McAllister Bros.

National Labor Relations Board - Board Decisions

Oct 29, 1993

312 N.L.R.B. 1121 (N.L.R.B. 1993)

1121
312 NLRB No. 177
MCALLISTER BROS.
1 The General Counsel and the Charging Party have excepted to
some of the judge’s credibility findings. The Board’s established pol-
icy is not to overrule an administrative law judge’s credibility reso-
lutions unless the clear preponderance of all the relevant evidence
convinces us that they are incorrect. Standard Dry Wall Products,
91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have
carefully examined the record and find no basis for reversing the
findings.
2 All dates are in 1988 unless otherwise indicated.
3 Because the Respondent did not make any unilateral changes
prior to the April 5 impasse, we find it unnecessary to pass on the
issue of whether the parties reached impasse on February 15.
McAllister Bros., Inc. and Local 333, United Marine
Division International Longshoremen’s Asso-
ciation. Cases 2–CA–22970–1 and 2–CA–23248
October 29, 1993
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND RAUDABAUGH
On December 23, 1992, Administrative Law Judge
Howard Edelman issued the attached decision. The
General Counsel and the Charging Party filed excep-
tions with supporting briefs and reply briefs, and the
General Counsel filed an answering brief to the Re-
spondent’s cross-exceptions. The Respondent filed
cross-exceptions, a supporting brief, answering briefs,
and a reply brief.
The National Labor Relations Board has considered
the decision and the record in light of the exceptions
and briefs and has decided to affirm the judge’s rul-
ings, findings,1 and conclusions, as modified below,
and to adopt the recommended Order.
This case presents numerous issues arising in the
context of the parties’ unsuccessful negotiations for a
successor contract and an ensuing strike. The judge
found that the Respondent did not engage in any un-
lawful conduct and recommended that the complaint
be dismissed in its entirety. Although we agree with
the result reached by the judge, our rationale differs
from the judge’s on certain issues, as more fully dis-
cussed below.
1. The Respondent’s reopener proposal
For the reasons set forth by the judge, we agree with
him that the Respondent’s contract reopener proposal
was a mandatory subject of bargaining, that the Re-
spondent presented the Union with reasonable and le-
gitimate economic justifications for the proposal, and
that the complaint allegation that the Respondent vio-
lated Section 8(a)(5) by bargaining over the reopener
proposal should be dismissed. Inasmuch as no other
prestrike unfair labor practice is alleged, we also agree
with the judge that the strike which began on February
15, 1988,2 was an economic strike.
2. The April 5 impasse
The judge concluded, inter alia, that the Respondent
did not violate Section 8(a)(5) and (1) by unilaterally
changing the terms and conditions of employment for
economic strikers who returned to work on and after
June 2, because he found that the parties had reached
a lawful impasse in negotiations on February 15, and
that the changes were consistent with terms of the Re-
spondent’s final offer of April 4. In so finding, the
judge failed to address whether the parties also reached
a lawful impasse on April 5.
The Respondent has cross-excepted to the judge’s
failure to find that the parties reached lawful impasse
on April 5. Upon a careful review of the judge’s deci-
sion and the entire record, we find, for the reasons
stated below, that the parties had exhausted the pros-
pects of concluding an agreement and reached lawful
impasse on April 5.3 Accordingly, we agree with the
judge that the Respondent’s implementation of the
terms of the April 4 proposal for strikers returning to
work on and after June 2 did not violate the Act. The
relevant facts, which are more fully set forth in the
judge’s decision, may be summarized as follows.
The Respondent, a member of the Marine Towing
and Transportation Employers’ Association, was party
to a collective-bargaining agreement with the Union
effective February 16, 1985, through February 15,
1988. The Respondent timely withdrew from the Asso-
ciation and on January 20 began negotiations with the
Union for a new contract.
On February 15, the date the contract expired, the
Union voted to strike all the towing companies in the
port of New York, including the Respondent. The
strike was unsuccessful, and the Respondent and its
competitors were able to continue operations by hiring
replacement workers.
On March 16, 1 month after the strike began, the
Respondent sent the Union a set of revised proposals.
In light of the changed economic climate, these pro-
posals were less favorable to the Union than the Re-
spondent’s prestrike proposals. At a bargaining session
on March 18, the Union rejected the revised proposals
as ‘‘regressive,’’ and offered a counterproposal similar
to the Union’s last prestrike offer of a 10-percent wage
reduction. The Respondent explained that it could no
longer talk about a contract with a 10-percent reduc-
tion because the parties were now bargaining in a
much different economic environment. The Respondent
stated that it was competing against companies operat-
ing with low-wage replacement employees and stressed
that it needed to reduce its labor costs to the neighbor-
hood of its competitors’, which it estimated at $800 to
$1000 per day. The Respondent estimated daily labor
costs under the Union’s 10-percent reduction proposal
at approximately $1900.
1122 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
The parties next met on March 30 with the assist-
ance of a Federal mediator. The parties exchanged a
series of proposals and then caucused to cost them out.
The Respondent concluded that each proposal the
Union made still left it with labor costs of approxi-
mately $1700 a day, while its competitors were then
paying only $900 to $1000 per day.
The Union argued that the Respondent would be
protected by a most-favored-nations clause, but the Re-
spondent pointed out that this clause would apply only
if its competitors reached agreement with the Union.
The Respondent offered to sign a contract for whatever
wages its competitors were paying.
The Union offered to do away with the first hour of
overtime, and stated that it would agree to wages equal
to what Eklof, another struck employer, was paying its
replacement workers. The Respondent refused to agree
to Eklof wages because it did not consider Eklof, an
oil barge towing company, to be a competitor. The
Union closed the meeting by asking the Respondent to
furnish a proposal that set forth what the Respondent
was willing to offer to get the strikers back to work,
and the parties agreed to meet in several days.
The Respondent submitted a written proposal to the
Union on April 4 outlining what the Respondent was
willing to offer to end the strike. The proposal con-
tained, inter alia, the following terms: captains in-
volved in ship docking would receive $42,525 per
year, plus $1215 in 401(k) contributions; engineers and
deckmates $37,665 per year plus $1215 in 401(k) con-
tributions, and deckhands from $19,440 to $24,300 per
year plus $1215 in 401(k) contributions if they worked
243 days of the year. The proposal also covered man-
ning requirements, work schedules, overtime, vacations
and holidays, sick leave, ‘‘grub money,’’ and medical
and pension benefits.
The April 4 proposal was discussed at a bargaining
session conducted the following day in the presence of
a Federal mediator. The Union opened the meeting by
characterizing the proposal as ‘‘bullshit.’’ The parties
exchanged proposals but quickly recognized that they
were far apart on labor costs. The Respondent consist-
ently proposed labor costs of $800 to $1000 per day,
while the Union proposed labor costs of over $1500
per day. As the parties were unable to compromise on
this issue, the Respondent suggested alternatively that
the cook and second deckhand positions be eliminated.
The Union rejected this alternative by stating,
‘‘[T]hat’s out of the question, it’s a deal breaker.’’ The
Respondent’s attorney and chief negotiator, Ray
McGuire, credibly testified that the parties ‘‘were just
beating each other at that point. We were going no-
where. We made some nice talk, but ended the nego-
tiations.’’
The parties did not meet again until August 23,
some 4 months later, and thereafter on September 30
and December 12. Although the same issues were dis-
cussed in these meetings, neither party moved from its
April 5 position.
On and after June 2, six employees abandoned the
strike and returned to work. The parties stipulated that
the terms and conditions of employment for the return-
ing strikers were consistent with the Respondent’s
April 4 offer.
On September 2, the Union offered on behalf of the
striking employees ‘‘to return to work under the terms
and conditions that existed under the expired collective
bargaining agreement.’’ By letter of September 14, the
Respondent advised the Union that its offer was not
unconditional because ‘‘many months ago, McAllister
and Local 333 reached a good faith impasse in bar-
gaining over company proposals for wages, hours,
staffing levels, and terms and conditions of employ-
ment substantially below those contained in the ex-
pired collective bargaining agreements.’’
The Board has long held that an impasse occurs
‘‘after good-faith negotiations have exhausted the pros-
pects of concluding an agreement.’’ Taft Broadcasting
Co., 163 NLRB 475, 478 (1967), affd. sub nom. Tele-
vision Artists AFTRA v. NLRB, 395 F.2d 622 (D.C.
Cir. 1968). In Hi-Way Billboards, Inc., 206 NLRB 22,
23 (1973), enf. denied 500 F.2d 181 (5th Cir. 1974),
the Board stated:
A genuine impasse in negotiations is synonymous
with a deadlock: the parties have discussed a sub-
ject or subjects in good faith, and, despite their
best efforts to achieve agreement with respect to
such, neither party is willing to move from its re-
spective position.
Based on our review of the record, we conclude that
the parties had indeed negotiated to a genuine impasse
on April 5. There is no evidence that the Respondent
engaged in bad-faith bargaining. Despite the parties’
best efforts to reach an agreement, they were consist-
ently far apart on the central issue of labor costs. By
April 5, the Union had asked for and received the Re-
spondent’s offer to end the strike, and the Union char-
acterized it as ‘‘bullshit.’’ When the Respondent raised
the alternative of eliminating the cook and second
deckhand positions, the Union responded by totally re-
jecting the proposal and calling it a ‘‘deal breaker.’’
The parties acknowledged that neither of them was
willing to concede on these issues and determined that
continuing negotiations at that point was useless. The
April 5 session ended without any agreement to meet
again and, as the record shows, the parties did not
meet again for 4 months. Under these circumstances,
we conclude that the parties had exhausted all pros-
pects of achieving an agreement and reached impasse
on April 5.
1123MCALLISTER BROS.
4 Purolator Products, 270 NLRB 694, 700 (1984), enfd. mem. 121
LRRM 2120 (4th Cir. 1985).
3. Unilateral changes in terms and conditions
It is well established that after an impasse has oc-
curred, an employer does not violate the Act by mak-
ing unilateral changes in terms and conditions of em-
ployment consistent with its pre-impasse proposals.
Taft Broadcasting, supra. At the hearing, the parties
entered into the following stipulation with respect to
the strikers returning to work on and after June 2:
These individuals were employed under wages,
hours and terms and conditions of employment
which although not inconsistent with the wages,
hours and terms and conditions of employment
contained in McAllister’s proposal to Local 333
dated April 4, 1988, were different from and less
favorable to those individuals than the wages,
hours and terms and conditions of employment
which pertained under the expired Agreement.
Because the unilateral changes in working conditions
implemented on June 2 were consistent with the terms
of the Respondent’s pre-impasse offer of April 4, we
find that the Respondent did not violate Section 8(a)(5)
and (1) by making such changes.
4. Failure to make fund payments
It is undisputed that the Respondent did not make
payments to the New York Marine Towing and Trans-
portation Industry Insurance and Pension Funds with
respect to the employment of unit employees who
abandoned the strike and returned to work on and after
June 2. These employees were subject to the terms of
the April 4 offer which proposed Blue Cross health in-
surance and contributions to a 401(k) plan in lieu of
contributions to the Union’s health and pension funds.
Since the unilateral changes in benefit plans were con-
sistent with the Respondent’s April 4 pre-impasse
offer, we find that the Respondent did not violate Sec-
tion 8(a)(5) and (1) by making such changes.
5. Failure to reinstate the strikers
In agreement with the judge, we find that the
Union’s September 2 offer to return to work was con-
ditioned on implementation of the terms that existed
under the expired agreement. Accordingly, because an
unconditional offer to return to work was not made,
we conclude that the Respondent did not violate Sec-
tion 8(a)(3) and (1) when it refused to reinstate the
striking employees.4
6. Failure to use the hiring hall
The complaint alleges that after September 2 the Re-
spondent violated Section 8(a)(5) and (1) by failing to
use the Union’s hiring hall as required by the terms of
the expired contract. This issue was litigated on the
theory that the Union’s September 2 offer to return to
work was unconditional, that it ended the strike, and
that it triggered the Respondent’s obligation to resume
using the hiring hall. However, we have found, as stat-
ed above, that on September 2 the Union did not make
an unconditional offer to return to work. Accordingly,
as we have rejected the premise on which this com-
plaint allegation rests, we find that the Respondent’s
failure to use the hiring hall did not violate the Act.
ORDER
The recommended Order of the administrative law
judge is adopted and the complaint is dismissed.
Burt Pearlstone, Esq., for the General Counsel.
Raymond McQuire, Esq. (Kauff, McLain & McQuire), for the
Respondent.
Daniel Engelstein Esq. (Vladeck, Waldman, Elias &
Englehard), for the Union.
DECISION
STATEMENT OF THE CASE
HOWARD EDELMAN, Administrative Law Judge. This case
was tried before me at New York, New York, on September
30 and October 1–4, 1991.
On August 3, 1988, Local 333 United Marine Division,
International Longshoremen’s Association, AFL–CIO (the
Union) filed a charge in Case 2–CA–22970–1 against
McAllister Brothers Inc. (Respondent). On January 6, 1989,
the Union filed an additional charge against Respondent in
Case 2–CA–23248. On October 30, 1990, a consolidated
complaint issued alleging in substance, that Respondent in-
sisted, as a condition to consummating any successor collec-
tive-bargaining agreement, that the Union agree to a com-
pany proposal entitled ‘‘Company Proposals on Protective
Clauses,’’ and that Respondent bargained to impasse in fur-
therance of its insistence on this proposal. The complaint al-
leges further that this proposal: (1) is not a mandatory sub-
ject of bargaining, and (2) constitutes a demand for a con-
tract without any fixed duration, in circumstances where
there is no reasonable or legitimate justification for such a
demand. Additionally, the complaint alleges that Respondent:
(1) since on or about February 16, 1988, failed to make pay-
ments to the New York Marine Towing and Transportation
Industry Insurance Fund as required by the parties’ collec-
tive-bargaining agreement; (2) since on or about September
2, 1988, failed to use the contractual hiring hall provisions
on the occurrence of employment vacancies; (3) made other
unilateral changes, since on or before February 16, 1988, in
terms and conditions of employment of unit employees; and
(4) refused, since on or about September 2, 1988, a valid un-
conditional offer to return to work made by the Union on be-
half of employees who had commenced a strike on February
16, 1988, which strike was caused and prolonged by the
aforementioned unfair labor practices of Respondent.
Briefs were filed by counsel for the General Counsel and
by counsel for Respondent. On consideration of the entire
1124 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 In view of my ultimate conclusion that a lawful impasse was
reached prior to such strike vote, it would appear that the strike as
to Respondent was in any case, an economic strike.
2 That strike was in 1979, and lasted 3 months. The strike arose
over provisions concerning the geographic scope of the agreement.
record, the briefs, and the demeanor of the witnesses, I make
the following
FINDINGS OF FACT
Respondent is a domestic corporation, engaged in the ma-
rine towing and transportation in New York harbor, including
the docking and undocking of ships. It has an office and
place of business at Battery Place, New York, New York.
Respondent annually derives, in the course and conduct of its
business operations gross revenues in excess of $50,000 for
the transportation of freight in interstate commerce pursuant
to arrangements with, and as agent for various common car-
riers, each of which operates between and among various
States of the United States. Respondent functions as an es-
sential link in the transportation of freight and other com-
modities in interstate commerce. Respondent is an employer
engaged in commerce within the meaning of Section 2(2),
(6), and (7) of the Act.
The Union is, and has been at all times material, a labor
organization within the meaning of Section 2(5) of the Act.
In order to properly evaluate the collective-bargaining ne-
gotiations that took place in this case beginning in January
1988, it is necessary to review the collective-bargaining his-
tory between the Union and Respondent and between the
Union and Respondent’s competitors in the New York harbor
area, and to review Respondent’s economic condition and its
share of the work performed as against similar work per-
formed by its competitors.
There was no significant issue of credibility in this case
as to the facts, except as to what was stated by union offi-
cials to assembled members of the Union on February 15,
1989, concerning the reason for voting to strike Respondent.
This credibility resolution is dealt with in detail.1
For many years Respondent has been engaged in marine
towing and transportation in New York harbor, including the
docking and undocking of ships. Prior to 1988, Respondent
was a member of the New York Marine Towing and Trans-
portation Employers Association (the Association) a multi-
employer association with an aggregate of some 2000 em-
ployees. Respondent was bound by a series of collective-bar-
gaining agreements between the Association and the Union.
The most recent agreement was a 3-year agreement which
expired February 15, 1988. In 1987, Respondent timely with-
drew from the Association and notified the Union of its in-
tent to negotiate independently.
According to the credible and uncontradicted testimony of
William Kallop, Respondent’s chairman of the board, Re-
spondent’s decision to bargain independently, as well as its
subsequent bargaining strategy, were driven by certain fac-
tors described below. First, the marine industry in New York
harbor, and the tugboat business in particular, had been
shrinking for years because of containerization, decreased
cargo volumes, the use of larger ships and barges, and a gen-
eral reduction in the amount of barge towing work. These
circumstances had a significant negative impact on financial
conditions. Respondent lost some $1.9 million in 1987, and
was significantly delinquent in payments to the Union’s pen-
sion and welfare funds, as well as to other creditors. As a
result of Respondent’s poor economic condition, Respondent
took a prebargaining position that economic concessions
from the Union were necessary. Subsequently, during the
1988 negotiations, the Union acknowledged it was aware of
this necessity.
As a result of Respondent’s poor economic situation it de-
cided to reduce the scope as its operations and to concentrate
on ship docking in New York harbor, where it performed a
significant portion of the work. In the ship docking segment
of the market, Respondent held a 44-percent market share.
Two other competitors, Moran and Turecamo, held 40 and
15 percent of the market, respectively. However, both Moran
and Turecamo were much larger companies; most of their
business being in the general and oil barge towing segment
of the market, from which Respondent had withdrawn.
The competition for the New York harbor ship docking
business was aggressive. Respondent’s major competitor,
Turecamo had even gone so far as to hire away McAllister’s
entire 12-man cadre of ship docking pilots in 1987, as well
as a senior salesman, in an effort to capture McAllister’s ship
docking business, Kallop testified that such competition had
to be considered in Respondent’s upcoming bargaining nego-
tiations with the Union.
Another factor influencing Respondent’s bargaining strat-
egy was the unprecedented presence into the New York har-
bor of New York Towing, a tug company that was not a sig-
natory with Local 333 and whose employees received signifi-
cantly lower wages and other benefits then Respondent’s em-
ployees.
Contract negotiations between Respondent and the Union
began in January 1988, at the same time as Respondent and
the Union commenced negotiations for a new contract to suc-
ceed the one expiring on February 15, 1988, the Union was
involved in negotiations with many other tug companies
whose agreements with the Union were also to expire on
February 15, 1988. One group of these companies was a coa-
lition of employers commonly referred to by the Union as
the ‘‘Gang of Seven’’ and included Moran and Turecamo, as
well as five others. This group, was bargaining with Local
333 on a group basis. In addition, the Union was bargaining
with at least 10 other, smaller companies at the same time.
In January and early February 1988, as the negotiations
between Respondent and the Union were getting under way,
it was common knowledge in the industry that the coalition
was making proposals involving the ‘‘scope’’ of bargaining
unit provision that had precipitated the Union’s last strike in
1979, and that they also wanted to remove tug captains from
the bargaining unit. It was also common knowledge that
these demands were regarded with hostility by the Union. A
strike seemed likely. It was also expected that the coalition
employers would try to continue operations with replacement
workers if the Union struck.2
Kallop testified that Respondent viewed the above situa-
tion as presenting an opportunity to achieve a competitive
edge on its rivals. Since Local 333 is an affiliate of the Inter-
national Longshoremen’s Association (ILA). Thus Respond-
ent concluded that a Local 333 strike would probably suc-
ceed in halting all ship docking. Even if a ship were success-
fully docked by a strike-breaking tug, it was unlikely that
1125MCALLISTER BROS.
ILA stevedores would load or unload it. Kallop testified that
the Union’s president and various ILA officials had said as
much to him during informal conversations around their of-
fices. The Union’s offices are on the floor below
McAllister’s offices at 17 Battery Place, and the ILA’s of-
fices are on the same floor as McAllister’s offices.
Kallop testified that Respondent concluded that if it were
the only one of the three ship docking companies with a
union contract, it would be well positioned to increase its
market share from its struck rivals. Thus it was to Respond-
ent’s advantages to reach agreement with the Union if that
were at all possible.
The parties’ first bargaining session was held on January
20. Respondent’s bargaining team consisted of Raymond
McGuire and Kenneth Margolis Respondent attorneys, and
Cesare Del Greco, a respondent official. The Union’s bar-
gaining team consisted of Seymore Waldman and Daniel
Engelstein, attorneys, Albert Cornette, president of the
Union, Peter Gale, secretary/treasurer of the Union, and dele-
gate Joseph Fitzgerald. In addition, the Union’s bargaining
committee was generally present at most sessions. The meet-
ing consisted of the parties’ initial presentation of the con-
cepts that each believed necessary to the conclusion of an
agreement.
For Respondent, McGuire stressed that his client was bar-
gaining independently of the other companies. He assured the
Union that, unlike the coalition, Respondent did not intend
to exclude captains from the unit and that his client fully in-
tended to execute a contract by February 15. McGuire
stressed that Respondent as well as the industry in New York
in general, faced serious financial problems, including com-
petition from out-of-town companies and from New York
Towing, that would have to be addressed. McGuire explained
that as Respondent saw it, any solutions would have to in-
volve curtailing overtime and reducing the manning levels on
the boats.
For the Union, Cornette stated that Respondent’s financial
problems were caused not by labor costs but by mismanage-
ment, and that the best thing for Respondent would be to
sign a wage freeze contract like one he said Local 333 had
signed with a few of the other smaller companies. The par-
ties concluded their initial probing by agreeing that pension
and welfare fund issues also had to be addressed. They
agreed to meet on January 27.
The next bargaining session took place on January 27, Re-
spondent had previously delivered a set of written proposals
to the Union for their review. These proposals involved re-
ducing manning levels, instituting a new system of flat, per
diem wages rather than hourly rates plus overtime, adopting
a new approach for retirement provisions, and various other
changes.
The meeting opened with the Union’s flatly rejecting Re-
spondent’s proposals. McGuire explained that these proposals
were necessary because Respondent had been losing money
for years. Respondent offered to show the Union its books.
However, the Union did not pursue Respondent’s offer.
McGuire stressed that Respondent’s losses were a reality
and that the company had to do something about them. Re-
spondent’s per diem pay proposal had been advanced, he
said, in order to ‘‘restructure the contract to reduce excess
manning and get a handle on the overtime, which was a seri-
ous problem for the company.’’ McGuire, then proposed that
the employees receive a guaranteed monthly wage and a
month’s severance pay when someone was laid off, instead
of a daily ‘‘shape-up’’ that frequently resulted in lost work
for individual employees. McGuire stressed that he wanted to
work out new concepts to try to deal with the new competi-
tive realities that Respondent faced now that its business was
focused on ship docking. Gale testified that the Union under-
stood that he was ‘‘not trying to put down hard and fast de-
mands on the economics a much as trying to hear some pro-
posals. ‘Let’s see if we can work out a way of reducing the
labor costs.’’’ McGuire stressed that Respondent wanted to
be on the same level as its competitors. At this point the ses-
sion ended.
A third session was scheduled for January 29. Immediately
before the January 29 meeting, McGuire met privately in the
kitchen off the negotiating room with union representatives
Waldman and Cornette. Waldman and Cornette said that for
political reasons, they themselves could not make a con-
cessionary proposal, but that if McAllister were to propose
a 10-percent wage reduction and certain other concessions
they outlined, the Union would be willing to discuss it.
McGuire agreed with Cornette’s suggestion to ‘‘just run
through the paces today, get it over with, and then . . . think
about this other business.’’
The formal negotiations then began in another room, in the
presence of the Union’s negotiating committee. Greco ex-
plained the basis for Respondent’s assertion of financial dis-
tress. The parties discussed such issues as the presence of
New York Towing Co. in the harbor, ‘‘excessive manning,
overtime, and . . . a guaranteed monthly wage.’’ However,
there was no bargaining over the substance of McAllister’s
economic proposals of January 26. The meeting ended at this
point.
According to McGuire, Respondent believed there was
going to be a strike and that its competitors would be able
to operate with strike replacements working for wages sub-
stantially below those of Respondent’s employees even as-
suming a 10-percent wage cut as proposed by the Union.
Such a circumstance would threaten Respondent’s continued
existence. It was with the possibility in mind that Respondent
drew up position proposals.
In preparation for the next negotiating session, Respondent
drafted a new comprehensive economic proposal. These pro-
posals increased the per diem for captains from $175 to $300
and changed the proposed ratio of their days worked to days
off from 2-for-1 to 1-for-1, resulting in captains working 182
days per year instead of 240.
Respondent also prepared a set of ‘‘protective clauses,’’
separate from its substantive proposals. These were designed
primarily to protect Respondent from the possibility of hav-
ing to compete with companies operating with low-wage
strike replacements. According to Kallop, Respondent was
concerned about the possibility of contracting for labor costs
of as much as $1500 to $1800 per day and then having to
compete with tugs operated by Moran and Turecamo, using
striker replacements with labor costs of as little of $800 per
day.
These protective clauses included a traditional ‘‘most fa-
vored nations’’ clause. They also allowed Respondent to re-
open the agreement (a) if a non-Local 333 union tug, such
as New York Towing engaged in ship docking, or (b) if a
tug company operating with replacements for Local 333 em-
1126 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ployees engaged in ship docking in the port of New York.
These clauses provided that if one of these conditions oc-
curred and Respondent could reopen the agreement, and if
the parties could not reach agreement within 25 days from
the date of such notice, then either party could declare the
contract terminated on 7 days’ notice.
The next negotiation was held February 12, 1991. The ses-
sion began with McGuire’s handing to the Union, Respond-
ent’s new proposals, including the protective clauses. The
Union had no objection in principle to provisions that would
protect Respondent from strike replacement, competition,
however, Waldman said that Respondent’s proposals were
too loose and open-ended for the Union.
Cornette then outlined a union proposal similar to one the
Union had proposed to the coalition several days earlier. It
contained the 10-percent wage reduction that Waldman and
Cornette had suggested to McGuire on January 29, as well
as a few other relatively minor concessions. There was no
discussion at this meeting concerning the economic provi-
sions of either this proposal or the Respondent’s revised pro-
posal. Eventually, McGuire and Sanborn a respondent nego-
tiator, left the Union’s offices to speak with their principals.
On their return, Sanborn presented certain ideas concern-
ing the starting time for ‘‘day boats’’ and the length of the
day before overtime began. These ideas essentially con-
stituted modifications of the existing contract or the propos-
als Cornette had presented. Cornette conceded Respondent
had made a meaningful proposal but stated the Union could
only ask the unit employees to accept so many givebacks at
one time. He proposed tabling Respondent’s proposal.
McGuire then said that Respondent would accept
Cornette’s proposal if the Union would accept Respondent’s
reopener provisions contained in its proposals. Waldman, ac-
knowledging that the concerns motivating these proposals
were legitimate, stated that he needed to think about Re-
spondent’s proposals a little more. He then said at least for
purposes of discussion, he could accept the ‘‘most favored
nations’’ provision, and that the Union could live with Re-
spondent’s proposal concerning the operation of non-Local
333 union tugs, so long as Respondent could not invoke the
reopener until such a company or companies had garnered 10
percent of the market. Waldman stated however, that the pro-
vision which would permit Respondent to reopen if tugs
using strike replacements operated in the harbor was some-
thing the Union simply could not accept.
Waldman counterproposed instead that he might rec-
ommend the Union’s agreeing to Respondent reopening after
a year if during that time any company or companies operat-
ing with striker replacements were to acquire a 30-percent
share of the ship docking market. McGuire’s response was
that Respondent was reluctant to sign a contract committing
it for so long a period of time to labor costs which, if a
union strike against Moran and Turecamo failed, might be
more than double those of its competitors, particularly when
Respondent already was losing substantial money. Waldman,
then proposed that perhaps the formula could be tied to Re-
spondent’s market share rather than that of its competitors.
Waldman then proposed if Respondent’s market share were
to drop from 44 to 35 percent, perhaps the Union could
agree to permitting Respondent to reopen after 6 months.
Waldman testified that while Respondent’s proposals were
not encouraging, ‘‘it was not a turn down because we then
proceeded to draft the union’s position before the next meet-
ing in written form so that they would have it in front of
them.’’
The parties met again on February 14. The Union opened
the meeting by presenting its proposals in the form of a
Memorandum of Agreement. Those proposals included the
same ‘‘most favored nations’’ clause that Respondent had
sought, and a reopener which would be triggered (a) imme-
diately if a non-Local 333 union tug operator acquired 10
percent of the ship docking work in the port of New York,
or (b) after a year if one or more companies operating with
replacements for striking Local 333 workers achieved 30 per-
cent of the market share of ship docking work in the port
of New York. As in Respondents’ proposed ‘‘protective pro-
visions,’’ the reopener procedure contained in the Union’s
proposal provided that the contract could be terminated on 7
days’ notice if an agreement could not be reached within 25
days after notice of reopening was first provided.
Waldman stated the Union’s position was that a reopener
should not be based on the ‘‘mere fact that there is some-
body else out there operating in a certain way. It should be
related to some harm or damage that McAllister was suffer-
ing by reason of that fact.’’ He further stated that the market
share concept the Union had proposed was a way to measure
the presence and extent of such harm. Waldman suggested
at the same time that Respondent’s reopener proposal would
make the contract ‘‘illusory.’’ His primary concern was that
he did not want to ‘‘be sending everybody in the port out
on strike except McAllister’s employees.’’
McGuire indicated Respondent was concerned about the
risks it would face if the Union struck Moran and Turecamo
unsuccessfully. Respondent was losing money, and the po-
tential loss of operating with union wages while the coalition
employers used low-cost strike replacements and cut the rates
they charged for ship docking could put Respondent out of
business. Respondent had calculated its losses would be
about $600,000 a month, which would amount to more than
$3.5 million if it were to agree to a reopener in 6 months,
and twice that if the reopener could not be invoked for a
whole year. Further, Respondent’s vessels were cross-mort-
gaged, such that a default on one would trigger default and
possible foreclosure on all the other vessels. Respondent
wanted to be able to reopen immediately in order to avoid
financial disaster if a strike against Moran and Turecamo
failed. McGuire pointed out that the Union was aware of its
vulnerability since Respondent owed more than $300,000 to
the Union’s welfare and pension funds.
Waldman responded, again, by asserting that an immediate
reopener would make the contract ‘‘illusory.’’ Waldman said
he would not let Cornette send the other companies out on
strike in circumstances in which the membership could look
at the agreement and say that it was a ‘‘‘makebelieve’ con-
tract and you’re letting Respondent’s people work and mak-
ing us all strike and they didn’t give you anything.’’
The parties went back and forth over the Union’s proposal.
The Union attempted to reach agreement by proposing alter-
natively a 1-year reopener formula tied to the market share
of Respondent’s competitors, and a 6-month reopener for-
mula tied to a reduction in Respondent’s market share. Re-
spondent tried to persuade the Union that its reopener pro-
posal would not make the contract at all ‘‘illusory’’ because
it would not permit the contract to be terminated until: first,
1127MCALLISTER BROS.
another company or companies had acquired the agreed-upon
market share; second, 25 days had elapsed while the parties
negotiated, and third, 7 days’ notice of termination had been
given. McGuire pointed out it was possible that Respondent
might not have to exercise its right to reopen.
Significantly, the parties never discussed the substance of
Respondent’s economic proposals of February 12. At some
point in the negotiations, Waldman suggested that Respond-
ent’s desire for an immediate reopener would result in an
‘‘illusory’’ contract. McGuire replied, ‘‘[I]f you want a real
contract without any of this other stuff, sign our contract
with our proposals.’’ Waldman declined.
McGuire then proposed that Respondent would sign the
Union’s proposal right then and there if only it would elimi-
nate the 1-year clause and permit Respondent to invoke the
reopener procedure immediately if the agreed-upon market
share target was reached. The Union then proposed that it
could not agree to any reopener triggered by the use of strik-
er replacements on tugs unless Respondent was precluded
from reopening for at least 6 months.
On February 15, Respondent sent the Union a letter which
contained a revised contract offer. The proposals contained
in that letter increased Respondent’s economic offer of Feb-
ruary 12, proposing $155 per day for mates and deckmates
instead of the $150 Respondent had offered earlier, and $100
per day for deckhands instead of the $90 that had been of-
fered earlier. This proposal was not conditioned on the inclu-
sion of any reopener provisions. Respondent also proposed
that it would, ‘‘[i]n the alternative . . . sign an agreement
based on the contract proposal the Union delivered . . . yes-
terday, provided Respondent could reopen the contract imme-
diately if any of its competitors who use union crews engage
in ship docking using strike replacements for their union
crews. The letter further stated, ‘‘We seem to be one para-
graph apart but it appears to be a critical paragraph for both
of us. I know my clients have gone as far as they can in
compromising what they originally hoped to get out of these
negotiations and have, in effect, acceded [sic] almost totally
to the Union’s positions.’’ It concluded with McGuire’s invi-
tation for Cornette to call him, with the assurance that ‘‘[w]e
are available to talk about any of these matters today.’’
This letter was not received by the Union until the Union
had already voted to strike.
On February 15, the day of the expiration of the contract,
the Union held a meeting at the passenger ship terminal,
where it conducted a strike vote. The entire union member-
ship was present, and one overall, standup vote was taken by
the entire membership; it was not done on a company-by-
company basis. During this vote, nothing was ever said about
the reopener provisions that the Union and Respondent dis-
cussed during their negotiations, and Respondent’s proposal
was never characterized as a ‘‘one day’’ contract, an ‘‘illu-
sory’’ contract, or anything of that nature by any Union rep-
resentative.
The membership voted to strike the coalition employers
and Respondent, at midnight, February 15, 1991.
The facts concerning the Union’s strike vote is based on
the credible testimony of Greg Aitken who was a former unit
employee of Respondent. However, following the strike he
obtained employment by Ekhoff Marine. I was impressed by
his demeanor. His testimony was responsive and forthright.
Aitken’s testimony also had the ring of truth. In this con-
nection the facts establish that an entire group of some 2000
union members were voting by standup vote on whether to
strike an entire group of 10 or more employers. Common-
sense dictates that in a raucous, ‘‘pep rally’’ atmosphere like
that which prevailed at the Union’ strike vote meeting on
February 15, minor differences between the proposals of one
company and those of the next would neither be mentioned
nor paid particular attention to even if they were. All the
more would this be so where the Union was fired up to
strike the ‘‘Gang of Six.’’ Compared with those employers,
Respondent, although not quite ‘‘small potatoes,’’ was a
much smaller player, and any differences between its propos-
als and theirs would not likely have been highlighted.
Peter Gale and Louis Spadaro did testify that the reopener
proposals were mentioned at the strike meeting. I do not
credit their testimony, which is wholly at odds with Aitken’s
testimony.
Aitken is no longer employed by Respondent and was in
a sense an objective third-party witness without any financial
interest in the outcome of the trial. Spadaro, on the other
hand, had been a member of the Union’s negotiating com-
mittee; Gale, was one of the Union’s chief negotiators.
Spadaro’s testimony is suspect. It appears tailored to estab-
lish an unfair labor practice strike. When asked what was
said he testified, as though reciting what he thought he was
supposed to say, ‘‘Well they gave a synopsis of the offer
from Respondent, they also indicated about the reopening
clause in there and they specified, you know, they advised
the guys that it was like not having any contract at all.’’
However, his memory as to other aspects of the strike vote
meeting were almost entirely nonexistent.
Similarly, Gale’s testimony on the matter of whether the
meeting included a discussion of the reopener proposal is
wholly lacking in credibility. On direct examination, he was
asked, ‘‘What was stated, if anything, with regards to
McAllister at the [February 15] meeting?’’ He testified:
Cornette told the membership that McAllister wanted a
contract that wasn’t a contract. I think he used the term
one day contract that they wanted to be able to get out
of, potentially right away.
However, in connection with the Union’s charges against the
coalition employers, Gale gave an affidavit in which he de-
scribed the February 15 meeting in the following manner:
On the day of February 15, we held a union member-
ship meeting to present to the membership the most re-
cent offer from management. There were about 2,000
members present. Cornette ran the meeting. He opened
up by stating that we had offers from the Gang of
Seven, McAllister, Polling, and that they were in his
view and in the view of the negotiating committee were
unacceptable. And that the only course available was to
reject them. . . . He said that the proposals from the
Gang of 7, Hess, Polling, and McAllister called for se-
vere reductions in manning, no overtime, elimination of
the existing scope of the unit clause . . . and drastic
changes in the pension and insurance plans.
Significantly, Gale said not a word about the ‘‘protective
clauses,’’ in connection with Respondent. Nor did he say
1128 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
anything about the ‘‘protective clauses’’ in his deposition in
the 10(j) proceeding against the coalition employers when he
described the state of the Union’s negotiations with Respond-
ent, other than to say, ‘‘I don’t think that employees’ protec-
tive clauses were a problem.’’
During the interim, the strike had proved unsuccessful.
The anticipated ILA support of the Union’s strike did not
materialize, and Respondent, Moran, and Turecamo were
able to conduct ship docking operations with strike replace-
ments. As of March 18, each company had retained approxi-
mately the same share of the ship docking market it had en-
joyed before the strike.
On March 16 Respondent sent a letter to the Union and
a copy of new proposals. The latter pointed out that during
the interim period of February 15 and March 16—and be-
cause of the obviously changed competitive climate in the
harbor, some of Respondent’s new wage proposals were dif-
ferent, and in some cases lower than those contained in its
February 12 proposals, which had been withdrawn on Feb-
ruary 15. Respondent’s March and April proposals contained
no reopener provision of any kind whatsoever.
The parties next met on March 18. The Union rejected Re-
spondent’s proposals out-of-hand as ‘‘regressive.’’ McGuire
explained that the parties were bargaining in a much different
environment than they were before the expiration of the
agreement. McGuire pointed out the tug companies that com-
peted against Respondent had been operating, Respondent
had recruited replacement employees at far lower wages, and
Respondent could now no longer talk about a contract with
a 10-percent reduction. Respondent estimated that Moran and
Turecamo were operating with labor costs anywhere from
$800 to $1000 a day and that included their security costs.
Daily labor costs per tug under the Union’s 10-percent reduc-
tion proposal.
The Union re-proposed its February 14 proposal and sug-
gested a contract with a 3-month reopener instead of a right
to reopen after 6 months or a year. Respondent pointed out
that the strike had proved unsuccessful and reopeners and
protective proposals were irrelevant. Thereafter protective
clauses was never bought up in this on any subsequent nego-
tiation.
Respondent tried to focus on its discussion manning levels,
Respondent took the position that to reduce labor cost the
Union would have to reduce crew. The Union was willing
to think about omitting the cook’s position in exchange for
some sort of ‘‘buy out.’’ Respondent took the position that
clearly would not be enough to get labor costs down to the
neighborhood of the $800–$1000 per day in labor costs that
Moran and Turecamo were now paying to do ship docking
with replacements.
Respondent stressed that it could not sign a contract with
higher labor costs than those paid by its competition. Re-
spondent offered not only to sign an agreement for whatever
wages Moran or Turecamo was paying, whichever was great-
er, but also to negotiate an agreement together with those
companies exclusively for ship docking work. The Union de-
murred, observing that Moran and Turecamo did other kinds
of work in addition to ship docking, and that it did not feel
they would be interested in such an arrangement.
The Union proposed instead that minor adjustments to the
expired agreement, such as the overtime provisions, would
provide the basis for a contract. The Union stressed that if
Respondent signed such an agreement, the Union would get
you 10 shipping companies who will sign up with you im-
mediately. The March 18 meeting ended with Respondent
agreeing to check around to see whether, if it had a contract
with Local 333, there were shipping companies that would
switch to McAllister as a result.
According to McGuire, Respondent did check with the
ship docking companies. It did not appear that a significant
number of them would agree to use Respondent instead of
Moran or Turecamo in the event Respondent became the
only tug company doing ship docking operations in the port
that was signed on with the Union. According to McGuire,
the other companies simply were not interested in making a
long-term commitment to any single tug operator.
The parties next met on March 30, with the assistance of
Robert Kennedy, a mediator from the Federal Mediation and
Conciliation Service. The parties exchanged a series of pro-
posals based on their prior proposals. The parties then cau-
cused to cost out those proposals. Respondent concluded that
each proposal the Union made still left it with labor costs of
around $1700 a day, while its competition was then paying
only $900 or $1000 per day.
The Union pointed out that Respondent would be pro-
tected by the most-favored-nations clause it had agreed to
sign, but Respondent responded that this clause would apply
only if Moran and Turecamo signed with the Union. Re-
spondent proposed signing a contract which provided wages
to match those of either of its competitors, at the Union’s op-
tion. The Union proposed signing an agreement to pay the
same wages that Ekloff (a towing company that was heavily
engaged in the lucrative oil barge market and did no ship
docking work) was paying its replacements. Respondent re-
fused because it was not competing with Ekloff, but rather
with Moran and Turecamo. The meeting concluded with the
Union’s asking Respondent to furnish a proposal that set
forth exactly what Respondent was willing to offer to end the
strike.
On April 4, Respondent sent such a proposal which set
forth as follows:
This proposal is for crews involved in ship’s docking
work only. We urge you to give this proposal serious
consideration. Do not reject it just because it is dif-
ferent. Captains involved in ship docking would get
paid $42,525 per year, plus $1,215 in the 401K con-
tribution; engineers and deckmates $37,665 per year
plus $1,215 in 401K contributions, and deckhands from
$19,440 to $24,300 per year plus $1,215 in 401K con-
tribution if they worked a full 243 day year. As you
know ship docking is not merely as strenuous or de-
manding work as towing barges, nor does it require as
much skill. Although the men will be working more
days than under the previous contract, the Captain and
crew on McAllister’s tugs have a great deal of ‘‘down
time’’ during the working day and would also have at
least eight hours of uninterrupted rest each day.
This proposal also included different, higher wage rates for
captains and crew members engaged in coastwise towing, al-
though Respondent currently does very little barge towing.
The parties next met on April 5. The Federal Mediator
was present. The Union opened the meeting by characteriz-
1129MCALLISTER BROS.
ing Respondent’s proposal as ‘‘bullshit.’’ ‘‘The parties once
again went back and forth, persistently ending far apart, with
Respondent looking for labor costs in the area of $800–
$1000 per day, while the Union’s proposals persistently re-
sulted in costs above $1500 per day.’’ Respondent proposed
that reducing crew levels was the only way to bridge the gap
between the parties, stating that the cook and the extra deck-
hand should be eliminated. The Union responded to the pro-
posed elimination of the second deckhand by stating it was
out of the question, it was a deal breaker. At this point the
session ended.
The parties did not meet again until August 23, and there-
after again on September 30 and December 12. At each
meeting there was no movement by either side from the posi-
tions they held on April 5. The same issues were discussed
in these three meetings as in the prior meetings, particularly
manning levels.
Subsequent to the strike, Respondent continued its oper-
ations using strike replacements who were offered permanent
positions.
On June 2, the first bargaining unit employee left the
strike and returned to work with Respondent. Two more re-
turned on June 8 and 16, respectively, and three more subse-
quent to February 1990. The terms and conditions of em-
ployment of these unit members were not inconsistent with
those contained in Respondent’s proposal of April 4. These
terms and conditions were different from, and less favorable
to these employees than those contained in the expired agree-
ment. In addition, Respondent did not make payments to the
pension and welfare funds for these returned strikers.
On September 2. the Union telecopied a letter to Respond-
ent which stated:
By this letter Local 333 makes an unconditional offer,
on behalf of all members of the bargaining units cov-
ered by the expired collective bargaining agreements, to
return to work under the terms and conditions that ex-
isted under the expired collective bargaining agreement.
The letter also accused Respondent of unspecified unfair
labor practices. By letter of September 14, McGuire re-
sponded on behalf of Respondent denying that Respondent
had committed any unfair labor practices, and advising that
the Union’s offer on behalf of the employees to return to
work was not unconditional because many months ago, Re-
spondent and Local 333 reached a good-faith impasse in bar-
gaining over company proposals for wages, hours, staffing
levels, and terms and conditions of employment substantially
below those contained in the expired collective-bargaining
agreements.
By a letter dated September 14, 1988, McGuire proposed
on behalf of Respondent that the men be returned to work
under the terms and conditions of Respondent’s April 4 pro-
posal without prejudice to either party’s right to assert to the
Board any positions it or the strikers might wish; that the
question of the terms and conditions to which returning strik-
ers are entitled would be resolved by the Board if the parties
could not settle it by bargaining; and that the parties would
continue negotiating to conclude a new collective-bargaining
agreement.
By a letter dated September 26, the Union declined this
offer disagreeing as to McGuire’s characterization of the pre-
vious bargaining and stating that while the Union might be
willing for the men to go back to work under interim terms
and conditions less favorable than those of the expired agree-
ment, the terms of the April 4 proposal were unacceptable.
Respondent replied to this letter on September 23, offering
to meet and bargain. This offer was made shortly before the
parties met to bargain on September 30. No agreement was
then reached concerning the reinstatement of striking em-
ployees.
Respondent did not use the Union’s hiring hall to recruit
new employees at any time after the Union’s offer of Sep-
tember 2.
Analysis and Conclusions
The facts of this case establish that both parties came into
these negotiations with a good-faith effort to reach an agree-
ment. The parties had a long and amicable relationship with
each other and there is no evidence that Respondent was try-
ing to rid itself of the Union. Rather there is undisputable
evidence that as a result of competition Respondent was los-
ing a tremendous amount of money annually. For example,
Respondent had lost $1.9 million in 1987 alone. Moreover,
Respondent was significantly delinquent in its pension and
welfare payments to the Union’s funds. The parties were
aware that an industrywide strike in the tugboat industry in
New York harbor was highly probable and Respondent’s
competitors in anticipation of such strike had made arrange-
ments to operate with strike replacements. It was with this
economic climate and with these conditions that Respondent
proposed its protective clauses. The first question that must
be explored is whether in light of the circumstances of this
case, such protective clauses constitute a mandatory subject
of bargaining.
The Board has consistently held that duration clauses, re-
opener clauses and ‘‘most favored nations’’ clauses are man-
datory subjects of bargaining Steelworkers Local 2140
(United States Pipe), 129 NLRB 357, 360 (1960), enf. de-
nied on other grounds 298 F.2d 873 (5th Cir. 1962); Dolly
Madison Industries, 182 NLRB 1037 (1970); NLRB v. Lion
Oil Co., 352 U.S. 282, 285–286 (1957). Respondent’s pro-
posed protective clauses have elements of each type of the
clauses described above. Thus, Respondent’s proposed clause
would condition the duration of the agreement on Respond-
ent’s competitors operating during a strike with nonunion re-
placements or replacements represented by another labor or-
ganization and capturing a specified percentage of the ship
docking work normally performed by Respondent. On the
happening of either condition, Respondent could reopen the
agreement and thereafter terminate the agreement on 7 days’
notice, if a new agreement was not reached within 25 days
after Respondent’s notice of such reopening was first pro-
vided.
Counsel for the General Counsel contends that the provi-
sions of the protective clauses as proposed by Respondent
provide for an uncertain or unreasonable duration without
any reasonable economic justification. In this connection the
General Counsel essentially contends that Respondent’s pro-
posal assumed that there would be a strike and that Respond-
ent’s competitors would operate their tugs with nonunion or
other union replacements, and would trigger the economic
percentages described in Respondent’s proposals. Thus, the
General Counsel contends the term of such proposed agree-
ment would be ‘‘illusory,’’ resulting in a contract of unrea-
1130 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
sonably short duration. However, the Board has held that an
employer’s insistence on a collective-bargaining agreement
which contains a short or otherwise unreasonable duration is
an indicia of bad faith only where there is no reasonable eco-
nomic justification for such duration. Cleveland Sales Co.,
292 NLRB 1151, 1155–1156 (1989); Deister Concentrator
Co., 253 NLRB 358, 359 (1980); Bagel Bakers Council of
Greater New York, 174 NLRB 622, 630 (1969); Borg War-
ner Corp., 128 NLRB 1035, 1051 (1960). In Ellis Tacke Co.,
229 NLRB 1296, 1302–1303 (1977), the Board held that a
contract provision giving the union an exclusive right to ter-
minate the contract at any time upon written notice does not
in and of itself make the contract illusory. However, a par-
ty’s insistence on a contract with no termination date, thus
making the contract terminable at will is an indicia of bad-
faith bargaining.
I conclude, contrary to the General Counsel’s contention,
that the facts establish that Respondent clearly had economic
justification for bargaining and seeking inclusion of protec-
tive clauses in a collective-bargaining agreement, and that the
Union was not only aware of such justification, but so sen-
sitive to Respondent’s position to the extent that it made
counterproposals concerning such clauses. Respondent made
the Union aware that it was operating with extreme monetary
losses that threatened its continued existence. The Union
never disputed this assertion. In this regard, Respondent was
delinquent, in significant amounts, to its required union fund
contributions. The Union even attempted to accommodate
Respondent’s proposals for protective clauses by proposing
its own protective clauses. However, as Respondent convinc-
ingly argued in negotiations, such union proposals, which set
forth the same economic conditions for reopening, but pro-
posed different fixed time periods, as the time when such re-
opener could be activated, could result in such catastrophic
losses that Respondent could be out of business long before
even the shortest time period of 3 months, proposed by the
Union, could take effect. Thus, it is clear that the Union’s
only dispute concerning Respondent’s protective clause pro-
posals was the unlimited time period proposed by Respond-
ent which would activate the reopener. Respondent’s Feb-
ruary 15 letter to the Union which stated: ‘‘We seem to be
one paragraph apart but it appears to be a critical paragraph
for both of us,’’ accurately describes the state of negotiations
as of February 15, the date that the Union took a strike vote
and the membership voted to strike Respondent and other
employers in the tugboat business operating in New York
harbor.
The General Counsel contends that Respondent’s proposed
protective clause is nothing more then a proposal for a con-
tract, terminable at will, with no fixed term. The General
Counsel relies primarily on Massillon Community Hospital,
282 NLRB 675 (1987), in support of this contention. How-
ever, the instant case is clearly and most significantly distin-
guishable from the Massillon case and other similar cases
cited by the General Counsel in his brief. In Massillon, the
Board held that the employer had bargained in bad faith by
insisting on a contract, terminable at will. In this connection
the Board stated :
[A]bsent any lawful or reasonable economic justifica-
tion, a party’s unwillingness to enter into a contract for
a fixed term raises in and of itself a presumption that
the party is not bargaining in good faith. [282 NLRB
at 676.]
However in the instant case, as distinguished from
Massillon, and the other cases cited by the General Counsel
in its brief, Respondent presented to the Union persuasive
and compelling economic justification for its proposed pro-
tective clause, as set forth and discussed above. Moreover,
as also set forth above, the Union was so convinced of Re-
spondent’s economic justification, that it counterproposed
various other protective clauses, all of which Respondent
found unsatisfactory because it failed to meet Respondent’s
economic needs. The instant case is also distinguishable from
Massillon and the other cases cited by the General Counsel
that in the instant case, Respondent had agreed to a specific
3-year contract term. This protective clause was merely a re-
opener provision that might not result in a contract of a short
term. By its terms, it might not even become necessary to
reopen the agreement, the conditions triggering the reopening
might not take place within the agreed-on 3-year contract
term. Thus, though there was a high probability that a strike
would take place and Respondent’s competitors would hire
strike replacements, this fact does not establish that Respond-
ent would necessarily meet those conditions necessary to
trigger the protective reopener provision in issue so as to
make the contract terminable at will or of unreasonably short
duration.
Thus, by February 15, it appears that agreement had been
reached by the parties on essentially all issues but the protec-
tive clause. Further, it appears that Respondent was unable
to agree to a contract with the Union without such protective
clause and that the Union was equally unable to take to its
membership an agreement which included Respondent’s pro-
posed protective clause. Under these circumstances, I con-
clude that as of February 15, after the Union obtained strike
authorization from its members, a lawful impasse had been
reached. Taft Broadcasting Co., 163 NLRB 475 (1967), enfd.
395 F.2d 622 (8th Cir. 1968).
The evidence establishes that following the February 15
bargaining session, and the commencement of the strike, Re-
spondent never again proposed the above protective clauses.
Accordingly, I conclude that there is insufficient evidence to
establish that Respondent insisted to impasse on the inclusion
of such protective clause and thus, insufficient evidence to
establish that Respondent bargained in bad faith as alleged.
The General Counsel has alleged in its complaint that the
strike which took place since February 16, was an unfair
labor practice strike caused by Respondent’s insistence on in-
clusion in a collective bargaining between the parties of Re-
spondent’s protective clauses described above, an alleged
nonmandatory subject of bargaining.
C-Line Express, 292 NLRB 638, 639 (1989), accurately
sets forth the Board’s objective and subjective considerations
that determine whether a strike is an unfair labor practice or
an economic strike. The Board in C-Line states:
[A]n employers unfair labor practices during an eco-
nomic strike do not ipso facto convert it into an unfair
labor practice strike. Rather, the General Counsel must
establish that the unlawful conduct was a factor (not
necessarily the sole or predominant one) that caused a
prolongation of the work stoppage.
1131MCALLISTER BROS.
The Board goes on to point out that:
In many cases the record will afford the Board an
opportunity to evaluate the employees knowledge of,
and subjective reactions to, an employers unlawful con-
duct in order to confirm that it interfered with the set-
tlement of a strike and thus prolonged the work stop-
page.
I.e., the subjective considerations. The Board states further
that:
Certain types of unfair labor practices by their nature
will have a reasonable tendency to prolong the strike
and therefore afford a sufficient and independent basis
for finding a conversion.
I.e., objective considerations. Application of either standard
assumes that Respondent has committed unfair labor prac-
tices.
In the instant case, I have concluded that Respondent’s de-
mand for inclusion in an agreement negotiated between Re-
spondent and the Union of the protective clause proposed by
Respondent was not an unfair labor practice. Since it is not
alleged that Respondent has committed any other unfair labor
practice prior to February 16, the date the strike commenced,
I conclude that at its inception, the strike was an economic
strike. As set forth and discussed below, I have concluded
that actions by Respondent which took place subsequent to
February 15, and alleged by the General Counsel to con-
stitute unfair labor practices, were not unfair labor practices.
Accordingly, I conclude that the unions strike, beginning on
February 16, 1988, and at all times thereafter was an eco-
nomic strike.
It was stipulated that following the strike on February 16,
Respondent continued to operate with strike replacements. At
various times thereafter, a total of six unit employees aban-
doned the strike and returned to work with Respondent.
These employees received terms and conditions of employ-
ment which were consistent with Respondent’s April 4 pro-
posals, but were lower and less favorable then the terms and
conditions set forth in the expired contract. the General
Counsel contends that the change in the terms and conditions
of the rehired strikers from those set forth were unilateral
changes that Respondent could not make unless Respondent
bargained in good faith with the Union and the Union agreed
to such change or an impasse was reached. Taft Broadcasting
supra. However, the law is well settled that an employer does
not violate the Act if he makes unilateral changes after a le-
gitimate impasse has been reached. Taft Broadcasting, supra;
Western Newspaper Publishing Co., 269 NLRB 355 (1984).
The terms and conditions offered the returning strikers were
consistent with Respondent’s proposals made to the Union’
on April 4, 1988. Although these terms were less favorable
then the terms set forth in the expired contract, a lawful im-
passe had been reached on February 15, Respondent was
now in a stronger economic position since it was able to op-
erate with strike replacements. Accordingly, I conclude that
such unilateral changes did not violate Section 8(a)(5) of the
Act.
The General Counsel contends that following the expira-
tion of the contract on February 15, 1988, Respondent failed
to make fund payments to the Union’s fund pursuant to the
terms of the expired contract, without bargaining with the
Union and in violation of Section 8(a)(5) of the Act. Re-
spondent admits that it did not make fund payments after the
expiration of the contract on February 15. In view of my
conclusion that a lawful impasse had been reached by Feb-
ruary 15, the date the parties contract expired, Respondent
was free to make such unilateral change. Taft Broadcasting
supra; Western Newspaper Publishing, supra; NLRB v.
Cauthorne, 691 F.2d 1023 (D.C. Cir 1982); Excelsior Pet
Products, 276 NLRB 759 762–763 (1985). Accordingly, I
conclude Respondent did not violate the Act by its failure to
make such fund payments.
The General Counsel also contends that following the ex-
piration of the parties, contract, Respondent thereafter failed
to utilize the union’s hiring hall as required by the terms of
the expired contract, and that such failure constitutes a uni-
lateral change in the terms and conditions of employment in
violation of Section 8(a)(5) of the Act. Respondent admits
that following the expiration of the contract on February 15,
it no longer utilized the Union’s hiring hall. Based on the
conclusions of law described above relating to Respondent’s
unilateral changes, I conclude for the same reasons that Re-
spondent did not violate Section 8(a)(5) of the Act by such
action. Excelsior Pet Products, supra.
The General Counsel contends that Respondent violated
Section 8(a)(3) of the Act by its failure to reinstate the strik-
ers pursuant to the Union’s letter dated September 2, 1988.
The facts establish that such offer to return to work was spe-
cifically conditioned on the returning strikers receiving the
same terms and conditions set forth in the parties’ expired
contract. Respondent, by a letter in response to the Union’s
September 2 letter refused to reinstate the striking employ-
ees, claiming the unions offer was conditional.
It is well settled that whether a strike is economic or an
unfair labor practice strike, a striker’s right to reinstatement
is triggered on an unconditional offer to return to work.
Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 278 (1956):
NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 378–380
(1967). It is equally well settled that a conditional offer,
whether the strike is an unfair labor practice strike or an eco-
nomic strike, does not trigger reinstatement rights of any
kind. Mid-County Transit Mix, 265 NLRB 782, 788–789
(1982); Atlanta Daily World, 192 NLRB 159 (1971). Since
it is clear that the offer of reinstatement at issue was condi-
tional on a return under the same conditions as provided in
the parties expired contract, and that Respondent was no
longer applying such terms and conditions to newly hired
employees, I conclude Respondent did not violate Section
8(a)(1) and (3) of the Act by its refusal to reinstate striking
employees pursuant to the Union’s conditional September 2
offer.
CONCLUSIONS OF LAW
1. Respondent is an employer within the meaning of Sec-
tion 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. Respondent has not violated Section 8(a)(1), (3), and (5)
of the Act as alleged in the complaint.
1132 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended 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 purposes.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended3
ORDER
The complaint is dismissed in its entirety.