NLRB v. Central Illinois Public Service Company

• Citation: 324 F.2d 916
• Decision Date: 20 November 1963
• Docket Number: No. 14158.,14158.
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CENTRAL ILLINOIS PUBLIC SERVICE COMPANY, Respondent.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

324 F.2d 916 (1963)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CENTRAL ILLINOIS PUBLIC SERVICE COMPANY, Respondent.

No. 14158.

United States Court of Appeals Seventh Circuit.

November 20, 1963.

Marcel Mallet-Prevost, Asst. Gen. Counsel, Jules H. Gordon, Atty., Washington, D. C., Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Assoc. Gen. Counsel, Melvin Pollack, Atty., N. L. R. B., for petitioner.

Thomas L. Cochran, Sorling, Catron & Hardin, Springfield, Ill., for respondent.

Before HASTINGS, Chief Judge, and DUFFY and KNOCH, Circuit Judges.

HASTINGS, Chief Judge.

This case is before us for review on petition of National Labor Relations Board for enforcement of its order issued November 29, 1962 against respondent Central Illinois Public Service Company. The Board's decision and order are reported at 139 N.L.R.B. 1407 (1962).

Respondent is engaged in the business of furnishing electricity and gas as a public utility service to consumers in central and southern Illinois.

The Board found that respondent violated § 8(a) (5) and (1) of the National Labor Relations Act, 29 U.S.C.A. § 158 (a) (5) and (1), by unilaterally discontinuing a discount in the price of gas sold to its employees who used gas for space heating.

The Board's order requires respondent to cease and desist from unilaterally changing conditions of employment, and from in any like or related manner infringing upon its employees' rights under the Act. Affirmatively, the order requires respondent to make whole the eligible employees from any loss suffered by reason of the termination of the gas discount for the period from September 15, 1961 to February 20, 1962, including the payment of interest thereon at the rate of 6% per annum.

The primary questions presented for decision are whether the Board properly found that respondent unilaterally discontinued its employee gas discount in violation of § 8(a) (5) and (1) of the Act, and whether the Board's order awarding compensation and interest is valid.

Respondent raises several collateral issues which we shall discuss later.

Respondent, from about 1925 until September 15, 1961, granted a 33 1/3% discount in the price of gas sold to its employees who used gas for space heating.

Respondent's employees in its Eastern Division have been represented by the union since 1945. Union and respondent have entered into successive collective bargaining contracts since that date. None of the contracts has expressly referred to the gas discount. However, respondent, in comparing the wages of its Eastern Division employees with the wages of its other employees, occasionally stated that the gas discount benefits should not be ignored.

In May, 1961, both parties served notice that they wished to modify in certain specific details the existing contract due to expire June 30, 1961. The notices did not refer to the gas price discount and neither party mentioned it at the several negotiating sessions held before August 15, 1961.

On August 14, 1961, respondent decided to discontinue the gas price discount to its employees. Respondent was advised by its attorney that it was obligated to bargain with the union concerning the discontinuance. However, on August 15, respondent filed a revised rate schedule with the Illinois Commerce Commission stating in effect that on September 15, 1961, the price discount to its employees, except retired employees, would be discontinued. Also on August 15, respondent distributed a bulletin to all its Eastern Division employees announcing the gas discount would be discontinued on September 15, 1961.

Respondent did not officially or formally notify the union or attempt to bargain with it concerning the discontinuance.

On August 25, J. O. Jones, the union's business manager, wrote K. E. Bowen, respondent's Eastern Division manager, that he had been informed of the intended gas discount discontinuance. Jones stated that respondent's conduct was improperly unilateral and in "violation of the policy and application of the labor agreement." He concluded his letter, "We will be glad to discuss this matter with you at your earliest convenience."

Respondent did not acknowledge or answer Jones' letter. On September 11, Jones again wrote Bowen and requested Bowen's views concerning the intended discontinuance. Bowen answered on September 13 by sending a copy of the bulletin respondent had previously distributed to its employees. Bowen stated in the letter, "I believe you will find our views set forth therein."

On September 15, the discontinuance of the gas discount automatically became effective under the revised rate schedule which respondent had filed with the Illinois Commerce Commission.

The union continued to protest the discontinuance and requested that respondent restore the discount or negotiate the matter. Respondent agreed to negotiate and in January, 1962 indicated it would entertain union proposals to compensate the affected employees in some way for the loss of the discount. The union declined to make any compromise proposals and on February 20 the parties reached an impasse. Respondent refused to submit the matter to arbitration.

The union filed an unfair labor practice charge with the Board and in addition, brought suit in the United States District Court for the Eastern District of Illinois alleging breach of contract for refusal to arbitrate. The suit in the district court is the subject of a companion appeal to this court, Local Union No. 702, International Brotherhood of Electrical Workers, A.F.L.-C.I.O. v. Central Illinois Public Service Company, 324 F.2d 920, (November 20, 1963).¹

In this case, the employees had selected a union as their collective bargaining representative. There was a long history of amicable labor relations between respondent and its employees and the union. Respondent unilaterally discontinued its gas discount to a specified class of employees without affording the bargaining representative an opportunity to discuss and negotiate concerning the change. There was no evidence of or finding by the Board that respondent was guilty of bad faith in pursuing this course. A finding of bad faith is not a prerequisite to finding an unfair labor practice in such a situation.

In National Labor Relations Board v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed. 2d 230 (1962), in passing on this question, the Supreme Court said: "Unilateral action by an employer without prior discussion with the union does amount to a refusal to negotiate about the affected conditions of employment under negotiation, and must of necessity obstruct bargaining, contrary to the congressional policy. It will often disclose an unwillingness to agree with the union. It will rarely be justified by any reason of substance. It follows that the Board may hold such unilateral action to be an unfair labor practice in violation of § 8 (a) (5), without also finding the employer guilty of over-all subjective bad faith." Id. 369 U.S. at 747, 82 S.Ct. at 1114, 8 L.Ed.2d 230.

Section 8(a) (5) of the Act provides: "It shall be an unfair labor practice for an employer * * * to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 159(a) of this title."

Section 8(d) of the Act provides: "For the purposes of this section, to bargain collectively is the performance of the mutual obligation of the employer and the representative of the...