. In this letter Fortenberry also reminded
Harman that Harman had agreed to submit "a draft of the
proposed contract" and a current list of employees and their
addresses.
On September 1, 1972, negotiations resumed. At this
meeting, Harman handed Fortenberry a list of employees
and proposed vacation and holiday provisions. Discussions
11 In view of the 6-month limitation proviso in Sec. 10(b) of the Act, the
events preceding May 19, 1973, are set forth only as background to shed light
on subsequent alleged unfair labor practices encompassed by the amended
complaint . It appears that the delays and infrequency of negotiation meet-
ings are characteristic of the industrial relations scene involving the oil and
gas drilling industry in this area.
12 Although Frederickson testified that any complete agreement reached
with the Union was subject to the approval of the Company's president and
board of directors, I find, contrary to the implication in the General
Counsel's brief, that Frederickson and Harman possessed sufficient authori-
ty to negotiate a contract and that their authority was not so circumscribed
as to reflect adversely on the Respondent's performance of its bargaining
oblation.
1 Fortenberry did not attend a negotiation meeting on May 5, 1972, which
Harman testified he had scheduled . However , Fortenberry denied ever re-
ceiving written notice of such a meeting which Harman testified he had sent.
There is absolutely no purpose to resolve this dispute.
ensued, among other things, concerning these proposals,
contract duration, and a hiring hall. However, the parties
remained in dispute with respect to the 60- or 90-day quali-
fying condition and the contract term which the Respon-
dent still wanted to be for 1 year and the Union for a longer
period. As for the hiring hall, the Company stated that it
had no objection to its drillers using that facility to secure
help but that it opposed the inclusion of such a clause in a
contract. At the end of the meeting, Fortenberry requested
Harman to submit a draft contract containing items tenta-
tively agreed upon and Harman consented to do so.
On September 12, 1972, Harman sent Fortenberry an
18-page "Working Agreement." In the covering letter, Har-
man noted that "Mr. Frederickson has been authorized to
agree on a one-year term beginning on date working agree-
ment is signed." It appears from Fortenberry's undisputed
testimony that Harman's draft contained several provisions
on which agreement had not previously been reached. Spe-
cifically, he referred to the arbitration clause which did not
provide for "binding [mandatory] arbitration" but depend-
ed upon the consent of both parties. Also not agreed on
were the vacation eligibility condition and a narrow reten-
tion of benefits clause.
At the Union's January 1973 membership meeting, For-
tenberry reported on the terms of the Respondent's Septem-
ber 12 proposed contract. The members expressed
dissatisfaction with certain items in that contract and other
proposals were considered."' As a result of this meeting,
Fortenberry on January 23, 1973, telephoned Harman and,
in a brief conversation, informed him that the Respondent's
employees wanted a 25-cent hourly wage increase, a hiring
hall, binding arbitration, as well as the previously agreed-
upon items, including retention of benefits. There is no
testimony concerning Harman's response, if any. In the
course of another telephone call made to Harman 2 days
later concerning contract negotiations relating to another
drilling company, Harman informed Fortenberry that Hon-
do wanted to give its employees a wage increase. Fortenber-
ry responded with a request that they negotiate before any
increase is granted.
Subsequently, the parties arranged for another bargain-
ing session which was held on March 13, 1973. Here, too,
no progress was made with respect to the parties' 60-90 day
differences regarding eligibility for vacation, although Fred-
erickson indicated that he would speak to the board of
directors about the Union's position. This led to a discus-
sion of a wage increase. The Company offered 5.5 percent
in a 1-year contract. This meant an hourly increase of 17
cents for floorhands and 18 cents for derrickmen and mo-
tormen. The Union, on the other hand, repeated its request-
ed 25-cent-an-hour across-the-board raise. Harman refused
to yield on the Company's position, asserting that 5.5 per-
cent was the limit under the Government wage freeze. When
Fortenberry remarked that this created a problem, Harman
commented that wages were not the only problem, appar-
ently referring to the other disputed items. Fortenberry's
suggestion that the Company seek Government approval of
an increase in excess of the 5.5 percent was rejected by
14 It appears that the Union filed an unfair labor practice charge on Janu-
ary 16, 1973, which was withdrawn with the Regional Director's approval on
January 29, 1973 (Case 16-CA-5039).
232 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Frederickson. In the course of a further wage discussion,
Fortenberry made it clear that the Union would not agree
to any increase apart from a complete contract. Also consid-
ered on this occasion was the Company's proposal that
insurance coverage for an employee should become effec-
tive 90 days after the beginning of employment. The Union
requested a 60-day period. These differences were not rec-
onciled. The net effect of these negotiations was that the
parties arrived at no understanding on a contract or wage
increase.
Because he was planning to be out of town for a while,
Harman about March 21, 1973 left a message for a member
of his law firm, Joseph Connally, to inform Fortenberry of
the Company's willingness to raise its prior 5.5 percent of-
fered wage increase to 6.2 percent and to secure the Union's
approval. Thereafter, either on the same day or March 22,
Connally and Fortenberry discussed this matter in a tele-
phone conversation while Business Manager Howell stood
nearby at Fortenberry's end of the line. Connally inquired
whether the Union would accept a 6.2 percent increase
effective immediately. In response, Fortenberry stated that
the Union would agree provided a complete contract was
consummated which included binding arbitration with a
no-strike clause such as that embodied in the McVay Drill-
ing Company contract which he had recently negotiated
with Harman as McVay's attorney; a clause providing a
week vacation a year for employees with less than 90 days
of service interruption; a contract term of 1 year; and all the
other provisions contained in the Company's September 12
draft. 5 Fortenberry also requested Connally to prepare and
submit to him a draft of a contract embodying
Fortenberry's proposition.16 No such document was ever
delivered to the Union, although the Respondent put into
effect the 6.2 percent increase a few days after the above
telephone conversation. 17
2. Negotiations, unilateral action, and withdrawal of
union recognition subsequent to May 19, 1973
Fortenberry was hospitalized from May 14 to June 5,
1973,15 and did not return to his duties on a full-time basis
until late in September. For this reason, Business Manager
Howell undertook to handle the Hondo negotiations and
correspondence.
15 Fortenberry testified that Connally, in response to Fortenberry's pro-
posal , stated that he saw no problem , thereby indicating acceptance of the
proposal . Admittedly, Fortenberry 's written summary of this conversation,
which he prepared 3 months later, omits mentioning Connally's answer.
Assuming , however, that Connally made the asserted reply, I do not interpret
it as a commitment by Connally on the Company' s behalf to accept
Fortenberry's proposition . Indeed , in Howell's letters sent to Harman on
June II and July 27, 1973, Howell referred to Connally's 6.2 percent offer
and Harman 's failure to forward a draft of an agreement containing terms
previously negotiated by Fortenberry with Harman himself. In any event, I
find no evidence that Connally, who had not participated in any of the
negotiations since the Union's second certification , was authorized to bind
the Company to Fortenberry' s proposition.
16 In all negotiations , whether with Hondo or other clients of Harman, it
was the practice for Harman to prepare drafts of contracts.
17 Frederickson testified that he presumed the 6.2 percent was acceptable
to the Union without any conditions.
18 Unless otherwise indicated, all dates hereinafter mentioned relate to
1973.
On May 21, Harman wrote to Fortenberry, suggesting a
negotiating session to "go through the contract (apparently
referring to the September 12 one) and see just where we
stand." By letter of May 23, Howell advised Harman of
Fortenberry's hospitalization and that he would talk to For-
tenberry about Harman's proposed meeting. On June 7,
Howell sent Harman another letter in which he stated that
Fortenberry would contact him as soon as he sufficiently
recovered his health and resumed his normal duties. How-
ever, Howell added that, if this suggestion was not agree-
able, he would make himself available for negotiations.
Howell followed up this letter with another one on June 11
in which he stated:
Mr. Fortenberry informed me that Mr. Joe Connally
had called him in Hobbs, New Mexico, on either the
21st or 22nd day of March, 1973 in your behalf wanting
to put into effect a 6.2% wage increase for Hondo em-
ployees immediately.
Mr. Fortenberry informed Mr. Connally that the
Union would agree if Mr. Connally would forward
immediately a draft of an agreement on subjects and
items that had been agreed to in prior negotiating sessions
between Mr. Fortenberry and yourself.
Please forward the draft of agreement to this office at
your earliest convenience. I will then contact you on
any questions regarding same that I may have. (Em-
phasis added).
When Harman failed to reply to Howell's request, Howell
on July 27 again wrote Harman, expressing surprise that he
(Howell) had not yet "received the draft of the agreements
made in negotiations . . . between yourself and Business
Representative Fortenberry [emphasis supplied]," which he
had requested in his June 11 letter, and urging that the draft
be forwarded at Harman's earliest convenience.
Finally, on August 6 Harman sent Howell a letter in
which he enclosed
... the provisions of a working agreement which have
been tentatively agreed to by both parties. There are
other provisions which have not been agreed upon and
which will require further negotiation.
It is my understanding you have the right to secure
approval of the employees before finally agreeing to
the terms of the agreement and Mr. Frederickson must
secure the approval of the Board of Directors.
Please advise when you would like to negotiate further.
[Emphasis supplied.]
According to Howell's testimony, the enclosed contract
draft omitted the provisions which Connally had agreed
upon in his above conversation with Fortenberry on March
21 or 22. Thus, he testified that the August 6 contract draft
did not provide for binding arbitration but, instead, provid-
ed for arbitration only if agreeable to both parties; that it
HONDO DRILLING COMPANY, N.S.L. 233
added in section 6.3 language not previously negotiated,
recognizing the Company's right unilaterally to give em-
ployees subsistence allowances;19 that the draft omitted
completely an insurance provision which was in the
Company's September 12, 1972, draft, although the employ-
ee qualifying coverage date was in dispute; and that the
August 6 draft did not contain retention of benefits and
vacation clauses also included in the September 12 draft,
although the Union had previously sought some changes in
them. Howell admitted not calling the foregoing matters to
Harman's attention before the August 22 bargaining session
for the asserted reason that he was trying to arrange a
meeting to negotiate on these items. Harman, on the other
hand, testified in conformity with his letter that the August
6 draft was intended to reflect only those provisions which
had been tentatively agreed to in the earlier negotiations. It
is clear, however, that the Union had never accepted, at
least, the noncompulsory arbitration clause mentioned in
the August 6 draft.
Thereafter, the parties scheduled a negotiating session for
August 22. In the meantime, the Union learned on August
16 that the Respondent had unilaterally decided to pay
"bottom hole" money or bonus 20 to employees working on
Rig 3.21 It appears that on or about August 5 the Respon-
dent posted on rig 3, then operating on C & K Petroleum's
Lowe State # 1, the following notice signed by Drilling
Superintendent Frederickson:
Crew members who work continuously from date of
hire to well completion will receive a subsistence allow-
ance equal to 10% of their gross pay for such period of
continuous work.
This is to be paid on the pay period following the
completion of the well to employees completing this well.
Frederickson testified that the C & K Petroleum job was
a long distance from the crews' living quarters and involved
unusual dangerous gas and other difficult problems. For
this reason, he testified, it was necessary to offer the men
this special 10-percent allowance in order to induce them to
work on this job and to remain until completion of the well.
Frederickson further testified-and in this he was corrobo-
rated by Harman-that before he accepted the C & K Pe-
troleum job, he consulted with Harman whether he could
give the employees this bottom hole money without negoti-
ating with the Union and was advised that he could do so
19 Sec. 6 . 3 provided that "[iln case of unusual locations involving rough
terrain , long distances , etc., the Company may provide a subsistence allow-
ance as it deems necessary, and the company may provide additional induce-
ments on a temporary basis in order to secure and maintain sufficient crew
members."
20 Bottom hole money or bonus is money paid to employees provided they
remain on the particular job until the well is completed. It differs from
subsistence which is generally given to employees in addition to their regular
pay to compensate them for the distance they have to travel to the job and
other difficulties encountered to reach it. However , the employees ' right to
subsistence normally does not depend on the completion of the well.
21 Originally , Howell was under the erroneous impression that the bottom
hole pay was applicable to other rigs and jobs. This impression was subse-
quently corrected by Frederickson at the August 22 bargaining session.
because Frederickson had given it before and it was custom-
ary in the oil fields to pay such money under comparable
circumstances , although the occasion infrequently arose.
Frederickson also testified that the last time he paid bottom
hole pay before this occasion was in 1969. It was stipulated
that the bottom hole allowance was given only on rig 3 and
covered the payroll periods ending August 12 though Sep-
tember 23. It further appears that this allowance was also
subsequently paid to the crewmen operating rig 3 on anoth-
er location where comparable problems existed for the pay
periods of November 18, 1973, through January 13, 1974.
However, in both instances, only the roughnecks who re-
mained until the completion of the well actually received the
bonus.
On August 22, about 5 months after their last bargaining
session , Howell met with Harman and Frederickson. Ho-
well started off the discussions by alluding to the Connally-
Fortenberry telephone conversation in March, claiming
that agreement had there been reached on such items as
binding arbitration with a no-strike clause, as embodied in
the McVay contract, and vacations, and that Connally had
undertaken to reduce this agreement to contract form for
signature . In addition, Howell pointed out that such a
signed contract had never been forwarded to the Union and
that the Respondent had reneged on Connally's agreement.
Instead, Howell asserted, Harman sent the Company's Au-
gust 6 draft which omitted Connally's accepted terms, as
well as other items in the September 12, 1974, draft such as
insurance where only the employee coverage eligibility peri-
od was in dispute. Furthermore, Howell commented that he
had not filed an unfair labor practice charge in the hope that
the parties would get together and sign a contract.
Frederickson's answer to all this was that Connally lacked
the authority to bind the Company. 2 This elicited Howell's
response that the Company received the Union's approval
of the 6.2-percent wage increase in return for a complete
agreement.
Howell then raised the question of the Respondent's uni-
lateral grant of the 10-percent bottom hole pay, contending
that it related to a term and condition of employment and
should be negotiated. Harman argued that it was not a
bargainable matter as the Respondent had paid bottom hole
money before. Howell threatened to file a charge, which he
ultimately did, and the matter was dropped after further
argument.
Howell also initiated a discussion of subsistence pay as
part of an incentive safety program which he claimed had
been instituted by several of the Respondent's competitors.
In addition, Howell proposed a special allowance (appar-
ently bottom hole pay) of $5 a day for the crews on rig 3
22 Frederickson testified that shortly after the March Connally-Fortenber-
ry conversation, he spoke to Connally on the telephone solely with respect
to the 6.2-percent wage increase which he presumed Fortenberry had accept-
ed. There is an apparent testimonial conflict whether Frederickson stated at
the August 22 meeting that in his March conversation with Connally, the
latter wanted to send him a draft of a contract for signature but Frederickson
told him not to do so and asked Connally to have Harman contact Freder-
ickson upon Harman's return from his trip. As I have found that Connally
did not possess the authority to commit the Respondent to a complete
contract, it is unnecessary to resolve this conflict . In this connection, it is
noted that the amended complaint does not allege an unlawful refusal to sign
an agreed-upon contract.
234 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
only but nothing conclusive was decided. A follow-up meet-
ing was then tentatively scheduled for August 27 and Fred-
erickson agreed in the meantime to take up the Union's
requested contract with the Respondent's board of direc-
tors.23
No meeting was held on August 27 and the parties were
unable to reschedule an early bargaining session convenient
to both sides. On October 2, Howell reminded Harman that
he had not heard from him regarding a negotiating date,
although Harman's secretary had advised Howell that Har-
man would communicate with him when he returned from
vacation. On October 17, however, Harman wrote Howell
that Hondo proposed to increase the hourly wage rate of
floorhands from $3.40 to $3.68, and of derrickmen and
motormen from $3.50 to $3.80, effective the pay period
beginning October 27, 1973, and requested to be advised
whether this increase met with the Union's approval. The
next day, Harman notified Howell that the correct effective
date of the increase was October 22, 1973.
Upon receipt of the foregoing notices of proposed wage
increases, Howell telephoned Harman on October 19 and
arranged for a meeting on October 31 to negotiate on this
matter. On the same day, Howell sent Harman a letter in
which, after confirming this conversation, accused the Com-
pany of not bargaining in good faith, adding:
... You only propose in your letter dated October 17,
1973 to raise wages and ignored my requests for negoti-
ations for a complete working agreement. I strongly
object to the pattern you have established in only noti-
fying the Union two or three days in advance of the
effective date of when the Company proposes a change.
As I advised you and Mr. Frederickson in our meeting
on August 22, 1973, Mr. Joe Connally had agreed to a
complete contract back in March of 1973 with Mr.
J. D. Fortenberry and the reason I had not filed
charges was in an effort to reach an agreement on the
date of our meeting on August 22, 1973.
Therefore, please be prepared to negotiate until a full
agreement is reached as I feel the Company has inten-
tionally avoided meeting with the Union on a regular
basis in an effort to stall and delay the signing of an
agreement.
Howell also requested a current list of unit employees and
their home addresses which information he stated was need-
ed because of the long delay between meetings.
In the meantime, Harman prepared a new contract draft
containing a number of changes in provisions embodied in
the previous draft. The new proposed contract received ad-
vance approval from the Respondent's board of directors
and Frederickson was authorized to sign that document if
the contract was acceptable to the Union. Thereafter, on
October 31, a relatively short bargaining session was held.
At this meeting, Harman handed Howell the previously
23 The foregoing findings concerning the August 22 meeting is based on
a composite of Howell 's and Harman 's testimony which I believe reflects
what probably occurred there.
requested list of current employees together with the latest
draft of an agreement which Harman described as a con-
tract the Company was willing to execute then and there.
Upon reviewing the draft, Howell voiced objection to sever-
al provisions. These included the retained nonmandatory
arbitration clause (Sec. 5.1); the clause reserving to the
Company the unilateral right to grant subsistence allowanc-
es to employees, which was previously included in the Au-
gust 6 draft (Sec. 6.3); the clause recognizing the Company's
unilateral right to grant wage increases to meet competition
(Sec. 7.1), which provision had never before been the subject
of discussion;24 the vacation provision which granted a 1-
week vacation a year to employees with less than 60 days
of uninterrupted service (Sec. 11.1); and wage increases in
excess of those offered in Harman's letter of October 16
($3.90 an hour for derrickmen and motormen and $3.80 an
hour for floormen).
In the course of this meeting, Howell presented a written
hiring hall proposal substantially similar to that submitted
at an earlier negotiation session . He, however, made it clear
that the Union was not committed to this language but that
the Union would be satisfied with the language in the con-
tract of Tri-Service Drilling Company, another employer
represented by Harman. Howell then commented that the
Union was also involved in negotiations with other drilling
companies to whom new proposals relating to wages and
other benefits to be approved by the membership would be
submitted. He further informed the Respondent that such
proposals would also be forwarded to Harman. In answer
to Frederickson's inquiry whether, in the meantime, the
Respondent could put into effect the increases offered in its
latest contract proposal, Howell gave a negative response.
However, Howell noted that he would call a meeting of
Hondo employees to vote on the Company's proposals and
that he would advise the Company of the employees' deci-
sion . Frederickson expressed the hope that the employees
would accept the increase , remarking that he was aware that
the Union could strike the Company and, if it did, the
Company would have shut down the rigs. This was the last
of the bargaining meetings.25
Thereafter, the Union scheduled a morning and evening
meeting of Hondo employees on November 7. In a letter
dated November 1 notifying the employees of this meeting,
they were advised of the October 31 negotiations in which
the Company offered a 40-cent-an-hour increase, "without
any method of resolving grievances except to strike if the
Company did not want to go to arbitration." The letter
further mentioned the Company's request "to retain the
right to give . . . wage increases at their option," and the
Union's proposed hiring hall. Urging the employees "to
24 In addition to establishing wage rates , Section 7.1 provided:
... Due to the competition for crew members any time a group of
competitors increase wages it has the effect of depriving this Company
of crew members. Therefore, any time Company determines it is neces-
sary to increase wages because a group of competitors have incraased
wages, it may do so unilaterally provided it immediately notifies the
Union of such increase . And provided further, the Company will meet
with the Union during a period of 5 to 10 days after the increase, to
negotiate whether a further increase should be granted , but only if the
Union requests the meeting.
25 The foregoing findings relating to the October 31 meeting are based on
the substantially uncontradicted testimony of Howell and Harman.
HONDO DRILLING COMPANY, N.S.L. 235
attend one of these Special Meetings and have a voice in
what wages and benefits you will be required to work un-
der," the letter reminded them of the existing "extreme
shortage of crew members and [that this was] . . . the time
to get the benefits and protection in a contract that you
deserve."
Following these union meetings, Business Representative
Fortenberry on November 12 advised the Company that the
Union's members had rejected the Company's October 31
proposal. In this letter, Fortenberry also listed eight coun-
terproposals several of which were new demands pertaining
to a union shop with respect to the Company's New Mexico
operations (#3); shift differentials (#4); a cost of living
escalator clause (#5); and a free meal where employees
work 2 hours beyond quitting time (#7). Concluding, For-
tenberry requested a date for further negotiations.
On November 14, Harman responded with a summary
withdrawal of recognition, as follows:
Mr. Walter Frederickson telephoned me this morning
and stated the company does not believe the Union
represents a majority of bargaining unit employees
and, therefore, refuses to recognize [the Union] . . . as
the bargaining representative of its employees.
The particular grounds to which Frederickson testified in
justification of his action will be discussed in the section of
this Decision entitled "Concluding Findings."
On the same day, the Respondent posted a notice over
Frederickson's signature, announcing effective November
12 an hourly wage increase for derrickmen and motormen
from $3.50 to $3.90 and for floormen from $3.40 to $3.80.26
These were the same increases offered in the Respondent's
proposed October 31 contract. A copy of the posted an-
nouncement was mailed to the Union. Harman testified that
the reasons the increases were granted at that time were that
the employees wanted them and the Respondent had to
keep up with its competitors who had already given their
employees such raises.
In the first week of December, the Respondent granted
its employees another wage increase of 6 cents an hour
effective December 3. According to Harman's testimony,
this increase was prompted by information Frederickson
had acquired that the Company's wage rates were still below
those of its competitors and that the additional 6 cents
brought them in line with the Company's "primary competi-
tors."
C. Concluding Findings
As indicated above, it is the General Counsel's position
that since May 19, 1973, the Respondent failed to bargain
in good faith in a genuine effort to reach agreement with the
Union; for this reason the Respondent was precluded from
questioning the Union's majority status and withdrawing
recognition on November 14, 1973; in any event, the
Respondent's withdrawal of recognition was not based on
objective considerations justifying a reasonable doubt of the
26 The posted notice also announced an increase for drillers, who were
supervisors of the crews, effective October 22.
Union's continued majority support; and by the foregoing
conduct, as well as by its action in unilaterally granting
bottom hole pay on or about August 5, 1973, and wage
increases in November and December 1973, the Respon-
dent violated Section 8(a)(5) and (1) of the Act. The Re-
spondent, of course, denies that it breached its bargaining
obligation in any of the indicated respects. For the reasons
set forth below, I find that, although the record does not
establish overall bad-faith bargaining on the Respondent's
part, its withdrawal of recognition and unilateral action
were in violation of the Act.
With respect to the Respondent's alleged overall bad-
faith bargaining
Section 8(a)(5) of the Act requires an employer to recog-
nize and bargain collectively with the statutory representa-
tive of his employees with respect to their terms and
conditions of employment. Section 8(d) defines the bargain-
ing obligation as requiring the parties, inter alia, "to meet at
reasonable times and confer in good faith [regarding such
matters] . . . or the negotiation of an agreement . . . and
the execution of a written contract incorporating any agree-
ment reached if requested by either party...." Although
this obligation does not "compel either party to agree to a
proposal or require the making of a concession," it does
contemplate, as the Board and the courts have uniformly
held, a willingness to enter the discussions "with an open
mind and purpose to reach an agreement consistent with the
respective rights of the parties."27 Simply entering "upon a
sterile discussion of union management differences,"28 is
not sufficient. Essentially then, the "ultimate issue whether
the Company conducted its bargaining negotiations in good
faith involves a finding of motive or state of mind which can
only be inferred from circumstantial evidence."29
Applying these principles to the facts of this case, I find
insufficient evidence in the record that during the period
from May 19 to November 14, 1973, when the Respondent
withdrew recognition, the Respondent negotiated in bad
faith with no intention of entering into any final or binding
collective bargaining contract. Without repeating the de-
tails , it is clear that, while agreement had been reached on
a number of items, there were others where serious differ-
ences developed between the parties. The parties' inability
to resolve these differences can no more be attributed to the
Respondent's inflexibility than to the Union's. Considering
all the facts and circumstances surrounding the negotia-
tions, the Respondent's conduct amounted to no more than
hard bargaining which the Act does not condemn.
The General Counsel, nevertheless, urges as evidence of
bad-faith bargaining, the Respondent's failure to embody in
a contract Attorney Connally's alleged telephone accep-
tance on March 21 or 22, 1973, of the Union's proposals
with respect to certain disputed items. However, apart from
27 Majure Transport Company v. N. L. R. B., 198 F.2d 735, 739 (C.A. 5); see
also N.L.R.B. v. Johnson Manufacturing Company of Lubbock, 458 F.2d 453
(C.A. 5, 1972); N.L.R.B. v. Darlington Veneer Company, Inc., 236 F.2d 85,
88-89 (C.A. 4, 1956).
28 N. L. R. B. v. American National Insurance Co., 343 U.S. 395, 402.
29 N.L.R.B. v. Reed & Prince Manufacturing Company, 205 F.2d 131, 139-
140 (C.A. 1), cert . denied 346 U.S. 887.
236 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the fact that that telephone conversation occurred outside
the 6-month limitation period, I have found that Connally
neither committed the Respondent to acceptance of the
items in question nor possessed the authority to do so.
Also relied upon by the General Counsel as indicative of
the Respondent's bad-faith approach to the negotiations, is
the omission from the August 6 contract draft of clauses
dealing with retention of benefits, vacations, and insurance.
However, as found above, complete agreement on these
subjects had not previously been reached by the parties and
the Respondent's letter accompanying this document ex-
plicitly stated that the draft embodied provisions which had
been "tentatively agreed to" and that there were other pro-
visions which had not been agreed upon and required fur-
ther negotiations. In these circumstances, an inference of
bad-faith bargaining from the asserted omissions is certain-
ly unwarranted. Moreover, the subjects in question were
subsequently included in the Respondent's last proposed
contract which it submitted to the Union on October 31,
1973.
In further support of his contention that the Respondent
bargained in bad faith, General Counsel alludes to the pro-
visions in the Respondent's August 6 and October 31 drafts
reserving to itself the unilateral right to grant employees a
subsistence allowance in case of the unusual location of its
rigs and to the provision in its October 31 draft recognizing
the Company's right to grant wage increases to meet compe-
tition without prior negotiation with the Union. However,
proposals of this nature are clearly bargainable matters and
do not necessarily establish a disposition to avoid agree-
ment , as the General Counsel suggests3° Moreover, it is
incomprehensible to me how, as the General Counsel also
urges, the Respondent's offer in the October 31 draft of a
wage increase in excess of that previously offered to the
Union impugns the sincerity of the Respondent's negotia-
tions . Lastly, although I find below that the Respondent's
action in granting employees bottom hole pay on or about
August 5 without first conferring with the Union violated its
statutory obligation, and may in another context indicate
bad-faith bargaining, I am not convinced that under the
particular facts and circumstances of this case, such con-
duct reflects adversely on the Respondent's entire course of
dealings with the Union.
In sum, I find that the General Counsel failed to prove
that the Respondent's conduct prior to its withdrawal of
union recognition did not comport with the standards of
good-faith bargaining or that the Respondent utilized its
October 31 contract proposal as a tactic to avoid agreement.
With respect to the Respondent's withdrawal of union
recognition
In Laystrom Manufacturing Co.," the Board reviewed the
principles governing an employer's continuing duty to rec-
30 Cf . N.L.R.B. v. American National Insurance Co., supra.
31 151 NLRB 1482, 1483-84. Although enforcement of the Board's bar-
gaining order was denied (359 F.2d 799 (C.A. 7)), the court did so only
because of its disagreement with the Board 's finding that the employer ques-
tioned the Union 's majority status in bad faith and not because it disagreed
with the Board 's statement of governing principles . See Automated Business
Systems, 205 NLRB 532, fn. 8 (1973).
ognize and bargain with a union which had previously been
certified by the Board as his employees ' exclusive represen-
tative , as follows:
Absent unusual circumstances, there is an irrebuttable
presumption that the majority status of a certified
union continues for 1 year from the date of certifica-
tion. After the first year the certificate still creates a
presumption of majority status, but the presumption is
normally rebuttable by an affirmative showing that the
union no longer commands a majority. Moreover,
where the certificate is a year or more old an employer
may withhold further bargaining without violating the
Act and insist that the union reestablish its statutory
representative status if, but only if, he in good faith has
a reasonable doubt of the union's continuing majority.
A showing of such doubt, however, requires more
than an employer's mere assertion of it and more than
proof of the employer's subjective frame of mind. The
assertion must be supported by objective consider-
ations. The applicable test, as defined in the Celanese
case, is whether or not the objective facts furnish a
"reasonable basis" for the asserted doubt, or, put an-
other way, whether or not there are "some reasonable
grounds for believing the Union has lost its majority
status since its certification." [Citations omitted.]
Clearly, the burden of proving a good-faith, reasonably
grounded doubt of the union's continued majority status
rests upon the employer. 32 However, such a defense is not
available where the withdrawal of recognition occurred in
the context of unfair labor practices.33
At the outset, it may be well to dispose of the General
Counsel's contention that the Respondent is precluded from
questioning the Union's majority because of the
Respondent's overall bad-faith bargaining. Having found
the allegation of bad faith bargaining not sustained by the
evidence, the contention is rejected. Nor am I persuaded
that the isolated instance of unilateral granting of bottom
hole pay on or about August 5 to employees working on rig
3 is sufficient, under the special circumstances of this case,
to warrant depriving the Respondent of the defense of
good-faith doubt, assuming that the defense could other-
wise be established. We turn to the consideration of the
reasons for the Respondent's asserted doubt.
As discussed above, the Respondent suddenly withdrew
recognition by letter dated November 14, 1973, and refused
to proceed with further negotiations. This was the first time
the Respondent had ever raised the question of the Union's
majority status since the Union's second certification 20
months earlier, although the Union's status apparently had
not changed much during the intervening period. Moreover,
the withdrawal of recognition occurred only after the Union
32 Terre!! Machine Company, 173 NLRB 1480, 1481 (1969), enfd . 427 F.2d
1088 (C .A. 4), cert. denied 398 U.S. 929; Nu-Southern Dyeing & Finishing,
Inc., 179 NLRB 573, In. 1 (1969).
33 Celanese Corporation of America, 95 NLRB 664, 673 (1951); Nu-South-
ern, supra.
HONDO DRILLING COMPANY, N.S.L. 237
had indicated its unwillingness to accept all of the terms
embodied in the Respondent 's contract proposal presented
to the Union at the October 31 , 1973, bargaining session
but, instead , put the Respondent on notice that it intended
to submit additional proposals of its own . Furthermore, the
withdrawal of recognition followed immediately after the
Union in its letter of November 12 advised the Respondent
of its membership 's rejection of the Respondent 's October
31 contract proposal and listed its additional counterpropo-
sals.
Against this background , the Respondent urges the fol-
lowing considerations which assertedly prompted it to ques-
tion the Union 's majority status:
The unusual high labor turnover : There is no dispute that
the Respondent experienced a high rate of turnover among
the roughnecks it employed on its rigs in the Permian Basin
area . It is clear , however, that this situation is characteristic
of the oil and gas drilling industry in that area where rough-
necks are generally hired for relatively short periods of time
and freely move from one drilling job to another . To accom-
modate its election procedures to such turnover , the Board,
with court approval , devised the so-called Hondo voting
eligibility formula previously described . Moreover, the
Board has recently held on the basis of employment facts
comparable to those involved in the present case that this
high rate of turnover among roughnecks, considered alone
or in conjunction with other facts , does not provide ajustifi-
able ground for doubting the majority status of the union
which had won Board certification several years before. 34 I
find no reason to hold otherwise in the present case especial-
ly since the record is barren of any evidence of employee
dissatisfaction with the Union 's representation. As noted in
the cited Leatherwood and Brahaney cases, a change in per-
sonnel does not necessarily mean that the new employees
are not interested in being represented by the incumbent
certified union in collective bargaining with their employ-
er.35
Accordingly , I find that the high rate of turnover relied
on by the Respondent is insufficient to warrant an inference
that the Union no longer enjoyed majority support when,
recognition was withdrawn.
The Union 's alleged refusal to bargain in good faith on and
after October 31, 1973: The Respondent also asserts that, in
deciding to withdraw recognition from the Union , it relied
on the Union 's refusal to negotiate a full contract at the
October 31 meeting but , instead , subsequently submitted
new proposals never before offered . I find nothing in the
Union 's conduct at this meeting or in the new proposals
which could reasonably suggest to the Respondent that its
employees had rejected union representation . The most that
can be said is that the Union was seeking better contract
terms than those the Respondent was offering . Indeed, the
Respondent itself was seeking to improve its bargaining
position when at the October 31 meeting it presented its last
contract proposal containing several new terms . All things
34 Leatherwood Drilling Company, 209 NLRB 618; Brahaney Drilling Com-
pany, 209 NLRB 624. The Union in the present case also represented the
emloyees of the employers in the cited cases.
See also Laystrom Manufacturing Co., 151 NLRB 1482, 1484; Printers
Service Inc., 175 NLRB 809, 812 (1%9); Harpeth Steel, Inc., 208 NLRB 545.
being considered, I find no plausible reason in the indicated
events for doubting the Union's majority status.
The Union's alleged efforts to dissuade employees from
working for the Respondent: Drilling Superintendent Freder-
ickson testified that he was influenced to withdraw recogni-
tion by reports he had that the Union unsuccessfully
attempted to persuade employees to stop working for the
Company or to refuse employment with it. However, I find
these alleged reports wholly unsubstantiated by any proba-
tive evidence. Moreover, it is well settled that a union's
unsuccessful efforts to persuade employees to withhold
services from their employer does not necessarily indicate
that the employees are no longer interested in union repre-
sentation. It is not uncommon for employees to refuse to
follow their bargaining agent's advice for economic and
other reasons and yet favor the union's continued represen-
tation.36 I, therefore, find no justification in the above re-
ports for questioning the Union's majority. Indeed, as
previously discussed, Frederickson at the October 31 meet-
ing expressed his awareness that the Union could, if it want-
ed, call a strike against the Company and thereby cause the
rigs to shut down.
Alleged lack of employee enthusiasm for the Union: The
Respondent contends that this attitude was evidenced by
the roughnecks' inquiries made of the toolpushers as to
when they would receive wage increases which other rough-
necks were then getting in the oil fields. I am unable to find
anything in these inquiries which demonstrate displeasure
with union representation. In fact, there is evidence that at
a union meeting the membership had rejected the
Respondent's October 31 contract proposal containing a
40-cent hourly wage increase. Accordingly, I find that the
roughnecks' wage raise inquiries were not of such a nature
as to raise a reasonable doubt that the Union lost majority
support.
In sum, I conclude that the Respondent's withdrawal of
union recognition and its refusal to resume contract negoti-
ations constituted a breach of its statutory bargaining obli-
gation and that the Respondent thereby violated Section
8(a)(5) and (1) of the Act.
With respect to unilateral action
It is conceded that on or about August 5, 1973, the Re-
spondent instituted bottom hole pay amounting to 10 per-
cent of gross earnings for roughnecks working on rig 3 until
completion of the well. It is also undisputed that this allow-
ance was granted without first notifying and discussing this
matter with the Union. In fact, the Respondent admittedly
did not regard the bottom hole pay a bargainable matter.
Such unilateral action, relating as it did, to wages and other
terms and conditions of employment, amounted to a breach
by the Respondent of its bargaining obligation violative of
Section 8(a)(5) and (1) of the Act, irrespective of its good or
bad faith 37 The fact that the Respondent might have paid
bottom hole money in 1969 does not convincingly demon-
strate that this was a long-established condition of employ-
36 Cf. Food Service Company, 202 NLRB 790 (1973); Kentucky News, Incor-
porated, 165 NLRB 777, 779 (1967).
37 N. L. R. B. v. Benne Katz, d/b/a Williamsburg Steel Products Co., 369 U.S.
736 (1962).
238 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ment which exculpated its action 4 years later. Nor does the
fact that such pay was needed as an inducement to recruit
and retain roughnecks for a difficult and dangerous job
excuse its institution since it does not appear the Respon-
dent lacked the opportunity to consult with the Union be-
fore providing bottom hole pay.
As for the Respondent's unilateral grant of across-the-
board wage increases in November and December 1973, I
find this conduct similarly violative of Section 8(a)(5) and
(1) of the Act. As found above, this action was taken after
the Respondent had unlawfully withdrawn recognition
from the Union and refused to engage in further bargaining
with the Union.
IV. THE REMEDY
Pursuant to Section 10(c) of the Act, as amended, it is
recommended that the Respondent be ordered to cease and
desist from engaging in the unfair labor practices found and
in any like or related conduct and take certain affirmative
action designed to effectuate the policies of the Act. To
remedy the Respondent's unlawful refusal to fulfill its statu-
tory obligation, it is further recommended that it recognize
the Union as the certified bargaining representative of the
Company's employees in the unit found appropriate herein
and that, on request, it resume negotiations with that orga-
nization concerning rates of pay, wages, hours of employ-
ment, and other conditions of employment. An appropriate
notice for posting is also recommended.
Upon the basis of the foregoing findings of fact and upon
the entire record in the case, I make the following:
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. All derrickmen, motormen, and floorhands, otherwise
referred to as roughnecks, employed by the Respondent in
drilling operations in the area generally known as the Perm-
ian Basin, but excluding all toolpushers, drillers, office em-
ployees, technical employees, guards, professional
employees and all supervisors as defined in the Act, consti-
tute a unit appropriate for the purposes of collective bar-
gaining within the meaning of Section 9(b) of the Act.
4. At all times material herein, the Union has been the
exclusive bargaining representative of the employees in the
aforesaid appropriate unit within the meaning of Section
9(a) of the Act.
5. By withdrawing on November 14, 1973, recognition
from the Union as the exclusive representative of the em-
ployees in the aforesaid appropriate unit, and by thereafter
refusing to resume negotiations and bargain with the Union,
the Respondent engaged in unfair labor practices within the
meaning of Section 8(a)(5) and (1) of the Act.
6. By unilaterally granting its employees in the above
unit bottom hole pay on or about August 5, 1973, and
across-the-board wage increases on or about November 14
and December 3, 1973, without first notifying and bargain-
ing with the Union over these matters, the Respondent en-
gaged in unfair labor practices within the meaning of Sec-
tion 8(a)(5) and (1) of the Act.
7. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
8. The Respondent has not engaged in overall bad-faith
bargaining in violation of Section 8(a)(5) and (1) of the Act;
nor has it violated Section 8(a)(1) of the Act by threatening
employees that if they did not accept, and if the Union did
not approve, a 40-cent hourly wage increase, the Respon-
dent would "stack" the rigs.
Upon the foregoing findings of fact, conclusions of law,
and the entire record, and pursuant to Section 10(c) of the
Act, as amended, I hereby issue the following recommend-
ed:
ORDER38
The Respondent, Hondo Drilling Company, N.S.L., Mid-
land, Texas, its officers, agents, successors, and assigns,
shall:
1. Cease and desist from:
(a) Refusing to recognize and bargain collectively with
Local 826, International Union of Operating Engineers,
AFL-CIO, as the exclusive representative of the employees
in the unit described below, concerning rates of pay, wages,
hours of employment, and other conditions of employment:
All derrickmen, motormen and floorhands, otherwise
referred to as roughnecks, employed by the Respon-
dent in drilling operations in the area generally known
as the Permian Basin , but excluding all toolpushers,
drillers, office employees, technical employees, guards,
professional employees and all supervisors as defined
in the Act.
(b) Unilaterally granting wage increases or bottom hole
pay or instituting any other changes in terms and conditions
of employment, without first notifying and bargaining with
the above-named Union as the employees' exclusive bar-
gaining representative.
(c) In any like or related manner interfering with, re-
straining , or coercing employees in the exercise of their
bargaining rights through the above-named Union, which
are guaranteed to them in Section 7 of the Act.
2. Take the following affirmative action which is neces-
sary to effectuate the policies of the Act;
(a) Upon request, bargain collectively with the above-
named Union, as the exclusive representative of all the em-
ployees in the unit described above, concerning rates of pay,
wages, hours of employment, and other conditions of em-
ployment and, if an understanding is reached, embody such
understanding in a signed agreement.
(b) Post at its offices and yards in Midland, Texas, and
78 In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions, and recommended Order herein shall, as provided in Sec . 102.48
of the Rules and Regulations, be adopted by the Board and become its
findings, conclusions, and order, and all objections thereto shall be deemed
waived for all purposes.
HONDO DRILLING COMPANY, N.S.L. 239
at all its other locations in the Permian Basin area, copies
of the attached notice marked "Appendix."39 Copies of said
notice , on forms provided by the Regional Director for
Region 16, after being duly signed by the Respondent's
authorized representative, shall be posted by the Respon-
dent immediately upon receipt thereof, and be maintained
by it for 60 consecutive days thereafter, in conspicuous
places, including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by the
Respondent to insure that said notices are not altered, de-
faced, or covered by any other material.
(c) Notify the Regional Director for Region 16, in writ-
ing, within 20 days from the receipt of this Order, what steps
the Respondent has taken to comply herewith.
IT IS FURTHER ORDERED that the allegations of the amended
complaint that the Respondent engaged in overall bad-faith
bargaining in violation of Section 8(a)(5) and (1) of the Act
and that it threatened employees in violation of Section
8(a)(1) of the Act be, and they hereby are, dismissed.
39 In the event the Board 's Order is enforced by a Judgment of the United
States Court of Appeals, the words in the notice reading "Posted by Order
of the National Labor Relations Board" shall be changed to read "Posted
Pursuant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board."
wise referred to as roughnecks, employed by the
Company in drilling operations in the area generally
known as the Permian Basin but excluding all tool-
pushers , drillers , office employees , technical em-
ployees, guards, professional employees and all su-
pervisors as defined in the Act.
WE WILL NOT unilaterally grant wage increases or bot-
tom hole pay or institute other changes in terms and
conditions of employment, without first notifying and
bargaining with the above-named Union as the em-
ployees' exclusive bargaining representative.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of
their bargaining rights through the above-named
Union, which are guaranteed in Section 7 of the Act.
WE WILL bargain collectively, on request, with the
above-named Union, as the exclusive representative of
all the employees in the unit described above, with
respect to rates of pay, wages, hours of employment,
and other conditions of employment and, if an under-
standing is reached, embody such understanding in a
signed agreement.
HONDO DRILLING COMPANY,
N.S.L.
(Employer)
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT refuse to recognize and bargain collec-
tively with Local 826, International Union of Operat-
ing Engineers , AFL-CIO, described below , concerning
rates of pay, wages , hours of employment , and other
conditions of employment . The bargaining unit is:
All derrickmen, motormen , and floorhands , other-
Dated By
(Representative) (Title)
This is an official notice and must not be defaced by
anyone.
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. Any questions concerning
this notice or compliance with its provisions may be direct-
ed to the Board's Office, Federal Office Building, Rm 8-
A-24, 819 Taylor Street, Fort Worth, Texas 76102, Tele-
phone 817-334-2941.