Liquor Industry Bargaining Group

National Labor Relations Board - Board Decisions

May 2, 2001

333 N.L.R.B. 1219 (N.L.R.B. 2001)

LIQUOR INDUSTRY BARGAINING GROUP 1219
Liquor Industry Bargaining Group and Fedway As-
sociates and Local 19d, Wine and Liquor Sales-
men of New Jersey, United Food and Commer-
cial Workers, AFL–CIO
Royal Division of R&R Marketing, L.L.C. and Local
19d, Wine and Liquor Salesmen of New Jersey,
United Food and Commercial Workers, AFL–
CIO
The Jaydor Corporation and Local 19d, Wine and
Liquor Salesmen of New Jersey, United Food
and Commercial Workers, AFL–CIO. Cases
22–CA–19915, 22–CA–20497, and 22–CA–20963
May 2, 2001
DECISION AND ORDER
BY CHAIRMAN TRUESDALE AND MEMBERS
LIEBMAN AND HURTGEN
On April 15, 1997, Administrative Law Judge Robert
T. Snyder issued the attached decision. The Respondents
filed exceptions and a supporting brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and brief and has decided to
affirm the judge’s rulings, findings, and conclusions and
to adopt the recommended Order as modified.1
1. The 8(a)(5) allegation against Respondent Liquor In-
dustry Bargaining Group
The Union represents sales representatives employed
by the employer-members of Respondent Liquor Indus-
try Bargaining Group (the Group), a multiemployer
group composed of wholesale liquor distributors, and has
had a collective-bargaining relationship with the Group
over many years. The most recent collective-bargaining
agreement between the Union and the Group ran from
October 1, 1990, to September 30, 1993. In mid-1993,
the Union and the Group began negotiating the terms of a
successor collective-bargaining agreement. Following
months of bargaining to reach a successor agreement,
including a 16-day strike by unit members, the Group
made a final contract proposal to the Union on March 24,
1994. By letter dated May 13, 1994, the Group an-
nounced that it planned to implement the final proposal
on June 1, 1994. The Group’s final proposal encom-
passed a number of modifications to the expired agree-
ment, most dramatically the unit members’ compensation
plan.

1 The Respondents move to reopen the record to introduce a collec-
tive-bargaining agreement dated March 31, 1997, and the certification
of results of election in Case 22–RD–1287 dated May 11, 2000. The
Respondents claim that this agreement shows the Union accepted a
proposal similar to one at issue in the instant case, and consequently
rebuts the judge’s finding that their wage proposal unlawfully dero-
gated the Union. Further, the Respondents claim the decertification by
Fedway unit employees evidences that the employees do not object to
the proposal that the judge found unlawful.
We deny the motion to reopen the record as it seeks to adduce evi-
dence of events occurring after the close of the hearing. See Modern
Drop Forge Co., 326 NLRB 1335 fn. 1 (1998); WXRK, 300 NLRB 633
fn. 1 (1990); Contemporary Guidance Services, 291 NLRB 50 fn. 2
(1988). Furthermore, we find that such evidence does not compel a
different result in the instant case. That the Union accepted the agree-
ment the Respondents seek to introduce, or that Fedway employees
have chosen to decertify the Union, has no bearing on whether their
course of conduct in the instant case constitutes bad-faith bargaining.
Citing Sec. 102.46(h) of the Board’s Rules and Regulations, the Re-
spondents request special leave to file a supplemental brief addressing
“the applicability and impact upon this case” of Detroit Typographical
Union No. 18 v. NLRB, 216 F.3d 109 (D.C. Cir. 2000). The Board
takes notice of the court’s decision, but denies the request for further
briefing. In addition, the Board finds the court’s decision to be distin-
guishable for the reasons stated infra.

Article 6.01 of the expired agreement provided a basic
5-percent commission rate to be paid to employees on
the sales of all liquor, with slightly different rates for
domestic still wine and other items. Sales representatives
made the bulk of their annual salary through these com-
missions. The Group’s final proposal altered article 6.01
by eliminating the commission-based compensation plan
and, in its stead, establishing that “sales representatives
shall be compensated in accordance with the wage and
salary programs put into effect by the Employer.”
The new plan guaranteed a 1-year transitional salary of
the lesser of 75 percent of the sales representative’s prior
year’s commissions or $50,000. It further guaranteed a
minimum annual salary of $25,000 to each sales repre-
sentative. However, the new wage proposal was silent as
to how the Group’s member-employers would set each
sales representative’s wage. The proposal stated that
prior to implementation of the new wage structure, the
Employer would provide each sales representative and,
upon request, the Union, with “a written explanation of
the wage and salary compensation program applicable to
that sales representative.” In addition, article 6.01 of the
Group’s final proposal exempted the terms of the pro-
posed compensation plan from the contract’s grievance
and arbitration procedures. The final offer also included
the no-strike, no-lockout language of the prior contract.
Thus, under the final contract proposal, the unit employ-
ees and their representative would have no input into the
establishment of their compensation, and would have no
means by which to dispute it following its implementa-
tion.
During negotiations, the Union sought details from the
Group regarding the meaning and implications of the
new article 6.01. At the bargaining table, the Union re-
quested information from the Group’s negotiators regard-
333 NLRB No. 137
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1220
ing the method the Group intended to use to set compen-
sation for each sales representative, and emphasized that
it wanted to maintain its representative role in negotiat-
ing compensation. Shortly before the Group’s scheduled
implementation date, the Union requested by letter “cer-
tain very basic information—namely, [the Union] must
know exactly what compensation is to be implemented
for each and every unit salesperson . . . and how such
level of compensation has been determined for each such
unit employee.” In response to the Union’s repeated
inquiries during negotiations, the Group stated only that
it was seeking “complete flexibility” in setting sales rep-
resentatives’ compensation, that it would not be “locked
into specifics,” and that it would advise the Union in
writing as to the “timing, criteria and procedures” for
determining pay prior to making any changes in compen-
sation packages.
The Group’s final offer included changes to other sig-
nificant contract provisions as well. In particular, the
final offer deleted the provisions of article 10.02 of the
expired agreement that required the Employers, when
removing and reassigning retail accounts to sales repre-
sentatives, to replace lost accounts with other accounts of
“substantially equal volume.” In addition, the final offer
deleted the provisions of article 12 that prohibited super-
visors from performing unit work, and eliminated a pro-
hibition against “house accounts,” thereby permitting
Employers to make sales to large, warehouse-style retail
outlets through the “house” without the involvement of,
and the payment of a commission to, a sales representa-
tive. Together with the modification to the compensation
structure, these proposals constituted a vast change to the
sales representatives’ basic terms and conditions of em-
ployment.
The judge found, and we agree, that the totality of the
Group’s conduct during negotiations evidenced an intent
to frustrate agreement on a collective-bargaining contract
with the Union, and that such conduct constitutes bad-
faith bargaining in violation of Section 8(a)(5) of the Act.
The relevant principles are well established.
The proposal at issue here, which would have granted
the employer-members of the Group broad discretionary
authority over wages, is a mandatory subject of bargain-
ing over which a party may bargain in good faith to a
bona fide impasse. See McClatchy Newspapers, 321
NLRB 1386, 1388 (1996), enfd. 131 F.3d 1026 (D.C.
Cir. 1997), cert. denied 524 U.S. 937 (1998). In deter-
mining whether a party has complied with the duty to
bargain in good faith, the Board looks to whether the
party’s conduct “evidences a real desire to reach an
agreement—a determination made by examination of the
record as a whole.” Chevron Chemical Co., 261 NLRB
44, 45 (1982), enfd. 701 F.2d 172 (5th Cir. 1983).
Specific contract proposals may be considered in de-
termining whether a party has bargained in bad faith.
Reichhold Chemicals, 288 NLRB 69 (1988), enfd. 906
F.2d 719 (DC Cir. 1990). A finding of bad faith, how-
ever, does not depend on whether a proposal would be
acceptable or unacceptable. Rather, the Board’s exami-
nation of a proposal focuses on whether, on the basis of
objective factors, a demand is clearly designed to frus-
trate agreement on a collective-bargaining agreement.
Id. In examining the totality of bargaining conduct, un-
realistically harsh or extreme proposals can serve as evi-
dence that the party offering them lacks a serious intent
to adjust differences and reach an acceptable common
ground. A-1 King Size Sandwiches, Inc., 265 NLRB 850,
858 (1982), enfd. 732 F.2d 872 (11th Cir. 1984), cert.
denied 469 U.S. 1035 (1984).
For example, it is not a per se violation of Section
8(a)(5) merely to propose a management rights clause
that vests exclusive control in the employer on a particu-
lar employment issue. NLRB v. American National In-
surance Co., 343 U.S. 395 (1952). However, some man-
agement proposals that seek to secure the employer’s
right to act in a unilateral and unrestricted fashion on key
terms and conditions of employment, such as establish-
ing total employer discretion over wages and the assign-
ment of unit work in conjunction with the diminution or
abolition of grievance and arbitration processes, create a
fundamental shift in the bargaining relationship and may
effectively nullify the union’s ability to carry out its
statutory function as the employees’ bargaining represen-
tative. Hydrotherm, Inc., 302 NLRB 990, 994 (1991).
Management rights proposals that are so comprehensive
as to essentially preempt the union’s representative func-
tion, and, if accepted, would leave employees with less
protection than they had prior to electing a collective
bargaining representative, should be made with corre-
spondingly proportionate incentives for the union to
agree to such sweeping waivers of its statutory right to
employee representation. Id. As a result, in a number of
cases, the Board has held that a proposal that vested ex-
clusive control in the employer on the setting of wages,
while offering little more than the status quo in return,
was significant evidence of an intent to frustrate agree-
ment, and in conjunction with other indicia of bad faith,
violated of Section 8(a)(5) of the Act. A-1 King Size
Sandwiches, 265 NLRB at 858–859; John Ascuaga’s
Nugget, 298 NLRB 524, 527 (1990), enfd. in pertinent
part 968 F.2d 991 (9th Cir. 1992); Harrah’s Marina &
Casino, 296 NLRB 1116, 1133 (1989); Alba-
Waldensian, Inc., 167 NLRB 695, 696 (1967), enfd. 404
LIQUOR INDUSTRY BARGAINING GROUP 1221
F.2d 1370 (4th Cir. 1968); Tex-Tan Welhausen Co., 172
NLRB 851, 879–80 (1968), enfd. 419 F.2d 1265 (5th Cir.
1969), vacated and remanded 397 U.S. 819 (1970),
Board Order enfd. in pertinent part 434 F.2d 405 (5th
Cir. 1970), cert. denied 402 U.S. 973 (1971).
In accord with the cases cited above, we find the fol-
lowing factors establish that the Group entered into bar-
gaining with no real intent to reach a collective-
bargaining agreement:

The Group’s final proposal vested in its member-
employers exclusive control over the critical subject
of wages and eliminated entirely the Union’s role in
negotiating wages for unit employees, thus preclud-
ing bargaining on the most important issue in nego-
tiations and eviscerating the Union’s representa-
tional function. Indeed, the Group’s wage proposal
in this case is comparable to wage proposals in other
cases which the Board has held to constitute evi-
dence of bad faith bargaining. See, e.g., Harrah’s
Marina, 296 NLRB at 1130–1133 (employer’s wage
proposal contained no minimum or maximum rates,
set no criteria upon which wages would be based,
and removed wage disputes from grievance-
arbitration procedures); Alba-Wal-densian, Inc., 167
NLRB at 696 (employer’s wage proposal granted the
employer the right to cut wages unilaterally if it so
desired).
The Group’s final proposal foreclosed any possi-
bility that a unit member could contest either the
means by which wages were set, or the actual wages
themselves, because it removed the subject of wages
from the contract’s grievance and arbitration proce-
dures altogether and barred strikes over all subjects,
including wages.
The Group’s final proposal deleted article 12,
which prohibited supervisors from performing unit
work, and eliminated article 3, which prohibited
“house accounts,” thereby permitting the employer
to make direct sales to outlet and other stores with-
out involving the sales representatives or paying
them commissions. These proposals had the effect
of granting the employers unrestrained license to
transfer sales accounts away from unit employees
and effectively dissipate unit work.
The Group’s final proposal deleted article 10.02,
which required employers to replace unit employees’
reassigned accounts with accounts of substantially
equal volume, further permitting unilateral reduction
of employee compensation without restriction.
Despite repeated requests from the Union for in-
formation and explanation about how the wage pro-
posal would work, the Group stubbornly refused to
offer any details, saying only that it needed “flexibil-
ity” in it operations. The Board has held that a sig-
nificant manifestation of bad-faith bargaining is a re-
fusal to offer explanations for one’s bargaining pro-
posals beyond conclusory statements that “this is
what the party wants,” or needs, as in this case. Alba
Waldensian, 167 NLRB at 696 (respondent made no
attempt to explain its proposal but merely asserted
that wages and seniority were a matter for manage-
ment alone to decide); Summa Health System, Inc.,
330 NLRB [1379] (2000) (respondent failed “to
provide any specific economic justification for the
absolute discretionary powers it demanded which
lessened protections for bargaining unit work, other
than generalized insistence on some vague concept
of ‘flexibility[.]’”)

Taking these factors together, we conclude that the
Group’s final offer was extreme in nature, was made
without any corresponding incentives to secure the Un-
ion’s assent, and evidences that the Group was not nego-
tiating in good faith with a view to trying to reach or
complete agreement with the Union. The Group’s pro-
posal has the effect of granting its members exclusive
and unilateral control over wages, thus permitting em-
ployers to set wages based on any criteria, or no criteria
at all, without affording the Union or the unit members
the opportunity to question or challenge such determina-
tions.2 The proposal also permits further dissipation of
unit work and employee earnings by allowing supervi-
sors to perform unit work and by allowing employers to
remove sales accounts without replacing lost accounts
with similarly valued ones. The proposal strikes at the
core of the sales representatives’ most significant inter-
ests—wages and volume of accounts—and severely di-
minishes any role played by the Union with respect to
those interests. Finally, throughout negotiations, despite
repeated pleas from the Union for explanations of the

2 Our dissenting colleague suggests that because the Respondent’s
proposal includes a 1-year transitional salary (of the lesser of 75 per-
cent of the sales representative’s prior year’s commissions or $50,000)
and a $25,000 guaranteed minimum salary thereafter, the Respondent
has imposed some significant limitation on its own authority to set
wages. We find this contention to be unconvincing. As the judge
found, the “Respondent’s transitional offer limiting commission losses
to 25 percent for 1 year as well as its offer of a $25,000 minimum,
where average commissions are double that figure, can hardly be
deemed serious compensating proposals.” Given this significant gap
between the earnings histories of unit employees and the proposed
minimum salary guarantee, the Respondent has still retained a wide
measure of discretion over wages. Therefore, we cannot agree that the
inclusion in the proposal of a salary guarantee constitutes any meaning-
ful limitation on the unilateral right to set compensation “in accordance
with the wage and salary programs put into effect by the Employer.”

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1222
wage proposal, the Group adamantly refused to engage in
reasoned discussion of its proposal and refused to provide
information that would support its demands. Accordingly,
under all of the circumstances, we agree with the judge
that the Group’s final offer was intended to frustrate
agreement with the Union, and thus constituted bad-faith
bargaining in violation of Section 8(a)(5) of the Act.
The court’s decision in Detroit Typographical Union
No. 18 v. NLRB, 216 F.3d 109 (D.C. Cir. 2000), is dis-
tinguishable. In that case, the court, inter alia, reversed
the Board’s finding that the company violated Section
8(a)(5) by implementing its merit pay proposal. The
Board had held that the merit pay proposal was similar to
the proposal addressed in McClatchy Newspapers, 321
NLRB 1386 (1996), enfd. 131 F.3d 1026 (D.C. Cir.
1997), in which the Board held that the respondent’s
merit pay proposal involved so much discretion over the
timing and criteria for the setting of merit pay raises that
the respondent would not be allowed to implement its
proposal after impasse. The court in Detroit Typo-
graphical Union No. 18 held that the respondent’s pro-
posal involved less discretion than the proposal ad-
dressed in McClatchy, and thus the Board erred in apply-
ing the McClatchy holding to the facts of that case. De-
troit Typographical Union No.18, supra at 118. Here, we
are finding that the Respondent bargained in bad faith
based in part on its wage proposal, but our unfair labor
practice determination is not premised on the implemen-
tation of a proposal concerning wages.
The court also reversed the Board’s finding that the re-
spondent Detroit News had bargained in bad faith, a find-
ing that the Board based in part on its conclusion that the
News “had repeatedly obfuscated and withheld details
about its merit pay proposal, which details were relevant
and necessary to the Guild’s understanding of the pro-
posal and to the formulation of a bargaining response.”
Detroit Newspapers Inc., 326 NLRB 700 (1998), quoted
in Detroit Typographical Union No. 18 v. NLRB, supra,
216 F.3d at 119. The court held that the information re-
quested by the unions concerning this proposal was in
reality designed to narrow the range of discretion which
the News proposed to retain, and not simply to elicit fur-
ther explanation or justification for its proposal. Id. at
119. The court stressed that the Detroit Typographical
Union No. 18 proposal provided more details than the
McClatchy proposal in that it afforded some guidance as
to the amounts of the merit pay raises that would be
awarded. It also provided that merit raises would be
awarded on fixed dates according to a detailed perform-
ance appraisal system, and, significantly, it allowed em-
ployees to challenge their merit raises in the grievance
procedure. Id. at 118.
By contrast, in this case, we base our finding of bad-
faith bargaining on a combination of factors which to-
gether show that the total discretion sought by the Group
reflected a true intent not to reach an agreement with the
Union. One of these factors was the Group’s refusal to
provide the Union with information or an explanation for
its compensation proposal. The Group also proposed to
retain almost total discretion over how it would set com-
pensation (not merely merit pay as in Detroit Typo-
graphical Union No. 18) for each sales representative,
and to deny the sales representatives any recourse to the
grievance procedure to challenge their compensation
system. Thus, the discretion sought by the Group in this
case was far greater than that sought by the respondents
in either McClatchy or Detroit News, and the Union in
this case sought an explanation from the Group for why
it needed such discretion, and was not simply trying to
narrow the range of discretion sought by the Group in its
compensation proposals. In short, our bad-faith bargain-
ing findings here are independent of any McClatchy or
Detroit News analysis.
2. The alleged 8(a)(3) violation by Respondent Royal
The judge dismissed the complaint allegation that Re-
spondent Royal violated Section 8(a)(3) by removing
various accounts from sales representative Edward Pri-
mavera. The judge found that Royal removed the ac-
counts for legitimate business reasons, and no party ex-
cepts to this finding. The judge went on to find, how-
ever, that Royal violated Section 8(a)(3) by failing to
replace the removed accounts with accounts of substan-
tially equal volume, which, according to the judge,
Royal’s expired contract with the Union required.
The complaint did not, however, allege that the failure
to replace the removed accounts violated the Act. Dur-
ing the hearing, the judge ruled that the General Counsel
could obtain a make-whole remedy for a removal of ac-
counts violation only by showing that Primavera suffered
a loss in commission earnings, i.e., the sales volume of
his newly assigned accounts was less than the sales vol-
ume of his removed accounts. The parties’ litigation of
the replacement of accounts issue was limited to address-
ing the judge’s request for data that would assist in de-
termining a make-whole remedy. The General Counsel
did not attempt to amend the complaint, nor seek to
prove that Royal’s replacement of accounts was dis-
criminatory. Following the hearing, the General Counsel
did not claim in his brief to the judge that the failure to
replace the removed accounts violated the Act.
It is well established that a violation of the Act cannot
be properly found where the violation was not alleged in
the complaint and the issue was not fully litigated at the
hearing. Bouley, Inc., 306 NLRB 385, 386–387 (1992).
LIQUOR INDUSTRY BARGAINING GROUP 1223
Here, the replacement-of-accounts issue was not alleged
or fully litigated. Accordingly, we shall reverse the
judge’s unfair labor practice finding and make the appro-
priate modifications to the recommended Order.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge as
modified below and orders that the Respondent, Liquor
Industry Bargaining Group, its officers, agents, succes-
sors, and assigns, and the Respondents Fedway Associ-
ates, Kearney, New Jersey, Royal Division of R&R Mar-
keting, L.L.C., Trenton, New Jersey, and the Jaydor Cor-
poration, Milburn, New Jersey, their officers, agents,
successors, and assigns, shall take the action set forth in
the Order as modified.
Delete section C of the administrative law judge’s Or-
der and Appendix C.
IT IS FURTHER ORDERED that paragraphs 21, 22,
and 35 of the complaint are dismissed.

MEMBER HURTGEN, dissenting.
My colleagues conclude that Respondent has engaged
in bad-faith bargaining. However, they do not premise
this conclusion on any finding that Respondent was try-
ing to avoid reaching a contract. Rather, they rely prin-
cipally on their dislike of Respondent’s proposals. That
is, my colleagues do not cite any evidence of foot-
dragging, dilatoriness, closed-mindedness, lack of infor-
mation, etc. Rather, they cite the substantive proposals
made by Respondent.
I recognize that those proposals vested substantial con-
trol in Respondent. However, the Supreme Court has
held that such proposals do not establish bad-faith bar-
gaining.1 In addition, the fact that the unilateral control
is in the area of employee compensation does not show
bad-faith bargaining. In the McClatchy Newspapers, 321
NLRB 1386 (1996), line of cases, the employer’s insis-
tence upon substantial unilateral control over wages is
not held to be bad-faith bargaining. Rather, the post-
impasse unilateral implementation is the conduct that is
held to be unlawful.
Moreover, the Respondent’s position here did not give
Respondent unilateral control over wages, and it did not
exclude the Union. For the first year, the wages would
be fixed by the union contract. In the other 2 years, there
would be minimum guaranteed salary. My colleagues
find fault in this offer of Respondent because, they say, it
would substantially reduce prior earnings. In their view,
it “can hardly be deemed a serious compensating pro-
posal.” However, the Board is not in the business of

1 NLRB v. American National Insurance Co., 343 U.S. 395 (1952).
evaluating the substantive worth or fairness of proposals.
That is to be left to the bargaining process.
Concededly, the Respondent retained discretion as to
how compensation beyond that would be set. However,
Respondent’s proposal said that, prior to implementation,
Respondent would provide each employee and the Union
upon request, with a written explanation of the compen-
sation applicable to that employee. This would include
“timing, criteria, and procedures” for determining com-
pensation.
My colleagues also point to other matters to establish
bad-faith bargaining, but, again, these are simply sub-
stantive proposals which my colleagues do not like. Un-
der the prior contract, there were certain contractual
guarantees relating to the replacement of reassigned ac-
counts, to supervisory performance of unit work, and to
“house accounts.” In the instant bargaining, Respondent
sought to delete these guarantees. However, there is no
statutory requirement that contractual guarantees must be
maintained in subsequent contracts.
My colleagues cite cases in which the Board consid-
ered substantive proposals and found bad-faith bargain-
ing. However, in those cases, there were other indicia of
bad-faith bargaining not present here. The Board found
the violation based on all of these indicia.
Hydrotherm, Inc., 302 NLRB 990 (1991), cited by my
colleagues, is clearly distinguishable. In that case, the
employer offered the union a contract which gave the
union less than it would have had without a contract. In
the instant case, Respondent has not done that. For ex-
ample, there are contractual wages for the first year and a
contractual minimum after that.
Finally, my colleagues decry the absence of informa-
tion and explanation. However, there is no allegation or
finding that Respondent has withheld relevant requested
information. As to an explanation, Respondent ex-
plained that it desired flexibility with respect to wages.
My colleagues simply do not like the explanation.

Stephen J. Holroyd, Esq., for the General Counsel.
Jedd Mendelson, Ilene F. Lainer, and Kimberly Mundell, Esqs.
(Grotta, Glassman & Hoffman), of New York, New York,
for the Respondents.
Howard A. Goldberger and Edward Cohen, Esqs. (Schneider,
Goldberger, Cohen, Finn, Solomon, Leder & Montalbano),
of Kenilworth, New Jersey, for the Charging Party.
DECISION
STATEMENT OF THE CASE
ROBERT T. SNYDER, Administrative Law Judge. This
case was tried before me in Newark, New Jersey, on May 9, 10,
15 ,and 16, June 20 and 21, July 17, and August 15, 1996. The
consolidated complaint alleges that the Liquor Industry Bar-
gaining Group (the Group or the Association), during negotia-
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1224
tions for a successor labor agreement with the Charging Party,
Local 19D, Wine and Liquor Salesmen of New Jersey, United
Food and Commercial Workers, AFL–CIO (Local 19 or the
Union), by its overall conduct, including an insistence to im-
passe on a wage proposal by which it sought total unilateral
control over wages of unit employees, has failed and refused to
bargain in good faith with the Union in violation of Section
8(a)(1) and (5) of the Act. The complaint also alleges that by
acts of offering certain benefits and the implementation of the
Association’s withdrawals of certain other benefits, by individ-
ual members of the Association, including Respondents Fed-
way Associates, Royal Division of R & R Marketing, L.L.C.,
and the Jaydor Corporation (Fedway, Royal, and Jaydor) re-
spectively, these individual Association members and Respon-
dents, violated their bargaining obligations under Section
8(a)(1) and (5) of the Act. Finally, the complaint alleges that
by removing certain sales accounts from its employee Edward
Primavera, Respondent Royal discriminated against an em-
ployee in violation of Section 8(a)(1) and (3) of the Act.
By their first amended answer, Respondents denied the alle-
gations of commission of unfair labor practices under the Act,
and asserted numerous separate affirmative defenses which
shall be considered, infra.
Posttrial briefs were filed by the counsel for the General
Counsel, in which the Union joined, and by the Respondents.
Each has been carefully considered.
On the entire record, including my observation of the de-
meanor of the witnesses, I make the following
FINDINGS OF FACT
I. JURISDICTION AND LABOR ORGANIZATION
STATUS
At all material times, Respondents Royal, Jaydor, and Fed-
way, each a corporation with an office and place of business,
respectively, in Trenton, Milburn, and Kearny, New Jersey,
have been engaged in the nonretail sale and distribution of al-
coholic beverages. During the 12 months preceding issuance of
the consolidated complaint, in conducting their business opera-
tions, they each have purchased and received at their respective
New Jersey facilities, goods, valued in excess of $50,000 di-
rectly from points located outside the State of New Jersey.
During the same period of time, the employer-members of the
Association in conducting their business operations, collec-
tively purchased and received at their New Jersey facilities
goods valued in excess of $50,000 directly from points outside
the State of New Jersey. Respondents admit, and I find that
each of the individual Respondents, is an employer engaged in
commerce within the meaning of Section 2(2), (6), and (7) of
the Act. Respondents admit that Respondent Association has
been an organization composed of various employers engaged
in the nonretail sale and distribution of alcoholic beverages,
including, inter alia, Respondents Royal, Fedway, and Jaydor,
one purpose of which is to represent its employer-members in
negotiating collective-bargaining agreements with the Union.
As such, Respondent also admits its status as an employer
within the literal meaning of Section 2(2) of the Act.1 I take
this to mean that Respondents admit the Association’s status as
an agent of its members for the purpose of negotiating collec-
tive-bargaining agreements. In view of this admission, which is
an adequate legal bases for determining the Respondent Asso-
ciation’s status as an employer for the purpose of committing
unfair labor practices under the Act, should liability be so de-
termined herein, I find it unnecessary to rule on the further
allegation in the complaint that the Respondent Association is
an employer within the meaning of Section 2(6) and (7) of the
Act, which Respondent has denied.2
The Respondents admit, and I find, that at all times material
herein, the Union has been a labor organization within the
meaning of Section 2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Bargaining History and Early Negotiations for a
Successor Agreement Leading to a Union Strike
The Union has had a lengthy-bargaining relationship going
back many years with the Group on behalf of the salesmen
employed by its members, including industry wholesalers Fed-
way, Royal, and Jaydor who have authorized it to bargaining on
their behalf. The most recent collective-bargaining agreement
between the parties ran from October 1, 1990, to September 30,
1993. That agreement contains a number of provisions relevant
to the disputes subsequently arising in the negotiations for a
successor agreement and which resulted in the Union’s filing of
the unfair labor practice charges herein.
In article III “House Accounts,” the members of the Group
agree they “shall not open, maintain or sell through any house
accounts.” The provision goes on to credit the salesman as-
signed for any sales made on an account by the covered em-
ployer’s officers, members of the firm or any other means than
through a salesman. If a new account is opened by a nonsales-
man, the covered employer need not pay a salesman commis-
sion on sales for the first 30 days of the account, but must
thereafter assign the account to a salesman who shall be given
full credit. In a separate article XII, the Group agrees that sales
on unsold accounts made by supervisors must be credited to a
union salesman. In article IV, the Group dealing with dis-
charge, grievance procedure and seniority, section 4:04 permits
discharge for just cause of a salesman unable to earn $25,000 in
commissions over the previous consecutive 12 working
months, and commencing in the last year of the agreement on
October 1, 1992.
Article VI, “Rate of Commission and Expenses,” provides in
section 6:01 for a commission rate of 5 percent on all sales with
the exception of domestic still wines on which the rate shall be
5.4 percent. Substantially lower rates of commission are pro-

1 Sec. 2(2), in pertinent part, defines the term “employer” to include
“any person acting as an agent of an employer, directly or indirectly.”
2 The record contains no evidence that the Respondent Association
employs any employees or that it independently engaged in any busi-
ness operations other than its function in serving as its members’ col-
lective-bargaining representative in negotiating agreements. The Re-
spondents deny, and I also conclude, that the Association does not
represent its members in administering such agreements with the Un-
ion.
LIQUOR INDUSTRY BARGAINING GROUP 1225
vided for sales on wine coolers and top deals offered monthly
on a given brand. In article V “Arbitration,” the parties agreed
all unsettled disputes arising regarding the application or inter-
pretation of any provisions of this Agreement shall be submit-
ted to binding arbitration.
The Agreement also provided for a drawing account against
commissions in the minimum amount of $100 weekly, with a
lesser draw of $75 for the first 6 months of a salesman’s em-
ployment. A trial period of 6 months is provided for newly
hired salesmen, which may be extended by 3 months on the
Union’s agreement.
A separate article XVIII dealing with Casino Sales, requires
the Employer to pay a royalty of 2-1/2 percent on all future
sales to casinos made by means other than through a union
member, such royalty to be distributed in a manner to be de-
cided on by mutual agreement of the respective Employer and
the Union. All present salesmen selling to casinos shall con-
tinue to enjoy the benefits of the preexisting commission terms
on specific casino accounts being serviced on the date of ratifi-
cation.
Article X “Miscellaneous” contains in section 10:01 a “most
favored nation” clause, permitting the Group to demand appli-
cation of any more favorable agreement or provision contained
in any labor agreement between the Union and any other em-
ployer, on 15 days’ notice to the Union, provided any unsettled
dispute between the parties shall be referred to binding arbitra-
tion. Section 10:02 gives the members of the Group the right to
assign and reassign accounts based on sound business judg-
ment, provided, however, that the salesmen so affected shall be
assigned other accounts with substantially equal volume, and
further provided that the Employer shall not exercise this right
in an arbitrary, capricious or discriminatory manner.
Article XII “Supervisors” prohibited supervisors from per-
forming the duties of union salesmen, but when, on occasion,
soliciting business from unsold accounts, any accounts sold
must be credited to a union salesman and commission paid to
such salesman in accordance with article III, “House Ac-
counts.’’
In August 1993, the Union commenced negotiations with the
Group for a successor agreement. The Group was represented
by Jerold Glassman and Ilene Lainer, partners in the law firm
of Grotta, Glassman & Hoffman, P.C., longtime legal counsel
for the Group and each of its members. The Union was repre-
sented by Emil Verdoni, the Union’s president, Leonard
Richman, its secretary-treasurer, salesmen members of the Un-
ion’s executive board and Howard Goldberger, partner in the
law firm of Schneider, Goldberger, Cohen, Finn, Solomon,
Leder, & Montalbano, P.C., longtime legal counsel to the Un-
ion. From time to time Edward Cohen, another partner, repre-
sented the Union in negotiations and on the record in this pro-
ceeding, in place of Goldberger.
These negotiations were not successful. In an offer, de-
scribed as the “Industry Final Proposal,” presented in person on
October 1, 1993, the Group would delete the $25,000 minimum
commission earning criteria in section 4:04 and replace it with
a $600,000 sales volume criteria, the failure to meet which in a
12 month period permits discharge for good cause. The Group
also proposed, inter alia, reducing the domestic still wine com-
mission rate to 5.2 percent and to reduce the commission rate
paid to sales representatives on new products sold to a club or
warehouse account, by successive annual steps of 1.5, 2, and
2.5 percents. The proposal defined club or warehouse accounts
as those which buy on a regional or centralized basis and in-
clude such stores as BJ’s, Price Club, Cosco, Pace, Sams, and
Walmart. The Group’s October 1 proposal would have also
increased monthly expense money, either $400, or $350, de-
pending on seniority, by $25 to all eligible sales representa-
tives. A further proposal increased contribution rates to the
Union’s welfare fund by $65, $10, and $10 in each of the 3
years of a new Agreement. Aside from a few other proposed
changes, all other terms and conditions in the expired agree-
ment would be renewed for a new 3-year term.
The reductions, particularly in the area of club and ware-
house accounts, were unacceptable to the Union, the member-
ship rejected the proposal unanimously, and they went on
strike. The strike lasted only from October 3 to 19. By its end,
many salesmen had crossed the picket line and returned to
work, as the Group members continued to operate by assigning
salesmen’s accounts to salesmen who had either refused to
strike or had earlier crossed the picket line.
B. Group’s Final Offer, Alleged Impasse and Implementation
of Individual Terms by Certain Members
The salesmen now continued to work under the terms of the
expired agreement as negotiations resumed with the same rep-
resentatives in attendance, except that Edward Cohen, replaced
Union Attorney Goldberger. Tentative agreements were
reached on individual terms, such as vacation dates, increased
employer contributions to the health and welfare plan and an
increase on the minimum earnings required to remain as a
salesperson, but no final agreement was reached.
Then on March 24, 1994, the Group submitted a final offer, a
proposal containing full terms to run from whenever the agree-
ment was reached in 1994 until December 31, 1996. In place
of section 6:01 in the expired agreement dealing with commis-
sion rates, the final offer, in relevant part, provided as follows:

6.01 a) Sales Representatives shall be compensated in accor-
dance with the wage and salary programs put into effect by
the Employer, except that no Sales Representative with three
years or more service with the Employer shall be paid less
than $25,000 per year.

The Employer will provide the sales representative, prior to
implementation and the Union upon request, with a written
explanation of the wage and salary compensation program ap-
plicable to that sales representative. Notwithstanding any pro-
vision in this Agreement to the contrary, the terms of the writ-
ten compensation program shall not be subject to the grievance
and arbitration procedure. However, the issue of whether a
sales representative was paid in accordance with the terms of
the written compensation program may be submitted to the
grievance and arbitration procedure.
In section 6:02 the Group provided a transitional benefit dur-
ing the first year of this agreement, guaranteeing each sales
representative at least 75 percent of his 1993 calendar year
commission earnings or $50,000, whichever is less.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1226
Another major change from the expired agreement in the
area of compensation involved house accounts. While prohib-
ited under the expired and earlier agreements, the Group now
eliminated that prohibition, merely providing in the first sen-
tence of a new article III “Accounts,” that Accounts shall be
serviced in accordance with the policies and procedures prom-
ulgated by the Employer, and, then noting, in a second sentence
that compensation for servicing accounts to sales representa-
tives shall be in accordance with section 6:01 of this Agree-
ment. The Group also eliminated from section 10:02 of article
X the provision requiring the Employer to assign to a salesman
whose accounts had been removed, other accounts with sub-
stantially equal volume. Furthermore, article XII in the expired
agreement was deleted. This provision, earlier noted, prohib-
ited supervisors from performing saleman’s duties or from
receiving commissions on unsold accounts, which were to be
credited to union salesman.
The Group’s final offer also provided for an increase in
monthly contributions per salesperson to the Union’s welfare
fund to $280, effective January 1, 1995, and $290, effective
January 1, 1996.
Neither in face-to-face meetings preceding the final offer,
nor in the final offer itself did the Group or any of its members,
including Fedway, propose the institutions of a section 401(k)
investment plan for its members.
Richman testified that he understood from the interchanges
at the negotiation sessions leading up to the March 24 final
offer that in establishing compensation the employer members
of the Group would take each salesperson, separately, and in-
form him what he was worth, based upon the nature of his ac-
counts, whether he sold to package stores, or to “white table-
cloth” or “checkered tablecloth” restaurants, taverns, or bars.
The salesperson would then be informed what he would receive
in compensation, whether an hourly rate or a salary, or com-
mission rate or a combination of these schemes. The Union
was to be part of this process after the fact, by provision for its
receipt, upon request, of a written explanation of the compensa-
tion program applicable to a particular salesperson.
At the bargaining table, the Union asked for specifics, ex-
actly what each person was going to get, ahead of time, so it
could negotiate the compensation program. But, according to
Richman, and later admitted, the Group’s negotiator Jerold
Glassman kept repeating that the Group’s members wanted
flexibility, which meant complete flexibility in setting compen-
sation and would not lock into specifics at the table.
On May 11 this final offer was presented to the Union mem-
bership—numbering some 670—with a recommendation to
reject it. The union officers at this meeting presented the mem-
bership with a contract negotiation summary, which itemized
the changes from present working conditions in the expired
contract contained in the Group’s final offer, most of which
have been noted herein, supra. The union membership unani-
mously turned down the final offer.
By letter dated May 13, 1994, Ilene Lanier, on behalf of the
Group, wrote to Verdoni and George Orlando, listed as Local
One President, Wine Liquor & Distillery Workers’ Union, but
described by Richman as the International Union President,
who had helped prepare the Union’s contract negotiation sum-
mary. She first noted the Group’s understanding that its March
24 proposal was rejected and then proceeded, “Since the Union
has stated on numerous occasions, that it is unwilling to accept
fundamental issues in the Employer’s proposal, and the Em-
ployers are concerned about the financial conditions of the
employees’ health fund, the March 24th offer will be imple-
mented effective June 1, 1994, except for the following provi-
sions: article II - Union Security, article V - Arbitration, article
IX Union Dues, article XI - No Strike, No Lock-Out and article
XVI - Effective and Termination Dates of Agreement.” The
letter went on to propose that the parties agree to abide by four
provisions, substantively the same as included in the expired
agreement, naming union security, arbitration, union dues and
no-strike, no lock-out, such an agreement to continue for 90
days, and which could be canceled by either party on 90-days
notice. A side letter was enclosed to memorialize such an
agreement.
By responsive letter dated May 17, 1994, Edward Cohen in-
formed Lanier that in order for the Union and its members to
meet and intelligently discuss and evaluate her letter and pro-
posal the Union must know exactly what compensation is to be
implemented for each and every unit salesperson as of June 1,
1994, by each Employer and how such level of actual compen-
sation has been determined for each such unit employee.
Cohen reminded Lanier that the only specific compensation
proposals the Group had made were minimum percentages and
not actual compensation to be paid. Cohen asserted time was
of the essence as implementation was set for 2 weeks hence and
the Union was to schedule a membership meeting as soon as
possible.
By letter dated May 23, 1994, and forwarded by Federal Ex-
press, Glassman first advised Cohen they were in receipt of his
May 17 letter and then wrote: “Prior to implementing any
changes in the Sales Representatives’ compensation structure
pursuant to article 6 of the employer’s March 24, 1994 pro-
posal, we will advice the Union as to the timing, criteria and
procedures for determining and paying such compensation.”
Glassman closed by noting that the described information will
be provided to Cohen in a timely manner.
Richman testified that on advise of counsel the Union re-
jected the side letter agreement to continue four provisions for
90 days.
Prior to Cohen receiving the May 23 letter, Richman was
made aware by employees that they had received letters di-
rected to them by Group members. One, a letter from Federal
Wine & Liquor Company, a Division of Fedway, to its sales-
persons at their homes, signed by its President Richard Leven-
thal, and dated May 17, first referred to the Union’s rejection of
its proposal for a new agreement and its advice to the Union
that Federal intended to implement certain provisions in that
proposal effective June 1. The letter then noted no sales repre-
sentative’s compensation will be changed without prior notifi-
cation, but that Federal will increase its contributions for their
health benefits effective June 1. Leventhal then announced a
meeting of employees to be held on June 2 to explain Federal’s
final offer and answer questions.
At the June 2 meeting, Leventhal announced the following:
One, club accounts will become house accounts with the club
LIQUOR INDUSTRY BARGAINING GROUP 1227
accounts being assigned to management personnel, and royal-
ties were being eliminated. Two, the company was interested
in instituting a corporatewide 401(k) plan, effective January 1,
1995. However, with respect to Local 19 unit employees, the
company was awaiting the Union’s response regarding this.
(By letter dated June 2, addressed to Richman, Neil Barnett,
general manager of four wine divisions of Fedway, including
Federal, advised that these divisions intended to institute a
401(k) plan effective January 1, 1995, available to each sales
representative.) Three, compensation would remain the same
for Local 19 sales representatives until the Company and Union
discussed timing, criteria, and procedures for determining and
paying changes on compensation. Four, the health insurance
contribution rate was increased effective June 1, 1994, from
$215 per month for each eligible employee to $280.
Richman described the club accounts as relatively new
warehouse style outlets which came into New Jersey. Other
testimony establishes them as multistate, even national chains.
Retail customers must purchase memberships to purchase there
and these outlets sell liquor at great discounts. Names of these
chain clubs have previously been mentioned. Richman also
described a royalty pool which was established when the first
came into Atlantic City and an understanding was reached to
limit to one the salesman servicing multiple casino accounts but
to create a pool of commissions on sales to casinos to be shared
equally by salesmen thus displaced. Every quarter the resulting
commissions were divided up among salespersons of Fedway,
Jaydor, and Royal assigned to their southern divisions.
Aside from Fedway, both Jaydor and Royal ultimately im-
plemented the proposal in the March final offer to remove club
accounts and designate them as house accounts and to eliminate
the royalty pool, thus eliminating commissions previously paid
to salespersons on sales made to all these accounts. By letter
dated October 11, 1995, Louis T. De Marino, senior vice presi-
dent, sales & marketing of Jaydor wrote to Verdoni advising
that effective November 10, 1995, 12 named salespersons will
no longer be assigned the responsibility to service club ac-
counts, instead reassigning this responsibility to its key account
managers, which reassignment may result in the loss of income
to a number of these named. Jaydor would attempt to assign
other accounts to those impacted to lessen the loss of income.
In the letter Jaydor then requested an early meeting to negotiate
a transitional compensation system for the four sales represen-
tatives who will be most substantially effected. Previously, in
January 1995, upon the death of a salesman named Nestor who
had serviced the Price Club, Jaydor had, on the Union’s in-
quiry, informed it after the fact that this account had become a
house account. By responsive letter of October 12, 1995, Ver-
doni objected to the unilateral removal of club accounts from
sales representatives and advised it was filing charges with the
Board.
Richman testified that sometime in mid-1994, Royal re-
moved the casino royalty commission sharing plan or pool from
its sales persons. He learned this when members informed him
they were no longer receiving their checks for the royalty plan.
According to Richman the Union had never bargained sepa-
rately with individual employer members of the Group regard-
ing wages or any other terms comprising a contract prior to the
1993–1994 round of negotiations. Neither had the Union ever
sought individual contracts with any of these employers.
During his cross-examination, Richman confirmed that the
Group exercised only a bargaining function on behalf of its
members, and that during the life of the agreement the member
companies administered the agreement as it affected their indi-
vidual operations.
Richman also agreed that club accounts were a relatively
new phenomenon, only becoming a significant presence in
1990 or 1991, and the 1993 negotiations being the first in
which they became an issue. Some salesmen who had club
accounts among their total accounts had total compensation
exceeding $150,000 annually.
Richman also acknowledged that the Union initially agreed
to meet with Jaydor to negotiate a transitional compensation
plan for salesperson adversely affected by the removal of club
accounts and their conversion into house accounts, but that on
advise of union counsel the meeting was canceled. The Union
would not bargain with an individual company over a change in
compensation structure for individuals. Correspondence be-
tween Jaydor and the Union confirm this turn of events. On
October 23, 1995, De Marino wrote Verdoni to reconsider his
refusal to meet, and ended by proposing to provide affected
sales representatives, who will continue to be paid at the current
commission rates, a 1-year guaranteed 75 percent of their No-
vember 1, 1994, through October 31, 1995 commission or
$50,000, whichever is less.
Richman also agreed that Fedway sought to bargain with the
Union over transitional pay for two salespersons whose club
accounts were changed to house accounts. The evidence shows
that a meeting was held on June 6, 1994, between Lanier and
Verdoni, at least, to discuss compensation for two salespersons,
Scott Hutchinson and Jim Mosel, employed by a Fedway divi-
sion, Gateway-Perrone, who had previously performed mer-
chandising services (unloading goods, packing) as well as sales
services on club accounts. At the meeting Lanier proposed
compensating the two for continued merchandising activities on
the club accounts Fedway had removed at the rate of 1-3/4
percent on all merchandise shipped for the remainder of 1994,
1-1/4 percent in 1995, and 3/4 percent in 1996. In subsequent
contacts the Union sought additional information and requested
a modification permitting these two salesperson to refuse to
continue providing merchandising services.
In a June 16, 1994 letter, Lanier confirmed a Fedway/Union
understanding providing 2, 1-1/2-, and 1-percents commission
rates for 1994, 1995, and 1996, and that the two men could
decline to continue merchandising efforts. The letter finally
notes that Verdoni informed Lanier that Hutchinson resigned
from employment, leaving only Mosel covered by the transi-
tional scheme. Richman agreed that the Union did not respond
in writing to Lanier’s letter but Verdoni may have telephoned
her.
Richman also agreed that during the terms of the 1990–1993
agreement as a result of a Fedway consolidation of its division,
meetings took place with the Union over complaints involving
reassignment of accounts raised by members. Richman consid-
ered these matters to be informal grievances arising under the
contract which were sufficiently satisfactorily resolved.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1228
Richman also acknowledged that during negotiations in 1993
and 1994, the Group indicated that certain club accounts had
advised they no longer wished sales representatives to continue
to call upon or visit them. Among union members on the bar-
gaining committee were persons who had opened, serviced, and
sold those club accounts.
Richman now was asked about meetings which took place
between the Union and Fedway and other Group members,
individually, in June and/or July 1995. Richman testified that
at the urging of Lanier and Glassman, after Glassman told Ver-
doni he couldn’t get his Group together on compensation, Ver-
doni agreed to meet, individually, and did meet Group members
to seek to arrive at individual compensation packages, which,
coupled with a master contract for work rules, would resolve
the collective-bargaining differences outstanding between the
Union and the Group and result in an overall master agreement
with individual compensation riders. In two letters Respondent
introduced in evidence, Union Counsel Goldberger on June 26
and Union President Verdoni on July 12, respectively, sought to
assure Lanier that the informal discussions the Union held with
Fedway and Jaydor should not be deemed as changing in any
way the status of each employer as a part of the multiemployer
bargaining unit. While the Union was willing to try to seek a
master agreement and compensation riders with Group mem-
bers, it remained adamant in opposition to the Group’s attempt,
expressed in section 6:01 of article XI of the March 1994 final
offer “to bargain individually with each sales representative not
the Union” (Richman at Tr. 449). In two letters to Lanier, on
August 3 and 11, 1995, Union Attorney Cohen made clear the
Union’s rejection of a belated and untimely withdrawal from
association bargaining of the individual employers, and its un-
willingness to negotiate on a single employer basis.
Richman conceded that in an effort made at the urging of and
under the instructions of Glassman the Union did meet with all
of the employers separately, but that in spite of Leventhal’s
effort, on behalf of Fedway to negotiate a contract in its en-
tirety, the Union declined to continue meetings on such a basis.
As Richman noted, when they met with each employer they
wanted a contract from A to Z and the Union wasn’t willing to
do that. 3 Richman also conceded that the Union left with each
employer member at the conclusion of their meetings a multi-
page proposal, excluding compensation, which was not dis-
cussed at the meetings, but which contained terms and condi-
tions which the Union was prepared to accept in a master con-
tract with the Group if individual compensation packages could
be arrived at.

3 Richman’s version of the position taken by Fedway at their meet-
ings is corroborated by a memorandum circulated for signing by Leven-
thal at their second meeting, erroneaously described as an “attendance
sheet,” which recites that “Fedway Associates and Local 19 agree that
Fedway’s affiliated companies . . . are no longer members of the multi-
employer bargaining unit.” The following people acknowledge that
“they met on July 7, 1995 in order to negotiate for an individual collec-
tive-bargaining agreement between Fedway’s affiliated companies . . .
and Local 19.” The union representatives repudiated this document.
Richman’s version of the meetings, in particular the attempt by Fed-
way, among other member companies, to negotiate a separate complete
agreement, and the Union’s rejection of the ploy, is credited.
Richman also acknowledged that during their bargaining re-
lationship each of the member company’s from time to time put
into effect separate incentive and bonus programs for its sales
representatives not covered by the labor agreement.
With respect to the Fedway decision to implement a 401(k)
plan effective January 1, 1995, although Federal Wine & Liq-
uor Company, one of the implementing Fedway divisions,
wrote Verdoni confirming an offer to meet and to discuss the
plan and enclosing a summary planned description, the Union
refused to meet with Fedway to discuss the 401(k) plan.
During Richman’s cross-examination, and after, in their own
presentation, Respondents sought to establish that the Union
knowingly permitted house accounts, i.e., liquor sales by own-
ers or management on accounts for which no unit salesmen
received commission.4 By establishing the existence of such
accounts by employers not members of the Group, Respondent
argues that its removal of the prohibition against house ac-
counts in its final offer and its implementation of that removal
by its members was permitted by the most favored nation arti-
cle of the expired Group agreement and thus, was not an unlaw-
ful unilateral change as alleged in the complaint. The legal
principles involved and their application to the facts will be
discussed, infra. Although expressing serious reservations
about this defense, I did permit a limited development of the
facts relating to it as disclosed in the following summary of
Richman’s testimony.
Richman denied that there were distributors outside the
Group with whom the Union had bargaining relationships that
have over the years had house accounts. Respondent counsel
then asked specifically about an alleged warehouse manager
named Richard Bronstein who sold for F & A Distributing
Company and received sales commissions, an owner of a com-
pany called Goldstar, Arnold Goldberg, who sold liquor and
received commissions, and a manager of American B & D,
Tom Dirigibus, who placed orders on its behalf. Richman ini-
tially denied knowledge of either the status of these individuals
or their sales, except for acknowledging that Bronstein did
receive commissions.
Richman did confirm that during negotiations, Verdoni did
say that the Union would not give up that article prohibiting
house accounts. He further confirmed that the strike was called
as a direct result of two October 1 prestrike Group offers, one,
the steep proposed reduction in commission rates on club and
warehouse accounts and the other the inadequate increase in
contributions to the health and welfare fund in light of the
fund’s precarious financial position. As to club accounts and
casino royalty pools, these accounts generated substantial sales
in the many millions of dollars, thus providing under the 1990–
1993 agreement substantial commission income to the salesper-
sons in the unit. Their steep reduction prestrike, and their re-
moval entirely from the Group’s poststrike offer, and later, by
4 Richman later defined a house account as one in which someone in
management is selling and there is no commission paid and the com-
pany is keeping that commission. The General Counsel then noted that
by virtue of the receipt of the commission by a manager, director, or
owner, the company is able to defray other salary which might other-
wise be paid to that person, if the manager foregoes the commission
due on a sale, this is also a benefit to the company.
LIQUOR INDUSTRY BARGAINING GROUP 1229
action of individual Group members, coupled with the elimina-
tion of the prior requirement of providing accounts of equal
volume to the ones removed, resulted in a substantial loss of
income by affected sales representatives. Respondent’s transi-
tional compensation proposal to ameliorate these losses was to
be of short duration, and, further, the retention of a merchandis-
ing function only affected very few salespersons and provided a
far lower commission rate than previously enjoyed.
The adverse impact on salespersons of the withdrawal of the
language protecting their income level by requiring compensa-
tion with accounts of equal volume on the reassignment of
accounts was graphically presented by Richman. When cou-
pled with the new March 1994 proposal giving the Respondent
the authority to set compensation for each salesperson and to
implement the compensation scheme without Union input but
only an explanation, upon its request, and without being able to
dispute the setting of compensation through binding arbitration,
the Respondent’s proposal was viewed by Richman as eliminat-
ing the Union as a participant in the bargaining process to the
extent of making its role meaningless.
As for the Union agreeing to the percentage commission
rates for Fedway employee Mosel for performing merchandis-
ing work as recounted in Lainer’s June 16, 1994 letter to Ver-
doni, Richman disputed that these rates were fixed by agree-
ment with the Union and he is credited. It does appear, that at
its meeting with Lanier the Union did seek a higher rate than
originally offered by Fedway as well as the right of the affected
employees to decline the merchandising work. And the terms
in the letter probably resulted from the talks at the June 6 meet-
ing. Thus, Lanier’s recital of the final terms probably reflects
the best terms the Union could secure, but not an agreement
which the Union was prepared to acknowledge, leaving the
acceptance of the terms of the offer up to the remaining em-
ployee, Mosel, to whom they would apply.
During a redirect examination Richman explained that Gold-
star had been an independent company until roughly 10 years
ago, when it was purchased by Royal, apparently ceased opera-
tions under its original name and became part of the Group.
Richard Bronstein, who died about 3 years ago, had helped out
in F & A’s warehouse. Richman now acknowledged that Tom
Dirigibus, was a salesperson and member of the Union who
was later placed in management of American B & D, as
brother-in-law of the owners. But, Richman explained, the
commissions generated by Dirigibus’ sales in the period 1990–
1993 were put into a pool to be shared by the unit salespersons
under a side letter and in the current successor agreement it was
written into the agreement as a royalty pool arrangement.
Richman also explained that it is the salesman, not members
of management, who visit accounts on a regular basis, thereby
encouraging and generating sales. Salesmen have also incurred
extra expenses in cultivating club accounts, by visiting out-of-
state offices, which probably exceeded their $400 monthly
expense allowances under the expired agreement, and engaged
in review of industry publications and newspapers and solicit-
ing their contacts in locating and selling new or transferred
accounts. Richman later noted that the club accounts taken
away from Mosel and another Fedway salesperson, Marilyn
Rheingold, accounted for half of their compensation, which
prior to the changes in their assignments, exceeded $150,000 a
year each. The parties agreed that the average sales representa-
tive earns approximately $45,000 to $50,000 a year.
During further redirect examination, Richman explained that
when Jaydor and Fedway converted certain club accounts into
house accounts and the Union raised objections to these ac-
tions, the employers never offered to submit the dispute to
binding arbitration under section 10:01 of article X “Miscella-
neous” of the expired agreement or last offer, which provides
for unresolved disputes arising with respect to an employer
claim that it is entitled to more favorable treatment under an-
other labor agreement with respect to creation of house ac-
counts to be submitted to binding arbitration. Neither did the
employer members of the Group invoke the most favored na-
tion article as a basis for its elimination of the prohibition in its
final offer or in the individual employer implementations made
the following year.
In its defense to the alleged bargaining allegations, Neil Bar-
nett, general manager of Fedway, testified that when the nego-
tiations for a successor agreement got underway in mid-1993,
the Group explained to the Union that the changing nature of
the industry and the continued decrease in consumption, ad-
versely affected the Group’s proposed terms for renewal. As a
consequence of the growth in national buying clubs and chains,
the managements of the Group members were required to deal
directly with their centralized buying offices on an expedited
basis, which resulted in incurring significant extra costs in ser-
vicing arising from the odd times of deliveries, special packag-
ing requirements and related factors. These clubs and chains
also increasingly sought the exclusion of salespersons from the
sales process.
Even before bargaining commenced, following meetings
held among the members to prepare their bargaining demands
and goals, one member, F & A Distributing Company (the
company which had employed Richard Bronstein) which had
historically been a member of the Group, withdrew from the
Group, asserting it had no interest in changes in compensation.
Another member, Baxter (the Baxter Group, Inc. and its divi-
sions) did not unilaterally implement any terms of the Group’s
final offer other than the monthly increases in health insurance
contributions. Within 6 months of the hearing, Baxter and F &
A had merged into a new entity known as Allied Beverage.
Baxter is not alleged as a Respondent. Two other members,
Reitman Industries and Royal Distributors & Importers and
their respective divisions ultimately merged to form R & R
Marketing L.L.C., the Royal division of which is one of the
individual alleged Respondents in this case.
Barnett noted that various incentives, such as bonuses, trips
and prizes, offered by Group members, which differed com-
pany to company, in excess of the commission rates were not
covered in the labor agreement. Such incentives comprised 10
to 20 percent of total compensation. On sales of brands sold at
lower prices by other, nonunion employer competitors, the
Union had agreed, approximately 6 years ago, to reduce the
commission rate to no lower than 2 percent. This is the rate
applicable to “top deal” sales contained in section 6:01 of arti-
cle VI of the expired agreement. Group members also made
arrangements in individual cases to continue new hires on sal-
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1230
ary well beyond the probationary period to subsidize them
while they built their sales territory. These matters as well as
extensions of probation are normally discussed with the Union.
Respondent sought to demonstrate individual bargaining be-
tween Fedway and the Union when an agreement was reached
between them in the early 1980’s regarding the manner of dis-
tribution of the royalty pool generated from sales to s. Again,
in 1992, when Fedway consolidated from five sales divisions to
three, discussions were held with the Union without incident
regarding the reassignment of merged accounts. But Barnett
later agreed that both of these instances involved issues that
arose during the life of the contract and that the Union never
negotiated a contract individually with Fedway. Indeed, nego-
tiations relating to the division of the casino royalty pool was
specifically provided for in article XVIII of the expired agree-
ment.
The 401(k) plan which Fedway implemented in January
1995, for all employees, was under consideration for a number
of years before a decision was finally made to offer it. Barnett
did not testify that the matter was ever raised by the Group
during bargaining for a successor agreement. It was only on
June 2, 1994, that the Union was first notified by Fedway and
no response was ever received. Even when eight or so employ-
ees requested Fedway to institute a 401(k) plan, still the Union
was not informed. Yet, when the decision was made to imple-
ment the 401(k) plan the Union was notified. Barnett agreed
that the greater the employee participation the more likely the
plan would be approved by the Internal Revenue Service under
its rules pertaining to the qualification of the program. Of 500
odd employees, Fedway employed 200 salespersons. So, sales-
person participation was important to the company. Barnett
also later testified under Union cross-examination, after being
recalled by Respondent, that, just as with respect to the Fedway
401(k) plan, to his recollection neither Fedway nor Glassman,
during the 1993–1994 negotiations, had ever proposed a mer-
chandising bonus for salespersons whose commissions from
club accounts were being reduced and then eliminated by the
March 1994 final proposal.
Contrary to Richman’s testimony, and the union position ex-
pressed in its counsel’s letters, Barnett claimed that in late June
or early July 1995, Verdoni telephoned him to say he wanted to
meet with Fedway to see if they could come to an agreement,
without indicating any specific limitations on the format. Bar-
nett attributed comments to a Union Executive Board Member
Frank DiLorenzo and President Verdoni made at a July 7 meet-
ing expressing a willingness to negotiate a full agreement. Yet
Barnett also corroborates Richman that after Leventhal of Fed-
way passed around the sheet committing the Union to bargain
individually with Fedway outside the multi-bargaining Group,
the tone of the meeting changed and the Union rejected indi-
vidual across-the-board bargaining, although it took a telephone
call to union counsel to have the Union confirm this change. At
a second meeting on July 11, the union representatives were
accompanied by Counsel Goldberger who, although expressing
a willingness to explore issues, raised the Union’s objection to
the nature of the bargaining Fedway was seeking which was
shortly confirmed in writing by the Union’s president and coun-
sel. Whether or not the union agents initially went along with a
with a format permitting wide ranging discussions on all issues,
and I doubt this is so, given the prompt Union withdrawal on
receiving Leventhal’s typed form of agreement, it is clear that
the discussions broke down over a basic disagreement as to
format and a union misapprehension of Fedway’s intentions,
which, after all, exceeded the parameters of compensation ne-
gotiations described by Glassman in his initial talk with Ver-
doni. The fact that the Union provided a form agreement at the
July 7 meeting, excluding names of employers and a compensa-
tion article, corroborates my finding, and is in accord with the
Union’s interest in expediting an overall master agreement with
the Group once individual compensation riders were concluded.
Barnett confirmed that club accounts were converted into
house accounts after June 1, 1994, with salesmen no longer
receiving commissions from sales made to them. During the
period from June 1994 to March 1996, sales to these now con-
verted house accounts totaled $10–15 million. Thus, Fedway
saved approximately $700,000 in commissions previously paid
to salespersons at rates of $5 or 5.4 percent of sales. No re-
placement accounts were offered to salespersons losing club
accounts; under the implemented agreement, both the prohibi-
tion against house accounts and the requirement of compensat-
ing sales representatives from whom accounts were removed
with accounts of substantially equal volume, were removed.
Further, in spite of the claims made in bargaining as to the ma-
jor business concerns facing the wholesale liquor industry,
Barnett did agree that Fedway has continued to be one the lead-
ers, nationwide, in wholesale sales of alcoholic beverages,
ranking 14 or 15 overall. But Barnett also testified that overall
the market is shrinking.
During his redirect testimony Barnett was asked for the first
time by Respondent counsel about discussions at the bargaining
table before the strike dealing, in particular, with house ac-
counts. Barnett testified that there were numerous discussions,
during which management reiterated the need to service the
club accounts in a different fashion. At one point, in September
1993, the Group proposed that no commission shall be owed
for sales made to a national account. National accounts were
defined as multistate operations which buy on a regional or
centralized basis. In addition, management referred to there
being house accounts effective in certain companies that put
certain other companies at a competitive disadvantage. At one
meeting in the mediator’s office, near the end of the negotia-
tions prior to the strike, Verdoni made a comment that you are
not taking any accounts away from my men, you are not getting
any house accounts. Barnett failed to specify in the meetings
which nonGroup member wholesalers were being alleged to be
maintaining house accounts, what the nature of the house ac-
counts were and whether it was claimed that the Union was
aware of the practice. Both Richman and Verdoni testified that
it was exceedingly difficult to establish the presence of house
accounts at a particular employer and that suspicion did not
equate with actual evidence that such sales were being made in
which commissions were not being paid to salespersons. Re-
spondent did not dispute that union contracts with non-Group
employers would have contained the prohibition against the
opening, maintaining or selling through house accounts set
forth in article III of the expired agreement.
LIQUOR INDUSTRY BARGAINING GROUP 1231
While no names were mentioned in the bargaining meetings,
Barnett did assert at the hearing that Bronstein, although a
member of Local 19, was also the warehouse manager at F & A
and had some of the largest accounts in the State assigned to
him. The period during which this was alleged to have oc-
curred was while F & A was a Group member to whom the
most favored nation clause would not be applicable, Bronstein
having died on August 11, 1993. While Barnett also claimed
that F & A left the Group because of satisfaction with a com-
pensation system which included operating house accounts
through Bronstein, there was no mention of F & A at the bar-
gaining table. If it had, the Union would surely have disputed
Bronstein’s receipt of commissions as house accounts, as it did
during the hearing, based on Bronstein’s longtime membership
in the Union, his sole reliance on commissions for his renu-
meration from F & A, the lack of any formal managerial title or
function and the fact that even if he was acting as a warehouse
manager he was not overseeing salespersons or selling accounts
from which salespersons had been removed.
A Respondent witness, Louis De Marino, senior vice-
president of sales and marketing, for Jaydor for 16 years, con-
firmed that his company had never negotiated directly with the
Union an entire collective-bargaining agreement. Furthermore,
as alleged in the complaint, Jaydor ceased making payments to
sales representatives of their shares under the royalty pool since
the pool was first established between Jaydor President Michael
Silverman and the Union.
As further evidence of the history of alleged direct bargain-
ing between the Union and individual Group members, Jay-
dor’s president, Michael Silverman, referred to a April 20, 1982
letter he wrote to Verdoni confirming their agreement on the
means of disbursing the royalty, including eligibility, disburse-
ment periods and formula. It is clear that this agreement was
entered during the term of the Group/Union collective-
bargaining agreement in effect at the time, when the Group was
not functioning, it only being authorized to act during negotia-
tions for new agreements. The expired 1990–1993 agreement
contains an article XVIII memorializing the parties’ under-
standing that if any member/employer decides to sell to casinos
other than through a union member, it shall pay a royalty, to be
distributed in a manner to be decided upon by mutual agree-
ment of the parties. Even if not in existence in 1982, this provi-
sion recognized the legitimacy of the prior practice.
Silverman also referred to the time, in 1980, when Jaydor
acquired a wine company, United Vitners, whose name it
changed to International Vitners, and it agreed with the Union
to compensate sales persons hired from United who had previ-
ously been represented by a different union, at a 5.7-percent
rate, higher than the contractual commission rate. The Decem-
ber 2, 1981 letter from Silverman to the Union, refers to Inter-
national as being a party to the multiemployer collective-
bargaining agreement for the term of October 1, 1981, through
September 30, 1984. As noted previously, at the time of this
agreement, the Group had again dissolved.
Silverman corroborated earlier accounts of the position
maintained by the Group as bargaining commenced in 1993.
The Group spoke of a lengthy, multiyear decline in liquor and
wine consumption, putting greater pressure on industry partici-
pants to increase productivity so that commission rates, gener-
ally, in particular on club and national accounts, would have
more of a direct relationship to the sales effort and the actual
work performed. The Group also stressed at the table the
change in the nature of the industry, with small licensees, char-
acterized as mom and pop licensees, being replaced by fewer
and more powerful retail entities, both on and off premises. As
to on premises sales, national retail restaurant chains had grown
and expanded. As to off-premises sales, clubs were now a
dominant force, as large retailers, either operating independ-
ently, or in retail buying cooperatives were leveraging their
buying power, and advertising together. These changes also
required a much more efficient, cost effective operation.
In this context the Group told the Union they were looking
for a no-cost contract, one that balanced all elements in such a
fashion that it was neutral in terms of its cost to the employers.
Thus, when the Union urged an increase in contributions to the
health plan of a substantial nature and also sought an increased
expense allowance, the company countered that if these items
were agreed to, cost savings would have to be found in other
areas, such as in commission rates, or narrower segments of the
market, such as house accounts. Yet, while Silverman spoke
generally of establishing house accounts, and the Union
strongly opposed them, the Group did not formally propose
creating house accounts until its final offer following the strike,
although it did propose severally reducing club account com-
mission rates, progressively, extending the initial period follow-
ing opening of a new account during which its members could
retain the commission, and eliminating commissions on na-
tional accounts (in its September 29, 1993 written proposal).
After the strike, when the Group made its March 24, 1994 fi-
nal proposal, and during meetings held thereafter to January
1995, Silverman described Group negotiator Glassman as ex-
plaining that the Group sought flexibility as to compensation.
He noted that different types of accounts require specialized
skills, product knowledge and the recognition of differences
between selling off premises distilled spirits, fine wines, or on
premises white table cloth (restaurant) accounts. These differ-
ences might lead to the creation of different classes of salesper-
sons for purposes of compensation. Glassman also pointed out
that there existed significant differences between the employer
members of the Group regarding philosophy and strategy in
how to approach the market place.
With respect to the later meetings held in June and July
1995, with the Union, Silverman maintained that Verdoni
agreed to his request that Jaydor be released from its obligation
to negotiate within the Group. I have already found that the
Union never finally agreed to the withdrawal of Fedway or any
other Group member, including Jaydor, from the Group, and
whatever impression Group members may have initially re-
ceived,any misunderstanding and ambiguity was finally dis-
pelled, in the case of Jaydor, by Verdoni’s July 12, 1995 letter
to Lainer. Silverman did acknowledge that when Glassman
suggested the members initiate meetings with the Union to seek
individual compensation riders to a master agreement and he
responded that Jaydor would prefer to bargain the whole thing
out, Glassman told him to ask the Union.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1232
In a 1-1/2 page typed communication to all sales representa-
tives dated May 21, 1994, Silverman informed them that Jaydor
along with the other employers, will formally implement cer-
tain terms and conditions of the Groups contract proposal, in-
cluding increases in contributions to the health plan. “All of
our options with respect to compensation, job duties, account
assignments, as well as other conditions of employment will,
from June 1 on, be in accordance with the terms set forth at
length in the offer being implemented.” As to compensation,
Silverman noted that . . . “while the contract proposal being
implemented gives us the right to formulate the compensation
system for sales representatives . . .,” it required a lot of study
and consideration before taking any actions. The letter went on
to insure that their employees’ skills, special knowledge and
experience would be respected and a fair plan arrived at which
would recognize competitive realties and not induce them to
leave. Near its end, Silverman assured the sales representatives
that “should we decide on any specific changes that impact you,
we will notify the union, and you, in advance.” In cross-
examination, Silverman agreed that in his May 21 letter to the
unit employees, he did not say anything about negotiating with
the Union with respect to a revised wage system.
During his cross-examination Silverman recognized that
since no successor agreement had been reached with the Union,
and the Union had ended up not providing permission for it to
bargain individually, the member employers remained under a
legal obligation to bargain as a group.
Jerold Glassman, Chairman of Grotta, Glassman & Hoffman,
the law firm representing Respondents, and longstanding chief
spokesman and consultant in bargaining for the Group, testified
for Respondent that meetings with the Union commenced in
early September 1993. The Group members took the position
they were seeking to achieve more control over the assignment
of accounts, job functions, productivity, and costs. The Union
opposed any more givebacks, it wanted no more benefits re-
duced. Over the years, e.g., the Group had gotten the right to
reassign accounts so long as equivalent accounts were pro-
vided, and to retain commissions on new or previously unsold
accounts for 30 days, and requiring salespersons to perform
display work.
Glassman expressed the Group view at early meetings that
the commission should bear some relation to the effort it took
to sell the product. The Group also wanted to address the
growth in club and national accounts, the desires of some of
these customers to deal directly without a salesperson, with
personnel being increasingly used in packing functions as op-
posed to selling, and salespersons’ receipt of large commissions
in return for very little effort. The Group also wanted a freer
hand in assigning and reassigning accounts. A particular stated
objective of the Group was a cost neutral contract.
Up until the strike the Group continued to seek these objec-
tives in their proposals, in particular, pushing hard for severely
reduced and declining commissions on club accounts, reaching
zero by the end of the next 3-year contract. As sweetners the
Group offered increased expenses and higher health and wel-
fare contributions.
Following the 3-to 3-1/2-week strike, the Group picked up
on a union bottom line suggestion, and made a written proposal
to the Union through the Federal and State mediators on Octo-
ber 18, 1993, which, inter alia, changed a $25,000 minimum
commission earning criteria to remain a salesperson with a
$575,000 minimum sales volume criteria, and changed the
commission rate to 3-1/2-percent bottom line, and offered
commissions on club and warehouse accounts of 3-1/2 percent
down to 0 percent in the third year. The Union was not inter-
ested in this proposal because it cut earnings too far, but later,
in mid-November expressed interest in going back to the
Group’s immediate prestrike or immediate poststrike proposal,
with some changes, such as a sufficient increase in the contri-
bution to the financially shaky health and welfare fund. Glass-
man told the Union the Group was no longer interested and the
time had come to seek to control accounts including the method
of renumeration of salesmen.
In a new November 22, 1993 proposal, again submitted to
the Union through mediators, Glassman now sought, inter alia,
the elimination of the prohibition on opening, maintaining or
selling through any house accounts, require salesmen to per-
form stockboy, display and window trimming functions, and, as
to article VI, “Rate of Commission and Expenses” section 6:01,
negotiate a change to the entire clause, discussing a collectively
bargained compensation scheme that fits the various sales and
marketing operations of the Group, wherein types of sales, sales
effort and productivity are determining factors.
By December 7, 1993, in another written proposal made to
the Union through the mediators, Glassman now offered, inter
alia, that section 3:01 of article III “House Accounts” shall be
deleted and revised to provide that Accounts shall be serviced
in accordance with the policies and procedures promulgated by
the Employer and compensation for servicing accounts shall be
in accordance with section 6:01 (the identical language in its
March 1994 final offer) and that section 6:01 shall be deleted
and revised to read “Salesmen shall be compensated in accor-
dance with the wage and salary program put into effect by the
Employer, except that no salesman shall be paid less than [the
amount and formula to be negotiated at the bargaining table].”
This language in its salient features is identical to the first para-
graph of section 6:01 of the March 1994 final offer. This pro-
posal also eliminated the obligation to provide accounts of sub-
stantially equal volume to salespersons from whom accounts
had been removed through assignment and reassignment and is
identical to section 10:02 of the final offer.
As Glassman explained it, each of the companies at the bar-
gaining table had different marketing plans and objectives. The
Group members were no longer willing to merely pay a per-
centage of a sale to a salesman without adding value to the cost
of the product in some form or another. The Group was ready
to address certain concerns of the Union expressed at the bar-
gaining table. When the Union said that by this proposal you
could take away all earnings, Glassman responded the Group
would be willing to consider a minimum earning amount. As
to Union fears of hurting a salesman in the transition from one
form of compensation to another, the Group was also prepared
to respond at the next meeting. As noted previously, the final
proposal included a base compensation for the first year of the
new agreement of either 75 percent of 1993 commissions or
$50,000, whichever is less.
LIQUOR INDUSTRY BARGAINING GROUP 1233
But as to answering the union objections to administering a
contract with all the varying compensation schemes indicated
and its later demands for specific compensation, Glassman
provided no real response except to note that the schemes could
vary between salary, salary plus commission, and commission
itself could vary between a percentage of sales and cents or
dollars per case sold, and include incentive schemes as well.
These schemes would vary between companies and vary de-
pending upon the nature of the account, whether on or off
premises, the nature of the product, and whether on or off
premises, the nature of the product, and whether a salesman
visited accounts or dealt primarily by phone with the buyer.
When a union representative asked, aren’t you really proposing
you could have an individual compensation scheme for each
salesman, Glassman admitted he answered yes, that could be
the case, but added he didn’t think that was practical and could
ever work.
In sum, Glassman proposed a basic framework in which
commissions would be based on the nature of the produce sold,
the type of effort performed and the incentive the company was
offering to market the product. Glassman admitted he did not
indicate a willingness to discuss and agree with the Union at the
table as to the basic formulas that would apply. The Group
could only indicate the various schemes available to any em-
ployer setting up a compensation structure, but to set forth
every scheme or structure and agree to it at the table would
hardly be possible. Glassman did later suggest the contract
could contain the general types of compensation structures the
Group members were contemplating.
In response to a question by the undersigned about the nature
of bargaining or discussions with the Union after a company
adopted a particular compensation structure, Glassman re-
sponded that the company would advise the Union, tell them
what they wanted to do and when and they would discuss it and
agree on it. According to Glassman the parties had a 40-year
history of working out problems and issues. But at no point did
Glassman state that before making its decision on a new com-
pensation scheme that the company would negotiate with the
Union as to its particulars.
If certain salesmen felt they were not being equitably com-
pensated under a newly adopted scheme, the Group would be
willing to subject its calculations or applications to arbitration
but did not want to subject the system itself to arbitration.
Thus, the final offer precluded submitting the terms of the writ-
ten compensation program to the grievance and arbitration
procedure.
When the Union said the compensation system contemplated
could absolutely destroy the earning power of certain very good
salesmen, Glassman testified the Group’s response was that if a
salesman felt he wasn’t compensated adequately enough or felt
the system being applied in his company would not provide the
renumeration he felt he deserved for the effort he put in, he
could go to another company.
Although the Union expressed opposition to the section 6:01
compensation proposal, several times during negotiations and
subsequently in settlement discussions they did state that if they
knew the specific compensation structure of the Company they
might deal with it.
Thus, in a letter dated February 25, 1994, to the mediators
and passed along to the Group counsel, Verdoni, referred to
multiple compensation schemes suggested by the employers,
yet, while the employers emphasize this is a key element to
settlement, they have not on an individual and detailed basis
provided the Union with the information it must have to dis-
cuss, analyze and bargain in an intelligent and meaningful
manner.
By the end of the winter or early spring 1994, the Group and
the Union had reached the point where the discussions were not
resulting in any changes in position and were becoming repeti-
tious. At this point management let the Union know they
would be implementing their March 24, 1994 proposal effective
June 1. The Union’s unanimous rejections of the proposal took
place, shortly followed by the exchange of letters in which
Union Counsel Cohen sought on May 17 to learn exactly the
compensation to be implemented for each unit salesperson and
Glassman responded on May 23 that prior to implementing any
changes in the sales representatives’ compensation structure
pursuant to article 6 of the March 24 proposal they will “advise
the Union as to the timing, criteria and procedures for determin-
ing and paying such compensation.”
Glassman described his letter as telling the Union in a timely
manner when and if there would be a change, what this change
would be, and how the change came about and why. The Un-
ion was not shy about responding and meeting to talk about
such matters. Later, Glassman stated that the Union would be
notified. They would know about the compensation system.
They could participate in the discussions with the salesmen.
But they could not seek to change the system through interest
arbitration. In this description, Glassman failed to state that
what the Group would disclose was subject to negotiation be-
fore implementation. And in using the phrase “advise,” a very
experienced negotiator who drafted the language along with his
partner Lanier was avoiding the language that would clearly
alert the Union that it would have an opportunity to truly nego-
tiate as to a decision already made, under a proposal—the lan-
guage of section 6:01—which precluded negotiations over the
terms of the wage and salary programs put into effect by the
Group employers. In describing his May 23 letter, Glassman
was using language substantially similar to that contained in the
second paragraph of section 6:01 which only required that
“[t]he Employer will provide the Sales Representative, prior to
implementation and the Union upon request, with a written
explanation of the wage and salary compensation program ap-
plicable to the Sales Representative.”
In a later explanation, Glassman described a process in
which the Union would have an opportunity to discuss and seek
to modify a particular compensation scheme, but if the com-
pany involved remained unmoved, it would implement that
scheme, meanwhile providing a minimum and transition
protection, but being required only to arbitrate any grievance
over its application, not the setting of the scheme itself. This
protection was sought by the Group to obtain changes in
compensation from commission only, which the Union wished
to retain, to some combination involving salary which the
companies needed to remain competitive.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1234
During his cross-examination, Glassman acknowledged that
when the Union asked for specifics he probably told them the
Group was seeking flexibility, and that complete flexibility
means complete flexibility. Neither were the several kinds of
compensation systems he offered to the Union ever reflected in
any written proposal. Neither had the Group made a counter
offer earlier once the Union rejected the 3.5-percent commis-
sion rate proposed as a bottom line.
Glassman was thus forced to admit that nowhere in section
6:01(a) in the final, implemented offer is it noted, expressly,
that the Group will bargain with the Union in determining what
its wage compensation program will be. Glassman also agreed
that what the Group was seeking in section 6:01(a) was total
control over the setting of the method of compensation. If the
Union did not agree with whatever method or methods the
Group employers chose for each employee or group of employ-
ees there was no avenue for the Union to pursue its differences.
In a revealing letter dated March 1, 1994, from Lanier to the
mediators but which was passed along to the Union, Lanier, for
the Group responded to Verdoni’s January 25 letter requesting
information concerning the Group’s final proposal. Lanier
writes, “Contrary to the Union’s letter, the Employer never
proposed ‘multiple compensation schemes.’ Rather, the Em-
ployer proposed to maintain the flexibility to implement, in its
sole discretion, any type of compensation scheme that would
address its business needs and market conditions. The Em-
ployer specifically stated during numerous bargaining sessions
that it would not agree to contract language that sets forth spe-
cific compensation schemes either by house or by sales repre-
sentative.” At page 2 of the letter, Lanier notes, “In light of the
Employer’s proposal to maintain ultimate flexibility to deter-
mine compensation systems that would be applied to its sales
representatives, the Employer has already provided the Union
with all the ‘details’ that are available.”
Under further cross-examination by Union Counsel Glass-
man sought to defend the absence of the words, “negotiate” or
“discuss” with the Union in section 6:01(a) as not reflecting
any intent to preclude negotiations over the terms of the com-
pensation schemes. I find much of these interchanges represent
fencing with counsel, are contradictory of his earlier testimony,
and exhibit an avoidance by Glassman of the responsibility of
using language which would have clarified the Union’s role in
jointly establishing the new compensation programs. To rely,
as Glassman did, on a history of labor bargaining in the indus-
try and the statute as justifying terminology giving every ap-
pearance of making employer unilateral decisions on compen-
sation a fact accompli, is somewhat misleading and disingenu-
ous.
Glassman also agreed that the unit employees would be pro-
vided with copies of any agreement reached so they could un-
derstand the provisions, that, in particular, affected their com-
pensation. They then would be able to note the Union’s se-
verely reduced role in jointly setting their renumeration. Con-
sistent with the reduced role of the Union was the identical
wording of the individual Group employer May 1994 letters to
their salespersons informing them that “As we told the union,
no sales representative’s compensation will be changed without
prior notification.” In one letter, to Jaydor sales representatives
dated May 25, as described earlier, President Silverman, re-
ported, inter alia, that “the contract proposal being implemented
gives us the right to formulate the compensation system for
sales representatives.” and further, “that should we decide on
any specific changes that impact you, we will notify the union,
and you, in advance.”
Finally, while Glassman testified that under the law, the Un-
ion had the right to demand bargaining about the timing, crite-
ria and procedures for determining and paying any changes in
the sales representatives compensation structure pursuant to
article 6 of the Employer’s March 24, 1994 proposal, his letter
to Cohen of May 23 says nothing about negotiations on its face.
Glassman explained that his May 23 letter was in response to
Cohen’s May 17 letter, and was an attempt to clarify what ap-
peared to be a confusion on Cohen’s part as to the willingness
of the Group members to negotiate the new compensation sys-
tems prior to implementation. Yet, Glassman was compelled to
agree that the March 24 contract proposal made 2 months ear-
lier did not spell out the Union’s right to negotiate the compen-
sation program to be explicitly put into effect by the Group
members, and thereafter to be explained to the Union at its
request.
The Respondent called Emil Verdoni, the Union’s president
as its own witness, in a further attempt to establish a known
practice by the Union of condoning house accounts among the
Group’s competitors. Verdoni denied any knowledge of any
one, i.e., any employer under contract with it, having house
accounts. During the 1993 negotiations, when certain represen-
tatives of employer members of the Group indicated they
wished to have house accounts, Verdoni told them no company
in the industry would be permitted to have house accounts with
Local 19 and there would be house accounts over his dead
body. Verdoni agreed he told the union membership if the
Union permitted house accounts it would be the end of the Un-
ion. Verdoni was not asked to confirm or deny Barnett’s testi-
mony complaining, generally, about the existence of house
accounts at certain companies.
It appears that Verdoni knew about the receipt of commis-
sions to the three individuals about whom Union Official
Richman had been previously questioned. But in each case
Verdoni denied that their commission earnings represented
creation of house accounts or that the three were housemen. As
to Bronstein, Verdoni said he had been a close friend. He knew
Bronstein had been close to the owners of F & A but denied
any knowledge of his alleged position as warehouse manager,
declaring that he knew both day and night F & A warehouse
managers. Verdoni asserted that Bronstein was a member of
the Union and had been a commission salesman for many years
and these commissions comprised his sole income. Even if he
was manager, he did not manage or supervise salespersons and
was not thereby disqualified from receiving commissions as a
bargaining unit salesman. As earlier noted, since F & A had
been a Group member until 1993, the most favored nation
clause could not be applied to F & A’s past practice, even if it
could be claimed, in error, that F & A maintained house ac-
counts. And, on Bronstein’s death in August 1993, any alleged
past practice involving him ceased. In any event, under the
Union’s definition of a house account, which requires the own-
LIQUOR INDUSTRY BARGAINING GROUP 1235
ers to retain commissions, F & A’s and the Union’s conduct, in
permitting Bronstein to receive commissions, was not the crea-
tion or establishment of a house account in violation of article
III of the 1990–1993 agreement. A later witness for Respon-
dent, Myron Feldman, chairman of the board of F & A Distrib-
uting Company, described Bronstein as a close friend from
boyhood who was his partner in other businesses. At F & A he
was considered to be a member of the family and performed
unspecified duties in the warehouse and kept an eye on things
for the owners and reporting to management, in addition to
being a full-time salesman. Documents received in evidence
show Bronstein was permitted to sign purchase orders on behalf
of F & A for large pieces of warehouse equipment from 1986 to
1989 and that he signed, on behalf of F & A, two letters in 1991
discharging a driver in a separate bargaining unit represented
by the International Brotherhood of Teamsters. Respondent
argues that regardless of the applicability of the most favored
nation clause to Bronstein’s receipt of sales commissions while
functioning as a de facto manager, F & A received a competi-
tive advantage over the Group members in the 1993–1994 ne-
gotiations from saving money by not paying Bronstein any
salary for his warehouse work but permitting his receipt of
commissions in lieu of salary and that this was a motivation for
Respondent’s removal of the prohibition against house accounts
in the Group’s final offer. But according to Feldman, with 50
years in the business, Bronstein was not a house man; his sales
did not meet his understanding of a house account, which was
an account without a salesman, but sold by a salaried person or
executive of the firm. Verdoni’s definition added to this the
factor that the commission retained by the company had to
deprive a Local 19 member of the opportunity to sell and make
money and Bronstein’s receipt of commissions did not do that.
Concerning Arnold Goldberg, an owner of Goldstar, Verdoni
testified he confronted Goldberg shortly after his election as
union president in January 1985, after hearing he was drawing
sales commissions. Goldberg told him he was a union member
since 1950, that his father owned the business, and that he
worked every day as a salesman and did not draw any salary as
owner or manager. When his father died in the 1980s Goldberg
inherited some ownership shares but continued his union mem-
bership and selling and earning commissions. After learning
from others at the company that Goldberg covered a run every-
day, Verdoni said he could not tell him to get off the road.
Although present at the bargaining table on the owner’s side he
did not participate in negotiations and his two brothers operated
the business and dealt with Verdoni and the Union. Verdoni
did not understand that Goldberg was an officer of Goldstar
Verdoni maintained that the article III prohibition on house
accounts was not violated by Goldberg’s receiving commis-
sions on sales he generated. In fact, Goldstar was an employer
member of the Group since 1989 and before its dissolution or
buyout. Prior to 1989, when Goldstar had been an independent
employer, there had never been any complaints or grievances
by Group members regarding commissions received by Gold-
berg. Neither had there ever been any Group employer or in-
dustry complaints about F & A maintaining a house account by
virtue of Bronstein’s receipt of commissions. In fact, no com-
plaints had ever been made by Group or other employers about
improper house account arrangements until the damage phase
of a Fedway arbitration proceeding about a year before this
hearing, to be discussed, infra.
Verdoni knew Tom Dirigibus of American B & D, listed by
them as a commission salesperson, had become a manager
there. Dirigibus had been a union member for over 30 years
and was a salesman. The American B & D owner’s sister is
Dirigibus’ wife. Verdoni had no knowledge that Dirigibus
earned a salary. The record contains evidence and Respondent
does not dispute that since becoming a manager, Dirigibus’
commissions have been pooled for distribution to unit salesper-
sons.
On one occasion, Verdoni came down hard on a member,
Steve Vagotsky, who had fairly substantial earnings as a sales-
person, when Verdoni learned that he retained a solicitor’s
permit to sell for five companies associated with Fedway.
Vagotsky complied when Verdoni informed him he could only
represent one company or subsidiary and drawing commissions
on sales for all five was unfair. In the discussions with Vagot-
sky it appears that Verdoni accused him, improperly as it turns
out, of being a houseman.
Although the Union receives yearly sheets from Group
members, as well as other contracting employers, showing
commissions received on sales, they were not generally used by
the Union to investigate whether house accounts were being
created, but were useful in learning how commissions derived
from a particular assigned run of accounts of members who had
died or left the industry were being reallocated, whether di-
vided among other salespersons or even retained by the owner
in violation of article III. Apparently, according to Verdoni and
confirmed by records in evidence, some companies reported
annual earnings of managers to the Union on the sheets, even
though it was evident they did not sell or earn commissions. In
some cases, these managers or owners retained union member-
ship to obtain health fund coverage.
It was in the Union’s efforts to protect and expand the earn-
ings of salespersons that article III became part of the contract
years ago. While Verdoni acknowledged that the casino roy-
alty pool is a house account in the sense that it is solicited and
sold by management, by insisting on an arrangement to have
the royalty or resulting commissions shared by salesmen, the
Union has been providing protection to its unit employees.
Certain documents received in evidence toward the end of
the hearing show a total of $121,287.77 in commissions not
paid to unit salespersons by Jaydor for a 4-1/2-month period
since it implemented, effective November 10, 1995, the with-
drawal of club accounts from its salespersons, pursuant to the
March 1994 final offer. By letter dated February 29, 1996,
DeMarino sent a memorandum to all employees, but not to the
Union, informing them that starting March 1, 1996, Dobbs
Wine & Liquor, a Division of Jaydor Corporation will be ser-
vicing its club customers and selected key accounts, and all
primary advertisers in New Jersey. The memorandum went on
to list the sales sanager, two key account managers and two
marketing representatives servicing these accounts. It appears,
based on an offer of proof received in evidence in lieu of testi-
mony by Jaydor President Silverman, that the name of Dobbs
Wine & Liquor had been used in the past by Jaydor for the
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1236
purpose of filing base liquor prices with the State Liquor Au-
thority in contemplation of making sales through that division,
although it never did so. The idea of using Dobbs to market
club accounts evolved over time; since November 10, 1995,
club accounts had been marketed and serviced through its exist-
ing wine houses. Of the two marketing representatives named
in the memorandum, one had never been a sales representative
in the bargaining unit, and the other had been a unit sales repre-
sentative in 1995, but had been terminated for failure to earn
the minimum required commission after having been subsi-
dized for a time.
Finally, on the question of the most favored notion defense
asserted by Respondents to the allegation that their unilateral
implementation of the proposal permitting house accounts was
independently violative of the Act, the Union introduced two
arbitration awards. The first, dated March 3, 1995, dealt with a
Union grievance against Fedway claiming a failure to pay
salesmen’s commissions under the 1990–1993 agreement. The
Union claimed that the sales, made through an affiliate which
was activated for the particular purpose of making pallet sales
at low prices to meet competition, and whose sales were appar-
ently made by nonunit personnel, nonetheless came under the
contract’s coverage and required the payment of commissions.
The arbitrator rejected a defense that the sales were to ‘unsold
accounts’ as defined in article III and therefore, required com-
mission payments from the first day of sales rather than after 30
days. Article XV was also violated since the sales were ac-
complished through supervisors and not credited to union
salesmen. The arbitrator discredited an assertion by President
Leventhal that he did not have the intention to avoid paying the
commissions when he created the pallet sales concept and util-
ized an inactive affiliate. As the Fedway affiliates were found
to be a single employer, the award of unpaid commissions on
gross sales in excess of $6 million ran against all six of them
and directed the parties to meet timely to attempt to agree on
the exact figure due, but retained jurisdiction in the arbitrator in
the event of a failure to agree.
The second award, dated March 12, 1996, recounted a failure
of the parties to agree and a subsequent hearing held on No-
vember 15, 1995. It was at this hearing for the first time that
the Employer raised a most favored nation defense, claiming
that all the commissions were due and payable to an individual
named Dokachev, the designated salesman for the resurrected
affiliate, even though he was a manager, as its director of fi-
nance, because the Union had permitted other managers to join
and receive commissions and therefore had to apply this more
favorable practice to Dokachev. The arbitrator noted that this
defense had not been raised in the earlier phase of the case, the
matter of Dokachev’s entitlement to commissions had been
decided adversely then to the Employer since its activation of
the passive house, and attempt to add Dokachev as a salesman
by submitting an altered Local 19 dues transmittal form had
been found to be improper, and, moreover, the earlier award
obligated Fedway to sell through the selling houses within the
Union’s jurisdiction, and not a name which had no salesmen or
accounts and was no longer covered by the labor contract.
This belated and unsuccessful attempt by Fedway to raise the
most favored nation article 10.01 of the 1990–1993 contract
appears to have been the very first time the Group or any mem-
ber sought to do so with respect to the use of managers to re-
ceive commissions, and thereby create a house account, and
was only done so after all of the charges had been filed in the
instant proceeding.
C. Respondents’ Alleged Discriminatory Removal of Sales
Accounts from Edward Primavera
Edward Primavera testified that he had been employed by
Royal for 29 years as a salesman, earning commissions based
on goods sold to assigned retail liquor outlets. He was a mem-
ber of Local 19 since 1965, a shop steward for the last 7 or 8
years, and a Board member and member of the employee nego-
tiating committee for the negotiations which commenced in the
summer of 1993. Primavera was active in the strike which
commenced in October 1993, serving as a captain to man and
check on the picket lines established at the northern and south-
ern division locations of his employer, Royal. He picketed the
Royal premises 4 to 5 hours at a time for the almost 3 full
weeks of the strike. Primavera described the strike as being
short-lived because many employees crossed the picket line and
returned to work. In his own southern division all but four
employees out of 32 eventually crossed the line by the time the
strike terminated. Primavera was one of the four who did not
cross the line. Primavera was the only one of the four who was
a steward and who served on the negotiating committee.
Those employees who crossed and returned to work early in
the strike were going into and writing orders on accounts as-
signed to strikers. Primavera learned from his own customers
that crossovers were writing orders on his own accounts. In
one instance, Primavera followed a truck and discovered the
driver was delivering an order placed by a crossover on one of
his accounts. Because of his relationship with the particular
customer the order was returned and Royal was informed Pri-
mavera would be that customer’s salesman after the strike.
On a Friday, the first day back to work after the strike, Pri-
mavera’s sales manager told him there had been a review of
accounts, and he was given a list of his to review with certain
accounts removed. Twelve out of 82 had been removed, leav-
ing him with 70. Over the weekend, Primavera received a mes-
sage on his voice mail to disregard the list, and the removed
accounts would be placed back on his book. He understood
other employees complained to the Union and this resulted in
the restoration.
After the strike Primavera continued to serve on the Union
Executive Board and the bargaining committee. After the final
offer was rejected by the membership in late May 1994, Prima-
vera suffered a heart attack, was hospitalized before Memorial
Day and was released 8 or 9 days later on the following Friday
in early June. After the tests disclosed he had a blockage he
had to return to the hospital for an angioplasty on June 12.
Afterwards, from mid-June, he recuperated at home and ser-
viced his accounts by telephone on a regular basis, twice a
week, his customers expressed satisfaction and his sales actu-
ally increased. Eventually, he returned to his preillness work
activity, he believed, in September 1994.
In either October or November 1994, Primavera was called
into the office and informed by Henry Feney, his sales man-
LIQUOR INDUSTRY BARGAINING GROUP 1237
ager, that he was removing two accounts from Primavera’s
ledger, Walls Liquors and Lincroft Liquors. Between them,
Primavera was earning $3500 to $5000 yearly in commissions
on annual sales. Lincroft had reopened after being closed and
Primavera was developing it, placing a lot of new items and the
account was growing. Primavera learned that a Billy Stryker,
who had crossed the picket line and returned to work during the
strike, was assigned the Lincroft account. Feeney only said that
the removal of the accounts was his decision but did not explain
why he did so. As to the Wall account, the owner who had
been placed on C.O.D. status by Royal for slow payments on
bills, and was later warned he would not receive further deliver-
ies unless prompt payments were made, became angry with
Royal and Primavera, who was unable to change the Royal
policy, and ceased placing regular orders, thereby resulting in
lower sales and commissions before Primavera was removed as
salesman. When Primavera complained about not receiving
any accounts as compensation for losing the two (under art.
10:02), Feeney and Frank Bilancio, then vice president of sales
in Royal’s southern division, told him accounts would be com-
ing his way, mentioning a new store, part of the Spirits Unlim-
ited Cooperative, would be opening. As a consequence of the
promise Primavera did not push for immediate compensation.
At about the same time, Primavera was told about an F & T
account in Shrewsbury, part of the Spirits Cooperative, which
would be opening up.
In November, Primavera learned that the old F & T account
which he had long serviced and had closed, had now reopened
and Primavera approached the new owners, advised them on
certain items and placed their initial liquor order. Primavera
spoke to Bilancio who told him he would be getting this ac-
count as of December 1, 1994. And on a document forwarded
by fax to Bilancio from the Spirits Cooperative coordinator,
Bruce Hamilton, Primavera’s name is listed as the salesman for
the Royal liquor sales to F & T and included a handwritten
notation by Hamilton confirming his request for Primavera
made to Bilancio. Of the five different company salesmen
listed on the document faxed by Hamilton to Bilancio, only
Primavera was not assigned the F & T store account. Each of
the salesmen listed for F & A, Rietman (R & R), Jaydor and
Fedway, were assigned by their respective companies. Yet,
Primavera received no commissions on this sale, was not as-
signed this account and was not compensated with any re-
placement accounts.
After the strike Primavera had a conversation about the strike
with Bilancio during which Bilancio told him you know what I
think of your union and I don’t even want to discuss it. Bilan-
cio also told him he had made a big mistake by going on strike.
When Primavera continued to question him about not receiving
new replacement accounts at sales meetings, Bilancio told him
how could he possibly expect for the company to cooperate
with him with the position he took because he aligned himself
with the Union.
In February 1995, Primavera had his regular annual review
about his sales performance in 1994. He was presented with a
sheet reflecting his account activity compared with prior years.
Although his performance was fairly good Feeney and Bilancio
told him he had dropped the ball on the “President’s Circle,” an
incentive program under which salesmen who meet targeted
monthly quotas on particular products, receive a dinner at the
end of the year. Primavera had won this award for 7 or 8 years
in a row, every year it had been offered, except for the year of
the strike, when he was never invited to participate. Primavera
told them how could you possibly hold this year’s results
against me, given I was out sick for about 6 months. They said
there was no excuse for this performance and then they told
him they were removing the Allaire Liquors account in Red
Bank from him. They gave him no explanation for the re-
moval. Primavera had done $116,000 to $120,000 in sales in
1994, worth $6000 in commissions, more with incentives. It
was the biggest liquor store in its area and he had helped set up
the store when it opened. Primavera later learned that cross-
over striker Billy Stryker had been assigned to this account.
Primavera complained bitterly about this removal and told
the supervisors he would see them in court. They offered him
two accounts in its place, Patassies Red Lion Inn and Parkway
Liquors in Bricktown. They were combination bars and pack-
age stores. Primavera estimated their sales as totaling roughly
$20,000 each annually with total commissions of $2000 to
$2,500. He had serviced these accounts years before and they
had little value. Primavera rejected the offer because they
weren’t fair compensation for the loss of Allaire.
Primavera also described a past practice before the strike
when a new account opened and is issued a new license to sell
liquor. When he wrote the first order on such accounts by per-
sonally soliciting the business he would be assigned the account
as an incentive for opening new accounts. Primavera gave
some examples of this practice, naming individual stores.
Since the strike, Primavera wrote the initial order for a newly
issued licensee in Cream Ridge, New Jersey, called Goods to
Go. He had seen an ad in a publication, learned they wanted to
join the Spirits Unlimited Co-op, contacted Susan Amburgey,
the owner, went in to the store and wrote the order. On June
21, 1995, he arranged for the owner to sign a form he had pre-
pared entitled “Requested Sales Person” and list his name as
the salesperson to be credited with 100 percent of the licensee’s
cooperative purchases and all resulting commissions, and filed
it with Royal. When Primavera called Royal the next day for
the order number so he could place the order through the com-
puter he was first told management was away, and then a few
days later was told by the coop coordinator that the account had
been assigned to another salesman.
In a subsequent conversation with Susan, the owner, she in-
formed him that Royal had not given her the privilege of select-
ing the salesman, she had refrained from placing an owner, and
he went into the store on the following Saturday and wrote up
the opening order. Primavera then called Bilancio to plead for
the account, noting the owner’s preference for him but was told
that the decision had been made by the company and it stands.
He learned the salesman assigned was Joe D’Angelo, another
cross-over.
Another sales practice Primavera described relates to a store
which closes and then later reopens. If it is a large store, when
it closes the company tries to compensate the salesman. Nor-
mally, if it reopens the original salesman has the right to sell the
store again. When Towne Liquors, an account on Route 35 in
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1238
Middletown he had serviced for 25 years closed around
Thanksgiving in 1993, Primavera was not given any compensa-
tion. When it later reopened in December 1994, before the
holiday season, it was assigned to a James Malibashca, another
cross-over.
During his cross-examination Primavera testified he saw
Feeney, Bilancio, and Domenick Biasi, a sales manager, since
retired, come out to the picket line and talk to pickets, but not to
him, because, in his view, they had enough sense to stay away
from him. In discussions on the picket line he overheard Biasi
tell pickets they were making a big mistake, their alliance
should be to the company, not the Union, that’s who pays them.
He was informed by fellow pickets of similar remarks made by
the three to them.
Primavera understood that the F & T Spirits Unlimited Corp.
in Shrewsbury had no Royal salesman assigned to it for over a
year; the store owner, a man named Frank, informed him on
periodic visits that nobody was coming in to see him from
Royal Liquors. Yet, he had seen orders in writing for that store
which were substantial in size.
Primavera was a thoughtful, responsive witness. During his
cross-examination when pressed about any negative comments
made to him about his participation in the strike, he repeated in
substance his testimony on direct that within a month after the
strike Frank Bilancio had told him he had aligned himself with
the Union and had to live with it. These statements were re-
peated a few times by Bilancio in the presence of Feeney. Al-
though Primavera’s pretrial affidavit contains a statement that
no one from management threatened him or otherwise com-
mented on his strike activity when he returned to work, it also
contains earlier references to Biliancio’s negative comments
about his aligning himself with the Union. It is apparent that
Primavera did not consider this and like comments to be
threats,5 but that they showed an attitude towards him which
was reflected in the removal of, and failure to assign to him,
certain accounts and thereby helped explain company decisions
in this regard, particularly when he was not provided with any
explanations on the Wall, Lincroft, and Allaire removals or the
refusal to assign him the F & T account after the coop
coordinator had requested him and apparently received an
assurance about his assignment.
With respect to the Cream Ridge account assigned to a
crossover, Respondent’s cross-examination seemed to claim the
location of the account was well outside Primavera’s geo-
graphic territory. Primavera testified he serviced a very large
territory which requires over an hour-and-a-half travel time on
his part from the southern most, to the northern most account.
He also handled an account in Manalopin only 15 minutes drive
east from Cream Ridge.
Henry Feeney testified for Respondent. He had a friendly re-
lationship with Primavera which on occasion, extended beyond
the work place. During the strike his verbal exchanges with
pickets during the strike were only the exchange of pleasant-
ries. Feeney also observed Bilancio and Biasi doing the same
on occasion. Feeney confirmed that 28 of 32 southern division

5 Neither, apparently did the General Counsel since they are not al-
leged as violations of Sec. 8(a)(1) in the complaint.
salesmen returned to work before the end of the strike. In view
of the added pressures placed on them and extra long hours
worked by Feeney and the other managers by virtue of the
strike, the comments overheard by Primavera and reported to
him, the lack of credibility of the denials that the pickets dis-
cussed the strike with them, and the conduct of the pickets in
quickly following the early few crossovers in returning to work,
I find, contrary to Feeney’s denial, that comments were made to
induce the strikers early return to work, and probably included
information that their accounts were at risk.
Feeney testified about receiving reports of dissatisfaction
from Wall and Lincroft as to Primavera’s servicing of their
accounts, about the same time after the strike, such as not
showing up and advising about items on sale or taking care of
credit problems which arise from breakage and the like.
Feeney evidenced some lack of recall as to when these prob-
lems with Wall started, whether before or after the strike or
before or after Primavera’s illness. Primavera is credited that
they were removed in late 1994. A later stipulation confirms
this date. In any event, after the problems continued, he re-
moved both of these accounts, but told Primavera some Spirits
Unlimited family stores might be opening up and he would get
something later from it. But Feeney testified, no new store
opened and no replacement was provided to him. Feeney did
agree that some dissatisfaction with Primavera on the Lincroft
account may have arisen from his failure to receive some dis-
count coupons on an item of liquor which Primavera didn’t
deliver but which a competitor received. Feeney himself deliv-
ered these coupons directly to Lincroft after Primavera in-
formed him but Feeney did not credit Primavera with seeking
them for the customer or apparently even inform Primavera he
had done so. Some dissatisfaction with Primavera may have
also arisen from his not visiting the store during his illness.
During the 2-1/2 months Primavera was out of circulation
with his illness and recuperation, he and Bilancio physically
covered the accounts on a weekly basis. It was during this
period, that Feeney learned of some complaints from his ac-
counts arising before his illness, but none resulted in any repri-
mands.
As to the reassignment of the Towne Liquors account which
had closed for over a year, when it was reopened by a man
named Rumsen, it was reassigned to a salesman, Jim Mali-
bashca, who had an excellent prior relationship with Rumsen.
In this case, these circumstances overcame the normal practice
of reassigning back to the salesman who had the original ac-
count. Yet, Feeney did not provide Primavera with any re-
placements to cover its loss.
As to newly opened accounts, Feeney disputed Primavera
that they were invariably assigned to salesmen who solicited
initial orders. Royal’s new customer information form used to
open an account contains no reference to salesmen and Feeney
was unaware of the form used by Primavera until he submitted
it when the Cream Ridge account opened in mid-1995.
Feeney’s explanation as to why Primavera was not assigned the
Cream Ridge account after placing the initial order and being
requested by the owner was that it was completely outside his
area and was in the heart of D’Angelo’s run. Primavera’s clos-
est other western most account was 20 miles away. Primavera
LIQUOR INDUSTRY BARGAINING GROUP 1239
generally covered a north/south run on the Jersey shore,
D’Angelo, in contrast, has an east/west run and Cream Ridge
was in the heart of it.
Feeney explained that various factors went into account as-
signments, including geographic coverage, past relationship
with the customer, whether the salesman had the store before it
closed and how long it was closed, if dealing with a renewed
license, and whether an account was lost because of an act of
god such as a fire.
As to Respondent’s removal of the Allaire Spirits Unlimited
store in Red Bank from Primavera, over a period of perhaps a
year the manager had expressed dissatisfaction with Prima-
vera’s servicing of the account. He was not showing up, not
showing new items, not advising on off-price deals every
month. This store and another, in Middletown, were commonly
owned and the general manager of both was very friendly with
Primavera, so, although Eddie was talked to, the account was
not earlier removed. Finally, at a meeting at which both Allaire
managers sought Primavera’s removal, but asked their effort
not be disclosed, Feeney and Bilancio agreed to remove him.
They recognized it was a large hit on his income, so they of-
fered him three accounts, valued at between $60,000 and
$70,000, in lieu of the Allaire store. Primavera after no more
than two seconds, physically threw the papers back at them.
Primavera also accused them of removing the account because
of the Union and that higher management made the decision.
According to Feeney, and disputed by Primavera, he and Bi-
lancio told Primavera about his shortcomings, things missing
when they visited the store which they considered a key ac-
count in the State. I credit Primavera that he was not informed.
The only two written recordings of company criticism of
Primavera’s work performance on any account were made, both
entitled ‘‘Reprimand Slip,’’ but not shown to Primavera, one in
April 1994, and a second on January 31, 1995, shortly before
his removal from the Allaire account. In the first, Bilancio
recounts that as a result of several visits to the Allaire store and
discussions with Feeney and Biasi, he believed Royal was un-
derdeveloped there and he had spoken to Eddie about his ap-
proach and salesmanship and pointing out best buys at the end
of the month and sending in drive (monthly priority) items
without consent of the men. Bilancio concludes that he in-
formed Primavera that unless his performance improved he
would lose the account. In the second slip Feeney reports to
Bilancio the manager’s dissatisfaction with Primavera’s ab-
sence from the store at the end of November and December, the
2 biggest months, as well as the first 2-1/2 weeks of January.
The manager also criticized Primavera’s failure to present him
with new items or promotions, point of sale materials or walk
the store. Bilancio’s own visit to the store confirmed short
comings in shelf position and distribution of key items. Fur-
ther, the manager complained Eddie was rude and offensive in
soliciting sales. Because his actions were deemed unprofes-
sional and not up to minimum standards of service, Feeney
recommended to Bilancio removing the account. Yet, he did
not recommend, as he had in August 1994, in the case of an-
other salesman not servicing to minimal standards, that no re-
placement accounts be provided.
As to the Wall and Lincroft store removals, Feeney agreed
that Primavera generally got the new family Spirits stores when
they opened, and that he promised Eddie something for losing
the two. Yet, Feeney also agreed that Primavera was not as-
signed the new F & T Spirit store after writing out the first
order within a month thereafter.
Even as to the Allaire account, on which Feeney registered
the manager’s complaints, the store’s sales had gone up consis-
tently over the period of Primavera’s servicing.
Now, for the first time, during cross-examination, Feeney re-
called that in addition to the Red Lion and Parkway accounts,
he thought that Primavera was also offered the F & T account
he had written the first order on back in December 1994, when
Allaire was taken away in February 1995. But Feeney could
not explain why Primavera was not given the F & T account in
November/December 1994. His boss Bilancio, handled it and
he was not involved with it at the time. As to the Cream Ridge
account assignment, Feeney also disclosed that both Primavera
and D’Angelo had accounts in Lakewood, 20 miles due east of
Cream Ridge. D’Angelo, who lives in Cherry Hill, in the
southern part of the state, and only 10 to 20 minutes from Phila-
delphia, starts his run in Cherry Hill and covers one of the larg-
est and most unusual territories in going east to west rather than
north and south.
Frank Bilancio, then vice-president for sales for Royal in its
southern division, recalled periodically visiting Primavera’s
Allaire account in the period from late 1993 all through 1994
and receiving complaints on certain occasions from its manager
that Eddie didn’t keep him informed of sale prices on products
for the following month so that he could purchase and feature
them. Bilancio also saw lack of point of sale material or floor
feature displays of Royal products on visits to the store. The
store is large, containing maybe 20,000 square feet.
Bilancio confirmed that he did not show his April 1994 rep-
rimand slip to Primavera but claims he discussed with him the
substance of the complaints in the document.
At around the same time Bilancio became aware of the com-
plaints concerning Primavera’s Lincroft and Wall Liquor ac-
counts, but that Feeney dealt directly with him in removing
those accounts and he was not present when this was done.
After numerous conversations with Eddie, at his annual review
meeting with Bilancio and Feeney at the end of February 1995,
the Allaire account was removed from him. He was told it
would be replaced with three other accounts to try to make up
for the loss of dollar volume. Eddie was angry, disputed the
worth of the three accounts, said he didn’t want them and
would see us in court. Based on their sales history, Bilancio
valued Parkway Liquor in Lakewood at $30,000 or $31,000,
Patassis Red Lion Inn in Brick Township at $20,000 and F & T
Spirits, the third, which had just opened in November or De-
cember 1994 at $25,000. This last figure was estimated on the
basis of $8000 business. The three replacement accounts thus
totaled about $70,000 to $75,000 in sales. Sales figures re-
ceived in evidence confirm these figures for 1995, and as pro-
jected for 1996 the F & T Store should well exceed its prior
sales. Bilancio acknowledged that the Allaire account had
about $116,000 in sales. Documents in evidence show sales of
$118,474.29 in 1994 and $116,589.82 in 1993. In removing the
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1240
account Bilancio alluded to the material in his two reprimand
slips regarding Primavera’s lack of salesmanship, poor point of
sale and lack of distribution on key items.
Bilancio disputed that there was any practice of assigning a
new account to the salesman who writes the initial order. In
one other instance, Bilancio recalled that Primavera was as-
signed a new Spirits account, TGIF on Route 37, although he
had not placed the opening order. In Bilancio’s opinion,
D’Angelo was assigned the new Cream Ridge store because it
was more closely aligned with his geographic area than with
Primavera’s area.
An examination of the map of New Jersey received in evi-
dence, which pinpoints the locations of Primavera’s accounts,
predominantly along the Atlantic shore line and up and down
the Garden State Parkway from Manahawkin in the south, to
Atlantic Highlands in the north, and which describes in circles,
as supplemented by Bilancio’s testimony, the geographic area
covered by D’Angelo running northeast from his home in
Cherry Hill, it is apparent that Cream Ridge is located much
closer to the bulk of the area covered by D’Angelo than to the
accounts serviced by Primavera.
Bilancio denied having any discussions with pickets about
the negotiations and collective bargaining, although it was dif-
ficult servicing customers and he was curious about when the
strike would end. He was also unaware of any confrontation or
discussions between Biasi and pickets. Bilancio also denied
that in his conversations with Primavera concerning his dissat-
isfaction with the way he was handling his accounts he had
indicated that his actions were the result of the fact he was a
union official, had filed charges with the Board or was litigat-
ing with Royal. These questions and answers which are quite
limited do not preclude finding that Bilancio had made the
comments attributed to him by Primavera critical of the strike
and Primavera’s participation in it or even the comment about
aligning himself with the Union in response to Primavera’s
questioning him about not receiving replacement accounts.
I have previously credited Primavera as to the comments he
heard Biasi make to the pickets and those reported to him made
by Feeney and Bilancio. I do not credit Bilancio’s denial that
he discussed the strike or sought the pickets return to work. I
also find that Bilancio made the remarks attributed to him by
Primavera in their discussions at work.
During his cross-examination, Bilancio confirmed that Bruce
Hamilton, the coordinator for Spirits Unlimited cooperative
store, had telephoned him on December 1, 1994, and had re-
quested Primavera to service the F & T account for Royal. Yet,
Bilancio also agreed he did not assign the account to Primavera
at that time. He told Hamilton that Eddie would not be the
salesman until after the first of the year. Bilancio could not
recall if Feeney told him when he removed the Wall/Lincroft
account that he had promised to give this account to Primavera
when it opened.
On further redirect examination Bilancio corrected his earlier
testimony regarding his conversation with Bruce Hamilton. He
now testified that whenever a Spirits store opened, Hamilton
always asked for Eddie. If it was a family store he would
oblige or arrange a swap so Eddie would be assigned. The F &
T was not a family store. On this occasion on December 1, he
told Hamilton he had assigned another salesman to F & T and
he would meet with Hamilton after the first of the year and
discuss the assignment. Hamilton was not happy and Bilancio
said he would look into it. Bilancio explained that the Spirit
coop wanted the same company salesman in all their stores and
Hamilton was comfortable with Eddie as the Royal salesman.
In January, at their meeting Bilancio told Hamilton he couldn’t
accommodate him every time a Spirit store opened and he was
going to retain the salesperson who had the account before it
had became a Spirits affiliate. Then, in February 1995, Bilan-
cio did offer this store to Eddie to provide him with some sales
volume to make up for his loss of the Allaire account.
Under further cross-examination, Bilancio was unable to ex-
plain and could not dispute Primavera’s testimony that he had
serviced the F & T store for many years before it closed and
then became part of the Spirits cooperative. Neither could Bi-
lancio recall that it was Primavera who wrote the opening sales
order after F & T reopened.
A significant factual dispute has arisen regarding whether or
not Respondent offered Primavera a third account—the F & T
store—when it removed the Allaire account from him in Febru-
ary 1995. Primavera nowhere mentions a third account being
offered when he rejected the two accounts because from his
past experience with them they were relatively worthless. Nei-
ther was Primavera cross-examined as to Respondent’s claim of
the belated offer of the third store. It was only during his cross-
examination that Feeney mentions the F & T account. Bilan-
cio’s explanation as to the reason for not initially assigning
Primavera to the F & T account is unconvincing, given his
inability to counter Primavera’s multiple claims to the assign-
ment, including his long-term servicing of the account prior to
its closing. I am not prepared to find that Bilancio was pre-
pared to now assign an account he had earlier improperly with-
held from Primavera when he removed the Allaire account. In
this conclusion I also rely, at least in part, on the credited testi-
mony of Primavera attributing to Bilancio a motive of refusing
to cooperate with him on the assignment of replacement ac-
counts because he had aligned himself with the Union. Fur-
thermore, in light of Primavera’s claim of being treated unfairly
and discriminatorily when he was denied the F & T account in
November or December 1994, when it reopened, if the F & T
account had been included in the offer 2 months later, it would
be reasonable to conclude that Primavera would have recalled it
and might even have looked favorably on the three store re-
placement offer. While Feeney spoke of an offer of $60,000 to
$70,000, Bilancio described an offer of $70,000 to $75,000 and
Primavera’s figured the offer was for accounts with sales of
approximately $40,000, I find that the replacement offer to
Primavera was for two accounts only and did not include F &
T.
ANALYSIS AND CONCLUSIONS
The consolidated complaint alleges that about March 24,
1994, Respondent Association insisted to impasse on a wage
proposal which included the language contained in its proposed
section 6:01(a) set forth at page 5, supra, thereby seeking total
unilateral control over wages. The complaint further alleges
that since the aforesaid date Respondent Association has failed
LIQUOR INDUSTRY BARGAINING GROUP 1241
to bargain as to the timing, criteria and procedures for compen-
sation of employees in the unit, and then finally alleges that by
its overall conduct, including the conduct described, it has
failed and refused to bargain in good faith with the Union. I
conclude that these allegations are supported by a preponder-
ance of the evidence.
Section 8(a)(5) of the Act makes it an unfair labor practice
for an employer “to refuse to bargain collectively with the rep-
resentative of his employees.” Section 8(d) defines the duty to
bargain collectively as the “performance of the mutual obliga-
tion of the employer and the representative of the employees to
meet at reasonable times and confer in good-faith with respect
to wages, hours and other terms and conditions of employ-
ment.” The duty imposed on the parties under Section 8(a)(5)
to bargain collectively does not obligate a party to make con-
cessions or yield a position fairly maintained, H. K. Porter Co.
v. NLRB, 397 U.S. 98, 106 (1970); NLRB v. American National
Insurance Co., 343 U.S. 395, 404 (1952). On the other hand,
the parties are obligated to do more than merely go through the
formalities of negotiation. There must be “a serious intent to
adjust differences and to reach an acceptable common ground.”
NLRB v. Insurance Agents’ Union, 361 U.S. 477, 485 (1960).
The foregoing does not mean, however, that the Board is
prohibited from examining the contents of the proposals made.
The Board “must take some cognizance of the reasonableness
of the position taken by an employer in the course of the bar-
gaining negotiations” if it is not to be “blinded by empty talk
and by the mere surface motions of collective-bargaining.”
NLRB v. Reed & Prince Mfg. Co., 205 F.2d 131, 134 (1st Cir.
1953). See Atlanta Hilton & Tower, 271 NLRB 1600 (1984).
Thus, in determining whether there was a lack of good-faith
effort to reach agreement the Board will consider the totality of
a party’s bargaining conduct, including the presence of unrea-
sonable bargaining demands. In Reichlold Chemicals, 288
NLRB 69 (1988), the Board reaffirmed that in examining the
totality of conduct it will consider as part of the evidence a
party’s insistence on “extreme proposals” in determining
whether a demand was “designed to frustrate agreement on a
collective-bargaining contract.”
An employer’s insistence on unilateral control of all wages
evidences just such an unreasonable proposal as can result in a
finding of bad-faith bargaining. In Harrah’s Marina Hotel &
Casino, 296 NLRB 1116 (1989), the employer proposed no
wage rates nor maximums or minimums and the size and pro-
cedures for determining merit increases would be decided uni-
laterally, with disputes made subject only to an internal appeal
procedure with no union recourse to the grievance—arbitration
provision of the contract. This wage proposal was accompa-
nied by others to reduce and eliminate existing benefits. This
insistence on controlling all assets of wages was found to be
one part of a pattern of conduct supporting a finding of bad-
faith bargaining in violation of Section 8(a)(5). In Alba-
Waldensian, Inc., 167 NLRB 695, 696 (1967), enfd. 404 F.2d
1370 (4th Cir. 1968), in addition to refusing to supply data
necessary for the charging party to discharge its function as the
collective-bargaining representative with respect to the vital
subject of wages, the employer eliminated piece-rate guarantees
unilaterally and did not provide the charging party adequate
data from which to bargain with respect thereto. From the out-
set of negotiations it insisted not only upon the maintenance of
the existing wage structure but also upon the right to cut wages
unilaterally if it so desired. The Board stated, at 696: “Its insis-
tence upon retaining the right unilaterally to control during the
contract term an item as vital to an agreement as wages appear
to us, moreover, the clearest manifestation of bad faith.” A
significant element of the Board’s finding of bad-faith bargain-
ing in John Ascuaga’s Nugget, 298 NLRB 524 (1990), was the
employer’s insistence upon total control of wages, seniority,
and work rules, thereby excluding these items from the bargain-
ing process both at the contract-negotiation table and through-
out the term of the contract. Such conduct, said the Board “was
all the more likely to frustrate agreement because of the Re-
spondent’s refusal to provide any justification for placing sub-
jects of such importance to the employees beyond the influence
of the employees’ collective-bargaining representative.” Id. at
527 (Footnote omitted).
While the Board has held that an employer’s bargaining to
impasse on institution of a merit pay program with amounts to
be determined solely by the employer under the totality of all of
the circumstances is not violative of the bargaining duty, Colo-
rado-Ute Electrical Assn., 295 NLRB 607 (1989), enf. denied
939 F.2d 1392 (10th Cir. 1991), cert. denied sub nom. Electri-
cal Workers IBEW Local 111 v. Colorado-Ute Electrical Assn.,
112 S.Ct. 2300 (1992), the Board has distinguished those situa-
tions where an employer insists to impasse on total control over
all compensation issues. It did so in Harrah’s Marina Hotel,
supra at fn. 1, and, again in Cincinnati Enquirer, 298 NLRB
275 (1990), petition for review denied sub nom. 938 F.2d 276
(D.C. Cir. 1991), where it found no violation because “the
General Counsel did not establish that the Respondent insisted
during negotiations on control over its entire wage system.” Id.
at 275.
Where the parties have reached the point where there is am-
ple reason to believe that no useful progress could be made
toward a total agreement, the Board may determine that the
bargaining is at impasse. Whittier Area Parents’ Assn., 296
NLRB 817 (1989).
In determining whether a valid impasse has been reached the
Board will examine a number of factors relating to the pattern
of behavior of the parties involved. They include (1) the bar-
gaining history; (2) the good faith of the parties in negotiations;
(3) the length of the negotiations; (4) the importance of the
issues on which disagreement exists; and (5) a contemporane-
ous understanding of the parties as to the state of the negotia-
tions. These factors are an aid in determining whether the im-
passe is a valid one or shows an “overall pattern of behavior
designed to frustrate the bargaining process,” Litton Microwave
Cooking Products, 300 NLRB 324, 330 (1990).
A valid impasse permits a party to lawfully engage in unilat-
eral action implementing its last best offer. But where the party
declaring impasse and seeking to take advantage of its declara-
tion has by its own action precluded an agreement being
reached, the Board will conclude that the declaring party has
forfeited its privilege of announcing impasse. See Litton Mi-
crowave Cooking Products, 300 NLRB at 324. Any resulting
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1242
unilateral action will be held to be violative of the bargaining
duty under the Act.
I find that when the Respondent produced its final offer on
March 24, 1994, it was a culmination of a number of prior pro-
posals, which in their totality evidenced an intent to frustrate
agreement and violated its bargaining obligation under the Act.
First and foremost, the Group’s article XI proposal, on its face,
manifested an insistence on maintaining unilateral control over
the setting of compensation for each of the salespersons in the
bargaining unit. As such, its unwillingness to bargain the tim-
ing criteria and standards for establishing the compensation for
the unit employees employed by the Group members, derived
from the language itself of section 6:01(a), is particularly in-
structive. The language purposely used could not be clearer
that it is the Employer (alone) who will put into effect the wage
and salary programs pursuant to which sales representatives
shall be compensated. Only upon its request will the Union be
provided with a written explanation of the program applicable
to the sales representative. No mention is made of the right of
the Union to negotiate the program applicable to each employee
or even to be consulted as to the procedures, criteria and timing
of the program established. Finally, the Group would, by the
terms of section 6:01(a), be denied the opportunity to contest
the merits of the program unilaterally determined, under the
grievance and arbitration procedure.
The cases I have discussed support my conclusion that by the
language of section 6:01(a) Respondent was unlawfully insist-
ing on its right to unilaterally control during the contract term
the setting of compensation for the unit employees.
Negotiator Glassman’s letter of May 23, 1994, does not
change this result. I have previously discussed the implications
which flow from this letter. In insisting by its letter of May 17,
1994, on the basic information of the compensation plans and
schemes to be applied by the Group on implementation of them
as of June 1, 1994, the union counsel was seeking information
to which it was lawfully entitled if it was to fulfill its bargain-
ing obligation to the unit employees it represented. By stating
that it will ‘advise’ the Union as to the timing, criteria and pro-
cedures for determining and paying such compensation a week
prior to its intended implementation Respondent was not re-
sponding to the Union’s legitimate request, but was rather giv-
ing lip service to its obligations under the Act. The letter pro-
vides none of the legitimate information requested. Neither
does the letter inform the Union it will negotiate any compensa-
tion plans or schemes, or that article XI will be modified to
incorporate its May 23 offer. Respondent reaffirms it will con-
tinue to make the decision on timing, criteria and procedures,
only providing the Union with the results of its decision and
nothing more. When almost a year later, on March 6, 1995, the
Group agreed in writing to incorporate this language in a re-
vised section 6:01(a) proposal, Union Attorney Cohen, by letter
dated March 7, 1995, registered the Union’s rejection of revised
6:01(a) which he reasonably asserted continued to give the
Employers the right to determine and modify compensation of
unit salespeople as the Employers see fit.
In using the terms it selected in the letter, Respondent ap-
pears to have viewed the Board’s holdings in such cases as
Colorade-Utte, supra, and McClatchy Newspapers, 299 NLRB
1045 (1990) (McClatchy II) and 322 NLRB 812 (1996)
(McClatchy III), as determinative although they govern the
bargaining obligation only as to merit pay proposals, not, as
here, total wages or compensation plans, which are governed by
such cases as Harrah’s Marina Hotel &, Alba-Waldensean, Inc.
and John Ascuoga’s Nugget, supra. But even were these cases
to be considered controlling, Respondent has failed to demon-
strate any willingness to bargain to agreement or to impasse
“definable objective procedures and criteria” governing com-
pensation under its section 6:01(a) proposals. McClatchy II,
supra. The Group had previously declared impasse, and al-
though implementation had not yet taken place, it was immi-
nent and it was not prepared to negotiate the compensation
plans or schemes applicable to each employee. In Glassman’s
testimony and the correspondence from Lanier the common
thread of Respondent intransigence and the right of unilateral
adoption of totally new compensation schemes is made abun-
dantly clear. The Union’s role is to receive information which
the Group or its members are prepared to provide it, whether
timely or untimely in relation to planned implementation as to
complicated compensation schemes is unclear, and without the
option of either being able to assert economic pressure or to
grieve or to arbitrate any resulting disagreement. This is so,
because for the Union to receive such information it would
have had to execute section 6:01(a) as offered with all its severe
limitations as to the Union’s role in helping to set and adminis-
ter compensation. The final offer also included the preexisting
no-strike, no-lockout language in article XI.
In view of the section 6:01(a) removal of compensation from
the bargaining table in its final offer, more would be required of
the Group to display an openness and good faith in offering to
jointly determine the standards and criteria for compensation
than merely the cited and formalistic response to the Union’s
demand for detailed information.
Aside from section 6:01(a), other proposals of the final offer,
strip the Union of prior contractual benefits and protections in
the area of compensation to such an extent, that when combined
with article VI they establish a Respondent design to frustrate
bargaining and an unwillingness to accommodate differences.
These proposals include the right of Group members to estab-
lish house accounts, and not to compensate unit employees for
withdrawing or reassigning accounts, as well as the right to
assign supervision to salesmen’s duties and to receive commis-
sions. The Respondent’s transitional offer limiting commission
losses to 25 percent for 1 year as well as its offer of a $25,000
minimum, where average commissions are double that figure,
can hardly be deemed serious compensating proposals.
I conclude on the basis of the foregoing proposals advanced
and insisted upon, the evidence derived from the testimonial
statements of its chief negotiator as well as correspondence by
its other negotiating representative, and Group members, see
Kellwood Co. v. NLRB, 434 F.2d 1069, 1073 (1970), that Re-
spondent offered its revised, final proposal with no real inten-
tion of concluding a final and binding collective-bargaining
agreement. On the contrary, by insisting upon its own, unilat-
eral establishment of compensation plans applicable to each
unit employee, as well as by its Group members communica-
tions directly with its employees as to the rights they had and
LIQUOR INDUSTRY BARGAINING GROUP 1243
were prepared to exercise in derogation of their Union’s role as
their bargaining representative, Respondent’s conduct as a
whole shows an evasion of its statutory duty to bargain collec-
tively under the Act. Harrah’s Marina Hotel & Casino, supra;
A-1 King Size Sandwiches, Inc., 265 NLRB 850 (1982);
Reichold Chemicals, supra; NLRB v. Wright Motors, Inc., 603
F.2d 604, 609–610 (7th Cir. 1979); Continental Insurance Co.,
495 F.2d 44, 49–50 (2d Cir. 1974); Kayser-Roth Hosiery Co.,
176 NLRB 999 (1969), enfd. 430 F.2d 701 (1970).
The Respondent’s rational provides no legal defense for its
conduct. “The Board has repeatedly held that economic expe-
diency or sound business considerations are insufficient de-
fenses to justify unilateral changes in terms and conditions of
employment.” Van Doren Plastic Machinery Co., 265 NLRB
864, 865 (1982), modified 736 F.2d 343 (6th Cir. 1984). Par-
ticularly is this so with respect to a terms of such importance
and centrality to the bargaining process as wages and compen-
sation. Oak Cliff-Golman Baking Co., 207 NLRB 1063, 1064
(1973). Respondent does not argue and, indeed, could not sus-
tain a claim, that the changes in the forms of compensation,
retaining nonetheless, its present commission and incentives as
a major component of any changes contemplated, constitute a
fundamental change in scope or direction of the businesses
excluded from the duty to bargain under First National Mainte-
nance Corp., 452 U.S. 666 (1981). In any event, the elevated
industry standing of Fedway, Royal, and Jaydor in terms of
sales and the argument that these liquor wholesalers must main-
tain their competitive positions hardly supports a claim of an
economic crises or business emergency justifying its unilateral
conduct. Cf. Wim-Dixie Stores, Inc., 243 NLRB 972, 974 fn. 9
(1979).
The complaint further alleges that by implementing the
Group’s house account proposal, removing club accounts from
their salespersons, Fedway, Jaydor, and Royal committed inde-
pendent violations of Section 8(a)(5).
I have already concluded that the impasse Respondent de-
clared on or about March 24, 1994, was ineffective because it
was insisting on implementing an invalid and unlawful bargain-
ing proposal set forth in section 6:01(a) of article VI and be-
cause the combination of proposals it made in its final offer
giving the Group the right to unilaterally set compensation,
without Union recourse to grievance/arbitration procedures,
authorizing previously prohibited house accounts and the con-
comitant withdrawal of club accounts, eliminating equivalent
compensation on reassignment or withdrawal of accounts and
granting it the previously prohibited right to assign supervisors
to service accounts and receive commissions, in their totality,
manifest a pervasive intent to deny the employees the right to
an effective collective voice in determining the compensation
terms at the heart of the collective-bargaining relationship.
Without a valid impasse, the Group had no right to unilaterally
implement any proposal encompassed in its final offer, cer-
tainly not one which represented a major reduction in compen-
sation for a portion of the unit and on which the Union had long
expressed opposition and against the implementation of which
the Union had achieved protections in a series of agreements
over the years. So long as the bargaining obligation continued,
there is “a duty to refrain from implementation at all, unless
and until an overall impasse has been reached on bargaining for
the agreement as a whole.” Bottom Line Enterprises, 302
NLRB 373, 374 (1991), and cases cited at fn. 9. As a conse-
quence, the Union had no obligation to respond to Respon-
dents’ notices of implementation and did not thereby waive its
statutory right to bargain over the changes in the unit employ-
ees’ terms and conditions of employment.
Furthermore, it was not the Group which announced imple-
mentation of the house account proposal, but individual Group
members. By doing so, and, further, by offering to meet, indi-
vidually, with the Union while the Group was under a continu-
ing duty to bargain a contract in the multiemployer unit, Fed-
way, Jaydor, and Royal were engaged in conduct in derogation
of the unit, undermining its integrity, and unlawfully fragment-
ing the overall unit at times when neither the Group nor the
Union had authorized individual bargaining. Teamsters Local
378 (Olympia Automobile), 243 NLRB 1086, 1088 fn. 14
(1979); Callier’s Custom Kitchens, 243 NLRB 1114, 1118
(1979). As I have previously found, the attempt by individual
Group members to bargain as to compensation with the
Group’s and the Union’s approval had been aborted when the
members’ attempts to bargain full separate agreements had
become apparent and were rejected by the Union. The attempt
of individual members to implement individual terms of the
Group proposal and to seek alternate compensation agreements
covering, e.g. merchandising commission rates, were incom-
patible with the acknowledged continuing duty of the members
to negotiate all terms and conditions of employment through
the Group while no agreement or true impasse existed. Simi-
larly, the conversion of club accounts to house accounts were
not ‘limited matters’ where individual bargaining would be
consistent with multiemployer bargaining as permitted in Cus-
tom Colors Contractors, 226 NLRB 851, 854 fn. 16 (1976).
The Union thus had every right to ignore the individual
members’ offers to meet to negotiate alternate compensation
arrangements and to insist on restoration of all terms of the
expired agreement which continue in effect pending completion
of negotiations. While Respondent is correct in its brief that
the Union would normally have a continuing obligation to bar-
gain about the effect of an unlawfully implemented decision,
the line of cases represented by Michigan Ladder, Co., 286
NLRB 21, 22 (1987), see also Blue Circle Cement Co., 106
F.3d 413 (10th Cir. 1997), revg. in part 319 NLRB 954 (1995),
are inapplicable, where, as here, employers were seeking to
bargain individually on a term of employment contained in the
multiemployer agreement. Moreover, the record establishes
that the Group never proposed merchandising commissions as a
form of substitute compensation for salespersons whose club
accounts would be removed, and thus the Group members were
seeking to implement terms not contained in the Group’s final
offer, further violative of their bargaining duty. On reflection, I
do not view these alternate forms of compensation as the effect
of decisions removing club accounts, but as terms of employ-
ment in their own right about which Respondent had an obliga-
tion to propose, and bargain to impasse, before attempting to
unilaterally implement them.
Respondent cites Haddon Craftsmen, Inc., 300 NLRB 789
(1990); and Jim Walter Resources, Inc., 289 NLRB 1441, 1442
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1244
(1988), in support of its argument that by indicating its willing-
ness to bargain by committing to furnish timely notice of con-
templated changes, the Union had an obligation to respond and
that in failing to do so it waived its right to negotiations. As
earlier noted, neither the Group’s final offer nor its claimed
clarification of May 23, 1994, invited any response from the
Union, particularly the May 23 letter from Glassman which
failed to respond to Cohen’s request for information. I have
concluded that by its conduct at the bargaining table, the testi-
mony of its chief negotiator as well in various correspondences
apart from the May 23 letter, Respondent demonstrated a
closed mind, reviewed objectively. Neither did Respondent
provide the terms (criteria, procedures) which it offered to pro-
vide in the future. For these reasons, among others, I distin-
guished Haddon Craftsmen where the Board held a union
which failed to request negotiations in a timely fashion with an
employer which had made its intentions clear and had provided
the terms of the process of reclassification of certain employ-
ees, relieved the employer of further negotiations in the matter.
Similarly, in Jim Walter Resources, the employer had provided
the terms of its proposal to cease paying certain insurance bene-
fits, to the Union, something which was never forthcoming
from Respondent.
Another complaint allegation asserts that by offering unit
employees a section 401(k) plan for the first time, subsequent
to the final offer, Fedway had independently violated Section
8(a)(5). The facts support this allegation. Fedway had the
401(k) plan under study for some time, and its IRS approval
required substantial employee participation. However, at no
time during negotiations did the Group inform the Union of
Fedway’s intention or propose instituting such a plan for unit
employees. When employees were informed on June 2, 1994,
of Fedway’s interest in instituting a 401(k) plan, corporate-
wide, the Union had not yet been formally notified but a letter
dated June 2 had been forwarded to it in which Fedway made
known its intention. In insisting upon a term of compensation
never proposed at the bargaining table, the Group was not free
to implement this plan unilaterally following the breakdown in
bargaining, even if a valid impasse had been achieved. Neither
was Fedway free to separately propose and then to implement a
term where it had delegated its bargaining rights to the Group
and neither the Group nor the Union had consented to separate
bargaining by Fedway. So long as the Union continued to in-
sist upon multi-employer bargaining it had no obligation to
respond to this intended implementation. See Teamsters Local
378 and Callier’s Custom Kitchens, cited, supra.
In its brief, Respondent argues that by failing to respond to
Fedway’s announcement and offer to bargain, the Union
waived its right to bargain about the plan. Whether or not the
Union relied upon its pending Board charge, in refusing to do
so, the Union was free to refrain from engaging Fedway in the
absence of an overall valid impasse having been reached on
bargaining with the Group for an overall agreement. Under
such circumstances, as existed here, Fedway was obliged to
refrain from any implementation, aside from its failure to have
obtained authorization from the Group and Union to bargain
independently about the matter.
As earlier noted Respondent also urges that the most favored
nation article of the expired agreement privileged Fedway,
Jaydor, and Royal to convert club accounts to house accounts.
Even if, as Respondent argues in its brief, the most favored
nation clause is a mandatory subject of bargaining which sur-
vives expiration of the labor agreement, Respondent acknowl-
edges that it can only rely on its survival if its defense that the
June 1, 1994 implementation was unlawful, is rejected. By
such reasoning, Respondent would assert that without having
relied on the clause at the time of its members’ implementation
of the final offer, it may interpose it now if the terms and condi-
tions of employment contained therein are held to survive its
invalid declaration of impasse. But survival of this terms of the
agreement would not permit the Union to demand arbitration of
a dispute arising from a claim of privilege under it because the
grievance/arbitration article is not a term which survives con-
tract expiration as a matter of law and Respondent admittedly
refused to agree to its survival. The Union would not have
recourse to assert, as it did on this record, that it did not permit
house accounts to be maintained by Group competitors. Thus,
Respondents’ argument lacks mutuality and article X, section
10:01 which, by its language, carefully balances the claim to
most favored treatment along with the Union’s right to contest
such claim within 15 days notice by referral to arbitration, be-
comes ineffective. Permitting the Group to raise this defense
under all of these circumstances, I conclude, would be improper
and unfair.
Furthermore, I have previously examined in detail the facts
and circumstances surrounding the sales by Richard Bronstein,
de facto F & A warehouse manager, Arnold Goldberg, Union
member and a shareholder by inheritance in Goldstar, and Tom
Dirigibus, manager of American B & D, and, I conclude that
they do not constitute evidence of a practice pursuant to which
the Union condoned the establishment and maintenance of
house accounts by Group competitors. This conclusion is aside
from the reservation I have noted as to the applicability of the
clause to F & A, particularly in view of its membership in the
Group until 1993 and Bronstein’s death in August 1993, Gold-
star’s membership in the Group since 1989, the pooling ar-
rangement on Dirigibus’ commissions, and in the absence of
any claim under section 10:01 ever having been made by Re-
spondent until the second arbitration proceeding before Arbitra-
tor Ligbit on November 15, 1995. In this connection, I reaffirm
my reliance on Control Services, 303 NLRB 481 (1991), as
precluding the Respondent members from relying on the clause
in the absence of any evidence that the conversion of the club
accounts was effected pursuant to it.
Respondent also asserts that the history of individual dealing
between Group members and the Union on such matters as unit
accretions and casino royalties, among others, permitted Group
members to implement portions of the final offer and invite
individual bargaining from the Union. As earlier noted, each of
these instances arose during the life of prior Group agreements,
when the Group, as agent to negotiate agreements, had dis-
banded. Each of these instances also involved normal instances
of administration and enforcement of existing labor agreements
and cannot be equated with unilateral implementation of con-
tract proposals at a time when, as admitted e.g. by Michael
LIQUOR INDUSTRY BARGAINING GROUP 1245
Silverman of Jaydor, no successor agreement had been reached
and the member employers remained under a legal obligation to
bargain as a group.
Respondent also claims that the Union had, ‘unclean hands’
during the bargaining process, thereby permitting the Group to
avoid having its own good faith in bargaining tested under the
Act. As to the Union knowingly permitting the maintenance of
house accounts by the Group members’ competitors, I have
rejected that defense. As a consequence, there is insufficient
bases for asserting that the Union acted in bad faith in permit-
ting house accounts. Neither does the record support the asser-
tion that the Union mischaracterized any of the Group’s offers
to its membership. On the record I indicated that I viewed
skeptically Respondent’s reliance on such cases as Times Pub-
lishing Co., 72 NLRB 676 (1947), or its progeny as establishing
a union lack of good faith, thereby precluding the testing of an
employer’s own good faith. Nonetheless Respondent now
claims in its brief, in error, that not only has the Union done
everything to avoid bargaining in an effort to preserve the
status quo, but also argues that in its insistence on its members
receiving a commission on the sale of every bottle of liquor
regardless of whether they engaged in any sales effort the Un-
ion has violated Section 8(b)(6) of the Act.6
It should first be noted that no refusal to bargain charge
against the Union under Section 8(b)(3) nor any charge of vio-
lating Section 8(b)(6) has ever been filed. The Group and its
members were surely aware of their rights under the Act and
their failure to have exercised them in this regard surely must
be weighed in determining the bona fides of these assertions.
Second, Respondent has never claimed that the sales article
XVIII in the expired agreement, whose genesis was described
on the record, constituted an unlawful extortion, or featherbed-
ding. As I understood the matter, at least one or more salesman
had sold casinos until either the customer of the Group member
or both had determined to deal directly. Thus, this article
represents a quid pro quo for loss of services previously per-
formed. Similarly, inasmuch as salespersons had originally
solicited and serviced a variety of clubs until the Group mem-
bers started servicing these accounts directly the provision for
continued payment of a commission on such sales represents
not only a quid pro quo for the loss of the opportunity of sales-
persons to continue to service them but also represents a renu-
meration for work which the contract assigned to unit employ-
ees. At no time has the Union ceased demanding that the arti-
cle prohibiting house accounts be continued in any successor
agreement and, further, that servicing of accounts and receipt of
commissions by supervision be continued to be prohibited. By
insisting on the retention of club accounts the Union has been
seeking continued work for its salesperson members and not
make work or payment for no services. Only by validly bar-
gaining to impasse could the Group place itself in a position to
eliminate or convert the club accounts and avoid the continued
payment of commissions on them. But by its overall unlawful

6 That Section prohibits a labor organization or its agents from caus-
ing or attempting to cause an employer to pay or deliver or agree to pay
or deliver any money or other thing of value, in the nature of an exac-
tion, for services which are not performed or not to be performed.
conduct in this case the Group and its members have failed to
achieve that objective to date.
I now turn to consideration of the allegation of discrimina-
tion against Edward Primavera.
I conclude that the evidence is insufficient to establish that
either the Wall and Lincroft accounts, or the Allaire account,
were removed from Primavera for discriminatory reasons.
While the removal of the Wall and Lincroft accounts appear
slightly more suspect than the Allaire removal, it appears that
reassignments of accounts was authorized under section 10:02
when based upon sound business judgment, was not an unusual
occurrence, and while Feeney acknowledged that certain fac-
tors, relating to Primavera’s illness and problems arising from
Lincroft’s inability to make prompt payments for deliveries of
liquor may have soured the Lincroft owner on Primavera, these
factors were unrelated to his protected concerted activity. As to
Allaire, the documentation of Primavera’s shortcomings on
servicing and the customer’s dissatisfaction over a lengthy
period of time before the account was removed also overcome
whatever prima facie case the General Counsel may have estab-
lished, in spite of Royal’s failure to provide Primavera with the
documentation or even to discuss it with him.
However, in both cases, Primavera was entitled under the
contract, which continued in effect after termination with re-
spect to the terms and conditions of employment contained
therein, absent a valid impasse, and, independently, by virtue of
a practice which the Respondent witnesses did not seriously
dispute, to compensation by offers of substitute accounts of
substantially equivalent volume. It is noteworthy that a Re-
spondent witness, Louis DeMarino, senior vice president, sales
and marketing, of Jaydor interpreted section 10:01 as requiring
members of the Group to give dollar for dollar when reassign-
ing accounts (Tr. 785). This was so, even as to the Allaire
situation where Feeney and Bilancio did not dispute Prima-
vera’s entitlement to compensation for his loss of the account.
The record establishes, however, that no compensation was
provided Primavera when he lost Wall and Lincroft, and the
promise of a Spirits Unlimited account was never fulfilled.
Even when Primavera cultivated his old F & T account when it
reopened as a Spirits affiliate, the account was denied him
without any explanation. I conclude that the denial of this ac-
count as compensation was motivated by Primavera’s Union
activities, and, further that the failure to provide any compensa-
tion for Wall and Lincroft and the inadequate compensation to
him in the removal of the Allaire account was similarly moti-
vated. Even if, although I have concluded it was not, the F & T
account was belatedly offered to Primavera’s, the sum of the
three accounts was some $50,000 less in total value in 1994 the
year just passed, than the Allaire account, representing a loss to
Primavera of some $2500 in commissions annually. Although
in 1995 sales volume of the three increased to $77,000 and in
1996 to $113,766, primarily because of the F & T sales, the
motivation of Royal’s conduct must be measured on the date of
the inadequate offer, not a year or two later. Royal’s treatment
of Primavera was consistent with Bilancio’s response when
Primavera protested not receiving adequate compensation on
account removal, that Primavera’s alignment with the Union
was a basis for the company to refuse to cooperate with him.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1246
The evidence of the Royal hostility to its employees’ exercise
of their section 7 rights to strike also support this conclusion as
does the failure of Royal to provide any reasonable explanation
for its failure to provide any compensation on removal of Wall
and Lincroft, to assign the F & T accounts to Primavera, or to
provide equivalent compensation on its removal of the Allaire
account. I further conclude that Respondent has failed to show
by a preponderance of the evidence that it would have denied
Primavera equivalent compensation for the reassignment of his
accounts absent his protected conduct. Wright Line, 251 NLRB
1083 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied
455 U.S. 989 (1982); NLRB v. Transportation Management,
426 U.S. 393 (1983).
I also conclude that counsel for the General Counsel has
failed to establish by a preponderance of the evidence that the
Towne Liquors account was discriminatorily denied to Prima-
vera on its reopening or that the Cream Ridge account was
disciminatorily withheld from Primavera. In the case of Towne
Liquors the evidence supports Royal’s defense that salesman
Malibashca’s prior excellent relationship with the new owner
overcame the normal practice of reassigning the account back
to Primavera after he had serviced the same location before it
closed a year before. As to Cream Ridge, there is insufficient
evidence to support Primavera’s claim to the account, given its
closer proximity to D’Angelo’s other accounts. That salesmen
who replaced Primavera on these accounts, among others, may
have been crossovers is not significant, given the fact that 28 of
the 32 of the salesmen in the southern division were in that
category.
CONCLUSIONS OF LAW
1. The Respondent Association is an employer within the
meaning of Section 2(2) of the Act and Respondents Fedway,
Royal, and Jaydor are employers within the meaning of Section
2(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. By failing, since about November 1994 to assign to em-
ployee Edward Primavera other sales accounts with substan-
tially equal volume, upon its removal from him and reassign-
ment of certain sales accounts, because he assisted the Union
and engaged in concerted activities, Respondent Royal has been
discriminating in regard to the hire and tenure and terms and
conditions of employment of its employees, in violation of
Section 8(a)(1) and (3) of the Act.
4. The following employees constitute a unit appropriate for
the purposes of collective bargaining within the meaning of
Section 9(b) of the Act:

All sales representatives in the State of New Jersey employed
by members of Respondent Association and of the employers
who have authorized Respondent Association to bargain on
their behalf, including Respondent Fedway, Respondent
Royal, and Respondent Jaydor, but excluding all office cleri-
cal employees, professional employees, guards and supervi-
sors as defined in the Act.

5. At all material times, the Union has been and is now the
exclusive collective-bargaining representative of the employees
in the unit described above in paragraph 4.
`6. Since on or about March 24, 1994, by insisting to im-
passe on a wage proposal which, by its terms sought to retain
unilateral control over all aspects of wages and compensation,
by failing to bargain with the Union as to the timing, criteria
and procedures for compensation of employees in the bargain-
ing unit described, and by its overall conduct, including the
conduct described, Respondent Association has failed and re-
fused to bargain in good faith with the Union as the exclusive
collective-bargaining representative of the unit employees
within the meaning of Section 8(d) of the Act in violation of
Section 8(a)(1) and (5) of the Act.
7. By offering its unit employees a section 401(k) plan which
had not been previously proposed or made part of the Respon-
dent Association’s final contract offer, and at a time when nei-
ther the Union nor the Respondent Association had authorized
it to bargain separately with the Union, Respondent Fedway,
and by unilaterally implementing a part of the Respondent As-
sociation’s final offer by removing certain customer accounts
from their unit employees and designating them as “house ac-
counts” at a time when no valid impasse in bargaining with the
Union had occurred, and at a time when neither the Union nor
the Respondent Association had authorized them to bargain
separately with the Union, Respondents Fedway, Jaydor, and
Royal, have failed and refused to bargain in good faith with the
Union as the exclusive collective-bargaining representative of
their unit employees within the meaning of Section 8(d) of the
Act in violation of Section 8(a)(1) and (5) of the Act.
8. The aforesaid and unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
REMEDY
Having found that Respondents Association, Fedway, Jay-
dor, and Royal have engaged in violations of Section 8(a)(1)
and (5) of the Act, I shall recommend that they cease and desist
therefrom, and take certain affirmative actions necessary to
effectuate the purposes and policies of the Act. The recom-
mended Order shall provide that the Respondents be required to
bargain collectively in good faith, upon request, with the Union
as the exclusive collective-bargaining representative of the unit
employees, and that they be required, if requested by the Union,
to restore and apply to all of these employees the wages, com-
pensation and all other terms and conditions of employment of
the expired collective-bargaining agreement which ran from
October 1, 1990, to September 30, 1993, by and between the
Union and the Respondent Association members and their af-
filiates and successors, before their unlawful unilateral changes,
until a valid impasse in bargaining is reached or until an under-
standing is reached, which shall be embodied in a signed
agreement. The order will also require Respondents Fedway,
Jaydor, and Royal to make whole unit employees for any losses
suffered as a result of their unlawful actions in the manner pre-
scribed in Ogle Protection Service, 183 NLRB 682, 683 (1970),
with interest to be computed in the manner set forth in New Hori-
zons for the Retarded, 283 NLRB 1173 (1987).

LIQUOR INDUSTRY BARGAINING GROUP 1247
To the extent that any of the unlawful unilateral changes imple-
mented by the Respondents may have improved the terms and
conditions of employment of unit employees, I note that no provi-
sion of my recommended Order shall in any way be construed as
requiring the Respondents to revoke such improvement.
Having found that the Respondent Royal unlawfully denied
compensation to Edward Primavera by failing to provide him
with accounts of substantially equal volume when certain ac-
counts of his were reassigned, I shall recommend that it be
ordered to provide him with such accounts, and make him
whole for any loss of earnings and other benefits he may have
suffered as a result of Respondent’s Royal’s unlawful discrimi-
nation against him. Such amounts shall be computed in the
manner prescribed in F. W. Woolworth Co., 90 NLRB 289
(1950), with interest computed in accordance with New Hori-
zons for the Retarded, supra. I shall also recommend that in
accordance with the time restraints set forth in Indian Hills
Care Center, 321 NLRB 144 (1996), Respondent remove from
its files any references to the unlawful denial of equivalent
accounts and notify him in writing that this has been done and
that its failure to provide him with equivalent accounts will not
be used against him in any way.
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended7
ORDER
A. The Respondent Liquor Industry Bargaining Group, Tren-
ton, New Jersey, its officers, agents, successors, and assigns,
shall
1. Cease and desist from
(a) Refusing to bargain with Local 19D, Wine and Liquor
Salesmen of New Jersey, United Food and Commercial Work-
ers, AFL–CIO as the exclusive bargaining representative of the
employees in the unit described below, by insisting to impasse
on a wage proposal which by its terms sought to retain unilat-
eral control over all aspects of wages and compensation, by
failing to bargain with the Union as to the timing, criteria and
procedures for compensation of employees in the unit, and by
its overall conduct:

All sales representatives in the State of New Jersey employed
by members of Respondent Association and of the employers
who have authorized Respondent Association to bargain on
their behalf, including Respondent Fedway, Respondent
Royal, and Respondent Jaydor, but excluding all office cleri-
cal employees, professional employees, guards and supervi-
sors as defined in the Act.

(b) In any like or related manner interfering with, restraining,
or coercing employees in the exercise of the rights guaranteed
them by Section 7 of the Act.
2. Take the following affirmative action necessary to effec-
tuate the policies of the Act.
(a) On request, bargain collectively with Local 19D, Wine
and Liquor Salesmen of New Jersey, United Food and Com-

7 If no exceptions are filed as provided by Sec. 102.46 of the Board’s
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.
mercial Workers, AFL–CIO as the exclusive bargaining repre-
sentative of the employees in the appropriate unit concerning
rates of pay, wages, hours of work and other terms and condi-
tions of employment and, if an understanding is reached, em-
body the understanding in a signed written agreement.
(b) Within 14 days after service by the Region, mail signed
copies of the attached notice marked “Appendix A” to the Re-
gional Director for posting at the offices and places of business
of each of its employer member principals. Copies of the no-
tice on forms provided by the Regional Director for Region 22,
after being signed by Respondent Association’s authorized
representative, shall be posted by each of its employer members
immediately upon receipt and maintained for 60 consecutive
days in conspicuous places, including all places where notices
to members are customarily posted. Reasonable steps shall be
taken by Respondent Association and its employer members to
ensure that the notices are not altered, defaced, or covered by
any other material.
(c) Within 21 days after service by the Region, file with the
Regional Director a sworn certification of a responsible official
in a form provided by the Region attesting to the steps that the
Respondent Association has taken to comply.
B. The Respondents, Fedway Associates, Royal Division of
R & R Marketing, L.L.C., Trenton, New Jersey, and the Jaydor
Corporation, Milburn, New Jersey, their officers, agents, suc-
cessors, and assigns, shall
1. Cease and desist from
(a) Refusing to bargain with Local 19D, Wine and Liquor
Salesmen of New Jersey, United Food and Commercial Work-
ers, AFL–CIO by unilaterally implementing changes in com-
pensation and terms and conditions of employment of unit em-
ployees at a time when no valid impasse in bargaining with the
Union has occurred and at a time when neither the Union nor
the Respondent Association had authorized them to bargain
separately with the Union, and by Respondent Fedway offering
a form of investment and savings benefit plan popularly known
as a section 401(k) plan, which had not been previously pro-
posed or made part of the Respondent Association’s final con-
tract offer and at a time when neither the Union nor Respondent
had authorized it to bargain separately with the Union.
(b) In any like or related manner interfering with, restraining,
or coercing employees in the exercise of the right guaranteed
them by Section 7 of the Act.
2. Take the following affirmative action necessary to effec-
tuate the policies of the Act.
(a) On request, bargain collectively in good-faith with the
Union as the exclusive bargaining representative of the em-
ployees in the appropriate unit described above, concerning
rates of pay, wages, hours of work and other terms and condi-
tions of employment, and, if an understanding is reached, em-
body the understanding in a signed written agreement.
(b) On request, restore and apply to all unit employees, the
wages and all other terms and conditions of employment of the
expired collective-bargaining agreement which ran from Octo-
ber 1, 1990, to September 30, 1993, by and between the Union
and the Respondent Association members and their affiliates
and successors, before their unlawful unilateral changes, until a
valid impasse in bargaining is reached or until an understanding
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1248
is reached, which shall be embodied in a signed agreement, and
make whole the unit employees for any loss of pay or benefits
that they have suffered by reason of the unlawful unilateral
changes which the named Respondents have implemented.
However, no provision of this Order shall in any way be con-
strued as requiring the Respondents to revoke unilaterally im-
plemented improvements in terms and conditions of employ-
ment to unit employees.
(c) Preserve and, within 14 days of a request, make available
to the Board or its agents for examination and copying, all pay-
roll records, social security payment records, timecards, per-
sonnel records and reports, all other records necessary to ana-
lyze the amount of backpay benefits, contributions, and reim-
bursement of expenses due under the terms of this Order.
(d) Within 14 days after service by the Region, post at their
respective offices and places of business, located, respectively,
in Kearney, New Jersey, Trenton, New Jersey, and Milburn,
New Jersey, copies of the attached notice marked “Appendix
B.” Copies of the notice, on forms provided by the Regional
Director of Region 22, after being signed by each Respondent’s
authorized representative, shall be posted by each Respondent
and maintained for 60 consecutive days in conspicuous places
including all places where notices to employees are customarily
posted. Reasonable steps shall be taken by the Respondents to
ensure that the notices are not altered, defaced, or covered by
any other material.
(e) Within 21 days after service by the Region, file with the
Regional Director a sworn certification of a responsible official
on a form provided by the Region attesting to the steps that the
Respondents have taken to comply.
APPENDIX A
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

The National Labor Relations Board has found that we violated the
National Labor Relations Act and has ordered us to post and abide
by this notice.

Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives of their
own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected con-
certed activities.

WE WILL NOT refuse to bargain with Local 19D, Wine and
Liquor Salesmen of New Jersey, United Food and Commercial
Workers, AFL–CIO as the exclusive representative of our em-
ployees in the appropriate unit described below, by insisting to
impasse on a wage proposal which by its terms seeks to retain
unilateral control over all aspects of wages and compensation,
by failing to bargain with the Union as to the timing, criteria
and procedures for compensation of employees in the unit, and
by our overall conduct:

All sales representatives in the State of New Jersey employed
by members of Respondent Association and of the employers
who have authorized Respondent Association to bargain on
their behalf, including Respondent Fedway, Respondent
Royal, and Respondent Jaydor, but excluding all office cleri-
cal employees, professional employees, guards and supervi-
sors as defined in the Act.

WE WILL NOT in any like or related manner interfere with,
restrain, or coerce you in the exercise of the rights guaranteed
you by Section 7 of the Act.
WE WILL, on request, bargain with the above-named Union
as the exclusive representative of all the employees in the ap-
propriate unit concerning rates of pay, wages, hours of work,
and other terms and conditions of employment and, if an under-
standing is reached, embody the understanding in a signed writ-
ten agreement.

LIQUOR INDUSTRY BARGAINING GROUP
APPENDIX B
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

The National Labor Relations Board has found that we violated the
National Labor Relations Act and has ordered us to post and abide
by this notice.

Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives of their
own choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected con-
certed activities.

WE WILL NOT refuse to recognize and bargain with Local
19D, Wine and Liquor Salesmen of New Jersey, United Food
and Commercial Workers, AFL–CIO as the exclusive represen-
tative of our employees in the appropriate unit described below
by unilaterally implementing changes in compensation and
terms and conditions of our unit employees at a time when no
valid impasse in bargaining with the Union has occurred and at
a time when neither the Union nor the Liquor Industry Bargain-
ing Group, our bargaining representative, has authorized us to
bargain separately with the Union, and by Fedway Associates,
one of us, offering a form of investment and savings benefit
plan, popularly known as a section 401(k) plan, not previously
proposed or made part of the Bargaining Group’s final contract
offer and at a time when neither the Union nor the Bargaining
Group had authorized us to bargain separately with the Union:

All sales representatives in the State of New Jersey employed
by members of Respondent Association and of the employers
who have authorized Respondent Association to bargain on
their behalf, including Respondent Fedway, Respondent
Royal, and Respondent Jaydor, but excluding all office cleri-
LIQUOR INDUSTRY BARGAINING GROUP 1249
cal employees, professional employees, guards and supervi-
sors as defined in the Act.

WE WILL NOT in any like or related manner interfere with,
restrain, or coerce you in the exercise of the rights guaranteed
you by Section 7 of the Act.
WE WILL, on request, bargain with the above-named Union
as the exclusive representative of all the employees in the ap-
propriate unit described above concerning rates of pay, wages,
hours of work and other terms and conditions of employment,
and, if an understanding is reached, embody the understanding
in a signed written agreement.
WE WILL, on request, restore and apply to all unit employ-
ees, the compensation and all other terms and conditions of
employment of the expired collective-bargaining agreement
which ran from October 1, 1990 to September 30, 1993, by and
between the Union and the Respondent Liquor Industry Bar-
gaining Group the Group’s members and their affiliates and
successors, before we made our unlawful unilateral changes,
until we reach a valid impasse in bargaining with the Union or
until an understanding is reached, which we shall embody in a
signed agreement.
WE WILL make whole our unit employees for any loss of
pay or benefits that they have suffered by reason of the unlaw-
ful unilateral changes which we have implemented, plus inter-
est. However, no provision of this Order shall in any way be
construed as requiring us to revoke unilaterally implemented
improvement in terms and conditions of employment of our
unit employees.