San Antonio Machine & Supply Corporation v. NLRB

• Decision Date: 24 August 1966
• Docket Number: No. 21687.,21687.
• Citation: 363 F.2d 633
• Parties: SAN ANTONIO MACHINE & SUPPLY CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

363 F.2d 633 (1966)

SAN ANTONIO MACHINE & SUPPLY CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 21687.

United States Court of Appeals Fifth Circuit.

July 21, 1966.

Rehearing Denied August 24, 1966.

Theo F. Weiss, L. Bruce Fryburger, San Antonio, Tex., Clemens, Knight, Weiss & Spencer, San Antonio, Tex., of counsel, for petitioner.

Elliott C. Lichtman, Atty., N.L.R.B., Marcel Mallet-Prevost, Asst. Gen. Counsel, Dominick L. Manoli, Assoc. Gen. Counsel, N.L.R.B., Washington, D. C., Arnold Ordman, General Counsel, Warren M. Davison, Linda R. Sher, Attorneys, N.L.R.B., for respondent.

Before BELL and THORNBERRY, Circuit Judges, and FISHER, District Judge.

THORNBERRY, Circuit Judge:

This is a petition by San Antonio Machine & Supply Corporation for review of a decision and order of the NLRB. The Board has filed a cross-petition for enforcement of its order.

By substantially adopting the findings and conclusions of the Trial Examiner, the Board found that petitioner, by withdrawing from and repudiating agreements reached in the course of a series of bargaining sessions, failed to bargain in good faith with the Union (United Steel Workers of America), thereby violating Section 8(a) (5) and (1) of the National Labor Relations Act, 29 U.S.C. §§ 158(a) (5) and 158(a) (1). The Board further found that a subsequent strike was substantially caused by petitioner's unfair labor practice and that petitioner violated Section 8(a) (3) and (1) of the Act by discharging employee Florence Alsbury because she gave aid and comfort to the Union by bringing refreshments to a picket.

In adopting the Trial Examiner's recommended order, the Board ordered petitioner to cease and desist from refusing to bargain with the Union and from discouraging membership in any labor organization of its employees by discriminating in regard to their hire and tenure of employment. Affirmatively, the Board ordered petitioner to bargain with the Union upon request, to reinstate with backpay the strikers and Florence Alsbury, and to establish a preferential hiring list for those strikers for whom positions might not be immediately available. Petitioner was also ordered to post appropriate notices.

Petitioner is engaged in the manufacture and distribution of industrial, water and plumbing supplies. On April 1, 1963, petitioner purchased certain assets from its predecessor of the same name. A collective bargaining contract between the Union and petitioner's predecessor was due to expire on April 12, 1963, and the Union had submitted a draft of proposed changes in the contract to petitioner's predecessor. Negotiations between the petitioner and the Union began on April 5, 1963. It was agreed that extended discussion of economic proposals would be held in abeyance, pending agreement on non-economic matters. Although it was clear from the beginning that the question of seniority would be difficult to agree upon, the testimony of petitioner's president (Lewis) and the Union negotiator (Ray) reflects that prior to the meeting of May 16 both sides were optimistic about the possibility of an agreement.

At the meeting of May 16, Clifford Shawd, a professional management consultant newly hired by petitioner, joined in the negotiations. Shawd stated that some of the tentative agreements previously reached might have to be reexamined in the light of administrative cost and offered to present a proposal on economic matters at the next meeting.

The next meeting was held on May 23. A new contract proposal was presented to Ray by petitioner's representatives. According to Ray, as he read over the new proposal he "blew his stack," since he found that "the whole thing had been changed up considerably from what we had already agreed upon."

Ray also testified that when he asked Shawd whether this meant that the Company was withdrawing the tentative agreements already reached, Shawd replied, "Yes, the company has withdrawn all the tentative agreements they had with you." Ray did agree to go through the new proposal, item by item, however, and actually agreed to many of the articles. Ray rejected the proposal as a total package and testified that he informed petitioner's representatives that he was going to call in the Conciliation Service for aid in resolving the dispute.

Subsequently, on May 25 and 26, bargaining sessions were conducted by a mediator, but the parties were unable to reach any agreement. One concession was made by the Company with regard to seniority on May 26: The Company agreed to let seniority date back to service with the old company, but proposed substitution of the words "in the judgment of the management" in two places in the contract with reference to judging an employee's ability to perform the work. This was termed a "concession of sorts" by the Trial Examiner and was rejected by the Union.

At the conclusion of the May 26 meeting, Ray informed the Company representatives that because of their withdrawal of the tentative agreements and because the parties were therefore further apart than at the beginning of negotiations, the Union was going to strike. The strike began on Monday, May 27.

During June, July, August and September more bargaining sessions were held, with the principal topic of discussion being seniority. Ray testified that at a meeting on June 3, he offered to call off the strike if the Company would restore the tentative agreements as the basis for further negotiations, but that the Company president did not respond to this offer. The strike was ended by the Union on November 13, 1963, and numerous strikers wrote the Company offering unconditionally to return to work.

During the course of the strike, Florence Alsbury was discharged by petitioner. She was employed as a secretary in the Company's plumbing department, and her work consisted of filing, typing, waiting on customers and answering the telephone. Shortly after the inception of the strike, Mrs. Alsbury brought a soft drink and a sandwich to a picket at his request. (She was on her coffee break at the time.) This incident was observed by the office manager of the plumbing department (Novian) who in turn reported it to his superior (Heltebridle). The testimony concerning the events which transpired thereafter is in dispute and will be discussed later; at any rate, Heltebridle obtained permission from the Company vice-president to discharge Mrs. Alsbury, and she was discharged shortly after the incident.

Having reviewed the evidence in this general way, we now pass to a more detailed analysis of the Board's findings, bearing in mind that our scope of review is limited by the substantial evidence rule. Each of the alleged violations of the Act will be considered separately.

I. The Alleged Failure to Bargain in Good Faith

The ultimate finding by the Trial Examiner on this question is as follows:

"I find that petitioner on and after May 23, 1963, by withdrawing from and repudiating agreements already arrived at, and by changing its position abruptly and without any announced reason, and maintaining its changed position without deviation except for a concession of sorts in the definition of continuous service, failed to bargain in good faith with the Union thus engaging in unfair labor practices in violation of Section 8(a) (5) and (1) of the Act."

At the outset it should be noted that there is really no dispute in the record that the Company did in fact withdraw from numerous tentative agreements which had been reached during the course of bargaining between the Company and the Union. It is also clear that Ray objected to the Company's deviation from those tentative agreements and that this objection was conveyed to the Company.¹

Petitioner's initial contention is that, because of the tentative nature of the agreements, the refusal of the Company to be bound by the agreements cannot constitute evidence of bad faith. In rejecting petitioner's contention, the Trial Examiner relied on Shannon & Simpson Casket Co., 99 NLRB 430, 30 LRRM 1081; enforced, 9th Cir. 1953, 208 F.2d 545, wherein the Board made the following statement:

"Apparently the Respondent seeks to justify certain of the above-described conduct by reliance on axioms of contract law. However, the rules by which it is determined whether the parties have made a contract are not the rules by which it is determined whether or not the parties have bargained in good faith. * * * The obligations under the Act contemplate that the parties come to the bargaining table with a fair and open mind and a sincere desire and purpose to conclude an agreement on mutually satisfactory terms. Reliance upon the rules of contract law so as to forestall and avoid agreement does not satisfy that obligation."

Petitioner correctly points out that the facts in the Shannon & Simpson case were stronger for the Board's position than those in the instant case; we are convinced, however, that the above-quoted language correctly states the general rule to be applied to a situation involving collective bargaining. The rule is stated in substantially the same language in Lozano Enterprises v. N.L.R.B., 9th Cir. 1964, 327 F.2d 814, at 818:

"In our view, the employer\'s arguments may be accepted as stating good technical contract law, but we do not think that in this particular case they state good collective bargaining law. We do not think that, in deciding whether, under a particular set of circumstances, an employer and a union have in fact arrived at an agreement that the employer is then obliged to embody in a written contract upon the union\'s request, the Board is strictly bound by the technical rules of contract law."

A case decided by this Court which lends strong support to the Board's conclusion that petitioner's conduct was inconsistent with its statutory obligation to bargain in good faith is N.L.R.B. v. International Furniture Co., 5th Cir. 1954, 212 F.2d 431. There, at the employer's...