Sundstrand Castings Co.

National Labor Relations Board - Board Decisions

Mar 6, 1974

209 N.L.R.B. 414 (N.L.R.B. 1974)

414 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Sundstrand Castings Company and Sundstrand Corpo-
ration and Local 233, International Molders and
Allied Workers Union, AFL-CIO. Cases
13-CA-11299 and 13-CA-11689
March 6, 1974
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS
FANNING AND PENELLO
On July 29, 1973, Administrative Law Judge Ivar
H. Peterson issued the attached Decision in this
proceeding. Thereafter, the General Counsel and the
Charging Party filed exceptions and a supporting
brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, findings,
and conclusions of the Administrative Law Judge as
modified herein.
On March 3, 1972, the Union filed charges in Case
13-CA-11299 alleging that the Respondent's institu-
tion of an incentive pay plan and the disciplinary
actions and layoffs arising out of the implementation
of that plan constituted unfair labor practices. On
May 4, 1972, Case 13-CA-11299 was settled by the
Respondent and the Regional Director for Region
13; the Union did not appeal the settlement. On July
27, 1972, the Union filed charges in Case
13-CA-11689 alleging a refusal to bargain with
respect to Respondent's decision to close its facilities
and alleging also an unlawful failure to reinstate
strikers who had offered to resume their work. A
complaint was issued in Case 13-CA-11689 on
September 20, 1972. On January 8, 1973, the
Regional Director withdrew his approval of the
settlement agreement in Case 13-CA-11299 and
issued an amended consolidated complaint covering
Cases 13-CA-11299 and 13-CA-11689.
We have long followed a policy that settlement
agreements will not be set aside absent a breach of
their provisions or the commission of subsequent
unfair labor practices.' It is undisputed that Respon-
dent fully complied with the terms and conditions of
the settlement agreement in Case 13-CA-11299.
Furthermore, the Administrative Law Judge found,
and we agree, that the Respondent committed no
additional unfair labor practices. In these circum-
stances, the policies of the Act are best effectuated
by reinstatement of the settlement agreement in Case
13-CA-11299. Unlike the Administrative Law Judge,
209 NLRB No. 73
therefore, we find it unnecessary to consider the
matters covered by that settlement agreement and,
consequently, we do not adopt his findings with
respect to such matters.2
CONCLUSIONS OF LAW
1. The Respondent is engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. Respondent has not engaged in the unfair
labor practices alleged in the amended consolidated
complaint.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the amended
consolidated complaint herein be, and it hereby is,
dismissed in its entirety, and that the settlement
agreement in Case 13-CA-11299 be, and it hereby is,
reinstated.
i See , e.g., Mohasco Industries, Inc (Laurens Park Miii). 172 NLRB 2079.
2 Specifically covered by the settlement were the complaint allegations
concerning the installment of an incentive plan, all disciplinary action taken
pursuant to it, the recall of employees who were laid off in anticipation of
that plan , and the suspension of Preston Harris
Not mentioned by the terms of that settlement agreement were the
alleged discriminatory suspension and discharge of Willie Williams and
Tom Bell, respectively. However, since both of those events occurred prior
to the settlement, it may well be that, under the principle laid down by the
Board in Steve's Sash & Door Co, 164 NLRB 468, 473, enfd. in relevant part
401 F 2d 676 (C A. 5), the Respondent 's alleged unlawful treatment of them
would be barred from litigation before us as presettlement conduct, unless
the alleged violations were- ( 1) not known to General Counsel or readily
discoverable through investigation , or (2) explicitly reserved from the
settlement by the parties We find it unnecessary to resolve whether these
two elements are present in the instant case , since, in any event , we agree
with the Administrative Law Judge s disposition of the allegations
concerning Williams and Bell on the merits.
DECISION
STATEMENT OF THE CASE
IvAR H . PETERSON , Administrative Law Judge : I heard
this consolidated proceeding in Chicago , Illinois, beginning
on January 30, and concluding on February 2, 1973, upon
the complaints issued by the Regional Director for Region
13, on September 20, 1972 and January 8, 1973. based
upon charges filed on March 3 and July 28 , 1972, by Local
233, International Molders and Allied Workers Union,
AFL-CIO, herein called the Union , against Sundstrand
Castings Company and Sundstrand Corporation , herein
referred to as the Respondent . Briefly stated, the com-
plaints alleged that early in 1972 Respondent unilaterally
instituted an incentive pay plan in violation of Section
8(a)(5) and 8(d) of the Act; laid off 42 employees in
anticipation of increasing production under the incentive
pay plan: suspended employee Preston Harris under the
plan and because of his position as a union committeeman;
issued oral and written warnings to numerous employees
SUNDSTRAND CASTINGS CO.
for failure to achieve the incentive plan standards; and
suspended employee Willie Williams for openly opposing
the plan. The position of counsel for the General Counsel
is that when the Union filed an unfair labor practice charge
concerning the foregoing conduct, the Respondent formu-
lated a scheme to force the employees into a strike so that
the blame for the ultimate closing of the plant would be
laid at the Union's door step rather than being attributed
to the president and vice president of the Respondent, who
had urged the purchase of the plant in 1967. Counsel for
the General Counsel further contends that, in furtherance
of this scheme, the Respondent terminated employee Tom
Bell, and adopted a new policy of not resolving grievances.
Afte; the strike began, so counsel for the General Counsel
contends, the Respondent prolonged the strike by continu-
ing the new grievance policy and denying severance pay to
striking union employees, while granting severance pay to
nonstriking, unrepresented, salaried employees. Finally, it
is contended that when the unfair labor practice strikers
unconditionally offered to return to work, the Respondent
refused to reinstate them.
Upon the entire record in the case, my observation of the
witnesses as they testified, and careful consideration of the
able briefs filed by counsel for all parties on or about
March 26. 1 make the following:
FINDINGS OF FACT
1. JURISDICTION
Sundstrand Corporation and its wholly owned subsidiary
Sundstrand Castings Company are both Delaware corpo-
rations. Sundstrand Corporation maintains its principal
office in Rockford, Illinois, whereas Sundstrand Castings
Company maintained a plant in Chicago where it engaged
in the manufacture of molded castings until about July 21,
1972, when operations ceased. Admittedly, both concerns
are engaged in commerce within the meaning of the Act
and meet the jurisdictional standards of the Board. I find
that the Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act. I
further find that the Union is a labor organization within
the meaning of Section 2(5) of the Act.1
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
The parent corporation purchased the facility involved in
the present case from Howard Foundry in 1967 and the
operations of the foundry were assumed and continued by
Sundstrand Castings. The evidence is uncontradicted that
from the beginning of operations the Respondent lost
money. The losses for 1969, 1970, and 1971 were
$1,000,400, $2 million, and $840,000, respectively. For the
I At the begining of the hearing the Respondent moved to dismiss
certain allegations in the complaint for the reason that a settlement
agreement had been entered into between the Respondent and the Regional
Director in Case 13-CA-11299, dated May 4, 1972 Under date of January
8, 1973, the Regional Director withdrew his approval and set aside the
settlement agreement , for the reason that since May 4 "new evidence
establishes reasonable cause to believe that Sundstrand Casting Company
committed unfair labor practices prior and subsequent to the signing of the
415
first 3 months of 1972 the loss was in excess of $715,000.
Ben Weissman, who retired in September 1972 and
theretofore had been in charge of personnel and industrial
relations for the Respondent, testified that despite the fact
that the Respondent spent considerable amounts for
improved machinery and rearranged the shop layout,
productivity continued to worsen and losses continued.
Weissman further testified that customers who in the past
had placed orders with Respondent refused to reorder
because they were able to obtain the product elsewhere for
a lower price. Robert Sugarman, counsel for the Union for
approximately 10 years, testified that Philip Polgreen,
Respondent's director of industrial relations , at one point
offered to allow the Union to look at the books of
Respondent Castings but not of the parent corporation.
According to Respondent, performance reviews indicated
that production at the foundry averaged 60 to 70 percent of
accepted industry standards. In consequence, management
decided it was necessary to increase the level of productivi-
ty or to cease operations. One method was to counsel and
discipline those employees whose production was the
lowest, and the other was to devise an incentive system to
reward employees who produced more than 90 percent of
standard.
Early in 1972 Respondent adopted a considerably firmer
attitude toward employee productivity. Prior thereto,
employees had worked at whatever rate they themselves
chose. Management personnel determined to institute a
system of progressive discipline for employees with the
lowest rates of production. Accordingly, where verbal
encouragement did not produce results , employees were
given oral, and/or written warnings in an effort to improve
their output or face further discipline. One employee,
Preston Harris, was given a disciplinary suspension, which
is here in issue . According to the Respondent, Harris'
production was the lowest in his department (50 percent)
and verbal efforts to improve his output had not succeed-
ed; moreover, his job as coremaker was at the very
beginning of the production line and, in consequence, the
production rate of other employees in his department
depended to a substantial extent upon how quickly he
produced a core. The Respondent, therefore, argues that
Harris was a logical employee with which to begin the
disciplinary policy. The Respondent's evidence is that
Harris was initially given an oral warning, followed by a
written warning. Thereafter, he was suspended for a half
day on Friday, February 11. When he returned the
following Monday, and his performance apparently did
not improve, he was given a 2-day suspension. Upon his
return Harris improved his work output and has continued
to maintain it.
Counsel for the General Counsel contends that Harris
was selected for discipline because he was a union
committeeman. To the contrary, Respondent contends that
above-mentioned Agreement. These unfair labor practices are set forth as
allegations in the Notice of Consolidated Hearing issued on this date " He
further advised that "the specific issues involved in the Settlement
Agreement will be alleged as unfair labor practices in the amended
complaint issued today . However, in those instances where there has been
compliance with the Settlement Agreement we will seek no additional
remedy." I denied the motion, without prejudice to its renewal ; it was not
renewed.
416 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the uncontradicted evidence plainly supports the discipline
meted out to him and that his subsequent improvement in
production output demonstrates that the Respondent was
warranted in considering him to be an unreasonably low
producer and justifies the action taken against him.
B. The Incentive Program
Counsel for the General Counsel contends that the
institution of the incentive plan constitutes a violation of
Section 8(a)(5) of the Act. On the other hand, the
Respondent alleges that the program was instituted only
after it had reached a collective-bargaining impasse with
the Union.
James Lenoir, who had worked for the Respondent or its
predecessor since October 1947, had been a committeeman
for the Union from 1950 to 1957 and in the latter year was
elected shop chairman, a position he held until the strike
which began March 28, 1972. On November 30, 1971,
Lenoir attended a meeting together with Walter Nezgoda,
assistant shop chairman, Don Malaney, and Ben Weiss-
man, vice president and general manager and industrial
relations manager, respectively. At that time Malaney
stated that he desired to put in an incentive plan, which he
represented would permit the employees to make more
money. Lenoir stated that he was not in a position to
accept that proposal, but had to contact the International.
Malaney cautioned Lenoir not to discuss this proposal with
the union membership. Lenoir was also informed that if
the plan were instituted, no employee would be disciplined
if he did not come up to standard.
On January 13, 1972, representatives of the Company
and the Union, including one Tony Tnzna, assigned by the
International, met to discuss the incentive plan. On
January 28 representatives of the parties again met and on
this occasion Malaney stated that he wished to put the
incentive plan into effect as soon as possible. According to
Lenoir, union representatives "explained to him still the
membership had to approve this before it could be put into
effect." Malaney stated that he would like to present the
matter to the union membership himself. The following
Monday Malaney did have meetings with employees and
passed out literature concerning the incentive plan. In the
meeting with night-shift employees Malaney, so Lenoir
testified, explained "how badly he needed this plan in
order for the plant to operate." An employee, Willie
Williams, asked permission to speak and "got up and
explained to the membership and Mr. Malaney and
everybody else present that he had worked for a shop that
had an incentive plan, the plan was no good." He further
stated that "it was one of the worst things you could put
into a plant." He recommended that the employees not
accept it. At that point Malaney asked Weissman for the
identity of the employee that had opposed the plan.
C. The Discipline of Preston Harris
According to the testimony of Fair, Malaney in early
February 1972 told Fair and Martin that they had "to
discipline and pressure the employees to accept the
incentive plan" and added that they "are the two fellows to
make this thing go." The day the incentive program was
placed into effect, February 9, Harris, who was also a
union committeeman, was given an oral warning by
Foreman Pete Camerano with respect to the standard
under the new incentive plan; Harris was warned that if he
did not come up to "the rate that we have set" he would be
suspended. Camerano informed Harris and Shop Chair-
man Lenoir that he was acting under "orders." The
following day, Harris was given a written warning by
Camerano. The day thereafter, Camerano suspended
Harris for a half day for failure to meet production
standards. When Lenoir protested that this action was
unfair, Camerano replied that he was acting under orders.
The same day, McNeely called Martin and Fair into his
office and told them that the Respondent had taken
disciplinary action against Harris because he was "not up
to standard." McNeely further informed them that he was
going to "discipline guys on days" and that they would
"have to discipline guys on nights, otherwise, if you don't,
it will make us all look bad. You have to find something to
discipline them for." In response, Martin and Fair said that
they were not going to discipline employees for no reason.
McNeely responded that the "guys are either innocent or
guilty. In this case they are guilty. You will do it. [We] have
to have it for a tool to fight with. [We want] Rockford to
know that it wouldn't be our fault; it would be the Union's
fault because [they] did not cooperate. Preston Harris was
a good example for the men to start on, a good example to
start on the committeeman to accept the incentive
program."
McNeely testified that it was his decision to discipline
Harris and that he was aware on February 9 that Harris
was a union committeeman.
Harris was given a 2-day suspension on February 15 by
Camerano, allegedly for failing to meet incentive stand-
ards. Lenoir protested, saying, "Pete, I don't think this is
right. Why are you picking on a union representative? You
have got other employees in here not coming up to
standard." On the first day of Harris' suspension , Lenoir
had a conversation with Camerano concerning the new
man who had replaced Harris. This was in the presence of
Nezgoda. Lenoir asked Camerano how many pieces Harris
had been turning out, and Camerano replied that it was
somewhere in the neighborhood of 400 or better. Lenoir
then asked how many pieces the new man had turned out
and Camerano, according to Lenoir, replied, "No, Jimmy,
he didn't come no where near what Preston had done."
The following day Lenoir, in company with Nezgoda,
asked the replacement employee how many pieces he had
turned out, and at the end of the shift they returned to the
man's machine and the replacement employee showed
them the card which indicated that the number of pieces he
had turned out was in the neighborhood of 370 or 375. To
Lenoir's knowledge, the replacement employee did not
receive any warning for poor production nor was he given
a suspension. The Union filed two grievances concerning
the Harris matter.
The parties stipulated that on or about February 15 the
Respondent issued oral or written warnings to 13-named
employees "because of production deficiencies under the
standard hour incentive plan." They further stipulated that
on or about March 17, the Respondent issued oral and/or
SUNDSTRAND CASTINGS CO.
written warnings to 10-named employees, many of whom
were included in the February 15 warnings, "because of
production deficiencies under the standard hour incentive
plan."
D. The Suspension of Williams
Williams began work on September 13, 1971, as a night-
shift coremaker. On January 31, he attended one of the
meetings in which company personnel urged the employees
to accept the proposed incentive program. After Malaney
finished speaking, Williams asked permission to speak and
stated that the proposed program "is no good because I
have just come out from under the same situation they
want to set up here." He characterized the incentive
program as "fast labor" rather than piece work. It is
undisputed that after Williams spoke Malaney asked
Weissman for the identity of the employee who had
opposed the incentive plan.
On February 8, McNeely and Plant Manager Valaska
had a number of meetings in each department to inform
the employees of the implementation of the incentive plan.
In the core department, Williams stated that McNeely
"was told in the meeting by me that this thing wasn't any
good." McNeely testified that Williams was the only
"name" he remembered of those who opposed the
incentive program.
Fair testified that on February 11, McNeely told him
that the Respondent was giving Williams a 30-day
suspension for "deliberately" "messing up" 70 castmgs.
Fair argued that other men were doing the same type of
work and that Williams should receive a verbal and written
warning before being given a suspension. McNeely replied
that Malaney had instructed him to give Williams a 30-day
layoff, and that Williams and another employee "come
from another plant where they had the incentive program.
We have to get something on them to get them out of the
plant altogether, so, otherwise them two guys will make it
hard for the other guys to accept the incentive program."
Martin and Fair protested this action to Weissman, but the
latter stated that Malaney had ordered a 30-day suspen-
sion. When Williams was informed by Fair of the
suspension, Williams protested that he was merely follow-
ing instructions given him by McNeely and Fair as to the
amount of "paste" that should be applied to the gooseneck
of the core machine. Fair told Williams that his suspension
would commence after he completed his shift that day-
During this meeting McNeely instructed Martin and Fair
to observe Williams during the shift. There is considerable
testimony that while observing Williams, Fair and Martin
determined that the application of too much paste (five
layers) as a sealer was the cause of the "scrap" product,
inasmuch as the excessive paste ran inside the mold and
caused holes in the metal product. Martin stated that
Williams had "no business" being given a 30-day suspen-
sion inasmuch as he was merely following instructions
given him by Fair and McNeely. There is undisputed
testimony that, approximately 1 month before the suspen-
2 Counsel elaborates on this by stating that it believed there would be no
productivity increase so long as the work flow was such that the employees
were not required to work harder, that is "if all of the work got done by
working at 50% efficiency, why should they work at 80% efficiency'"'
417
sion, McNeely had instructed Williams and employees
Jimmy Rhodes, Barlow and Cliff to "put the paste across
the gooseneck five times to make sure we get a good seal."
Before being suspended on February 11, Williams did not
know that he was allegedly producing scrap, and had never
received a reprimand on any matter.
The day following the suspension of Williams, Martin
and Fair met with Malaney. The latter stated that they had
mishandled the matter and that he wanted "Willie
Williams and the other guys out of here. Willie Williams is
one of the guys who spoke up and who spoke against the
incentive program at one of the employees' meetings."
Under cross-examination, McNeely and Malaney admitted
that Martin and Fair had protested Williams' suspension.
Malaney testified that Martin and Fair "made an error in
the performance of disciplinary action . . . when they
disciplined the man, that he was to be gotten off the floor
and sent home immediately ...."
The Union filed a grievance concerning the discipline
given Williams and it was processed through the grievance
procedure. There is no showing that in any of the grievance
meetings the Union contended that the discipline given
Williams was in any manner related to his opposition to
the incentive plan. It appears that Williams was not the
only employee who spoke against the incentive plan; other
employees expressed their opposition and, in fact, testimo-
ny adduced by the Union is to the effect that the
membership was almost 100 percent against the plan.
E. The Layoff of Forty-two Employees
on January 28
Paragraph 8 of the complaint alleged that the Respon-
dent laid off 42 employees, who were members of the
appropriate unit, on or about January 28, and that this
action "was based, in part, on Respondent's decision that
under the incentive pay program . . . there would be need
for fewer employees because of increased production." On
the other hand, counsel for the Respondent in his brief
contends that the General Counsel failed to sustain his
burden of proof that this action constituted a violation of
the Act; indeed, he asserts that there "is not a scintilla of
evidence in the record to support the allegations in the
complaint that the layoff of 42 employees on January 28,
1972, was undertaken in part on account of the anticipated
advent of the incentive plan." Respondent's counsel
contends that both Weissman and Malaney explained that
the decision to lay off was entirely unrelated to the wage
incentive system and that the reasons for the layoff were
(a) that General Motors, the Respondent's major customer,
reduced its volume of orders and (b) apart from the
foregoing the Respondent was overstaffed for the amount
of work available.2 It is further contended that no evidence
was produced by counsel for the General Counsel showing
that the layoffs were in any way connected with the
incentive plan. Rather, counsel for the General Counsel, it
is asserted, relied entirely upon a pretrial affidavit signed
by Weissman. In that document, executed March 20,
Accordingly, it is contended that the Respondent simply reduced its work
force to a level that could handle the work if the employees produced at an
acceptable rate.
418 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Weissman is credited with saying the following: "On
January 28, 1972. there was a reduction in the schedule
because of G.M: s reduced requirements. There was a hope
that because of increased production with the incentive
program there would be less need for certain of the
employees and therefore a total of 42 employees were laid
off on January 28, 1972. All 42 employees would have been
under the incentive program."
As a witness, Weissman stated that that statement was
made , "but that statement needs to have an explanation."
Weissman testified that the Respondent "had to take a
look at the total of its labor costs and a total of its
productivity, together with the fact that General Motors
had reduced the amount of products that they wanted from
us." He further added that "it had been hoped that after
these people were laid off, that if the productivity had
come to someplace where he had hoped it would, these
people would have been put back." He added that the
foregoing "is my meaning when 1 say that the people were
affected by the incentive." Weissman denied that the
foregoing statement was "exactly what he told the agent of
the Board." Weissman further testified that the statement
was in error in reciting that "all 42 employees would have
been under the incentive program." In fact, he stated,
about 25 or 26 would have been under the incentive
program and that the remainder were the least senior
employees who were maintenance employees, and were not
.,any part" of the incentive plan.
F. The Termination of Tom Bell
Bell had worked as a furnance operator with the
Respondent and its predecessor for something over 24
years. On March 24, 1972, McNeely accused Bell of
striking his foreman, Gupta Sudir. McNeely scheduled a
first-step grievance meeting immediately after the alleged
incident, but refused to allow the witnesses to the event to
be present. Lenoir stated that he would not "sit in any
meeting" without witnesses, and instructed Bell to go
home. As Bell walked out of the front door at the plant,
McNeely followed him into the middle of the street and
shouted "you are fired. Don't come back." Bell and J. C.
Harris, a witness to the alleged altercation, testified that no
assault occurred and that Sudir and Bell merely engaged in
a short conversation about the desirability of putting cold
iron into a hot furnance. According to the testimony, Sudir
walked away when Bell questioned his judgment in the
matter. The testimony of Bell and Harris was not disputed.
On the following workday, March 27, the first and
second grievance step meetings were held. Admittedly,
McNeely refused to permit the presence of the numerous
witnesses to the incident. Moreover, McNeely testified that
he never at any time thereafter talked to the witnesses to
the alleged assault. The Respondent upheld the discharge.
In the following 2 days, Lenoir approached Valaska on
several occasions to request a meeting on the Bell matter,
but Valaska stated on each occasion that he did not have
the time.
Lenoir testified that during 17 years of handling
grievances as shop chairman the Company (1) never
refused to allow witnesses in the early grievance stages; (2)
never discharged an employee outside of the plant or after
working hours; (3) never discharged an employee prior to
the first two steps of the grievance procedure; and (4) that
the plant manager had never refused to process a third
grievance step no later than I day after the second step of
the procedure. Fair testified that on March 24, the day
following the alleged altercation, McNeely told him and
Martin, "You know, Tom Bell struck a supervisor." Fair
stated that he did not believe this and McNeely answered
that Bell was discharged. Martin then stated, "George, you
are making a big mistake. These guys will go out on strike."
McNeely, so the testimony goes, replied "Good." This is
what we want them to do. We want to let Rockford know if
we close the joint it wouldn't be our fault. It is the Union's
fault because they would not cooperate. If they walk out,
they will take the monkey off the Company's back."
On March 26, the Union voted to strike over unfair labor
practices, including the discharge of Bell. As previously
related, the strike began on March 28. About a week later,
McNeely, Martin, and Fair were working in the plant.
During the course of a conversation, Fair asked McNeely
whether he believed that Bell had struck a supervisor.
McNeely, according to the testimony, responded by
stating, "No, I don't, but I have to protect my supervisors.
The Company was using Tom Bell as a weapon to get the
guys to walk out on strike so they could close the joint
down." Bell was never reinstated. On June 29, during the
course of the final grievance step, the Respondent refused
to change Bell's discharge to a "quit" for purposes of
future employment.3
On February 27 a union meeting was called and Lenoir
spoke to the assembled members, stating that the Respon-
dent was "in violation of unfair labor practices." He
referred specifically to the incentive plan, employee
discipline, Harris and Williams, and to the failure of the
Respondent to process grievances . He stated that the
Union intended to file unfair labor practice charges against
the Respondent and the employees voted unanimously to
strike. On February 29, the Union sent the Respondent a
letter giving notice that "there was no adjustment satisfac-
tory to the Union in connection with any of the grievances
discussed at the fifth step meeting between the parties held
on February 24, 1972." However, the Union did not strike
at this time. On March 3, the Union filed unfair labor
practice charges alleging violation of Section 8(a)(1).(3),
and (5) and 8(d) of the Act.
At a meeting early in March among McNeely, Martin,
and Fair, in McNeely's office, McNeely stated that he did
not think the employees "are going out." Martin, however,
stated that "these guys are going out on strike. They are
waiting until the time is right." McNeely then stated that
that "is what we want them to do. We want to let Rockford
know if the guys go out it is not our fault. It will take the
monkey off the Company's back because the Union does
not cooperate." He added that the Respondent did not
intend to settle any grievances and "was not going to give
an inch." He further stated that the Board "is going to rule
i The agreement between the parties did not contain an arbitration
clause Following the fifth grievance step, the Union is permitted to strike.
SUNDSTRAND CASTINGS CO.
in the Company's favor because we are planning to keep
the point open. The only thing the Company was going to
give on would be 15 minutes of the 30 minute dock." 4
The parties met on February 24 and March 2 to discuss a
number of fifth-step grievances. They reached no resolu-
tion. The Respondent stated that the incentive program
would continue in effect and that disciplinary methods
would continue to be used in connection with the plan.
As previously noted, Bell was discharged on March 24
and Martin told McNeely that the termination of Bell
would precipitate a strike. McNeely responded by stating
that the Respondent wanted a strike in order to shift the
blame of a permanent plant closedown to the Union.
On March 26, at a union meeting, Lenoir informed the
approximately 200 members present that following the last
meeting with the Respondent it would "do nothing" on the
grievances. He further told the membership that the
Respondent had discharged Bell on the previous Friday
afternoon, claiming that he had struck a foreman. The
testimony is that some 4 or 5 members stated that they
were present and that Bell did not touch the foreman.
Lenoir also adverted to the Williams matter and stated that
he felt that "this is unfair labor practice." In addition, the
Union's attorney, Sugarman, spoke to the group, stating
that unfair labor practices had been filed against the
Respondent and that in his opinion the Respondent had
committed unfair labor practices and, moreover, had
committed contract violations. The employees voted
virtually unanimously to strike as soon as possible.
On the following day, March 27, McNeely asked Lenoir
if the Union was going to strike. It is undisputed that
McNeely told Lenoir that the "stuff you fellows have took
in the last month, I wouldn't have taken it for nothing in
the world. You should have been out of here long ago.
How in the world you fellows took this stuff as long as you
did, I wouldn't know."
As previously stated, the Union went on strike on March
28. Early in April, McNeely stated to Martin and Fair that
the Respondent "was using Tom Bell as a weapon to get
the guys to walk out on strike so they could close the joint
down."
An informal settlement agreement was entered into by
the Respondent and the Regional Office, approved by the
Regional Director on May 4. The notice posted by the
Respondent under date of May 26 provided that, the
Respondent would not give oral or written warnings,
suspension, or other discipline to employees because of
production deficiencies as measured by the standards
established in the incentive pay program; that it would not
in any like or related manner interfere with, restrain, or
coerce employees; that it would revoke the incentive pay
program; that it would rescind and revoke any oral or
written warning, suspensions, or other discipline given
employees because of production deficiency; that it would
make Harris whole for any loss of pay he suffered; and, if
production warranted, the Respondent would offer to
4 The record shows, however, that it was not until May 10, and after a
number of grievance sessions between the Company and the Union that the
Company proposed a compromise on the "30-minute dock" grievance In
consequence, counsel for the Respondent argues in his brief that "It is
inconceivable that McNeely would accurately predict the terms of a
419
recall those employees who were laid off on January 28.
The Union did not participate in this agreement.
After the settlement agreement was entered into, Lenoir
met with union members on many occasions at the union
hall and on the picket line. The possibility of returning to
work was discussed. According to Lenoir, many members
referred to Williams and they thought he had been
wronged by the Respondent and also to Bell in a similar
vein. Lenoir testified that the members felt these were
unfair labor practices and, according to him, stated, "We
are not willing to go back when the company had done
these people like they have been done, they won't do
anything on it." Early in May, Martin, in the presence of
Fair and McNeely, asked Malaney when the strike would
be over. According to Fair, Malaney answered that "This
thing won't be over soon. If the guys had come back in
when the Labor Relations Board ruled in their favor, the
company would have stayed over, but as they didn't, they
let the company off the hook. We didn't lose the case after
all."
Fair testified that in about the middle of June Joe
Varick, the chief engineer and superintendent of the
maintenance department, stated that the Respondent
"[w ]as looking for a way to close the place down to get Mr.
Sadler and Mr. Taylor off the hook. The Union did exactly
what Mr. Taylor and Sadler wanted them to do by walking
out." .5
Lenoir further testified, without contradiction, that in
mid-June Martin telephoned him and stated that he
(Martin) had had a talk with McNeely that afternoon and
that McNeely "told me that he was sent here at this plant
... to give the Union hell, not settle any grievances with
them. That way maybe they would walk out." He further
testified that he had been told by McNeely that Vice
President Sadler "went out on a limb to buy this plant"
and that if the Union walked out it would get Sadler "off
the limb." McNeely also stated that supervisory and office
personnel were receiving severence pay but that employees
represented by the Union did not get any.
The parties met four times in May and also on June 29.
At these meetings fifth-step grievances and the effects of
closing the plant were discussed. At the first meeting
following the strike. Polgreen stated that the Respondent
was considering ceasing its operations in Chicago. There
was further discussion of fifth-step grievances including the
matter relating to Bell and Williams; however, no
resolution was reached. At a meeting on May 10, the
Union offered to extend the existing contract for 1 year
with no wage increases and accord the Respondent
discretion regarding the incentive program. In addition,
there was further discussion of grievances but no settle-
ment was reached, although the Respondent offered to
compromise 15 minutes of the "30-minute dock" griev-
ance.
At the May 19 meeting the Respondent rejected the
Union's contract offer and informed the union negotiators
that the Respondent would close. Attorney Sugarmen
compromise taking place several months in the future" and urges this
circumstance, among others , as reflecting adversely on the credibility of
Fair
s Taylor is vice president and Sadler is president of the parent
corporation.
420 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
proposed severance pay on the same basis as had been
granted to employees who were severed in 1969 when the
magnesium-aluminum division was closed . However,
Polgreen indicated that severence pay would not be
granted. Grievances were discussed, particularly the
matters relating to Bell and Williams, but no agreement
was reached . At the May 23 meeting Polgreen stated that
the Respondent would not grant severence pay to union-
represented employees but he did state that it would be
granted to office and supervisory employees under a
discretionary policy of the Respondent. No grievances
were resolved.
The final company-union meeting was held on June 29.
The Union made an unconditional offer to return to work.
The Respondent again refused the severence pay proposal,
and offered no counterproposal. Grievances were dis-
cussed and the Union accepted the 15-minute "dock"
grievance settlement. The Union made a proposal that
Bell's discharge be converted to a "quit" for purposes of his
employment record, but the Respondent refused this
suggestion . There was no settlement of other grievances.
Employees reported to work on July 3 and 5. However,
no employees were ever reinstated. The Respondent ceased
all operations on July 21.
When the magnesium-aluminum division of the Respon-
dent closed in 1969, the Respondent granted severence pay
to the approximately 600 union-represented workers in that
division. The operative collective-bargaining agreement at
that time provided that the Respondent "will not make any
decision to permanently terminate any of its operations in
any department or division of the company, until after
prior notice to the Union, and after good faith collective
bargaining with the Union in connection with any such
decision."
Fair testified that early in April McNeely stated, "These
guys think that they're going to [get] severance pay, but
they are going to be disappointed because the supervisors
will get it, but they Won't." e
The Respondent' s firm decision to close the plant was
announced at the May 19 meeting. Attorney Sugarman
proposed that severance pay be granted on the basis of the
formula used when the magnesium -aluminum division
closed 3 years earlier. However, Polgreen stated that he did
not think severance pay was appropriate in view of the
Respondent 's monetary losses. At succesive meetings,
Sugarman also proposed severance pay but the Respon-
dent refused to go along with that proposal and offered no
counterproposals. stating there was no contractual obliga-
tion to pay severance pay, that the Respondent had lost
enough money already, and that union employees received
benefits under the contract which the nonunion employees
did not receive.
After the strike began on March 28, and until the final
closing of the plant, supervisory employees crossed the
picket lines and performed the work of the strikers.
About May 15 Taylor and Malaney met in the parent
corporation's offices in Rockford. At that meeting Taylor
advised Malaney that severance pay would be granted to
salaried employees. The supervisory, office, and clerical
employees were advised by Malaney on May 19 that they
would receive severance pay, and it was subsequently
granted them.
According to the Respondent , there was a corporate
policy on severance pay which was discretionary as applied
to subsidiaries , such as the Respondent . This discretionary
policy was applied to Sunstrand Casting Company's
salaried employees in 1972 but not to union -represented
employees because , according to Polgreen , "[t]here are
things that the foundry or the union employees enjoy that
office and supervisory employees do not enjoy" under the
contract. The Respondent informed the Union at the May
23 meeting that the supervisory, office , and clerical
employees would receive severance pay.
Contentions and Conclusions
1. The incentive pay plan issue
Counsel for the General Counsel argues that the
Respondent clearly violated Section 8 (d) and Section
8(a)(5) of the Act by instituting the incentive program. He
refers to the following interpretation of Section 8(d) of the
Act rendered by the Board in C & S Industries, Inc., 158
NLRB 454, 457.
The statutory intent to stabilize during a contract
term agreed-upon conditions of employment is appar-
ent from the provisions of Section 8(d) of the Act,
which defines the obligation to bargain. That section
not only imposes an obligation on each party to a
contract to refrain from modifying the contract without
complying with the notice and waiting period require-
ments therein set forth , but also expressly provides that
the "duties so imposed shall not be construed as
requiring either party to discuss or agree to any
modification of the terms and conditions contained in a
contract of a fixed term , if such modification is to
become effective before such terms and conditions can
be reopened under the provisions of the contract." In
line with that provision , the Board has consistently held
that a party does not violate its bargaining obligation
when it refuses to discuss changes proposed by the
other party in the terms of an existing contract. The
Board has also held that an employer acts in derogation
of his bargaining obligation under Section 8(d). and
hence violates Section 8 (a)(5), when he unilaterally
modifies contractual terms or conditions of employ-
ment during the effective period of a contract-and
this even though he has previously offered to bargain
with the union about the change and the union has
refused.
Thus, counsel points out that : (a) The incentive plan was
put into effect on February 9, clearly within the duration of
the contract, which has an expiration date of May 15, and,
consequently, under Section 8(d)(4), the contract could not
be unilaterally modified prior to May 15; (b) admittedly
there was no agreement between the Union and the
Respondent for the institution of the incentive pay plan;
F It such he noted that , according to the Respondent , the decision to
close was made on May 15
SUNDSTRAND CASTINGS CO.
(c) admittedly the contract contained a wage provision
setting forth minimum and maximum hourly rates; (d) it is
undisputed that in 1969 , during collective-bargaining
negotiations , the Respondent proposed a wage incentive
plan similar to the one it instituted on February 9 which
was discussed and specifically withdrawn by the Respon-
dent . (See G .C. Exh . 10.) Also, the Respondent proposed a
broad management rights clause which specifically gave
management the exclusive right to institute an incentive
pay plan ; however, this proposal was withdrawn and a
narrower management rights clause was included in the
contract.7
On the other hand , counsel for the Respondent in his
brief argues that the record shows that "it is clear that the
Company implemented the program only after it reached a
collective-bargaining impasse with the Union ." He points
to the following sequence of events: (a) On November 30,
1971, after preliminary discussion with local representa-
tives of the Union , the Respondent notified the Interna-
tional of its proposal to institute a wage incentive plan; (b)
in December , International Representative Trizna was
assigned to meet with the Respondent concerning the plan;
(c) on January 13, representatives of Respondent and the
Union met and discussed the plan ; (d) on January 28,
representatives of the Respondent, including an industrial
engineer, met with Trizna and other union representatives
for a detailed discussion of the proposed program , and the
Respondent 's existing standards were discussed , which the
Respondent proposed to incorporate into the program and
at this meeting the Union suggested that the Respondent
explain its proposal directly to the employees; (e) on
January 31, management representatives conducted meet-
ings with the employees to explain the program and the
employees were assured that no one would be disciplined
for failing to make incentive pay, that is , for failing to
produce in excess of 90 percent of standard: (f) on
February 3, the Union submitted the plan to the employ-
ees, who rejected it, (g) only after the membership rejected
the plan and continued insistence by the Union that the
incentive system not be instituted without approval of the
employees , did the Respondent decide that it had no
alternative but to install the program unilaterally.
Concerning the alleged violation of Section 8(d), Counsel
for the Respondent refers to the Board's decision in
Central Illinois Public Service Co., 139 NLRB 1407, enfd.
324 F . 2d 916 (C.A. 7, 1963). In that case the Board stated
at 1414:
The contract modification restrictions of Section 8(d)
apply, the Board has held, "to terms and conditions
which have been integrated and embodied into a
contract"; they do not refer "to matters relating to
`wages, hours and other terms and conditions of
employment ' which have not been reduced to writing"
Tidewater Associated Oil Company, 85 NLRB 1096,
1099; Allied Mills, Inc., 82 N LRB 854.
Counsel argues that , in the present case , the contract was
silent on incentives , with the consequence that there were
r This clause provides "The management of the plant and the selection
and direction of the working forces shall be vested exclusively in the
421
no terms or conditions in the contract that the Respondent
sought to modify . In C & S Industries supra, the Board held
that an employer violated Section 8(d) when it instituted a
wage incentive plan in the face of a negotiated contract
provision requiring that "there shall be no change in the
method of payment of any employee covered by this
agreement without prior negotiations and written consent
of the Union ." Moreover, counsel for the Respondent
argues that in the present case the contract included a
specific provision which bound the Union "on behalf of its
members" to "cooperate with the company in encouraging
by all available means an increase in the productivity of its
employees, individually and collectively, in all divisions of
the Company."
Thus, counsel for the Respondent argues that by this
"mutual cooperation" clause the Union "waived its right to
arbitrarily reject the Company's good faith efforts to
increase productivity through the institution of an incen-
tive program." It further argues that, inasmuch as the plan
incorporated the same work standards that were already in
effect and guaranteed that there would be no reduction in
wage rates , "the only conceivable reason for the rejection
was that the employees simply objected to increasing
production . By their unwillingness to cooperate in these
dire circumstances , the employees breached their promise"
contained in article VI, of the contract.
When the employees rejected the plan, the Respondent
had the following alternatives : (a) to continue as it was,
thereby facing virtually certain plant closure, or (b) it could
install the plan in the hope that this would save the
foundry . The Respondent chose the latter course and
counsel argues that this action "neither violated nor
changed any contract provision and ... furthermore, this
action was fully supported by Article VI of the agreement,
as well as by the management rights clause."
In my opinion , the C & S Industries case is distinguisha-
ble. In that case, the agreement between the parties
provided that "there shall be no change in the method of
payment of any employee covered by this agreement
without prior negotiations and written consent of the
Union." No such provision appears in the present matter.
To the contrary, the agreement provided that the Union
would "cooperate with the Company in encouraging by all
available means an increase of the productivity of the
employees, individually and collectively , in all divisions of
the Company." In my view, by this "mutual cooperation"
clause, the Union relinquished its right arbitrarily to reject
the Respondent's efforts in good faith to increase pro-
ductivity through the institution of an incentive program.
Inasmuch as the plan incorporated the same work
standards as were already in effect and, moreover,
guaranteed that there would be no reduction in wage rates,
it seems fairly evident that the employees rejected the plan
because they objected to increasing production . From this,
I infer that the employees did not live up to the promise
contained in article VI of the agreement. I do not view this
as a "modification" of contractually established terms and
conditions of employment , within the meaning of Section
8(d) of the Act . I conclude and find , therefore, that by
company, subject to the terms of this Agreement "
422 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
instituting the incentive plan under the circumstances
outlined above , the Respondent did not violate Section
8(a)(5) or 8(d) of the Act. Accordingly, this aspect of the
complaint will be dismissed.
Inasmuch as I have found that the institution of the
incentive pay plan did not constitute a violation of the Act,
it necessarily follows that the layoff which flowed directly
from the plan cannot be regarded as violative of Section
8(a)(5) or 8 (a)(3) of the Act.
2. The discipline of Hams and the suspension of
Williams
Concerning the discipline of Harris, a union committee-
man, it is evident that Foreman Camerano told Harris and
Shop Chairman Lenoir that if Harris did not come up to
production standards he would be suspended under
"orders" given to Camerano. Moreover, McNeely told
Martin and Fair that Harris "was a good example for the
men to start on, a good example to start on the
committeeman to get the guys to accept the incentive
program." I conclude and find that the suspension of
Harris was violative of Section 8(a)(3) and (1) of the Act.
With respect to the suspension of Williams, it is
undisputed that he was outspoken in his opposition to the
incentive plan program at the January 31 meeting.
Moreover, when McNeely and Valaska held meetings with
employees in the various departments on February 8,
Williams again spoke out against the plan, stating that
"this thing wasn't any good." McNeely testified that
Williams was the only "name" he remembered of those
who opposed the incentive program. Fair testified that on
February 11, McNeely told him that the Company was
giving Williams a 30-day suspension for "deliberately"
"messing up" some 70 castings. Fair argued that other men
were doing the same type of work and that Williams
should be given a verbal and written warning before being
given a suspension. To this, McNeely responded that
Malaney had ordered that Williams be given a 30-day
layoff and that he and another employee, A. T. Staten,
came from another plant where an incentive program was
in effect and that the Respondent would "have to get
something on them to get them out of the plant altogether,
so, otherwise them two guys will make it hard for the other
guys to accept the incentive program." When informed of
the 30-day suspension, Williams protested that he was
merely following instructions given him by McNeely and
Fair concerning the amount of "paste" to apply to the
gooseneck of the core machine.
About a month before the suspension, McNeely had
instructed Williams and three other employees "to put the
paste across the gooseneck five times to make sure we got a
good seal." After being informed of his suspension,
McNeely instructed Martin and Fair to observe Williams
during the balance of the shift. They did so and determined
that the application of too much, i.e., five layers, was the
cause of the scrap product. However, Martin stated that
Williams had no business being given a 30-day suspension
since he was merely following the instructions given him by
Fair and McNeely.
3. The termination of Bell
With regard to the termination of Bell , who had worked
for the Respondent or its predecessor for something over
24 years, it is undisputed that on March 24, McNeely
accused Bell of striking his Foreman Sudir. McNeely
arranged for a first-step grievance meeting immediately but
refused to permit the witnesses to the occurrence to be
present. Shop Chairman Lenoir said that he would not
attend any meetings without witnesses and instructed Bell
to go home. Bell went out the front door and McNeely
followed him into the middle of the street and shouted that
Bell was fired and not to come back. Bell and J. C. Hams,
a witness to the alleged incident, testified that no assault
occurred and that Sudir and Bell merely had a short
conversation concerning the desirability of putting cold
iron into a hot furnace. According to the credited
testimony, Sudir walked away when Bell questioned his
judgment concerning the matter. Sudir did not testify.
The first- and second-grievance step meetings were held
on March 27 and McNeely again refused to permit the
witnesses to the incident to be present. The discharge was
upheld. The following 2 days, Lenoir approached Valaska
on several occasions to request a meeting on the Bell
incident but each time Valaska stated that he did not have
time.
The procedure in the Bell case was in marked departure
from the prior history of handling grievances, according to
the testimony of Lenoir. He stated that Respondent had
never refused to allow witnesses at the early stages of the
grievance, had never discharged an employee outside of
the plant or after working hours, had never discharged an
employee prior to the first two steps of the grievance
procedure, and that the plant manager had never refused
to process a third-step grievance no later than 1 day after
the second step.
According to Fair, the day following the alleged
altercation McNeely told him and Martin that Bell had
struck a supervisor. Fair responded that he did not believe
this and McNeely stated that Bell had been discharged.
Martin then stated that McNeely was "making a big
mistake" and that the employees would go out on strike.
McNeely responded that he agreed with him as "This is
what we want them to do. We want to let Rockford know if
we close the joint it wouldn't be our fault. It is the Union's
fault because they would not cooperate. If they walk out,
they will take the monkey off the Company's back."
On the other hand, counsel for the Respondent asserts in
his brief that the procedure followed with respect to the
Bell grievance was in accord with the contract. Thus, he
points out that article XVI, section 3, provides that before
disciplinary action is taken, the foreman involved "shall
advise the committeeman of the department and the shop
chairman as to the reasons and circumstances and afford
them an opportunity to discuss the case." There is no
provision for having witnesses at such a disciplinary
meeting. Moreover, section 5 of the same article specifical-
ly excludes witnesses from the first step of the grievance
procedure. According to the contract, witnesses are not
permitted until step four of the grievance procedure.
Accordingly, counsel contends that McNeely was only
complying with the disciplinary procedure provided by the
SUNDSTRAND CASTINGS CO.
contract. Counsel points out that when Lenoir refused to
participate in the meetings and-discuss the case, Bell left
the meeting and McNeely "had no choice but to support
his supervisor and assess the appropriate discipline. All of
this is simply unrelated to any protected union activities."
Concerning the contention of counsel for the General
Counsel that the Respondent discharged Bell in order to
"precipitate a strike by employees," counsel for the
Respondent states that that charge "is baseless and without
support. The Union had served notice of its intent to strike
long before Bell's discharge. Furthermore, it is plain that
the strike was caused by unsettled grievances relating to
other matters, as the notice from the Union indicated .. .
(the Union could not legally have struck over the Bell
discharge until after it had been processed through the
grievance procedure)."
Although Foreman Fair testified that McNeely once
stated that the Respondent had used Bell "as a tool to get
the employees to go on strike," McNeely denied having
made such a statement or having such an intention. In this
respect, I credit McNeely inasmuch as it seems only logical
that when told that Bell had struck Gupta he would take
action to support his supervisor.
I conclude that the preponderance of the evidence
concerning the termination of Bell supports the position of
the Respondent. Accordingly, the allegation that the
Respondent violated Section 8(a)(3) and (1) of the Act by
terminating Bell will be dismissed.
4. Alleged failure to process grievances
After Bell's discharge the parties held a number of
grievance meetings , but they were unable to resolve any of
them. At a union meeting on March 26, Lenoir told the
approximately 200 members in attendance that the
Respondent would "do nothing" on the grievances and
that Bell had been discharged allegedly for having struck a
foreman. The record shows that some four or five members
stated that they were present and that Bell did not touch
the foreman. Both Lenoir and the Union's attorney,
Sugarman, told the group that the Williams matter
constituted an unfair labor practice and Sugarman added
that unfair labor practice charges had been filed against
the Respondent, and that, in his view, the Respondent had
committed contract violations. The employees voted
virtually unanimously to strike and did so on March 28.
Early in April McNeely allegedly told Martin and Fair
that the Respondent was using the Bell incident in order
"to get the guys to walk out on strike so that they could
close the joint down."
The only evidence that the Respondent delayed in the
handling of any grievance was that Plant Manager Valaska
told Lenoir that he was too busy to meet with him on the
Bell grievance on March 27 and on the morning of March
28.8 In this regard, it should be noted that the Respondent
8 Doubtless Valaska was busy on those days since the Union had taken a
strike vote on March 26 and the union walkout (which took place on March
28) was imminent
9 In his brief, counsel for the Respondent states that "the real objections
of the Union to the Company's grievance handling appears to be that the
Company would not give in to the Union demands as it had done in the
past " Counsel for the Respondent notes that the contract did not contain
an arbitration clause and that the Union legally was permitted to strike over
423
had met with the Union and completed steps one and two
of the Bell grievance procedure the morning of Monday,
March 27, following his discharge the previous Friday.
Counsel for the General Counsel, with respect to any other
grievances, failed to show a single instance of delay on the
part of the Respondent. Indeed, with respect to every
grievance for which an approximate filing date was
established, the record shows that the grievance was
processed through the fifth step with expedition. Thus, the
incentive system was installed on February 9 and the fifth-
step grievance meeting over that matter and all related
grievances was held on February 24. With regard to the
Bell grievance, which was filed on March 27, it reached the
fifth step of the grievance procedure on May 2. There was
no evidence that any grievance failed promptly to reach
the fifth and final step of the grievance procedure. I
conclude, therefore, that the allegation of the complaint
regarding delay or failure to process grievances is without
merit.9
As far as appears, the Union never contended that the
discipline given Williams was in any manner related to his
opposition to the incentive system. Indeed, he was by no
means the only employee who spoke out against the
inventive plan. Many other employees vocally opposed it
and, according to testimony submitted by the Union, the
membership was nearly 100 percent against it. The issue
pressed by the Union concerned whether the number of
castings actually scrapped was only 31 instead of 51 and
whether the Respondent could prove that it was Williams
who caused the scrap. When the Union filed charges in
Case 13-CA-11299 on March 3, it did not alleged that the
suspension of Williams was violative of the Act; nor did
the Union raise this issue before the Board when the
settlement agreement was entered into in May. When
charges were filed in Case 13-CA-11689, the Union still
did not allege that the suspension of Williams was a
violation of the Act. Thus, argues the Respondent, it "is
clear that the Union regarded Williams' case as nothing
more than a disputed disciplinary action, which is exactly
what it was."
The Respondent argues that uncontradicted evidence in
the record establishes that Williams was disciplined for
cause. He had been making identical cores for over 2
months without applying excess paste and then, all of a
sudden, he produced several thousand dollars worth of
castings that had to be scrapped. The Respondent points
out that if it had "been intent upon getting rid of Williams
because of his opposition to the incentive plan, it certainly
could have fired him for causing the scrap. However, it
chose the more lenient penalty, thereby showing its good
faith. Williams returned to work on March 11, without
further incident."
I agree with the Respondent, for substantially the
unsettled grievances , this, according to counsel for the Respondent,
explains why it was "no surprise that the Company had been forced to yield
on most past grievances." Counsel for the Respondent also notes that the
Union "was equally adamant in its positions throughout the period
involved In this regard, the record shows that the Union never offered to
compromise a single issue . The Company offered to compromise on the
only grievance for which settlement was reached , the '30-minute dock'
grievance"
424 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
reasons it advanced. Thus, the complaint as to Williams
will be dismissed.
5. The settlement agreement in Case
13-CA-11299
The Regional Director and the Respondent entered into
a settlement agreement under date of May 4. The evidence
is uncontradicted that the Respondent took every action
required of it pursuant to that agreement. Thus, it
withdrew the incentive plan, revoked and withdrew all
written and oral warnings allegedly issued pursuant to the
incentive plan, paid Harris backpay for the time of his
suspension, agreed to recall laid-off employees as jobs
became available, and posted the required notices and
advised the Regional Office of its actions. On the other
hand, counsel for the General Counsel argues that the
Respondent "committed new and independent unfair labor
practices subsequent to entering into the Settlement
Agreement." Thus, he asserts that the Respondent violated
Section 8(a)(3) of the Act on June 29 by refusing to
reinstate unfair labor practice strikers. Moreover, he states
that on May 19 and thereafter the Respondent violated
Section 8(a)(3) by denying severance pay to union
employees. General Counsel argues that the Respondent's
conduct between January and July "reveals a course of
devious and flagrant conduct." He contends that the
"virtual ramrodding of the incentive plan upon the
employees by illegal discipline and the suspensions of
Harris and Williams, followed by a calculated policy of
unfair labor practices and refusal to resolve grievances in
order to compel and prolong a strike, reflects the
overwhelming bad faith by the Company." He contends
that, by discharging Bell, the Respondent desired to
"insure that the Union strike." Moreover, he asserts that
the Respondent's conduct subsequent to signing the
agreement "shows that its bad faith and antiunion animus
was of a continuing nature." Finally, he urges that the
settlement agreement had to be set aside in order to
establish the various unfair labor practices which caused
and prolonged the strike, and that by refusing to reinstate
the strikers on June 29, thereby violating Section 8(a)(3) of
the Act, the Respondent "forfeited any right to hide behind
the Settlement Agreement." Finally, it is urged that the
Regional Director "never put his imprimatur of compli-
ance" on the agreement, inasmuch as under Board practice
and "implicit in the terms of the Agreement" the latter "is
not fully consummated until the Notice of Compliance
letter is sent out."
Counsel for the Respondent refers to the dissenting
opinion of Chairman Miller in International Photographers,
Local 659, IATSE, 197 NLRB 1 187, 1192 (1972), where the
Chairman made the following observations:
We have a very real interest in settling charges, since
if it were not for the fact that over 90 percent of such
charges are disposed of by settlement and other early
methods of disposition at the regional level, this Board
would be inudated by such a caseload that we would be
totally paralyzed. Considerations of equity also require
that a respondent which has in good faith bound itself
to a course of complying with such an agreement
should be entitled to rely on compliance therewith by
the other party or parties, and not be subject to their
whim or caprice in deciding to withdraw after a
definitive agreement has once been executed. Indeed, if
it becomes known that a party cannot rely on such
agreements and if instead they are mere will o' the
wisps doomed to disappear at the whim of the other
contracting party, how can we expect respondents
seriously to consider entering upon settlement discus-
sions?
Members Fanning and Kennedy, who constituted the
majority in that case, held that the Regional Director did
not commit reversible error in withdrawing approval of the
settlement agreement and reopening the case for further
proceedings, under the circumstances of the case. The
majority stated: "While settlement agreements are entitled
to be treated with sanctity and should not be lightly set
aside, we recognize that circumstances can exist which
warrant permitting withdrawal from a settlement agree-
ment. Such is the case here."
Following the execution of the settlement agreement,
Shop Chairman Lenoir met with union members on
numerous occasions at which the possibility of returning to
work was discussed. Lenoir testified that many members
felt that Williams and Bell had been wronged and that the
Respondent had thereby committed unfair labor practices.
In rrud-June Joe Varick, the chief engineer and superin-
tendent of the maintenance department, told Fair that the
Respondent was looking for "a way to close the place
down to get Mr. Sadler and Mr. Taylor off the book, and
that the Union had done exactly what Taylor and Sadler
wanted them to do by walking out." It is not contradicted
that in mid-June Martin telephoned Lenoir and stated that
McNeely had told him (Martin) that McNeely had been
sent to the plant "to give the Union hell, and not settle any
grievances with them. That way maybe they would walk
out."
In his brief, counsel for the Respondent discusses the
credibility of Foreman Fair, whose testimony he describes
as "so improbable and filled with discrepancies and half-
truths that it cannot be credited." Fair had been employed
from September 1955 until the plant closed on July 21,
1972. In 1971 and 1972 he was a night supervisor over
some 30 employees. I watched Fair closely as he testified,
because it was a little difficult to understand him on
account of a slight speech defect. In view of counsel's
characterization of the testimony of Fair, I have carefully
read the testimony bearing thereon and have considered
the objective points made by counsel for the Respondent in
his brief.
Counsel makes the following points concerning the
credibility of Foreman Fair:
(1) He testified that in early March, in a conversation
with McNeely, the latter told him that the Company was
not going to give an inch on any grievances and that
McNeely stated that "the only thing the Company was
going to give on would be fifteen minutes of the thirty
minute dock." By contrast, the record shows that it was not
until May 10 and only after a number of grievance
meetings with the Union that the Company for the first
time proposed a compromise on the 30-minute dock
SUNDSTRAND CASTINGS CO.
grievance. In view of this, counsel submits that it is
inconceivable that McNeely would actually predict the
terms of a compromise taking place several months in the
future," and that certainly in early March when the
statement was allegedly made "the possibility existed that
the Union would give in on the grievance and that it would
not even have to be compromised, or that it might be
compromised on a different basis."
(2) Fair testified that he did not know about the defective
castings made by Williams until McNeely came up and
told him that Williams "had deliberately ruined 70
castings." However, McNeely testified that Fair came
down and looked at the castings with Martin and McNeely
before Williams' name was mentioned. Fair testified that
his first concern when he learned of the scrap problem was
why Williams should be suspended when he had a
warning. Counsel argues that McNeely's version "is more
probably," in that it would seem logical that a supervisor
would be shown scrap produced by a man immediately
under his supervision and that the scrap production would
be his first concern rather than whether the employee
involved had been given a warning.
(3) Fair made no reference to his having instructed
Williams concerning the application of past, thus leaving
the impression that McNeely's alleged instructions were
the basis for his believing the discipline too harsh.
However, Williams testified that Fair gave him instructions
on several occasions to "use plenty of paste" and that
McNeely had not given him any instructions for at least a
month.
(4) Fair testified that the Respondent wanted to shut the
plant down and wanted to have the employees walk out.
Witnesses for the Respondent denied any such intention
and, argues counsel, the record shows how unlikely it
would be. Respondent had spent hundreds of thousands of
dollars on plant equipment and was "trying desperately to
operate the plant."
(5) Counsel suggest that Fair's allegiance was with the
unit employees and refers to the fact that when told that
Bell had struck a supervisor, Fair's first comment was "I
don't believe it." When informed that the incentive plan
would be placed in operation he objected on the ground
that the Union would not accept it, and he objected to
disciplining employees for low production, contending that
he had been instructed "to find something to discipline"
them for whether they were "innocent or guilty." Finally,
counsel points out that Fair attributed statements to either
McNeely or Malaney which they categorically denied ever
making. Counsel, therefore, submits that Fair's testimony,
which is not corroborated, "cannot be credited as against
that of McNeely, Malaney and other Company witnesses."
While I am persuaded that Foreman Fair was sympa-
thetic with the Union's cause, I am not convinced that he
knowingly distorted his testimony to favor the position of
the Union and counsel for the General Counsel. He has
10 1 have not overlooked the fact that he stated that the decision to
change the "dock" from 30 minutes to 15 minutes was reached in early
March, whereas, the preponderance of the evidence indicates that it actually
was reached in May. I do not regard this discrepancy as warranting the
rejection of his testimony While I recognize that the Respondent's
witnesses denied the statements attributed to them by Fair, I am of the
opinion that Fair did not fabricate out of whole cloth the remarks he
425
been employed by the Respondent since 1955 and during
the last 2 years he had occupied the position of foreman
over some 30 employees. Fair appeared to me to be a
candid witness who responded to questions forthrightly
and without hesitation. I do not believe that he colored his
testimony to- favor the government's case and, accordingly,
I conclude that he is entitled to be credited.io
6. Failure to recall strikers
On July 3 and 5 the striking employees offered to return
to work. As of either date, however, so argues the
Respondent, it had eliminated most of their jobs pursuant
to a plant closedown and the jobs that remained were
being performed by office employees and supervisors. It
urges that since they have been permanently replaced, they
had no claim to job reinstatement, unless they were striking
over unfair labor practices. The Respondent's position is
that the strike was economic in nature from its beginning.
However, it further contends that assuming that the
institution of the incentive plan and the allegedly related
discipline in layoffs were unfair labor practices, the
settlement reached in May "eliminated those matters from
strike consideration and converted the continuing strike
into an economic strike."
As we have seen , Respondent revoked its incentive plan,
revoked all discipline allegedly assessed pursuant thereto,
paid Harris backpay for the period of suspension, and
informed the Union that the employees laid off would be
recalled as soon as possible. Thus, argues the Respondent,
"there were no longer any outstanding issues between the
Company and the Union over the incentive plan or related
discipline. Therefore, these matters, even if unfair labor
practices, were not the cause of the continuation of the
strike and cannot serve to make it continue as an unfair
labor practice strike." I'
Shop Chairman Lenoir testified, with respect to why the
strike continued after May 4, that he had "talked with
many of the members, and many of the members told me,
they said, `Jimmy, we have Willie Williams, who we felt the
Company did wrong; we have Tom Bell, who we felt the
Company did wrong, and we feel that it is an unfair labor
practice, and we are not willing to go back in there when
the Company done these people like they have been done,
they won't do nothing on it.' " Thus, the issue of whether
or not the strike continued as an unfair labor practice
strike turns on the resolution of the issues relating to Bell
and Williams.
As I have found above, the Respondent did not commit
any violation of the Act in connection with the termination
of Bell or the suspension of Williams. It follows, therefore,
that the continuation of the strike cannot be ascribed to
any unfair labor practices. It follows, therefore, that when
the employees offered to return to work on July 3, they had
been permanently replaced by supervisors and office
ascribed to fellow supervisors . It seems to me to border on the incredible to
attribute to Fair such animosity toward his employer of some 18 years as
counsel for the Respondent suggests in his brief
11 In support, the Respondent cites A 0 Corporation, Smith, Granite City
Plant v N LR B, 343 F.2d 103 (C.A 7, 1965), and Nelson B Allen, 149
NLRB 229 (1964)
426 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
workers and, moreover, the Respondent was engaged in
winding down operations preparatory to closing the plant.
Even if it be assumed that the institution of the incentive
plan and the allegedly related discipline and layoffs were
unfair labor practices, the May settlement agreement
eliminated these matters from strike consideration and
converted the strike into an economic strike. In the Nelson
B. Allen case, supra at 245, the Trial Examiner stated, and
the Board adopted his statement, that:
After January 23 when valid offers had been made to
all [pursuant to a Board settlement agreement],
however, all remained on strike to seek a contract.
Their status thus would change from unfair labor
practice strikers, to economic strikers, unless it can be
said that in pursuing such objective they were protest-
ing an unlawful refusal to bargain. Since I have found
that the Respondent was, by this time, meeting its
statutory bargaining obligation, I must conclude that
the continuing strike was for an economic object, and
that the drivers who remained away became economic
strikers.
Moreover, the Respondent argues that even if it be
assumed that the employees were unfair labor practice
strikers it would have been an unreasonable requirement
for the Company to have called them back. Polgreen
testified that by the time the question of recall came up, the
Respondent had closed its semi-steel division and was
winding down operations in its investment division. Office
employees were dividing their time between the office and
the production floor and were doing the little production
work that was left. Moreover, points out the Respondent,
only 10 to 12 days remained before final shutdown and it
would have taken a number of days to determine who
should be recalled to what jobs under the terms of the
contract.
In addition, counsel for the Respondent points out that a
question exists as to whether the request to reinstate made
on July 3 was an appropriate offer, since, " it spoke in terms
of reinstating all strikers rather than those for which
positions were left. It was not until July 8, that the Union
formally retreated from this position (R. Exh. 9) "
The record shows that the Respondent advised the
Union of the possible plant closing on May 2 and
thereafter discussed with the Union possible ways and
means of continuing operations. During this time Polgreen
assured Attorney Sugarman that if the decision to close
were made, the Respondent would be willing to bargain
over the effects of the closing upon employees. At a
meeting on May 19, the Respondent informed the Union
of its final decision to close. On this occasion, Attorney
Sugarman introduced the question of severance pay and
asked what the Respondent's position was with regard to it.
Polgreen responded that he did not think severance pay
would be appropriate in view of the magnitude of the
losses sustained at the foundry, but that Respondent would
consider any firm proposal that the Union would make.
Sugarman then proposed that severance be paid on the
same basis as it had been paid in 1969 to the magnesium-
aluminum employees. Polgreen told Sugarman that he
would try to get him an answer that day. However, after
being unsuccessful in attempting to reach his superiors by
telephone, Polgreen informed Sugarman that the Company
would take the question of severance pay under considera-
tion and communicate with the Union at a later date. The
parties met on May 23. At that time they discussed the
severance pay plan for office and supervisory employees.
The Union argued this severance plan was discriminatory
in that it provided severance pay for unrepresented office
employees but not for union-represented production
employees. Polgreen took the position that there were
many differences in benefits for the two groups, including,
among other matters , pension contributions . Polgreen
offered to make an analysis comparing benefits for office
employees with the benefits of union-represented employ-
ees. However, Sugarman did not ask that such an analysis
be made and stated that he did not regard the difference in
benefits as an adequate answer . Polgreen again stated that
the Respondent's position that severance pay was not
appropriate in view of the very substantial losses incurred
at the foundry.
Sugarman and Polgreen had two telephone conversa-
tions late in May and early in June in which the subject
matter of the discussion was substantially similar to what
had been discussed at the May 23 meeting. On June 29, the
parties had a meeting under the auspices of the Federal
Mediation and Conciliation Service, where the issue of
severance pay was discussed. Sugarman asked if the
Respondent had a counterproposal and Polgreen respond-
ed by stating that the Respondent had considered the
severance pay request and had decided to deny it.
In my view , the General Counsel has failed to sustain his
burden of proving lack of good faith on the part of
Respondent. All he proved is that with regard to a single
issue the Respondent refused to accede a union demand, or
conversely, that the Union refused to accede to a proposal
of the Respondent. Section 8(d) of the Act provides that
the requirement of good -faith bargaining "does not compel
either party to agree to a proposal or require the making of
a concession." It seems plain to me that the Respondent
was not required to compromise its position and to give the
Union more benefits upon the closing of the plant. It seems
obvious that these are matters for bargaining and not
subject to the judgment of the Board. As the court
observed in Chevron Oil Company, Standard Oil Company
of Texas Division v. N.L R.B., 442 F.2d 1067, 1074 (C.A. 5,
1971):
Collective bargaining by its very nature is "an anneal-
ing processing hammered out under the most severe
and competing forces and counteracting pressures."
N.L.R.B. v. Dalton Brick & Tile Corp., 5th Cir. 1962,
301 F.2d 886, 895. The Board is charged with the
responsibility of overseeing and refereeing the bargain-
ing process, but it is not empowered to compel, either
directly or indirectly, concessions or otherwise sit in
judgment upon the substantive terms of the agreement.
It follows that "it is not for the Board to balance the
scales or equalize or neutralize pressures in the name of
lack of good faith." [Citations omitted.]
General Counsel further contends that it was illegal
discrimination for the Respondent to accord severance pay
SUNDSTRAND CASTINGS CO. 427
to unrepresented office employees and not production
employees who were represented by the Union. In this
connection, it should be noted that the office plan makes
no distinction between office employees represented by a
union and those not so represented. It is further clear that
if the production workers here were not represented by a
union they still would have no right to participate in the
office plan. In other words, the distinction is between
office employees and production employees, and not
between represented and unrepresented employees. In this
regard, the Board and the Courts have consistently held
that, in the absence of proof of unlawful motive, it is not an
unfair labor practice for an employer to grant benefits to
unorganized employees and withhold the same benefits
from organized employees. See e.g., Chevron Oil Company,
supra; Firestone Synthetic Fibers Company, 374 F.2d 211,
216 (C.A. 4, 1967); B. F. Goodrich Co., 195 NLRB 914
(1972); and Quaker Tool & Dye, Inc., 169 NLRB 1148
(1968). Thus in the Goodrich case, the Board stated that
"[T ]he granting of new profit-sharing benefits to unorgan-
ized employees but not to represented employees is not,
standing alone, prohibited discnmination. The Act does
not impose upon an employer the obligation to grant or
confer upon represented employees the right to receive
such benefits solely on the basis that like benefits were
conferred elsewhere."
In my opinion, the record evidence shows that, in view of
the very substantial losses over the entire 5-year period that
the Respondent operated the foundry, the Respondent had
the compelling business justification for refusing gratui-
tously to grant severance pay not required by the terms of
the contract with the Union. Accordingly, I shall dismiss
this allegation.
CONCLUSIONS OF LAW
1. The Respondent is engaged in commerce within the
meaning of Section 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 suspending employee Preston Harris the Respon-
dent violated Section 8(a)(3) and (1) of the Act.
4. The aforesaid unfair labor practice is an unfair labor
practice affecting commerce within the meaning of Section
2(6) and (7) of the Act.
5. In all other respects as alleged in the complaint,
Respondent has not engaged in conduct violative of the
Act.
THE REMEDY
In order to effectuate the policies of the Act, I find it
necessary that the Respondent be ordered to cease and
desist from the unfair labor practices found and from any
like or related invasion of the rights of employees under
Section 7 of the Act, and to take certain affirmative action.
[Recommended Order omitted from publication.]