Wayron, LLC, (2016)

NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Executive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal errors so that corrections can be included in the bound volumes.

Wayron, LLC and International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers of America, Local 104; The International Association of Machinists and Aerospace Workers, AFL–CIO, District Lodge 160, Local Lodge 1350; and The International Union of Painters and Allied Trades, District Council 5. Case 19–CA–032983

August 2, 2016

DECISION AND ORDER

BY CHAIRMAN PEARCE AND MEMBERS MISCIMARRA AND HIROZAWA

This case involves the Respondent’s refusal to submit to a financial audit during contract bargaining and the Respondent’s unilateral changes to employees’ wages and benefits after it terminated the bargaining.¹ Contrary to the judge and the dissent, we find that the Respondent’s communications about its financial circumstances, viewed in their entirety and in context, conveyed inability to pay, rather than unwillingness. We therefore conclude that the Respondent acted unlawfully when it refused the Unions’ request for a financial audit and that this refusal prevented the parties from reaching a valid impasse. We additionally find that, even assuming, arguendo, that the parties had reached a valid impasse, the Respondent acted unlawfully by unilaterally implementing terms and conditions of employment that did not rea

¹ On March 29, 2012, Administrative Law Judge Gerald A. Wacknov issued the attached decision. The General Counsel filed exceptions and a supporting brief, the Respondent filed an answering brief, and the General Counsel 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 only to the extent consistent with this Decision and Order.

The General Counsel has excepted to some of the judge’s credibility findings. The Board’s established policy is not to overrule an administrative law judge’s credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing the findings. The Respondent, by declining to file exceptions or cross-exceptions, has accepted the judge’s findings; however, its answering brief to the General Counsel’s exceptions describes its conduct in ways that contradict some of the judge’s credibility findings. Even if the Respondent’s characterization of the facts had been properly raised in the form of exceptions, which they were not, we would find no basis, applying Standard Dry Wall, to reverse the judge’s findings.

sonably fall within its final offer to the Unions. Thus, we reverse the judge’s dismissals of those allegations.²

Facts

The Respondent owns and operates a metal fabrication shop. It employs metalworkers, mechanics, and painters, represented, respectively, by local affiliates of the Boilermakers, Machinists, and Painters Unions. The parties’ most recent collective-bargaining agreement ended by its terms on September 30, 2010.

The parties’ negotiations for a new agreement during late 2010 and early 2011³ were focused almost exclusively on labor costs. Throughout, the Respondent’s owners, Jeff Spendlove and Faye Dietz, and its labor consultant, Dean Nordstrom, expressed the Respondent’s need to reduce the average per-hour cost of wages and benefits from $30.51 to $24 or less, so that the Respondent could be competitive in bidding for work. The Unions initially demanded an increase of $1.25 per hour, but ultimately they sought only the continuation of the expiring agreement’s monetary terms.

It is undisputed that, before and during the negotiations, the Respondent was obtaining few of the jobs that it bid for and had laid off most of its unit employees. In the early bargaining sessions, the Respondent was represented by Dietz and Nordstrom, who provided a September 15 proposal (the “red and blue contract,” which was prepared by Spendlove) that reflected drastic changes to both economic and noneconomic terms. The Respondent later calculated that the red and blue contract would have

² We adopt the judge’s findings, to which the Respondent has not excepted, that the Respondent violated Sec. 8(a) (1), (3), and (5) in various respects between February 4 and August 25, 2011. We shall correct the judge’s Conclusion of Law 3 and the remedy section of his decision to properly reflect his uncontested finding that the Respondent violated Sec. 8(a)(3) and (1) by terminating the employees and making them reapply for work under the unilaterally changed conditions as a result of the Unions’ failure to agree to the Respondent’s bargaining demands. Further, in accordance with our decision in AdvoServ of New Jersey, Inc., 363 NLRB No. 143 (2016), we shall modify the judge’s recommended remedy by ordering tax compensation and Social Security reporting remedies. In addition, we shall modify the judge’s recommended Order to conform to our findings and the Board’s standard remedial language, as described in the Amended Remedy below. Finally, we shall substitute a new notice to conform to the modified Order and the Board’s decision in Durham School Services, 360 NLRB No. 85 (2014).

In light of our finding that the Respondent failed to reach impasse for other reasons, we find it unnecessary to pass on whether the Respondent violated Sec. 8(a)(5) and (1) by engaging in overall bad-faith bargaining because it would not materially affect the remedy.

We have corrected several inadvertent errors made by the judge in his decision, including misspellings, typographical errors, misnomers, and mistaken references. Those errors have not affected our disposition of this case.

³ Dates are between September 2010 and August 2011 unless otherwise stated.

2 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

reduced average hourly labor costs by $10, nearly a 33 percent reduction. At the September 15 bargaining session and at the next session, on October 6, the parties discussed the terms of their proposals to some extent but mainly spoke about the Respondent’s financial hardship and the limited pool of money available for compensation. Nordstrom’s bargaining notes from October 6 show that the parties discussed their overall interests: “attract/retain/co[mpany] viability vs. Unions[’] concerns for continue[d] employment.”⁴ Also on that day, in response to the Respondent’s question about the employees’ financial priorities, the Unions stated that wages were a priority.

The next bargaining session, on November 4, was the first session that Spendlove attended. Speaking for the Respondent, he offered a proposal that would reduce average compensation to $24 per hour and would give the employees the choice of which cost items to cut. Spendlove spoke about the Respondent’s difficulties in securing work, because of its increased loss of bids, and in staying competitive. He did not state that the Respondent was unable to fulfill current contractual obligations to actively working employees or unable to pay those employees more money. Rather, he testified, “what I tried to convey was . . . that “Wayron as a company wasn’t in jeopardy . . . [but] that what we were not going to be able to provide was jobs” if the company was not competitive. Spendlove also informed the Unions that the Respondent “needed the cost reductions ‘in a short term fashion’ due to the need to acquire a new line of credit,” and that the contract must be signed by February. Machinists Business Representative Gregory Heidal credibly testified that Spendlove stated that the company was “having a hard time, having difficulties” and “that they were looking for a competitive edge or an even playing field, if you will, with his competitors, and that he needed to reduce the costs of the contract.” Heidal further testified that “[e]ssentially . . . they had to come to an agreement with the bank and the landlord”⁵ and “it was important for us to get on board for them to make some sort of agreement so that they could go to the bank and say, hey, this is where we’re at.” Heidal added, “I believe Jeff [Spendlove] said they were going to be in financial trouble if they were unable to make some agreement with the bank.” As reflected in Spendlove’s and Nordstrom’s separate bargaining notes for November 4, Spendlove further explained that the Respondent was

⁴ The Unions’ bargaining notes confirm that Nordstrom stated, “the viability of the co[mpany] is always important. So is the retention of employees.”

⁵ The judge found that the Respondent had already reached an agreement with the landlord to reduce its rent.

operating at a financial loss, having earned only $2.5 million that year but needing $4.5 million simply to break even. Spendlove’s bargaining notes show he also stated that the Respondent had lost money in 2008, 2009, and 2010 and that it was “out of reserves” and “into debt.”⁶ Nordstrom’s notes similarly reflect that Spendlove said to the Unions that it had “no reserves now – can’t borrow in this economy – overheads have been reduced as much as humanly possible.” Spendlove told the Unions that he wanted to explain to employees “why such a significant reduction in wages and/or benefits was essential,” and the Unions agreed to Spendlove’s speaking directly to the employees about the matter.

Spendlove met with unit employees the next day, November 5. He told the employees that he needed them to take a large cut in pay and/or benefits; it was not that the Respondent...