Standard Oil Co. of California

National Labor Relations Board - Board Decisions

Sep 11, 1963

144 N.L.R.B. 520 (N.L.R.B. 1963)

520 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(b) Notify the Regional Director, in writing, within 20 days from date of receipt
of this Intermediate Report and Recommended Order, what steps Respondent has
taken to comply herewith .8
8In the event this Recommended Order is adopted by the Board, this provision shall
be modified to read: "Notify the Regional Director for the First Region, in writing, within
10 days from the date of this Order, what steps the Respondent has taken to comply
herewith."
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor Rela-
tions Act, we hereby notify our employees that:
WE WILL NOT by speeches or publications of any kind threaten to close or
move the plant, eliminate existing employee benefits, deprive employees of
overtime work as consequences of United Steelworkers of America, AFL-CIO,
or any other union securing rights of representation at this plant.
WE WILL NOT post or distribute company notices referring to serious harm
as a consequence of union representation.
WE WILL NOT interrogate employees concerning statements given to agents
of the National Labor Relations Board.
WE WILL NOT in any like manner interfere with employees' rights under the
National Labor Relations Act, as amended.
SURPRENANT MFG CO.,
Employer.
Dated------------------- By-------------------------------------------
(Representative) (Title)
This notice must remain posted for 60 consecutive days from the date of posting,
and must not be altered, defaced, or covered by any other material.
Employees may communicate directly with the Board's Regional Office, Boston
Five Cents Savings Bank Building, 24 School Street, Boston, Massachusetts, Tele-
phone No. Lafayette 3-8100, if they have any question concerning this notice or
compliance with its provisions.
Standard Oil Company of California , Western Operations, Inc.
and International Union of Petroleum Workers, AFL-CIO.
Case No. 21-CA-5045-1. September 11, 1963
DECISION AND ORDER
On May 17, 1963, Trial Examiner Martin S. Bennett issued his In-
termediate Report in the above-entitled proceeding, finding that the
Respondent had not engaged in the unfair labor practices alleged in
the complaint and recommending that the complaint be dismissed in
its entirety, as set forth in the attached Intermediate Report. There-
after, the General Counsel and the Charging Party filed exceptions to
the Intermediate Report and supporting briefs. The Respondent
filed a brief in support of the Intermediate Report.
Pursuant to the provisions of Section 3 (b) of the Act, the Board has
delegated its powers in connection with this case to a three-member
panel [Chairman McCulloch and Members Leedom and Fanning].
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
144 NLRB No. 61.
STANDARD OIL CO. OF CALIF., WESTERN OPERATIONS, INC. 521
The rulings are hereby affirmed. The Board has considered the In-
termediate Report, and the entire record in this case, including the
exceptions and the briefs, and hereby adopts the findings, conclusions,
and recommendations of the Trial Examiner with the following
modification.
We agree with the Trial Examiner that Respondent did not violate
Section 8(a) (5) when it discontinued the checkoff of dues after the
contract between the parties, which contained a checkoff clause, had
expired. In doing so, we deem it unnecessary to pass upon the Trial
Examiner's conclusion that, under the Bethlehem Steel decision,' Re-
spondent could lawfully abandon checking off dues regardless of
what;ler the checkoff clause was limited to the term of the contract.
Article III of the agreement between Respondent and the Union
recites that "Employees covered by thi.s Agreement may authorize the
Company in writing on a suitable form to deduct the regular monthly
dues of the Union from their wages and remit same to the. Bakers fie]d
Offices of the Union not later than one month after the end of the
payroll period in which the deduction is made." [Emphasis sup-
plied.] As in the Bethlehein Steel case,2 the italicized language clearly
links Respondent's checkoff obligation to the period the contract
remained in force. Accordingly, we need not decide in this proceed-
ing whether the obligation to deduct clues under a checkoff clause
would cease with the expiration of the agreement where the existence
of the clause was not specifically tied to the term of the agreement.
[The Board dismissed the complaint.]
I Bethlehem Steel Company ( Shapbuilding Division ), 136 NLRB 1500.
2Industrial Union of Marine and Shvpbuilding Workers of Ameiiea, AFL-CIO (Bethle-
hem Steel Co, Shipbuilding Division ) v. N L R.B , enfd in this respect 320 F 2d
615 (CA. 3).
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
This case was heard before Trial Examiner Martin S. Bennett, at Los Angeles,
California, on March 26, 1963. The complaint 1 alleges that on and after October 5,
1962, Respondent, Standard Oil Company of California, Western Operations, Inc.,
had engaged in unfair labor practices within the meaning of Section 8(a)(5) and
(1) of the National Labor Relations Act, by unilaterally refusing to check off union
dues subsequent to the termination of a collective-bargaining agreement containing
a dues checkoff clause between Respondent and International Union of Petroleum
Workers, AFL-CIO, herein called the Union. Briefs have been submitted by all
parties.
Upon the entire record in the case, and from my observation of the witnesses, I
make the following:
I Issued February 11, 1963, and based upon charges filed November 2 and 15, 1962, and
February 5, 1963. Pursuant to unopposed motion by the General Counsel, the transciipt
of testimony is ordered corrected as follows:
Page 11, line 8, insert "one on August 29th and" after "9th"; page 13. line 11,
change "October 30th" to "August 30th" ; page 37, line 9, insert "the Company"
after "didn't".
522 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
Standard Oil Company of California, Western Operations, Inc., is a Delaware
corporation which is engaged in California in the production, refining, sale, and
distribution of petroleum products. It annually ships such products valued in ex-
cess of $1,000,000 directly to points outside the State of California. I find that the
operations of Respondent affect commerce within the meaning of Section 2(6) and
(7) of the Act.
If. THE LABOR ORGANIZATION INVOLVED
International Union of Petroleum Workers, AFL-CIO, is a labor organization
within the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The issue
On January 19, 1961, Respondent and the Union entered into a collective-
bargaining agreement covering certain California operations of Respondent. The
Union subsequently brought about a termination of this agreement. Two exten-
sions of the agreement were agreed upon and the contract ultimately terminated on
October 5, 1962. The General Counsel attacks the conduct of Respondent in notify-
ing the Union on October 3 that Respondent would no longer honor a dues checkoff
clause subsequent to the termination of the contract, and by, on October 5, 1962,
discontinuing the checkoff of such dues.
B. Appropriate unit and majority representation therein
The complaint alleges, Respondent's answer admits, and I find that the unit de-
scribed below is a unit appropriate for the purposes of collective bargaining within
the meaning of Section 9(b) of the Act, and that Respondent at all times mate-
rial herein has been and now is the representative of the employees in said unit
within the meaning of Section 9(a) of the Act. The unit is:
All employees on the classified payroll of the Company for whom the Union
was certified as the collective bargaining representative in proceedings before
the National Labor Relations Board in the following entitled cases: Case No.
21-R-3059, Case No. 21-R-3107, Case No. 20-RC-164, Case No. 20-RC-275.
Motor Transport Department employees in California excluding those in the
San Francisco and Sacramento Sales Districts and all office and clerical
employees.
Field employees in California in the Purchase and Stores Department (ex-
cluding those in the Refineries), Pipe Line Department, Producing Department
(including those in operations conducted by the Natural Gasoline Department
at date of National Labor Relations Board proceedings in [Case No. 21-R-
3006] ), and Field Clerks in these departments.
C. Sequence of events
Respondent and the Union entered into the above-described contract on Janu-
ary 19, 1961, for a 1-year term covering the employees in the unit described above.
Article III thereof provided as follows:
ART III.-Voluntary Payroll Deduction of Union Dues
Employees covered by this Agreement may authorize the Company in writing
on a suitable form to deduct the regular monthly dues of the Union from their
wages and remit same to the Bakersfield Offices of the Union not later than
one month after the end of the payroll period in which the deduction is made.
Employees may at any time revoke such authorization by giving the Company
written notice on a suitable form, a copy of which will be sent to the Union.
It is conceded that over 1,700 of the employees in this unit had authorized dues
deductions in accordance with article III. The record does not disclose the number
of those in the unit. Each signatory signed a form which authorized Respondent to
deduct monthly dues "until further notice from me" and provided that said authoriza-
tion would remain in effect until canceled.
In November 1961, the Union served Respondent with notice that it desired to
amend and modify 12 articles of the contract, including article III, above, as well as 2
schedules. Meetings on these proposed changes commenced in March 1962. The
STANDARD OIL CO. OF CALIF., WESTERN OPERATIONS, INC. 523
proposals would have replaced the existing open shop and dues checkoff with an
agency shop. At the first meeting in March, the agency shop request of the Union
was discussed but not agreed to by Respondent. This difference of opinion persisted
throughout the ensuing meetings although at most of them there was no discussion
of the existing dues checkoff plan.
In June, a tentative agreement was reached but was rejected by the union member-
ship. Turning to the crucial meetings which are stressed herein by the General
Counsel, it is to be noted that the contract was due to terminate on August 5 and
that this was taken up by the parties on August 3. This original termination date
is not in dispute. In a discussion of the imminent expiration of the contract, Fred
Maguire of Respondent's labor relations department informed the union negotiators
that when the contract terminated, Respondent would cease the deduction of union
dues. The Union proposed a 1-week extension, but Respondent sought a 30-day
extension. The contract was then extended by agreement for 30 calendar days
beyond August 5.
At meetings on August 9 and 29, there was no mention of the dues checkoff. The
August 30 meeting was attended for the first time by Commissioner of Conciliation
Dunmire. Again, a company representative, either Maguire or E. C. Purtell of
Respondent's motor transport department, stated that dues deductions would be ter-
minated at such time as the contract ended. A Commissioner Dunmire's request,
the parties agreed to extend the contract through October 4, 1962.
The parties met again on October 2. According to International Representative
Edward Farmer of the Union, the subject of dues checkoff was not raised. Chair-
man Milford Jones of the Union's negotiating team testified that he asked which
provisions of the contract would remain in effect after the contract terminated and
the employer representatives replied, without objection, that they would be in a posi-
tion to respond to this on the following day.
On October 3 the Union notified Respondent that it was unwilling to extend the
contract further because, as Farmer testified, "negotiations had been declared at an
end by the Federal mediator." Jones then asked which contract provisions would
be honored by Respondent after the contract terminated. Maguire replied that
the contract provisions would be generally followed with two exceptions: (1) Re-
spondent would not follow the final portion of the grievance procedure which pro-
vided for arbitration, and (2) the dues checkoff would be discontinued.2
Respondent did offer again to extend the contract for another 30 days but the
Union refused for the reason, as Farmer testified, that "no progress was being
made in contract negotiations." Indeed, according to Farmer, Commissioner Dun-
mire had "declared'." that the parties had reached an "impasse." Purtell in behalf
of Respondent further announced that Respondent would continue to recognize
and bargain with the Union so long as it represented a majority of the employees
in the appropriate unit. The record indicates that recognition has never been with-
drawn. Indeed, on January 22, 1963, the parties entered into a new contract con-
taining a similar dues checkoff clause which was ratified by the union membership
on January 29, 1963, and is presumably now in effect.
D. Analysis and conclusions
(1) The parties have focused attention upon the Board's decision in Bethlehem
Steel Company (Shipbuilding Division), 136 NLRB 1500 (Supplemental Decision
and Order). They variously derive support from the language therein.
The conduct of the employer in that case was closely parallel to that of Respond-
ent herein-so much so that one may speculate that this Respondent patterned its
conduct upon that decision. The issue there, as here, was whether an employer
violates Section 8(a) (5) by refusing to honor certain language in a contract after its
expiration. The Board in Bethlehem noted that union-security and dues checkoff
clauses were terms and conditions of employment, as were such matters as preferen-
tial seniority for union stewards, and therefore all were mandatory subjects for col-
lective bargaining. Nevertheless, it distinguished a union-security and dues checkoff
provision and stated as follows:
Similar considerations prevail with respect to Respondent's refusal to continue
to check off dues after the end of the contracts. The checkoff provisions in
Respondent's contracts with the Union implemented the union-security pro-
visions. The Union's right to such checkoffs in its favor, like its right to the
imposition of union security, was created by the contracts and became a con-
2 issue is raised herein as to (1)
524 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tractual right which continued to exist so long as the contracts remained in force.
The very language of the contracts links Respondent's checkoff obligation to the
Union with the duration of the contracts. Thus, they read: ". . . the Company
will, beginning the month in which this Agreement is signed and so long as this
Agreement shall remain in effect, deduct from the pay of such Employee each
month ... his periodic Union dues for that month." Consequently, when the
contracts terminated, the Respondent was free of its checkoff obligations to the
Union. [Emphasis supplied.]
The General Counsel and the Union stress that portion of the foregoing which
notes that the contract itself provided that the dues checkoff would remain in effect
so long as the contract remained in force. Therefore, they argue that in the absence
of such a provision in the contract under consideration herein, a vital factor is
missing and different considerations apply.
Respondent, on the other hand, relies on the basic distinction made by the Board
in Bethlehem, viz, that this was a right created by the contract, and I am convinced
that this is both the logical position as well as the position which is compelled by
adherence to Bethlehem. The fact is that in making this distinction in Bethlehem,
the Board perforce relied on the distinctive treatment given union security under
the Act. As elsewhere stated in Bethlehem, "The acquisition and maintenance of
union membership cannot be made a condition of employment except under a con-
tract which conforms to the [union-shop] proviso of Section 8(a)(3) . . . How-
ever, upon the termination of a union-security contract, the union-security provisions
become inoperative and no justification remains for either party to the contract
thereafter to impose union security requirements."
The simple answer is that it is the language of the Act which perforce led the
Board to make the distinction it did in Bethlehem. True, it there referred to
"The very language of the contract," but this, I believe, was in the nature of a
buttressing argument. If the statutory language controls, it controls irrespective of
inclusion or exclusion in the contract of the reference to the contract which is relied
upon by the General Counsel and the Union. I find, therefore, that under the
aegis of the Bethlehem decision, Respondent was entitled to do precisely what it did,
viz, to abandon this portion of the contract after the contract expired.
(2) A second cogent consideration is presented by Respondent. It points out
that it did bargain with the Union for many months and that one of the issues was
the Union's demand for an agency shop which Respondent refused to accept. When
both 30-day contract extensions were made, Respondent informed the Union that it
took the position, and would adhere to it, that the dues checkoff clauses would be
continued only so long as there was a contract. The Union was clearly on notice
of what Respondent proposed to do.
The record warrants the finding, as Respondent contends, that an impasse was
reached. Farmer conceded that the Union on October 3 was unwilling to extend
the contract further because negotiations had been declared at an end by Com-
missioner Dunmire, and further, that "no progress was being made in contract
negotiations." When asked if the parties had "reached an impasse," he replied,
"The Federal mediator had so declared."
Respondent points to well-established authority that when an impasse is reached
in negotiations, and the bona fides of Respondent in these negotiations is not other-
wise attacked, an employer may effect unilateral changes or make unilateral offers
to the extent of his last offer to the Union so long as no greater inducement is
offered to the employees. N.L R.B. v. U.S. Sonics Corp., 312 F. 2d 610 (C.A. 1).
Respondent argues that it is not required to grant to the Union what it offered,
namely, a dues checkoff clause conditioned upon an accompanying contract, when
the Union flatly rejected this condition. Respondent contends, and I agree, that
in the presence of an impasse, Respondent did no more than to act within the terms
of its offer to the Union, that is, a checkoff with a contract or no checkoff without
a contract. Inasmuch as the Act imposes upon both parties the obligation to bar-
gain collectively for a contract and sign it if agreement is reached, it can hardly be
contended that Respondent, having complied with the mandate of Section 8(d), has
demonstrated any hostility to the objectives of the Act; indeed, a contrary inference
is warranted.
(3) It is further contended that Respondent has not bargained collectively in
good faith because it has acted in derogation of the unrevoked dues checkoff
authorizations of employees in the unit.3 This, I believe, amounts to putting the
'It is not contended that dues deduction authorizations had been signed by all in the
unit Since this checkoff was permissive rather than mandatory in this large unit, it is a
logical inference that all had not executed them.
STANDARD OIL CO. OF CALIF., WESTERN OPERATIONS, INC. 525
cart before the horse. The Union has bargaining rights because it has been so
designated by the employees in the unit. On the other hand, Congress, in an effort
to protect employees against unwarranted or improper usurpation of their wages,
has seen fit to restrict dues checkoffs to cases where they have been duly authorized
in writing by the employees.
Section 302 of the Act, aptly entitled "Restrictions on Payments to Employee
Representatives" flatly forbids, inter alia, any employer to pay, and any labor or-
ganization to accept, any moneys, with certain exceptions. One of these exceptions
is "with respect to money deducted from the wages of employees in payment of
membership dues in a labor organization." Following immediately is a proviso
which states:
... Provided, That the employer has received from each employee, on whose
account such deductions are made, a written assignment which shall not be
irrevocable for a period of more than one year, or beyond the termination date
of the applicable collective agreement, whichever occurs sooner; ... .
This certainly indicates an effort to protect the employees against dues checkoffs
for periods of undue length. Indeed, it flatly makes all checkoffs revocable no
later than the time a contract ends. In brief, this section which has been placed
in the Act to protect the employee does not lend itself to transposition into a right
inherent in the bargaining representative.
(4) Another factor herein warrants consideration. The checkoff clause in this
contract is not compulsory but is rather a permissive one. Precisely, it is applicable
only to those in the bargaining unit who have signed dues checkoff authorizations
and has no force or application whatsoever with respect to those who have refused
to sign.
Is this then a condition of employment in the commonly recognized sense of the
term which is applicable to all in the unit? While a union shop and compulsory
dues checkoff is a condition of employment, and hence a subject for mandatory
bargaining, even that, under the Bethlehem decision, does not survive the expira-
tion of a contract. It would seem that this much milder and purely permissive
form of legal union assistance would have far less vitality and may very well not
constitute a condition of employment concerning which mandatory bargaining may
be compelled.
In view of all the foregoing considerations, and particularly in view of the con-
trolling logic and application of the Bethlehem decision, supra, I find that Respond-
ent has not refused to bargain in good faith within the meaning of Section 8(a) (5)
of the Act. Indeed, in its March 1963 brief, p 25, to the Court of Appeals for the
Third Circuit in the Bethlehem case, the Board distinguished ". . . union shop clauses,
which are controlled by the express terms of the proviso to Section 8(a)(3) and
thus, unlike seniority provisions, may not lawfully be continued after the termina-
tion date of the underlying agreement " Bethlehem Steel Co. v. N.L.R.B., Nos.
14052 and 14102? I shall accordingly recommend that the complaint be dismissed
in its entirety.
CONCLUSIONS OF LAW
1. The operations of Respondent , Standard Oil Company of California , Western
Operations , Inc., affect commerce within the meaning of Section 2(6) and (7) of
the Act.
2. International Union of Petroleum Workers , AFL-CIO, is a labor organization
within the meaning of Section 2(5) of the Act.
3. Respondent has not engaged in unfair labor practices within the meaning of
Section 8(a) (5) and (1) of the Act.
RECOMMENDATIONS
In view of the foregoing findings of fact and conclusions of law, it is recommended
that the complaint be dismissed in its entirety.
'This of course is consistent with long established doctrine that a union-security or
maintenance-of-membership clause cannot support discharges of employees who have re-
si;ned in a period of hiatus between two contracts. International Union, United Auto-
mobile, Aerospace, Agricultural Implement Workers of America (UAWV), AFL-CIO, and
its Local 899 (John I. Paulding, Inc.), 142 NLRB 296.