Allis-Chalmers Mfg. Co. v. National Labor Rel. Bd., 10991.

• Decision Date: 21 May 1954
• Docket Number: No. 10991.,10991.
• Citation: 213 F.2d 374
• Parties: ALLIS-CHALMERS MFG. CO. v. NATIONAL LABOR RELATIONS BOARD.
• Court: U.S. Court of Appeals — Seventh Circuit

213 F.2d 374 (1954)

ALLIS-CHALMERS MFG. CO. v. NATIONAL LABOR RELATIONS BOARD.

No. 10991.

United States Court of Appeals, Seventh Circuit.

May 21, 1954.

W. J. McGowan, J. L. Waddleton, Milwaukee, Wis., Gerard D. Reilly, Washington, D. C., Maxwell H. Herriott, Milwaukee, Wis., Lines, Spooner & Quarles, Milwaukee, Wis., Reilly, Rhetts & Ruckelshaus, Washington, D. C., of counsel, for petitioner.

David P. Findling, Associate Gen. Counsel, A. Norman Somers, Asst. Gen. Counsel, Owsley Vose, Atty., George J. Bott, Gen. Counsel, National Labor Relations Board, Washington, D. C., Irving M. Herman, Atty., National Labor Relations Board, New York City, for respondent.

Before MAJOR, Chief Judge, and LINDLEY and SWAIM, Circuit Judges.

MAJOR, Chief Judge.

This case is here upon petition of Allis-Chalmers Manufacturing Company (herein called the Company or petitioner) to review and set aside an order of the National Labor Relations Board (herein called respondent or the Board), issued against the Company on August 26, 1953, pursuant to § 10(c) of the National Labor Relations Act, as amended, 29 U.S.C.A. § 151 et seq. In its answer to the petition the Board requests enforcement of its order.

The complaint filed by Office Employees International Union, Local 19, AFL (herein called the Union), charged the Company with the unfair labor practice of refusing to bargain. A hearing was had before a trial examiner who made a report adverse to the Company. The Board sustained the recommendations of the examiner and entered the order now under attack, directing the Company (1) to cease and desist from (a) failing or refusing to bargain collectively with the Union, (b) insisting upon the strike vote and ratification clauses or any other proposals not involving conditions of employment to the point of breakdown of negotiations with the Union, (c) in any like or related manner interfering with, restraining or coercing employees in exercise of rights guaranteed by § 7 of the Act; and (2) upon request, to bargain collectively with the Union with respect to wages, hours and other conditions of employment and embody any understanding reached in a signed agreement.

The contested issue as stated by the Board is whether it properly held that the Company's insistence, to the point of breakdown in the negotiations, on further consideration and discussion of the contract ratification and strike authorization clauses as a condition to fulfillment of its bargaining obligation, constituted a refusal to bargain in violation of § 8(a)(5) of the Act. The Company poses the contested issues thus: (1) Is the Company's strike vote clause (Article XIII) a statutory proposal? and (2) Did the Company conduct negotiations on the strike vote clause (Article XIII) and the ratification clause (Article XIV) in such a manner as to constitute a refusal to bargain in violation of § 8(a) (5) of the Act, assuming arguendo that such clauses are not statutory proposals? The Company contends, and the Board disputes, that any issue relevant to the Company's proposed ratification clause is moot.

As will be subsequently shown, there is hardly room for doubt but that lengthy negotiations carried on between the Company and the Union were abruptly terminated by the latter. It is the theory of the Board, however, upon which its decision is predicated, that the Company by its insistence upon its strike vote and ratification proposals as a prerequisite to a continuation of negotiations justified the Union in its refusal to bargain further because the two proposals were not encompassed within the terms of the statute which requires the employer and the representative of the employees to confer in good faith "with respect to wages, hours, and other terms and conditions of employment". Section 8(d) of the Act. See also § 9(a) of the Act.

It thus appears that the first and most important issue is whether the ratification and strike vote clauses proposed by the Company are included within the statutory language, "other terms and conditions of employment". If so, the proposals are statutory, requiring the party to whom they are made (in this case the Union) to bargain concerning the same in good faith. If not, they cannot be insisted upon by the proposer to the point of creating an impasse in negotiations. More specifically, as applied to the instant situation, if the Company's proposals were statutory the Union was obliged to bargain in good faith relative thereto, even though they might not be able or willing to reach an agreement. If they were not statutory, there may be some question as to what duty, if any, the Union had to bargain but, in any event, they could not be utilized by the Company to the point of causing a breakdown in negotiations. If this statutory proposal issue be decided adversely to the Board, there is no further issue which requires consideration or decision. If it be decided adversely to the Company, there remains its contention that in any event the ratification and strike vote proposals were not urged to the extent of affording the Union a valid reason for terminating its negotiations with the Company. Admittedly, the issue as to whether the Company's proposals were statutory is one of law.

Notwithstanding the lengthy recital contained in the examiner's report and in the briefs of the parties, we think a brief statement of the facts will suffice, particularly as they bear upon the legal issue for decision. The Company, with its principal place of business at Milwaukee, Wisconsin, is engaged in the manufacture and sale of machinery and farm equipment and it owns and operates manufacturing plants at many points, including its Tractor Division at Toledo, Ohio. It has approximately 35,000 employees and, since 1937, has engaged extensively in collective bargaining with various CIO, AFL and independent Unions and has existing collective agreements with Unions representing fourteen separate bargaining units. On November 17, 1950, the Board, on the basis of a consent election, certified the Union (which represents employees of several employers in the Toledo area) as the exclusive representative for a collective bargaining unit comprised of seven office employees at the Company's Toledo office.

The bargaining negotiations between the Company and the Union fall into two categories, namely, those of 1951 and 1952. We perceive no occasion to relate the facts relative to the 1951 negotiations as it is admitted that the present controversy arises from those conducted in 1952. Negotiation meetings were held at Toledo between the respective parties on February 13, 14, 20, 21 and 22, 1952, at and during which, proposals and counter-proposals were submitted and discussed. Three of such proposals made by the Company (referred to jointly as the "democratic processes" clauses) were designated as (1) a union elections clause (Article II, Sec. E), (2) a strike vote clause (Article XIII) and (3) a ratification clause (Article XIV). These proposals were submitted for the first time on February 22. They were objected to by Taylor (Union business manager), and the Company proposed that it would revise and submit a composite proposal for a complete agreement. On March 3, 1952, the Company submitted to Taylor a revised draft of the proposed agreement, which he presented to the International Union Office and Union counsel at Cleveland for consideration. At a meeting on March 20, 1952, participated in by International representative Daugherty, Taylor presented to the Company a letter, repeating the Union's objection to the "democratic processes" clauses, in which letter it was stated that both Articles XIII and XIV were unacceptable to the Union because they "permit interference with the internal affairs of the Union and moreover are of doubtful legality," and that "We cannot enter into an agreement which by insistence of an employer in effect constitutes an amendment of our Constitution and By-laws by individuals who are not even Union members." Daugherty agreed with Taylor's position and stated that there was little need for a further meeting if the Company continued to insist on those clauses.

At the Company's insistence, however, further meetings were held on March 28 and April 11, 1952. On April 17, 1952, the Company forwarded to Taylor a revised counterproposal for a complete agreement and invited negotiations thereon. In this proposal the union elections clause was deleted. The strike vote clause (Article XIII) as thus redrafted provided:

"This agreement shall remain in force for a period of one (1) year from date of execution hereof and thereafter from year to year unless, within the ten (10) day period immediately preceding the sixty (60) days prior to any date of termination written notice of termination is given by either party.

"If a new agreement cannot be reached within the sixty (60) day period, then the agreement shall be automatically extended for an additional thirty (30) days.

"If a new agreement cannot be reached within such thirty (30) day period or thereafter, the Union shall have the right to conduct a strike provided a majority of the employees in the bargaining unit shall have voted in favor thereof in a secret ballot referendum held under the supervision of an impartial State or Federal Agency designated by the Union. If desired by the Union, such vote may be conducted on Company premises during working hours at Company expense."

The essential change in the redrafted proposal is found in the third paragraph. Originally it was proposed that the secret ballot strike referendum be held on Company premises and at Company expense, which was changed in the final proposal to provide for a secret ballot referendum held under the supervision of an impartial State or Federal Agency designated by the Union. The Union raised no issue as to the first two paragraphs of the proposal; it was the third paragraph to which it objected.

The ratification clause (...