Stein Industries Inc.

National Labor Relations Board - Administrative Judge Opinions

Apr 27, 2015

29-CA-134711 (N.L.R.B. Apr. 27, 2015)

JD(NY)–18–15
Amittyville, NY
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
NEW YORK BRANCH OFFICE
STEIN INDUSTRIES INC.
and Case 29-CA-134711
NEW YORK CITY AND VICINITY DISTRICT
COUNCIL OF CARPENTERS
Erin E. Schaefer, Esq., for the General Counsel.
Alan B. Pearl and Brian J. Shenker, Esqs.
(Alan B. Pearl & Associates, PC),
of Syosset, New York, for the Respondent.
Lydia Sigelakis, Esq. (Spivak Lipton, LLP),
of New York, New York, for the Union.
Decision
Statement of the Case
STEVEN DAVIS, Administrative Law Judge. Based on a charge filed on April 14,
2014, by the New York City and Vicinity District Council of Carpenters (the Union), a complaint
was issued against Stein Industries Inc. (the Respondent or the Employer) on October 30, 2014.
The complaint alleges and the Respondent admits that on July 8, 2014, following
meetings for the purpose of negotiating a successor collective-bargaining agreement, the
Respondent provided the Union with its final contract proposal and declared an impasse in
bargaining.
The complaint also alleges but the Respondent denies that (a) its declaration of impasse
was premature; (b) it implemented changes in the contract which differed from the final proposal
made to the Union; and (c) it implemented those changes without first bargaining with the Union
to a good-faith impasse.
Finally, the complaint alleges and the Respondent admits that the subjects contained in
the final proposal and in the implemented changes relate to wages, hours, and other terms and
conditions of employment of the collective-bargaining unit and were mandatory subjects for the
purposes of collective bargaining.
The Respondent’s answer denied the material allegations of the complaint and asserted
certain affirmative defenses which will be discussed below. On January 14 and 15, 2015, a
hearing was held before me in Brooklyn, New York. On the entire record, including my
observation of the demeanor of the witnesses, and after considering the briefs filed by all
parties, I make the following
JD(NY)–18–15
2
Findings of Fact
I. Jurisdiction and Labor Organization Status5
The Respondent, a domestic corporation, having an office and place of business in
Amityville, New York, has been engaged in the manufacture and nonretail sale of concession
stands. In the course of its operations during the year ending December 31, 2013, the
Respondent purchased and received goods and materials at its Amityville facility valued in
excess of $50,000 directly from points located outside New York State. The Respondent admits 10
and I find that it is an employer engaged in commerce within the meaning of Section 2(2), (6),
and (7) of the National Labor Relations Act (the Act).
The Respondent also admits and I find that the Union has been a labor organization
within the meaning of Section 2(5) of the Act.15
II. The Alleged Unfair Labor Practices
A. The Facts
20
1. Background
The Respondent currently employs between four and six employees. It has been a party
to agreements with the Union for 40 years. Its last contract, which ran from July 1, 2007, to June
30, 2012, set forth the appropriate unit as follows:25
All foremen, journeymen mechanics, carpenters, bench hands,
machine men, cabinet makers, model makers, sprayers,
varnishers, wood finishers, wood carvers, and turners, kalamein
men, apprentices, helpers, unskilled and semi-skilled production 30
workers, metal workers and all other employees doing production
and maintenance work, except a caretaker of a building.
The Union has two types of agreements with employers. The first is a Memorandum of
Agreement (MOA) with the Manufacturing Woodworkers Association (the Association) for 12 35
employers who are members of that Association. That contract is negotiated and executed by
the Association and the Union. The Respondent is not a member of the Association.
The second is an Independent Shop Agreement called the Memorandum of
Understanding (MOU) executed by independent employers who are not members of the 40
Association. The MOU has the same terms as the MOA. Typically, the independent shops are
presented with the “me-too” MOU and are asked to sign it.
For the past 40 years the Respondent has signed the Independent Shop Agreement,
apparently without any negotiation or re-negotiation of its terms, and it did so in the last contract 45
which expired in June 2012. Although the union agent expected the Employer to sign it following
the expiration of that contract, it did not.
2. The negotiations
50
Andrew Mucaria and Robert Villalta negotiated for the Union. The Respondent’s
representative was Mark Portnoy. He was occasionally joined by his client, the Employer
JD(NY)–18–15
3
president, Andrew Stein.
On April 9, 2012, Portnoy wrote to Mucaria, advising that he sought to negotiate a new
agreement and asking that meetings be scheduled.
5
One and one-half years later, in September 2013, Portnoy wrote again, asking Mucaria
to contact him so that negotiations could begin. Mucaria replied, advising that “historically, Stein
has always signed an independent agreement that mirrored the other shop agreements. The
[Union] is currently in negotiations with the [Association] and should be completed soon. As
soon as it is completed we can send it over for your review. . . .”10
Portnoy replied that “we want to negotiate our own terms and conditions. The
Association is not authorized to bargain on behalf of [the Employer] and we are not bound by
any terms or conditions they bargain for with the employers they are negotiating with. Please
advise me of dates we can meet to enter into negotiations.”15
Portnoy wrote in October 2013, suggesting specific negotiation meetings on five dates in
early November. Mucaria replied that two of those dates were available. On December 4,
Portnoy asked for a date to negotiate in the next 2 weeks.
20
a. The November meeting
Portnoy testified that he met with Mucaria on November 6, 2013. He explained that the
Employer is a small company performing work in a specialized area – the construction of movie
theater displays and counters. He complained of great worldwide competition and a smaller 25
market for his work which is not similar to other Independent Shop Agreement signatories.
Portnoy asked for concessions and Mucaria replied that concessions would be given.
Mucaria conceded that he met with Stein in November 2013, but that meeting did not
concern negotiations. He supported that statement by noting that the Association agreement 30
had not been finalized until January, and he was waiting for that agreement to be executed
before beginning negotiations with the Employer.
b. Events in 2014
35
On January 23, 2014, Portnoy wrote to the two union agents, asking that they set a date
for negotiations. The following day, Villalta replied that the Union can meet on “February 13, we
can meet to discuss the Independent Agreement but not to negotiate.” At the time of the
hearing, Villalta was employed by the Union and available to testify but did not.
40
On January 29, Mucaria wrote that “we should have the offer for all independent shops
ready in approx. 1-2 weeks. As soon as it is ready I will contact you.”
One and one-half years passed between the time the contract with the Respondent
expired in June 2012 and the Association contract was signed in January 2014. It was only then 45
that Mucaria “decided that negotiations could go forward with Stein.” He stated that he was “not
inclined to meet with the Employer” until the Association contract was executed, and told the
Respondent that he was not prepared to negotiate with it until agreement was reached on the
Association contract. Further, he stated that the Union was “not prepared to negotiate until we
completed the [Association] negotiations in January, 2014. . . . .. Our position was when we 50
finished the Association negotiations is when we were going to start with Stein.”
JD(NY)–18–15
4
On February 19, 2014, Portnoy wrote that “it is now three more weeks without a
meeting.” He asked for meeting dates. Mucaria wrote that day that he was “working diligently to
put together a fair and equitable proposal for you” and was available on February 27 or 28, or
on March 3 or 4.
5
Given the dates suggested by Mucaria, I cannot credit his testimony that a negotiation
session took place on February 24. The above emails indicate that a meeting was not
contemplated by him until February 27 at the earliest. Portnoy denied that there was a February
meeting. Further, given the amount of time between meetings, it is doubtful that two substantive
meetings would have occurred 1 week apart, on February 24 and March 4.10
I accordingly find that the first negotiation meeting took place on March 4.
c. The March 4 meeting
15
At the time of this meeting, nearly all the independent shops had signed the MOU or did
so shortly after March 4. The Union was represented by Villalta. Mucaria was not present.
Portnoy expressed his concerns regarding the Employer’s ability to compete in the current
market.
20
The Union presented the Independent Shop MOU which was essentially the agreement
reached between the Union and the Association in January. He explained that the MOU
contained “major concessions” – reductions in terms and conditions of employment from the
Respondent’s expired contract.
25
The Union’s proposed agreement set forth the following terms:
1. All new hires will be paid at the Tier II rates for wages ($22.00 per hour) and benefits
($10.94). Benefits will be provided pursuant to the Hollow Metal Welfare Fund.
[Mucaria testified that these rates represented a $10 wage cut and about a $10 30
benefit reduction for new employees as compared to the expiring contract, and that
this proposal helped the Employer by hiring new employees at a lower rate, thereby
lowering its costs. He further stated that the cost of the benefits from the Hollow
Metal Benefit Fund are less costly to the employer than the Union’s Benefit (Big)
Fund which was the current carrier for the Union. Mucaria also testified that the Tier 35
II employees would have no prescription drug coverage, and fewer physicians to
choose from]
2. All fringe benefit contributions for all hours paid at the Tier II rate are capped at 40
hours per week.
[The prior contract required contributions for all hours worked]40
3. Ten year contract.
4. Tier I employees receive a 1% increase in February, 2014 and a 2% increase in July,
2014. Tier II employees receive a 2% increase in July, 2014.
5. The Employer had the ability to send more than 2 employees on a job which had
been the limitation imposed by the expired contract.45
In addition, the MOU provided for disputes to be arbitrated before Martin Scheinman.
The Union made no proposal to change the benefits for Tier I employees.
Portnoy testified that the Union never made any other proposal, and Mucaria conceded 50
that the Union did not submit another MOU to the Employer during negotiations.
JD(NY)–18–15
5
Portnoy presented the Employer’s proposal, as follows:
1. All employees’ wage and fringe package shall be the Union’s described Tier II
package for the duration of the contract. No one shall be designated Tier I during the
term.5
2. Add Ira Cure to the Arbitration Panel with Roger Maher.
3. The Employer shall have the unlimited right to subcontract work.
4. The Employer shall have the right to establish reasonable work standards.
5. Three year agreement.
10
The Employer’s first, but unwritten, wage proposal was for a wage freeze at the current
$30-per-hour level. Then, apparently seizing on the Union’s proposal to pay new hires at a Tier
II level, the Respondent proposed that all its workers, current and new hires, receive
compensation at that level, which was $22 per hour.
15
Portnoy conceded that that was a regressive proposal, since his original proposal was
that wages be frozen at the then current rate of $30 per hour. However, he stated that it was a
“proposal, it was not meant to be a settlement. It was meant to get talking going.”
Thus, the Employer applied the Union’s lower Tier II rates to all its employees, and 20
eliminated the higher paid, Tier I category. The Union regarded the proposal as
“counterproductive” to its concessions, and considered proposals 1, 3, and 4, above,
“completely offensive.”
Mucaria testified that as to the subcontracting provision, the union agents considered it 25
be contrary to the Union’s standards, adding that no other union shops had a contractual
provision permitting unlimited subcontracting. Nevertheless, he stated that he would have taken
that proposal “into consideration” since he had the authority to approve or disapprove that
clause, but he would not consider the Employer’s demand for unlimited subcontracting until the
Employer made other, positive, progressive proposals.30
Regarding the reasonable work standards clause, Mucaria testified that such a proposal
created a quota for employees which was contrary to the Union’s standard of a “fair day’s work
for a fair day’s pay,” but that he would agree to that proposal, if the Employer made a better
proposal on wages and benefits.” Mucaria also stated that the Union was receptive to reviewing 35
language drafted by the Employer which did not involve imposing quotas on the employees. As
noted above, Mucaria was not present at this bargaining session.
Portnoy testified that after presenting the Employer’s proposal, Villalta said that there
could be “no deviation” from the Union’s proposal - “this is where we have to go.” 40
Portnoy stated that after discussing the proposals, he made the identical proposal as he
had before, with the exception that instead of eliminating Arbitrator Roger Maher from the
arbitration panel, he proposed adding Ira Cure to the panel with Maher. However, it should be
noted that the Respondent’s first written proposal that day states “add Ira Cure to the arbitration 45
panel with Roger Maher.”
After the meeting, Mucaria and Villalta discussed with Union Vice President Michael
Cavanaugh whether they should make a counterproposal or ask the Respondent to make
another offer. They told Cavanaugh that “although traditionally Stein has always signed on to 50
the independent shop agreement with no negotiations, we do feel that we could possibly move
off the independent MOU for the independent shops and continue to negotiate separately for
JD(NY)–18–15
6
Mr. Stein.” Cavanaugh was not happy with the Employer’s proposal but told the men that he had
“absolutely no problem. If the employer claims to be in a financial hardship feel free to continue
negotiating and we’ll go from there.”
d. The April 4 meeting5
The Employer presented the same proposal as at the prior meeting. Portnoy told the
Union that the Respondent needed economic assistance in the Union’s proposals. Mucaria said
that the Union could do so but that he first “had to come back with a more realistic proposal in a
positive way, not just taking all the concessions we gave and then asking for additional 10
concessions.”
At that point, according to Mucaria, the Employer president, Andrew Stein, became irate,
stood up, said that this is “ridiculous,” he did not “need this,” and would leave. Mucaria
responded that although the Union had no official counterproposal it was “willing to come off our 15
proposal; but you need to move in the correct direction in order for us to do that.”
Portnoy stressed the fact that the Respondent was “still experiencing financial
difficulties, and trying to help himself stay in business,” and that it would not survive without
economic help from the Union. 20
Stein left the room and Portnoy asked the union agents to give him some time to speak
with his client. According to Mucaria, Portnoy told the representatives that the Union made
“great concessions and a great deal of movement with the initial proposal” but the Employer
needed more. Portnoy purportedly commented that the Union’s proposal was “fair” and that 25
Stein was being “totally unreasonable, greedy and wanting more” in refusing to agree to it.
In contrast, Portnoy testified that the Union’s proposal was “horrible” – it was not a great
cost-savings opportunity for the Employer and “we weren’t going to accept it.”
30
Portnoy stated that he reiterated the Employer’s need to subcontract work and Mucaria
said that he was “hesitant” to agree to that proposal. Portnoy wanted all employees to receive
compensation in Tier II and Mucaria replied “absolutely not.”
Portnoy said that he was “reluctant to impose any terms, but if you have nothing else to 35
offer, I have nothing to offer. Let’s just set another date.” Mucaria stated that he was prepared to
make a counteroffer to the Respondent’s proposals but did not.
e. The June 25 meeting
40
No proposals were made at this 1-hour meeting. Portnoy testified that he asked the
Union for a proposal and it did not produce one, with Mucaria replying, “[W]e don’t need another
proposal. The Tier II savings was of great value to the Employer and that we had to focus on it.”
Portnoy replied that the Union’s proposal was increasing the Respondent’s cost. He was 45
frustrated by the Union’s refusal to make a second proposal. He said that Mucaria rejected his
proposals that were still pending from the prior meeting. The Union agreed to add Ira Cure as
an arbitrator and “explicitly” rejected the Employer’s economic proposals but failed to make a
counterproposal on economic terms.
50
JD(NY)–18–15
7
f. The July 8 meeting
Portnoy testified that he asked the Union if it had a proposal. It did not, and he advised
the Union that “we are not moving because you won’t negotiate.”
5
The Employer again presented its offer:
1. All employees wage and fringe package shall be the Union’s
described Tier II package for the duration of the contract.
No current employee shall be paid less than $22.00 per hour. 10
Tier I category is removed from the contract.
New hires shall be paid no less than $20.00 per hour.
2. Add Ira Cure to the Arbitration Panel with Roger Maher.
3. The Employer shall have the unlimited right to subcontract
work. 15
4. The Employer shall have the right to establish reasonable
work standards.
5. Three year agreement.
Other terms remain in effect.
6. These terms will be in effect on 7/15/14. The company is 20
available to discuss these terms at any time between now and
then.
This was the same proposal as previously made, with the addition in proposal number
one that “new hires shall be paid no less than $20.00 per hour.” This represented a reduction in 25
the prior offer since the proposal made on March 4 was that all employees would be paid at the
Tier II rate, which was $22 per hour.
According to the Respondent, proposal number 6 was omitted from a first draft given at
this meeting, but was added later during the meeting. Mucaria denied that proposal 6 was on 30
the paper given to him, conceding, however, that Portnoy advised him orally that the Employer
was available to discuss the terms within the next week.
Mucaria testified that he rejected the offer of Tier II wages and benefits for all employees
because he believed that he had a responsibility to the Union and its members to obtain the 35
best deal possible and not go backwards. He believed that the Union’s delegates were likely to
reject that proposal. Portnoy quoted Mucaria as saying the proposal for Tier II wages and
benefits for all employees “will never happen. One hundred delegates from all locals have to
vote on anything we agree to. They’re never going to agree to this. This won’t fly. The delegates
will vote and even if the members ratify it, it won’t pass unless the delegates agree and this will 40
never pass. You have mirrored the group all of these years.”
Mucaria agreed that Ira Cure be added as an arbitrator,
Portnoy testified that he told Mucaria that “we are not moving because you won’t 45
negotiate.” He specifically asked if the Union would agree to a 3-year contract as proposed by
the Employer. Mucaria said, “[N]o, we’re looking for a 10 year agreement.” Portnoy’s notes
state, “[S]o you won’t agree to three years?” and Mucaria said, “[N]o.”
However, Mucaria testified that he told Portnoy that he would agree to a contract term 50
other than 10 years. Mucaria denied saying that the Union was “bound” to a 10-year contract.
Mucaria testified that he was willing to move down in the direction of a 3-year contract, and
JD(NY)–18–15
8
would “work out something other than a 3 year contract, but it did not have to be a 10 year
deal.”
He told Portnoy that he did not understand why the Employer would not want a long-
term contract “but it that’s what the company is looking for, we’re willing to do that,” meaning 5
that the Union would entertain some term less than 10 years. He told Portnoy that the Union
would be willing to move off its 10-year proposal toward his 3-year proposal “upon a more
favorable proposal on wages and benefits.” In this regard, Mucaria testified that he did not
propose a 3-year contract. His proposal was that he would “come off” the 10-year proposal but
set no firm figure. 10
Mucaria also said that the Respondent’s request for reasonable work standards was “too
broad, unacceptable and totally against everything we ever stood for.” However, he was willing
to “work something out” if that clause was modified, but that the Employer still “needed to come
back with a better proposal on wages and benefits.” He added that he could include the work 15
standards proposal in the agreement if it was “cut and dry” and would not create a quota of
products an employee had to produce.
Portnoy then asked if the Union would change its proposals. Mucaria said that he
wanted “some positive movement by you.” Portnoy told Mucaria, “[Y]ou are not being 20
responsive we’re having trouble competing in our industry. We need help,” and testified that
Mucaria refused to make a counterproposal. Portnoy then said, “[W]e’re not making any
progress. You won’t’ change your proposal. You really can’t change your proposal, so I’m going
to give you a final offer,” adding that he would be prepared to discuss the offer any time during
the next week, but that the terms would be imposed 1-week later. 25
Then Portnoy presented a “final proposal” which consisted of the same terms he last
made, with the addition that the Employer agreed to discuss its terms with the Union for 1 week
before they were implemented. Portnoy conceded that there was nothing new in this final offer
that he did not present to the Union in previous meetings.30
Mucaria testified that the two agents were in “shock.” He asked Portnoy, “[H]ow are you
giving us your final offer? First of all we’re still making positive movement, we just need you to
also participate in the positive movement . . . we’re not done negotiating.” Portnoy replied that
this was the Employer’s final offer which would be implemented the following week.35
Mucaria testified that he told Portnoy that it was “highly unlikely” that the Employer’s
proposal would be approved by the delegates, and that it must be modified and needs to be a
more positive proposal. He noted that if he had a “decent” wage and benefit proposal it would
be “easier” for the delegates to approve it. 40
Portnoy stated that he did not expect that his initial proposal would be accepted
immediately without any quid pro quo, but that the Union believed its initial proposal would be
accepted immediately. Accordingly, Portnoy believed that the Union had no intention to bargain.
Mucaria’s assessment of the negotiations was that he “did not think that he would likely reach 45
an agreement with the Employer.” He termed the Employer’s proposals concerning wages,
benefits, and the unlimited right to subcontract work “unfair and unrealistic.” In addition, he
stated that he had “no intentions of agreeing to anything until I had an entire MOU to agree on.”
Mucaria testified that, as of July 8, no tentative agreement had been reached, and 50
accordingly he did not refer any of the proposals to higher levels of the Union for approval.
JD(NY)–18–15
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g. Events following July 8
On August 5, Portnoy sent a letter to the Union advising that the Employer “presented its
final offer on July 8, 2014, when we reached an impasse. No meetings or requests for further
discussions have occurred since we last spoke on July 14. Accordingly, the company will5
implement that final offer on Monday. Employees, as needed, will be told that work is available
under the implemented terms.”
Mucaria called Portnoy, expressing surprise that he implemented his last offer. Mucaria
offered to “sit down again, let’s try and make some movement. I don’t feel that we’ve reached 10
impasse.”
On August 11, the Employer sent a letter to employees advising that work was available
“under the terms of employment recently implemented by the company. Your hourly rate will be
$22.00 and your benefits will be with the Union’s Tier II Package.”15
On August 13, the Union’s attorney wrote, denying that an impasse had been reached,
and said that the Union “fully intends to continue bargaining.” The Union proposed two dates to
meet to bargain, one being August 28. Portnoy conceded that following his declaration of
impasse on July 8, Mucaria contacted him “on more than one occasion to set up successive 20
meetings.”
h. The August 28 meeting
Mucaria asked Portnoy to make another proposal. Portnoy replied that there was “no 25
point” in doing so. Portnoy quoted Mucaria as saying that the Union had “room to move, but you
have to come close enough to convince us that it’s worth going to ask whether we can deviate
from the agreement.” Portnoy testified that he responded that he was “never going to get that
close. Give me something that can be the savings that we’re looking for and let’s bargain.”
30
The union agents told Portnoy and Stein that they would be “more than happy to move
from our proposals but we couldn’t do it in good conscience before [you] made a proposal that
went forward instead of backward like [your] previous proposal.”
The Employer stated that it was having economic hardships and difficulty competing in 35
the market. Mucaria offered to help “but we needed to be realistic in the way that we did it.”
According to Mucaria, he asked for a proposal from the Employer and, in turn, the
Employer asked the Union for another proposal. Nothing was forthcoming from either party.
40
Portnoy suggested having a mediator enter the negotiations. Mucaria agreed with that
suggestion but proposed that the Respondent “open up their financials to us to prove that
they’re having such financial difficulties.” Mucaria suggested that, after the financial documents
were reviewed, each party could make another proposal, and then the mediator could enter the
negotiations. 45
Portnoy testified that Mucaria said, “[W]e have room to move but I need a better
proposal from you. We offered concessions. We want the proposal from you.” Portnoy replied,
“[N]othing I propose can come close to your level. Give us a package. There’s no point in
making small moves. Show us something.”50
JD(NY)–18–15
10
Portnoy added, “[Y]ou showed us that we can be in the Hollow Metal Fund. If you can
live with the wage and fringe package it would be a big help here. If you can live with this wage
and fringe package is the goal here. We can’t compete. Our competition is nonunion. Your
benefits are too high. No one has the structure. Show us how to get the savings we are looking
for.”5
Mucaria replied, [H]how do I know you aren't going to reject our next package?” Portnoy
said, “[W]e’ll review concessions that you show us. We used your package and just applied it to
everybody. Give us another proposal to save money.” Mucaria said, “[W]e gave you our
proposal from the District Council. We’re too far apart. The Council might let us move if you 10
show movement . . . something more realistic . . . otherwise not.”
Portnoy said that the $35-wage and fringe payments were too high. “There’s no point in
changing our position. Give us an offer. Maybe through a mediator we can protect our
positions.”15
Portnoy again described the extreme financial distress the Employer was facing – wages
and its cost of doing business were too high. Portnoy testified that he was frustrated. “They
wouldn’t make a proposal. I was not going to come in with a proposal.” He told Mucaria,
“[T]here’s no point in going back and forth. This has gotten too far.” Mucaria replied, “We don’t 20
want to make a proposal to you that you’re going to reject and that is not going to make any
progress.” Portnoy answered, “[I]f you want to protect your position and you don’t want to do it
publicly, do it through a mediator. There’s lots of ways to make proposals, but if you’re not
willing to move from your proposal, we’re never going to make an agreement.”
25
No meetings were held after the August 28 meeting. Mucaria stated that he intended to
meet with the mediator once he received the financial records, noting that “I conditioned the
next meeting on getting the financials.” However, inasmuch as no complete financial
documentation was sent to him, as described below, he saw no need to request another
meeting. 30
Mucaria testified that certain of the Union’s proposals were not discussed during
bargaining. They included the capping of benefit contributions at 40 hours per week; special
arrangements for manning which permitted the Employer to use additional employees for
installations; and the proposal that once an employee was promoted from Tier II to Tier I he or 35
she could not be reverted to Tier II; electronic recording of time worked by employees; the time
limit for the Employer to make benefit contributions; and withdrawal of members from work if
such payments are not made. There were minimal discussions concerning the proposed
increases in wages.
40
Portnoy conceded not discussing union proposals concerning the electronic recording of
time, and the time period for the payment of benefit contributions. As to the latter proposal,
Portnoy testified that he assumed that the Employer is subject to the terms of the trust
agreement, and that is an issue that is usually discussed on the last day of bargaining, and is
not a matter to bargain about. He further stated that the Employer accepted, as part of the Tier II 45
proposal, the capping of benefit contributions at 40 hours.
i. Later events
On September 9, Mucaria wrote to Portnoy “if the company is going to request that we 50
give another proposal with further concessions I will need to see proof to his claim that the
company is experiencing extreme financial hardship.”
JD(NY)–18–15
11
On September 11, Respondent Attorney Alan Pearl wrote to Board Attorney Erin
Schaefer. The letter stated that the Employer was supplying letters from the Employer’s
accountant who filed U.S. Income Tax Returns and New York State Tax Returns for 2011, 2012,
and 2013. 5
Pearl’s letter, which was sent to the Union 1 week later on September 18, contained
Pearl’s analysis of the tax returns and his discussion with the firm’s accountant in which Pearl
concluded that in those 3 years, the Employer lost a total of $716,848, and that Stein
contributed $484,000 to the Employer. The letter did not contain the accountant’s letters.10
Mucaria received Pearl’s letter but did not receive any of the letters presumably supplied
to Schaefer. Nor did he receive any other financial statements or supporting documentation
from the Employer. The Employer concedes that Pearl’s letter was the only document sent to
the Union.15
3. Pay received by employees
A pay stub from current employee Felix Rodriguez was received in evidence. It shows a
pay rate of $30 per hour during the months of September through December 2014. 20
The Employer sent payments for Rodriguez to the Carpenters Benefit (Big) fund for
fringe benefits at the lower rate provided by the Hollow Metal Fund. The checks were returned
to the Employer with the notation that the Employer “does not have a signed current collective-
bargaining agreement with the New York City District Council of Carpenters.”25
The Respondent was not eligible to participate in the Hollow Metal Fund because it had
not signed a collective-bargaining agreement with the Union providing for coverage by that
Fund. Accordingly, neither Rodriguez nor other Respondent’s employees were covered by the
Hollow Metal Fund. 30
The Respondent’s Affirmative Defenses
The Respondent claims that the Union’s negotiators, Mucaria and Villalta, were “only
authorized to propose and agree to the terms bargained with the Association.”35
In contrast, Mucaria testified that he and Villalta had full authority to negotiate an
agreement that they believe is fair for the employees and the Employer. He further testified that
he had authority to “approve or decide not to approve prior to moving forward with negotiations.”
He had the authority to make decisions at the bargaining table and then the Union has “checks 40
and balances” because of its democratic process requiring the negotiators to seek approval of
the agreement at higher levels. He does not submit individual proposals to the Union until
negotiations have been completed, resulting in a tentative agreement.
Mucaria testified that neither he nor Villalta spoke to Joseph Geiger, the Union’s 45
executive secretary-treasurer, regarding these negotiations. Nor did Geiger instruct them in
tactics when he bargained with the members of the Independent Shop Association.
He stated that during the negotiations he told the Respondent that he had to obtain the
Union’s approval of the agreement, and gave his opinion whether certain proposals would or 50
would not be approved by the Union, often saying, “[T]his will never get approved and will never
pass,” adding that they should “keep moving” until they agree on a term that is “more realistic
JD(NY)–18–15
12
that will get passed.”
However, Mucaria stressed that the above procedure does not inhibit his ability to make
a proposal, or negotiate, or reach agreement, although it does cause him to consider whether
the agreement reached will be approved by the delegate body. 5
Following agreement with the Employer, the contract is presented to the Union’s
executive committee which is comprised of the president and vice president, and the executive
delegate from each local. After they approve the agreement and recommend that it be ratified, it
is presented to the delegate body comprised of 100 delegates which then votes to approve or 10
disapprove.
Mucaria stated that the Respondent had the ability to negotiate independently, without
being bound to the MOA of the Association, and the Union was willing to bargain a contract with
it which differed from the MOU. 15
Indeed, Mucaria testified that the Respondent was the only independent shop which had
not signed the Memorandum of Understanding as of July 8, 2014, noting that as the contracts
were sent to the independent shop employers they would sign them and return them
immediately. The Respondent was the only shop that did not do so. 20
Portnoy quoted Villalta, who did not testify, as saying that “I’m sure 99% we can’t deliver
anything other than the independent agreement.” Portnoy protested that that was not fair, and
Villalta replied that he agreed, but that it is “not in my control.”
25
The expired MOA between the Association and the Union, and the expired Independent
Shop Agreement between the Employer and the Union contains the following clause in article I,
section 7:
The Union shall utilize its best efforts to monitor all woodwork 30
installed within its jurisdiction and confirm that said woodwork was
manufactured by a shop, which either is a signatory to this
agreement or in the alternative manufactured by a shop that is
paying equal to or better than the wages and fringe benefits
provided for in this agreement. The Union shall not allow the 35
installation by any of its members of any woodwork, which is
identified as not being furnished and/or manufactured by a
signatory to this agreement or in the alternative which is not
furnished and/or manufactured by a shop that is paying equal to or
better than the wages and fringe benefits provided for in this 40
agreement subject to applicable law.
When the MOU was renegotiated and executed in January 2014, the second
sentence, above, was deleted. Thereafter, the MOU presented by the Union to the Respondent
as its offer provides that that sentence “shall be deleted.”45
The apparent reason for the deletion of the second (most favored nation) sentence is
that a grievance was filed by the Association against the Union claiming that the Union had
entered into a contract with Gilbert Displays, Inc. which provided for better wages and benefits
than those set forth in the Association contract. 50
JD(NY)–18–15
13
An arbitrator sustained the grievance, and an award of $8 million to Gilbert was paid by
the Union. The Respondent argues that the Union was precluded from granting more favorable
terms to Stein than those in the Association contract because it feared another grievance and
huge award. The Employer concludes, therefore, that the Union was unable to modify the terms
of the Association contract and therefore had no choice but to refuse to change its original 5
proposal.
The Respondent concludes from this that, despite its good-faith effort to bargain and
reach agreement, the Union would not, and could not change its original offer which mirrored
the Association (MOA) agreement. 10
Mucaria testified that neither he nor Villalta gave any assurance to Association members
that members of the Independent Shops would receive more favorable terms and conditions in
any renewal agreement.
15
Mucaria testified that if the Employer received better terms in these negotiations than
other Independent shops, he would not expect that an arbitration matter would be filed against
the Union by the Association because there is no most-favored-nation clause in the other
contracts in force nor in the proposal offered to the Respondent. Indeed, because the second
sentence of that clause has been deleted from the Association contact and the Independent 20
Shop Agreement, the Union would have no liability if it deviated from the terms of those
agreements.
The Respondent further asserts that although the second sentence was deleted, the first
sentence remains in the MOU. The first sentence requires the Union to “utilize its best efforts to 25
monitor” work performed by shops within its jurisdiction and “confirm” that such work is
performed by employers who pay equal to or better than the wages and benefits set forth in the
Association contract.
Accordingly, the Union now simply “monitors” and “confirms” that shops pay equal or 30
better terms. There is no language in the new Association or Independent shop contracts which
provide that the Union “shall not allow” the installation by its members of products which were
manufactured in a shop paying terms more favorable than those provided in the Association
contract.
35
Portnoy’s notes added that Mucaria stated that the Union would take a strike vote.
Mucaria stated that he did not threaten to strike the Employer. However, he stated that in later
meetings with Portnoy, in an effort to restart negotiations, Portnoy suggested that Mucaria take
a strike vote to put pressure on the Employer to bring it back to the bargaining table.
40
The Respondent argues that it raised its wage offer. Its first position was a wage freeze.
However, that is not set forth in its first written offer of March 4. It then modified its wage offer to
adopt the Union’s Tier II rate of $22 for all employees. Accordingly, its July 8 offer stated that no
current employees shall be paid less than $22 per hour.
45
Portnoy stated that he needed a rate for new hires. Since he did not want to start new
employees at the rate of experienced workers, he established a rate for new hires at “no less
than $20.00 per hour.” That is set forth in the two offers dated July 8 at 1 p.m.
Portnoy stated that the Union did not make a counteroffer to any of the Employer’s 50
proposals during the entire course of negotiations, except its agreement that Ira Cure be added
as an arbitrator.
JD(NY)–18–15
14
Analysis and Discussion
The complaint alleges that the Respondent prematurely declared impasse in
negotiations and that it implemented changes in the contract which differed from the final 5
proposal made to the Union without first bargaining with the Union to a good-faith impasse.
I. The Alleged Impasse
Section 8(a)(5) and (1) prohibits an employer from unilaterally instituting changes 10
regarding wages, hours, and other terms and conditions of employment before reaching a good-
faith impasse in bargaining.
It is well settled that the party asserting the existence of a bargaining impasse bears the
burden of proof that impasse has occurred. CalMat Co., 331 NLRB 1084, 1097-1098 (2000). 15
The question of whether a valid impasse has been reached is a “matter of judgment”
and among the relevant factors are the bargaining history, the good faith of the parties in
negotiations, the length of the negotiations, the importance of the issue or issues as to why
there is disagreement, and the contemporaneous understanding of the parties as to the state of 20
negotiations. Taft Broadcasting Co., 163 NLRB 475, 478 (1967), enfd. 395 F.2d 622 (D.C. Cir.
1968).
“As a recurring feature in the bargaining process, impasse is only a temporary deadlock
or hiatus in negotiations which, in almost all cases is eventually broken, either through a change 25
of mind or the application of economic force.” Charles D. Bonnano Linen Service v. NLRB, 454
U.S. 404, 412 (1982).
The Board will find that an impasse existed at a given time only if there is “no realistic
possibility that continuation of discussion at the time would have been fruitful, and only if both 30
parties believe that they are at the end of their rope.” Cotter & Co., 331 NLRB 787, 787 (2000);
PRC Recording Co., 280 NLRB 615, 635 (1986).
When interposed as a defense to allegedly unlawful unilateral changes, the evidence
must demonstrate that impasse existed at the time the disputed changes were implemented. 35
Northwest Graphics, Inc., 343 NLRB 84, 90-92 (2004).
In order to prove the existence of an impasse, the Respondent must prove that there
was a contemporaneous understanding by both sides that they had reached impasse. Essex
Valley Visiting Nurses Assn., 343 NLRB 817, 841(2004). Here, the Respondent failed to 40
establish that the Union believed that impasse had been reached when the Respondent
implemented its proposals. See Laurel Bay Health & Rehabilitation Center, 353 NLRB 232, 233
(2008), where the Board found no impasse where the union stated that it was willing to consider
an alternative medical plan proposals and would begin preparing a counterproposal of its own.
45
The Board has recognized that a bargaining stance where both sides merely maintain
hard positions and each indicates to the other that it is standing pat is the rule in bargaining and
not the exception. PRC Recording Co., above at 635 .
The Union's position was that it would consider making additional proposals and move 50
closer to the Employer’s proposals if the Respondent made a further proposal. Thus, the Union
expressed its flexibility on all the Employer’s proposals, if the Respondent responded in kind, is
JD(NY)–18–15
15
strongly indicative that further bargaining could be useful and that no impasse existed. In Cotter
& Co., 331 NLRB at 788, in finding that no impasse had taken place, the Board noted that prior
to the employer's declaration of impasse, there had been movement on important issues and
the union had demonstrated flexibility. Here, too, the Union expressed its flexibility in
considering the Respondent’s proposals, but only if it presented another proposal. The Union’s 5
insistence that the Employer make a further proposal does not require a finding that the Union
was intransigent. Rather, it shows that the Union agreed to modify its proposal if the Employer
acted in the same manner.
The limited number of sessions which took place prior to implementation belies a 10
contention that the parties were at impasse at the time. Monmouth Care Center, 354 NLRB 11,
58 (2009); PRC Recording Co., above at 635, where the Board stated, “while . . . the number of
negotiating sessions is not controlling, generally, the more meetings, the better the chance of
finding an impasse.” and NLRB v. Powell Electrical Mfg. Co., 906 F.2d 1007, 1012 (5th Cir.
1990), where the court stated:15
Little substantive bargaining had taken place before the time of
the purported impasse. The parties only had met five times . . . .
The existence of so few substantive sessions cannot alone lead to
the conclusion that there was no impasse. But it certainly 20
constitutes an important factor to be weighed in evaluating the
Board’s decision.
An employer has a “basic duty of allowing adequate time and opportunity for reasonable
discussion of the essential details of its offer.” Firch Baking Co. v. NLRB, 479 F.2d 732, 736 (2d 25
Cir. 1973).
In Betlem Service Corp., 268 NLRB 354, 354 (1983), it was stated that “generally, the
Board will not find that an impasse has occurred unless the negotiations between the parties
have been exhaustive.” Here, after only four negotiation sessions, it cannot be said that a “full 30
discussion” of all the issues in dispute has taken place.
The Respondent argues that the Union was determined that it sign the master
agreement and would not consider any changes thereto. The Employer cites the Union’s refusal
to make counterproposals following its initial offer of the Independent Employers Agreement as 35
proof that the Union bargained in bad faith with no intention to reach agreement on any terms
other than the master agreement.
The Respondent first cites Villalta’s email message that the Union was prepared to meet
“to discuss the Independent Agreement but not to negotiate.” Villalta did not testify. The 40
Respondent argues that the email message supports its position that the Union refused to
deviate from the master agreement. I do not agree. Villalta’s message was brief, vague, and
ambiguous. I further find that Villalta’s uncontradicted statement to Portnoy that “there could be
no deviation from the Union’s proposal – this is where we have to go,” even if it was made, was
uttered at the first negotiation session. It could be expected that the Union’s position would 45
change at later sessions, and it did. Moreover, it was contradicted by his and Mucaria’s
subsequent meetings and negotiations with the Employer.
The Respondent further argues that the Union was locked into insisting on the same
economic terms as it negotiated in the Association and Independent Employer agreement, and 50
concludes that impasse was inevitable because the Union refused to grant the Respondent
more favorable terms than those master contracts. There is some support for this position.
JD(NY)–18–15
16
Mucaria testified that he expected the Employer to sign the me-too industry agreement as it had
for the past 40 years. However, this expectation did not harden into a fixed resolve not to accept
terms different than the master agreement. There is no credible evidence that the union
negotiators stated that any issue was nonnegotiable.
5
In addition, the Respondent is correct that the Union made no counteroffers other than
the MOU it originally proposed. Further, even according to Mucaria’s testimony, on July 8 he
rejected the Employer’s wage proposal and believed that the Union’s delegates would likely not
approve it. Further, Mucaria termed the Respondent’s work standards proposal unacceptable
and contrary to what the Union “ever stood for.” 10
In agreeing with the Employer that the Union took a hard position on these issues, “the
mere fact that the Union now refuses to yield does not mean that it never will. Parties commonly
change their position during the course of bargaining notwithstanding the adamance with which
they refuse to accede at the outset. Effective bargaining demands that each side seek out the 15
strengths and weaknesses of the other's position. To this end, compromises are usually made
cautiously and late in the process.” Detroit Newspaper Local 13 v. NLRB, 598 F.2d 267, 273
(D.C. Cir. 1979).
The Union's course of conduct, on the whole, demonstrates that it was willing to continue 20
negotiations with the Respondent. While the Respondent may have been impatient with the
Union's pace in agreeing to its proposals or even making proposals of its own, its frustration is
not the equivalent of a valid impasse nor did it mean that a negotiated settlement was not within
reach. Newcor Bay Division of Newcor, 345 NLRB 1229, 1240 (2005);Grinnell Fire Systems,
Co., 328 NLRB 585 (1999); Futility, not some lesser level of discouragement or apparent 25
gamesmanship is necessary to establish impasse.
Moreover, Mucaria’s statements do not compel or even suggest a finding that impasse
had been reached. The Union’s position at all times was that its agents would make further
proposals and would move closer to an agreement if the Respondent made another proposal. 30
Thus, as set forth above, the Union’s initial proposal represented a marked departure, in
favor of the Employer, from that of the recently expired Independent Employers Agreement.
Thus, the Union offered a Tier II category with significantly lower wages than the Tier I category
which was the only category available in the prior, expired contract, and also reduced benefit 35
contribution rates and proposed a 40-hour cap on benefit contributions for new employees. In
addition, the Union accepted Ira Cure as an additional arbitrator. Further, at the March 4 and
April 4 meetings, Mucaria told Portnoy that he would consider the Respondent’s subcontracting
proposal, and, in fact, agree to its work standards proposal if it made other, positive, progressive
proposals on wages and benefits. At the July 8 meeting, Mucaria told Portnoy that he would be 40
willing to consider less than a 10-year contract if he received a “more favorable proposal on
wages and benefits.” Further, Mucaria told Portnoy that if the Employer made a “decent” wage
and benefit proposal the Union’s delegates would find it easier to approve.
In Serramonte Oldsmobile, 318 NLRB 80, 98 (1995), the Board found that, although at 45
the final bargaining session “all the elements of a genuine impasse in bargaining were in place”
the Union’s offer to alter its proposal if the Respondent did so, represented “serious
movement—a substantial effort” to bridge the gap in positions. This case is stronger than
Serramonte because here, at the final bargaining session, not all the elements of a genuine
impasse were in place. Accordingly, Mucaria’s offer, identical to that of the union in Serramonte,50
signaled that movement was possible. That does not mean that the Union could be expected to
change its position, but it is “realistically possible” that continued discussion would have been
JD(NY)–18–15
17
fruitful. The Board found that no impasse had occurred in Serramonte.
In finding that no impasse occurred, the Board in Newcor Bay, above, observed that
when the employer asserted that the parties were at impasse, the union agent asked to
continue bargaining and assured the employer that it was prepared to negotiate. It was 5
expected that the union would make concessions depending on what information the employer
provided. The Board found that no impasse occurred even though the union “had not yet offered
specific additional concessions, but only declared its intention to be flexible and continue
bargaining.” The Board also noted that although a “wide gap” existed between the parties'
positions, no impasse occurred where there was a possibility of further movement on important 10
issues. 345 NLRB at 1238-1240.
Here, the Union remained flexible and expressed a willingness to offer another proposal
if the Employer did so. It must be emphasized that the Union’s approach was in marked contrast
to the Respondent’s regressive proposals. Thus, the Employer’s first wage offer was a wage 15
freeze at $31 per hour for Tier I employees. Its next offer was that wages for those employees
be reduced to $22 per hour. Finally, it offered to reduce the new hire rate from $22 per hour to
$20 per hour.
There thus appeared to be prospects for future discussions even at the time the 20
Respondent declared impasse even according to the Employer. Thus, on July 8, Portnoy
offered to speak about the terms during the following week, before they were implemented on
July 15. Such an offer to discuss the terms of the Respondent’s “final offer” may be seen as the
Employer’s invitation to continue bargaining – surely an indication that impasse had not taken
place. 25
In addition, on July 8, Mucaria expressed shock at the declaration of impasse, and told
Portnoy that “we are not done negotiating” and offered to continue discussions. Accordingly,
there was no contemporaneous understanding by both parties that they had reached impasse.
30
Indeed, the evidence clearly shows that the union officials were not at the end of their
negotiating rope, but were ready and willing to negotiate further. When the Employer declared
impasse, the Union protested that it had not completed negotiations, and it could be expected,
as the Union stated, that it would make further concessions and would be flexible upon the
Employer’s making an additional proposal. In addition, it offered to continue to bargain. 35
In addition, following the declaration of impasse, Mucaria contacted Portnoy several
times to arrange further negotiations. Indeed, the Union’s attorney wrote to Portnoy, denying
that impasse had been reached, and suggested dates to bargain.
40
In fact, the parties met on August 28, nearly 2 months following the declaration of
impasse. Mucaria told Portnoy at that time that the Union had “room to move” but asked him to
come closer to what the Union sought. Portnoy asked that the Union make a proposal which
would provide the Employer the savings it sought and, indeed, said, “[L]et’s bargain.”
45
Here, the Union’s offer to modify its proposal if the Employer did the same, and the
Respondent’s suggestion that a mediator enter the discussion, certainly created a “new
possibility of fruitful discussion.” However, Mucaria asked for financial records which would
prove the Respondent’s claimed financial hardship. The Union agreed to meet with the mediator
once those records were received. However, no detailed records were produced and a further 50
meeting did not take place.
JD(NY)–18–15
18
Accordingly, the Union sought additional bargaining sessions, and the Employer
committed to doing so as well. Under these circumstances where the Union expressed
flexibility, the Respondent “might reasonably be required to recognize that negotiating sessions
might produce other or more extended concessions.” Royal Motor Sales, 329 NLRB 760, 772
(1999), 5
Moreover, the parties had not discussed certain terms of the Union’s proposal including
proposals to cap the benefit contributions at 40 hours per week, arrangements for manning,
electronic recording of time worked by employees, the time limit for the Employer to make
benefit contributions, and the withdrawal of members from work if such payments were not10
made.
Portnoy’s testimony that discussion of these items is usually reserved for the last day of
negotiations, and that it accepted the capping of benefits as part of its implementation of Tier II
benefits does not ring true. The last day of bargaining took place without such discussion and 15
the Employer did not inform the Union that it accepted the capping of benefits proposal.
In light of the Union's willingness to continue bargaining at the time of the declaration of
impasse and thereafter, I cannot find that the parties had reached a deadlock on all the issues
set forth in the proposals. 20
Whether the parties could be expected to resolve their differences is unknown. What is
known is that the Union offered to modify its proposals if the Respondent made a new proposal.
Although the Respondent believed that there was an impasse the Union did not. Accordingly,
there was no contemporaneous understanding by both parties that they had reached impasse.25
In Newcor, above at 1239, the union advised the employer that it “was prepared to make
further concessions on central issues, and that more extreme movement would be possible in
the future, depending in part on what information the respondent provided.” Here, as in Newcor,
the union agents never stated that the Union would “not make further movement towards the 30
Respondent’s position on any issue, or even foreclosed the possibility that the union would
eventually accept the Respondent’s initial proposal.” This is true even though the Union had not
yet offered specific additional concessions, but only declared its intention to be flexible and
continue bargaining.
35
Similar to the instant case, in Grinnell Fire Protection Systems Co., 328 NLRB at 586,
the Board found that no impasse had occurred where the union had not yet offered specific
concessions, but on the last day of negotiations had declared its intention to be flexible, and
sought another bargaining session. The Board stated that “even assuming arguendo that the
respondent has demonstrated it was unwilling to compromise any further, we find that it has 40
fallen short of demonstrating that the union was unwilling to do so.”
“The essential question is whether there has been movement sufficient ‘to open a ray of
hope with a real potentiality for agreement if explored in good faith in bargaining sessions.’”
Hayward Dodge, 292 NLRB 434, 468 (1989). I find that such ray of hope presented itself at the 45
last bargaining session on July 8 before impasse was declared.
Moreover, there was no “most-favored nations” clause in the Union’s proposed
agreement. The Union therefore was not prohibited from deviating from the master agreement.
The Union was accordingly able to be flexible in its proposals. 50
JD(NY)–18–15
19
Nevertheless, the Respondent argues that the proposal requires the Union to insist on
obtaining the same terms as the industry agreement. I do not agree. The proposal merely
requires the Union to “utilize its best efforts to monitor” work performed by shops within its
jurisdiction and “confirm” that such work is performed by employers who pay equal to or better
than the wages and benefits set forth in the Association contract. Such language does not 5
require the Union to refuse to allow the installation by its members of products which were
manufactured in a shop paying terms more favorable than those provided in the Association
contract.
Further, even if the Union was determined that the Employer sign the master contract, it 10
has been recognized that a union has the legitimate right to seek for its members the same or
similar terms and conditions of employment that have been negotiated with other employers.
Teamsters Local 282 (E. G. Clemente Contracting), 335 NLRB 1253, 1255 (2001); Mine
Workers v. Pennington, 381 U.S. 657, 665 (1965). “A union may adopt a uniform wage policy
and seek vigorously to implement it” among several employers. 381 U.S. at 665 fn. 2.15
I reject the Respondent’s argument that the two union negotiators could not
independently negotiate the contract because they had to obtain the approval of union officials.
The Union’s internal procedure required such approval, and there is nothing improper with that
procedure. Mucaria testified that the Union’s bylaws were written by a review officer and that he 20
was bound by that document. Its purpose was to ensure fairness and honest dealing by the
union representatives with the Union’s membership and oversight by the review officer.
Moreover, Mucaria credibly testified that neither he nor Villalta was given any limitations by
Union officials on their ability to bargain with the Employer.
Here, the overall course and conduct of the parties does not evince a mutual 25
understanding that further bargaining would not take place or be fruitful. Based upon the
foregoing, I conclude that the evidence is insufficient for me to find that the Respondent has met
its burden of proof that, at the time of the promulgation or implementation of the final offer, the
parties were of a contemporaneous mutual understanding that further bargaining would be
futile.30
The Respondent’s reliance on ACF Industries, LLC, 347 NLRB 1040, 1040-1042
(2006), is misplaced as the facts therein are clearly distinguishable from the instant matter.
There, the union's membership had twice voted to reject respondent's offers, after which
respondent stated that it had nothing further to offer and would implement its last offer. The
union stated that it had additional proposals to make but did not divulge what the proposals 35
would be and did not request any further negotiations.
In ACF, the employer submitted several proposals during the course of 12 bargaining
sessions, but here the Respondent submitted only 2, nearly identical proposals in only 4
sessions before it declared impasse. Here, the Union said that it was willing to make new
proposals but expected the Respondent to do the same. In addition, unlike ACF, the Union 40
offered to continue negotiations and did not exhibit an intransigent position. Rather, it asserted
that it was flexible and would offer further proposals if the Employer did so.
The Respondent also relies on E. I. du Pont & Co., 268 NLRB 1075 (1984). In that case,
the Board finding that impasse had occurred, emphasized that the parties bargained “long and
hard” in 17 sessions over a specific issue during which the parties had “adequate opportunity to 45
discuss their difference” but could not reach agreement on that matter. The Board also based its
JD(NY)–18–15
20
holding on the fact that the union “gave no indication that it would concede on [that issue] in
return for a favorable trade-off in another area or otherwise that its positions on this and other
matters were interchangeable.”
In contrast, here, the negotiations comprised only four sessions during which the Union 5
indicated that it would make further proposals, coming closer to agreement on the Respondent’s
offers, if the Employer made a better offer on wages and benefits. Thus, the parties did not have
an “adequate opportunity to discuss their differences” and the Union offered to reach an
accommodation on the contract’s term and manning proposals in exchange for the
Respondent’s making a better offer concerning wages and benefits. 10
The Respondent also relies on H & H Pretzel Co., 277 NLRB 1327 (1985). In that case,
the Board held that impasse had been reached, basing its finding on the facts that the employer
provided financial data supporting its position that it suffered economic distress. Significantly,
the union did not review such data and remained adamant in not reducing labor costs. 15
Here, of course, the Respondent did not provide the Union with detailed financial
records. It submitted only a summary of such records with no supporting documentation. The
Union correctly argues that without precise records it could not assess the degree of economic
hardship the Employer claimed. Indeed, the Union suggested that following its receipt of back-20
up financial data, each party could then make additional proposals and meet with the mediator.
The Respondent further argues that the length of time prior to the start of bargaining is
evidence of the Union’s bad faith. I cannot agree. The Union had a legitimate reason to delay
the start of bargaining until the master contract was executed. The Union expected that the 25
Employer would sign it and accordingly was justified in waiting until the master contract was
produced. The more important consideration is the length of time between bargaining sessions.
It does not appear that an inordinate amount of time elapsed between sessions once they
began, nor that the Union was responsible for any delay in meeting once bargaining began.
30
The Implementation of Changes by the Respondent
During negotiations for a collective-bargaining agreement an employer may not make
unilateral changes in mandatory subjects of bargaining without first bargaining to a valid
impasse. NLRB v. Katz, 369 U.S. 736 (1962). While such negotiations are ongoing, “an 35
employer's obligation to refrain from unilateral changes extends beyond the mere duty to give
notice and an opportunity to bargain; it encompasses a duty to refrain from implementation at
all, unless and until an overall impasse has been reached on bargaining for the agreement as a
whole.” Bottom Line Enterprises, 302 NLRB 373, 374 (1991).
40
As discussed above, I have found that the parties had not reached an impasse in
bargaining. Accordingly, the Respondent was not entitled to make any changes in its
employees’ terms and conditions of employment, and, as set forth below in the remedy part of
this decision, the Respondent shall be ordered to restore the terms of the expired contract until
it bargains in good faith to impasse. 45
In the interest of completion, and assuming, arguendo, that impasse was reached, I will
relate the changes that the Respondent made to its employees’ wages and benefits. The
Respondent’s first oral proposal was for a wage freeze at the current wage rate of $31 per hour.
Its first written offer was for a wage rate for all employees, current and new hires, of $22 per 50
hour. Its next offer was that current employees be paid no less than $22 per hour and new hires
paid no less than $20 per hour.
JD(NY)–18–15
21
Following the declaration of impasse, the Respondent sent employees a letter advising
that work was available “under the terms of employment recently implemented by the company”
and that their hourly rate will be $22 per hour. Nevertheless, current employee Rodriguez was
paid at a rate of $30 per hour from September through December 2014. 5
“Although impasse is one of the generally recognized exceptions permitting unilateral
changes, the law is clear that an employer's post-impasse changes cannot be substantially
different from the terms of its prior offers.” See, e.g., Grondorf, Field, Black & Co. v. NLRB, 107
F.3d 882, 886 (D.C. Cir. 1997) (“When impasse occurs, an employer may implement only those 10
changes reasonably falling within its pre-impasse proposal.”); and Atlas Tack Corp., 226 NLRB
222, 227 (1976), enfd. 559 F.2d 1201 (1st Cir. 1977) (impasse enables an employer to make
unilateral changes that are “not substantially different or greater than any which the employer …
proposed during the negotiations.” Church Square Supermarket, 356 NLRB No. 170, slip op. at
5 (2011).15
Here, the payment to employee Rodriguez, and perhaps other employees of a wage rate
of $30 per hour is “substantially different” than that set forth in its last offer. The Respondent’s
last offer was that they would be paid not less than $20 per hour. Concededly, a rate of $30 is
not less than $20 per hour. However, such a rate is much different than the rate provided in its 20
last offer. Moreover, the $30--per-hour wage rate substantially differed and was greater than the
wage rate of $22 which the Employer’s letter said they would be paid.
Conclusions of Law
25
1. The Respondent is an employer within the meaning of Section 2(2), (6), and (7) of the
Act.
2. The Union is a labor organization within the meaning of Section 2(5) of the Act.
3. By prematurely declaring impasse in bargaining, the Respondent has engaged in 30
unfair labor practices affecting commerce within the meaning of Section 8(a)(5) and (1) and
Section 2(6) and (7) of the Act.
4. By implementing terms and conditions of employment upon its employees when a
valid impasse has not been reached, the Respondent has violated Section 8(a)(5) and (1) of the 35
Act.
5. By failing and refusing to bargain with the Union in the following appropriate collective-
bargaining unit, the Respondent has violated Section 8(a)(5) and (1) of the Act:
40
All foremen, journeymen mechanics, carpenters, bench hands,
machine men, cabinet makers, model makers, sprayers,
varnishers, wood finishers, wood carvers, and turners, kalamein
men, apprentices, helpers, unskilled and semi-skilled production
workers, metal workers and all other employees doing production 45
and maintenance work, except a caretaker of a building.
Remedy
Having found that the Respondent has engaged in certain unfair labor practices, I find 50
that it must be ordered to cease and desist and to take certain affirmative action designed to
effectuate the policies of the Act.
JD(NY)–18–15
22
Inasmuch as the Respondent unlawfully failed and refused to bargain with the Union for
a successor contract by unlawfully declaring that impasse had taken place and unlawfully
implementing the terms of its last offer, the Respondent shall be ordered to bargain with the
Union, and, if an understanding is reached, to embody the understanding in a signed 5
agreement.
The Respondent shall immediately put into effect all terms and conditions of employment
set forth in its contract which expired on June 30, 2012, and shall maintain those terms in effect
until the parties have bargained to agreement or a valid impasse, or the Union has agreed to 10
changes.
The Respondent shall also be ordered to rescind any changes to the terms and
conditions of employment of its employees, and to make whole those employees for any loss of
earnings and other benefits they may have suffered as a result of the Respondent's unlawful 15
actions. In addition, the Respondent must make its employees whole for any loss of earnings
and other benefits that resulted from its unilateral and unlawful decision to, on or about July 15,
2014, implement its final offer. Backpay for this violation shall be computed in accordance with
Ogle Protection Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), with interest
at the rate prescribed in New Horizons, 283 NLRB 1173 (1987), compounded daily as 20
prescribed in Kentucky River Medical Center, 356 NLRB No. 8 (2010). This includes
reimbursing unit employees for any expenses resulting from the Respondent's unlawful changes
to their contractual benefits, as set forth in Kraft Plumbing & Heating, 252 NLRB 891 fn. 2
(1980), affd. 661 F.2d 940 (9th Cir. 1981), with interest as set forth in New Horizons and
Kentucky River Medical Center, supra. I further recommend that the Respondent be ordered to 25
make all contributions to any fund established by the collective-bargaining agreements with the
Union which were in existence on June 30, 2012, and which contributions the Respondent
would have made but for the unlawful unilateral changes, in accordance with Merryweather
Optical Co., 240 NLRB 1213, 1216 (1979).
30
In accordance with Don Chavas, LLC d/b/a Tortillas Don Chavas, 361 NLRB No. 10
(2014), the Respondent shall compensate affected employees for the adverse tax
consequences, if any, of receiving lump-sum backpay awards, and file a report with the Social
Security Administration allocating backpay awards to the appropriate calendar quarters for each
employee. 35
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended
1
ORDER40
The Respondent, Stein Industries Inc., Amityville, New York, its officers, agents,
successors, and assigns, shall
45

1 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and
Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec.
102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed
waived for all purposes.
JD(NY)–18–15
23
1. Cease and desist from
(a) Failing to follow the terms and conditions of the collective-bargaining agreement with
the Union that expired on June 30, 2012, until a new contract is concluded or good-faith
bargaining leads to a valid impasse, or the Union agrees to changes.5
(b) Implementing terms and conditions of employment that are different than those in the
collective-bargaining agreement that expired on June 30, 2012, before a new contract is
concluded or good-faith bargaining leads to a valid impasse, or the Union agrees to changes.
10
(c) In any like or related manner interfering with, restraining, or coercing employees in
the exercise of the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to effectuate the policies of the Act.
15
(a) On request, bargain with the Union for a new contract for the employees in the
following unit and, if an understanding is reached, embody the understanding in a signed
agreement.
All foremen, journeymen mechanics, carpenters, bench hands, 20
machine men, cabinet makers, model makers, sprayers,
varnishers, wood finishers, wood carvers, and turners, kalamein
men, apprentices, helpers, unskilled and semi-skilled production
workers, metal workers and all other employees doing production
and maintenance work, except a caretaker of a building. 25
(b) Restore, honor, and continue the terms and conditions of the contract with the Union
which expired on June 30, 2012, before a new contract is concluded or good-faith bargaining
leads to a valid impasse, or the Union agrees to changes.
30
(c) Rescind the unilateral changes to the terms and conditions of employment of the
employees until such time as the parties have bargained in good faith to an agreement or
impasse on the terms and conditions of employment of such employees.
(d) Make employees whole for any loss of earnings and other benefits they may have 35
suffered as a result of the Respondent's unlawful actions, with interest, as set forth in the
remedy section of this decision.
(e) Make all contractually-required benefit fund contributions, if any, that have not been
made to the fringe benefit funds on behalf of the employees and reimburse those employees for 40
any expenses ensuing from its failure to make the required payments, with interest, as set forth
in the remedy section of this decision.
(f) Preserve and, within 14 days of a request, or such additional time as the Regional
Director may allow for good cause shown, provide at a reasonable place designated by the 45
Board or its agents, all payroll records, social security payment records, timecards, personnel
records and reports, and all other records, including an electronic copy of such records if stored
in electronic form, necessary to analyze the amount of backpay due under the terms of this
Order.
50
JD(NY)–18–15
24
(g) Within 14 days after service by the Region, post at its facilities nationwide copies of
the attached notice marked “Appendix.”
2
Copies of the notice, on forms provided by the
Regional Director for Region 28, after being signed by the Respondent’s authorized
representative, shall be posted by the Respondent and maintained for 60 consecutive days in
conspicuous places including all places where notices to employees and members are 5
customarily posted. In addition to physical posting of paper notices, the notices shall be
distributed electronically, such as by email, posting on an intranet or an internet site, and/or
other electronic means, if the Respondent customarily communicates with its employees by
such means. Reasonable steps shall be taken by the Respondent to ensure that the notices are
not altered, defaced, or covered by any other material. In the event that, during the pendency of 10
these proceedings, the Respondent has gone out of business or closed the facility involved in
these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the
notice to all current employees and former employees employed by the Respondent at any time
since June 8, 2013.
15
(h) Within 21 days after service by the Region, file with the Regional Director a sworn
certification of a responsible official on a form provided by the Region attesting to the steps that
the Respondent has taken to comply.
Dated, Washington, D.C. April 27, 201520
____________________
Steven Davis
Administrative Law Judge25

2 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.”
JD(NY)–18–15
APPENDIX
NOTICE TO EMPLOYEES
Posted by Order of the
National Labor Relations Board
An Agency of the United States Government
The National Labor Relations Board has found that we violated Federal labor law and has
ordered us to post and obey this Notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities
WE WILL NOT fail to follow the terms and conditions of the collective-bargaining agreement
with the Union that expired on June 30, 2012, until a new contract is concluded or good-faith
bargaining leads to a valid impasse, or the Union agrees to changes.
WE WILL NOT implement terms and conditions of employment that are different than those in
the collective-bargaining agreement that expired on June 30, 2012, before a new contract is
concluded or good-faith bargaining leads to a valid impasse, or the union agrees to changes.
WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights guaranteed you by Section 7 of the Act.
WE WILL on request, bargain with the Union for a new contract for you in the following unit and,
if an understanding is reached, embody the understanding in a signed agreement.
All foremen, journeymen mechanics, carpenters, bench hands,
machine men, cabinet makers, model makers, sprayers,
varnishers, wood finishers, wood carvers, and turners, kalamein
men, apprentices, helpers, unskilled and semi-skilled production
workers, metal workers and all other employees doing production
and maintenance work, except a caretaker of a building.
WE WILL restore, honor, and continue the terms and conditions of the contract with the Union
which expired on June 30, 2012, before a new contract is concluded or good-faith bargaining
leads to a valid impasse, or the Union agrees to changes.
WE WILL rescind the unilateral changes to your terms and conditions of employment until such
time as we and the Union have bargained in good faith to an agreement or impasse on your
terms and conditions of employment.
WE WILL make you whole for any loss of earnings and other benefits you may have suffered as
a result of our unlawful actions, with interest.
JD(NY)–18–15
WE WILL make all contractually-required benefit fund contributions, if any, that have not been
made to fringe benefit funds on your behalf and reimburse you for any expenses ensuing from
our failure to make the required payments, with interest.
STEIN INDUSTRIES INC.
(Employer)
Dated By
(Representative) (Title)
The National Labor Relations Board is an independent Federal agency created in 1935 to
enforce the National Labor Relations Act. It conducts secret-ballot elections to determine
whether employees want union representation and it investigates and remedies unfair labor
practices by employers and unions. To find out more about your rights under the Act and how to
file a charge or election petition, you may speak confidentially to any agent with the Board’s
Regional Office set forth below. You may also obtain information from the Board’s website:
www.nlrb.gov.
One MetroTech Center (North), Jay Street and Myrtle Avenue, 10th Floor
Brooklyn, New York 11201-4201
Hours: 9 a.m. to 5:30 p.m.
718-330-7713.
The Administrative Law Judge’s decision can be found at www.nlrb.gov/case/29-CA-134711 or by using the QR code
below. Alternatively, you can obtain a copy of the decision from the Executive Secretary, National Labor Relations Board,
1099 14th Street, N.W., Washington, D.C. 20570, or by calling (202) 273-1940.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND
MUSTNOT BE ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS
CONCERNING THIS NOTICE OR COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE
ABOVE REGIONAL OFFICE’S COMPLIANCE OFFICER, 718-330-2862.