McDonnell Douglass Aerospace

National Labor Relations Board - Board Decisions

Sep 30, 1998

326 N.L.R.B. 1391 (N.L.R.B. 1998)

MCDONNELL DOUGLAS AEROSPACE SERVICES CO. 1391
McDonnell Douglas Aerospace Services Company
and International Union of Electronic, Electri-
cal, Salaried, Machine and Furniture Workers,
AFL–CIO. Case 32–CA–16311

September 30, 1998

DECISION AND ORDER
BY MEMBERS FOX, LIEBMAN, AND HURTGEN
On June 2, 1998, Administrative Law Judge Joan
Wieder issued the attached decision. The Respondent
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 brief1 and has decided to
affirm the judge’s rulings, findings,2 and conclusions and
to adopt the recommended Order.3
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, McDonnell Douglas Aero-
space Service Company, Fallon, Nevada, its officers,
agents, successors, and assigns, shall take the action set
forth in the Order.

Jo Ellen Marcotte, Esq., Counsel for the Acting General Coun-
sel.
Raymond M. Deeny, Esq. and Edward J. Butler, Esq. (Sherman
& Howard L.L.C.), Colorado Springs, Colorado, for the
Respondent.
Tom Keane, Business Representative, of Corona, California, for
the Charging Party.

1 The Respondent has requested oral argument. The request is de-
nied as the record, exceptions, and brief adequately present the issues
and the position of the Respondent.
2 Member Hurtgen agrees with the judge that the Respondent vio-
lated Sec. 8(a)(5) by withholding scheduled benefits from unit employ-
ees on April 1, 1997. In his view, once the Respondent, in December
1996, unconditionally promised to provide employees with specific
benefits (regardless of whether they selected union representation),
those benefits became a term and condition of employment, and part of
the status quo ante. Thereafter, the burden was on the party seeking to
change that term and condition to request bargaining over it. Member
Hurtgen does not find that the Respondent’s March 23 announcement
that “these benefits will not be unilaterally provided to IUE represented
employees . . . on April 1” satisfied this bargaining obligation. Rather,
Member Hurtgen finds that the Respondent unlawfully presented the
Union with a fait accompli. A different result might obtain, in his view,
if it had been “proposed” that the benefit package not be implemented
on that date.
3 The judge erroneously ordered that any backpay owed to employ-
ees be computed in the manner set forth in F. W. Woolworth, 90 NLRB
289 (1950). The correct backpay formula applicable in this case is set
forth in Ogle Protection Service, 183 NLRB 682 (1970).
DECISION
STATEMENT OF THE CASE
JOAN WIEDER, Administrative Law Judge. This case was
tried on April 13, 1998,1 at Oakland, California. The charge
was filed by International Union of Electronic, Electrical, Sala-
ried, Machine and Furniture Workers, AFL–CIO (Union or
Charging Party), on August 26, against McDonnell Douglas
Aerospace Services Company (Respondent or MDASCO). The
Regional Director for Region 32, issued a complaint and notice
of hearing on November 28, alleging Respondent violated Sec-
tion 8(a)(5) and (1) of the National Labor Relations Act (Act)
by advising employees covered by the Service Contract Act, on
or about December 13, 1996, that effective April 1, they would
receive enhanced fringe benefits regardless of the outcome of
the forthcoming union representation election, and unilaterally
determined not to implement the promised benefits on April 1.
Respondent’s timely filed answer to the complaint, admits
certain allegations, denies others, and denies any wrongdoing.
Respondent admits at least some of the enhanced benefits are
mandatory subjects of bargaining. Based on the findings and
conclusions stated below, Respondent’s motion to dismiss the
complaint because the General Counsel failed to make a
prima facie case, should be, and is hereby, denied.
All parties were given full opportunity to appear and intro-
duce evidence, to examine and cross-examine witnesses, to
argue orally, and to file briefs.
Based upon the entire record, from my observation of the
demeanor of the witnesses, and having considered the post-
hearing briefs, I make the following2
FINDINGS OF FACT
I. JURISDICTION
Based on the Respondent’s answers to the complaint, as
amended, and the parties stipulations at hearing, I find Respon-
dent meets one of the Board’s jurisdictional standards3 and the
Union is a statutory labor organization.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
Respondent4 provides a wide variety of services pursuant to
military contracts across the United States. The vast majority
of those contracts involve the training of U.S. Air Force pilots.
Respondent has “smaller contracts” for maintenance services
on military aircraft, “and we do what’s known as total training
1 All dates are in 1997 unless otherwise indicated.
2 I specifically discredit any testimony inconsistent with my find-
ings.
3 Respondent’s admitted business operations, including the provision
of services valued in excess of $50,000 to the United States Navy dur-
ing the past 12 months, are sufficient to have a substantial impact on
the national defense of the United States within the meaning of the
Board’s discretionary guidelines for asserting jurisdiction. Castle In-
stant Maintenance/Maid, Inc., 256 NLRB 130 (1981); Ready Mix Con-
crete & Materials, Inc., 122 NLRB 318 (1958); Trico Disposal Service,
Inc., 191 NLRB 104 (1971).
4 In December 1996, the merger of McDonnell Douglas with Boeing
was announced. The merger was effected in August 1997. There was
no claim Boeing or any other entity should have been made a party to
these proceedings.
326 NLRB No. 151
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1392
systems on the C–17 where we take care of the entire training
system for the Air Force.”
Respondent won a contract to provide maintenance services
at the Fallon, Nevada, Navy Air Station in 1995. The Union
filed a petition on October 3, 1996, to represent Respondent’s
maintenance and service employees at Fallon, that led the par-
ties to agree to an election. In December 1996, the Union was
in a campaign to organize Respondent’s Fallon employees. The
representation election was conducted on December 18, 1996.
On December 27, 1996, in Case 32–RC–4219, the Union was
certified as the exclusive collective-bargaining representative of
the following appropriate unit:

All full-time and regular part-time production, service,
and maintenance employees employed by Respondent at
the Fallon Navel Air Station, Fallon, Nevada, including
Quality Assurance Representatives; excluding all office
clerical employees, guards, leads, maintenance controller
supervisors, and supervisors as defined in the Act.

B. Events of December 13, 1996
Only one witness, Eric Benjamin, testified about the Decem-
ber 13, 1996 mandatory meeting Respondent held for about 80
of its employees at Fallon, 5 days before the election. Benjamin
is a current employee of Respondent and works as a senior
aircraft mechanic. He also served on the union negotiating
committee. I credit his testimony based on his open and
straightforward demeanor. He also demonstrated clear recall of
the event. Benjamin was informed by his supervisor, Roland
Easler, that he had to attend the December 13, 1996 meeting.
The second speaker at the meeting was Mike Sartor, site man-
ager. The first speaker awarded plaques to exceptional employ-
ees. Sartor is no longer employed by Respondent, but all times
here pertinent, he is an admitted agent of Respondent.
Sartor informed the employees “he had just gotten confirma-
tion that the new benefits package was approved by St. Louis.5
He just got it off the fax machine.” Respondent distributed a
memorandum entitled “Enhanced Benefits Package” to the
attending employees. The package was for all of MDASCO’s
employees, not just those working at Fallon. Attached to Sar-
tor’s memorandum6 was a memo from Frank Kimball, identi-
fied as “MDASCO’s General Manager.” Kimball’s memo pro-
vided: “I am please [sic] to announce that after months of effort
and study, we are now prepared to announce the enhancements
to our fringe benefit program. The changes as outlined below
will go into effect during the month of March in 1997.”
Benjamin recalled an employee, Ken Cox, asked:

[W]ith the upcoming union vote, how would—would the new
benefits package go into effect regardless of the outcome of
the vote whether we voted for the union. His [Sartor’s] re-
sponse was that it would go into effect even if we vote for the
union.7

Respondent described the benefits it announced as providing
each employee an additional $2.56 per hour worked. The em-

5 The site of Respondent’s corporate headquarters.
6 Sartor’s memo references Kimball’s missive as highlighting “the
new benefits package that has been approved by McDonnell Douglas
Corporation and will be effective as of March 1997.” Respondent ad-
mitted implementing the benefits for its other employees on April 1,
with some changes at the various sites.
7 This testimony is not refuted.
ployee could elect to take the cash or contribute the money to a
health and welfare benefits plan. The employees who chose to
contribute the $2.56 per hour to the plan were also entitled to
participate in other benefits, including life insurance, sick pay,
an investment plan, a retirement income plan, tuition reim-
bursement, jury duty pay, bereavement pay, and military differ-
ential pay.
The Charging Party, in a distribution to unit members in De-
cember 1996, critiques some of the “Enhanced Benefits Pack-
age.” This missive informed the employees at least some of the
benefits would be studied by the Union’s benefits experts.8
David Bouse, Respondent’s manager of human resources, ob-
tained a copy of this flyer. This material was circulated prior to
the representation election and cannot, by content or nature, be
construed a waiver or operate as an estoppel. On March 21, Ed
Warshauer, the Union’s representative involved in the organiz-
ing campaign and lead negotiator, wrote Respondent a letter
explaining the Union’s position concerning the announced
“Enhanced Benefits Package.”9 The letter advised:

. . . regarding MDASCO’s plans to implement a new “en-
hanced” benefit program effective April 1, 1997, to groups
not covered under collective-bargaining agreements.
After consultation with the employees affected, as well
as our legal counsel, it is the union’s view that the em-
ployees at NAS Fallon should be offered these “enhanced”
benefits. We believe that it would be an unfair labor prac-
tice to deny them the new benefit package at this time.
The Union does not endorse the new plan, nor does it
waive its rights to bargain over these benefits when we
begin contract negotiations.
Please advise if there are any questions or suggestions
whatsoever.

Respondent, by Bouse, manager, human resources, replied to
this letter on March 23, stating:

It’s [sic] the company’s view that these benefits will
not be unilaterally provided to IUE represented employees
at NAS Fallon on 01 April 1997. Such benefits are proper
subject for discussion and may be addressed during up-
coming contract negotiations.
8 The circular also mentioned:
The union does not discount everything that the company has
proposed in their “benefit enhancement” package. These items need
to be discussed calmly, in collective bargaining, with full disclosure
and the democratic involvement of your elected negotiating commit-
tee. Without a union, the company makes all labor relations deci-
sions. With the IUE, you have a say. With the IUE, you will elect
your own negotiating committee. you will have the support, re-
sources, and expertise of a national labor union. And you will vote
on your wages, benefits, and working conditions in a legally binding
contract.
9 Warshauer explained:
What prompted me to write the letter was that as a result of
meetings that we’d had with employees we became aware that the
company did not plan to implement the benefits package that had
been announced prior to the union vote back in December of ‘96,
and so we wanted to make our position clear in advance of the im-
plementation. We understood that they planned to implement that
enhanced benefit package on April 1. We wanted to make our posi-
tion clear in advance of that what we though their obligation was in
that regard.
MCDONNELL DOUGLAS AEROSPACE SERVICES CO. 1393
We remain available to negotiate this contract at your
earliest convenience, which we understand to be approxi-
mately 01 May 1997.

Respondent did not implement the “Enhanced Benefit Pack-
age” for its represented Fallon employees on April 1, but did
implement the benefits with some changes, that were not fully
detailed on the record, at its other facilities. Either prior to, or
after this letter exchange, Warshauer had a telephone conversa-
tion with Ken Heinger, who was in-house legal counsel for
Respondent, and Bouse. Heinger told Warshauer Respondent
believed it was “in a dilemma because they couldn’t unilater-
ally just implement benefits without giving [the Union] an op-
portunity to bargain about that.” Warshauer could not recall if
the conversation included a statement by him that the Union did
not consider the implementation of the “Enhanced Benefits
Package” to be an unfair labor practice and Respondent should
proceed with the implementation. Warshauer believed his letter
accomplished the communication of that opinion to Respon-
dent.
C. Contract Negotiations
The first negotiating session occurred May 7.10 The Union
did not lodge any further protests concerning Respondent’s
failure to implement the “Enhanced Benefits Package” for the
employees it represents until the first negotiating session.11 The
Union made an oral presentation to Respondent during the first
negotiating session, including reasserting its claim Respondent
should have implemented the “Enhanced Benefits Package” for
unit members on April 1.12 The Union made this assertion dur-
ing several of the negotiating sessions, according to War-
shauer’s unrefuted testimony. Moreover, Warshauer appeared
open and answered questions in a direct and convincing man-
ner, therefore, his testimony is credited.

10 The failure to meet earlier was not shown to be due to lack of
good faith or a refusal to bargain.
11 Specifically, Warshauer testified:
the union made a verbal presentation of our bargaining position on
the key—on many of the key points that affected the bargaining, and
one of the points that I made as the lead spokesperson was that the
union’s position was that the company should have implemented the
benefits package on April 1. We’ve maintained that position. We
never wavered from that position, and we felt that they had commit-
ted an unfair labor practice by not implementing that package on
April the 1st.
The Respondent answered “That we would have to agree to disagree
on that point, and that—but that the company understood the union’s
position.” According to Warshauer,
. . . at least 2 or 3 other occasions during the bargaining process
where, as an aside in the bargaining process, the union maintained
its position, and I maintained the union’s position that the company
should have implemented the entire benefits package as of April the
1st and that we still maintained our position that they had committed
an unfair labor practice by, in effect, putting us in a hole in the bar-
gaining—to bargain for something that we should have already had.
The parties continued to negotiate with the understanding this was a
legal dispute and they agreed to disagree.
12 Bobby Greene, a labor specialist for Respondent who participated
in the negotiations for a collective-bargaining agreement, admits the
Union raised the issue of benefits either May 7 or 8. Greene informed
the Union that Respondent “considered benefits being a mandatory
subject for bargaining and that we would be discussing such things as
bargaining progressed.”
After a series of negotiating sessions, the Union presented
Respondent with its 39th proposal dated August 5. The first
paragraph of this proposal provided:

The parties have agreed that the Company will imple-
ment effective September 29, 1997, the group insurance,
optical insurance, [dental] insurance, life insurance, paid
sick days, tuition reimbursement, retirement plan, and sav-
ings plan, and other benefits as described in the Com-
pany’s proposal dated August 5. 1997. The Company will
advise the Union of any change in the companies which
currently administer these plan benefits.

The Union’s proposal also included references to the retire-
ment income plan, including methods of computing benefits
and vesting of benefits, the health plans, and the statement,
“The parties have agreed that to the extent practical, benefits as
described in the Company’s proposal dated—shall be made
retroactive to April 1, 1997.” Respondent’s counsel indicated it
construed this proposal to reflect the agreement of the Union
that these benefits be implemented on September 29. I find this
argument unpersuasive. The Union indicated it was just its
manner of making proposals, and also contemplated the parties
being able to agree to make the benefits retroactive to April 1,
if practical. Supporting this position is the fact this proposal
included benefits that were not part of the December 16, “En-
hanced Benefits Package.”
Respondent failed to establish the Union’s proposal accu-
rately reflected an agreement they reached in prior negotiations,
or was more than a proposal. In fact, Respondent admitted in its
brief it was only a proposal. There is no persuasive evidence
the Union specifically waived its claim the “Enhanced Benefit
Package” was vested at the time it was announced and should
have been implemented on April 1. That the parties disagreed
about the impact of the representation election on the unit em-
ployees’ entitlement to the benefits did not foreclose negotia-
tions in general or specifically on matters relating to benefits
encompassed in the “Enhanced Benefit Package.”
The evidence clearly establishes there was no clear and
knowledgeable waiver on its agreement concerning the propri-
ety of Respondent’s position concerning the “Enhanced Bene-
fits Package.” The parties had negotiations about credits for
vesting of pension benefits, and on August 5, the Company had
a pension specialist discuss this issue with the negotiators. At
about this time, Respondent and the Union agreed to use the
services of the Federal Mediation and Conciliation Service. The
Union did not mention the dispute concerning the “Enhanced
Benefits Package” to the mediator. Such a failure does not con-
stitute a waiver by the Union and Respondent agreed the issue
was a legal matter that would not be resolved through negotia-
tions.
In sum, I find Respondent has failed to establish the negotia-
tions during this session resulted in any agreements or resolu-
tions of the dispute or waiver by the Union concerning the em-
ployees entitlement to the “Enhanced Benefits Package” effec-
tive April 1, or when they should have been implemented. The
contrary is indicated by the fact Respondent made a final pro-
posal to the Union on August 11, that was rejected by the bar-
gaining unit on or about August 20, 1997. This conclusion is
supported by the testimony of Greene that both Respondent and
the Union submitted written proposals for consideration during
this negotiating session. Greene also admitted the Respondent’s
proposal on this date had some differences from the “Enhanced
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1394
Benefit Package” announced the preceding December. This
final offer was not shown to propose the imposition of the “En-
hanced Benefit Package” effective April 1. Warshauer had told
the employees there was more for them to get from Respon-
dent. The benefits were not specifically mentioned in this
statement, but his statement does not clearly waive any rights.
Negotiations resumed and the parties discussed vesting of
the pension plan. Respondent presented another final offer on
September 7. This offer was accepted. After about 31 negotiat-
ing sessions, a collective-bargaining agreement was ratified on
September 9. The agreement made some of the “Enhanced
Benefits Package” effective retroactive to April 1, for the em-
ployees who were on the payroll on or after September 29.
Other of the “enhanced benefits” were effective for those em-
ployed on September 29, and some were not effective until
September 29, including, according to Warshauer, the an-
nounced tuition reimbursement program, a savings program
with matching contributions by Respondent, improved formula
for computation of sick days, improved medical insurance
benefits, and the jury duty differential pay. Warshauer’s uncon-
troverted testimony is credited.
Greene testified he did not know at the time Respondent
made the September 7 final offer that certain employees were
excluded from the retroactive application provisions. According
to Green, the Union never attempted to bargain to get these
excluded employees included in the coverage. I do not credit
this testimony based on demeanor. Greene did not appear to be
testifying in an open and straightforward manner. Moreover,
the Union’s August 5 proposal contained reference to making
all the benefits retroactive to April 1, albeit, as far as practical.
Another reason for not crediting Greene is Bouse’s admission
that Respondent and the union negotiators “discussed at length”
vesting and retroactivity, “[t]here were a great many discus-
sions on the benefit service time . . . .” Respondent was con-
cerned about when the collective-bargaining agreement would
be ratified because timely ratification would afford it the oppor-
tunity to seek a new wage determination from the Department
of Labor to recoup any increases in costs.
The collective-bargaining agreement entered into by the Un-
ion and Respondent was effective September 9, 1997. Accord-
ing to this agreement, health care expense benefits became
effective for the unit employees on September 29, not April 1.
Similarly, the life and accidental death and dismemberment
insurance and disability provisions had an effective date of
September 29. The hourly life insurance benefit also became
effective September 29, as did the prescription drug plan, and
the tuition reimbursement plan.
Subsequent to reaching an agreement, Warshauer had a con-
versation with Bouse which Warshauer initiated concerning a
member of the unit who was preparing to resign right after the
collective-bargaining agreement had been ratified. Bouse
“thought it would be important for him to contact employees
who were—who had announced resignation to explain to them
what benefits they may have coming to them.” Respondent
offered to similarly inform any other unit members who indi-
cated they intended to resign that if they remained until after
September 29, it could materially affect the vesting of their
retirement plan. Bouse believed three employees resigned and
left Respondent’s payroll between the time the collective-
bargaining agreement was ratified on September 29. Bouse
admitted other employees, with whom Respondent’s represen-
tatives did not speak to about the impact of their resignations on
their retirement benefits, resigned between April 1, and the
ratification of the collective-bargaining agreement, and thus did
not have any “enhanced benefits” vest.
After negotiations were finalized and the collective-
bargaining agreement ratified, Warshauer spoke with one or
more of Respondent’s representatives. During the discussion
Bouse asked Warshauer, “What was gonna happen with the
union’s unfair labor practice charge?” Warshauer replied: “That
it was probably going to go away, and I was hopeful that it
would go away because I thought there was enough good faith
that we would be able to resolve those issues.” There is no
persuasive showing the Union, as part of the collective-
bargaining agreement negotiations committed to withdrawal of
the unfair labor practice charge or otherwise is bound to with-
draw the charge or waive the employees right to the “Enhanced
Benefits Package.”
D. Service Contract Act
At the time Respondent commenced operations at Fallon,
they were governed by the Service Contract Act (SCA). Ac-
cording to Bouse, on government contracts covered by the SCA
where there is no collective-bargaining agreement, the service
contract is accompanied by a contract called an area wage de-
termination that sets the floor for wages and a computation of
an average wage that must be paid. Most of Respondent’s con-
tracts under the SCA provide for health and welfare benefits.
Respondent inferred but failed to prove, it was restricted in
what it could negotiate because it had to acquire a conformance
or exception from the Department of Labor to increase benefits.
The unit employees had not received a wage increase in the 4 to
5 years prior to the union representation election. Respondent
had been unsuccessful in persuading the Department of Labor
to raise the area wage determination. Such failure was not
shown to have barred Respondent from implementing the
promised “Enhanced Benefits Package.” On the contrary, Re-
spondent admitted under the SCA there was no ceiling to the
wages and benefits it could pay its employees.
I find Respondent has failed to convincingly establish the
Service Contract Act, precluded it from implementing the “En-
hanced Benefit Package” on April 1. Respondent never claimed
it would not have implemented this package if the Union lost
the representation election. That the costs of the benefits may or
may not be susceptible to recoupment after negotiations with
the Department of Labor did not act as a legal bar and was not
shown to be a practical bar. Respondent did not point to any
provision of the SCA which prevented implementation of the
“Enhanced Benefits Package.” Bouse admitted the Service
Contract Act did not preclude Respondent from increasing
wages and benefits. Respondent did not need to get the ap-
proval of the Department of Labor to implement the benefits.
III. ANALYSIS AND CONCLUSIONS
At the time, Respondent unconditionally promised to implement
the “Enhanced Benefits Package” the employees were not repre-
sented by the Union. No objections were filed to the Board’s certi-
fication of the Union. As noted in Holland American Wafer Co.,
260 NLRB 267, 270 (1982):

The violative unilateral changes may include either the
denial of a benefit which, because of practice or promise,
has become a term or condition of employment (see Lib-
erty Telephone & Communications, Inc., and Century
Telephone Enterprises, Inc., 204 NLRB 317 (1973), and
MCDONNELL DOUGLAS AEROSPACE SERVICES CO. 1395
cases cited therein) or the grant of a benefit which is not a
term or condition of employment because it involves the
exercise of discretion. See, e.g., Allis Chalmers Corpora-
tion, 237 NLRB 290 (1978). See also Mercury Industries,
Inc., 242 NLRB 90 (1979).

The General Counsel contends Respondent, by this promise,
created a vested right to the “Enhanced Benefits Package” and
thus, Respondent’s decision, reached without bargaining, to not
implement the package on April 1 at Fallon, constitutes an un-
lawful unilateral change in working conditions in violation of
Section 8(a)(1) and (5) of the Act. Respondent argues the elec-
tion of the Union as the unit members collective-bargaining
representative created an obligation on the part of Respondent
to bargain with the Union concerning the units terms and condi-
tions of employment, including these benefits.
The Respondent claims it notified the Union of its intent to
withhold implementation of the “Enhanced Benefits Package”
and the Union waived its right to bargain over the unilateral
change. I find this argument is unpersuasive. The Union pro-
tested the change and requested bargaining over the matter.
Under the circumstances of this case, I find the Union has not
waived any rights to bargain over the matter. The Union argued
against Respondent’s course of action stating it believed with-
holding the benefits constituted an unfair labor practice and
expressed the Union’s willingness to bargain over benefits in
general. The Union raised the matter at the first and subsequent
negotiating sessions. Respondent and the Union agreed their
dispute involved a legal question and they disagreed on the
answer, which effectively foreclosed bargaining on Respon-
dent’s decision to make the unilateral change in terms and con-
ditions of employment. Moreover, Respondent’s actions pre-
sented a fait accompli. Respondent never agreed to bargain
over its decision, only over benefits. R.R.R. Restaurant, 314
NLRB 1267 (1994). Respondent failed to delay the unilateral
change despite the Unions bargaining request and presented its
decision as a fait accompli. Mercy Hospital of Buffalo, 311
NLRB 869 (1993).
Thus, Respondent made a unilateral change during the
course of a collective-bargaining relationship of matters that are
mandatory subjects of bargaining, in violation of the Act. For
the reasons stated below, I find the employees had a vested
right to the “enhanced benefits.” Litton Financial Printing Di-
vision v. NLRB, 501 U.S. 190, 198 (1991), held “[A]n employer
commits an unfair labor practice if, without bargaining to im-
passe, it effects a unilateral change of an existing term or condi-
tion of employment.” There is no claim the parties bargained to
impasse prior to the unilateral change, indeed, there was no
bargaining prior to the unilateral change. Public Service Co. of
Colorado, 312 NLRB 459 (1993).
I find Respondent has failed to demonstrate any of the cir-
cumstances the Court in NLRB v. Katz, 369 U.S. 736 (1962),
and its progeny justified unilateral employer action.13 Thus,

13 The Court in Katz, id. at 747, explained:
Unilateral action by an employer without prior discussion with the
union does amount to a refusal to negotiate about the affected condi-
tions of employment under negotiation, and must of necessity ob-
struct bargaining, contrary to the congressional; policy. it will often
disclose an unwillingness to agree with the union. it will rarely be
justified.
The Court also determined it was unnecessary to demonstrate sub-
jective bad faith on the part of the employer to establish a violation of
the Act because the conduct was viewed as so harmful to the collective-
acknowledgement of the Union’s win in the election did not
alter Respondent’s obligation to refrain from unilaterally
changing unit members’ terms and conditions of employment
until good-faith bargaining resulted in an impasse. White Oak
Coal Co., 295 NLRB 567 (1989). In fact, the Respondent rec-
ognized its obligation to bargain prior to implementing the
unilateral change when Bouse indicated in his letter the matter
would be the subject of bargaining in May. A unilateral change
violates the Act even if the employer has a mistaken good-faith
belief an impasse had been reached or the union had not been
negotiating in good faith. Columbia Portland Cement Co., 294
NLRB 410 (1989); Saunders House, 265 NLRB 1632 (1982),
enf. denied 719 F.2d 683 (3rd Cir. 1983); cert. denied sub nom.
Hospital & Health Care Employees District 1199C v. Saunders
House, 466 U.S. 958 (1984); Stone Boat Yard v. NLRB, 715
F.2d 441 (9th Cir. 1983), cert. denied 466 U.S. 937 (1984).14
In sum, I conclude there is no persuasive evidence the Un-
ion, by either action or inaction waived or relinquished any
rights concerning Respondent’s unilateral change in terms and
conditions which are mandatory subjects of bargaining. The
Union protested Respondent’s announced unilateral action in a
timely manner. There is no clear and unmistakable waiver
demonstrated on this record. Metropolitan Edison Co. v. NLRB,
460 U.S. 693, 708 fn. 12 (1983). The Union clearly did not
acquiesce to Respondent’s announced and implemented unilat-
eral change in terms and conditions of employment. Thus, the
evidence falls far short of establishing a clear and unmistakable
waiver by the Union. The Union both protested the unilateral
action and sought to bring it to the bargaining table.
Respondent argues the promised benefits were not vested. I
disagree. There is no question there was a specific promise to
implement the “Enhanced Benefit Package” unconditionally at
a time certain and specifically regardless of the outcome of the
representation election. It is clear the promised “enhanced
benefits” relate to wages, hours, and other terms and conditions
of employment of the unit members, and are mandatory sub-
jects of bargaining. As the Board held in Liberty Telephone,
supra, 204 NLRB 317:

. . . logic and relevant authority decree that the definition of
“condition of employment” includes not only what the em-
ployer has already granted, but also what he “proposes to
grant.”3 The terms and conditions of employment in a labor
contract are fixed not by rigid formulas or stipulations but by
the relationship between the employer and the employees. It is
the normal foreseeable expectations arising out of the rela-
tionship, including the expected weekly wage, the usual pro-
motion policy, anticipated wage increases, customary bonuses
and vacations, and other announced or expected benefits,

bargaining process. Dailey News of Los Angeles, 315 NLRB 1236
(1994). As found herein, this reasoning applies to cases where benefits
have vested, not just where there is a long history of wage increases,
but where there is a clearly promised benefit which thereby became
vested.
14 I also find Respondent’s reliance on McCulloch Corp., 132 NLRB
201 (1961), unpersuasive. In McCulloch, there was not a promise to
implement the change in benefits regardless of the outcome of a repre-
sentation election, therefore, the benefit may not have been considered
as vested. Moreover, there was a finding the company had a good-faith
doubt the union represented a majority of the unit at the end of the
certification year. I find the decision in Holland American Wafer Co.,
260 NLRB 267 (1982), discussed in greater detail herein, to be more on
point and applicable to the facts in the instant case.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1396
which constitute the terms and conditions of employment.
Hence in determining whether a particular matter or program
is a term and condition of employment which is subject to
collective bargaining, the Board and courts have properly
considered whether the program is a reasonable expectancy of
the employment relationship, i.e., whether the program in fact
acted as an inducement to employees to accept or continue
employment. [Emphasis added.]
____________________________
3 Armstrong Cork Company v. NLRB, 211 F.2d 843, 847
(5th Cir.); United Aircraft Corporation, Hamilton Stan-
dard Division (Boron Filament Plant), 199 NLRB No.
68.

It is uncontroverted the promise to implement the “Enhanced
Benefit Package” was not contingent upon a certain result in
the Union election or any other event. On the contrary, the
promise was specifically that the “Enhanced Benefit Package”
would be implemented regardless of the outcome of the elec-
tion.15 The nature and amount of the benefits were also con-
tained in the announcement.16 As the Board found in Baker
Brush Co., 233 NLRB 561, 562 (1977):

We find that the discretionary increase promised for
implementation on or about January 1 was, by reason of
that promise, an existing condition of employment which
Respondent—had the Union been certified—would have
been legally obligated to continue and could not alter
without consulting the Union. Liberty Telephone & Com-
munications Inc., and Century Telephone Enterprises, Inc.,
204 NLRB 317 (1973).5
____________________________
5 See also Armstrong Cork Company v. NLRB, supra,
211 F.2d 843 (5th Cir. 1954).17

I conclude the announced “Enhanced Benefits Package” was
an explicit promise which became a term and condition of em-
ployment at the time it was announced. As the Supreme Court
held in May Department Stores Co. v. NLRB, 326 U.S. 376
(1945), the mere announcement of a wage increase constituted
a change in the existing terms and conditions of employment.
The Court also noted the involvement of the War Labor Board
in that case did not alter this finding or act in mitigation. The
fact the unit employees worked under the Service Contract Act,
similarly, does not alter this conclusion; even more so in this
case where Respondent admits the Labor Department does not
set a ceiling on wages and benefits under the Service Contract
Act. Respondent failed to show the representation of its em-
ployees by a Union prevented implementation of the “En-
hanced Benefit Package” under the SCA or any other law.

15 There is no claim the announcement of the “enhanced benefit”
package was unlawfully motivated.
16 That Respondent altered in some manner, which was not detailed
on the record the benefits it implemented on April 1 at different facili-
ties and for different employees does not demonstrate on this record,
that promised benefits were to amorphous to be considered terms and
conditions of employment. Respondent announced the benefits would
be implemented without contingencies. There was no evidence the
facilities that received the benefits on April 1, were all represented or,
that any was represented by a collective-bargaining representative
received the same announcement on or about December 13, and did not
bargain with and agree to, or waive such right, prior to Respondent
implementing any of the subsequent changes to the “Enhanced Benefits
Package.”
17 Cf. United Aircraft Corp., 199 NLRB 658 (1972), enfd. in part
NLRB v. United Aircraft Corp., 490 F.2d 1105 (2d Cir. 1973).
Concomitantly, there was no showing the SCA or any other
law constituted a legitimate and substantial business justifica-
tion for Respondent’s unilateral action. Thus, there was no
contingency attached to the announcement. The withholding of
the announced benefits from the unit employees discouraged
them and denied them their reasonably expected benefits, an
expectation which resulted from Respondent’s prior an-
nouncement. The question of obtaining any quid pro quo from
the Union for these benefits does not obtain in this case, for
these benefits had been vested prior to the Union becoming the
employees’ representative. The withholding of these promised
benefits after the representation election thereby unilaterally
changed their terms and conditions of employment. Liberty
Telephone, supra.
Respondent referred to the dilemma it faced resulting from
the Board’s decisions in this area. Any difficulty was created by
Respondent announcing it would implement the announced
benefits regardless of the outcome of the election and then uni-
laterally choosing not to implement the benefits on April 1, and
bargain with the Union prior to withholding the benefits. It was
Respondent who made the choices and acts or refuses to act at
its own risk. O’Conner Chevrolet-Buick-GMC Co., 209 NLRB
701 (1974), enfd. 512 F.2d 684 (8th Cir. 1975). In general,
during a representation campaign an employer must proceed as
he would have done had the Union not been on the scene. Gates
Rubber Co., 182 NLRB 95 (1970).
The Union did not protest the implementation of the “En-
hanced Benefits Package.” Smith & Smith Aircraft, Co., 264
NLRB 516 (1982). The court in NLRB v. Dothan Eagle, Inc.,
434 F.2d 93, 98 (5th Cir. 1970), determined:
At first glance it might appear that the employer is
caught between the proverbial “devil and the deep blue
sea.” It is an unfair labor practice to grant a wage increase
during the campaign and bargaining periods, but at the
same time it may be an unfair labor practice to refuse to
grant an increase during this same period. Indeed, the em-
ployer in this case has made just this sort of an argument,
claiming that it could not grant the pressroom employees
their normal progression raises since to do so would have
been an unfair labor practice. We find little merit in such
arguments. The cases make it crystal clear that the vice in-
volved in both the unlawful increase situation and the un-
lawful refusal to increase situation is that the employer has
changed the existing conditions of employment. It is this
change which is prohibited and which forms the basis of
the unfair labor practice charge.

Analogously, I have found Respondent’s unconditional
promise to implement the “Enhanced Benefits Package,” by its
nature, became an existing condition of employment which
Respondent unilaterally withheld because the Union won the
election. Thereby, Respondent has failed to bargain in good
faith with the Union in violation of Section 8(a)(5) and (1) of
the Act. This is a violation despite the fact that the Respondent
may have believed it could not grant any (increase in benefits)
because the Union won the representation election. Dorn’s
Transportation Co., 168 NLRB 457 (1967).
To find otherwise would permit an employer to box unions
in on future bargaining positions by unconditionally promising
benefits shortly before an election and then refusing to imple-
ment them on the stated date because the union won the elec-
tion. Respondent knew the Union won the election when it
determined not to implement the promised benefits on April 1.
MCDONNELL DOUGLAS AEROSPACE SERVICES CO. 1397
Allis-Chalmers Corp., 234 NLRB 350 (1978); enfd. in part
NLRB v. Allis Chalmer Corp., 601 F.2d 870 (1979); Laney &
Duke Storage Warehouse Co., 151 NLRB 248 (1965). Even if I
conclude Respondent lacked antiunion motivation, such unilat-
eral action is still a violation of the Act. Chatham Mfg. Co., 172
NLRB 1948 (1968).
CONCLUSIONS OF LAW
1. McDonnell Douglas Aerospace Services Company, is an
employer engaged in commerce within the meaning of Section
2(6) and (7) of the Act.
2. International Union of Electronic, Electrical, Salaried,
Machine and Furniture Workers, AFL–CIO is a labor organiza-
tion within the meaning of Section 2(5) of the Act.
3. At all times since December 27, 1996, the Union has
been, and is now, the exclusive collective-bargaining represen-
tative of Respondent’s employees in the following unit, which
is appropriate for collective-bargaining purposes within the
meaning of Section 9(b) of the Act:

All full-time and regular part-time production, service and
maintenance employees employed by Respondent at the
Fallon Navel Air Station, Fallon, Nevada, including Quality
Assurance Representatives; excluding all office clerical em-
ployees, guards, Leads, Maintenance Controller Supervisors,
and supervisors as defined in the Act.

4. By unilaterally changing the terms and conditions of em-
ployment of the employees in the appropriate unite described
above by delaying or withholding the scheduled “Enhanced
Benefits Package,” because the employees selected the Union
as their collective bargaining representative, thereby failing to
bargain with the Union in good faith, Respondent has violated
Section 8(a)(5) and (1) of the Act.
REMEDY
Having found that the Respondent has engaged in unfair la-
bor practices in violation of Section 8(a)(5) and (1) of the Act, I
recommend it be ordered to cease and desist therefrom and take
certain affirmative action to effectuate the policies of the Act.
As I have found, Respondent has illegally withheld benefits
to which bargaining unit employees were entitled and would
have received but for Respondent’s unilateral conduct in viola-
tion of Section 8(a)(5) and (1) of the Act, I recommend that
each of the affected employees be made whole for Respon-
dent’s failure to give effect to the promised “Enhanced Benefits
Package,” on April 1, 1997. The amount shall be computed on
a quarterly basis in the manner set forth in F. W. Woolworth
Co., 90 NLRB 289 (1950); plus interest as computed in New
Horizons For the Retarded, 283 NLRB 1173 (1987). Respon-
dent is to bargain in good faith with the Union regarding these
benefits.
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended18
ORDER
The Respondent, McDonnell Douglas Aerospace Services
Company, its officers, agents, successors, and assigns, shall

18 In the event 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.
1. Cease and desist from
(a) Unilaterally delaying or withholding the granting of
scheduled benefits because the employees had selected the
Union as their collective-bargaining representative of its em-
ployees in the following appropriate unit, thereby failing and
refusing to bargain with the Union in good faith:

All full-time and regular part-time production, service and
maintenance employees employed by Respondent at the
Fallon Navel Air Station, Fallon, Nevada, including Quality
Assurance Representatives; excluding all office clerical em-
ployees, guards, Leads, Maintenance Controller Supervisors,
and supervisors as defined in the Act.

(b) In any other like or related manner interfering with, re-
straining, 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) Make whole the employees in the appropriate unit for
any monetary losses they may have suffered by reason of Re-
spondent’s unilateral withholding of the “Enhanced Benefits
Package” which the employees would have received in the
manner set forth above in the remedy section of this decision
and, on request, bargain collectively with International Union
of Electronic, Electrical, Salaried, Machine and Furniture
Workers, AFL–CIO as exclusive representative of the employ-
ees in the appropriate bargaining unit, described above, and, if
an understanding is reached, embody that understanding in a
signed contract.
(b) Preserve and, within 14 days of a request, make avail-
able to the Board or its agents for examination and copying, all
payroll records, social security payment records, timecards,
personnel records and reports, and all other records necessary
to analyze the amount of backpay due under the terms of this
order.
(c) Within 14 days after service by the Regional Director,
post at its Fallon, Nevada office copies of the attached notice
marked “Appendix.”19 Copies of the notice, on forms provided
by the Regional Director for Region 32, after being signed by
the Respondent’s authorized representative, shall be posted by
the Respondent and maintained by it for 60 consecutive days
thereafter in conspicuous places, including all placed were no-
tices to employees are customarily posted. Reasonable steps
shall be taken by the Respondent to ensure that the notices are
not altered, defaced, or covered by other material. In the event
that, during the pendency of these proceedings, the Respondent
has gone out of business or closed the facility involved in these
proceedings, the Respondent shall duplicate and mail, at its
own expense, a copy of the notice to all current and former
employees employed by the Respondent at any time since April
1, 1997.
(d) Within 21 days after service by the Regional Director,
file with the Regional Director a sworn certification of a re-
sponsible official on a form provided by the Region attesting to
the steps that the Respondent has taken to comply.

19 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading “Posted by Order of the Na-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1398
APPENDIX
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 we have been ordered to
post 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 bargain as a group through representatives of their
own choosing
To act together for collective bargaining or other mu-
tual aid or protection
To refrain from any or all such activity except to the
extent that the employees’ bargaining representative and
employer have a collective-bargaining agreement which
imposes a lawful requirement that employees become un-
ion members.

WE WILL NOT fail to bargain with the Union in good faith by
unilaterally delaying or withholding the implementation of
scheduled benefits because the employees had selected the
Union as their collective-bargaining representative of our em-
ployees in the following appropriate unit:

All full-time and regular part-time production, service and
maintenance employees employed by us at the Fallon Navel
Air Station, Fallon, Nevada, including Quality Assurance
Representatives; excluding all office clerical employees,
guards, leads, maintenance controller supervisors, and super-
visors as defined in the Act.

WE WILL make whole, the employees in the above appropri-
ate unit for any losses they may have suffered by reason of out
unilateral withholding of the “Enhanced Benefits Package”
which they should have received on April 1, 1997, and, on
request of the Union, bargain collectively regarding the “En-
hanced Benefits Package” as it may affect bargaining unit em-
ployees, with the International Union of Electronic, Electrical,
Salaried, Machine and Furniture Workers, AFL–CIO.
WE WILL NOT in any like or related manner interfere with, re-
strain, or coerce any of you in the exercise of rights guaranteed
you by Section 7 of the Act.

MCDONNELL DOUGLAS AEROSPACE SERVICES COMPANY