Ford Motor Co. (Chicago Stamping Plant) v. N.L.R.B.

Decision Date23 March 1978
Docket NumberNo. 77-1707,77-1707
Citation571 F.2d 993
Parties97 L.R.R.M. (BNA) 3030, 83 Lab.Cas. P 10,388 FORD MOTOR COMPANY (CHICAGO STAMPING PLANT), Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Local 588, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW, Intervenor.
CourtU.S. Court of Appeals — Seventh Circuit

William J. Rooney, Dearborn, Mich., William W. McKittrick, Chicago, Ill., for petitioner.

Elliott Moore, Deputy Associate Gen. Counsel, Linda E. Auerbach, William R. Stewart, Attys., N.L.R.B., Washington, D.C., for respondent.

Before SWYGERT and SPRECHER, Circuit Judges, and GRANT, Senior District Judge. *

SPRECHER, Circuit Judge.

The question in this appeal is whether in-plant cafeteria and vending machine food prices and services are "terms and conditions of employment" under Section 8(d) of the National Labor Relations Act, as amended, or materially or significantly affect or have impact upon such terms and conditions under the facts and circumstances of this case. 1

The appeal comes here for review of an order of the National Labor Relations Board and upon the Board's cross-application for enforcement. On December 1, 1976, an Administrative Law Judge issued his decision recommending that the complaint be dismissed. The Board's decision and order issued on July 11, 1977, reversed the Administrative Law Judge and concluded that cafeteria and vending machine services and prices are mandatory subjects of collective bargaining. 230 NLRB No. 101 (1977).

I

The petitioner, Ford Motor Company (Company), operates an automotive parts stamping plant in Chicago Heights, Illinois, where it employs approximately 3600 hourly-rated production employees working in three shifts and represented by the intervenor, Local 588 of the United Automobile, Aerospace and Agricultural Implement Workers of America, UAW (Union). The Company and Union have been parties to a series of national collective bargaining agreements supplemented by local agreements. There is no other union in the plant.

The Company provides its employees with two air-conditioned cafeterias seating a total of 450-600 persons and five air-conditioned and enclosed vending machine areas, called "coke cribs," with a total seating capacity of 235-300 persons. All employees have a 30-minute lunch period. The parties agreed that it was not feasible for employees to leave the plant during their food breaks. Mobile food vending trucks are not permitted on plant property.

Employees are permitted to bring their own food into the plant and it may be eaten in the cafeteria or coke crib areas. However, the food brought in may only be stored in ventilated but not air-conditioned locker rooms. The employees have no refrigeration facilities and in the summer months the lockers become "very hot and sticky and smelly" with temperatures frequently ranging from 80 to 100 degrees and causing food spoilage. The Company has occasionally employed exterminator services because of unsanitary conditions in the locker rooms.

Based on physical counts of usage, it appeared that assuming a normal 5-day workweek, about 20-30% Of the employees used the Company cafeterias each day and, assuming that all employees used the vending machines, each employee used vending machines about 31/2 times per day.

The two cafeterias and five vending machine areas are serviced by a caterer, ARA Services, Inc., under a contract with the Company dated February 11, 1972, which provides that ARA shall:

furnish products of quality in accordance with purchasing specifications that shall have been submitted to and approved by Ford, and in accordance with a price and portion list for said manual food service and vending machines that shall have been submitted to Ford and that shall be subject to review at the request of Ford or contractor.

Under the agreement the Company furnishes rent-free space, rent-free equipment (except the vending machines), all needed utilities and maintenance whereas ARA furnishes the vending machines, all food and beverages, and management and labor. The agreement further provides that ARA shall be reimbursed for all direct costs of food and vending operations plus an allowance for general administrative costs equivalent to 4% Of net receipts plus a service fee of 5% Of net receipts. If gross receipts are less than the sum of the costs of the operation plus the service fee, the Company is obligated to reimburse ARA for the deficit by an annual amount not to exceed $52,000. For all recent years, the operation has been on a loss basis and the Company has made up the annual loss to ARA. Finally, the agreement provides that ARA is an independent contractor and that the contract is terminable by either party upon 60 days written notice.

Beginning with a letter dated October 29, 1967, from the Company to the Union entitled "Improved Vending and Cafeteria Service," the parties have bargained over various aspects of the quality of service provided by the caterer (at that time a predecessor of ARA). The 1967 letter provided in part that:

The Company recognizes its continuing responsibility for the satisfactory performance of the caterer and for providing the Union with a means for registering and expeditious handling of complaints concerned with such performance.

The letter, which was incorporated into the 1970 local collective bargaining agreement, dealt with the staffing of service lines, adequate cafeteria supervision, certain sanitary conditions, restocking and repairing of vending machines, and menu variety.

The local agreement in effect during the material times involved in this case became effective June 20, 1974, and continued through September 1976. The 1974 agreement included the above "recognition" clause in slightly modified language and other provisions dealing with cafeteria and vending services. 2

The Company has consistently refused to bargain with the Union concerning prices set by ARA with its approval. The present controversy developed when the Company informed the Union that cafeteria and vending machine prices would be increased on February 9, 1976. By a letter to the Company dated February 13, the Union sought "to bargain with you regarding (cafeteria and vending) prices and services." On February 18, the Company responded by letter stating that "(s)imilar requests have been made by the Union in the past, and the Company's response has been the same, that food prices and services are not a proper subject for negotiations." 3

Beginning on February 16, 1976, there was a boycott by Union members of the cafeteria and vending operations, which ended as to the cafeteria on May 19, 1976, and as to vending machines on June 7, 1976. The Administrative Law Judge found that "a substantial reason for abandoning the boycott was its ineffectiveness in reducing prices." He also noted that employees mostly brought in their lunches during the boycott and its termination was due in part to the onset of hot weather with consequent problems of spoilage of food.

Meanwhile on April 12, 1976, the Union had filed an unfair labor practice charge against the Company. On May 26, 1976, the Regional Attorney for the Board's General Counsel for Chicago issued a complaint against the Company. Our jurisdiction is derived from Sections 10(e) and (f) of the Act as amended (29 U.S.C. § 160), the alleged unfair labor practices having occurred in Illinois.

II

As early as 1949, the National Labor Relations Board held that an employer had a statutory duty to bargain regarding the prices of meals served at logging camps. Weyerhaeuser Timber Co., 87 NLRB 672 (1949). Through the years the Board has persisted in its position that in-plant cafeteria and vending machine food prices and services are terms and conditions of employment and hence mandatory subjects of bargaining. Westinghouse Electric Corp., 156 NLRB 1080 (1966); McCall Corp., 172 NLRB 540 (1968); Package Machinery Co., 191 NLRB 268 (1971); and Ladish Co., 219 NLRB 354 (1975).

These last four cases were all reversed by courts of appeals. Westinghouse Electric Corp. v. N.L.R.B., 369 F.2d 891 (panel decision), 387 F.2d 542 (supervening en banc decision, 4th Cir. 1967); McCall Corp. v. N.L.R.B., 432 F.2d 187 (4th Cir. 1970); N.L.R.B. v. Package Machinery Co., 457 F.2d 936 (1st Cir. 1972); and N.L.R.B. v. Ladish Co., 538 F.2d 1267 (7th Cir. 1976).

The Board takes the view that an Administrative Law Judge's duty is to apply established Board precedent which the Supreme Court of the United States or the Board itself has not reversed, despite reversals of Board precedent by courts of appeals. Iowa Beef Packers, Inc., 144 NLRB 615, 616 (1963). In the present case, the Administrative Law Judge reasoned that despite the Board's precedents in Westinghouse, McCall, Package Machinery and Ladish, the reversals of those cases by courts of appeals followed by the failure of the Board to seek certiorari from the Supreme Court in the most recent case, N.L.R.B. v. Ladish Co., 538 F.2d 1267 (7th Cir. 1976), indicated that the Board had acquiesced and changed its former position. The Administrative Law Judge therefore recommended that the complaint against Ford Motor Company be dismissed.

The Board rejected the Administrative Law Judge's reasoning and said that "(w)ith all due respect to the First, Fourth, and Seventh Circuits, we adhere to our position that cafeteria and vending machine prices are a mandatory subject of bargaining." 230 NLRB No. 101 (1977).

III

Section 8(a)(5) of the National Labor Relations Act, as amended, 4 makes it an unfair labor practice for an employer to "refuse to bargain collectively with the representatives of his employees . . . ." Collective bargaining is defined in Section 8(d) as:

the performance of the mutual obligation of the employer and the representative of the employees to meet at...

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