Economy Stores, Inc., 1 (1957)

Docket Number:05-CA-01020

Economy Stores, Incorporated and Teamsters, Chauffeurs, Warehousemen & Helpers, Miscellaneous Brewery & Soft Drink Workers of America, Local Union No. 822. Case No. 5-CA-1020.


On June 15, 1956, Trial Examiner Eugene F. Frey issued his Intermediate Report in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices, and recommending that it 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 the Respondent had not engaged in certain other unfair labor practices alleged in the complaint and recommended dismissal of those allegations. Thereafter, the Respondent, the General Counsel,_ and the Charging Party 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 Intermediate Report, the exceptions and briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner but only to the extent that they are consistent with this Decision and Order.

  1. The amended complaint alleged, inter alia, that the Respondent violated Section 8 (a) (5) and (1) of the Act by adamantly insisting upon an improper liability clause as i condition precedent to entering into a collective-bargaining agreement, and by continuing such conduct after the commencement of a str ke on September 6, 1955, thereby prolonging the strike. The Trial Examiner found that union liability is not a mandatory subject of collective bargaining but concluded that as the Union at all times treated the scope of the liability clause as a bargainable subject, the determination of the ultimate question of whether the Respondent bargained in good faith must be resolved by the application of the totality of conduct test. Applying that test, he found that the Respondent had not refused to bargain within the meaning of the Act, and recommended dismissal of this allegation of the complaint.

    The clause in question required the Union :

    To reimburse the Company for all damages suffered by it as a consequence of violation of the terms of this agreement by either, 120 NLRB No. 1.

    483142-59-vol. 120-2 1 the Union or its employees and to a penalty of $5.00 per day for each one of its members who participated in an illegal strike, walkout or slow down.

    At the first meeting between the parties on June 23, 1955, they discussed in detail the proposed contract which had been submitted by the Union. It contained no liability clause. The parties agreed to meet on June 28, at which time the Respondent was to present a counterproposal. Pursuant to instructions from the Respondent, Tugman (its labor relations consultant) proposed the counterproposal at the June 28 meeting. The parties agreed on some of its provisions but the Union objected to the proposed liability clause (set forth above) and to the Respondent's proposals on wages.

    The Union objected to the liability clause on the grounds that (1) in Virgnia, a 'right-to-work' State, employees cannot be compelled to join a union and it could not therefore be held responsible for conduct of employees over whom it had no control, and (2) the penalty provision was unacceptable in any form. Tugman agreed to drop the penalty provision but insisted on the need for the rest of the provisions as protection against 'irresponsible people upsetting agreements that had been made in good faith.' No agreement was reached on June 28, and the parties agreed to meet again on June 30 when the Union was to submit a counterproposal, including a provision to take care of the Respondent's demand for union responsibility under the contract.

    At the June 30 meeting, the Union submitted a substitute for the Respondent's liability clause which provided :

    SEC. 5. Employees shall not be charged for loss or damages unless clear proof of negligence is shown.

    SEC. 21. Employer has the right to discipline or transfer any employee or employees in the same classification, to instruct and direct the work, manage its terminals and docks and assign its equipment, and to make rules and regulations for the conduct of the business, not to conflict with the terms of this Agreement.

    Tugman, for the Respondent, rejected these clauses as not sufficiently binding on the Union. Also unresolved at the end of the June 30 meeting were the questions of wage increases, checkoff provision, and other relatively minor provisions. The parties agreed that the Respondent should prepare for the next meeting a new counterproposal incorporating provisions already agreed upon and the Respondent's ideas on matters still in issue.

    The parties met again on July 14 and considered the Respondent's second counterproposal. Mutual concessions settled all outstanding issues except wage increases for six employees, checkoff, effective date ECONOMY STORES, INCORPORATED 3 of-the contract, and the liability clause. With respect to the latter, the Respondent's counterproposal provided that the Union agree :

    15b. To reimburse the Company for all damages suffered by it as a consequence of violation of the terms of this agreement by either the Union or the employees.

    Union Representative Greeley thereupon proposed as a substitute several forms of liability clauses which had been used in various Teamsters contracts, all of which provided that the Union have no financial liability for the acts of its members or agents which were unauthorized or which it could not control. Tugman rejected this proposal, stating that the Respondent was entitled to some statement of union responsibility under the contract to the same extent that the Respondent had assumed liability thereunder. Greeley agreed to confer with Teamsters officials in Washington in an endeavor to prepare a liability clause which would be satisfactory to both parties.

    On July 16, Greeley telephoned Tugman stating that his superiors had rejected the Respondent's liability clause and suggested that some other clause be worked out and adding that if the Respondent would drop its demand for a liability clause, agree to the checkoff, and grant a 5-cent-per-hour increase to 6 employees, the contract could be signed. Tugman presented this proposal to the Respondent's board of directors who took the position that he had already accepted too much. The Union thereupon called in the Federal Mediation Service.

    The next meeting between the parties, on August 10, was attended by a mediator. At that meeting, the Union indicated that it did not oppose the liability clause as such and would be willing to write in a 'standard' clause such as those it had already proposed orally. Despite various efforts to achieve agreement, none was reached. A few days later, the employees, after hearing a report on the negotiations, voted to strike. The strike began on September 6, 1955.

    The Board is unanimous in agreeing with the Trial Examiner in his ultimate conclusion that the Respondent did not by its conduct, either before or during the strike, refuse to bargain in good faith with the Union within the meaning of Section 8 (a) (5) and (1) of the Act.

    Members Rodgers and Jenkins arrive at this result without, however, deeming it necessary in this case to accept or reject the General Counsel's contention that the liability clause was not a proper subject of collective bargaining because it was unrelated to wages, hours, and other conditions of employment. They are of the opinion that on the record in this case it is clear that the parties at all times treated the question of the scope of the liability clause for breach of contract as a bargainable subject. After the Respondent introduced the subject in its first proposal, both parties bargained on it both before and during the strike. The Union proposed various substitutes. The Union indicated that it did not oppose a liability clause in principle and, in fact, proposed substitutes and bargained with respect to thescope and terms of the clause. Both parties discussed the subject fully, making concessions at times, but were unable to reach agreement on a specific clause. Under the circumstances, whether or not the proposed liability clause was a proper subject of collective bargaining, the parties treated it as such, and thereby by their conduct in the course of the collective-bargaining negotiations rendered this issuemoot. Therefore, in view of the findings of the Trial Examiner, based upon a thorough review and analysis of all the pertinent evidence, that the Respondent bargained with the Union in good faith concerning the inclusion of this clause in the contract, Members Rodgers and Jenkins conclude, as the Trial Examiner did, that the General Counsel, failed to prove by a preponderance of the credible evidence that the Respondent engaged in bad-faith bargaining, either before or duringthe strike, by its insistence on the inclusion of the liability clause ii the contract. Accordingly, for the foregoing reasons, they adopt the finding that the Respondent did not violate Section 8 (a) (5) of the Act.

    Chairman Leedom and Member Bean specifically reject the General' Counsel's apparent position that it is a per se violation of the collec= tive-bargaining obligation for the Respondent to seek to secure unioir agreement to its proposed liability provision in the course of contract negotiations. In their opinion, no persuasive authority exists either in the statute or in court precedent for finding that good-faith advancement of such a proposal is unlawful. Section 8 (a) (5) states that it is an unfair labor practice for an employer 'to refuse to bargain collectively with the representative of his employees, subject to the provisions of section 9 (a).'...

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