NLRB v. Katz

• Decision Date: 11 April 1961
• Docket Number: No. 82,Docket 26289.,82
• Citation: 289 F.2d 700
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. Benne KATZ, Alfred Finkel and Murray Katz, d/b/a Williamsburg Steel Products Company, Respondent.
• Court: U.S. Court of Appeals — Second Circuit

289 F.2d 700 (1961)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. Benne KATZ, Alfred Finkel and Murray Katz, d/b/a Williamsburg Steel Products Company, Respondent.

No. 82, Docket 26289.

United States Court of Appeals Second Circuit.

Argued November 15, 1960.

Decided April 11, 1961.

Stuart Rothman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Frederick U. Reel, James A. Ryan, Attys., N. L. R. B., Washington, D. C., for petitioner.

Raphael, Searles, Levin & Vischi, New York City (Sidney O. Raphael, Leo M. Drachsler, New York City, of counsel), for respondent.

Before LUMBARD, Chief Judge, and WATERMAN and MOORE, Circuit Judges.

WATERMAN, Circuit Judge.

The National Labor Relations Board has petitioned this court pursuant to Section 10(e) of the National Labor Relations Act (NLRA) for enforcement of an order of January 22, 1960 it issued against the respondent, Benne Katz, Alfred Finkel and Murray Katz, d/b/a Williamsburg Steel Products Company (Employer).

The General Counsel's Complaint and Notice of Hearing was issued to Employer on September 8, 1958 based upon charges of unfair labor practices made by Architectural & Engineering Guild, Local 66, American Federation of Technical Engineers AFL-CIO (Union). The Complaint alleged that "Employer did refuse and continues to refuse to bargain collectively with Local 66 as the exclusive bargaining representatives of all the technical engineering employees of Employer's Engineering Department in New York in that:

"(a) In or about March 1957, and at various times thereafter to date, Respondent Employer unilaterally changed the terms and conditions of employment relating to sick leave of employees in the unit described above.

"(b) In or about April 1957, and at various times thereafter to date, Respondent Employer unilaterally changed existing wage rates and other terms and conditions of employment of employees in the unit described above.

"(c) Since in or about March 1957, and at various times thereafter to date, Respondent Employer bargained directly and individually with employees in the unit described above * * *, concerning rates of pay, wages, hours of employment, or other terms and conditions of employment.

"(d) In or about June and July 1957, Respondent Employer, through its agents, supervisors or representatives, including Herbert Jacobson and others unknown, aided and assisted employees in the unit described above * * * to repudiate Local 66 as their bargaining representative.

"(e) In or about June, July and August 1957, and at various unknown times thereafter to date, Respondent Employer, in derogation of Local 66\'s representative status, through Respondent Employer\'s agents, supervisors or representatives including Jacobson, Wisniewski and others unknown, publicized, sponsored, approved, permitted, attended and participated in meetings on its premises of employees in the unit described above."

These allegations were claimed to constitute separate unfair labor practices within the meaning of Sections 8(a) (1) and 8(a) (5) of the N.L.R.A., 29 U.S.C.A. §§ 158(a) (1), 158(a) (5).

After Employer's answer was filed a long contested hearing ensued before a Trial Examiner in which, as appears to be normally the case, two completely divergent versions of the history of the collective bargaining of the parties were presented. The Trial Examiner chose to accept the version presented by the Board's counsel, and his findings were unfavorable in every respect to Employer. He found that subsequent to the certification of Union on July 5, 1956 and during the negotiating of an initial collective bargaining agreement the following acts of Employer occurred:

(a) In October 1956 and January 1957 Employer unilaterally granted merit increases to its employees without notice to or negotiation with Union.

(b) On or about March 11, 1957 Employer unilaterally made a substantial change in its sick leave policy without notice to Union.

(c) In April 1957 Employer announced a new system of wage increases: "These increases were announced without notice to, or consultation with, the Union and were substantially better than what Respondent had previously offered the Union."

The Trial Examiner next considered and rejected the reasons advanced by Employer explaining the action taken. He concluded:

"Rather than demonstrating bad faith bargaining by the Union, the entire record compels the conclusion that it was Respondent\'s conduct which brought the negotiations to naught. Thus, Respondent\'s unilateral action heretofore found, `while negotiations were still continuing, and in complete disregard of the Union\'s status, provides the final insight into Respondent\'s conduct of the negotiations with the Union. It clearly shows that * * Respondent was merely going through the motions of collective bargaining without a genuine intention of trying to negotiate an agreement with the Union as required by the provisions of the Act.\' (Emphasis supplied.)

"On the entire record I find and conclude that by taking the unilateral action above found before any claimed impasse was reached, and while negotiations were pending, Respondent did so in clear disregard of its obligation to bargain with the Union as the exclusive bargaining representative of its employees, and thereby undermined the authority which the Act bestowed upon the Union. By that conduct, Respondent violated Section 8(a) (1) and (5) of the Act. Medo Photo Supply Corporation v. N. L. R. B., 321 U.S. 678, 683-684 64 S.Ct. 830, 88 L.Ed. 1007; May Department Stores Co. v. N. L. R. B., 326 U.S. 376, 66 S.Ct. 203, 90 L.Ed. 145; N. L. R. B. v. Crompton-Highland Mills, Inc., 337 U.S. 217 69 S.Ct. 960, 93 L.Ed. 1320.."

In a short decision the Board accepted the Examiner's factual findings (a), (b) and (c) above set forth in the second preceding paragraph. It rejected the Examiner's finding that Employer had failed to bargain in good faith,¹ but interpreted the unilateral acts as having been in themselves unfair labor practices within the purview of §§ 8(a) (1) and 8(a) (5).

An order was issued directing Employer to cease and desist from:

(a) "Unilaterally changing wages, rates of pay, or sick leave, or granting merit increases, or in any similar or related manner refusing to bargain collectively with Union * * *" (Emphasis supplied.)

(b) "Refusing to bargain collectively concerning rates of pay, wages, hours of employment, and other conditions of employment with the Union * * *"

And Employer was also affirmatively directed to bargain collectively if requested to do so.

We are of the opinion that the unilateral acts here complained of, occurring as they did during the negotiating of a collective bargaining agreement, do not per se constitute a refusal to bargain collectively and per se are not violative of § 8(a) (5). While the subject is not generally free from doubt, it is our conclusion that in the posture of this case a necessary requisite of a Section 8(a) (5) violation is a finding that the employer failed to bargain in good faith. Moreover, we conclude that here the § 8(a) (1) violations found by the Board derived from the violations of § 8(a) (5) that it found, and that these violations, also, are unproved without the necessary finding that the employer failed to act in good faith.

I

Section 8(a) (5) provides that 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 9(a) of this title."² Sections 8(a) (5) (then § 8(5)) and 9(a) were part of the original National Labor Relations Act of 1935 and were early interpreted to require that in the interest of industrial peace the employer confer and negotiate with the accredited representative of his employees, N. L. R. B. v. Jones & Laughlin Steel Corp., 1937, 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893. However, the act was not read to compel agreement. N. L. R. B. v. Jones & Laughlin Steel Corp., supra, at page 45, 57 S.Ct. 615. Therefore, it is not difficult to find a violation of § 8(a) (5) where the employer completely refuses to confer and to negotiate with the union representative of his employees.³ On the other hand, it is difficult indeed to determine whether the employer is in fact negotiating and conferring in an attempt to resolve differences with his employees, i. e., bargaining "in good faith," once the employer meets the union at the collective bargaining table. Such a determination rests upon a subjective evaluation of the employer's attitude.⁴ This evaluation can only be effectively made in terms of the complete bargaining situation.

In 1947 Congress re-evaluated the NLRA. At that time there was some concern expressed in the House of Representatives over the vagueness of the concept of the employer's duty to "bargain in good faith." It was suggested that perhaps a statutory definition of "collective bargaining" would solve that vagueness for there would then be an objective standard governing an employer's actions, which, if not met by the employer, would thereby constitute a refusal to bargain and consequently be a violation of § 8(a) (5). A formalistic, procedural definition of "collective bargaining" was included in the Bill that passed the House (H.R. 3020, 80th Cong. 1st Sess. § 2(11) (1947)). See I Legislative History of the Labor-Management Reporting and Disclosure Act of 1947, at 311. Senate amendments to the House Bill contained no such definition. The Senate desired to retain and make statutory the subjective test developed by adjudication under the original 1935 Act and refused to concur in the inclusion of the rigid definition of "collective bargaining" desired by the House. It was the Senate view that the approach the House proposed would retard rather than advance the course of collective bargaining and the cause of industrial peace, for the employer's true intent would be...