Yakima Frozen Foods

National Labor Relations Board - Board Decisions

Mar 9, 1961

130 N.L.R.B. 1269 (N.L.R.B. 1961)

YAKIMA FROZEN FOODS 1269
3. The Respondent Union has engaged in and is engaging in unfair labor practices
within the meaning of Section 8(b)(1)(A) and (2 ) of the Act.
4. The aforesaid unfair labor practices affect commerce within the meaning of
Section 2 ( 6) and (7) of the Act.
[Recommendations omitted from publication.]
George Mick , d/b/a Yakima Frozen Foods and Fruit and Vege-
table Packers' and Warehousemen 's Union , Local 760. Case
No. 19-CA-1760. March 9,1961
DECISION AND ORDER
On January 25, 1960, Trial Examiner Martin S. Bennett issued his
Intermediate Report in the above-entitled proceeding, finding that
the Respondent had engaged in and was engaging in certain unfair
labor practices alleged in the complaint herein and recommending that
he cease and desist therefrom and take certain affirmative action, as
set forth in the copy of the Intermediate Report attached hereto.
The Trial Examiner also found that Respondent had not engaged in
certain other unfair labor practices alleged in the complaint, and
recommended that those allegations of the complaint be dismissed.
Thereafter, the Respondent, the General Counsel, and the Charging
Party (hereinafter referred to as the Union), filed exceptions to the
Intermediate Report and supporting briefs.
The Board has reviewed the rulings made by the Trial Examiner
at the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Inter-
mediate Report, the exceptions and briefs, and the entire record in
the case, and hereby adopts the findings, conclusions, and recommenda-
tions of the Trial Examiner, only insofar as they are consistent with
the findings, conclusions, and order hereinafter set forth.
1. The Trial Examiner found that Respondent Mick, after claiming
inability to pay a wage increase requested by the Union, failed and
refused to furnish the Union with information to substantiate its
claim, and thereby failed to bargain in good faith, as required by
Section 8(a) (5) of the Act. We disagree.
As set forth in the Intermediate Report, the Union was certified on
February 27, 1959. At the parties' first bargaining conference, on
March 7, Respondent Mick stated that he was unable to pay a wage
increase the Union sought. To prove his claim, Respondent offered
to the Union the Company's most recent balance sheet, that is, one for
the calendar year 1957. The Union refused the offer.
On March 16, 1959, Respondent mailed to the Union a list of
counterproposals to the Union's demands. Respondent's accompany-
130 NLRB No. 128.
1270 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ing letter stated that as of December 31, 1957, the Company was
$51,748 "in the red" and there would be more loss in 1958. It stated
:further:
We can support this statement by an examination of the balance
sheet as compiled by James S. Warnick, C.P.A. We would be
willing to make this 1957 balance sheet available for inspection
and verification provided it was done by some licensed accountant
or C.P.A. in conference with Mr. Warnick, who could answer
any questions at the same time. Since January 1, 1958, we have
been operating under agreements made with our major creditors
that have enabled us to keep this operation going. We have made
commitments to our creditors than cannot be changed until we
have paid off our obligations to them. These commitments, in
some cases .and at some times have exceeded our net profits, ac-
cording to our daily cost sheets. Just what our financial picture
is as of December 31, 1958, I am unable to state as we have not
had an opportunity to have our books audited. At the moment,
I do not know when Mr. Warnick will be able to schedule an audit
of our books for 1958. If it follows the pattern of other years
which I presume it will, it will be some time in April before such
an audit will be possible.
On March 21, the parties met again. At the conclusion of the meet-
ing Farrington, the Union's chief representative, said :
We assume that the Company is able but not willing to meet
this contract in regard to costs. If the Company wishes us to
recognize their argument that they are not able to meet the costs
of some of these items they must submit to an audit of their books
by our auditor, probably from Frame and Whiting, if one is
available.
On March 23, the parties met at Respondent's office and discussed
the Respondent's books of account. Respondent stated that his attor-
ney was out of town, and that until his attorney returned, he would
not turn over his books to the Union or to any accountant, "though
we are in agreement that such procedure would be in order."
On March 26, Respondent opened a bargaining conference by stating
that he had conferred with counsel. He then said to the union repre-
sentatives:
We see no reason why we wouldn't be willing to make our
books available with the following provisions :
1. That the books and records be examined here in our office.
2. That no information pertaining to whom sales were made
or from whom purchases were made be taken out of the office.
.YAKIMA FROZEN FOODS 1271
3. That any questions concerning any aspect of the statement
or records would be directed to Mr. James Warnick* of Boyd
Olafson, our accountant.'
4. Any costs arising from this audit would be borne by the
Union.
5. Whatever accountant the union desires to appoint would
be a Licensed Public Accountant or C.P.A.
Farrington replied :
We would not agree to obtaining a C.P.A. and we would not
direct questions to your auditor. We are not obligated to do
this. We are not willing to agree to your stipulations because
we don't have to. We agree that they are not unreasonable but
we will not agree to them. The Union insists on being present
when the books are audited 2
On March 27, the parties again met, and the following transpired :
Mick stated :
Our position is this : we are willing to submit our books to an
audit. You flatly turned it down. We asked you under what
conditions you would audit the books. You said it would be a
licensed accountant or a C.P.A. Then yesterday you turned it
down.
Farrington replied : "Don't expect us to agree to any information
from records that you may have prepared yourselves." Mick then
said : "No. We are offering to submit our books and records." And
Farrington replied : "Under your terms which we will not agree to."
Mick then stated that he had talked to his own auditor concerning
a company audit and that one would not be ready for at least another
month.
While the parties were still in conference, the Union called the
night shift out on strike.
' Respondent pointed out Warnick was "the one familiar with all the general ledger
entries and whatever the questions might be , he is fully qualified to answer as he handled
our affairs for a number of years and knows our financial part of the business."
2 Minutes of the meeting were prepared by the Company . Regarding the question of
the audit of books, the minutes state:
The Company refused to submit the books to the union agent or to have the union
agent present when the books are audited . The Company is willing to submit the
books to any auditor who is qualified that the union wishes to appoint to audit the
books under the foregoing stipulations . The Union insists on "anyone they wish to
appoint to audit the books and if we do not agree to this they will insist that we
have refused to make the books available.
As stated in the minutes, Mick explained his position to the Union as follows. He was
afraid to let the Union know his sources of supply and his consignees for fear of
secondary boycotts ; but be believed that a licensed public accountant , a professional
man, would not disclose confidential information.
8 According to the minutes of the bargaining meetings as taken stenographically by
Mack's secretary. The General Counsel did not challenge their accuracy , and they. were
accepted as true by the Trial Examiner.
1272 DECISIONS OF NATIONAL, LABOR RELATIONS BOARD
In reaching his ultimate conclusion that Respondent failed to bar-
gain in good faith with, respect to his claim of inability to pay, the
Trial Examiner apparently relied on inconsistent premises. He
stated :
The question is, therefore, did Respondent bargain in good faith
by offering for inspection his 1957 financial statement and rec-
ords unspecified, on which the statement was based to a licensed
accountant of the union's choice.
In this connection, the Trial Examiner also found :
Respondent at all times flatly refused to disclose to a union
agent any of its current operating figures in support of its claim
of inability to pay. . . . Mick refused to supply any records
later than December of 1957.
However, the Trial Examiner seems to have based his ultimate finding
of a violation on a different ground. Thus he stated :
Turning to the issue as it ultimately resolves itself, viz, Mick's
claim that he would turn over the records only to a licensed
accountant and that he would not disclose his books to union
personnel. I must conclude on the record presented herein that
he has failed in his obligations under the Act.
These findings by the Trial Examiner raise two questions : (1) the
validity of the Trial Examiner's factual finding that Respondent
refused to submit current financial records; and (2) the validity of
the Trial Examiner's legal conclusion that the Respondent violated
the Act by its position on the inspection of its records only by a licensed
accountant.
As to the first question, the evidence summarized above shows that
Respondent offered the Union its most recent balance sheet; that it
offered to permit the "verification" of such- balance sheet by a "li-
censed accountant or C.P.A."; and that, finally, the Respondent of-
fered to submit its books and records to a full audit, in Respondent's
office, by a "Licensed Public Accountant or a C.P.A." designated by
the Union, provided the Union paid the cost of the audit. These
offers were never changed or withdrawn. On all the evidence, we
find, therefore, contrary to the Trial Examiner, that the Respondent
did not refuse to submit current financial records to the Union.
The second question is one of law-that is, whether the Respond-
ent violated the Act by refusing to permit the Union to make a gen-
eral inspection of its books and records, and by insisting instead that
that books and records be audited by a qualified accountant not in the
Union's general employ 4 We disagree with the Trial Examiner's
Cf. Albany Garage, Inc., at al., 126 NLRB 417, footnote 2, where the Board found it
unnecessary to pass on a similar question.
YAKIMA FROZEN FOODS 1273
conclusion that the Respondent violated the Act by taking this
position.5
The relevant rule of law, as enunciated by the Supreme Court in
N.L.R.B. v. Truitt Mfg. Co., 351 U.S. 149 (C.A. 4), is as follows:
where an employer claims financial inability to pay a demanded wage
increase, his failure to furnish on request substantiating financial
information may constitute a violation of Section 8(a) (5) depend-
ing on the facts of the particular case, the ultimate inquiry being
"whether or not under the circumstances of the particular case, the
statutory obligation to bargain in good faith has been met." Under the
Truitt principle, the obligation to furnish substantiating evidence
does not "automatically" follow a claim of inability to pay, nor is
the employer obligated to substantiate the claim; it is enough if the
employer in good, faith attempts to substantiate it.'
We hold on the facts presented that the Respondent satisfied his
obligation under the Truitt doctrine. The offer that the Respondent
made to permit his books and records to be audited was a reasonable
one. The conditions that the Respondent imposed on the audit cannot
be said to have been unduly burdensome or unduly restrictive on the
Union. And nothing that the Respondent said, or did, with respect to
the offer, or the events which preceded the offer, demonstrates that
the Respondent was not acting in good faith.
Consequently, we conclude that the Respondent did not violate the
Act, as alleged, by failing and refusing to furnish the Union with
information to substantiate its claim of inability to pay.
2. The Trial Examiner found that the Respondent violated Section
8 (a) (1) and (5) of the Act by bringing two rank-and-file employees
to the bargaining conference of March 27, 1959. We do not agree.
In support of his findings, the Trial Examiner relied on L. G.
Everist, Inc., 103 NLRB 308.1 The Everist case is distinguishable
from the instant case. Here, unlike in Everist, the Union raised no
objection to the presence of the invited employees. In fact, the Union
specifically stated it had no objection to their presence." Nor did the
u The Trial Examiner stated : "Although it is entirely understandable that Respondent
was reluctant to bare his books to a union agent, that is hardly a relevant factor where
it is by now well-established that he must do so."
The Board has never ruled that an employer is under an obligation "to bare his books"
to a union , or to any other employee representative. Consequently, the principle is not
"well established." Nor do we now affirm it. Instead we reject the principle as in-
consistent with the prevailing authority. See N.L.R.B. v. Truitt Mfg. Co., 351 U.S.
149, 153.
ewe specifically repudiate all the Trial Examiner 's statements of principle and law
with respect to an employer's obligation to substantiate a claim of inability to pay that
are inconsistent with those set forth in the text above.
In Everist, the employer had posted a notice inviting all its employees to attend a
bargaining conference. The union thereupon objected to holding the conference. Despite
the union 's objections, the employer insisted that the conference be held with the em-
ployees present . As a result, no conference was held.
g Findings with respect to the meeting of March 27, 1959 , and the position of the
Union with respect to the presence of the invited employees, are based on the minutes of
the meeting . See footnote 3, supra.
1274 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Union, as found by the Trial Examiner, request that the invited em
ployees leave. The only objection advanced by the Union was to the
fact that it had not been consulted in advance and given a chance to
pick an equal "shop committee." Nor, as found by the Trial Ex-
aminer, did Respondent refuse to pay for an equal number of union
observers, although there was a discussion as to the feasibility of re-
leasing union observers from work and having the Respondent pay
for their time lost from work. In fact, Respondent Mick offered to
release an equal number of union observers and pay them for their
time at the meeting. The matter after being discussed at length was
dropped by the Union, and the parties thereupon bargained for over
4 hours thereafter.
In these circumstances, we find that the Union concurred in Re-
spondent's action of bringing the two employees to the March 27,
1957, bargaining conference; and in the absence of any showing of
an intent by Respondent to undermine the Union or to interfere with
the employees' right to choose their own bargaining representative,
we conclude Respondent did not violate the Act by the presence of
the employees at the bargaining conference.
3. The Trial Examiner found that Respondent violated Section
8 (a) (1) of the Act by informing strikers I inquiring about employ-
ment 10 that they had been replaced, when in fact such was not the
case.
The strike in question started on March 27. On March 28, Re-
spondent mailed letters to all employees ordering them to report to
work on March 30 and 31, or "it would be necessary to replace your
services." On April 1, the strikers came for their pay. Four of them
inquired whether they had been discharged. ' They were told they had
not been discharged, but had been replaced.
The General Counsel offered no proof whatsoever as to the replace-
ment or vacancy situation on April 1. The Trial Examiner instead
based his finding on what he termed "inconsistencies and contradic-
tions" in Respondent's testimony. Whether or not Respondent's testi-
mony in this respect was inconsistent and contradictory we need not
decide; for we do decide, and find, that on this record the General
Counsel has not sustained the burden of proving affirmatively the
9 Though the complaint alleged that the strike beginning on March 27, 1959 , was caused
by Respondent 's alleged unfair labor practices , the Trial Examiner did not pass on, or
determine , the nature of the strike . In view of our ultimate conclusion that Respondent
did not commit any unfair labor practices , we find the strike to have been an economic
strike. As economic strikers , the striking employees were subject to replacement.
10 The General Counsel in his exceptions and brief concedes that the strikers were not
seeking "reinstatement ," terming them applicants for "employment ." By conceding that
the strikers were applicants for employment , as opposed to reinstatement, the General
Counsel , in our opinion , implicitly concedes the fact of replacement.
Moreover , there is a factual doubt as to whether the four inquiring employees were
"applicants" in any sense . Thus the strikers who inquired as to their status and were
told they had been replaced , also testified that they had not been seeking "yobs," and
would have refused offers to go to work so long as the strike continued.
YAKIMA FROZEN FOODS 1275
factual inaccuracy of Respondent's assertion to the four strikers that
they had been replaced.
Accordingly, we do not adopt the Trial Examiner's finding the
Respondent violated Section 8(a) (1) in this respect.I"
[The Board dismissed the complaint.]
CHAIRMAN MCCULLOCH and MEMBER FANNING took no part in the
consideration of the above Decision and Order.
u In view of our finding above, we do not reach the question of whether , had the
strikers in fact not been replaced , the statement to them that they had been replaced
constituted a violation , as found by the Trial Examiner.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
The complaint alleges that Respondent , George Mick, d/b/a Yakima Frozen
Foods, has refused to bargain in good faith with Fruit and Vegetable Packers' and
Warehousemen 's Union, Local 760, herein called the Union , and has interfered with,
restrained , and coerced employees by certain conduct, all within the meaning of
Section 8(a)(5) and ( 1) of the Act . Respondent 's answer denied the commission
of any unfair labor practices . Pursuant to notice , a hearing was held at Yakima,
Washington , on October 21, 22, and 23, 1959. All parties were represented by
counsel and were afforded full opportunity to be heard, to examine and cross -examine
witnesses , and to introduce relevant evidence . Oral argument was waived and briefs
have been submitted by the General Counsel and Respondent.
Upon the entire record in the case, and from my observation of the witnesses, I
make the following:
FINDINGS OF FACT
I. THE BUSINESS OF RESPONDENT
George Mick , d/b/a Yakima Frozen Foods, is engaged in the processing and sale
of frozen foods products at Yakima, Washington . During the year 1958 , Respondent
sold products valued in excess of $500,000, 98 percent of which was sold and shipped
directly to points outside the State of Washington . During the same period , products
valued in excess of $50,000 were purchased and shipped to Respondent directly from
points outside the State of Washington . I find that the operations of Respondent
affect commerce.
H. THE LABOR ORGANIZATION INVOLVED
Fruit and Vegetable Packers' and Warehousemen 's Union , Local 760 , is a labor
organization admitting to membership the employees of Respondent.
III. THE UNFAIR LABOR PRACTICES
A. The issues
The complaint alleges that between March 7 and 27 , 1959 , Respondent refused
to bargain in good faith with the Union by (1) making statements and pursuing a
course of conduct which had as its sole purpose the delaying-and stalling of bargain=
ing, and ( 2) bringing three employees to a bargaining meeting on March 27 to
witness, observe , and ask questions about the negotiations . Litigated primarily was
the latter allegation and, under ( 1) above, the alleged refusal of Respondent to
supply pertinent financial data, following its claim of inability to pay . Also treated
hereinafter is the allegation that Respondent falsely notified striking employees on
April 1 that they had been replaced when, in fact, such was not the case, this allegedly
constituting a violation of Section 8(a) (1) of the Act. .
B. The refusal to bargain
1. Majority representation in the appropriate unit
The complaint alleges and Respondent admits that following a consent election
in Case No . 19-RC-2281 , the Regional Director of the Nineteenth Region duly
1276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
certified the Union on February 27, 1959, _ as the representative of Respondent's
employees in the following appropriate unit:
All employees engaged in production, maintenance, and transportation work,
including seasonal employees, employed at the Respondent's plant in Yakima,
Washington, or in sheds or lots adjacent thereto where commodities or ma-
terials are processed and stored, excluding office clerical employees, fieldmen,
guards, and supervisory employees, as defined in the Act as amended.
I find that the above-described unit is one which is appropriate for the purposes of
collective bargaining within the meaning of Section 9(b) of the Act, and that the
Union on February 27, 1959, and at all times material herein has been and is the
exclusive representative of the above-described employees pursuant to Section 9(a)
of the Act.
2. Sequence of events
After winning the representation election in Respondent's previously unorganized
plant, the Union submitted a lengthy and complete contract proposal to Respondent
on February 24, 1959. On March 7, the first of a series of meetings took place
with Secretary-Treasurer James Farrington of the Union and George Mick as the
spokesmen for the parties. They proceeded to review the contract proposal and
there was initial objection by Mick, as Farrington testified, to entering into any
agreement which would increase Respondent's "current labor cost," this claim being
predicated upon Respondent's unsatisfactory financial position. Little progress was
made and the meeting ended with agreement that Respondent would submit a
counterproposal.
On March 16, Mick sent a six-page letter to the Union wherein he (1) proceeded
to distinguish his operation from that of the national organization covered in the
proposed contract; (2) claimed that "We are presently in no financial condition to
consider anything that will materially add to our present costs of production," with
supporting arguments; and (3) proceeded to give his views on each article of the
proposed contract.
On March 17 and 18, subsequent to receipt of this letter, the union officials met
with the employees. Respondent's counterproposal was rejected; a strike was author-
ized, if necessary in the view of the union officials; and further meetings with Re-
spondent were decided upon. Further meetings were held on March 21, 23, 26,
and 27. Mick's secretary took notes in shorthand of these meetings and, although
not complete, they are in evidence. The General Counsel does not challenge the
correctness of these notes.'
At the March 21 meeting, the Union rejected Respondent's counterproposal and
the discussion covered only the ,first five articles of the Union's original proposal.
As the General Counsel has stressed Respondent's claim of inability to pay any of
the increased benefits sought by the Union, primary attention herein, as well as at
later meetings, is given to the evidence on that topic.
It is clear and I find that the Union asked for proof in support of Respondent's
claim of inability to pay the various benefits sought by the Union. Respondent
offered its "balance sheet" in support of its position but this was rejected, the Union
contending, as the notes of the meeting disclose, "If the Company wants us to recog-
nize their argument that they are'not able to meet the costs of some of these items,
they must submit to an audit of their books by our auditor . . and if this investiga-
tion proves to us that they are unable to meet these costs, then we would be willing'
to recommend that this proposition we have made be altered to the extent that it
would fall within their ability to meet it. We want a true picture of the Company's
financial position . . . But we are not going to take only a balance sheet to prove
this."
This balance sheet, it is to be noted, is a document reflecting Respondent's financial
position as of December 31, 1957, and reflecting 1957 operations only, which Re-
spondent received from its auditor shortly after June 30, 1958. Indeed, Respondent
has maintained that it had and still has no financial records of a more recent vintage
and that it will not have any until the balance sheet of its 1958 operations becomes
available at some date in 1959 subsequent to the instant hearing? There is further
1 The notes taken by Mick's secretary are extensive although it Is conceded that her
notes of the March 21 and 23 meetings are not as complete as those of the later meetings.
Hence the notes which are credited herein have been supplemented by other testimony,
particularly as to the March 21 and 23 meetings.
2 After the close of the instant hearing, Respondent submitted a copy of the 1955
financial statement to the Associate Chief Trial Examiner together with a motion , opposed
YAKIMA FROZEN FOODS 1277
the point that the financial statement in question, a five-page document, was not,
according to Union Representative Farrington, the one proffered to him by Mick. It,
was Farrington's testimony that all that was demonstrated to him was a one-page
document.
The minutes also disclose that the Union requested proof of Respondent's inabi-
lity to pay and that they requested proof other than a balance sheet reflecting oper-
ations over a 1-year period ending some 15 months previous. They further disclose
that Mick stated he was willing to do what he had previously offered to do in his
March 16 letter. It is significant that in the March 16 letter Mick offered only to
submit the 1957 balance sheet "for inspection and verification provided it was done
by some licensed accountant or CPA in conference with Mr. Warnick [Respond-
ent's accountant]."
I find that this constituted a refusal to submit any pertinent records to an accred-
ited union representative. I further find that here, as well as on later occasions,
Mick refused to supply any records reflecting operations later than December 1957;
indeed, he claimed that there were no other records.
Another meeting was held on March 23 and the discussion was confined chiefly
to the Union's demand to see Respondent's books. Mick requested further time to
consult with his attorney and the Union agreed. Mick conceded that the Union
demanded on this occasion "that we turn our books over to •them or to their auditor."
The next meeting took place on March 26. According to the minutes, Mick
stated that he had conferred with his counsel and that he was willing to make his
books available with the following restrictions: (1) that they be examined in his
office; (2) that no data be taken as to the identity of customers and suppliers; (3)
that all questions be directed to his accountant; (4) that the work be done by a union
accountant who was a licensed public accountant or a CPA; and (5) that the Union
bear all costs. Farrington rejected these restrictions on the ground that the Union
was opposed to obtaining a CPA and that it was not required to direct its queries
to Respondent's accountant.
It is clear from a consideration of the minutes, and I find, that Respondent re-
fused to submit its books "to the Union agent" or to have a union agent present
when the books were audited. Just what books Respondent had in mind is difficult
to ascertain, because it was Mick's testimony herein that Respondent had no records
or documents available for inspection other than those upon which its 1957 financial
statement was predicated. It is apparent from the foregoing, and I find, that Re-
spondent refused to make its business records available to any designee of the Union
and insisted upon an accountant of the Union's choice making the inspection. Mick
testified that he predicated his insistence upon an accountant on the ground that
they were professional people who are subject to a code of ethics.
The balance of the meeting was devoted to a discussion of various contract
clauses with no agreement thereon. Inter alia, Respondent objected to a checkoff
clause for dues and initiation fees on the ground that this would add to Respondent's
payroll costs and claimed that employees were capable of handling their own funds.
At the conclusion of the meeting, the Union -threatened to strike at noon on the
following day unless a contract were agreed upon before that hour. In ending the
meeting, Farrington stated, "We are interested and we are entitled to any informa-
tion from the financial records of the company that would affect the situation of
your pleas of enability [sic] to meet labor costs. This is the decision 'that the
company must make when they want to take the position that they are not in a fi-
nancial position to pay." The meeting was then adjourned until 10 a.m. the follow-
ing day.
Between 7 and 8 a.m. on March 27, Quality Control Supervisor Alta Hartzell3
suggested to Mick that it would be desirable to have observers present at the meet-
ing so that they could hear what the Union said and "decide for themselves" what
the true picture was as to the Union's request to see Respondent's financial records.
She suggested two rank-and-file employees, Peterson and Dragoo, who were within
the bargaining unit, as potential observers and further agreed to attend herself.
by the General Counsel, for consideration of same as part of the instant record : said
motion and exhibit have been referred to the Trial Examiner. As I deem this to be not
material to the issues raised herein, the motion is hereby rejected and, together with the
General Counsel's response thereto, has been placed in the rejected exhibit file as Trial
Examiner's Exhibit No. 1. Furthermore, even if the exhibit were received in evidence, it
would not affect the conclusions arrived at hereinafter.
3 Hartzell was not in the bargaining unit and Respondent does not dispute that she was
a supervisor within the meaning of the Act ; in fact, it would appear to be Respondent's
position that she was.
1278 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Later that day, Mick notified these three employees that they were to attend the
meeting which had been postponed to the afternoon. As Peterson testified, and I
find, Mick told the three employees that they could take no part in the meeting,
that their presence might keep tempers down, and that they could thereafter tell the
other employees what nad happened at the meeting.
Mick contacted the Union at 9 a.m. on that date and arranged to have the meet-
ing postponed to the afternoon. He made addresses to the day shift employees at
9:20 and 10 a.m., wherein he told them what had taken place at the March 21, 23,
and 26 meetings. Significantly, he referred to the fact that although he was willing
to have his books examined by a licensed accountant he was refusing to submit the
books to a union agent for inspection.
The minutes or the meeting held on the afternoon of April 27 are extensive.
Present for the Union_ were Farrington and several assistants and for Respondent,
Mick, his plant superintendent, and his stenographer. The three observers were
seated at one portion of the table around which the various representatives were
grouped and had writing materials before them. Mick introduced the three obser-
vers and announced that he had invited them to attend. He stated, according to the
minutes, that he believed their presence would contribute to a more profitable and
harmonious meeting and that they should be entitled to question any statement that
mignt be made. According to rarrington, Mick also stated that they could take
notes and carry back to their fellow employees a true picture of what occurred.
Both Mick and Farrington testified herein that Farrington objected to the presence
of the three observers, although according to Farrington, he did not request that
they leave.
In response to Farrington's question, Mick admitted that the three employees were
being compensated for their time at the meeting. Farrington then requested the
right to select three additional compensated observers of union choosing from
among the employees. Mick rejected this, claiming that it would cripple his opera-
tions, and stated that he had asked the three employees to attend because "We feel
that the employees should know what was going on."
Mick offered to postpone the meeting to a later date when the entire plant com-
plement could attend, presumably during nonworking and noncompensated time.
The Union declined the offer, stating that the employees were awaiting a progress
report that evening and that they would participate in the meeting under protest.
The meeting then turned to a consideration of the union proposals and, by 6:30
p.m., some hours later, little progress had been made.
mere was again discussion or the lnanciat records, with Mick stating that he was
willing to submit his books to an audit. Farrington replied that the Union wanted
the records made available "to people we would select." Late in the meeting, at
approximately ) or 5:30 p.m., and apparently at a time when the parties were
covering the union-contract porposals item by item with no resulting agreement,
Farrington concluded that progress was not being made, as indeed was the case.
He sent word through one of his assistants that the strike was to commence and the
night-shift employees were so notified shortly after starting work at 5 p.m. They
immediately left work and reported to the union hall where Farrington appeared in
due course and brought them up to date on the state of negotiations.
3. Analysis and Conclusions
a. The request for financial records
The original contract submitted by the Union proposed increases in wages and
employee benefits and Respondent promptly asserted his inability to pay them be-
cause of his financial condition. The question is, therefore, did Respondent bar-
gain in good faith by offering for inspection his 1957 financial statement and rec-
ords, unspecified, on which the statement was based to a licensed accountant of the
Union's choice. No attack is made herein on Respondent's position that the record
or records were to be inspected in the office of Respondent and at union cost.
A recent touchstone in this area is the decision of the Supreme Court in N.L.R.B.
•v. Truitt Mfg. Co., 351 U.S. 149. There the Court stated:
Good-faith bargaining necessarily requires that claims by either bargainer
should be honest claims. This is true about an asserted inability to pay an
increase in wages. If such an argument is important enough to present in the
give and take of bargaining, it is important enough to require some sort of
proof of its accuracy. And it would certainly not be farfetched for a trier
of fact to reach the conclusion that bargaining lacks good faith when an
YAKIMA FROZEN FOODS 1279
employer mechanically repeats a claim of inability to pay without making the
slightest effort to substantiate the claim. . . .
The inquiry must always be whether or not under the circumstances of the
particular case the statutory obligation to bargain in good faith has been met.
As for the present case, bargaining meetings took place during March 1959 with
two subsequent meetings in April and May. The Union had presented an ex-
tensive contract proposal which manifestly entailed a number of increased benefits
and ensuing increased costs. Respondent raised the claim of inability to pay and
this squarely presents the criterion established by the Truitt decision, viz, has Re-
spondent come forward with an honest effort to substantiate his claim.
Although it is entirely understandable that Respondent was reluctant to bare
his books. to a union agent, this is hardly a relevant factor where it is by now a well-
established fact that he must do so. Respondent at all times flatly refused to dis-
close to a union agent any of its current operating figures in support of its claim
of inability to pay. Mick has steadfastly maintained that there were no such
records and that the most recent document in his possession was the 1957 financial
statement which Respondent received from his auditor at the end of June or the
first of July 1958, with its supporting data?
The 1958 statement, it is true, was not yet in the possession of Respondent and
indeed has been rejected herein as immaterial, because, in my belief, it is not disposi-
tive of the present issue one way or the other. The simple fact is that the 1958
statement was prepared from certain of Respondent's records, yet Respondent has
not seen fit to produce and in fact has refused to make such records available to the
Union. Indeed, both the 1957 and the 1958 statements contain the phrase that they
were "Prepared from books and records without audit." Manifestly, such books
and records do exist, contrary to Mick's testimony which I do not credit.
It is entirely conceivable that Mick's difficulty herein is one one of semantics
and that he believed he did not maintain the clear-cut and definitive type of records
which in his view might be more appropriate for perusal and inspection. But again
that is not the issue. The criterion here is whether he came forward with data to
support his plea of inability to pay.
Moreover, Federal tax returns have been prepared for Respondent, upon an
estimated basis, and obviously they had to be predicated upon some books and
records. In fact, Mick conceded that because of his financial stringencies creditors
of the business had appeared at the office and were shown his daily cost sheets. He
contended, however, that these cost sheets did not constitute a profit-and-loss state-
ment or a net-worth statement and that he therefore did not offer them to the
Union because he considered them "immaterial." While it is conceivable that
these costsheets might contain little to buttress Mick's claim, on the other hand, his
conclusion that they were immaterial constitutes a decision on his part that the
Union could not see them and an adverse inference is warranted.
Turning to the issue as it ultimately resolves itself, viz, Mick's claim that he
would turn over the records only to a licensed accountant and that he would not
.disclose his books to union personnel, I must conclude on the record presented
herein that he has failed in his obligations under the Act.
While it may be desirable that records be examined by one experienced or
skilled in the field, the cases do not impose a restriction of this nature upon the
demanding party. They hold that a labor organization is entitled under such
circumstances to all pertinent matter which will support a party's claim of inability
to pay. They do not hold that only certain professionals are qualified or authorized
to carry out this task. Moreover, as Farrington pointed out to Mick, the Union
has economists and research consultants within their own organization who are
competent to inspect any pertinent records, but Mick insisted upon an outside
accountant.
As the Board has stated in United Stares Steel Corporation (American Bridge
Division) 122 NLRB 1324:
In affirming the Trial Examiner's findings that the Respondent violated Sec-
tion 8(a)(5) of the Act, we do so only on the ground that the Respondent re-
fused to furnish to the Union data necessary to substantiate its claim that it
* I am assuming for the purpose of this discussion that Mick was prepared to bare the
records from which the 1957 statement was prepared . However, I am not convinced that
this meant anything more than the worksheets or similar totals used in computation of
the financial statement , if indeed his preparation did go that far.
1280 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
was operating its zinc mine at a loss. We interpret the Respondent's position
as pleading an "inability to pay" within the meaning of N.L.R.B. v. Truitt,
by asserting its inability to meet the Union's economic demands from the opera-
tions of its zinc mine.
It is further to be noted that the Union's position was a reasonable one and that
Farrington unequivocally stated that if the records of Respondent supported Mick's
position, the Union would modify its financial demands accordingly.5
This is not to say that Mick's testimony concerning his low salary and poor return
from his business is disbelieved. It is to say that the well-established case law holds
that by pleading inability to pay, Respondent imposes upon himself the burden as
Truitt requires, "to substantiate the claim." This Mick has refused to do.
In West Fork Cut Glass Co., 90 NLRB 944, the Board, in adopting conclusions
that there was a violation of Section 8(a) (5) of the Act, noted as follows:
the Union requested Respondent to produce such records as would disclose
its financial ability or inability to grant a wage increase. Respondent refused this
request, which was couched in general terms, but agreed to open its books to a
certified public accountant or other disinterested third party mutually agreed
upon.
The Union did not avail itself of this offer, and at no other time during the
conferences did it renew its request that Respondent open its books for the
Union's inspection.
I find that by failing and refusing to furnish to the Union data necessary to sub-
stantiate its claim of inability to pay the improved working conditions sought by the
Union, Respondent has failed to bargain in good faith within the meaning of Section
8(a)(5) of the Act and has thereby interfered with, restrained, and coerced its em-
ployees in the exercise of the rights guaranteed by Section 7 of the Act within the
meaning of Section 8 (a) (1) thereof.
b. Use of observers
The record discloses that between 7 and 8 a.m. on March 27, 1959, Supervisor Alta
Hartzell suggested to Mick that employee observers attend the bargaining session
that day. This immediately serves to refute Mick's testimony that he first thought of
the idea sometime after 1:30 p.m. that day "on the spur of the moment." The later
hour was one subsequent to the time originally set for the morning bargaining meet-
ing with the Union which Mick postponed to the afternoon. Significantly, Mick had
utilized this morning period for speaking to the employees. Indeed, he conceded
that he had obtained a postponement of the meeting so that he would have an oppor-
tunity to speak to his employees, and it was during this speech that he attempted to
convince them of the fairenss of his side of the dispute with the Union.
Mick then decided to send a committee of three employees, including Supervisor
Hartzell, to the meeting and so instructed the committee that afternoon. And, in ex-
plaining to the committee what their function would be at the bargaining session, viz,
to sit in, observe,,and take no part therein, Mick made it clear that his purpose was to
give them an opportunity to report back to their fellow employees concerning events
at the meeting. Mick also explained to his plant superintendent, Willden, that he
thought this would calm down the meeting and thereby avoid allegedly heated dis-
cussions that had taken place at prior meetings.
It is manifest from the foregoing that it was Mick's desire or hope that the ob-
servers be present so as to report to the rank and file of the employees within the unit
that Mick's position was just and that their own bargaining representative, the Union,
was in the wrong.. It is also clear that the three observers were not present to assist
Respondent in any way in carrying on bargaining negotiations with the Union, and in
fact no such claim is made. It follows, therefore, that Respodent was attempting to
lay down conditions for collective bargaining which went beyond the scope of proper
collective bargaining.
More particularly, this tactic, although perhaps in Mick's eyes well intentioned,
was in the nature of an undermining technique. The employees, through the
processes of the Board, had chosen the Union was their representative for the pur-
poses of collective bargaining. While it may not be undesirable for the members of a
bargaining unit to be present during bargaining, it is beyond the province of an em-
ployer to so dictate as a prerequisite to collective bargaining. Section 9(a) of the Act
provides that the duly selected representative shall be the exclusive representative of
5 Although clearly a far smaller cost item, Mick was not reluctant to incur the cost of
wages for the three observers at the March 27 meeting as discussed below.
YAKIMA FROZEN FOODS 1281
employees for collective bargaining. A proviso thereto reserves to employees the
rights to present grievances to their employer but there is no mention that an em-
ployer in bargaining with a union may dictate that members of the unit be present.
The net effect of this in logic was to undermine the Union in its attempt to bargain
with Respondent, to hamper the Union in its efforts to represent its constituents,
and to drive a wedge between the lawfully elected bargaining representative and the
employees it represented. See L. G. Everist Inc., 103 NLRB 308. As stated by
the Supreme Court, "The National Labor Relations Act makes it the duty of the
employer to bargain collectively with the chosen representative of his employees.
The obligation being exclusive . it exacts `the negative duty to treat with no
other.. . " Medo Photo Supply Corporation v. N.L.R.B., 321 U.S. 678.
And, as stated by the Board in Everist decision, ". Respondent's insistence that
bargaining negotiations be conducted in the presence of the rank-and-file employees
clearly was contrary to uniform industrial practice and was not conducive to the
orderly, formal, and frank discussion of the issues confronting the negotiators neces-
sary to reach a contract. It also constituted interference with the employees' right to
bargain through the representatives of their choosing, and evidenced the Respondent's
absence of good faith in dealing with the statutory bargaining agent of the employees."
I find, as alleged in the complaint, that Respondent brought observers from the
bargaining unit to the March 27 meeting and that by so doing Respondent has not
bargained in good faith within the meaning of Section 8(a) (5) of the Act. I further
find that by such conduct Respondent has interfered with, restrained, and coerced
its employees in the exercise of the .rights guaranteed by Section 7 of the Act within
the meaning of Section 8(a)(1) thereof.6
c. Other allegations
Although the litigation was confined chiefly to the topics treated above, if the
complaint as phrased is construed to include an allegation of refusal to bargain
by not making concessions during the March 7 through 27 period, I am persuaded,
primarily in view of concessions made by Respondent during the April and May meet-
ings, which are not attacked herein by the General Counsel, that a refusal to bargain
cannot be supported in this area. Consequently, no finding of a refusal to bargain is
made other than as heretofore set forth.
C. Interference , restraint , and coercion
The complaint alleges that Respondent engaged in conduct violative of Section
8(a) (1) of the Act by notifying striking employees on or about April' l that they had
been replaced when in fact such was not the case, at least in some instances. While
it is further alleged that these were unfair labor practice strikers, I deem it unneces-
sary to make such a determination, in the absence of an allegation of discrimination
against strikers and in view of the express position of the General Counsel that he
is not seeking a reinstatement or make-whole remedy. Therefore, a determination
as to whether Respondent's conduct was unlawful would not turn on their status as
economic or unfair labor practice strikers.7
On Saturday, March 28, Respondent wrote to its employees and notified them to
report for work on Monday morning, March 30, or Tuesday morning, March 31,
depending upon their place of residence. The letter further stated that if they did
not report to work at that time it would become necessary for Respondent to "re-
place your services."
There is testimony from various employees who appeared at the plant on Wednes-
day, April 1, for their paychecks. Thus, night-shift employee Pearl Vanover, who
had not received her letter but knew of the other letters, asked Plant Superintendent
Willden whether she was laid off. He replied that such was the case so long as she
was connected with the Union. Night-shift employee Margaret Zielke asked Willden
if he would work them any more and Willden replied that he had a full crew.
Night-shift employees Jane Stuard and Pearl Parker also heard Willden tell an
inquirer, apparently Vanover, that she was through so far as he knew. Dav-shift
worker Mary Peterson also asked Willden on April 1 if she was fired. He replied
9 This is not to be construed as a finding that an employer may not bring a super-
visory employee to a bargaining session. The circumstances here were entirely different
with a committee of three, comprising two employees and a supervisor who was in charge
of one if not both of the employees, sitting in as observers.
9 Certain other statements Attributed to Respondent are not covered by the allegations
of the complaint and are therefore not passed upon herein.
597254-61-vol. 130-82
1282 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that she was not and that the day shift was full, but that there were openings on the
night shift.8
According to Mick, Respondent had been operating two shifts since March 1 and
was operating two shifts on March 27, the day of the strike. He further claimed that
Respondent did not return to a two-shift operation until the night shift on Friday,
April 3. Mick also admitted herein, contrary to other testimony by him, that as "of
Wednesday, April 1, "not all of the positions on both shifts had been filled"; that by
Friday [April 3] "we had replaced the biggest percentage of them"; that, as of
April 1, "Most of the employees of the day shift had been replaced"; that as of
April 1, replacements had not been hired for all strikers; that a group of employees
was hired on April 1; and that one employee was hired on April 2. Consequently, I
do not credit Willden's testimony that there was a full day-shift complement on
April 1.
Moreover, Willden claimed that he told applicants for work on April 1 there
would be openings available when Respondent started the night shift. The fact is
that the night shift started 2 days later on April 3 and Willden said nothing about it.
In addition, as Peterson testified, Willden told her on Wednesday, April 1, that there
were openings on the night shift.
I find, therefore, as alleged in the complaint, that Respondent notified strikers
applying for jobs that they had been replaced or that there were no vacancies when
in fact such was not entirely the case. This obviously was a penalty motivated by
the concerted activities of the strikers; indeed the testimony of Willden reveals that
on April 1 he was angered by the fact that he observed strikers conferring with a
union business agent before applying for work. Mick's testimony also reveals that
he considered this to be a strategem masterminded by a union business agent. I find,
therefore, as alleged in the complaint, that by informing strikers inquiring about
emplyoment that they had been replaced, when in fact such was not the case, Re-
spondent has interfered with, restrained, and coerced its employees in the exercise
of the rights guaranteed by Section 7 of the Act, within the meaning of Section
8 (a)( I) thereof.
I
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of Respondent set forth in section III, above, occurring in connection
with his operations set forth in section 1, above, have a close, intimate, and substan-
tial relation to trade, traffic, and commerce among the several States, and tend to
lead to labor disputes burdening and obstructing commerce and the free flow thereof.
V. THE REMEDY
Having found that Respondent has engaged in unfair labor practices, I shall
recommend that he cease and desist therefrom and take certain affirmative action
designed to effectuate the policies of the Act.
It has been found that Respondent has refused to bargain collectively with the
representative of his employees by refusing to furnish pertinent data in support of a
plea of inability to pay various employee benefits and by bringing employees, super-
visory as well as from within the bargaining unit, to bargaining sessions. I shall,
therefore, recommend that Respondent be ordered to cease and desist from such
conduct and that, upon request, he bargain collectively with the Union and embody
any understanding that is reached in a signed agreement.
Upon" the basis of the foregoing findings of fact, and upon the entire record in the
case, I make the following:
CONCLUSIONS OF LAW
1. Fruit and Vegetable Packers' and Warehousemen's Union, Local 760, is a labor
organization within the meaning of Section 2(5) of the Act.
2. George Mick, d/b/a Yakima Frozen Foods, is an employer within the meaning
of Section 2(2) of the Act.
3. All employees engaged in production , maintenance , and transportation work,
including seasonal employees , at Respondent 's Yakima plant, or in sheds adjacent
thereto where commodities or materials are processed and stored, excluding office
clerical and supervisory employees , fieldmen , and guards , constitute a unit appro-
8 The testimony of these employees is credited herein. Willden was a witness who strove
to present testimony favorable to his employer and his denial of Vanover's testimony is
not credited. Moreover, he was contradicted by Mick himself as appears below. Willden
was vague when being questioned concerning Zielke's testimony and he did not deny it ;
the other statements attributed to him are not denied.
J. R. SIMPLOT CO., FOOD PROCESSING DIVISION, ETC. 1283
priate for the purposes of collective bargaining within the meaning of Section 9(b)
of the Act.
4. Fruit and Vegetable Packers' and Warehousemen's Union, Local 760, was on
February 27, 1959, and now is the exclusive representative of the employees in
the aforesaid appropriate unit for the purposes of collective bargaining within the
meaning of Section 9(a) of the Act.
5. By refusing to bargain collectively , as found above , Respondent has engaged in
unfair labor practices within the meaning of Section 8(a)(5) of the Act.
6. By the aforesaid refusal to bargain , and by falsely telling strikers requesting
reinstatement that they had been replaced, Respondent has engaged in unfair labor
practices within the meaning of Section 8 (a) (1) of the Act.
7. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
[Recommendations omitted from publication.]
J. R. Simplot Co., Food Processing Division , Heyburn Opera-
tions and American Federation of Grain Millers,, AFL-CIO,
Petitioner. Case No. 19-RC-2563. March 9, 1961
AMENDED DECISION AND DIRECTION OF ELECTIONS
On February 15, 1961, the Board issued a Decision and Direction
of Elections in the above-entitled case.' On February 27, 1961, the
Petitioner filed a motion for reconsideration, specifically objecting to
that portion of the Board's decision and direction which provided that
"If a majority of the employees in voting group (a) vote for no
union, the employees in both voting groups shall remain unrepre-
sented regardless of the vote in voting group (b) .112 The Petitioner's
motion is hereby granted. We 3 hereby amend the Decision and Di-
rection of Elections to conform with the following findings and
direction :
The Petitioner seeks a unit of all employees at the Employer's
Heyburn, Idaho, operation, consisting of the potato-processing plant,
starch plant, and packing and sorting sheds. For the reasons earlier
indicated, we find that the overall unit requested by the Petitioner
may be appropriate for the purposes of collective bargaining. The
Teamsters currently represents production and maintenance employees
at the starch plant. On the basis of the bargaining history, therefore,
we find that the presently represented production and maintenance
employees at the starch plant may also constitute an appropriate bar-
gaining unit, and that the remaining employees at the Heyburn site
who were previously unrepresented may comprise an appropriate
unit on a residual basis.4
1130 NLRB 272.
2 The other parties in the case filed no opposition to the Petitioner 's motion.
8 Chairman McCulloch and Member Jenkins did not participate in the instant petition.
4 Adams Coal Company, Inc ., 118 NLRB 1493, and cases cited therein ; see also, e.g.,
Gibbs Oil Company , et al. d/b/a Boulder Transportation Company, 120 NLRB 1783;
Tamiami Trail Tours, Inc., 123 NLRB 1501; Star Union Products Company, 127 NLRB
1173.
130 NLRB No. 136.