ACF Industries, LLC, (2006)

ACF Industries, LLC and United Steelworkers of America, AFL–CIO, CLC. Case 6–CA–33614

August 28, 2006

DECISION AND ORDER

By Chairman Battista and Members Liebman and Schaumber

On February 1, 2005, Administrative Law Judge David L. Evans issued the attached decision. The Respondent, the General Counsel, and the Charging Party each filed exceptions and a supporting brief. The Charging Party filed an answering brief to the Respondent’s exceptions, to which the Respondent filed a reply brief. The Respondent filed an answering brief to the General Counsel’s and the Charging Party’s exceptions, to which the Charging Party filed a reply brief.

The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.

The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, and conclusions and to adopt the recommended Order as modified.[1]

i.

We find, in agreement with the judge, that the Respondent did not violate Section 8(a)(5) and (1) of the National Labor Relations Act by implementing its final offer on August 21, 2003.[2] For the reasons set forth below, we agree with the judge that the parties had bargained in good faith to a valid impasse as of that date.

The Respondent manufactures railroad cars in Milton, Pennsylvania, and has had a series of collective-bargaining agreements with the Union covering a unit of production and maintenance employees. The most recent contract was effective from August 3, 2000 to August 2, 2003. The parties began negotiations for a subsequent contract in June, and continued until the Respondent declared impasse in August.[3]

In April, 2 months before the beginning of the contract negotiations, the Respondent informed the Union that because the Respondent’s parent corporation had no future need for a tax write-off of the losses incurred by the Milton facility, and because of the competition in the market, it needed to reduce its production costs to maintain reasonable profits and job security for unit employees. Consistent with this position, at the first bargaining session on June 11, the Respondent submitted its written economic proposals indicating the need for major concessions, including reductions in pay, base rates, severance, and benefits. In response, the Union proposed increases in wages and certain other benefits. On June 12, the parties agreed to negotiate noneconomic issues first. Over the course of the next three bargaining sessions, the parties reached agreement on the noneconomic issues, and thereafter began negotiations on the economic issues.

On June 26, the Respondent provided the Union with a first “major concessionary proposal” for a 5-year agreement. The proposal included various wage cuts for the first year, no general increases for the second year, and 15-cent-per hour increases for the remaining years. The Respondent’s proposal also included elimination of overtime premiums, paid holidays, shift differentials, severance pay, health insurance for employees after the month in which they were laid off, pension plan supplements, and substitution of the salaried workers’ health insurance plan for the production and maintenance workers’ plan.

On July 8, the Union submitted a proposal that contained some concessions from its previous economic proposals, but also proposed an increase in vacation pay, the retention or increase of certain other benefits, a neutrality agreement, and the retention of the current insurance and pension agreements. The Respondent answered by emphasizing the need for further reductions, and expressed disappointment that the Union’s proposal was going in the opposite direction. For the next five bargaining sessions, the parties exchanged additional proposals but failed to reach agreement on wage rates and other benefits.

The parties met with a Federal mediator on July 25 and again exchanged proposals. The parties reached agreement on some issues, but failed to do so on others. The Respondent then presented its “Final Economic Proposal,” stating that there was nothing left to offer.

By letter dated July 29, the Union notified the Respondent that in the event its membership rejected the Respondent’s final economic proposal, the Union desired to resume negotiations and to extend the contract for 2 years. The Respondent answered that should its final offer be rejected, it would be interested in meeting promptly to discuss the factors controlling the rejection. However, the Respondent was not interested in extending the contract long term and stated its preference for continuing the contract on a day-by-day basis with a provision providing for a 48-hour strike notice.

On August 3, the Union’s membership rejected the Respondent’s final offer by a vote of 275 to 22. On August 7, the parties met again with a Federal mediator. The Union submitted new proposals that entailed both concessions and increases from its previous proposals. The Respondent then submitted its “Best and Final Economic Proposal” which included some adjustments from its July 25 proposal. In presenting this proposal, the Respondent stated that it had no more room to move, that it was not going to make any further offers, and that the only thing that it could do “would be to remove something from pile A to pile B as long as it doesn’t have any cost impact.” The Union agreed to none of the terms presented by the Respondent. After this rejection, the Respondent made a few amendments to the proposal.

On August 15, the Union’s membership rejected the Respondent’s offer, this time by a vote of 167 to 113, and the Union requested further negotiations. On August 16, the Respondent informed the Union that it “had nothing further to offer” and that it would implement its final offer on August 21. In an August 16 telephone call with the Respondent, the Union’s chief negotiator, Robert English, stated that the Union had additional proposals on health, welfare, and pensions, but he did not divulge what the proposals would entail. The Respondent’s chief negotiator, Gary Rager, answered that the Respondent had nothing further to offer, that he has his “marching orders” and that “I got to implement.”

On August 18, 3 days before the Respondent implemented its final offer, the Union submitted an extensive information request concerning health-and-welfare benefits. Also on that day, the Union sent a letter to the Respondent stating that it did not believe that the parties were at impasse, and requested to meet on August 19 and 20. The Respondent answered that it did not see any useful purpose in meeting again, and that the Union’s request for health and welfare information was “disingenuous” because the Union waited until the “eve of implementation” in making the request. The letter further stated that the parties have negotiated for over 2 or 3 months about changes in health and welfare and that the Union’s request should have been made earlier. The letter ended with the Respondent’s offer to meet postimplementation.

By letter dated August 19, the Union repeated its objection to the implementation of the final offer, and further stated that it was prepared to make proposals on wage reductions and pension matters, but included no specifics of such proposals. The Respondent implemented its final offer on August 21.

The judge found that the parties were at impasse when the Respondent implemented its final offer on August 21. The judge found that although some progress had been made before the Union’s rejection of the Respondent’s August 7 final offer, no movement was attempted by the parties after August 7, and the parties were far apart on a number of significant issues when the Respondent declared impasse. The judge further found that the Respondent’s economic positions were the essence of hard bargaining, not bad-faith bargaining, and that the Union’s unwillingness to accept the proposals, which that bargaining posture produced, left the parties at impasse.

The judge also rejected the General Counsel’s contention that impasse was precluded by the Union’s August 16 statement that it was prepared to make additional proposals. The judge found that if the Union had meaningful proposals to make, it could have done so and asked for further negotiations on these proposals. The judge concluded that the reason the Union failed to do so was because it had no further (nonregressive) proposals to offer.

We agree with the judge, for the reasons he states, that the parties were at impasse when the Respondent implemented its final offer.

We note in particular that the Respondent informed the Union before negotiations began that its economic conditions necessitated major concessions in wages and benefits. Indeed, as found by the judge, the parties exchanged numerous proposals and engaged in hard but good-faith bargaining in 12 bargaining sessions over a 2-month period. By the time the Respondent declared impasse, the parties had engaged in extensive bargaining and yet remained far apart on a number of major issues. The Respondent had nothing left to offer beyond that which had already been rejected, and the Union similarly had offered no new proposals to demonstrate that further progress was possible.

Our dissenting colleague argues that the parties had not reached impasse when the final offer was implemented. The dissent contends that the Respondent gave the Union good reason to believe that it would be amenable to making additional concessions, beyond those in the August 7 final offer. Specifically, the dissent argues that the Respondents willingness to amend its July 25 proposal, and the Respondents statement before the Unions August 3 membership votethat it was willing to meet in the event that the membership voted to reject the proposalgave the Union reason to believe that it could elicit additional concessions after the memberships rejection of the Respondents August 7...