N L Industries, Inc., Petitioner, v. National Labor Relations Board, Respondent, 536 F.2d 786 (8th Cir. 1976)

The issue before us is whether the NLRB properly found that a union did not waive its right to require an employer to bargain, during the term of the present collective bargaining agreement, regarding an employee savings plan. We find substantial evidence on the record as a whole to support that finding and accordingly enforce the Board's order.

N L Industries is engaged in the manufacture, sale and distribution of titanium pigments and related products and operates a titanium plant in St. Louis, Missouri. There are three unions at N L Industries' plant in St. Louis. Local 1744, the charging party here, is the largest, representing approximately 800 production and maintenance workers. In 1944, the company adopted a profit-sharing plan for its office and salaried employees, who were represented by Local 5-225. Before 1973, Local 1744 had unsuccessfully sought inclusion of its members in the profit-sharing plan. However, while negotiating a three-year contract in 1973, Local 1744 representatives asked only for a stock-purchase plan for the employees. The request for the stock-purchase plan was dropped during negotiations and the 1973 collective bargaining agreement provided no such benefits.

In January 1974, the company significantly changed its profit-sharing plan to allow covered employees to initiate company contributions by voluntary individual payments. When Local 1744 learned of the new benefits provided the office workers, it requested the company to bargain on inclusion of the production and maintenance employees in the new plan. The company refused and on June 27, 1974, the union filed an unfair practice charge against the company alleging violation of § 8(a) (1) and (5) of the Labor Management Relations Act.

After an evidentiary hearing, the Administrative Law Judge found that the old profit-sharing plan had not been discussed during the negotiations for the 1973 contract. He further found that the amended plan provided new benefits and was thus dissimilar to the old plan. On those facts, he held that the union could not be held to have waived bargaining over something which was not in existence at the time of the 1973 negotiations, citing B. F. Goodrich Co., 79 L.R.R.M. 1563 (1972).

The Board adopted the findings and conclusion of the Administrative Law Judge and entered an order requiring the company to bargain with Local 1744 under § 8(a) (1) and (5) of the Act.

There is substantial evidence on the record as a whole to support the Board's finding that the union did not waive its right to bargain. At the time of the negotiations for the 1973 contract, neither the union nor the company knew that an amended profit-sharing plan would be adopted. The parties could not have contemplated this amended plan as a bargaining subject. The original plan's earnings had shown a downward trend and the union did not even attempt to negotiate for it. This conduct fails to demonstrate any "conscious relinquishment" of a new savings plan with a clearly enhanced value to the included employees.¹  It is settled law that any waiver of the statutory right to bargain over a mandatory subject of bargaining must be in "clear and unmistakable language." See NLRB v. R. L. Sweet Lumber Co., 515 F.2d 785 (10th Cir.), cert. denied, --- U.S. ----, 96 S. Ct. 393, 46 L. Ed. 2d 302, 44 U.S.L.W. 3305 (1975); Murphy Diesel Co. v. NLRB, 454 F.2d 303, 306-07 (7th Cir. 1971); General Electric Co. v. NLRB, 414 F.2d 918 (4th Cir. 1969), cert. denied, 396 U.S. 1005, 90 S. Ct. 557, 24 L. Ed. 2d 496 (1970). As the Administrative Law Judge found, the new plan was "far more than the old Profit-Sharing Plan operating under a new name."

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

The company's defense is that § 8(d) of the Act absolves them of the duty to bargain regarding the profit-sharing plan during the term of the contract.²  In support of this claim the company relies on NLRB v. Nash-Finch Co., 211 F.2d 622 (8th Cir. 1954). There, this court found that once the parties had entered into a collective bargaining agreement, the union had waived its right to bargain further over matters negotiated upon. In Nash-Finch the union had specifically bargained over certain benefits under a hospital insurance plan, as well as Christmas bonuses, but in final negotiation these requests were dropped and did not appear in the collective bargaining agreement. The facts in the present case are clearly distinguishable from Nash-Finch. Here, the union at no time requested inclusion in either the old profit-sharing plan or the new one during the 1973 negotiations. There was no "give and take" in the negotiations, and therefore no waiver.

Absent waiver manifested either by the terms of the contract or by actual negotiation, the Act requires bargaining upon request on a mandatory subject during the term of a contract. See NLRB v. Jacobs Mfg. Co., 196 F.2d 680 (2nd Cir. 1952). In Jacobs the Second Circuit recognized:

The purpose of (§ 8(d)) is, apparently, to give stability to agreements governing industrial relations. But, the exception thus created necessarily conflicts with the general purpose of the Act, which is to require employers to bargain as to employee demands whenever made to the end that industrial disputes may be resolved peacefully without resort to drastic measures likely to have an injurious effect upon commerce, and the general purpose should be given effect to the extent there is no contrary provision. Since the language chosen to describe this exception is precise and explicit, "terms and conditions contained in a contract for a fixed period," we do not think it relieves an employer of the duty to bargain as to subjects which were neither discussed nor embodied in any of the terms and conditions of the contract. Therefore, we hold that it was the respondent's statutory duty to bargain on the subject of pensions.

196 F.2d at 684.

The precise issue presented in Jacobs has arisen on infrequent occasion.³  This may be due to the fact that most collective bargaining agreements today contain grievance mechanisms culminating in binding arbitration. Moreover, the Supreme Court in NLRB v. American Nat'l Ins. Co.,343 U.S. 395, 72 S. Ct. 824, 96 L. Ed. 1027 (1952), upheld the right of the parties to engage in "hard" bargaining, that is, bargaining to impasse. Thus, the duty to bargain is not a duty to capitulate. As in Jacobs, the only effect of the Board's order here is to require the company to bargain in good faith on the subject matter involved.⁴ 

The Jacobs case requires bargaining over mandatory subjects during the term of the contract unless the contract expressly dealt with the subject matter. Nash-Finch resolved the unanswered question in Jacobs by holding that when the right to bargain has been clearly and unmistakably waived there is no duty to bargain during the term of the contract. We adhere to the Jacobs and Nash-Finch reconciliation of the conflicting policies embodied in §§ 8(a) (5) and 8(d), as consistent with the goals of the Act. Section 8(a) (5) recognizes the need for flexibility in contract negotiations and the desirability of continued bargaining to maintain industrial peace. Section 8(d), on the other hand, supports contract stability by providing that there is no mid-term duty to bargain over subjects included in the terms and conditions of the contract. However, § 8(d) does not relieve the parties of the duty to bargain over matters not previously negotiated or covered in their contract. A contrary interpretation would be inimical to industrial peace. See Wollett, The Duty to Bargain Over the "Unwritten" Terms and Conditions of Employment, 36 Tex. L. Rev. 863 (1958).⁵ 

The company's petition for review is denied and the order of the Board is enforced.