Lead Opinion
This is a petition to review a decision of the National Labor Relations Board finding Carpenter Sprinkler Company, a Vermont employer, in violation of the National Labor Relations Act, 29 U.S.C. § 151 et seq., and ordering remedial action. The Board cross-petitions for enforcement of its order. While we uphold the finding of violation of the Act, we deny enforcement in full of the order, and grant enforcement in part.
Carpenter Sprinkler Corporation (“Carpenter” or “employer”) is an installer of automatic sprinkler systems, lоcated in Colchester, Vermont. For approximately twenty years, it has had a bargaining relationship with Local 669 of the Road Sprinkler Fitters Union, associated with the United Association of Journeymen and Apprentices, in the Plumbing and Pipefitting Industry of the United States and Canada (“Union”). The Union represented nineteen employees of Carpenter.
For some time, Carpenter was a member of a multi-employer bargaining unit, the National Automatic Sprinkler and Fire Control Association. This association conducted bargаining with the International Union in Washington, D. C. Carpenter did not take part in the negotiations individually. In early 1977, Carpenter withdrew from the multi-employer bargaining unit. This withdrawal was caused by Carpenter’s belief that the wage and benefit rates of the national agreement were too high, and were causing economic losses to the company. Carpenter felt that the particular economic conditions of Vermont could be better reflected in an independently negotiated contract. The national agreemеnt terminated as of March 31, 1977.
On February 16, 1977, the employer and the Union met to begin negotiations on a new collective bargaining agreement. Most of this three-and-one-half hour session was spent in general discussions of the economically depressed conditions in the Vermont area. The employer made known that it felt it could not afford the higher rates which the Union wanted, in line with the national agreement. Neither the Union nor the employer presented any specific proposals at this first meeting, and no agreement was reached.
The next bargaining session was held on April 8, 1977. The Union representative read proposals from an outline. Some of these proposals called for rates which were even higher than those in a tentative agreement reached between the Union and the multi-employer association. On comparing the new proposals with those in the national, multi-employer agreement, the Carpenter representatives “expressed dismay,” and stated that they “could not live” with the higher rаtes proposed by the Union. The company did not present any proposals of its own, and again, no agreement was reached.
Several hours after the meeting ended on April 8, Wes Wilder, the Union representative, called Carpenter President Wayne LaFayette to get a response to the contract proposals which the Union had made at the
On April 12,1977, Union President Thomas Hanna sent a mailgram to Carpenter, noting his reports from Wilder that the bargaining between the company and the Union had been unsuccessful. He also told Carpenter that Wilder would return to the area for further negotiations, and it was
Local 669’s intention to take such legal and economic action as it deems appropriate and justified if these negotiations with your firm are unsuccessful.
Carpenter sent a letter in response to the Union on April 13. The company confirmed its belief that the parties were at an impasse. The letter stated
Since we are at an impasse and since the old contract has expired, we feel it necessary to put into effect a new schedule of wages and other benefits so that the employees will know where they stand.
A page of “Proposal Highlights” was attached to the letter. These proposals included various reductions in wages and benefits, including a reduction in wage rates for sprinkler fitters from $9.61 per hour to $7.50 per hour. The company noted that it intended to put the new schedule into effect on Monday, April 18, “and earnestly request that if you have any questions or comments concerning same that you contact us immediately.” The next day, the company sent another letter indicating its intention to alter existing medical, pension and hospitalization benefits.
After discussions between the local representatives and the union officials in Washington, Union President Hanna ordered a strike. On April 18, all of the nineteen union employees went on strike. That same day, Carpenter implemented its changes in wages and benefits. Nine of the strikers returned to work in the next three months under the new terms.
After a complaint of unfair labor practice was filed by the Union, a hearing was held. Administrative Law Judge Zankel found that no impasse had actually existed, and so the employer had violated § 8(a)(1) and (5) by its unilateral changes in terms which amounted to a refusal to bargain in good faith. The Administrative Law Judge (“AU”) ordered broad remedial action in the form of an order to bargain, reinstate striking workers with back pay, return wages, hours and other benefits to the status quo ante in existence prior to April 18, 1977, and make retroactive payments to the Union welfare and pension funds, at the Union’s request. On review, the National Labor Relations Board upheld the finding of violation based on no impasse, and extended the remedy by ordering a return to the status quo ante, including back pay for all employees of the company, not just the strikers, but also the strike replacements hired.
DISCUSSION
A. Impasse
We are unable to say that the Board’s finding that an impasse had not occurred is not “supported by substantial evidence on the record сonsidered as a whole.” 29 U.S.C. § 160(e) and (f). Thus, we uphold the finding of violation of § 8(a)(1) and (5) of the National Labor Relations Act. 29 U.S.C. § 158(a)(1) and (5).
Unilateral action by an employer concerning subjects of mandatory bargaining is a violation of the duty to bargain in good faith, in the absence of a true impasse in negotiations. NLRB v. Katz,
To protect the integrity of the collective bargaining process, there is a strong requirement that a clear impasse in negotiations exist before any unilateral changes in the terms of employment be made. The finding of a violation of the Act in this case, then, turns on the issue of whether an impasse actually existed. As has been recognized, the issue of the existence of an impasse “is a question of fact peculiarly suited to the Board’s expertise.” NLRB v. J. H. Bonck Co.,
The parties in this case had only met twice to attempt to reach a collective bargaining agreement before the “impasse” urged by Carpenter occurred. While there appears to have been a recognition by both sides that their respective positions were generally far apart, there was no continuous “give and take” in the form of negotiating over specific proposals. No specific proposals were made by either side at the first meeting, and no counterproposals were made by the employer in response to the Union’s list of suggestions at the second meeting. While the two negotiating sessions were not marked by any indication of bad faith on the part of the employer, compare General Electric, supra,
B. Tape Recording
When Union representative Wilder called Carpenter President LaFayette following the second meeting on April 8, LaFayette switched on a conference telephone to receive the call, and another company officer, James Esden, tape recorded the call from Wilder. Wilder had no knowledge that the conversation was being taped, and LaFayеtte did not inform him so.
At the administrative hearing, Wilder testified that he never made the statement that the parties were at an “impasse.” On cross-examination of Wilder by counsel for Carpenter, the tape recording of the phone conversation was offered as evidence to impeach Wilder’s testimony on this fact. Wilder authenticated the recording as a fair representation of the conversation. After conducting a hearing on the nature of the evidence, Administrative Law Judge Zankel admitted the taрe into evidence, ruling that the surreptitious nature of the tape did not affect its evidentiary value.
On review, the Board reversed the ALJ on this point, holding that secretly prepared
Section 10(b) of National Labor Relations Act provides that any unfair labor practice proceeding before the Board
shall, so far as practicable, be conducted in acсordance with the rules of evidence applicable in the district courts of the United States . . . [29 U.S.C. § 160(b).]
We have recognized that it is up to the courts of appeals to review evidentiary rulings of the Board, and to determine the extent to which rules of Board proceedings must conform to the rules of the federal courts. NLRB v. Stark,
Negotiations in the labor relations field are often a delicate matter. Courts must balance the interests of an employer against the possibility of coercing or intimidating employees in their exercise of rights under the Act, and harming the collective bargaining process. Cf. Title Guarantee Co. v. NLRB,
C. Remedy
Since we agree with the Board that a violation of the duty tо bargain, 29 U.S.C. § 158(a)(1) and (5), occurred in the unilateral action by Carpenter, some remedial action is warranted. In light of the facts in this particular case, however, we feel that the Board’s remedial order was too broad, and we grant only partial enforcement.
The AU issued an order requiring Carpenter to cease and desist from violations of the Act, specifically from taking unilateral action to change wages or other terms of employment or otherwise interfering with employees’ section 7 rights. (29 U.S.C. § 157.) The emрloyer was also ordered to take positive remedial action to bargain collectively with the Union, to reinstate the employees who had participated in the strike, and to award back pay to those employees who had returned to work during the strike. The AU also ordered Carpenter to return all wages and other terms of employment to the status quo ante in existence prior to the unilateral changes made April 18, 1977, including making ret
The Board upheld and extended the broad remedy ordered by the ALJ, concluding that the restitution remedy should be provided for strike replacements as well as for returning striking employees. Thus, the Board held that both employees who had gone on strike in response to Carpenter’s unilateral changes in terms of employment, and those had been hired as replacements for those strikers, should be reimbursed for the difference between wages and other benefits that they received аnd the economic benefits they would have received if the employer had not unilaterally altered wages and other conditions.
Carpenter takes strong exception to the remedy ordered by the Board. Carpenter claims that such an extensive remedy would have devastating economic consequences for the company, a small Vermont employer. While there is no evidence in the record as to the exact costs to the employer, Carpenter contends that the cost оf compliance with the Board’s order would be over $388,-000. Given the history of good relations between the Union and the employer, and the good faith belief by both sides that something close to an impasse had occurred, the remedy ordered is too drastic, according to Carpenter.
We are constrained to agree. Under the terms of the Act, 29 U.S.C. § 160(c) the Board is mandated, after a finding of unfair labor practice by a person, to issue an order
requiring such person to cease and desist from such unfair labor practice, and to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of [the Act].
It has been noted that the Board’s mandate calls for orders of a remedial nature, not a “penal program declaring the déscribed unfair labor practices to be a crime.” Republic Steel Corp. v. NLRB,
In effectuаting the policies of the Act, the Board is given broad discretion. Fibreboard Paper Products Corp. v. NLRB,
We do not hold here that the Board is not empowered to order broad remedial action in the areas of restitution and imposition of the status quo ante. Section 10(c) of the Act, 29 U.S.C. § 160(c), mandates that the Board carry out the policies of the Act in fashioning remedies. Section 10(e), however, allows for review by the courts of Board orders, and under that section
In evaluating each part of the Board’s order then, it is necessary to determine if the remedy is remedial or punitive. The cease and desist order, and the order to bargain with the Union are clearly remedi
The order to reinstate the strikers with back pay also comes within the remedial purposes of the Act’s policies. As found by the Board, the strike by the Carpenter employees was in response to the company’s unilateral changes in terms, and was thus an “unfair labor practice strike.” Consequently, reinstatement of strikers is a strongly favored remedy. Mastro Plastics Corp. v. NLRB,
In such a case, back pay to the strikers is also favored. Fitzgerald Mills, supra,
The remaining parts of the order, however, are unwarranted in the circumstances of this case, аnd we decline to order their enforcement. The Board urges that we refuse to consider the financial impact of its order on the company at this stage, leaving questions of cost to any further proceeding dealing with compliance. We do not accept the position that we are so narrowly bound in our review at this point, and we feel that an evaluation of the costs to the company is relevant in reviewing the appropriateness of the Board’s order. See Frito-Lay, Inc. v. NLRB, supra,
This is not to imply that cost to the сompany is the conclusive factor in reviewing the enforcement order. See M.S.P. Industries, Inc. v. NLRB,
The order for retroactive payments to the Union welfare, health, and pension funds is also inappropriate. The order is unclear, since it makes no allowance for offsetting the retroactive payments with the health and welfare benefits which the employer awarded during this time period. While uncertainty in computation is not sufficient reason automatically to deny enforcement, NLRB v. Darling & Co.,
The requirement that Carpenter return the wage and benefit levels to the status quo ante in existence before April 18, 1977 is also inappropriate here. When negotiations between the parties started, it was clear that therе was a basic disagreement over the levels of wages and benefits. The Union wanted those levels to be higher than those in the new national, multi-employer agreement; the company felt strongly that it could not afford even the levels of the expired national agreement. It was clear that the company would have resisted strongly Union demands calling for wages and benefits at the previous level. In that case, it is unfair to hold the company to the previous contract terms which caused it to withdraw from the multi-employer bargaining unit in the first place. See NLRB v. Dent,
As noted above, we do not hold that the Board can never order remedial action of the type here. In appropriate cases, restitution orders and requirements of return to the status quo ante can be effective ways of implementing the policies of the Act. In the circumstances of this case, however, where a small employer in an economically depressed region with twenty years of good relations with the union makes unilateral changes after some indicatiоn that an impasse in bargaining had occurred, extensive and financially crippling remedial action of the type discussed above should not be enforced. “In line with the Act’s essentially remedial rather than penal purpose, Board orders must be reasonably adapted to the situation that calls for redress.” NLRB v. Townhouse TV, supra,
Petition for enforcement of order granted in part, denied in part.
Notes
. Pursuant to § 10(e), 29 U.S.C. § 160(e), a reviewing court may enter a decree enforcing, modifying, and enforcing as so modified, or setting aside in whole or in part the order of the Board.
. This bargaining should include the question of changes in the health, welfare and pension plans, including the issue of retroactive payments. See discussion in text, infra; Beacon Journal Publishing Co. v. NLRB,
Dissenting Opinion
dissenting:
We have here a situation in which admittedly the employer withdrew from the National Automatic Sprinkler and Fire.Control Association’s contract because financially it was too onerous. Despite this fact, when the parties commenced negotiations, the Union advanced a proposal containing provisions more favоrable to the Union than were in the National agreement. When this proved completely unacceptable to the employer, the Union representative inquired whether the employer would become a signatory to the National agreement. When company representatives responded that they could not live with either agreement, the Union representative stated that they were at an impasse. This statement was repeated thereafter in several telephone conversations.
I am also unable to agree with my colleagues’ holding on the admissibility of the tape recording. Where, as here, the testimony of a Union representative on a vital matter is clearly impeached by a recording of his prior statements, I cannot accept the argument that the recording’s admission into evidence would harm the collective bargaining process. The integrity of the Board’s fact-finding process is as important a factor in this country’s labor-management relations as are the cross-the-table negotiations that precede Board review.
Were I to agree with the majority that enforcement of the Board’s order should be granted, I would concur in the modifications of the sanctions imposed. They ameliorate, at least in part, the inequity resulting from the Board’s determination.
. “It is sometimes forgotten that the National Labor Relations Act deals with people’s livelihoods and that the stakes in an unfair labor practice hearing are consequently extremely high.”
International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) v. NLRB,
