Carpenter Sprinkler Corp. v. N.L.R.B.

Decision Date17 August 1979
Docket NumberD,No. 807,807
Citation605 F.2d 60
Parties102 L.R.R.M. (BNA) 2199, 86 Lab.Cas. P 11,533, 4 Fed. R. Evid. Serv. 1408 CARPENTER SPRINKLER CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. ocket 78-4189.
CourtU.S. Court of Appeals — Second Circuit

Edward E. Shumaker, III, Concord, N. H. (Gallagher, Callahan & Gartrell, Concord, N. H., Christopher C. Gallagher, Concord, N. H., of counsel), for petitioner.

Mary K. Schuette, Atty., N. L. R. B., Washington, D. C. (John S. Irving, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Robert E. Allen, Acting Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, Janet C. McCaa, Atty., N. L. R. B., Washington, D. C., of counsel), for respondent.

Before SMITH, OAKES and VAN GRAAFEILAND, Circuit Judges.

J. JOSEPH SMITH, Circuit Judge:

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, located 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 bargaining 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 agreement 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 rates 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

meeting. LaFayette told Wilder that both the Union proposals and the terms of the national multi-employer agreement were financially unacceptable to Carpenter. Wilder then said that as far as he was concerned the parties were at an "impasse," and that the Union would call a strike. Wilder called back soon thereafter and told LaFayette that he wanted to clarify that he did not have the authority to call a strike, although it was his personal view that the negotiations were at an impasse. This telephone conversation was tape recorded by LaFayette, without Wilder's knowledge.

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 ("ALJ") 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.

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 considered 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, 369 U.S. 736, 743, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962); New York Printing Pressmen & Offset Workers v. NLRB, 538 F.2d 496, 501 (2d Cir. 1976). Such unilateral action by an employer is disfavored because it detracts from the legitimacy of the collective bargaining process by impairing the union's ability to function effectively, and by giving the impression to members that a union is powerless. See NLRB v. General Electric Co., 418 F.2d 736, 748 (2d Cir. 1969), Cert. denied, 397 U.S. 965, 90 S.Ct. 995, 25 L.Ed.2d 257 (1970). Thus, even unilateral increases in wages and benefits are prohibited in the absence of an actual impasse. Katz, supra; New York Printing Pressmen,supra. And accordingly, there is no requirement that the unilateral actions have been made in subjective bad faith in order to establish a refusal to bargain under the Act. Katz, supra, 369 U.S. at 743, 747, 82 S.Ct. 1107.

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., 424 F.2d 634, 638 (5th Cir. 1970). The scope of this court's review of Board factual findings is "quite limited," and a Board finding that no impasse existed could only be overturned if the "substantial evidence" standard of § 10(e) and (f) of the Act, 29 U.S.C. § 160(e) and (f), were not met. See NLRB v. Columbia University, 541 F.2d 922, 928 (2d Cir. 1976). Since we are unable to say that the standard has not been met, we affirm the Board's holding that there was no actual impasse in this case.

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...

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