# Petition — Blue Grass Provision Co. v. National Labor Relations Board

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1981
- **Citation:** 452 U.S. 915

## Text

80-1544
No.

In the Supreme Court of the United States

October Term, 1980

BLUE GRASS PROVISION CoO., INC.,
Petitioner,
VS.

NATIONAL LABOR RELATIONS BOARD,
Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE
SIXTH CIRCUIT

WILLIAM K. ENGEMAN
(Counsel of Record)

TAFT, STETTINIUS & HOLLISTER
600 Dixie Terminal Building
Cincinnati, Ohio 45202
(513) 381-2838

Counsel for Petitioner
Of Counsel:

Paut C. SUNDERLAND

600 Dixie Terminal] Building
Cincinnati, Ohio 45202

E. L. Menpenmatt, Inc., 926 Cherry Street, Kansas City, Mo. 64106, (816) 421-3030

QUESTIONS PRESENTED

1. Whether, as this Court will decide this term in
First National Maintenance Corporation v. National Labor
Relations Board, No. 80-594, an employer’s decision to
terminate a portion of its operations solely for legitimate
business reasons is itself a mandatory subject of bargain-
ing under Section 8 (a) (5) of the Act?

2. Whether, if there is a duty to bargain concerning
an employer’s decision to terminate a portion of its opera-
tions solely for legitimate business reasons and the em-
ployer has engaged in good faith bargaining, the em-
ployer must reach impasse with the union before im-
plementing the decision?

TABLE OF CONTENTS

I ll ae 2
a ila st eae ali seebiilalbiastoobasnimigsiles 2
pemcmtory Provisions Involved ................1. ncn cs nniccucenesianiat auinisves cuts tapas 11,13
NLRB v. Insurance Agents’ International Union, 261
SE MUI sccreanien pilanhsaSedeaanseetiiopntadedic Amina ncoaaminaciadie 11,13
NLEG 0. Katz, 300 US. T36 (1062) ncn c ences 10
NLRB v. Edward M. Rude Carrier Corp., 79 CCH Lab.
Cae Bene Cee Gas Bere) tk ee 6
NLRB v. J. P. Stevens & Co., Inc., Gulistan Div., 538
gw | El A; ee na ete niet Ue ae 9
NLRB v. Thompson Transport Co., 406 F.2d 698 (10th
ele IP eeetecaia acces tnstiaaheddicsoindicadetnaisicuincdcanleacciassuinacninitas 6
NLRB v. Wooster Division of Borg-Warner Corp., 356
Oe I 0 I erecct ie calteccges ces ncscsecpieicbvethntditbonnsnsunitnsaddantce 13

N.C. Coastal Motor Lines, Inc., 219 NLRB 1009 (1975),

enforced, 542 F.2d 637 (4th Cir. 1976) 20000000... 9
Philip Carey Mfg. Co., 140 NLRB 1103 (1963), modi-

fied, 331 F.2d 200 (6th Cir. 1964) oo. 13
H. K. Porter Co. v. NLRB, 397 U.S. 99 (1970) ................ 13
Royal Typewriter Co. v. NLRB, 533 F.2d 1030 (8th Cir.

MOPED ‘scdidsiechiecicsipetecsninicctsdogsecttascnedbasnabtdutiotad tte tao? 6

Taft Broadcasting Co.. WDAF AM-FM-TV, 163 NLRB
475 (1967), affirmed sub nom., American Federation
of Television & Radio Artists v. NLRB, 395 F.2d 622
een Mes: ANUP - vecekcossdosnstaishcaecanscpsaserahereebbionetdoniesaticendas 8,9

Winn-Dixie Stores, Inc., 243 NLRB No. 151 (1979)
STATUTORY PROVISIONS

28 USC §1254(1) |
9 EC Sibel es, 2,4, 10, 11, 12, 13

eB | RT ae iver REN GET AE EN
ee NE I aseattieestidecncch sealcscatecsbnccslsveupceibiaabncitbatteenientiben

OTHER AUTHORITIES

Cox, Labor Decisions of the Supreme Court at the Oc-
tober Term, 1957, 44 Va. L. Rev. 1057 (1958) ............
Epstein, Impasse in Collective Bargaining, 44 Texas L.
UT a a akin

Stewart and Engeman, Impasse, Collective Bargaining,
and Action, 39 U. Cin. L. Rev. 233 (1970) 0.

No.

In the Supreme Court of the United States

October Term, 1980

BLUE GRASS PROVISION CO., INC.,
Petitioner,
VS.

NATIONAL LABOR RELATIONS BOARD,
Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE
SIXTH CIRCUIT

Petitioner, Blue Grass Provision Co., Inc.,! prays that
a writ of certiorari issue to review the judgment of the
United States Court of Appeals for the Sixth Circuit en-
forcing an order of the National Labor Relations Board.

1. In accordance with Supreme Court Rule 28.1, the peti-
tioner states that it has no parent, subsidiary, or affiliated com-
panies.

OPINIONS BELOW

The opinion of the Court of Appeals (App. A at Al)?
is reported unofficially at 105 LRRM 3487. The opinion
and order of the National Labor Relations Board (App.
A at A8) are reported at 238 NLRB No. 128 (1978).

JURISDICTION

The judgment of the United States Court of Appeals
for the Sixth Circuit enforcing the Board’s order was en-
tered on December 9, 1980. This petition was filed within
ninety (90) days of that date. The jurisdiction of this
Court is invoked under 28 USC §1254(1). The jurisdiction
of the Court of Appeals was invoked under Section 10(f) of
the National Labor Relations Act, as amended, 29 USC
§160(f).

STATUTORY PROVISIONS INVOLVED

The pertinent provisions of the National Labor Rela-
tions Act, as amended, are Sections 8(a) (1), 8(a) (3), 8(a)
(5) and 8(d). They are set forth in Appendix B.

STATEMENT OF THE CASE

The petitioner is a small meat processor with a long
history of peaceful relationships with the two labor organi-
zations representing its employees.

2. “App. A” and “App. B” refer to the appendices to this
petition for certiorari. Appendix A contains the judgment and
opinions of the court below and the decisions and orders of the
National Labor Relations Board and the Administrative Law
Judge. Appendix B contains the relevant provisions of the Na-
tional Labor Relations Act.

3

On November 12, 1976, petitioner was notified by
the Teamsters local union representing its five delivery
drivers, that the union was cancelling its collective bargain-
ing agreement effective with its expiration on January 31,
1977. The parties subsequently agreed to extend the agree-
ment until February 11, 1977.

Prior to any meeting with the union, the petitioner had
investigated alternative methods of delivery in order to
lessen costs and increase its flexibility. During the course
of two meetings conducted in late January of 1977, peti-
tioner’s negotiator and president, Bill Rice, notified the
union that petitioner wanted to switch to a common carrier
for its deliveries and suggested that petitioner would be
willing to phase out the employees as they retired over the
next four years. The union agent refused to negotiate an
agreement which would eliminate the bargaining unit
through attrition and instead proposed an absolute bar on
subcontracting of unit work. The second and final meet-
ing between the parties was held on January 28, 1977.

The union requested no negotiations at any time after
January 28, 1977. Rather, on the evening of January 31,
1977, the union agent met with the petitioner’s delivery
drivers. He informed the drivers about his subcontract-
ing discussion with petitioner. He stated that he could not
negotiate a contract that would provide for subcontracting
away bargaining unit work. The employees then voted to
strike.

Petitioner’s president, having received no contact from
the union, telephoned the union’s agent on the morning of
February 7. In that telephone call, he told the union agent
of the company’s continued interest in going to a common
carrier. The union agent informed petitioner’s president
that he would do everything in his power to prevent peti-
tioner from going to a common carrier.

4

On the following day, February 8, petitioner’s presi-
dent sent a letter to the union’s agent stating that he was
still interested in talking with the union and asked the
agent to contact him if they could meet. Nothing further
was heard from the union prior to the expiration of the
extension on February 11.

After the telephone conversation with the union on
February 7, the three Rice brothers, principals in peti-
tioner, faced with the union’s adamant position on discon-
tinuing deliveries, met and reached agreement with a com-
mon carrier to take over the petitioner’s delivery operations
the following Monday, February 14, if no agreement was
reached with the union prior to the expiration of the
extension February 11. This was done in order to insure
delivery of the company’s perishable meat. The Rice
brothers assumed that there would be some response from
the union in light of the impending expiration of the agree-
ment and President Bill Rice’s February 8 letter.

Having heard nothing from the union by the end of
the work day Friday, February 11, President Rice notified
the drivers that petitioner would be using an outside car-
rier and that they need not report to work the following
Monday. The union struck petitioner without further
notice or discussion and picketing continued up to the time
of the hearing before the administrative law judge, De-
cember 14, 1977.

The petitioner immediately approached the Federal
Mediation and Conciliation Service requesting that a meet-
ing be scheduled to resolve the dispute. The union refused
this unconditional offer to meet and no meetings were held
up to the date of the hearing before the administrative law
judge.

The National Labor Relations Board held that the peti-
tioner had violated Sections 8(a) (1) and (5) of the Act “by

)

unilaterally subcontracting out all of its truck driving work
effective February 14, 1977.” (App. A at A23) The
Board found that the parties were not at “impasse” over
the petitioner’s proposal to phase out deliveries. The
Board scored petitioner’s feilure to communicate its im-
mediate discontinuance of its delivery operations “with
any definite particularities.” (App. A at A23) It noted
that the petitioner’s letter of February 8 requesting further
meetings was “inconsistent with the notion that matters
were deadlocked.” Applying its per se rule that “[u]ntil
the collective bargaining process has been exhausted, no
impasse can occur,” (App. A at A23) the Board ordered
reinstitution of the delivery operation, reinstatement of the
drivers and back pay. (App. A at A28-29)

The Court of Appeals for the Sixth Circuit, on review,
held that petitioner “had breached its duty to bargain by
instituting a unilateral change before an impasse had been
reached on a subject of mandatory bargaining.” (App. A
at A5) The Court said it was “mindful that Blue Grass
is a small company with a history of relatively peace-
ful labor relations and that the effect of the reinstatement
order may cause it hardship.” Nonetheless, it granted en-
forcement of the Board’s order. (App. A at A7)

REASONS FOR GRANTING THE WRIT

1. The first issue presented by this case is already
before the Court on substantially similar facts in First Na-
tional Maintenance Corporation v. National Labor Relations
Board, October Term, 1980, No. 80-594. This Court granted
certiorari in that case, apparently to resolve the very real
divergence among the circuits on this issue. The Sixth
Circuit below has interpreted Fibreboard Paper Products
Corp. v. NLRB, 379 U.S. 203 (1964) as automatically im-

6

posing a bargaining obligation on the employer, despite the
substantial modification of the employer’s operation which
involved total cessation of product deliveries and reduction
of its employee work force by about 20%. The impact on
the employer’s business here was proportionally greater
than that in First National Maintenance Corp., supra.
The Sixth Circuit’s per se approach here is at clear variance
with the “presumption” approach utilized by the Second
Circuit in that case as well as the approaches of the
Fourth, Eighth and Tenth Circuits discussed in detail in the
petition filed in that case.* It is also diametrically opposed
to the decision of the Eighth Circuit in NLRB v. Adams
Dairy, Inc., 350 F.2d 108 (8th Cir. 1965), cert. denied, 382
U.S. 1011 (1966), holding that discontinuance of an em-
ployer’s delivery operations for economic reasons did not
require bargaining. The only practical way of preserving
this petitioner’s legal rights, pending this Court’s decision
in First National Maintenance Corp., is by granting the
Writ.

2. This case also presents a second, closely related,
and, if anything, even more significant legal issue. If, as
here, an employer contemplates legitimate major business
action—what is the scope of any bargaining which at-
taches? This issue is not directly presented by First Na-
tional Maintenance Corp., supra. The employer there un-
dertook no bargaining whatsoever regarding its decision
to change its business operation. The instant case, how-
ever, presents the full range of issues raised by the Board’s

3. See Royal Typewriter Co. v. NLRB, 533 F.2d 1030, 1039
(8th Cir. 1976); NLRB v. William J. Burns International De-
tective Agency, Inc., 346 F.2d 897 (8th Cir. 1965); NLRB v. Ed-
ward M. Rude Carrier Corp., 79 CCH Lab. Cas. %11,615 (4th
Cir. 1976); NLRB v. Thompson Transport Co., 406 F.2d 698 (10th
Cir. 1969). Compare: Brockway Motor Trucks v. NLRB, 582 F.2d
720 (3d Cir. 1978).

7

intrusive approach to the process of implementing man-
agerial judgments.

Whether and upon what standard Congress has dele-
gated to the NLRB and the courts the power to regulate
the timing or the manner in which an employer takes ac-
tion solely in order to further legitimate business objectives
is an issue of paramount importance to National Labor
policy. It will be raised and discussed by this Court in ad-
dressing the management rights issues in First National
Maintenance Corp. It will substantially advance coherent
presentation and decision to have a record presenting the
entire subject directly.

3. . The incorrect decisions rendered in this case below
graphically illustrate the problem raised by the scope of
bargaining issue. The Court of Appeals and Board have
here held that an employer may not take action to further
its legitimate business objectives until it has reached im-
passe with the union on that specific action. The Court
of Appeals candidly acknowledged that the “state of affairs
that constitutes an impasse is not subject to precise defini-
tion.” (App. A at A5) It noted equally candidly that
the District of Columbia Circuit in Lane v. NLRB, 418 F.2d
1208 (D.C. Cir. 1969), affirming sub nom., Darling & Co.,
171 NLRB 801 (1968), had taken a different view of the
impasse requirement. The Court of Appeals, however,
went on to distinguish the Lane case based upon its own
analysis of the length of negotiations, the depth of the
parties’ feelings, the number of concessions the company
had made in negotiations and the company’s concern with
the timing of a possible strike. (App. A at A6-7)

These simply are not matters mandated by Congress
for interpretation by the Board or the Courts of Appeals
in second-guessing the timing of employer business ac-

8

tions. Neither the Board nor the courts have been em-
powered by Congress to determir.e when, in the exercise of
its managerial discretion, an employer may take legitimate
actions in furtherance of its business interest which may
indirectly or directly affect some or all of the conditions of
employment of its employees. The practical impossibility
of fairly and correctly applying the Board’s impasse rule
is apparent when the “rule” itself is seen as it is—nothing
more than the Board’s imprecise weighing of an amalgam
of factors. For example, in Taft Broadcasting Co.. WDAF
AM-FM-TV, 163 NLRB 475, 478 (1967) the Board stated:

Whether a bargaining impasse exists is a matter of
judgment. The bargaining history, the good faith of
the parties in negotiations, the length of the negotia-
tions, the importance of the issue or issues as to which
there is disagreement, the contemporaneous under-
standing of the parties as to the state of negotiations
are all relevant factors to be considered in deciding
whether an impasse in bargaining existed.

No business person or lawyer, can with confidence pre-
dict the outcome of the Board’s review of a decision in-
volving .uch factors. The Board’s review, of course, is
pure hindsight, made long after the decision has been
implemented, the effects of the decision realized, and po-
tential back pay liability is accrued. See generally, Ep-
stein, Impasse in Collective Bargaining, 44 Texas L. Rev.
769, 777 (1966); Stewart and Engeman, Impasse, Collective
Bargaining, and Action, 39 U. Cin. L. Rev. 233, 240-248
(1970). As a result, through the control of its impasse
doctrine, the Board has been able to hold hostage through
extended negotiations, or reverse, such traditional man-
agerial decisions as a radio station’s decision to change its
method of broadcasting, a manufacturer’s decision to close
a sales branch, and a trucking company’s discontinuance of

9

unprofitable runs.‘ It is hard to say that a “far heavier hand
in controlling .. . the prerogatives of private business man-
agement” is not already being wielded, despite Mr. Justice
Stewart’s warning in Fibreboard Paper Products, supra,
that this is a path “which Congress certainly did not choose
when it enacted the Taft-Hartley Act”. 379 U.S. 203 at
225-26. (Stewart, J., concurring).

The Court of Appeals for the Fifth Circuit fully recog-
nizes the plight to which a per se impasse rule would put
employers. In Houston Shopping News Co. v. NLRB, 554
F.2d 739 (5th Cir. 1977), that court found that the absence
of a bargaining impasse was not a bar to employer action
taken solely to further its legitimate business objectives.
See also NLRB v. J. P. Stevens & Co., Inc., Gulistan Div.,
538 F.2d 1152, 1162 (5th Cir. 1976); A. H. Belo Corp., 411
F.2d 959, 971 (5th Cir. 1969), cert. denied, 396 U.S. 1007
(1970). The Fifth Circuit has recognized: “The union
has no absolute veto power under the Act. Nor do ne-
gotiations have to exhaust themselves to the point of the
so-called impasse.” NLRB v. Citizens Hotel Co., 326 F.2d
901, 505 (5th Cir. 1964). Compare: Winn-Dixie Stores,
Inc., 243 NLRB No. 151 (1979) (in which the Board has
criticized the Fifth Circuit’s view).

4. See Taft Broadcasting Co., WDAF AM-FM-TV, 163
NLRB 475 (1967), affirmed sub nom., American Federation of
Television & Radio Artists v. NLRB, 395 F.2d 622 (D.C. Cir.
1968) holding an employer could implement chzAges in pre-re-
cording and interchange of announcer policies after 27 meetings
with the union had produced an impasse. The Court of Appeals
affirmed, specifically reserving the question of whether impasse
was required, 395 F.2d at 629; Brockway Motor Trucks, Div. of
Mack Trucks, Inc., 251 NLRB No. 23 (1980) on remand from
Brockway Motor Trucks v. NLRB, supra, 582 F.2d 720 (3d Cir.
1978) holding an employer had no need for “immediate action” in
closing a facility after sustaining seven years of losses totalling
over $1,400,000.00, two months of unsuccessful wage r >gotiations
and a two month strike; N. C. Coastal Motor Lines, Inc., 219 NLRB
1009, 1014 (1975), enforced on other grounds, 542 F.2d 637 (4th
Cir. 1976).

10

Clearly, a very real split exists among the circuit
Courts of Appeals on this issue. Although this Court has
never suggested that Congress intended so radical a regula-
tion of business decisions to be the province of the National
Labor Relations Board and the courts, its decisions are
being cited by the Board and some courts as if it had.

4. Both lines of authority discussed above stem from
the decision of this Court in NLRB v. Katz, 369 U.S. 736
(1962). The Court there held that an employer’s unilateral
implementation of several wage and benefit changes, dur-
ing collective bargaining negotiations over the very subjects
of wage and benefit increases, violated Sections 8(a) (5)
and (1) of the Act. The Court’s opinion speaks of an
obligation to first give notice and an opportunity to bargain
to the statutory bargaining representative of the employees
before taking such an action. The Court expressed its con-
cern that the unilateral nature of the action on a subject
already under negotiation was much the equivalent of a
“flat refusal” to bargain. 369 U.S. at 743. Of course,
explicitly the Court was speaking to a situation in which
the union was attempting to negotiate changes in tradi-
tional areas of its concern, i.e., wages and benefits. The
attempt was obviously being undercut by the employer’s
unilateral action. The Court in no way considered the
situation in which the employer was attempting to imple-
ment a legitimate economic change in its business opera-
tion and the union was opposed to the change.

This Court has never suggested that the timing of such
legitimate action is subject to Board or judicial review or
approval. On the contrary, in American Ship Building Co.
v. NLRB, 380 U.S. 300 (1965), this Court rather broadly
suggested that it was not. In that case, the Court struck
down the Board’s attempt to regulate employer lockouts
by expansive reading of Sections 8(a)(1) and (3) of the

11

Act. The Board had issued a Section 8(a) (5) complaint
as well but made no findings regarding that allegation.
However, this Court specifically addressed the Section
8(a) (5) point:

Although the complaint stated a violation of §8(a) (5)
as well, the Board made no findings as to this claim,
believing that there would have been no point in en-
tering a bargaining order because the parties had long
since executed an agreement. The passage quoted
below in the text of this opinion from Labor Board v.
Insurance Agents’ International Union, 361 U.S. 477,
has even more direct application to the §8(a) (5) ques-
tion. See also, Labor Board v. Dalton Brick & Tile
Corp., 301 F.2d 886, 894-895 (C.A. 5th Cir. 1962). 380
U.S. at 306 n. 5.

The meaning of this reference is clear from reading the
passage from Insurance Agents’ referred to:

‘[W]hen the Board moves in this area .. . it is func-
tioning as an arbiter of the sort of economic weapons
the parties can use in seeking to gain acceptance of
their bargaining demands. It has sought to introduce
some standard of properly ‘balanced’ bargaining power,
or some new distinction of justifiable and unjustifiable,
proper and ‘abusive’ economic weapons into .. . the
Act. . . . We have expressed our belief that this
amounts to the Board’s entrance into the substantive
aspects of the bargaining process to an extent Con-
gress has not countenanced.’ Labor Board v. Insur-
ance Agents’ International Union, 361 U.S. 477, 497-
498. 380 U.S. at 317-318.

The Court’s reference to NLRB v. Dalton Brick & Tile
Corp. is similarly instructive. In- that case the Second
Circuit was faced with an explicit finding that a lockout

12

during negotiations amounted to a refusal to bargain in
violation of Section 8(a) (5). The court stated:

Our approach is to match the employer’s conduct under
review against specific provisions of the Act to see
whether, within the accepted limits of judicial review
[Footnote], there is substantial evidence of actions

« Wwhi@h constitute violations of standards prescribed by
Congress. We stress the latter because several recent
decisions emphasize the necessity that a statutory basis,
either expressed or reasonably implied, be found when
the Board undertakes to fashion policies which, in its
judgment, are desirable in balancing the conflicting
interests between management and labor. ...

When this is done in this record, we find no basis for
the Board’s conclusion that the lockout as a weapon to
aid the Employer in the bargaining constituted a
§8(a) (5) failure to bargain in good faith.... 301
F.2d at 894-895.

The Court of Appeals continued:

So long as the partie¢ seriously and earnestly go for-
ward in a genuine desire to work out a final settlement
of their controversies, they have complied with that
mandate of the Act. The Insurance Agents’ case makes
clear that it is not for the Board to balance the scales,
equalize or neutralize pressures under the guise of a
lack of good faith attributed to the party resorting to
forces of a kind the Board thinks undesirable. Indeed,
we consider that case far-reaching by its concentrated
focus on the immediate process of bargaining. The
decision—if it does not impliedly do so completely—
comes close to holding what the concurring opinion
makes explicit, that it is inaccurate to regard any given
action as a per se refusal to bargain. More than that,

hm .

13

the decision frankly recognizes that the objective—the
collective bargaining agreement—is by the very nature
of things an annealing process hammered out under
the most severe and competing forces and counteract-
ing pressures. Unless Congress has proscribed a given
pressure, or unless its exertion or the manner of its
exercise collides with some other specific policy of the
Act, its use may not be transmuted to make what is in
fact good faith at the bargaining table into something
else, 301 F.2d at 895. (Emphasis added)

See also H. K. Porter Co. v. NLRB, 397 U.S. 99 (1970).

Here, the Board has taken its impasse principle, de-
veloped to determine when parties may break off good
faith negotiations’ and to regulate when a party may no
longer seek negotiations on non-mandatory bargaining
subjects® and re-generated impasse as a device to regulate
the timing of all legitimate employer actions.

The Board has never found that petitioner did not act
in good faith. It has never found that petitioner was mo-
tivated unlawfully or was violating Sections 8(a)(1) or
(3) of the Act. The Board here expressly refused to find
that petitioner violated Section 8(d). (App. A at AQ)
By simply declaring that petitioner’s action was mistimed
because no impasse had been reached and was thereby a
refusal to bargain in good faith, the Board has done ex-
actly what this Court repeatedly warned it against in
American Ship Building, supra, and Insurance Agents’,
supra. Matching the “employer’s conduct against specific
provisions of the Act” it is obvious that the Board’s action
has no basis. NLRB v. Dalton Brick & Tile Corp., supra.

5. See Philip Carey Mfg. Co., 140 NLRB 1103 (1963), modi-
fied, 331 F.2d 200 (6th Cir. 1964).

6. See NLRB v, Wooster Division of Borg-Warner Corp., 356
U.S. 342 (1958).

14

Applying the Board’s nebulous impasse standard to
the facts of the present case demonstrates its unworkability.
In the Board’s scenario, the petitioner’s president ap-
parently was supposed to call on Friday, February 11 to
see if a deal could not be worked out with the Teamsters’
agent for the immediate replacement of the petitioner's
drivers on the following Monday. This was the same agent
who had told him on Tuesday that he would do everything
in his power to stop petitioner’s going to a carrier. For
more than two weeks the union had adamantly refused to
consider the replacement of those drivers over four years.
They had not contacted him. They had voted to strike.
Now they would reasonably request discussion on this
issue because the Company called again? This scenario
is between tragedy and comedy. No layman, other than
a comic writer, could suggest such an approach. No
serious business person would consider it—certainly not
in the circumstances of a contract expiration and threatened
strike.

The Court of Appeals, while struggling with the very
real question of what petitioner was to do when its contract
expired, its no-strike clause protection evaporated and its
perishable meat products had to be shipped on the next
Monday, added its own practical advice for petitioner. It
simply announced petitioner “certainly could have taken
steps to have a common carrier act as a replacement if the
union drivers went on strike at the expiration of the con-
tract.” (App. A at A7) The Court of Appeals ap-
parently believed that refrigerated trucks—with drivers—
can be called up to deliver thousands of pounds of meat
over three states in much the same way you call a taxi
cab. Archibald Cox wrote with great perception over
twenty years ago:

15

The administrative and judicial processes are ill-
suited to drawing a line between proper subjects for
collective bargaining and management functions, The
NLRB is staffed chiefly by lawyers who lack practical
experience in industrial management and collective
bargaining, and judges are not familiar with the prob-
lems. Cox, Labor Decisions of the Supreme Court at
the October Term, 1957, 44 Va. L. Rev. 1057, 1083
(1958).

5. Engraftment of the Board’s impasse rules on the
implementation process is fraught with danger for the
national economy. As the Chamber of Commerce for the
United States noted in its amicus brief in support of the
petition in First National Maintenance Corp., supra:

A vital national economy requires a maximally free
flow and effective use of its economic resources... .
The need is especially acute in our time, when we
are experiencing sharp declines either in the rate of
increased productivity or, more alarmingly, in absolute
productivity figures. Brief Amicus Curiae in Sup-
port of Petition, p. 4.

This Court can do a great service by accepting the op-
portunity presented here to address this matter.

16

CONCLUSION
The Petition for Writ of Certiorari should be granted.
Respectfully submitted,

WILLIAM K. ENGEMAN
TAFT, STETTINIUS & HOLLISTER
600 Dixie Terminal Building
Cincinnati, Ohio 45202
(513) 381-2838
Counsel for Petitioner

Of Counsel:

PAu. C, SUNDERLAND
600 Dixie Terminal Building
Cincinnati, Ohio 45202

APPENDIX

Al

APPENDIX

APPENDIX A
No. 78-1483

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

BLUE GRASS PROVISION CoO., INC.,
Petitioner,

V.

NATIONAL LABOR RELATIONS BOARD,
Respondent.

On Petition for Review and Cross-Petition for
Enforcement of an Oruer of the National Labor
Relations Board.

Decided and Filed December 9, 1980.

Before: Livery and Kertn, Circuit Judges, and
LAMBROS, District Judge.*

LaMsROSs, District Judge. Blue Grass Provision Co.,
Inc. asks us to set aside a decision and order of the National
Labor Relations Board that found Blue Grass had refused
to bargain collectively in good faith with Truckdrivers,
Chauffeurs and Helpers Local No. 100 regarding the com-
pany’s decision to subcontract the delivery of its meat prod-
ucts. The Board’s decision was accompanied by an order
directing Blue Grass to reinstate its delivery operations

*“Honorable Thomas D. Lambros, District Judge, United
States District Court, for the Northern District of Ohio, sitting by
designation.

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and the delivery employees with back pay. The Board
on cross-petition seeks enforcement of this order.

This case was commenced upon the filing of a complaint
by the Board on August 10, 1977 alleging that “[s]Jince on
or about January 25, 1977, [Blue Grass Provision Co., Inc.]
has failed and refused, and continues to refuse, to bargain
collectively in good faith with the Union... by: (a) fail-
ing to negotiate with the Union with respect to its decision
to permanently and immediately subcontract out all unit
work performed by [the employees of Local 100] ... and
(c) [u]nilaterally subcontracting out all unit work per-
formed by [those] employees . . . and discharging all em-
ployees of said unit” in violation of sections 8(a)(1) and
(5) of the National Labor Relations Act, 29 U.S.C. § 151
et seq. The case was heard by an Administrative Law
Judge (ALJ) who found that the company had terminated
the contract in violation of § 8(a)(1) and (5), and ordered
the remedies previously mentioned. The Board affirmed.
Petitioner now asserts that these findings are against the
weight of the evidence and contrary to the interpretation
of the National Labor Relations Act given by current de-
cisions in this and in other Circuits.

At the time the dispute arose Blue Grass, a small
family-owned company, had employed members of the
union for about 20 years to make deliveries and was operat-
ing under a contract which was to expire on January 31,
1977. Concerned with rising costs, in early January com-
pany president William Rice began to explore the feasibility
of subcontracting the delivery operations. At about the
same time he contacted Local 100 Business Agent Fred
Batsche to ask when they could meet to discuss a new con-
tract. Batsche asked that they delay negotiations until
the major packers had signed their contracts at which
time union demands would be in clearer focus.

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The two men finally met on either January 24 or 25, at
which time the parties agreed to an eleven day extension
of the contract. Batsche presented Rice with the pro-
posals prepared by the union for presentation to all the
area meat packers which contained, inter alia, a clause
providing that no work presently performed by union
members would be subcontracted. Batsche testified before
the ALJ that Rice complained abut the overall cost of the
package but gave no indication that the subcontracting
clause was particularly troublesome. Rice claimed, how-
ever, that he told Batsche that Blue Grass “wanted to get
out of the trucking business.” This meeting was ad-
mittedly inconclusive, with Rice wanting time to consider
the proposals. The two met again on January 28, and Rice
mentioned that he desired to negotiate a contract that
would protect his employees so that they could retire
through attrition and that he would refuse to negotiate if
such a clause was not included. According to Batsche, this
was the first indication the union had that Blue Grass was
considering a change in its delivery operations.

On February 7, Rice called Batsche on the advice of
counsel in order to make sure that the union understood
the company wanted to terminate their trucking operations.
According to Batsche, however, the discussion centered
again on gradually phasing out the unit with Batsche
strongly opposed. The conversation ended with Rice af-
firming that he was unwilling to negotiate further. Fol-
lowing this interchange, Rice realized that he had spoken
too hastily, and sent a letter to Batsche the following day
indicating that Blue Grass was still willing to pursue nego-
tiations. This letter was not seen by Batsche until Feb-
ruary 12.

With no extension sought by either side and the con-
tract set to expire on February 11, Rice made plans to have

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a common carrier make his meat deliveries starting on
Monday, February 14, contingent on the failure to reach
an agreement with the union. Having heard nothing fur-
ther from the union, on February 11 Rice informed his
five drivers that they were laid off and that their work
would be performed henceforth by a subcontractor. The
laid-off drivers started picketing on February 15.

At the administrative hearing, Blue Grass argued that
an impasse had been reached and that the union had waived
its bargaining rights by refusing to consider the company’s
desire to subcontract. The union asserted that Blue Grass
had breached its obligation not to make unilateral changes
in employment conditions without first giving notice and
bargaining with the statutory bargaining representative of
the employers as required by N.L.R.B. v. Katz, 369 U.S. 736
(1962). Faced with a conflicting narrative, the ALJ gave
more credence to the testimony offered by Mr. Batsche.

Our function in reviewing his ruling as adopted by
the NLRB is to examine the record in order to ascertain
that the Board’s findings of fact are supported by sub-
stantial evidence on the record as a whole. Universal
Camera Corp. v. NLRB, 340 U.S. 474 (1951); NLRB v.
Retail Store Employees Union, Local 876, 570 F.2d 586
(6th Cir. 1978). Having done so, we affirm the Board
and dismiss petitioner’s claim.

Blue Grass does not dispute that an employer must
bargain about subcontracting which involves the replace-
ment of employees in the existing unit with those of an
independent contractor to do the same work under similar
conditions of employment, see Fiberboard Paper Products
Corp. v. NLRB, 379 U.S. 203 (1964), but asserts that it
had properly notified the union of its intentions and given
it a “meaningful chance to offer counter-proposals and
counter-arguments,” NLRB v. J. P. Stevens & Co., Inc.,

AS

Gulistan Div., 538 F.2d 1152, 1162 (5th Cir. 1976). In
Blue Grass’ view, the proper disposition would have been
for the ALJ to dismiss because of the Union’s failure to
negotiate, citing for authority The Emporium, 221 NLRB
1211 (1975), and Laclede Gas Co., 171 NLRB 1392 (1968).
Those cases disclose, however, that the employer had un-
equivocally informed the union of an intention to sub-
contract work on a definite date and that the union failed
to take advantage of that opportunity to negotiate. Our
examination of the record before us in the instant case
shows no such expression on the part of the employer.
Even giving Rice’s testimony full credence, we cannot say
that when he left the January 24 meeting, Batsche was
on notice that Blue Grass contemplated laying off all of
the drivers at the expiration of their contract. It may
well be that at the time Rice did not in fact plan to take
such action. Unfortunately, subsequent discussions be-
tween the parties reflect that each wrongly assumed the
other knew what issue was being discussed. Ideally, both
gentlemen would have used greater clarity, precision and
candor in their communications, but this was not the case.
and the ALJ had substantial evidence before him to sup-
port a finding that Blue Grass had breached its duty to
bargain by instituting a unilateral change before an im-
passe had been reached on a subject of mandatory bar-
gaining.

Blue Grass replies that an impasse had been reached
and that its actions in effect amounted to a legal lockout.
We are not persuaded on either count. While that state
of affairs that constitutes an impasse is not subject to
precise definition, at least it encompasses the notion that
both sides are aware of precisely what is at issue and
that they have made more than a perfunctory attempt to
reach a resolution. See, e.g. Taft Broadcasting Co., 163

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NLRB 475 (1967), enf’d sub nom AFTRA v. NLRB, 395
F.2d 622 (D.C. Cir. 1968). In light of a record that leaves
considerable doubt whether the Union ever understood
Blue Grass meant to terminate the bargaining unit upon
expiration of the contract and that discloses that any
meetings between the parties were at best preliminary
sparring matches, we cannot say that there existed a “state
of facts in which the parties, despite the best of faith,
[were] simply deadlocked.” NLRB v. Tex-Tan, 318 F.2d
472, 482 (5th Cir. 1963). This is particularly true in light
of Blue Grass’ own letter of February 8 evidencing its
willingness to talk further with the union.

Blue Grass’ assertion that the action it took would be
legal had it been denominated a lockout does not alter
our judgment. The Company cites Lane v. NLRB, 418
F.2d 1208 (D.C. Cir. 1969), aff’ing sub nom Darling & Co.,
171 NLRB 801 (1968), for the proposition that an employer
faced with a hard negotiating position but no impasse
and not an imminent strike can lockout in support of its
bargaining demands. In that case Judge Skelly Wright
was careful to note that

|fJirst, employer conduct which is “inherently destruc-
tive” of employee rights is an unfair labor practice
whether or not such conduct [is] based upon impor-
tant business considerations. Second, employer con-
duct which has only a “comparatively slight” impact
on the rights of employees will also be held an unfair
labor practice unless the employer comes forward with
evidence of “legitimate and substantial” reasons to
justify his conduct.

418 F.2d at 1211. Judge Wright, however, was faced with
a situation in which there had been ten negotiating ses-
sions with the union before the lockout, the disagreement
was over an issue that had been the subject of a long

—————————————————————————— es

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strike some years earlier, the company had already made
numerous concessions, and the union delayed striking until
the company’s peak season when 70 per cent of its annual
production was to be shipped in a two-month period.

Assuming arguendo that Blue Grass’ action was not
“inherently destructive” of employee rights, it still cannot
demonstrate that its business interests were so legitimate
and substantial as to justify the impact that the lockout
had on its employees’ rights. Contrary to its assertions,
Blue Grass had not made repeated attempts to get the
union to recognize its plight. It was not faced with a:
situation that would have a devastating impact on its busi-
ness and it certainly could have taken steps to have a
common carrier act as a replacement if the union drivers
went on strike at the expiration of the contract.

Under the circumstances, we think the Board’s finding
that there was a violation of Section 8(a)(1) and (5) is
amply supported by the record. We are mindful that
Blue Grass.is a small company with a history of relatively
peaceful labor relations and that the effect of the reinstate-
ment order may cause it hardship. Nonetheless, the Board
has a broad discretion in the remedies it selects to protect
employees who are the victims of an unfair labor practice,
Golden State Bottling Co., Inc. v. NLRB, 414 U.S. 168
(1973), and so long as it has responsibility exercised its
judgment, courts will not interfere with that remedy,
which is peculiarly a matter for administrative compe-
tence. Office and Professional Emp. Intern. Union Local
425 AFL-CIO v. NLRB, 419 F.2d 314 (D.C. Cir. 1969).

Blue Grass’ petition is dismissed, the decision of the
Boar! is affirmed, and its cross-petition for enforcement
of its order is hereby granted.

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UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD

Case 9-CA-11074

BLUE GRASS PROVISION CoO., INC.
and

TRUCK DRIVERS, CHAUFFEURS AND HELPERS

LOCAL UNION NO. 100, AFFILIATED WITH IN-

TERNATIONAL BROTHERHOOD OF TEAMSTERS,

CHAUFFEURS, WAREHOUSEMEN AND HELP-
ERS OF AMERICA

DECISION AND ORDER

; On April 14, 1978, Administrative Law Judge Phil W.
Saunders issued the attached Decision in this proceeding.
Thereafter, Respondent filed exceptions and a supporting
brief, and the General Counsel filed a brief in answer to
Respondent’s exceptions.

Pursuant to the provisions of Section 3(b) of the Na-
tional Labor Relations Act, as amended, the National Labor
Relations Board has delegated its authority in this pro-
ceeding to a three-member panel. .

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The Board has considered the record and the attached
Decision’ in light of the exceptions and briefs and has de-
cided to affirm the rulings,” finding,’ and conclusions‘ of

1. We note that at two points in his discussion the Admin-
istrative Law Judge inadvertently refers to Sec. 8(d)(3) as Sec.

8(a) (3).

2. Respondent requests that the Board decide the instant
case de novo or, in the alternative remand the proceedings to the
Administrative Law Judge, on the ground that the latter failed
to make independent findings of fact and conclusions of law con-
trary to the Board’s Rules & Regulations, Series 8, as amended,
Sec. 102.45. In support thereof, Respondent asserts that the
Administrative Law Judge’s Decision is, in large part, a verbatim
copy of the General Counsel’s brief to the Board.

Contrary to Respondent’s contention, the Administrative Law
Judge’s Decision provides an independent recitation of facts,
analysis, and conclusions of law, which are fully supported by
the record. Therefore, we conclude that the Administrative Law
Judge complied in full with applicable Board Rules in the instant
case. Accordingly, we hereby deny Respondent’s request for a
hearing de novo and its alternative request for remand,

3. Respondent has excepted to certain credibility findings
made by the Administrative Law Judge. It is the Board’s estab-
lished policy not to overrule an Administrative Law Judge’s reso-
lutions with respect to credibility unless the clear preponderance
of all of the relevant evidence convinces us that the resolutions
are incorrect. Standard Dry Wall Products, Inc., 91 NLRB 544
(1950), enfd. 188 F.2d 362 (C.A. 3, 1951). We have carefully
examined the record and find no basis for reversing his findings.

4. We agree with the Administrative Law Judge that Re-
spondent violated Sec, 8(a)(5) and (1) of the Act by unilaterally
subcontracting all of its truckdriving work, thereby eliminating
the bargaining unit, without giving notice to the Union of such
a change or affording it an opportunity for bargaining over the
effect of that change. Accordingly, Members Jenkins and Trues-
dale find it unnecessary to reach the question whether Respon-
dent further violated Sec. 8(a)(5) and (1) by failing to comply
with Sec. 8(d)(3) and (4) of the Act inasmuch as the scope of
the remedy is essentially identical; nor is Respondent’s obligation
to bargain (otherwise imposed by Sec. 8(a)(5)) with respect to
changes in terms and conditions of employment affected. There-
fore, the Administrative Law Judge’s recommended Order is
modified accordingly.

Member Murphy finds, in agreement with the Administrative
Law Judge, that Respondent further violated Sec. 8(a)(5) by
failing to comply with Sec. 8(d) (3) and (4) of the Act. However,
she disagrees with the view expressed by her colleagues that
neither the remedy provided nor the bargaining obligation which

(Continued on following page)

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the Administrative Law Judge and to adopt his recom-
mended Order as modified herein.°

ORDER

Pursuant to Section 10(c) of the National Labor Rela-
tions Act, as amended, the National Labor Relations Board
adopts as its Order the recommended Order of the Admin-
istrative Law Judge as modified below and hereby orders
that the Respondent, Blue Grass Provision Co., Inc., Cov-
ington, Kentucky, its officers, agents, successors and as-
signs, shall take the action set forth in the said recom-
mended Order, as so modified:

1. Delete paragraphs l(a) and (b) and substitute the
following:

“(a) Subcontracting out its unit delivery operations
without prior notice io or bargaining with the Union.

“(b) In any like or related manner interfering with,
restraining, or coercing employees in the rights guar-
anteed them by Section 7 of the Act.”

Footnote continued—

remains is significantly affected by a finding that Respondent un-
lawfully failed to comply with Sec. 8(d)(3) and (4). Thus, by
deleting that portion of the Administrative Law Judge’s recom-
mended Order designed to remedy the failure to comply with
Sec. 8(d) (by requiring that Respondent continue in full force
and effect the terms and conditions of the existing contract for
a period of 30 days following the giving of notice of a dispute to
the appropriate agency for the Commonwealth of Kentucky), the
Union is no longer accorded a minimum time frame during which
Respondent is precluded from instituting any unilateral changes
in terms and conditions of employment regardless of whether
it has bargained to impasse.

5. In his recommended Order and notice the Administrative
Law Judge failed to include a provision requiring Respondent
to cease and desist from any like or related manner interfering
with, restraining, or coercing the employees in the exercise of
the rights guaranteed them in Sec. 7 of the Act. Accordingly,
we shall modify the recommended order and notice herein to
include such a provision.

All

2. Delete paragraph 2(c) and reletter the following
paragraphs accordingly.

3. Substitute the attached notice for that of the Ad-
ministrative Law Judge.

Dated, Washington, D.C. September 29, 1978

Howard Jenkins, Jr., Member

Betty Southard Murphy, Member

John C. Truesdale, Member
(Seal ) National Labor Relations Board

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APPENDIX
NOTICE TO EMPLOYERS

Posted by Order of the
National Labor Relations Board
An Agency of the United States Government

WE WILL NOT subcontract out our unit delivery
operations without prior notice to or bargaining with
the Union.

WE WILL NOT in any like or related manner in-
terfere with, restrain, or coerce our employees in the
rights guaranteed them by Section 7 of the Act.

WE WILL restore our unit delivery operations.

WE WILL reinstate and make whole the unit em-
ployees for any loss of pay suffered by reason of their
lay off or discharge, with interest.

Blue Grass Provision Co. Inc.
(Employer)

(Representative ) (Title)

This is an official notice and must not be defaced by
anyone.

This notice must remain posted for 60 consecutive days
from the date of posting and must not be altered, defaced,
or covered by any other material. Any questions concern-
ing this notice or compliance with its provisions may be
directed to the Board’s Office, Federal Office Building,
Room 3003, 500 Main Street, Cincinnati, Ohio 45202, Tele-
phone 513—684-3634.

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UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR
RELATIONS BOARD
DIVISION OF JUDGES

Case 9-CA-11074
In the Matter of

BLUE GRASS PROVISION CoO., INC.

and
TRUCK DRIVERS, CHAUFFEURS AND HELP-
ERS LOCAL UNION NO. 100, AFFILIATED
WITH INTERNATIONAL BROTHERHOOD OF
TEAMSTERS CHAUFFEURS, WAREHOUSE-
MEN AND HELPERS OF AMERICA

Donald L. Crain, Esq., for the
General Counsel.

Bruce E. Pence, Esq., for ihe
Charging Party.

William K. Engeman, Esq. and
John E. Campion, Esq., for
the Respondent.

DECISION

Statement of the Case

PHIL W. SAUNDERS, Administrative Judge: Based
on a charge filed on February 17, 1977, by the Charging
Party, herein the Union or Local 100, a complaint was
issued on August 10, 1977, against Blue Grass Provision
Co., Inc., herein the Respondent or Company, alleging vio-
lations of Sections 8(a) (1), 8(a)(5) and 8(d)(4) of the
National Labor Relations Act, as amended. The Respon-

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dent filed an answer to the complaint denying it had en-
gaged in the alleged matter. The Respondent and the
General Counsel filed briefs.

Upon the entire record in the case, and from my obser-
vations of the witnesses and their demeanor,’ I make the
following:

Findings of Fact
I. The Business of the Company

The Respondent is a Kentucky corporation engaged
in processing and wholesale distribution of meat products
at its Covington, Kentucky facility. During the past 12
months the Respondent sold goods and materials valued
in excess of $50,000, and caused them to be shipped directly
from its Covington, Kentucky, plant to points outside the
State of Kentucky.

At all times material herein, Respondent is, and has
been, an employer as defined in Section 2(2) of the Act,
engaged in commerce and in operations affecting commerce
as defined in Section 2(6) and (7) of the Act.?

1, The facts found herein are based on the record as a whole
upon my observations of the witnesses, The credibility resolu-
tions herein have been derived from a review of the entire testi-
monial record and exhibits with due regard for the logic and
probability, the demeanor of the witnesses, and the teaching of
N.L.R.B, v. Walton Manufacturing Company, 369 U.S. 404. As
to those witnesses testifying in contradiction of the findings
herein, their testimony has been discredited, either as having
been in conflict with the testimony of credible witnesses or be-
cause it was in and of itself incredible and unworthy of belief.
All testimony has been reviewed and weighed in the light of the
entire record.

2. The record in this case is corrected in accordance with
Respondent’s Motion to Correct Transcript of Record dated Jan-
uary 26, 1978.

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II. The Labor Organization Involved

The Union is a labor organization within the meaning
of Section 2(5) of the Act.

III. The Unfair Labor Practices
The main issues in this case are:

1. Whether the Respondent violated Section 8 (a)
(9) and (1) of the Act by unilaterally subcontracting
out all delivery work.

2. Whether the Respondent violated Sections 8
(a)(5) and 8(d)(3) and (4) of the Act by failing
to continue in full force and effect all terms and con-
ditions of the existing collective-bargaining agreement
when notice was not given to the appropriate state
agency, pursuant to Section 8(d) (3) of the Act.

For many years the Respondent has been a party to
successive collective-bargaining agreements with the Union
covering a small unit consisting of the Respondent’s truck-
driver employees. The most recent collective-bargaining
agreement between the Respondent and the Union was
effective from February 1, 1974 through January 31, 1977.
Also for the past many years the Respondent's production
and maintenance employees have been represented in a

3. The appropriate unit for the purpose of collective bar-
gaining here involved, contains the following employees:

All truckdrivers, truckdrivers’ helpers, mechanics, mechanics’
helpers, checkers, forklift truck cperators, dockmen, car
washers, tire men, gas men and greasers employed by the
Employer, directly, indirectly, or in any wholly owned or con-
trolled subsidiary company of the Employer, who are reg-
ularly engaged in driving trucks, assisting in the operation
of a truck, loading or unloading trucks, checking or routing
merchandise or performing such services on similar other
vehicles, excluding office clerical employees and all guards,
professional employees and supervisors as defined in the Act.

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separate unit by Amalgamated Meat Cutters and Butcher
Workmen of North America, Local Union No. 7.

This record shows that the five truckdriving employees
within the unit here involved deliver the Respondent’s
meat products to various customers in Northern Kentucky
and in the Greater Cincinnati area. Four drivers have
completed from 20 to 28 years. Ed Scudder, the remaining
driver, was a vacation relief driver and has functioned as
such since 1974. Scudder has approximately 10 years of
seniority with the Respondent, but was not due to retire
for quite some time. Further background evidence reveals
that in 1975, the Respondent, without notice to the Union,
unilaterally began to use a driver provided by an indepen-
dent contractor headed by Don Saylor to fill temporary
vacancies resulting from its drivers’ illnesses and vacations.
In fact, Ed Scudder, then on layoff status, filed a grievance
over the subcontracting, and the grievance was eventually
submitted to binding arbitration and in late 1975, the arbi-
trator ruled that the Respondent had violated certain sec-
tions of the then current collective-bargaining agreement
and awarded Scudder backpay and reinstatement to his
relief driver position.

On November 12, 1976, the Union notified the Com-
pany in writing of its desire to terminate the collective-
bargaining agreement as of January 21, 1977, and requested
a meeting to negotiate a new agreernent. On that same
date the Union also sent a Section 8(d) (3) notice to the
Federal Mediation and Conciliation Service, one to the
Cincinnati Regional Office, and one to the Ohio Industrial
Commission. While the Union has its offices in Cincinnati,
the situs of the dispute in question is at the Respondent’s
Covington, Kentucky facility. Therefore, argues, the Gen-
eral Counsel, the 8(d)(3) notice should have been sent
to the Kentucky Department of Labor, the appropriate

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agency for the State of Kentucky. By the testimony of
Mediator Larry Roberts, it was established that such notice
was not, in fact, served upon the Kentucky Department
of Labor.

Although the bargaining agreement was about to ex-
pire, as aforestated, neither of the parties had been in
contact with one-another. However, on or about Jan-
uary 14, 1977, Respondent’s President William Rice, and
the Union’s Business Agent, Fred Batsche, who was to
negotiate for the Union, talked to one-another over the
telephone, and in this conversation Batsche noted that the
Respondent has always signed an industry-wide contract
with little, if any, changes, and suggested that the contract
between them be extended for 30 days so that the parties
could better gauge their negotiations based on what the
major meat packing firms agreed to. In addition, Business
Agent Batsche also requested a 30-day extension of the
expiring contract that would provide for retroactivity of
the new contract. However, Rice agreed to only an 11
day extension agreement—to February 11, 1977. There
was no discussion concerning the subject of subcontracting
during this telephone conversation, but the parties did
agree to meet later on. As pointed out, Rice did not men-
tion to Batsche that he had already contacted an outside
carrier for the purpose of discussing the sukcontracting
of Respondent’s delivery service. This record shows that
on or about January 12, 1977, Rice had contacted W. C.
Rottenberger of Total Transportation Services, Inc., be-
cause Rice was under the impression that Total Transpor-
tation was providing delivery service to Kahn’s, a large
Cincinnati meat packing plant. A few days later, Rice
received a letter from Total Transportation Services offer-
ing to do a feasibility study, but Rice then rejected this
idea because he thought it too expensive.

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On or about January 25, 1977, Batsche and Rice met
in the Respondent’s lunchroom in their first negotiating
session and the parties then signed the extension agree-
ment discussed above, and Batsche gave a set of the Union’s
written proposals to Rice. Rice reviewed the proposals
and asked some questions, but generally complained about
the overall cost of the package. When Rice finished look-
ing over the proposals, he then asked for additional time
to study them. Batsche stated that there was no discus-
sion concerning subcontracting at this negotiating session
nor was there any mention by Rice that he had contacted
or was negotiating with any outside carrier to perform
Respondent’s delivery service.*

Rice and Batsche met again on January 28, 1977.
Rice informed the Union that he did not have a counter
offer, but then told Batsche that he wanted to negotiate
a contract wherein he could protect his drivers so ‘that
they could retire through attrition,’ as he was “contem-
plating getting out of the trucking business.” Batsche
replied that “at this point” he could not do this, and
then inquired as to the status of Ed Scudder. Rice told
Batsche that Scudder would not be recalled from layoff.
Batsche stated that at this meeting he made no offer

4. Rice testified that at this meeting he mentioned to Batsche
that the Company “wanted to get out of the trucking business,”
and that the Company hoped, because of the seniority of its truck-
drivers, to find a way “to phase them out and let ¢!iem work” until
they reached the age of 58 when they could retire. Rice further
testified that Batsche then replied that he could not agree with
such a proposal because he could not negotiate a contract that
would do away with the bargaining unit through attrition, and
told Rice that he needed ‘“‘a three-year contract or nothing,” and
pointed out that Kahn’s a 1000-employee-plus meat packing
house, had gone with the 3-year contract with a $1.65 wage
increase and a cost-of-living clause, but that if Rice did not like
that proposal, Juengling, a small beef slaughtering plant, had
accepted a $2 per hour increase with no cost-of-living clause.
Rice also stated that on this occasion he further offered to main-
tain the Respondent’s present rate of pay and to pay the in-
creases in the fringe benefits as they became due.

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for a l-year contract, because a contract with such a
limited duration would require the abandonment of the
pension article since the rules governing the Teamsters
pension fund required a 36-month term commitment for
coverage. Batsche stated that there was no discussion
whatsoever concerning the Respondent immediately sub-
contracting out all the unit work, and that the meeting
ended by Rice telling Batsche that if the Union could
not negotiate a contract that would eliminate the unit
through attrition, then the Company could not reach a
contract with the Union. Batsche then inquired of Rice
if he was refusing to further negotiate, and Rice replied
that he was. Batsche asked Rice to reconsider his posi-
tion, but left with the understanding that Rice would
not do so.°

On January 31, 1977, the Union held a meeting of
its unit drivers, and Batsche brought them up-to-date on
the contract negotiations, and also explained to them their
pension rights and the possibility of losing the unit through
attrition. At this meeting the drivers voted to strike after
the expiration of the agreement extending the contract.

On February 7, 1977, Rice called the Union because
his attorney in Covington, Kentucky, had advised him
that he “had damn well better be sure that the Union
understood that [the Company] wanted to get out of the
trucking business and were going to a common carrier.”
Rice testified that this is the message “he tried” to convey
on the morning of February 7. Batsche stated that the
only subcontracting discussed on this occasion concerned
the continuation of the deliveries by drivers until they

5. Rice testified that on January 28, 1977, Batsche came
over to his place of business, and merely inquired if the Company
had changed their minds—“the way that we were thinking”—and
after he replied in the negative, Batsche then stated, “I don’t
think there is any reason for us to discuss this any further or
to talk anymore.”

A20

retired, then as they retired, the Company would sub-
contract. At the conclusion of their phone conversation,
Batsche inquired of Rice if he was refusing to negotiate,
and Rice answered in the affirmative. However, on the
next day, February 8, 1977, Respondent sent a letter to
the Union evidencing a clear interest in resuming nego-
tiations. This letter was delivered to the Union’s office
on February 10, but apparently Batsche did not actually
see the letter until sometime later.

At the end of the workday on Friday, February 11,
1977, Rice informed the unit drivers that they were laid
off and need not report to work on Monday, and that
thereafter the Respondent was going to employ the ser-
vices of a common carrier to perform their work. On
February 14, 1977, an outside firm made deliveries for
the Company, and on February 15, 1977, the unit drivers
involved herein commenced picketing the Respondent.®

It should be noted that sometime subsequent to Feb-
ruary 11, 1977, the Respondent admittedly purchased the
Ryder equipment it had been leasing prior thereto.

The Respondent argues that they fulfilled their duty
to bargain by notifying the Union that it was considering
subcontracting, and which notification the Union ignored
by refusing to bargain about the decision or its effects,
and that once notified, the Union must then request bar-
gaining on the issue for there to be any duty on the
employer to actually negotiate. Counsel for the Respon-
dent points out that when Rice notified Batsche that the
Company was thinking about subcontracting, no definite

6. After February 14, the Company approached the Federal
Mediation and Conciliation Service to see if they could assist
in the controversy. When the FMCS contacted Batsche and re-
quested that he meet with the Company, Batsche referred the
Mediation Service to the Union’s lawyer. Attorney Pence then
told the Mediation Service that the Union would not meet unless
the Company “put the unit back as it was.”

A21

arrangements had been made at this time with a carrier
other than to inquire in the most general way whether
a subcontractor might be available to assume the Com-
pany’s delivery operation, and that the Company had not
even inquired into the details of subcontracting. More-
over, that even when final detailed arrangements were
made with the outside subcontractor on February 7, 1977,
the Company refused to irrevocably commit itself to that
course of action, and made it clear to the subcontractor
that the whole arrangement could be “washed out” if
the Company could reach some agreement with the Union
before the subcontractor’s service were required. The
Respondent further argues that the Company acted law-
fully by subcontracting after bargaining to impasse as-
suming, arguendo, that the Union’s refusal to discuss the
subcontracting and insistence on discussing only its own
proposals, can be deemed bargaining on the issue of sub-
contracting.

The General Counsel maintains that Respondent’s
violation of Section 8(a) (9) is threefold. First, it com-
mitted an unfair labor practice by not bargaining over
the decision to immediately and totally subcontract its
delivery operation. Second, the failure to bargain over
the effects of the subcontracting constitutes a Section
8(a)(5) violation. Third, the Respondent violated Sec-
tion 8(a)(5) and (d) (4) of the Act by failing to continue
“in full force and effect . . . all terms and conditions of
the existing contract” without full compliance with the
notice and waiting requirements of Section 8(a) (3) and
(4) of the Act.

Final Conclusions

It is well established by both the Board and the
Courts, that an employer has an obligation to bargain
with its employees’ bargaining representative concerning

A22

both the decision to subcontract out unit work and the
effects of such action on its employees. It has also been
duly established that when an employer notifies a union
of proposed changes in terms and conditions of employ-
ment, it is then incumbent upon the Union to act with
“due diligence” in requesting bargaining. However, in
the instant case, the evidence shows that the Company
gave notice to the Union only of its desire to subcontract
out unit work over a period of time as the unit employees
retired under the terms of the existing collective-bar-
gaining contract, and there is no credited testimony that
the Company ever actually mentioned to the Union that
it would immediately and permanently subcontract out
all its unit delivery work and discharge its drivers upon
termination of the extension agreement on February 11,
1977. At the second negotiating meeting on January 28,
1977, Rice informed Batsche that he wanted to protect
his drivers so they could retire through “attrition” as
he was “contemplating” getting out of the trucking busi-
ness. Again, on February 7, 1977, the only subcontracting
discussed concerned the retirement of the drivers and
that the Company would then subcontract its deliveries.
Moreover, there was never any mention by Rice that
the unit drivers would be discharged, and, of course, there
is a great deal of difference between a gradual termina-
tion on the basis of retirement, as compared to their
immediate discharge.

It appears to me that if the Company had actually
imparted to the Union its desired change for the imme-
diate subcontracting of its delivery services upon expira-
tion of the current contract, then some statements detailing
this position would have been specifically mentioned, and
possibly the Union would have also been informed of
the preliminary contacts by the Company with outside
truckers. Moreover, it would seem to me an almost im-

A23

possible imposition to require a union to act with “due
diligence” in bargaining over a requested change, when,
in reality, the proposed change and its immediacy has
never been actually communicated to the other ‘party
with any definite particularities.

Thus, by unilaterally subcontracting out all of its
truckdriving work effective February 14, 1977, thereby
eliminating the entire bargaining unit, without giving
notice to the Union of such a change, or affording it an
opportunity for bargaining over the effects of such changes,
the Respondent violated Section 8(a)(1) and (5) of the
Act. I am also in agreement that the above conclusion
becomes even more inescapable since the parties had not
even reached any impasse on the issue of eventual or
gradual subcontracting.

In Mechanical Contractors Association of Newburgh,
202 NLRB No. 1, the Board, inter alia, stated: The term
impasse implies that collective bargaining has failed to
produce agreement. It cannot be said that a failure to
agree at what we view as the primary stage of a bi-level
bargaining procedure amounts to impasse. Until the col-
lective-bargaining process has been exhausted, no impasse
can occur,

By letter dated February 8, 1977, the Respondent
wrote the Union that it wanted to resume negotiations
or discussions. Clearly, this is inconsistent with the notion
that matters were deadlocked. But, as also pointed out,
even if there were an impasse on this matter, arguendo,
it would not change the result herein. Thus, any bar-
gaining over the proposed gradual subcontracting of unit
work over a period of time, cannot be deemed to have
satisfied the Respondent’s obligation to bargain about the
very different proposition of the immediate subcontracting
of all unit work.

A24

In the final analysis, the action of the Respondent
resulted in the discharge of the unit drivers who all had
many years of service with the Company. The evidence
in this record shows that the Union was unaware of
Respondent’s decision to immediately subcontract and ter-
minate its delivery operations, and, therefore, was in no
position to request negotiations.’

It is alleged in the complaint that on or about No-
vember 12, 1976, the Union gave notice to the Respondent
to terminate the collective-bargaining agreement without
giving notice to the Commonwealth of Kentucky, Depart-
ment of Labor, Division of Labor Standards, an agency
established to mediate and conciliate disputes within the
Commonwealth of Kentucky, as required by Section 8(d)
(3) of the Act. In relevant part Section 8(d) states:

Provided That where there is in effect a collective-
bargaining contract covering employees in an industry
affecting commerce, the duty to bargain collectively
shall also mean that no party to such contract shall
terminate or modify such contract, unless the party
desiring such termination or modification—

(1) serves a written termination or modification
sixty days contract of the propostd termination upon
the other party prior to the expiration date thereof,
or in the event such contract contains no expiration
date, 60 days prior to the time it is proposed to make
such termination or modification;

(2) offers to meet and confer with the other
party for the purpose of negotiating a new contract
or a contract containing the proposed modification;

7. See Ozark Trailers, Inc., 161 NLRB 561. See also Stagg
Zipper Corp., 222 NLRB No. 189; and P.B. Mutrie Motor Trans-
portation, Inc., 226 NLRB No. 199.

A25

(3) notifies the Federal Mediation and Concilia-
tion Service within thirty days after such notices of
the existence of a dispute, and simultaneously there-
with notifies any State or Territorial agency estab-
lished to mediate and conciliate disputes within the
State or Territory where the dispute occurred, pro-
vided no agreement has been reached by that time;
and

(4) continues in full force and effect, without
resorting to strike or lockout, all the terms and con-
ditions of the existing contract for a period of sixty
days after such notices is given or until the expiration
date of such contract, whichever occurs later:

The Board, with court approval, has construed the
60-day period specified in Section 8(d)(4) to include a
waiting period of 30 days from the date that satisfactory
notices are given under Section 8(a) (3).5

The Union notified the Company, the Federal Media-
tion Service, and the Ohio Industrial Commission, on
November 12, 1976, of its desire to terminate the contract,
as aforestated. On February 11, 1977, the day its con-
tract with the Union expired, the Company notified its
unit drivers that they were laid off and need not report
to work. The layoff or changes in question therefore
occurred more than 60 days after the Union’s service
upon the Company of an 8(d)(1) notice, and more than
the 30 days from the date of notices outlined under 8(d)
(3), and had proper notice been given to all parties,
there would have been a delay or moratorium on changes

8. The Company argues that 8(d) (4) is inapplicable since
the Respondent did not lock out its employees, that the notifica-
tion provisions of 8(d) are aimed only at reducing the use of
economic coercion to secure bargaining advantage, and that 8(d)
(4) of the Act requires only that the notice be given by the party
that initially seeks termination of the contract.

A26

until February 10, 1977, but thereafter the Company could
probably have made lawful changes in the terms of the
contract or treated it as expired, as they had fulfilled
the waiting requirements of Section 8(d)(3) and (4).
However, in the instant case, while the Union complied
with Section 8(d)(1) of the Act, it did not fully comply
with Section 8(d)(3) since it did not serve the notice
on the proper state agency, the Kentucky Department
of Labor. While the Union, as the initiating party, had
the obligation to provide the Section 8(d) (3) notices, both
the Union and Respondent were obligated under Section
8(d)(4) to refrain from striking or locking out, respec-
tively, and to maintain in full force and effect all the
terms and conditions of the existing contract, until valid
Section 8(d)(3) notices were given.” Consequently, by
discharging the drivers on February 11, 1977, and sub-
contracting out all the driving work on February 14, 1977,
without valid 8(d)(3) notices having been served, the
Respondent terminated the contract in violation of Sec-
tions 8(d)(4) and 8(a)(5) of the Act. Moreover, as
pointed out, since the subcontracting eliminated all bar-
gaining unit work, it was not just a mere breach of
contract but, rather, went to the heart of the collective-
bargaining relationship and, therefore, constituted a clear
unilateral change in its terms and conditions. The sub-
contracting may be viewed also as a termination of the
agreement because the Respondent effectively eliminated
the bargaining unit and thereby terminated the bargaining
relationship with the Union.

9. Respondent clearly was not privileged to resort to the
change in the terms of the existing contract without regard to
the requirements of Section 8(d) merely because of some default
on the part of the Union in meeting these requirements. Had the
Company desired, it could have ascertained from the Union or
from the state agencies involved, whether all the requisite 8(d)
(3) notices had been filed and, if not, filed its own notices. See
Peoria Painting & Decorating Contractors, 204 NLRB 345.

A27

The Remedy

Having found that Respondent has engaged in certain
unfair labor practices, I shall recommend an order di-
recting it to cease and desist therefrom and to take certain
affirmative action designed to effectuate the policies of
the Act.

It having been found that Respondent’s conduct and
layoffs constituted a refusal to bargain within the meaning
of Sections 8(a)(5) and 8(d) of the Act, I shall recom-
mend that they make whole the employees laid off for
loss of earnings suffered by reason of such layoffs, by
payments to each employee of a sum of money equal
to that which they would normally have earned. The
amount of backpay due shall be computed according to
the Board’s policy set forth in F. W. Woolworth Co., 90
NLRB 289. Payroll and other records in possession of
the Respondent are to be made available to the Board,
or its agents, to assist in such computation and deter-
mining the right to reinstatement. Interest on backpay
shall be computed in accordance with Florida Steel Cor-
poration, 231 NLRB No. 117 (1977).?°

Conclusions of Law

1. The Respondent is an employer engaged in com-
merce within the meaning of Section 2(6) and (7) of
the Act.

2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.

3. The Respondent has engaged in unfair labor prac-
tices violative of Sections 8(a)(5) and (1) and 8(d) (4)
of the Act.

10. See also Isis Plumbing & Heating Co., 138 NLRB 716.

eS Re re ee ee
ee Cc Or OOOO

A28

Upon the foregoing findings of fact and conclusions
of law and the entire record, and pursuant to Section
10(c) of the Act, I hereby issue the following recom-
mended: ?#

ORDER

Blue Grass Provision Co., Inc., its officers, agents,
successors, and assigns, shall:

1. Cease and desist from:

(a) Refusing to bargain collectively with the Union
concerning the termination or modification of the col-
lective-bargaining agreement by failing to continue in
full force and effect all the terms and conditions of the
agreement for a period of 30 days from the date a proper
notice is given to Federal Mediation Service and to the
appropriate state agency of the existence of a dispute
within the meaning of Section 8(d) (3) of the Act.

(b) Subcontracting out its unit delivery operations.

2. Take the following affirmative action which is
necessary to effectuate the policies of the Act.

(a) Restore its unit delivery operations.

(b) Bargain in good faith with the Union regarding
any future subcontracting of unit delivery work.

(c) Continue in full force and effect all terms and
conditions of the existing contract for a period of 30 days
following the giving of notice of a dispute to the appro-
priate agency for the State of Kentucky.

11. In the event no exceptions are filed as provided in Sec-
tion 102.48 of the Rules and Regulations of the National Labor
Relations Board, the findings, Conclusions, and recommended
Order herein shall, as provided in Section 102.48 of the Rules
and Regulations, be adopted by the Board and become its findings,
conclusions, and Order, and all objections thereto shall be deemed
waived for all purposes.

A29

(d) Reinstate and make whole all unit employees
discharged on February 11, 1977, for any loss of earnings
suffered by reason of such terminations in the manner
described in “The Remedy.”

(e) Preserve and, upon request, make available to
the Board or its agents, for examination and copying,
all payroll records, social security payment records, time-
cards, personnel records and reports, and all other records
necessay to analyze the amount of backpay due under
the terms of this Decision.

(f) Post at its place of business or plant, copies of
the attached notice marked “Appendix.”* Copies of said
notice, on forms provided by the Regional Director for
Region 9, after being duly signed by Respondent’s repre-
sentative, shall be posted by Respondent immediately
upon receipt thereof, and be maintained by it for 60 con-
secutive days thereafter, in conspicuous places, including
all places where notices to employees are customarily
posted, Reasonable steps shall be taken by Respondent
to insure that said notices are not altered, defaced, or
covered by any other material.

(g) Notify the Regional Director for Region 9, in
writing, within 20 days from the receipt of this Decision,
what steps have been taken to comply herewith.

Dated, Washington, D.C. April 14, 1978

/s/ Phil W. Saunders
Phil W. Saunders
Administrative Judge

12. In the event that the Board’s Order is enforced by a
Judgment of a United States Court of Appeals, the words in the
notice reading “POSTED BY ORDER OF THE NATIONAL
LABOR RELATIONS BOARD” shall be changed to read “POSTED
PURSUANT TO A JUDGMENT OF THE UNITED STATES
COURT OF APPEALS ENFORCING AN ORDER OF THE NA-
TIONAL LABOR RELATIONS BOARD.”

A30

APPENDIX B

Sec. 8. (a) It shall be an unfair labor practice for
an employer—

(1) to interfere with, restrain, or coerce employees
in the exercise of the rights guaranteed in section 7;

* * *

(3) by discrimination in regard to hire or tenure of
employment or any term or condition of employment to
encourage or discourage membership in any labor orga-
nization: Provided, That nothing in this Act, or any
other statute of the United States, shall preclude an
employer from making an agreement with a labor orga-
nization (not established, maintained, or assisted by any
action defined in section 8(a) of this Act as an unfair
labor practice) to require as a condition of employment
membership therein on or after the thirtieth day following
the beginning of such employment or the effective date
of such agreement, whichever is the later, (i) if such
labor organization is the representative of the employees
as provided in section 9(a), in the appropriate collective-
bargaining unit covered by such agreement when made;
and (ii) unless following an election held as provided
in section 9(e) within one year preceding the effective
date of such agreement the Board shall have certified
that at least a majority of the employees eligible to vote
in such election have voted to rescind the authority of
such labor organization to make such an agreement:
Provided further, That no employer shall justify any dis-
crimination against an employee for nonmembership in
a labor organization (A) if he has reasonable grounds
for believing that such membership was not available
to the employee on the same terms and conditions gen-
erally applicable to other members or (B) if he has rea-

A31

sonable grounds for believing that membership was denied
or terminated for reasons other than the failure of the
employee to tender the periodic dues and the initiation
fees uniformly required as a condition of acquiring or
retaining membership;

* » *

(5) to refuse to bargain collectively with the repre-
sentatives of his employees subject to the provisions of
section 9(a).

(d) For the purposes of this section, to bargain col-
lectively is the performance of the mutual obligation of
the employer and the representative of the employees
to meet at reasonable times and confer in good faith
with respect to wages, hours, and other terms and con-
ditions of employment, or the negotiation of an agreement,
or any question arising thereunder, and the execution
of a written contract incorporating any agreement reached
if requested by either party, but such obligation does not
compel either party to agree to a proposal or require the
making of a concession: Provided, That where there is
in effect a collective-bargaining contract covering em-
ployees in an industry affecting commerce, the duty to
bargain collectively shall also mean that no party to such
contract shall terminate or modify such contract, unless
the party desiring such termination or modification—

(1) serves a written notice upon the other party
to the contract of the proposed termination or modi-
fication sixty days prior to the expiration date thereof,
or in the event such contract contains no expiration
date, sixty days prior to the time it is proposed to
make such termination or modification;

(2) offers to meet and confer with the other
party for the purpose of negotiating a new contract
or a contract containing the proposed modifications;

A32

(3) notifies the Federal Mediation and Concilia-
tion Service within thirty days after such notice of
the existence of a dispute, and simultaneously there-
with notifies any State or Territorial agency estab-
lished to mediate and conciliate disputes within the
State or Territory where the dispute occurred, pro-
vided no agreement has Leen reached by that time;
and

(4) continues in full force and effect, without
resorting to strike or lock-out, all the terms and con-
ditions of the existing contract for a period of sixty
days after such notice is given or until the expiration
date of such contract, whichever occurs later:

The duties imposed upon employers, employees and
labor organizations by paragraphs (2), (3), and (4) shall
become inapplicable upon an intervening certification of
the Board, under which the labor organization or indi-
vidual, which is a party to the contract, has been super-
seded as or ceased to be the representative of the em-
ployees subject to the provisions of section 9(a), and
the duties so imposed shall not be construed as requiring
either party to discuss or agree to any modification of
the terms and conditions contained in a contract for a
fixed period, if such modification is to become effective
before such terms and conditions can be reopened under
the provisions of the contract. Any employee who en-
gages in a strike within the sixty-day period specified
in this subsection shall lose his status as an employee
of the employer engaged in the particular labor dispute,
for the purposes of sections 8, 9, and 10 of this Act, as
amended, but such loss of status for such employee shall
terminate if and when he is reemployed by such em-
ployer.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_1474%3A1. Public record. Not legal advice.