Palace Performing Arts Center

National Labor Relations Board - Board Decisions

Sep 30, 1993

312 N.L.R.B. 950 (N.L.R.B. 1993)

950
312 NLRB No. 142
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 On June 9, 1993, Administrative Law Judge Joel P. Biblowitz
issued the attached decision. The Respondent filed exceptions and a
supporting brief.
2 See generally Atlanta Hilton & Tower, 271 NLRB 1600, 1603
(1984).
1 Unless indicated otherwise, all dates referred to relate to the year
1992.
The Palace Performing Arts Center, Inc. and Local
No. 74, International Alliance of the Theatrical
Stage Employees and Moving Picture Opera-
tors of the United States and Canada, AFL–
CIO. Case 34–CA–5877
September 30, 1993
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND RAUDABAUGH
The issue in this case is whether the judge correctly
found that the Respondent violated Section 8(a)(5) and
(1) of the Act by failing to bargain in good faith with
the Union and by unilaterally subcontracting unit
work.1 The National Labor Relations Board has con-
sidered the decision and the record in light of the ex-
ceptions and brief and has decided to affirm the
judge’s rulings, findings, and conclusions, as modified
below, and to adopt the recommended Order.
In concluding from a review of the Respondent’s
total conduct that it engaged in unlawful surface bar-
gaining with the Union,2 the judge relied on several
factors: (1) the critical tone of three letters written by
Joel Schiavone, the Respondent’s president, to the
Union about the parties’ negotiations; (2) Schiavone’s
delay in obtaining subcontracting proposals, which he
had made the linchpin for bargaining about contract
concessions from the Union, and his delay in notifying
the Union about the proposals once he received them;
(3) the failure of Schiavone to make any specific pro-
posals until the parties’ fourth bargaining session on
September 16, 1992; and (4) the substance of the Re-
spondent’s proposals on that date.
We agree with the judge’s conclusion that the Re-
spondent engaged in overall bad-faith bargaining, but
we find it necessary to make the following comments
about the evidentiary factors supporting this conclu-
sion. (1) Although Schiavone’s letters may have been
caustic and self-serving, we do not rely on them as a
factor in finding that the Respondent engaged in bad-
faith bargaining. (2) Not only did Schiavone delay in
obtaining and transmitting the subcontracting proposals
to the Union, but also the record indicates that he
never proposed to the Union, at the September 16 bar-
gaining session, the higher rates which he agreed later
that day to pay subcontractor Helweg to perform unit
work on the Respondent’s first show of the season on
September 17. In this regard, we find it significant that
the Respondent had previously made clear to the
Union that it did not want to subcontract its work and
that it would ask the Union during negotiations to
make certain financial concessions commensurate with
the rates in the competitive bids submitted by sub-
contractors. (3) We disavow any suggestion in the
judge’s decision of a general rule that a party giving
notice of intent to modify or terminate an existing
agreement bears the initial burden of making specific
proposals in ensuing contract negotiations. In the con-
text of this case, however, we agree that Schiavone,
having said that concessions were needed, undermined
the bargaining process by failing to make any specific
proposals for concessions, despite the Union’s repeated
requests for same, until the bargaining session on Sep-
tember 16. Then, he essentially presented the Union
with an ultimatum to reach agreement at that meeting
or he would subcontract unit work for the show on
September 17. (4) Finally, we agree that the substance
of the Respondent’s September 16 proposals is a factor
supporting a finding of overall bad-faith bargaining
under Reichhold Chemicals, 288 NLRB 69 (1988).
These proposals were not merely ‘‘unacceptable’’ to
the Union, as the judge noted. Considered in the con-
text of the other conduct discussed above, the Re-
spondent’s proposal objectively indicated the Respond-
ent’s intent to frustrate negotiations by proposing an
extreme limitation on the expired contract’s scope by
‘‘gutting’’ the contract and converting it to a half-page
document containing three flat rates.
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, The Palace Performing
Arts Center, Inc., New Haven, Connecticut, its offi-
cers, agents, successors, and assigns, shall take the ac-
tion set forth in the Order.
Michael A. Marcionese, Esq., for the General Counsel.
Robert B. Mitchell, Esq. and Stephanie Lane, Esq. (Durant,
Sabanosh, Nichols & Houston), for the Respondent.
Burton M. Weinstein, Esq. (Weinstein, Weiner & Shapiro,
P.C.), for the Charging Party.
DECISION
STATEMENT OF THE CASE
JOEL P. BIBLOWITZ, Administrative Law Judge. This case
was heard by me on March 8 and 9, 1993, in Hartford, Con-
necticut. The complaint, which issued on November 20,
1992,1 and was based on an unfair labor practice charge and
an amended charge filed on October 8 and November 19 by
Local No. 74, International Alliance of the Theatrical Stage
Employees and Moving Picture Operators of the United
States and Canada, AFL–CIO (the Union), alleges that The
Palace Performing Arts Center, Inc. (Respondent) violated
951PALACE PERFORMING ARTS CENTER
Section 8(a)(1) and (5) of the Act by failing and refusing to
meet and bargain in good faith with the Union, the collec-
tive-bargaining representative of certain of its employees, and
by subcontracting the work of all its unit employees, without
prior notice to or bargaining with the Union.
FINDINGS OF FACT
I. JURISDICTION
Respondent, a Connecticut nonprofit corporation with its
office and place of business in New Haven, Connecticut (the
facility), has been engaged in the operation of a theatre for
the performing arts. During the 12-month period ending Oc-
tober 31, Respondent derived gross revenue in excess of
$500,000. During the 12-month period ending November 30,
Respondent purchased services valued in excess of $5000
which were furnished to Respondent at its facility directly
from points outside the State of Connecticut. Respondent ad-
mits, and I find, that it is engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
II. LABOR ORGANIZATION STATUS
Respondent admits, and I find, that the Union is a labor
organization within the meaning of Section 2(5) of the Act.
III. THE FACTS
As stated above, Respondent operates a nonprofit theatre
in the city of New Haven, Connecticut. The theatre presents
shows produced by others, principally rock or other musical
shows, but not Broadway-type shows. The theatre’s season
runs from mid-September to mid-May. The principal individ-
ual involved is Joel Schiavone, Respondent’s president, who
established it in 1984 to operate the theatre. Schiavone is
also the principal shareholder in other corporations that own
real estate in the vicinity. The building in which the theatre
is located is owned by a joint venture of which Schiavone
is a 95-percent owner and the FDIC, which took over from
a failed bank. At the present time, and for at least about a
year, Respondent has employed only one or two full-time
employees. In addition, Respondent employs the necessary
crew for each event it presents. These crews include
stagehands, electricians, soundmen, wardrobe attendants, and
others that may be needed for the show. Since 1984, and up
to September 16, Respondent recognized the Union and em-
ployed its members in these job classifications, at the facil-
ity.
After the original contract between the parties, they exe-
cuted a contract on May 11, 1988, that was effective for the
period September 1, 1987, through August 31, 1990. The
next contract between the parties was not entered into until
about April and was effective for the period August 1, 1991,
through July 31; the new rates were retroactive for a few
weeks. The protracted negotiations that ultimately lead to the
execution of this agreement (and the final agreement, so far,
between the parties) featured Schiavone as the negotiator for
Respondent for the first time. One reason for the protracted
discussions was that Respondent had been suffering losses
since it first opened, its cumulative deficit was about $2 mil-
lion and Respondent was seeking concessions from the
Union during these negotiations. Schiavone testified that Re-
spondent got no concessions in this contract: ‘‘But at least
we didn’t go way ahead like we have in the past.’’ By letter
dated April 8, from Schiavone to Edward Mangini, the
Union’s president and an employee of a nearby theatre in
New Haven, both signed off to clear up an ambiguity in the
letter. By letter of the same date, which was attached to a
copy of the new agreement that Mangini was to pick up at
Schiavone’s office, Schiavone wrote:
Reviewing these negotiations I find that we have given
a substantial increase in wages, in benefits and annu-
ities all of which have made the theatre essentially
more expensive to operate. We have not received any
concessions back in return. While you’ve accomplished
all of your objectives with the signing of this contract,
we’ve accomplished none of ours. Operating this thea-
tre is an overwhelming financial burden under the best
of circumstances; this new contract has made it worse.
We all have a responsibility to put a substantial amount
of effort into changes in working conditions so that the
theatre can operate again this fall.
When Mangini arrived at Schiavone’s office to pick up the
contract, he was given this letter, which he refused to accept
because he considered it insulting and inappropriate. By let-
ter dated April 13, Schiavone wrote to Mangini:
My trusty secretary tells me that you were insulted
with the attached letter. I’m not sure what’s insulting
about it, as it says quite simply that its going to cost
me much more to run the theatre this year and next
year than it did before. There have been absolutely no
concessions back to make it easier to run our facilities.
Being the negotiator, you should be pleased with these
results, not insulted.
The only purpose of sending it is to remind you that
this battle is not over. We cannot afford to operate this
theatre on the present basis. We’ll have to spend a lot
of time this summer working on it.
Sorry for the insult, but these are certainly the facts.
On April 20, Respondent sent the required 60-day notice of
its intention to terminate the contract and negotiate a new
agreement to the Union and FMCS. The letter refers to Re-
spondent’s desire ‘‘to terminate the contract on that date and
its desire to negotiate amended terms and conditions of em-
ployment to become effective on August 1.’’ By letter dated
May 22 to Schiavone, the Union requested him to contact
them to set up a mutually agreed meeting date. The Union
did not request that the 1991–1992 contract be reopened be-
cause they had just concluded a ‘‘long tedious negotiations
. . . and we thought that it might be better in this case to
let the contract just run another year.’’
Schiavone was asked by General Counsel whether he for-
mulated any contract proposals or modifications prior to the
first meeting. He testified:
We had always relied on the Union to present us with
a proposal. Over the years they had always walked in
and told us what we were going to have to pay. So it
never occurred to me to frame a proposal because we
had never framed one before.
He testified further that the April 20 letter was one that:
952 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
2 It should be noted that in addition to Schiavone’s position with
Respondent and the realty corporations in the city of New Haven,
he is the vice president of Connecticut Limousine Corporation,
which provides transportation to the New York area airports.
they send out every year . . . when our contract ex-
pired. It was a standard form letter. And they would al-
ways come back and tell us what they had to have.
That was the phrase: ‘‘we have to have this for next
year.’’ So I just assumed that they would walk in with
a proposal.
He testified: ‘‘I never did anything over the years in terms
of preparing for the Union. We were always told by the
Union what we would have to pay.’’2 He then testified that
he had not been involved in negotiations with the Union
prior to 1991–1992 and ‘‘assumed’’ that the letter was a
standard one that came from their files.
The first meeting, on July 30, and the second and third,
as well, lasted for only about an hour. It was attended by
Schiavone for Respondent, and Mangini and Union Business
Agent Dick Johnson for the Union. As to whether he pre-
sented any proposals to the Union for changes that he wanted
in the contract, Schiavone testified:
I presented in very broad but very specific detail on the
fact that we were not making any money at the theatre
and we needed changes across the board in the Union
contract, work rules, hourly rates, everything. And I
tried to make as clear as I could that we had to come
up with some sort of approach to this problem because
there was a significant ongoing financial problem for
the theatre and for me and we had to address all of
these issues. And I asked them for a response on all
these issues. So we didn’t have a specific proposal on
each item, but I certainly made it clear that all these
items had to be negotiated and reduced.
Mangini responded by asking Schiavone for specific sugges-
tions of where the Respondent wanted changes or relief.
Schiavone was surprised by Mangini’s request because:
‘‘he’d never asked me that question before. He always told
me what I was supposed to pay.’’ Schiavone then said:
‘‘This is the amount of money we’re losing in the theatre.
Whatever contribution you can make to that would be very
helpful.’’ Schiavone gave the Union no specific proposals at
this meeting.
Mangini testified that at this first meeting, Schiavone
began by telling them of the theatre’s financial difficulties
and his difficulties with the fire department, the police de-
partment, and the tax people in the city of New Haven; with
all his losses, he could not continue to lose money and stay
in business. He said that he would like to talk about some
things that would make the theatre more operable for him
and mentioned a figure of $50,000. Mangini said that he
didn’t think that Respondent’s yearly payroll equalled that
amount, but that he understood the theatre’s financial prob-
lems, ‘‘and that we were perfectly willing to talk about any
changes or avenues he might want to take.’’ Schiavone
shrugged his shoulders and said he thought it was a good
idea. Mangini told him to ‘‘put some things together’’ for
their next meeting so that the Union would know where they
could save him money from the old contract: ‘‘Give me
some specifics and we’ll sit down and talk about them.’’
By letter to the Union dated July 29, Schiavone wrote:
This will notify you in advance that sometime this
week we will be mailing out requests for proposals for
handling the stage management at the Palace Theatre.
These will be sent to a variety of individuals and cor-
porations in the northeast.
We can discuss this further at our meeting on Thurs-
day.
Attached to this letter was a letter stating that Respondent
was ‘‘looking for a contractor to handle all its requirements
for stage functions. Proposals should be submitted by August
15, 1992 to [Respondent].’’ The letter states that the contrac-
tor ‘‘would be required to handle all aspects of show produc-
tion for all performances’’ and that they may have to utilize
from 1 to 45 stagehands. It continues that the ‘‘contractor
must represent that it will handle the stage production with
qualified employees, e.g., licensed electricians, sound people,
lighting people, spot operators, carpenters, wardrobe person-
nel, riggers, loaders and experienced stagehands,’’ and that
it will provide workmen’s compensation and other payroll re-
quirements. The requested bids are for Respondent’s season,
which runs from September 11 through June 30, 1993.
The second meeting, apparently, took place on August 6
with the same participants. Respondent had not sent out the
request for proposals to potential bidders by this time. At this
meeting Schiavone made no proposals to the Union. He had
no idea how much it would cost to subcontract the work and
he therefore told the Union that it wouldn’t be fair to ask
them for specific givebacks until he got the information back
from the potential subcontractors. After testifying in that
manner, he testified that he did this because the Union would
not give him a proposal: ‘‘they made it clear that they
couldn’t do much of anything.’’ He told the Union, in re-
sponse: ‘‘If you won’t give me a proposal, what else can I
do?’’ Schiavone testified further that in the prior negotiations
for the contract that was signed 4 months earlier:
We went through all aspects of the contract. They un-
derstood very well where all the changes were that we
needed in terms of the contract improvement. They
knew specifically chapter and verse and what we were
asking for, all of which they ignored. And so we went
back into the original again of the negotiating and dis-
cussion of it. They knew precisely what I would like
in terms of a proposal. They didn’t choose to give me
any of those answers back. They put the burden on me.
So I said, ‘‘Fine. If you will not give me anything
. . . . If you’re not going to talk this time, then I’ve
got to do something which is fair and reasonable rather
than be arbitrary and just quote figures. I’ll go out and
get a price and get back to you.’’
He also testified:
I did not give them a written type list. But I had a very
engaging philosophical discussion about all of these
things [work rules, minimum rates, hourly rates and
health and welfare], all of which they didn’t seem inter-
953PALACE PERFORMING ARTS CENTER
3 He did not send out the requests for proposals until after the next
meeting on August 15.
4 In an affidavit given to the Board, Mangini stated (regarding
Schiavone’s July 29 letter): ‘‘This is the first time that the Union
was ever notified that the Palace Theatre was intending to sub-
contract our work.’’
ested in talking about except saying, ‘‘Give us a spe-
cific proposal.’’
At these sessions, he told Mangini that Respondent couldn’t
afford the minimum rates, the staffing, and work rules speci-
fied in the contract. ‘‘I went through all these things time
and time again and I didn’t get any response whatsoever.’’
The only response he did get was: ‘‘We can work on that.
We’d like a proposal on that.’’ He told the Union that he
would send out the requests for proposals and when they
were returned he would meet with the Union to see if they
would make similar concessions and that he would not hire
a subcontractor until he met with the Union and discussed
the bids that he received.3 He testified:
I was very specific. I said that we were going to use
a subcontracting proposal so that we could come back
and get our negotiations back on track. We never had
any attempt to subcontract this work. And I made that
very clear. And, in fact right up to the last minute we
said to them, ‘‘We do not want to sub-contract this
work. We want to work something out.’’ So it was only
an attempt to get a price fix on this whole negotiating
process.
Schiavone summarized the second meeting in this manner:
But my speech was: ‘‘I need some concessions. You’ve
got to come back to me with some suggestions as to
how we can get this thing on the right track.’’ And
their speech was: ‘‘Make us an offer.’’
Mangini testified that he received Schiavone’s July 29 let-
ter a few days before the second scheduled meeting; this was
the first time that Schiavone had mentioned the idea of sub-
contracting. At the beginning of the meeting, Mangini asked
Schiavone for an explanation of the letter. He said that he
was looking for someone ‘‘to come in and run the theatre
for him; that he was not a theatre person and that he might
be able to find someone to come in and manage the theatre.’’
Mangini thought that was a great idea because Schiavone
was not a theatre person and didn’t fully understand theatre
management. Mangini testified that he did not understand
this to mean that Respondent was going to replace the bar-
gaining unit employees, only the management of the theatre.4
Mangini asked Schiavone if there were any specific areas
that the Union could give him some assistance; ‘‘he had
nothing.’’ He said that he would send out the requests for
proposals ‘‘and then we’d be able to talk when he had some-
thing concrete.’’ Schiavone told Mangini that when he got
the bids, the Union could then make a proposal or a bid for
the work and that if the Union were successful he would stay
with the Union.
By letter dated August 6 (presumably, written at the con-
clusion of the second meeting) Schiavone wrote to Mangini:
I would like to meet with you again as soon as pos-
sible regarding our continuing discussions on the Palace
Theatre. As you know, we are considering a decision
to mail out a request for a proposal to a variety of cor-
porations and individuals asking for quotations on a
contract to operate the theatre’s stage for this next sea-
son.
In light of our long relationship, the Theatre offered
you, on behalf of the Union, an opportunity to propose
something which would affect our decision. However,
something means considerable concessions and reduc-
tions in our contract. We mentioned this last year dur-
ing our negotiations, and I’m sure you are not sur-
prised.
Assuming you would like to pursue this, let’s meet
as soon as possible. We have a deadline of August 15th
for wrapping up negotiations with you one way or an-
other. After that, we need to make our decision and
proceed with preparations for operating the Theatre for
this Fall. I’m sure you will understand why time is of
the essence.
The third meeting took place on August 15, attended by
the same three individuals. Schiavone told the union rep-
resentatives that he had not yet sent out his request for pro-
posals from stage subcontractors; he told them that he was
in the process of mailing it out now and would have the in-
formation back in about a week. The Union asked him for
specific proposals for concessions or givebacks and he said
that he had none at that time. Mangini testified that at this
meeting he asked Schiavone about the requests for proposals
from the subcontractors and Schiavone said that he had not
yet sent them out. Mangini asked him for proposals that they
could discuss, but he had none since he had not sent out for
the proposals. This meeting lasted less than an hour and they
agreed that when Schiavone received the proposals he would
immediately notify the Union.
On August 23, Respondent placed ads in New Haven and
Bridgeport newspapers stating:
STAGEHANDS—THE PALACE THEATRE—a con-
tractor is sought to handle all Palace Theatre stage
functions. Information can be obtained by calling
[Schiavone’s telephone number]; proposals must be
submitted by 8/28/92.
Schiavone testified that he placed the ads in the two news-
papers in the hope of locating a local subcontractor. He re-
ceived no responses to the ads. Mangini and Johnson saw the
ads and contacted the International Union. As a result,
Mangini was informed that he should have counsel with him
at the next meeting with Schiavone.
By letter dated August 28, Schiavone wrote to Mangini:
As I promised a follow-up from our last meeting.
Just so I will have something in the file reflecting what
transpired. I indicated that it is unacceptable for the the-
atre to open this year and lose money. We obviously
have to go over all of our expenses in order to elimi-
nate our deficit. IATSE wages are a significant propor-
tion of our Theatre expenditures each year and there-
fore something we have to look at carefully.
You indicated you were willing to discuss the entire
contract, but doubted if large-scale reductions in the
wages or the fringe benefits are possible. You also indi-
954 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
cated you were not willing to negotiate unless you
knew the extent of the concessions I was requiring.
I then suggested that we proceed with the plan we
had proposed weeks before, namely getting quotations
from outside contractors. These would give us an indi-
cation of exactly the savings we could achieve. I would
then give you this information with the understanding
you would get back to me, within a short period of
time, regarding your willingness to meet these conces-
sions. The reason for the short period is obviously the
opening of our Theatre in mid-September.
Finally, so there is no confusion, there is nothing in
the preceding suggesting that we will be deterred from
sub-contracting out stagework in the Palace even if you
were willing to make substantial wage and benefit con-
cessions. There are a substantial number of other issues
regarding the work required in the theatre over and
above the financial.
I will be back in contact with you shortly with some
firm figures for negotiation and a firm deadline for pro-
ceeding.
As to whether the contents of this letter accurately reflects
what had occurred at the prior three negotiating sessions,
Mangini testified: ‘‘Yes and no.’’ When Schiavone states in
the second paragraph of the letter that Mangini said that he
doubted that large scale reductions were possible, Mangini
testified that the only discussion of money that they had dur-
ing these meetings was Schiavone’s comment about a
$50,000 figure; Mangini responded that he didn’t believe that
the payroll for the year equaled that amount. In addition, the
letter states that when Respondent obtained the information
from the subcontractors he would give the information to the
Union in the hope that they would get back to him in a short
time with a willingness to meet regarding these concessions.
Mangini testified that he didn’t want this letter read to the
effect that the Union had previously been unwilling to talk
about concessions: ‘‘we were ready and willing to talk about
concessions or any ideas that he had in reaching an agree-
ment.’’
Schiavone testified that he wrote the August 28 letter be-
cause he ‘‘was in the habit of writing a letter after each time
we met.’’ The letter was meant to be a summation of his
thoughts about what transpired at the meeting and meetings.
As regards the next to final paragraph of the letter, what he
meant was that wages were not the problem; for example a
20-percent wage reduction would save Respondent only
$3400. The real problem was the Union’s work rules which
had to be changed if Respondent were to survive.
Sometime shortly before August 28, Schiavone sent out re-
quests for proposals to a number of potential subcontractors.
He received two written proposals on about September 1;
both are undated, but one, apparently, was faxed to Respond-
ent on September 1. He also received some inquiries by
phone which came to naught. On September 9, Schiavone
called Mangini and told him that he had received proposals
from potential subcontractors. He testified that he offered to
tell Mangini what the proposals were, but Mangini said that
he had already contacted a mediator to assist in their next
meeting, and the Union’s attorney told him not to speak to
Schiavone. After this telephone call, Schiavone wrote to
Mangini, inter alia:
the labor contract expired on July 31, 1992. At or about
the same time, Palace management notified you that it
was considering a decision to subcontract operation of
the Theatre during the 1992–1993 season. Commencing
on July 30, several meetings have been held during
which we have bargained regarding that decision and
the union has been given several opportunities to pro-
pose changes in working conditions which would affect
the subcontracting decision. Indeed, at the conclusion of
the most recent meeting, I was left with the distinct im-
pression that the union was willing to consider major
changes in working conditions, after comparing the sav-
ings that the Theatre could realize by subcontracting
out the work. That’s why, as explained to you in my
letter of August 28, 1992, I proceeded to obtain outside
quotations.
Today, however, you indicated that you were not in-
terested in meeting and reviewing this information as
matters were being turned over to your attorneys and to
the Federal mediator and would be discussed with their
participation.
You must understand that these machinations cannot
be allowed to delay the Theatre’s sub-contracting deci-
sion. We have told you from the outset that the timing
of this decision is tied to the scheduled opening of the
Theatre’s season. We have already postponed action
once, from the August 15 date mentioned in an earlier
letter, to give the union more time to consider what
input it might want to make. Further postponements are
not feasible.
The parties met next on September 16. In addition to the
participants at the prior sessions, present were Burton
Weinstein, counsel for the Union, George Nichols, counsel
for Respondent, and the mediator, Tom Carroll. At this meet-
ing, Schiavone gave the Union a document stating the fol-
lowing:
Stagehands: Flat fee of $85 to include electricians
and soundmen.
Riggers: $105 for load-in and load-out; showcalls
will be an additional $20.
Production Manager: $175 including showcall; this
will be a flat rate, regardless of the amount of hours
worked in one day.
The above proposal includes all benefits including
Workmen’s Compensation.
This document differs from the proposal submitted by Im-
panel Helweg, which was chosen by Schiavone for, at least,
the first show of the season. It states:
The following is a proposal for the contract of Stage
production personnel in your venue.
Stage Manager $18.00 hr.
Licensed Electrician 15.00 hr.
Riggers 16.50 hr.
Stagehand (loaders, carps, elect) 11.00 hr.
* A flat fee of $45 per show is required for all
SHOWCALL personnel (spot-ops/wardrobe/deckhands).
If there are any questions regarding these wages, please
feel free to contact me at my home.
955PALACE PERFORMING ARTS CENTER
5 He testified: ‘‘I understood this to, maybe, be part of a bid that
he would have received from someone else.’’
6 He testified that Schiavone told them that the rates specified
would cover up to a 24-hour period, whereas a ‘‘show’’ would indi-
cate that the rate would cover only the actual period of the perform-
ance.
7 There was an extensive amount of testimony produced by coun-
sel for Respondent to attempt to establish that it would have been
Continued
Schiavone testified that the meeting began with the parties
reviewing the expired contract clause by clause. After about
a half hour of this, Respondent’s representatives asked the
union representatives whether this was ‘‘the usual exercise or
are there substantial cuts at the end of this work because we
don’t want to go through and argue over work rules and ev-
erything . . . unless we have a sense that we are going to
achieve something as a result of this.’’ At about this point
the meeting ‘‘kind of blew up and everybody got very ex-
cited.’’ At this time, Schiavone gave the Union the flat fee
schedule set forth above. Schiavone was asked why he gave
the Union a flat fee proposal when Helweg’s accepted pro-
posal was on an hourly fee basis. He testified that after re-
ceiving this proposal from Helweg, he requested a flat fee
proposal and he negotiated the flat fee agreement with
Helweg on about September 9, although he did not write to
Helweg confirming this agreement until October 6 and it was
never confirmed in writing by Helweg. Schiavone testified
that at this meeting he told the Union that if they could not
reach agreement at that meeting, he was prepared to sub-
contract the stage work for the show on the following day.
The Union offered to continue negotiations and work under
the terms of the expired contract, Schiavone refused this
offer. He testified that Union Attorney Weinstein character-
ized his position as wanting to completely gut the contract,
but he responded by saying that he was prepared to discuss
everything. Schiavone testified that he made clear to the
Union that the proposal that he had agreed to with Helweg
was not yet binding, and was only for the show the follow-
ing day. Even if they could not reach agreement that day,
they could negotiate at a later date for the next show. The
negotiations ended at about noon; within an hour, Schiavone
called Helweg and finalized the agreement for the show on
the following evening.
Mangini testified that when the meeting began, the Union
asked why they had not received a call to be prepared for
the show the following day; they learned of the show earlier
from an ad in the newspaper. The Union also asked for pro-
posals and offered to bargain day and night, if necessary, to
work out an agreement. There were allegations of bargaining
in bad faith and ‘‘things broke down a little bit in the talks’’
and the mediator called for separate caucuses. When they re-
turned from caucus, Schiavone gave them the flat fee pro-
posal,5 and ‘‘we were trying to find out exactly what this
meant . . . .’’ He testified that he was ‘‘confused’’ by it.
The union representatives asked what the $85 meant: was it
for a show, a day, or an hour? They were told that it was
just a flat fee of $85 for each event, not show.6 They asked
what a production manager did, but, again, were given an
unsatisfactory explanation. They asked what portions of the
expired agreement would remain in effect, and Schiavone
said that no aspect of the old contract would apply. The
Union asked what controlled overtime work and weekend
work, and ‘‘we’re just told that this was the proposal and
this is what we have to deal with.’’ The Union asked about
work rules and Schiavone said that there would be no work
rules as no aspect of the old contract would apply. The
Union asked about staffing of the shows, and Schiavone said
that it would be at the employer’s discretion, ‘‘and that even
if we were to accept this as an agreement, there would be
no guarantee that bargaining unit employees would be used.’’
That would also be at his discretion. He testified that, by the
conclusion of this meeting, he knew that the rates listed on
Respondent’s flat rate proposal was the entire contract. There
would be no work rules, union-security clause, grievance
procedure, minimum manning requirements, etc. When asked
on cross-examination what his position was on this offer, he
initially testified that he was willing to sit and bargain all
day and night to negotiate an agreement. When pushed by
counsel for Respondent, he testified that this offer was not
acceptable, although the Union was willing to consider
changes in work rules. The mediator then suggested another
caucus; when they returned Nichols stated that the Respond-
ent decided to use the subcontractor for the show on the fol-
lowing day. Mangini told them that he was willing to con-
tinue bargaining until show time the following day, and that
the union members would continue to work under the ex-
pired agreement, but this offer was refused by Respondent.
He testified that the meeting ended because Respondent’s
counsel Nichols told them that Schiavone had to leave; they
left at about 1.
Attorney Nichols also testified about this meeting. He tes-
tified that they submitted the flat rate proposal to the Union:
‘‘This was presented as a proposal which had been made by
a potential subcontractor and that the contractor was telling
us that this is what he would do the stage work for.’’ ‘‘We
asked the Union if they would make a proposal to us, now
that they had a chance to examine this document and discuss
it. The Union refused to make a proposal and said that they
felt it was incumbent upon us to make a specific proposal
instead.’’ A caucus followed. He testified that during this
caucus, he and Schiavone ‘‘decided to try a different ap-
proach.’’ This involved some ‘‘off the record’’ discussions,
first with the mediator and then with the mediator and Attor-
ney Weinstein. This ‘‘approach’’ involved an ‘‘arrangement’’
at some theatres in New England, which Schiavone informed
him of, but, admittedly, he did not know all the details of
this arrangement. In these situations, the theatres hire ‘‘as
more or less full-time employees a few union members as
department heads.’’ The theatre is run by these employees
with nonunion stagehands brought in to work individual
shows. Weinstein asked some questions about this arrange-
ment, caucused with the union representatives, and returned
to say ‘‘that the Union was not interested in that sort of ar-
rangement.’’ The union representatives did say that they
were willing to work under the terms of the expired agree-
ment while negotiations continued. At about that time the
meeting ended because Attorney Weinstein had a previously
scheduled appointment that he had to attend to. At that time
Nichols told the union representatives that Respondent would
be using a subcontractor for the following day’s perform-
ance. About 1 or 2 p.m. that day he called Helweg and told
him that they would be the subcontractor on the Spin Doctor
show the following day.7 Admittedly, the rates paid to
956 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
more expensive to produce this show under the terms of the expired
union agreement as compared to subcontracting the show to Helweg.
On reconsideration, I find this evidence irrelevant and, for that rea-
son, it will not be considered.
Helweg for the show were higher than those specified in Re-
spondent’s flat rate proposal. This proposal provided for a
flat fee of $85 for electricians and $20 for show calls. The
billing for the September 17 show establishes that Respond-
ent paid Helweg $110 for one electrician and $25 for each
of four show calls. No riggers were used on this show. In
shows produced in October, Respondent paid Helweg $145
for each rigger, $20 to $40 more than is provided in its flat
rate proposal given to the Union on September 16.
In about November, Respondent discontinued using
Helweg as a subcontractor operating the theatre. By letter to
Mangini dated November 18, Schiavone stated:
We have replaced our first contractor at the Palace
with a new contractor. I wanted to keep you informed
of the financial aspects of the relationship in case the
Union wants to change its position and make a pro-
posal:
Crew Head: $14/hr.
Heads: $12/hr.
Stagehands: $8/hr.
Loaders: $8/hr.
Wardrobe: $8/hr.
Fifteen percent (15%) on top of these rates for all
fringe benefits, including FICA, Workmen’s Comp and
all employer insurances paid by the contractor.
The Palace Theatre will reimburse contractor for
statutory premium he is required to pay if crew member
works in excess of 40 hours per week. Week runs Mon-
day through Sunday.
The Palace Theatre, in conjunction with the pro-
ducer, determines the size of the crew for any show and
when workers will be needed, from the beginning of
load-in to the end of load-out. The contractor directs
the workers in all other respects.
If there are any questions, I’d be happy to answer
them at the negotiating session scheduled for Wednes-
day, November 25.
Mangini testified that when he received this letter he called
Schiavone and asked him if he could consider it a proposal
to the Union. Schiavone said that it should not be so consid-
ered, that it was for his information only.
The next meeting (the first since September 16) of the par-
ties took place in mid-December, with the same individuals
who were present at the prior meeting. At this meeting Re-
spondent gave the Union a summary of its position on most
of the articles of the prior agreement. The information was
given to the Union:
to consider in determining whether and in what manner
to respond to the sub-contract arrangement that the Pal-
ace is considering. We list below those portions of the
contract that expired on July 31, 1992, which we would
agree to include, in whole or in part, in a new contract
with Local 74, as an alternative to the sub-contract ar-
rangement. Of course, we would expect that any new
contract will meet the Theatre’s financial needs. All
other provisions of the expired contract are not accept-
able and have been omitted from the following list:
Mangini testified that the union representatives considered
this proposal and determined that ‘‘effectively, this proposal
negates our contract altogether.’’ The Union then proposed
a 10-percent reduction across the board with an increase in
health and welfare costs. Nichols and Schiavone caucused
and returned saying that they found the Union’s offer would
save Respondent between $1000–$2000 a year and therefore
was unacceptable. Schiavone testified that the subcontractor’s
costs were a third to a half less than this. He testified that
at this point Attorney Weinstein said that the parties were at
an impasse. Attorney Nichols asked him: ‘‘Are you saying
that we’re at an impasse?’’ Weinstein answered: ‘‘Yes, we’re
clearly at an impasse. We can’t make any more progress.
We’re too far apart.’’ That was the extent of the meeting.
Respondent’s operation had been losing money since it
began; its tax return for 1991 shows a loss of $85,000.
Schiavone testified that prior to 1992 Respondent had made
all the cuts it could think of; the theatre, at one time, had
12 to 15 employees. By 1992, this number had been reduced
to one and a half regular employees, with additional employ-
ees hired for each show. In addition, Respondent cut down
on advertising and promotion. He testified that by the time
of negotiations: ‘‘there really wasn’t much left. They only
had one item really on the agenda and that was the Union.’’
At the negotiations, Schiavone said that he was looking to
save $50,000, but this was not solely from the Union. It
couldn’t be because the union employees’ payroll casts prob-
ably did not equal this amount. Other than this figure, he
never informed the Union how much of a savings he was
seeking from them.
Schiavone testified that when Respondent asked for bids
from subcontractors, it was originally not to obtain a contrac-
tor to perform the union employees’ work, but was to assist
him in the negotiations:
I didn’t know enough about theatres in detail to be able
to give them a fair proposal. [The Union asked for of-
fers] and I said, ‘‘I don’t have the expertise at the mo-
ment. I have a general understanding and I think we’re
out of line by a lot. But I really don’t know precisely.
So the only way I could think to get to this is for me
to go get bids.’’ Subcontracting was not an option. It
was something that we were using to get facts to help
us deal with this particular situation with the Union.
Schiavone also testified:
We used the sub-contracting to get a bead . . . on these
negotiations so we could get a fix on what was possible
in what I call the real world.
He testified that one reason he didn’t want to subcontract the
work was that it was ‘‘too complicated.’’ The present em-
ployees knew the theatre and the equipment. It would be dif-
ficult for somebody new to learn all the equipment in the
theatre.
Schiavone testified that his purpose in meeting with the
Union on the five occasions specified above was to negotiate
a new collective-bargaining agreement. However, in his affi-
957PALACE PERFORMING ARTS CENTER
davit given to the Board, he stated that he told the union rep-
resentatives at the first, third, and fourth bargaining session
that he was not there negotiating on a new contract. Rather
he was negotiating over his decision to subcontract out the
stage management of the theatre. Nichols testified that his
understanding was that Respondent’s purpose in meeting
with the Union was to negotiate over its decision to sub-
contract bargaining unit work; the purpose of the meetings
was not for collective-bargaining negotiations for a new con-
tract.
IV. ANALYSIS
There are two allegations: that Respondent failed and re-
fused to bargain in good faith with the Union for a contract
to succeed the one that expired July 31, and that Respondent
subcontracted the unit employees’ work without prior bar-
gaining with the Union, each in violation of Section 8(a)(1)
and (5) of the Act. The bad-faith bargaining allegation will
be discussed first.
Whether an employer has engaged in bad-faith bargaining
is a difficult determination. In making this determination, the
judge and Board must look at the employer’s activities both
during, and away from, the bargaining table. As the Board
stated in Atlanta Hilton & Tower, 271 NLRB 1600 (1984):
‘‘It is necessary to scrutinize an employer’s overall conduct
to determine whether it has bargained in good faith.’’ There
are two aspects of Respondent’s overall conduct away from
the bargaining table that deserve inspection in determining
whether it engaged in bad-faith bargaining: its letter writing
and its delay in obtaining subcontracting proposals.
In about April, Schiavone and Mangini reached agreement
on the 1991–1992 contract after many months of hard bar-
gaining by both sides. When Mangini went to Schiavone’s
office to pick up the signed agreement, attached to it was a
letter from Schiavone which stated that under the agreement
the theatre was more expensive to operate and: ‘‘You’ve ac-
complished all of your objectives with the signing of this
contract, we’ve accomplished none of ours.’’ The letter con-
tinued by stating that the contract made the burden of operat-
ing the theatre even more difficult, ending: ‘‘We all have a
responsibility to put a substantial amount of effort into
changes in working conditions so that the theatre can operate
again this Fall.’’ Mangini refused to accept this letter be-
cause he considered it insulting and inappropriate; I agree.
The parties had just concluded protracted negotiations and
signed the resulting agreement. At the same time that
Schiavone signed the agreement he was criticizing it. If he
didn’t approve of the contract, why did he negotiate and sign
it? It appears to me that this letter was the initial indication
of Respondent’s actions over the next few months.
Schiavone’s letters to Mangini of August 28 and September
9, while not as insulting, are self serving and do nothing to
assist the collective-bargaining process. Rather, it appears to
me, that if Schiavone were as direct in the actual negotia-
tions as he was in his letters to Mangini, the parties’ negotia-
tions would have been more fruitful.
Another indication of Respondent’s attitude toward the ne-
gotiations was its delay in obtaining the subcontracting pro-
posals. By letter dated July 29, prior to the first bargaining
session, Schiavone told Mangini that Respondent would be
mailing out requests for subcontracting proposals ‘‘sometime
this week.’’ However, it wasn’t until a month later that
Schiavone sent out the requests for proposals, which he re-
ceived on about September 1. Also unexplained is
Schiavone’s delay in transmitting these proposals to Mangini.
He waited until September 9 to tell Mangini that he had the
proposals. I also find puzzling the fact that the proposal from
Helweg was based on hourly rates while the proposal that
Schiavone presented to the Union on September 16 was a
flat rate proposal. Schiavone testified that he renegotiated a
flat fee proposal on about September 9, but, apparently, this
was not in writing because it was never introduced at the
hearing. Considering Schiavone’s repeated appeals to the
Union of the urgency in Respondent obtaining financial as-
sistance and concessions, I find that his delay in obtaining
the subcontracting proposals, and his further delay in notify-
ing the Union of the proposals, is an additional factor estab-
lishing his lack of good faith in the negotiations.
The principal method of determining a parties good (or
bad) faith in collective bargaining is its activities at the bar-
gaining sessions between the parties. As the Board stated in
J. D. Lunsford Plumbing, 254 NLRB 1360 (1981), quoting
from West Coast Casket Co., 192 NLRB 624, 636 (1971):
‘‘From the context of an employer’s total conduct, it must
be decided whether the employer is lawfully engaging in
hard bargaining to achieve a contract that it considers desir-
able or is unlawfully endeavoring to frustrate the possibility
of arriving at any agreement.’’ The parties met on four occa-
sions: July 30, August 6 and 15, and the final session was
on September 16. General Counsel alleges that Respondent’s
bad faith in these bargaining sessions is established by the
fact that Respondent never presented any proposals to the
Union until September 16, when it presented the flat rate
proposal it allegedly had negotiated with Helweg. I should
initially note that as between Mangini and Schiavone, I
found Mangini to me the more direct and credible witness.
I found that Schiavone was very reluctant to make any ad-
missions and attempted (unsuccessfully) to explain every in-
consistency in his testimony and his affidavit. I found
Mangini to be more credible. Aside from his conflicting tes-
timony about not understanding early during the negotiations
that Schiavone meant to subcontract the entire theatre oper-
ation, I found him to be a credible witness who attempted
to answer the questions put to him in an honest and direct
manner.
In Chevron Chemical Co., 261 NLRB 44, 45 (1982), the
Board stated:
Determining whether parties have complied with the
duty to bargain in good faith usually requires examina-
tion of their motive or state of mind during the bargain-
ing process, and is generally based on circumstantial
evidence, since a charged party is unlikely to admit
overtly having acted with bad intent. Hence, in deter-
mining whether the duty to bargain in good faith has
been breached, particularly in the context of a ‘‘surface
bargaining’’ allegation, we looked to whether the par-
ties’ conduct evidences a real desire to reach an agree-
ment—a determination made by examination of the
record as a whole, including the course of negotiations
as well as contract proposals.
Further, the Board stated: ‘‘The Board does, of course, with
Court sanction, consider the content of bargaining proposals
958 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
as part of its review when making a determination as to the
good faith of parties negotiating a contract.’’
It is clear that Section 8(d) of the Act does not compel
either party to agree to a proposal or make any concessions
in bargaining. However, as the Supreme Court stated in
NLRB v. Insurance Agents’ Union, 361 U.S. 477, 498
(1960):
The Board has been afforded flexibility to determine
. . . whether a party’s conduct at the bargaining table
evidences a real desire to come into agreement . . . .
And specifically we do not mean to question in any
way the Board’s power to determine the latter question,
drawing inferences from the conduct of the parties as
a whole.
In NLRB v. Reed & Prince Mfg. Co., 205 F.2d 131, 134 (1st
Cir. 1953), the court stated that an employer is ‘‘obliged to
make some reasonable effort in some direction to compose
his differences with the union, if Section 8(a)(5) is to be read
as imposing any substantial obligation at all.’’ Port Plastics,
279 NLRB 362, 381 (1986), citing NLRB v. Herman Sausage
Co., 275 F.2d 229, 231 (5th Cir. 1960), stated: ‘‘There seems
to be universal agreement about what the obligation to bar-
gain in good faith entails. It means that a party must ‘enter
into discussion with an open and fair mind and a sincere pur-
pose to find a basis of agreement.’’’
By letter dated April 20, Respondent notified the Union
that it wished to terminate the contract and negotiate new
terms and conditions of employment for its employees effec-
tive August 1. Yet throughout the first three bargaining ses-
sions Respondent never made a bargaining proposal to the
Union, despite Mangini’s invitations to Schiavone to do so.
Schiavone spoke of Respondent’s financial difficulties, and
the Union recognized the problem. Only 4 months earlier,
Respondent and the Union had concluded the prior negotia-
tions with the resulting contract which Schiavone quickly
criticized in his April 8 letter. Schiavone was certainly, by
then, familiar with the issues and the contract’s terms, and
could easily have formulated contract proposals to help alle-
viate Respondent’s financial difficulties. He failed to do so,
without explanation. Rather, he appeared to be waiting for
the Union to make a proposal. I find that because he moved
to reopen the contract and negotiate a new agreement, he
was obligated to make proposals, which the Union would
then have to respond to. In this situation, it was not the
Union’s obligation to make the initial proposals. Such an ob-
ligation would place the Union in an unfair position. In
United Technologies Corp., 296 NLRB 571, 572 (1989), as
one factor in finding that the employer refused to bargain in
good faith with the union, the Board found that: ‘‘Respond-
ent has not presented any economic proposals, despite re-
peated prompting from the Union, and has never even inter-
nally discussed its economic demands.’’
It was not until the forth meeting, on September 16, that
Respondent made its first bargaining proposal. At that time,
Respondent gave the Union the flat rate proposal that was,
allegedly, agreed to with Helweg. Even absent the confusion
caused by these rates (whether they were for each event or
each show), it is difficult to view this as a serious proposal.
The expired contract was a 20-page document. This ‘‘pro-
posal’’ listed three classifications with a flat rate for each.
Schiavone told the union representatives that this proposal
represented the entire agreement, there would be no work
rules, no union-security agreement, and no requirement that
he employ members of the Union. No portion of the prior
agreement would remain in effect. They were told that ‘‘this
was the proposal and this is what we have to deal with.’’ It
could not have surprised Schiavone that the Union refused
this ‘‘offer,’’ while offering to continue bargaining. I find
that this ‘‘proposal’’ was so one-sided that Schiavone had to
be aware that no union could accept it. As stated above,
under Section 8(d) of the Act neither the employer or the
union is obligated to agree to a proposal or make a conces-
sion. However, the parties must act in a way that indicates
that they truly wish to reach an agreement with the other
side. As the court stated in NLRB v. Mar-Len Carpets, 659
F.2d 995, 999 (9th Cir. 1981): ‘‘proposal content supports an
inference of intent to frustrate agreement where . . . the en-
tire spectrum of proposals put forward by a party is so con-
sistently and predictably unpalatable to the other party that
the proposer should know agreement is impossible.’’
In Reichhold Chemicals, 288 NLRB 69 (1988), the Board
referred to a statement it made in the original case in that
matter at 277 NLRB 639, 640 (1985): ‘‘The Board will not
attempt to evaluate the reasonableness of a party’s bargaining
proposals, as distinguished from bargaining tactics, in deter-
mining whether the party has bargained in good faith.’’ In
discussing this statement, the Board stated:
On further reflection, we conclude that this statement
is an imprecise description of the process the Board un-
dertakes in evaluating whether a party has engaged in
good-faith bargaining. Specifically, the quoted sentence
could lead to the misconception that under no cir-
cumstances will the Board consider the content of a
party’s proposal in assessing the totality of its conduct
during negotiations. On the contrary, we wish to em-
phasize that in some cases specific proposals might be-
come relevant in determining whether a party has bar-
gained in bad faith. The Board’s earlier decision in this
case is not to be construed as suggesting that this Board
has precluded itself from reading the language of con-
tract proposals and examining insistence on extreme
proposals in certain situations.
That we will read proposals does not mean, however,
that we will decide that particular proposals are either
‘‘acceptable’’ or ‘‘unacceptable’’ to a party. Instead, re-
lying on the Board’s cumulative institutional experience
in administering the Act, we shall continue to examine
proposals when appropriate and consider whether, on
the basis of objective factors, a demand is clearly de-
signed to frustrate agreement on a collective bargaining
contract.
Indeed, the fundamental rights guaranteed employees
by the Act—to act in concert, to organize, and to freely
choose a bargaining agent—are meaningless if their
employer can make a mockery of the duty to bargain
by adhering to proposals, which clearly demonstrate an
intent not to reach an agreement with the employees’
selected collective-bargaining representative. The Board
will not have fulfilled its obligation to look at the
whole picture of a party’s conduct in negotiations if we
959PALACE PERFORMING ARTS CENTER
have ignored what is often the central aspect of bar-
gaining, i.e., the proposals advanced by the parties.
In the situation here, at the fourth bargaining session, Re-
spondent made its first proposal to the Union, a proposal that
would have ‘‘gutted’’ the contract and converted it to a one-
half-page document containing three flat rates. Respondent
must have been aware that this proposal would be unaccept-
able to the Union. I therefore find that Respondent has failed
to bargain in good faith with the Union, in violation of Sec-
tion 8(a)(1) and (5) of the Act.
It is also alleged that Respondent violated Section 8(a)(1)
and (5) of the Act by subcontracting the stage work for the
September 17 show featuring the Spin Doctors, as well as
later shows, without proper notice to, and bargaining with,
the Union. By letter to the Union dated July 29, Schiavone
told Mangini that Respondent ‘‘that sometime this week we
will be mailing out requests for proposals for handling the
stage management at the Palace Theatre.’’ This was not a
clear notification of its intent to subcontract the employees’
work because for a number of years the theatre had been run
by Brian Alden and his company, Live Productions. At the
first meeting, Schiavone told Mangini that he was looking
for someone to ‘‘run the theatre for him’’ because he was
not a theatre person. Schiavone’s letter to Mangini of August
6 stated that Respondent was ‘‘considering a decision to mail
out a request for a proposal . . . asking for quotations on a
contract to operate the theatre’s stage for the next season.’’
This letter then asks the Union to propose considerable con-
cessions which would affect their decision. I find that this
letter cleared up any ambiguity in Schiavone’s prior letter
and his statements to Mangini at the first meeting; the Union
was then on notice of Respondent’s interest in subcontracting
all the work at the theatre.
In NLRB v. Eltec Corp., 870 F.2d 1112 (6th Cir. 1989),
the Court stated that in Fibreboard Corp. v. NLRB, 379 U.S.
203 (1964):
The Supreme Court has found several facts significant
in determining the propriety of collective negotiation
concerning the decision to subcontract work. These
facts are: (1) whether the decision has altered the com-
pany’s ‘‘basic operation’’; (2) whether the decision
contemplated substantial capital investment; and (3)
whether imposing a bargaining requirement would
‘‘significantly abridge’’ the employer’s ‘‘freedom to
manage the business.’’ An essential fact is whether
labor problems contributed to the employer’s decision
to subcontract—such a connection indicates ‘‘that col-
lective bargaining in advance of the decision might
have produced a union offer which could have affected
the decision to transfer the jobs.’’ NLRB v. Production
Molded Plastics, 604 F.2d 451, 453 (6th Cir. 1979).
In Otis Elevator Co., 269 NLRB 891, 893 (1984), the Board
stated: ‘‘The appellation of the decision is not important.
Fibreboard ‘subcontracting’ must be bargained not because
the decision turns upon the label, but because in fact the de-
cision turns upon a reduction of labor costs.’’ In Storer
Cable TV of Texas, 295 NLRB 295, 296 (1989), the Board
stated: ‘‘Indeed, as the decision to subcontract existing unit
work here turned on the desire to reduce labor costs, the
Union had control over this labor-related factor and could
have offered alternatives such as wage reductions or expand-
ing the scope of the employees’ duties.’’ In Mountaineer Pe-
troleum, 301 NLRB 801, 815 (1991), the administrative law
judge stated:
In the instant situation, as in Fibreboard Corp., em-
ployees in the bargaining unit were replaced with those
of an independent contractor to do the same work under
similar conditions of employment. The decision to con-
tract out the work did not turn on a change in the basic
direction or nature of the enterprise as the contractors
continued to be dispatched by Respondent to petroleum
pickup points, and the petroleum products were there-
after delivered to Respondent’s facilities involved here-
in. Moreover, as the Respondent’s avowed object was
to accomplish the work at lesser costs . . . the decision
was particularly amenable to resolution within the col-
lective bargaining framework.
The facts fall squarely within the facts set forth in these deci-
sions. This was not a change in the nature or direction of Re-
spondent’s business. It was only a substitution of a sub-
contractor’s employees (at first, Helweg) to perform the work
previously performed by Respondent’s employees who were
members of the Union. The subcontractor’s employees were
performing the identical work that Respondent’s union em-
ployees had performed months earlier, and the only reason
they were performing the work was, allegedly, because it
was less expensive for Respondent to operate in that manner.
As discussed above, this is a classic example of a subject
amenable to collective bargaining; if Respondent had bar-
gained in good faith with the Union the parties might have
been able to work out an agreement that was acceptable to
both sides, and saved Respondent some money as well. I
therefore find that Respondent was obligated to give proper
timely notice to the Union about its intent to subcontract the
work, and then to bargain with the Union in good faith about
this subject.
I have previously found that Respondent notified the
Union of its interest in subcontracting the theatre work by
letter of August 6. As stated above, this letter said that Re-
spondent was ‘‘considering a decision’’ to requests propos-
als. The next notification that the Union received was not at
the next meeting (Respondent had no proposals to make at
this meeting and had not yet sent out the request for propos-
als), but in a newspaper ad that they saw on August 23 stat-
ing that Respondent was looking for stagehands at the theatre
and another newspaper advertisement for the Spin Doctor
Show.
Schiavone received two responses to his request for pro-
posals on about September 1. He called Mangini on Septem-
ber 9 and offered to tell him about these proposals. Mangini
refused this request and counsel for Respondent, in his brief,
uses this refusal as a defense. I disagree. About a month after
negotiations began, and after the third bargaining session,
Mangini saw the August 23 ad for employees to operate the
theatre. His reaction of notifying the International Union of
this event was not unreasonable, nor was their response of
supplying the Union with an attorney. By September 9, a
mediator had been assigned to the negotiations. Mangini’s re-
sponse of refusing to speak directly to Schiavone was a pru-
dent one, all facts considered. Additionally, if Schiavone was
so anxious for the Union to see Helweg’s proposal, as modi-
960 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
8 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.
fied, he could have enclosed it in his September 9 letter to
Mangini; he did not do so.
It was not until the September 16 bargaining session that
Respondent showed the Union the flat rate proposal; this was
the first opportunity that the Union had to bargain about the
subject. Also at this meeting, Schiavone told the Union that
unless an agreement was reached at that meeting, he would
subcontract the stage work for the Skin Doctor’s show the
following day. His proposal to the Union was Helweg’s flat
rate proposal, period. The Union refused this offer, while of-
fering to work under the existing agreement and continue ne-
gotiations. Schiavone refused this offer and subcontracted the
stage work the following day and thereafter.
It is not enough to notify the union of your intention to
subcontract; the employer must also ‘‘afford the Union an
adequate opportunity to bargain concerning the decision
. . . .’’ Mountaineer Petroleum, supra. In NLRB v. Eltec
Corp., supra at 1117, the Respondent defended that it gave
the union full opportunity to bargain about its move. The
court rejected this argument, stating:
The Board was justified in concluding that respondent
hadn’t seriously intended to bargain before moving,
when it waited until February 11 to announce its plans
to move, plans it began to formulate in December and
January. The Board was entitled to find a notice of five
business days was insufficient time to allow a meaning-
ful exchange under all the circumstances here.
In the instant matter Schiavone gave the Union the flat rate
proposal for the first time on September 16. He told the
Union: ‘‘Accept this or the work on tomorrow’s performance
will be performed by Helweg’s employees.’’ This is not bar-
gaining envisioned by the Act. Respondent therefore violated
Section 8(a)(1) and (5) of the Act by subcontracting this
work without proper notice and bargaining.
CONCLUSIONS OF LAW
1. Respondent is engaged in commerce within the meaning
of Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
3. The following employees of Respondent constitute a
unit appropriate for the purposes of collective bargaining
within the meaning of Section 9(b) of the Act:
All carpenters, electricians, property men, flymen,
curtainmen, frontlight operators, lighting board opera-
tors, soundmen and wardrobe personnel employed by
the Respondent as stagehands at its theatre located at
246-248 College Street, New Haven, Connecticut; but
excluding all other employees (including Motion Pic-
ture Projectionists), all managerial and confidential em-
ployees, all guards and supervisors as defined in the
Act.
4. At all times since 1984, the Union has been the exclu-
sive collective-bargaining representative of these employees.
5. Since on or about April 8, 1992, Respondent has failed
and refused to bargain in good faith with the Union, in viola-
tion of Section 8(a)(1) and (5) of the Act.
6. On about September 17, 1992, Respondent subcon-
tracted work previously performed by its employees rep-
resented by the Union, without having previously bargained
in good faith with the Union over its intention to do so.
THE REMEDY
Having found that Respondent has engaged in acts and
conduct in violation of Section 8(a)(1) and (5) of the Act,
I shall recommend that it be ordered to cease and desist
therefrom and take certain affirmative action designed to ef-
fectuate the policies of the Act. I have found that Respondent
has failed and refused to bargain in good faith with the
Union. As a remedy, I shall order that Respondent be or-
dered, on request, to resume bargaining with the Union and
to do so in good faith, and, in the event an agreement is
reached, embody such agreement in a signed contract. I have
also found that Respondent violated Section 8(a)(1) and (5)
of the Act by subcontracting the stage work at the theatre
without first bargaining in good faith with the Union about
the subject. In order to remedy this violation, I shall rec-
ommend that Respondent be ordered to cancel its sub-
contracting agreements and to directly employ its former em-
ployees as it had done prior to September 17, 1992. I shall
also order that Respondent, on request, bargain with the
Union in good faith about its decision to subcontract this
work. If and when a valid impasse occurs in the course of
this bargaining, Respondent shall be entitled to resume sub-
contracting this work. In addition, I shall recommend that
Respondent be ordered to make whole those employees who
lost their jobs with Respondent due to the unlawful sub-
contracting of the stage work at the theatre by paying to
these employees a sum of money equal to the amount they
would have earned absent Respondent’s unlawful activity,
less interim earnings. This backpay will end when Respond-
ent makes a valid offer of reinstatement to them or they ob-
tain equivalent employment elsewhere. This amount shall be
computed in accordance with F. W. Woolworth Co., 90
NLRB 289 (1950), and New Horizons for the Retarded, 283
NLRB 1173 (1987).
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended8
ORDER
The Respondent, The Palace Performing Arts Center, Inc.,
New Haven, Connecticut, its officers, agents, successors, and
assigns, shall
1. Cease and desist from
(a) Bargaining in bad faith with Local No. 74, Inter-
national Alliance of Theatrical Stage Employees and Moving
Picture Operators of the United States and Canada, AFL–
CIO as the exclusive collective-bargaining representative of
the employees in the following appropriate unit:
All carpenters, electricians, property men, flymen,
curtainmen, frontlight operators, lighting board opera-
tors, soundmen and wardrobe personnel employed by
the Respondent as stagehands at its theatre located at
246-248 College Street, New Haven, Connecticut; but
961PALACE PERFORMING ARTS CENTER
9 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
National Labor Relations Board’’ shall read ‘‘Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order
of the National Labor Relations Board.’’
excluding all other employees (including motion picture
projectionists), all managerial and confidential employ-
ees, all guards and supervisors as defined in the Act.
(b) Unilaterally subcontracting work previously performed
by these bargaining unit employees without prior bargaining
with the Union.
(c) In any like or related manner interfering with, restrain-
ing, or coercing employees in the exercise of their rights
guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to ef-
fectuate the policies of the Act.
(a) On request, bargain in good faith with the Union as
the exclusive bargaining representative of the employees in
the appropriate unit described above concerning rates of pay,
wages, hours of work, and other terms and conditions of em
ployment, and if an agreement is reached, embody it in a
signed contract.
(b) Offer to its bargaining unit employees whose jobs were
lost as a result of the unlawful subcontracting, full and im-
mediate reinstatement to their former positions of employ-
ment, or if those positions no longer exist, to substantially
equivalent positions of employment, without prejudice to
their seniority or other rights and privileges previously en-
joyed.
(c) Make these employees whole for any loss of earnings
they suffered as a result of their being replaced by the sub-
contractor’s employees, in the manner set forth in the remedy
section of this decision.
(d) Preserve and, on request, make available to the Board
or its agents for examination and copying, all payroll records
or other records necessary to analyze the amount of backpay,
and the names of the discriminatees, under the terms of this
Order.
(e) Post at its facility in New Haven, Connecticut, copies
of the attached notice marked ‘‘Appendix.’’9 Copies of the
notice, on forms provided by the Regional Director for Re-
gion 34, after being signed by Respondent’s authorized rep-
resentative, shall be posted by Respondent immediately on
receipt and shall be maintained for 60 consecutive days in
conspicuous places, including all places where notices to em-
ployees are customarily posted. Reasonable steps shall be
taken by Respondent to ensure that the notices are not al-
tered, defaced, or covered by any other material.
(f) Notify the Regional Director in writing within 20 days
from the date of this Order what steps Respondent has taken
to comply.
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 vio-
lated the National Labor Relations Act and has ordered us
to post and abide by this notice.
WE WILL NOT refuse to bargain collectively and in good
faith concerning rates of pay, hours of employment, and
other terms and conditions of employment with Local No.
74, International Alliance of the Theatrical Stage Employees
and Moving Picture Operators of the United States and Can-
ada, AFL–CIO (the Union) as the exclusive representative of
the employees in the bargaining unit described below:
All carpenters, electricians, property men, flymen,
curtainmen, frontlight operators, lighting board opera-
tors, soundmen and wardrobe personnel employed by us
as stage hands at our theatre located at 246-248 College
Street, New Haven, Connecticut, but excluding all other
employees (including motion picture projectionists), all
managerial and confidential employees, all guards and
supervisors as defined in the Act.
WE WILL NOT unilaterally subcontract stage work at our
theatre without previously bargaining in good faith with the
Union about this subject.
WE WILL NOT in any like or related manner interfere with,
restrain, or coerce you in the free exercise of your rights
under Section 7 of the National Labor Relations Act.
WE WILL, on request, bargain with the Union and put in
writing any agreement reached on terms and conditions of
employment for our employees in the above bargaining unit.
WE WILL, on request, bargain in good faith with the Union
concerning our decision to subcontract the stage work at our
theatre.
WE WILL offer to our employees who lost their jobs due
to our subcontracting the stage work at the theatre beginning
on September 17, 1992, immediate and full reinstatement to
their former jobs or, if those jobs no longer exist, to substan-
tially equivalent positions, without prejudice to their seniority
or other rights and privileges previously enjoyed, and WE
WILL make those employees whole for any loss of earnings
and other benefits they may have suffered as a result of their
unlawful discharges.
THE PALACE PERFORMING ARTS CENTER, INC.