National Labor Relations Board v. Henry Vogt MacHine Company ( 1983 )

WEICK, Senior Circuit Judge.

The parties to this proceeding have argued their case twice before this court. The first time was in April 1982, before a panel, one of whose members died before the panel reached any decision. The second argument was on June 10, 1983.

At the outset, we note that the Administrative Law Judge (ALJ) conducted an extensive evidentiary hearing and found the facts, (which the Board later admitted were largely uncontroverted) as well as the law, against the Board and dismissed the complaint. The Board reversed the ALJ’s decision with one of the Board’s three member panel dissenting.

The National Labor Relations Board (Board) held that the respondent Henry Vogt Machine Company (Company) violated Section 8(a)(5), (3) and (1) of the National Labor Relations Act (Act) (29 U.S.C. § 158),¹ by revoking lunchroom privileges held by 12 laboratory employees, which the Company said they were not entitled to possess after they voted to join the 900 member production and maintenance unit of the Union. The collective bargaining agreement applicable thereto did not provide for such benefits and the Company was not required to provide them, nor did it have sufficient cafeteria space for all 900 bargaining unit members. The Board ordered the Company to cease and desist from withdrawing the cafeteria privilege of said 12 workers; from refusing to bargain collectively with the charging party union on the cafeteria benefits; and from otherwise interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by the Act. The Board ordered the cafeteria privilege reinstated and ordered that affected employees be made whole for any losses caused by the Company’s action. It now seeks enforcement of its order.

For the reasons stated below we deny the Board’s application for enforcement of its order, as it is not supported by substantial evidence and is contrary to law.

I.

Respondent, Henry Vogt Machine Company, is a Kentucky corporation engaged in the manufacture and sale of power boilers, heat exchangers, ice machines, valves, fittings and other metal products. At its Louisville plant, it has about 900 production and maintenance employees who have for over. 29 years been represented by Local Union 1693 of the United Steelworkers of America (Union), which Union has entered into a series of collective bargaining agreements with the Company. There are also 17 “die sinkers” who are represented by the International Die Sinkers Conference. The Company’s office and clerical workers are not represented by a Union. In addition, the Louisville plant has 12 day shift laboratory employees who are the focus of the present dispute.

In 1977, the Board held a representation election to provide an opportunity for these non-union laboratory employees to join the Union, if they desired to do so. Shortly before the election, the employees were addressed by Werner Vogel, a Company vice-president, as to why they should vote not to join. He advised them in part as follows:

Also for the non-union employees on the day shift, the company has the lunchroom in which all of you are eligible and have been invited to utilize for the nominal amount of $1.00 per week for five (5) lunches. This is far less than you would pay for one lunch outside and is probably less than your cost for bringing lunch from home. I do not know how many of you take advantage of this benefit but, it is available to you and because of space, is not available to our union shop employees. I believe that you will have to agree that this is a decided plus if you are taking advantage of it.

The laboratory employees voted to continue their non-union status.

In 1978, another representation election was held and again Vice-President Vogel addressed the laboratory employees as follows:

Also for the non-union employees on the day shift, the company has the lunch room in which all of you may eat for the nominal cost of $1.00 per week for five lunches. This is far less than you would pay for one lunch outside and is undoubtedly less than your cost for bringing lunch from home. I do not know how many of you take advantage of this benefit but, it is there if you want it. I believe that you will have to agree that this is a substantial benefit for those of you who are taking advantage of it.

The election notice stated that if the laboratory employees voted for the Union, then they would become part of the Union’s production and maintenance bargaining unit. The collective bargaining agreement later entered into provided for many benefits including increased salary. The agreement, however, contained no provision for lunches for the 12 workers. This issue was not even raised by the Union negotiating committee in any of the lengthy bargaining sessions. The representation election was held on August 4, at which time the laboratory employees voted to join the Union and thereby become a part of the larger bargaining unit of more than 900 members. The Board certified the result on August 14, 1978.

Prior to their joining the Union, the laboratory employees were, along with office, engineering, sales and supervisory employees, carried on respondent’s records as “office payroll.” As such, they were entitled to certain benefits and privileges which were spelled out in a white booklet titled “Information for You and other Vogt Office, Engineering, Sales and Supervisory Employees”. In this booklet is a section on Food Service which provides:

You may bring your lunch or supper, or you may purchase food at the plant. Vending machines for hot and cold drinks, and snacks are located in various areas of the plant. Day shift employees on office payroll are eligible to have lunch in the Company lunchroom on the third floor, front office, (emphasis added)

At the same time, the Company had a blue booklet which covered all the Company’s bargaining unit employees. This blue booklet is titled “Information for You and Other Employees At Vogt”, and its Food Service section provides:

You may bring your lunch or supper, or you may purchase food at the plant. Vending machines for hot and cold drinks, and snacks are located in various areas of the plant. The trucks of a caterer are in the Steel Storage Area of Department 28 and in the vicinity of Department 16, Machine Shop, during the lunch and supper periods.

When the laboratory employees were carried on “office payroll”, they were eligible to have their lunches at the subsidized Company cafeteria,² at a cost of one dollar for five lunches a week. However, when they voted to join the Union (and shortly thereafter came under the terms and conditions of a newly negotiated contract), the company transferred them from office payroll to bargaining unit (plant) payroll, and their eligibility to use the cafeteria ceased.

At the time the laboratory employees chose Union representation, the production and maintenance members of the bargaining unit were already covered by an existing collective bargaining agreement. That agreement was scheduled to expire in the near future. Thus, rather than bargaining concerning the laboratory employees with respect to the period of time preceding the expiration of the existing contract, the Company and the Union agreed to delay bargaining úntil negotiations for a new collective bargaining agreement, which would cover all members of the bargaining unit, began in early September 1978. These negotiations commenced on September 7. They involved 19 lengthy sessions and resulted in a proposed contract covering many subjects, that was ratified on October 22 and took effect on October 23, 1978 (App. 195-213).

Both before and during negotiations, the Union held meetings where it gave its members, including the laboratory employees, an opportunity to make suggestions and help formulate proposals that would be submitted to the Company’s negotiating team. It is clear from the record that the Union’s proposals to the Company were made on the basis of benefits to be enjoyed by all bargaining unit members. The Union did not attempt to obtain special benefits or concessions for the 12 laboratory employees. The only proposals specifically directed toward the laboratory employees related to a determination of job classifications and wages, which had not previously been established for new bargaining unit members.

The record further reveals that before and throughout the negotiation process various laboratory employees advised the Union’s negotiating committee that the Company was going to revoke their cafeteria privileges. As is shown below, the Union neither attempted nor intended to negotiate special benefits for the laboratory employees; rather the employees were told they would receive the same benefits as other workers in the unit and no more.

On October 28, 1978, the day the newly negotiated collective bargaining agreement took effect, the Company transferred the laboratory employees from office payroll to plant payroll and revoked their cafeteria privilege. Several laboratory employees complained to the Union causing the Union to mention the problem to Company officials. When no accommodation was reached, the Union filed a charge with the Board alleging violations of Section 8(a)(5), (3) and (1) of the Act.

II.

The charges were heard by an AU. The General Counsel of the NLRB argued that revocation of the laboratory employees’ lunchroom privilege resulted from those employees choosing to be represented by a union and that such revocation was inherently discriminatory. Following a review of all the facts, the ALJ concluded the Company’s action was neither inherently discriminatory nor discriminatorily motivated. The ALJ further concluded the Union negotiating committee knew the Company intended to terminate the lunchroom privilege, and that its failure to raise the issue during any of the extensive negotiations which followed resulted in a waiver of its right to bargain over that issue. Having determined the Company did not violate Section 8(a)(5), (3) and (1) of the Act, the ALJ ordered the complaint dismissed in its entirety.

The ALJ’s decision was appealed to a three member panel of the Board. In a split decision, the Board reversed the ALJ, concluding that although the facts were not in dispute, the Company’s termination of the cafeteria privilege was made without prior notice to or consultation with the Union; that the Union did not waive its right to bargain over termination of the privilege; and that the Company’s unilateral withdrawal of the benefits was inherently discriminatory.

III.

Before us for review is the question of whether the Board’s conclusions are supported by substantial evidence in the record considered as a whole. Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951). We believe they are not.

A.

The Board contends the Company unilaterally revoked the cafeteria privilege without first affording the Union an appropriate and meaningful opportunity to bargain over the issue. It says that where the Union has not waived its statutory bargaining rights, such action violates Section 8(a)(5) and (1) of the Act.

It is generally true that an employer violates Section 8 of the Act if it unilaterally changes a term or condition of employment over which it has a duty to bargain. N.L.R.B. v. Allied Products Corp., 548 F.2d 644, 652 (6th Cir.1977). Such action does not violate the Act, however, if the Union has waived its right to bargain. Waiver will be found if the evidence shows that the Union received sufficient notice of the proposed change, and yet failed to protest or demand bargaining on the issue. International Ladies Garment Workers Union V. N.L.R.B., 463 F.2d 907, 918 (D.C.Cir. 1972). The Board requires proof of clear and unequivocal notice such that the Union’s subsequent failure to demand bargaining constitutes a “conscious relinquishment” of the right to bargain. NL Industries, Inc., 220 NLRB 41, 43 (1975), aff’d, NL Industries, Inc. v. N.L.R.B., 536 F.2d 786 (8th Cir.1976). Although we agree with the standard enunciated by the Board, substantial evidence does not support the Board’s finding in this case that there was insufficient notice to point to conscious relinquishment of the right to bargain. Rather, the record reveals the Union’s negotiating committee was well aware the Company intended to terminate the cafeteria privilege, but that the Union deliberately and consciously chose not to raise that issue at any time during the negotiations for the collective bargaining agreement.

For example, David Wagner, a laboratory employee whose cafeteria benefit was revoked, testified that in September 1978, he told “Basically the whole [negotiating] committee” that the Company was going to terminate the cafeteria privilege (App. 114). On October 22, just prior to the ratification vote, Wagner informed a committee member that as of that weekend the Company would no longer allow laboratory employees to use the cafeteria (App. 117). In other testimony, Wagner stated that since he was now a member of the bargaining unit he expected to get exactly the same benefits that other bargaining unit employees got (App. 95-96), and to be covered by the terms and conditions spelled out in the blue “Information for You” booklet given to bargaining unit members (App. 99-101).

Another laboratory employee, Roger McCombs, testified that during contract negotiations he talked several times with the Local Union president (also a member of the Union negotiating committee) to find out “... if we wouldn’t be able to continue eating there.” The president responded that he did not know, but that he would look into it “and talk to Hatfield [the Union’s chief negotiator] about it” (App. 126).

Although Hatfield testified he could not recall being told by laboratory employees prior to the contract’s ratification that the Company intended to revoke their cafeteria privilege (App. 75), he did testify that the Union did not intend to negotiate specific benefits for the laboratory employees that were not enjoyed by the bargaining unit as a whole (App. 60).

Another member of the Union’s bargaining committee during the 1978 negotiations was Kenneth Tharp, the treasurer of the Union. In one of several meetings Tharp had with Wagner during the September 7 to October 22 negotiations, Wagner told Tharp that the laboratory employees wanted a retroactive pay raise negotiated for them by the Union. (This was because the Company had already granted a pay raise to its office payroll personnel). Tharp’s response to Wagner was, “You are included in our bargaining unit and you will get the same as we get, at the same time.” (App. 177). Tharp testified that during negotiations the Union made no demand for retroactive pay for the laboratory employees because, “I am sure the other 900 people [members of the bargaining unit] would have hit the roof if we tried something like that.” (App. 177).

Thereafter, Tharp gave the following testimony:

Q “At the time the proposals were drafted and at the time of the August 20 meeting, was the [Union negotiating] committee aware that the laboratory employees had benefits which the general bargaining unit employees did not have?” A “Yes, we knew about their benefits.”

Q “Did the negotiating committee make any effort to preserve those benefits to the laboratory employees?”

A “No, we figured that it would be like them having their cake and eating it too, them having their benefits plus our benefits so we thought we should all have the same benefits.”

Q “Was this ever explained to the laboratory employees?”

A “Yet, it was.”

Q “Would you tell the judge when this was explained to the laboratory employees?”

A “The meetings that I just referred to that we had with Dave Wagoner (sic) and the rest of them, that explained how all the benefits that they were going to get by coming under our bargaining unit and they seemed to understand. I thought they did.”

Q “They never made any effort to get — ”

A “They never made a complaint at all.”

Q “I am directing your attention to the date of on or about October 18, 1978, and did you have a conference with Mr. Wagoner (sic) and any other members of the laboratory?”

A “Yes, it was the day we had a meeting with the company, that afternoon, and Dave and two or three others from the lab came up and talked to us at lunchtime, about their classifications and at the time we were negotiating their classifications and rates of pay.”

Q “During that meeting was any reference made by Mr. Wagoner (sic) or any of the laboratory employees to the lunchroom benefit?”

A “There was three or four from the lab and us five [members of the negotiating committee] and in the course of the conversation Dave said, ‘Well, Brown told us today that this would be our last week in the lunchroom’.”

Q “David Wagoner (sic) said that?”

A “Yes.”

Q “And you say the entire negotiating committee was present at that time?”

A “Yes, I am sure they were.”

Q “What was the response of the negotiating committee, if any?”

A “As far as a direct response, I don’t think we gave a direct response. Everybody just shrugged their shoulders and grinned, like we knew it was coming.”

Q “At any time prior to this starting of negotiations was the union committee aware that this privilege was being taken away?”

A “Yes, we have been aware when he [Vogel] read the letters the first time, they came back and told us what was read in the letters, back in ’77.”

Q “The people who petitioned for the union?”

A “Right. They would come and talk and tell us about the plant superintendent reading letters and tell us what was in them.”

Q “Was there any question in the committee’s mind during the negotiations that this privilege would no longer be enjoyed by the laboratory employees?” A “We knew it wouldn’t be.”

Q “Why was that?”

A “Because we have 900 other union men who don’t eat there and there was no way that we could say to let 12 people that have never, at the time, paid a penny in union dues, eat there when we had 900 people, some of whom had been paying union dues for as long as 30 years and tell them that they couldn’t eat there. We didn’t think it was fair.”

Q “Was it ever the intention or did the union negotiating committee ever propose benefits for the laboratory employees which would not be enjoyed by all the other bargaining unit members?”

A “No.”

Q “Was it ever the intention that that would occur?”

A “No, it certainly wasn’t.”

Q “Following this October 18 meeting with Mr. Wagner, you say there was a negotiating meeting that afternoon?”

A “With the company, yes.”

Q “Was any proposal made that afternoon on behalf of the laboratory employees to continue this lunchroom benefit?” A “No, we didn’t say a word to the company about it.”

Q “Were there meetings following this October 18 meeting?”

A “The 18th was on a Wednesday and we had meetings Thursday, Friday and Saturday, the 19th, 20th and the 21st.”

Q “At any of those meetings was any proposal made on behalf of the laboratory employees to continue this lunchroom benefit?”

A “No.”

(App. 179-182).

On the basis of the foregoing facts we do not believe that substantial evidence in the record considered as a whole supports the Board’s conclusion that the Union’s negotiating committee did not have notice the Company intended to terminate the laboratory employees’ cafeteria privilege or that the Company revoked the benefit without first affording the Union an appropriate and meaningful opportunity to bargain over the issue. Rather, it appears the negotiating committee knew the benefit was about to be revoked and it had numerous opportunities during the 19 negotiating sessions to address the issue. Yet it knowingly and intentionally chose not to raise the issue for it did not wish to create dissension among its other 900 bargaining unit members, many of whom had been paying dues for years and did not enjoy the luncheon benefits. The committee consciously chose to negotiate the same package of benefits for all its bargaining unit members, including the laboratory employees.

We believe the facts indicate the Union voluntarily waived its right to bargain over the Company’s planned termination of the laboratory employees’ cafeteria privilege.

B.

The Board further concluded:

... the abrupt, unilateral change in working conditions after the laboratory employees chose to be represented by the Charging Party contained a clear and dramatic message for the employees who chose the Union and for the remaining unrepresented employees, and thereby discouraged membership in unions and coerced employees in the exercise of rights guaranteed them in Section 7 of the Act.

Again, to withstand attack, the Board’s conclusion must be supported by substantial evidence on the record considered as a whole. Universal Camera Corp., supra. We do not believe that substantial evidence supports the Board’s contention that the Company’s action was so inherently destructive of important employee rights that no proof of anti-union motivation is needed. See, NLRB v. Great Dane Trailers, 388 U.S. 26, 87 S.Ct. 1792, 18 L.Ed.2d 1027 (1967).

As noted previously, the Union negotiating committee was well aware the Company intended to terminate the cafeteria privilege. In addition, we note that the Company did not terminate the benefit at the time the laboratory employees voted to join the Union; rather they were permitted to continue using the cafeteria throughout the negotiation period. Thus the Union had ample opportunity to bargain over the Company’s proposed change. Compare, Federal-Mogul Corp., 209 NLRB 343 (1974) (Following NLRB certification, the Company immediately applied the existing contract to newly “Globed-in” employees without affording their Union an opportunity to negotiate regarding the contractual terms that would apply to them).

Had the negotiating committee felt the cafeteria privilege constituted a sufficiently important issue over which to bargain, it could have done so at any time throughout the negotiation process. It knew the privilege was about to be terminated. Yet despite this knowledge and its having ample opportunity to address the issue, the Union chose to do nothing. Given the fact that the withdrawal of benefits was not unilateral, but was the result of the Union’s waiver of the right to bargain over the issue, the Company’s action cannot be characterized as “inherently discriminatory.”

Neither do we believe substantial evidence supports the Board’s conclusion that the company’s action was discriminatorily motivated. The Company distributed to its office payroll personnel the white “Information for You” booklet, and to its plant payroll personnel the blue “Information for You” booklet. The white booklet, which was given to the laboratory employees when they were carried on office payroll, clearly stated in the Food Service section that “Day Shift employees on office payroll are eligible to have their lunch in the Company lunchroom ...” (emphasis added). The cafeteria simply was not large enough to accommodate the 900 plus members of the bargaining unit, and therefore company policy strictly limited the cafeteria privilege to day shift employees on office payroll. Substantial evidence does not support the conclusion that the laboratory employees were being punished or discriminated against because they chose to join the Union. Rather, when they joined the Union, they became members of the bargaining unit and no longer eligible under long established Company policy to use the cafeteria. And in this regard we note the Company did not revoke the privilege until the new contract took effect, thus giving the Union an opportunity to incorporate in the new collective bargaining agreement, language which would preserve the cafeteria privilege for the laboratory employees.

The company’s position was consistent with both its and the Union’s apparent understanding that as part of the larger bargaining unit, the laboratory employees would be treated the same as other bargaining unit members and would be accorded whatever rights and benefits they were entitled to under the collective bargainirig agreement. It is not contested that the contract had no language preserving the laboratory employees’ cafeteria privilege. Furthermore, Article 21 of the contract provides:

ENTIRE AGREEMENT This contract expresses the entire agreement between the parties hereto. There are no understandings between the parties as to the subject matter of this contract other than as herein set forth. However, by mutual agreement the parties may amend this agreement.

It is not understandable just how the Board could reverse the decision of the Administrative Law Judge, who made findings on largely uncontroverted facts and adopted correct conclusions of law, as pointed out by dissenting Board member Penello with whom we agree. Also the Board ignored the fact that the lengthy Collective Bargaining Agreement, which was entered into after the election and after lengthy bargaining between negotiating members of the Union and Company, contained no provision with respect to the luncheon privileges of the 12 members of the 900 member unit. Although it provides for most everything else, it contains no such provision because the Union did not want to bring it up for discussion in any of the bargaining sessions. The Union did not want to treat the members of the unit differently. Undoubtedly, it must have believed that it would have a better chance for success in later making the charge before the Board and in this respect it was correct.

IV.

For the above reasons, we find that substantial evidence on the record as a whole does not support the Board’s conclusion with respect to adequacy of notice, waiver, and whether the Company’s action was discriminatory. We therefore deny the Board’s application for enforcement of its order.

1 . (a) It shall be an unfair labor practice for an employer—

(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title;

(3) By discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization.

(5) to refuse to bargain collectively with the representatives of his employees, ...

2 . The cafeteria consisted of a large, clean room seating 120 to 150 people and offered hot or cold lunches. Although it was large enough to accommodate the office payroll people, it clearly lacked the capacity to seat the 900 employees in the bargaining unit.