Libby, McNeill & Libby

National Labor Relations Board - Board Decisions

Feb 7, 1946

65 N.L.R.B. 873 (N.L.R.B. 1946)

In the Matter of LIBBY, McNEILL & LIBBY and CANNERY WORKERS
UNION, LOCAL No. 20707, A. F. of L.
Case No. 19-C-1330.-Decided February 7,1946
DECISION
AND
ORDER
On June 20,1945, the Trial Examiner issued his Intermediate Report
in the above-entitled proceeding, finding that the respondent had not
,engaged in the unfair labor practices alleged in the complaint, and
recommending that the complaint be dismissed, as set forth in the copy
of the Intermediate Report attached hereto. Thereafter, the Union
filed exceptions to the Intermediate Report. Oral argument before
the Board at Washington, D. C., was not requested, and none was had.
The Board has reviewed the rulings of the Trial Examiner and finds
that no prejudicial error was committed. The rulings are hereby
affirmed. The Board has considered the Intermediate Report, the
Union's exceptions, its brief filed with the Trial Examiner, and the
entire record in the case, and hereby adopts the findings, conclusions,
and recommendations of the Trial Examiner, with the modifications
hereinafter set forth.
The Trial Examiner found that the respondent did not refuse to
bargain collectively with the Union in violation of Section 8 (5) of the
Act and recommended dismissal of the complaint. In view of the
particular facts herein, we approve the Trial Examiner's recommen-
dation. In doing so, however, we find it unnecessary to, and do not,
pass upon or adopt so much of the Intermediate Report as appraises
the legal effect of the respondent's unilateral action.
ORDER
Upon the entire record in the case, and pursuant to Section 10 (c)
of the National Labor Relations Act, the National Labor Relations
Board hereby orders that the complaint issued herein against the
respondent, Libby, McNeil & Libby, Portland, Oregon, be, and it
hereby is, dismissed.
65 N. L. R. B., No . 156. 873
874 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
INTERMEDIATE REPORT
Joseph D . Holmes, Esq , of Seattle , Wash., for the Board.
Harry George , Esq., of Portland , Oreg., for the Union.
David L. Davies , Esq, of Hart , Spencer. aleCul loch. & Roclrrrood , of Portland,
Oreg ., for the respondent
STATEMENT OF THE CASE
On a charge duly filed September 4, 1944, by Cannery Workers Union Local
No. 20707, A. F. of L., herein referred to as the Union, the National Labor
Relations Board, herein called the Board, on March 22, 1945, by the Regional
Director for the Nineteenth Region (Seattle, Washington), issued its complaint
against Libby, McNeill & Libby, Portland, Oregon, herein called Respondent,
alleging that Respondent has engaged in and is engaging in unfair labor practices
within the meaning of Section 8 (1) and (5) of the National Labor Relations
Act, 49 Stat. 449, herein called the Act. Copies of the complaint together with
copies of the charge and a notice of hearing, were duly served upon the Union
and Respondent.
Concerning unfair labor practices, the complaint alleges that since early in
1941, the Union has been the representative for purposes of collective bargaining,
of the employees of Respondent at its plant in Portland, Oregon, exclusive of
clerical and supervisory employees, as a unit appropriate for the purposes of
collective bargaining ; that on or about August 1, 1941, and at all times thereafter,
Respondent refused and continues to refuse to bargain collectively with the
Union as the exclusive respresentative of the employees in the above unit, in
respect to rates of pay, wages, hours of employment, and other conditions of
employment and, more particularly, refused to discuss or negotiate incentive
pay regulations governing the wages, hours of employment, and other conditions
of employment of its employees in the unit, which regulations it unilaterally
established and is now maintaining at its plant; and that the above action of
Respondent constitutes an unfair labor practice affecting commerce within the
meaning of Section 8 (1) and (5) of the Act.
Respondent duly filed its answer admitting the allegations in the complaint
concerning the corporate existence of Respondent, the maintenance of an office
and place of business in the State of Oregon. and the nature and extent of the
business done by it which affects commerce; that the Union is a labor organiza-
tion within the meaning of Section 2 (5) of the Act; and that all the employees
of Respondent at its plant in Portland, Oregon, exclusive of clerical and super-
visory employees, constitute a unit for the purposes of collective bargaining
within the meaning of Section 9 (b) of the Act. The answer denies, for lack
of information, that the Union is the exclusive representative of the employees
with the unit; specifically denies that Respondent refused or continues to refuse
to bargain collectively with the Union in respect to rates of pay, wages, hours of
employment, or conditions of employment; alleges that it did so bargain and that
as a result thereof written agreements were made with the Union for the years
1942, 1943, 1944; that Respondent has explained and discussed its incentive pay
plan with the Union's representative and with the Union's negotiating committee
from time to time since 1941 and that the Union refused to discuss or negotiate
the incentive pay plan. The answer further specifically alleges as follows :
The incentive plan was unilaterally established in 1941 at a time when
there were no negotiations or union requests pending in connection there-
with. It has been thoroughly and repeatedly discussed with the representa-
LIBBY, McNEILL & LIBBY 875
tives of the Union and with all employe members of the Union who showed
any interest in it.
The answer further alleges that the rates of pay. wages, hours of employment,
and conditions of employment are governed by collective bargaining agreements
with the Union; that the hourly pay system has never been changed or the rates
varied by any unilateral action of Respondent, but that all hourly rates of pay
agreed upon with the Union have been paid, and that in addition thereto, the
Respondent voluntarily instituted an incentive pay plan in 1941 to pay its em-
ployees for extra production as a premium over the agreed hourly rate; that in
1944. the Union demanded that all provisions for piece work and for incentive
pay be eliminated, and that w hen this clen,.and was presented co the War Labor
Boaid, the Uniqn's demand was denied' and i directive order issued requiring
that the contract, effective as of April 1, 1944, contain a provision:
Any proposed changes in piece work or in incentive pay shall be the subject
for collective bargaining between the parties.
The answer further states that incentive pay regulations have not been changed
since that agreement was executed, and that no changes are contemplated.
Pursuant to notice of hearing issued by the Regional Director and duly served
upon the parties, a hearing on the complaint was held at Portland, Oregon, on
April 26 and 27, 1945, before the nndeisigued. R. N. Denham, the Trial Examiner
duly designated by the Chief Trial Examiner. The Board, the Union, and Re-
spondent appeared and.were represented by counsel. All parties participated
in the hearing and weir afforded full opportunity to be heard, to examine and
cross-examine witnersaes, mid to pieseiit evidence pertinent to the issues. At
the close of the hearing the motion of counsel for the Board to conform the plead-
ings to the evidence in all matters of form was granted without objection and
made applicable to the correction of the spelling of names, dates, and other minor
matters that do not go to the main issues in the case There was no argument
by counsel at the close of the hearing, but in iefs have been received from counsel
for the Board, for the Union, and for the Respondent.
Upon the basis of the foregoing and on the entire record, after having heard
and observed the witnesses and considered all the evidence offered and received,
the undersigned makes the following:
FINDINGS OF FACT
I. THE BUSINESS OF RESPONDENT
Respondent, Libby, McNeill & Libby, is a corporation duly organized and exist-
ing under and by virtue of the laws of the State of Maine and licensed to do
business in the State of Oregon. It maintains an office and place of business
in the City of Portland, Oregon, where it is engaged in the processing and pack-
ing of fruits and vegetables in cans and glass jars, and occasionally in wooden
containers The fruits and vegetables used are obtained from the States of
Oregon and Washington, and occasionally from some other States, and are valued
at more than $1,000,000 per annum. Approximately i0 percent of the production
of the Portland plant is delivered to fill war contracts. Respondent concedes
that it is engaged in commerce within the meaning of the Act.
IT. THE ORGANIZ ATION INVOLVED
Cannery Workers Union, Local No. 20707, affiliated with the American Federa-
tion of Labor, is a labor organization admitting to m,einbership the employees of
Respondent at its plant in Portland, Oregon
876 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
,III THE ArLEGL9) UNr AIR LABOR PRACTICES
A. The appropriate writ
It was stipulated by all the parties and admitted in the answer of Respondent„
that all the employees of the Respondent employed at its plant in Portland, Ore-
gon, exclusive of clerical and supervisory employees, constitute a unit appropri-
ate for the purposes of collective bargaining within the meaning of Section 9 (b)
of the Act. It is accordingly found that the foregoing described unit is a unit
appropriate for purposes of collective bargaining within the meaning of the Act.
B. Representation of rniploilee.s big the Union
In 1937, the Union was recognized by Respondent as the representative of a
majority of the employees within the above-described unit and as the exclusive
representative for purposes of collective bargaining, of all the emplosees'within
the unit. Since the original recognition in 1937, Respondent has continuously,
and at all times up to the present time, so recognized the Union' and has, each
year, entered into a contract with the Union as such exclusive representative,
concerning matters having to do with wages, hours, rates of pay, conditions of
employment and other matters normally the subjects of collective bargaining.
It is found that the Union is now and at all times since 1937 has been, the
bargaining representative designated by a majority of the employees within the
above-described appropriate unit, and, by virtue of such designation has been
and is the exclusive representative of all the employees in such appropriate unit
for purposes of collective bargaining with regard to matters concerning wages,
rates of-pay, hours, of,employmertt, and other conditions of employment.
C. The alleged refusal to bargain
Aside from the fact that the Union has been recognized by Respondent and has
represented the employees within the above-described appropriate unit as their
exclusive representative for purposes of collective bargaining since 1937, the rela-
tions of Respondent and the Union prior to 1941 are not material herein.
The 1940 contract expired April 1, 1941. In anticipation of this expiration, and
in accordance with established custom, negotiations were entered into by the
Union and Respondent in the early months of 1941, looking to the negotiation of
a new contract for the period April 1, 1941-March 31, 1942. These negotiations
were concluded in the early part of June and resulted in a contract which was
approN ed and executed by the Union and Respondent on June 12, 1941, retroactive
to April 1, 1941. This contract contains the usual type of provisions in labor con-
tracts covering minimum hourly rates for straight time, overtime rates, differen-
tials between male and female workers where such differentials were, indicated,
holidays, the adjustment of grievances, seniority, a no-strike-provision, and a
scale of minimum wages Piece work for certain jobs has been customary for
many years and the minimum wage schedule provided "all piece wdrk rates must
be approved by the Union "
In 1940, Respondent engaged the services of a firm of efficiency engineers to
make time studies of all the operations concerned with the handling and canning
of the different fruits and vegetables processed by Respondent at its plant in
Portland, with a view to determining the normal average production in each oper-
ation for a given unit of time, and, by deduction from these findings, to determine
' At the hearing, Respondent stipulated that the Union, since 1937. has been and is now
the exclusive representative of all the employees within the unit.
LIBBY, McNEILL & LIBBY 877
average normal costs to Respondent of each unit of production, broken down
into the component units of operation which go to make up the finished products.
Having determined from these studies the average cost of unit production based
upon the average production of the various employees in the plant, the engineers
set up itli elaborate system of bonuses to pay the employees over and above their
agreed hourly rate. for production in excess of the experienced average normal
pi oductior reflected by the time studies. By this incentive pay system, none of
the established hourly pay rates Nxere disturbed and in no event was the estab-
lished pay of any individual reduced The plan (lid no more than provide a
medium whereby an employee capable of producing more than the normal aver-
age` could receive additional compensation for such over-production. It was a
pay increase conditioned on incieased production.'
On or about June 30, 1941, the employees in the warehouse were assembled
and the new incentive pay system was explained to them by `the ' oflicitils 'iii
charge. It as immediately put into°effect in that department. From time
to time thereafter it was installed in other departments as the time studies
progressed, the latest installation being in the pickle department in January
and February 1944' 'there is no evidence that Respondent's intention to
introduce the incentive pay plan was discussed with the Union during negotia-
tions culminating in the contract of June 12, 1941. In fact, Respondent makes
no contention that the plan was ever negotiated in any respect with the Union
prior to its introduction on June 30, 1941. The following excerpt from the
record reflects that fact and the Company's position pertaining to the introduc-
tion of this plan:-
Mr. DAVIES [counsel for Respondent] There is' no - question- by.
the Company that this was not negotiated by the Union as a union matter;
it is the Company's position and has been the Company's position that it
didn't require negotiating, that we would be willing to state without further
testimony on that score it was not negotiated with the Union.
Trial Exanunei DENHAM I gather from reading the Answer that the
Company is not making any contention that there was any negotiation
on the matter of the installation of the incentive pay system, and the
sole position taken by the Company in the pleadings, it seems to me, is
that the Company was paying all the employees on an hourly rate and
that the hourly rate was a negotiated rate, bargained for each year, and
that the incentive pay system was something that was over and above
the hourly rate, and not a part of the contract, not negotiated even, and
2
while"the mechanics of the plan, its basic factors for purposes of computing premiums,
and the relative rate of pay reflected by such computations, were discussed by some of the
Witnesses, the merits of the plan as a medium for fair evaluation of over-production earn-
ings is not in issue here . It is material only that the working of the plan did not disturb
the amount of money paid any employee as wages under the provisions of the contract.
' The introduction of this plan was in line with a general policy of Respondent to install
the plan in its plants throughout the United States. Although it still is not universal
in all plants, most of them on the west Coast operate under it
4
According to McLane's testimony (McLane is a union representative), notice of a
desire to renegotiate the contract was supposed to he given 60 days prior to expiration
and negotiations were supposed to start within 15 da} s after the notice, which would
place the beginning of negetiations about February 15 McLane testified that to the
best of his recollection. the system was introduced in the warehouse in February or
Mareh 1941 However, McLane was unable to state that negotiations were then under
way "because negotiations didn't always start on the time designated. but they were
supposed to" Against this indefinite and ursatisfactorv testimony, the officials of Re-
spondent, with record, by which to be sanded, testified that the plan was inaugurated
June :30. 1941 That date has been accepted as the correct one
878 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
simply superimposed on the hourly rate voluntarily by the Company and
without conference with the Union; is that correct?
Mr. DAvIES . That is a correct statement.
Shortly following the foregoing colloquy, counsel for Respondent made the
following statement on the record:
. . . the Company stipulates that it engineered and established this
incentive pay plan and bonus plan ; that it was unilaterally established,
without negotiations between the Company and the Union or the negotiating
committee with respect thereto ; that the incentive bonus plan provides
for bonuses over and above the minimum rates for each classification in-
volved, and set up in the bargaining agreement between the Company and
the Union. In making this stipulation, the Company wishes the examiner to
understand and the record to show that it expects to offer evidence of
numerous discussions and explanations of the incentive bonus plan with
many of the employees ngcludnng, of course, many union members and union
officials; but that these discussions and conversations were not negotia-
tions in the manner outlined in the contract.
It was further agreed by counsel for Respondent that "nothing with reference
to the establishment, the engineering, and the instalh.tion and changing or
the amending of the application of the plan has ever been negotiated with
the Union."
Since the inauguration of the plan, each employee who has exceeded the
normal unit of production on what is termed the "labor index," has received two
checks on his pay day; one check represents his regular pay at the agreed terms
of the contract,.and the other represents bonus earnings for the pay period.
These double payments, starting in July 1241, have continued through to the
present time and were well known to the Union and union officials from the
beginning . The basis of computation is not a simple one and, as a result, fre-
quent questions have been raised by employees and frequent conferences have
been held by individual employees and groups of employees, at their request,
with the manager of the "Cost Control" (incentive pay system), in which the
manager was called upon to explain the working of the system and its applicability
to the pay checks of the persons who might at that time be inquiring. These
conferences involved non-member employ ees, union employees, and union officials
alike. There can be no question but that the existence of the incentive pay
system and its general workings were well known from its inception to prac-
tically every employee in the plant, including the members and officers of the
Union.
The Union voiced no objection to the plan when it was intioduced, and in
early 1942, negotiated a new contract with Respondent, with extended provisions
concerning wages and the methods for computing them together with a much
more comprehensive schedule of wages for the various classifications than had
been contained in the contract for the previous years. This contract is silent,
however, on the subject of the incentive pay system and the record indicates
that during these negotiations the subject of the plan was not discussed by either
the Union or the Company. That the 1942 contract was entered into with full
knowledge by the Union of the existence of the plan and its operation, and was
made in contemplation of it, may be presumed in the light of all the fon egoing.
During the life of the 1942 contract, which expired April 1, 1943, only once
was a question concerning the operation of the plan raised by the Union. as is
hereinafter noted, although its application to their own pay was discussed with
and explained to all who inquired, including union officials In eani,y 1943,
when a new contract was to be executed, again the matter of the incentive pay
LIBBY, McNEILL & LIBBY 879 ,
plan was not injected into the negotiations by either of the parties. The contract
of April 1, 1943, follows very much the line of the previous contract and is
entirely silent on the subject of incentive pay or bonuses, notwithstanding that
the plan had then been in operation for almost 2 years.
On March 15, 1913, a meeting was held to consider certain changes in the opera-
tion of the plan as to the warehouse work. This was called at the insistence of
L. D. McLane, a warehouse employee who had just become business manager
of the Union, and was attended by K. C. Hardwicke, the Northwest District
Superintendent of Respondent, a Mr. Dempster, president of the Union, McLane,
and one or two other company officials. Hardwicke's testimony on the matters
considered at the meeting, and the results accomplished, is uncontroverted and
uncontradicted, and reads as follows :
... We discussed ways and means of best checking the production being
turned in by the warehouse and adopted several suggestions of the Union
representatives at that time. They requested-the men were checking
themselves-and they requested that there be checkers put out and that
there be more education given to the men in the warehouse, and that there
be employees who should check the production records every day, and all
the points concerning it.
We went out of they meeting and actually put into operation the various
suggestions with respect to checking following that meeting; from my
checks with Mr. Dempster and with Mr. McLane, whether they were satis-
fied, and they apparently were.
The purpose of this meeting was to clarify some questions that had been
raised in the warehouse as to the method of securing production figures for these
men, on which to base their premiums. So far as the testimony of any of the
witnesses discloses, this was the fist incident when the matter of the operation
of the incentive pay plan was discussed between officers of the Company and
representatives of the Union, and anything of the nature of collective bargaining
with reference to the plan, was engaged in.
In May 1943, Frank Morris was placed in charge of administering the plan.
Numerous employees had complained about their inability to figure their premiums
and had asked to have the working of the plan explained to them. This was done
in every instance, using the inquiring employee's production as the working
example. The confusion of the employees over the plan which obviously is
highly complicated, resulted in Morris calling in Dempster, the president of the
Union, and officially inviting the Union to designate some representative from
among its numbers or of its selection, to go into the office and devote as much
time as might be necessary, which Morris estimated would be 6 months, to a
study of the incentive pay plan and its application, with his salary during the
period of study, paid by the Company, in order to provide the Union with some-
one who could serve it as an expert on the application ofy the plan and assist
the Union in handling any grievances or negotiations involving the plan. Noth-
ing was ever done with this proposal and no reply ever made by the Union, either
accepting it or rejecting it c
5 There is some testimony that in September 1943, at a meeting of the foreladies called
to discuss with Hardwicke the type of production reports thet were to turn in for the
computation of the bonus, one of those present asked that McLane be called into the meet-
ing but the request was refused on the ground that this was a matter of management
administration and did not involve matters with which the Union was concerned. It is
found that the position then taken by Hardwicke was appropriate and not in derogation
of any of the rights of the Union or its representative.
679100-46-vol. 65-57
880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In the negotiations for the 1944 agreement which began in the early part of
that year, the Union brought the subject of the incentive pay plan into the bar-
gaining negotiations for the first time since its inauguration on June 30, 1941.
It presented a proposed contract which contained the following as Section VI,
paragraph c:
There shall be no company form of piece work or incentive pay in any given
plant without the approval of then bargaining agent of the employer and the
local union concerned.
When this question was reached in the negotiations (April 25, 1944), Respondent
offered to and did bring Morris and another man associated with the administra-
tion of the plan into the meeting to explain and discuss it with the Union's
negotiation committee. The committee, however, refused to discuss the plan
with them or anyone else representing Respondent, saying that they did not
want to discuss "Cost Control" but "wanted to get rid of it."
These negotiations resulted in an impasse between Respondent and the Union
on the questions of the incentive pay plan, retention of piece work, check-off,
overtime, and vacations, and in due course the entire dispute was referred to
the Regional War Labor Board for disposition. Meantime, the Company had
been holding some further discussion with the representatives of the Union
concerning the labor indices under the incentive plan and, on June.30, 1944,
wrote the Unibn suggesting certain changes which would reduce the index of
minimum production to a point where the computation of the premium would
begin at a lower production level, thus putting the employees in the premium
earning group somewhat sooner and, in effect, increasing the earnings of all who
could meet the new reduced minimum. This could only be done with approval
by War Labor Board and the Director of Stablization, and required a War Labor
Board Form 10 application. In the letter transmitting this proposal to the
Union, Respondent renewed its suggestion that the Union select someone to
study and assist in checking the cost control work standards (the incentive pay
plan), and, as the main subject of the letter, advised the Union of its desire to,
submit the proposed increase to the War Labor Board on a Form 10 if the Union
would join in the execution of such application, in order to put the potential
increase in pay into effect. The Union failed to reply to the letter after con-
sidering it in its meetings As a result, the original schedules are still in effect
and the Union has as yet made no effort to familiarize itself with the structure
and operation of the plan, pursuant to the invitation of Respondent to do so
On September 21, 1944, the Twelfth Regional War Labor Board handed down
its directive concerning the dispute over the terms of the 1944 contract, in which
it stated, with reference to the demands of the Union, that the incentive pay
plan be abolished:-
Section VI, paragraph C of the proposed Union agreement shall not be
incorporated in the Collective Bargaining Agreement between the parties
but said Collective Bargaining Agreement shall provide that any proposed
changes in piece work or in incentive pay shall be the subject for collective
bargaining between the parties.
Following the above directive, the contract to cover the period from April 1,
1944, to March 31, 1045, was placed in final form and executed by the parties, with
the following provision incorporated :
Any proposed changes in piece work or in incentive pay shall be the subject
for collective bargaining betwen the parties.
LIBBY McNEILL & LIBBY 881
After the directive of September 21, 1944, and the execution of the 1944 contract,
no changes were made in either the piece-work rates' or in the incentive pay
rates; consequently the collective bargaining features provided for in the
contract were not invoked.6
Throughout this controversy, Respondent has taken the position that the in-
auguration and maintenance of the incentive pay plan is one of the prerogatives
of management and not properly a subject of collective bargaining.
In appearing before the Regional War Labor Board in connection with the
dispute over the provisions of the 1944 contract, Respondent filed a comprehensive
brief in which it took this position before the Board In its brief to the War
Labor Board, it said:
PIECE WORK AND INCENTIVE PAY
Section 6, paragraph C, on page 5 of Contract submitted by the Union,
provides:
There shall be no company form of piece work or incentive pay in any
given plant without the approval of the bargaining agent of the employer
and the local Union concerned.
The position of the employer with respect to this question is that it relates
entirely and solely to management and is not to be regarded as a subject for
collective bargaining. Piece-rate work is historical. It has been the practice
in the canning industry almost from the beginning of commercial canning.
By the reason of the highly seasonal nature of the work required to be
perfoimed in canneries, piece-vvoik and an incentive is the appropriate means
whereby seasonal and perishable products may be saved from spoilage.
The maintenance of piece work and incentive payment is a function of and
prerogative of management. As required, the base rates are paid for these
operations and the piece earnings and incentive may be in excess of these
base rates. The premiums earned over and above bases are due to superior
skill or greater effort gxercised by the worker. It is equitable and logical
to pay such premiums based on the worker's actual performance.
That such a position is untenable as a matter of general principle, ha§ been long
established by this Board, but the installation of an incentive pay plan without
first consulting with the Union is not necessarily an unfair labor practice, per se.
Whether the unilateral establishment of this plan falls in the proscribed class
will be discussed subsequently herein, in the light of all the surrounding cir-
cumstances.
In March 1943, negotiations were opened for the 1945 contract. In these nego-
tiations the Union again took the position that the incentive pay plan should be
abolished and stated that the Union could not understand it or its application
As a condition to negotiating the plan, the Union demanded that the Company
furnish it with a complete copy of all the schedules, data, and statistics as well
9 Some question was raised during the hearing, concerning an alleged change in the
method of computing the premium on cutting cauliflower. It developed however that
there was no change in the method of computing the premium but that a method was
changed with reference to determining the weight of the cauliflower handled by the opera-
tors , by making actual records of the weight of the vegetable handled instead of using
estimated weights and average weights as had been clone in the past , under which system
it was possible for operators to only partially fill their boxes but to get credit for full
boxes It was to correct this practice that the weighing of the actual cauliflower handled
by each operator was adopted It did not iesult from any change in the method of com-
puting the premiums , or in the operations , and was solely an administrative action to
permit accurate compliance with the i tiles then existing
882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
as the rates and other material upon which the computation of the incentive
pay premiums were based, and further demanded that a copy of the same material
be attached to and be made a physical part of any contract that should be nego-
tiated. Actually, according to the testimony of the Union' s officers , the Union
wanted only one thing-the abolition of the plan. The Respondent's representa-
tives protested that the demand of the Union for such copies was impracticable
in view of the fact that the data consisted of a volume about 8 inches thick,
made up of typewritten schedules and statistics, and that such a volume could
not be reproduced within the range of practicability ; but at the same time,
announced that the data was all available in the office and could be examined
at any time by the Union or its representative. Again Respondent called atten-
tion to its offer to pay the wages of any person whom the Union might select
to go into the office and make a study of and receive an education on the opera-
tion of the plan. The Respondent volunteered however to make up a sample
sheet and resume of typical operations of the plan, which would illustrate the
manner in which it worked, although it could only give spot examples of the
actual application of the premium system to specific operations. This demand
of the Union and suggestion of the Respondent was made at the last meeting
held previous to the nearing and was in the presence of a Conciliator of the
United States Department of Labor. Two days later, such sample sheet and
resume were prepared and delivered to the Union's officials. Again, in the
transmittal document which accompanies the sample schedules, Respondent
advised the Union as follows:
The Company holds its records available at all times for checking by any
operator or by someone designated by the union to represent the workers.
The Company will give this man the training which is necessary to fit him
for the job of checking on any situation that may arise regarding standards
or the application of this plan.
The Union continued to ignore this offer and suggestion of Respondent, and has
made no effort to inspect the data but has stood firm in its position that it desires
only the elimination of the piece-work system and the incentive pay plan here-
tofore dealt with.
At all times, both before and since the directive of the Regional War Labor
Board on September 21, 1944, and up to and including the hearing, Respondent
has neither made nor suggested any changes in the plan without first referring
them to the Union with an invitat.on that the Union confer with it about them.
Respondent has bargained with the Union on every occasion when the latter has
requested it, with reference CO the existence and provisions of the plan. In some
of these meetings, agreements have been reached on matters concerning the
administration of the plan, but in those meetings, when the Union'has demanded
the abandonment of the plan, the result has been an impasse. Respondent has
evidenced its willingness to bargain on the provisions of the plan and so stated
at the hearing, but indicated that it is Respondent's policy, however, not to
abandon the plan, although counsel for the Respondent stated for the record in
making a reply to an inquiry from counsel of the Board, that bargaining with
reference to the provisions very well could consist of bargaining for the ehrnina-
tion of all the provisions of the plan, but that "bargaining" does not necessarily
connote "agreeing" with the Union on its demands.
Conclusions
,The gist of the complaint here is that on June 30, 1941, while the Union was
the recognized exclusive bargaining representative of the employees, Respondent
LIBBY, McNEILL & LIBBY 883
unilaterally and without conference with the Union, put into effect an incentive
pay' plan which affected the wages and working conditions of the employees, and
by so doing ipso facto refused to bargain with the Union and engaged in an unfair
labor practice within the meaning of Section 8 (5) of the Act. The subsequent
maintenance of such incentive pay plan is cited as a continuance of such unfair
labor practice. Respondent freely admits that on the date stated, it unilaterally
inaugurated the incentive pay plan but denies that by so doing, and by subse-
quently maintaining it, any unfair labor practice has been engaged in, under all
the circumstances. The facts are not in great dispute.
On June 12, 1941, Respondent and the Union entered into their fifth consecutive
annual contract, effective as of April 1, 1941, which contract contained the
following clauses pertaining to wages :
Section 3 Wages. (a) Minimum wages shall be those set forth on the
list attached hereto and made part of this Agreement.
(b) No monthly, weekly, or hourly wage now being paid above the
minimum scale established hereby shall be reduced for any cause during
the life of this agreement for the same or equivalent work. . . .
(c) The employees shall be paid weekly.
On June 30, 1941, when the incentive pay plan was put into operation, all
negotiations pertaining to they relations of the Respondent and the Union had
been concluded and embodied in the written contract above referred to. Wage
scales had been set covering piece work and hourly rates. There were no nego-
tiations of any kind pending between Respondent and the Union and there is
nothing in any part of the record to indicate that at any time Respondent has
ever evidenced any antipathy toward the Union or any reluctance to bargain with
it on matters which were appropriate matters for collective bargaining. In
inaugurating the plan, Respondent in no way disturbed the then going wage
rates. It continued the hourly and piece work rates then in effect but, by means
of the incentive pay plan provided a medium whereby employees might incre ise
their weekly pay through the medium of increased production' The record
fails to suggest that the unilateral action of the Respondent in inaugurating the
plan was designed to belittle the Union or diminish its influence, but rather it is
undisputed that the establishment of such an incentive pay plan was a part of the
over-all policy of Respondent, which it had inaugurated or was inaugurating
in a very substantial number of its plants through the United States.
A refusal by an employer to bargain collectively with the designated represent-
ative of a majority of his employees is defined as an unfair labor practice under
Section 8 (5) of the Act, because it is one of the practices which, in the opinion
of Congress, as expressed in the passage of the National Labor Relations Act,
tends to interfere with, restrain, and coerce the employees in the exercise of the
rights guaranteed them in Section 7 of that Act. With this as a premise which
is inescapable, the action of Respondent here complained of must be measured
by the answer to the question as to whether it tended, per se, to interfere with,
restrain , or coerce, the employees in the exercise of the rights guaranteed them
in Section 7 of the Act. I am unable to see where it does any of these things.
In all the cases where the Board has considered the effect of unilateral pay
It was conceded that throughout its relations with the Union since 1937 Respondent
has made numerous upward adjustments of rates and wages, applicable to individuals or
groups, without consulting with the Union and that the Union has never raised a question
as to the propriety of such action nor evidenced any interest in discussing them other than
to provide in its annual contracts that wages being paid above the prescribed minima
may not be reduced without the approval of the Union.
884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
increases and has found them to l , per se , violations of Section 8 (5), the em-
ployer has been in 'some kind of a controversy with the Union , and it has been
found that such unilateral action was designed to undermine the Union in some
regard and to deprive it of the bargaining representation conferred by the Act.,
In each of those cases , also, the Union promptly acted to invoke the protection
of the Act against such conduct. V. 0. Millniq Company , 43 N. L. R B 348;
Henry McCleary Timber Company , 37 N. L . It. B. 725, The Barrett Company, 41
N. L. R B . 1327 , enf'd 120 F. ( 2d) 583 (C. C. A. 7) ; George P. Pilling & Son Com-
pany, 16 N . L. R. B. 650, enf 'd 119 F. ( 2d) 32 (C. C. A. 3). On the other hand,
in those decisions , the Board indicates that it is not the unilateral concession
that is an unfair labor practice , but the granting of the concession while bargain-
ing is in progress on the same subject, thus deteriorating the value of the Union's
efforts in the eyes of the employees . Where the situation has been free of such
circumstances , the Board has found such a unilateral concession to be legitimate,
as something put into effect by the employer pursuant to normal business policy.
Sam M. Jackson , et at., 34 N. L . It. B 194; Montgomery Ward & Co., Incorporated,
39 N. L. R. B. 229.
It is accordingly found that the establishment of the plan by the unilateral
action of Respondent in June 1941 , and the subsequent maintenance and applica-
tion of the plan, all without protest from or objection by the Union and as a part
of normal over-a l l business policy did not constitute a refusal to bargain with the
Union.
Following the establishment of the plan , the Union remained silent and accepted
its application without question for 2 years . In 1943, the Union made its first
approach to Respondent concerning the plan This had to do with its adminis-
tration in the warehouse . A bargaining conference was held with union officials
and the matter adjusted to the satisfaction Of all. The contracts for 1942 and
1943 were both negotiated by the Union in those respective years without men-
tioning the plan or bringing it into the bargaining negotiations . The second time
the plan was brought to the surface by the Union was in the negotiations for the
1944 contract . No one has accused Respondent of not bargaining with the Union
concerning the plan at those conferences An impasse was reached on the Union's
demand for the elimination of the plan and other items. The War Labor Board
disposed of this demand by rejecting it. The next occasion when the Union
broached the subject of the plan was in the negotiations for the 1945 contract.
Its position had not changed from the negotiations for the previous year. Only
its approach was different . Again there was an impasse , but no failure on the
part of Respondent to bargain.
In its brief , the Union dwells on the failure of Respondent to physically supply
the Union with it copy of all the data, statistics , schedules and other matter from
which the plan is formulated , and charges Respondent with refusing to agree to
physically attach such a copy to the 1945 contract when and if it is finally negoti-
ated There is no merit in either of these contentions . The record is silent on
the latter point. On the former , the refusal was based on the impracticability of
the request , since the material requested is made up into a massive volume of
typewritten matter and cannot, in reason, be copied for such a purpose. It is
admitted by the Union , that in response to this request , Respondent advised the
union committee that the whole record pertaining to the plan is available in its
office for inspection by the Union at any time , and that the Union has never made
an effort to inspect it The same is true of Respondent 's repeated invitations to
the Union to designate someone to receive instruction , with pay, concerning the
structure and operation of the plan, which the Union has ignored.
LIBBY, McNEILL & LIBBY 885
After accepting the benefits of the plan for almost three years without protest
or objection, the Union decided in 1944, that it wanted the plan eliminated. It
attempted to accomplish this through the medium of collective bargaining but 'vwas
unsuccessful. An impasse resulted and an appeal was made to the War Labor
Board to compel Respondent to yield to the Union's demand. This, too, was un-
successful. Now the Union seeks to accomplish its desire by attacking the
initiation of the plan. The attack comes too late. The Union accepted the plan
in the first instance and took its benefits for almost three years It should have
voiced its objection when the plan was introduced Having accepted it, there was
nothing for Respondent to bargain about until the Union brought it up for bar-
gaining, and when the Union did raise any questions concerning the plan,
Respondent did, in fact, fulfill all the requirements of good faith bargaining. It
is therefore found that, at no stage has Respondent refused to meet with the
Union and bargain on any feature having to do with the plan or any other matter
pertaining to proper subjects of collective bargaining, or has in any other regard
engaged in unfair labor practices within the meaning of the Act.
Upon the foregoing findings of fact and upon the entire record of the case, the
undersigned makes the following
CONCLUSIONS of LAW
1 Canning Workers Union Local No 20707, A. F of L , is a labor organization
within the meaning of Section 2 (5) of the Act.
2. Respondent is engaged in commerce within the meaning of the Act.
3. Respondent has engaged in no unfair labor practices within the meaning
of the Act.
RECOMMENDATIONS
Upon the foregoing findings of fact and conclusions of law and upon the entire
record herein, the undersigned recommends.-
1. That the complaint herein be dismissed.
As provided in Section 33 of Article II of the Rules and Regulations of the
National Labor Relations Board, Series 3, as amended, effective July 12, 1944,
any party or counsel for the Board may within fifteen (15) days from the elate
of the entry of the order transferring the case to the Board, pursuant to Section
32 of Article II of said Rules and Regulations file with the Board, Rochambeau
Building, Washington 25, D. C., an original and four copies of a statement in
writing setting forth such exceptions to the Intermediate Report or to any other
part of the record or proceeding (including rulings upon all motions or objec-
tions) as he relies upon, together with the original and four copies of a brief in
support thereof. Immediately upon the filing of such statement of exceptions
and/or brief, the party or counsel for the Board filing the same shall serve a
copy thereof upon each of the parties and shall file a copy with the Regional
Director. As further provided in said Section 33, should any party desire
permission to argue orally before the Board, request therefor must be made in
writing to the Board within ten (10) days from the date of the order transferring
the case to the Board.
R N DENHAM,
Trial Examiner
Dated June 20, 1945.