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National Labor Relations Board v. Decorel Corp.

June 24, 1968


Schnackenberg, Swygert, and Cummings, Circuit Judges.

Author: Swygert


The National Labor Relations Board petitions this court to enforce an order entered against the respondents, Decorel Corporation, Reliance Illinois Corporation, and Ridgecraft Corporation.*fn1 At issue in this review is the Board's determination that Decorel engaged in certain unfair labor practices.*fn2 First, the Board determined that Decorel violated section 8(a) (5) and (1) of the National Labor Relations Act, 29 U.S.C. ยง 158(a)(5) and (1), by unlawfully refusing to bargain with Upholsterers International Union, AFL-CIO, acting through its agent, Picture Frame Workers, Moulding Workers & Furniture Handlers Union, Local 18-B, on April 16, August 26, and September 30, 1965. Second, the Board determined that Decorel violated section 8(a)(1) of the Act by promising its employees "improved" benefits prior to a decertification election and by granting those benefits immediately upon the completion of the election.

Decorel is an Illinois corporation engaged in the manufacture of wooden picture frames and other related products in Mundelein, Illinois. In December 1964, shortly before the expiration of a contract entered into in January 1962, representatives of Decorel and local 18-B commenced negotiations for a new contract. Prior to 1960, Decorel had been part of a group of Chicago employers with whom the International and the local bargained on an industry-wide basis. After Decorel moved to Mundelein in late 1960, it no longer bargained as part of the Chicago group.

During the negotiations for the new contract, Decorel maintained that conditions in Mundelein differed enough from those in Chicago to warrant different terms in the Decorel contract than those contained in the contracts with the Chicago employers. After several preliminary meetings between the parties in December 1964,*fn3 a meeting was held in late January 1965 with a federal mediator, an employees' committee, and representatives of Decorel and the local.

A major issue in the negotiations concerned improved hospitalization benefits for Decorel's employees. Under the old contract, Decorel paid three per cent of the employees' gross monthly wages for those benefits.*fn4 The union proposed a hospitalization plan for the new contract whereby Decorel would pay four per cent. Decorel countered with a proposal to pay four and one-half per cent.*fn5 When the bargaining resumed between the parties on February 3, 1965 at the Federal Mediation Service, attorney Joseph M. Jacobs appeared for the first time on behalf of the local. During these negotiations which lasted three days, the single hurdle separating the parties was hospitalization benefits. Since the local desired that any insurance plan agreed upon be carried by the International's insurance carrier, Occidental Life, Jacobs proposed to determine if Occidental could handle the higher benefit plan proposed by Decorel. On February 3 or 4, Jacobs contacted the International's president and a representative of Occidental. He reported back to the Decorel representatives that such an arrangement could be worked out. With this hurdle removed, the agreement was put in final form and was presented to Decorel's employees, who ratified it on February 8, 1965.*fn6 Thereafter, the agreement was initialed by the president of Decorel and the president of the local. The agreement was to be retroactive to January 1, 1965.

As in the previous agreements between the parties, there was a provision in the newly-negotiated agreement that, "This Agreement shall not, however, become effective until countersigned by a duly authorized officer of the International Union." Pursuant to this provision, the local forwarded the initialed agreement to the International for countersignature.

Although Jacobs had played a significant role in the negotiations which culminated in an agreement, he was not pleased with the outcome. Shortly after the employees ratified the contract, Jacobs held a meeting with the officers of the local. At that meeting, Jacobs advised the local's officers "that in my judgment . . . the contract was illegal." Jacobs also said, "The conduct of the company was such as to justify . . . filing an unfair labor practice charge." On February 15, 1965, the International filed unfair labor practice charges against Decorel. Some insight into the motive for the meeting and the charges appears from Jacobs' testimony that, "We were hoping that the employees would reject it [the contract]."

Immediately upon the ratification and initialing of the new contract, Decorel began to implement the provisions for wage raises, improved vacation benefits, and meetings of management and employees.*fn7 In the past, the International had delayed the countersignature of the contract until March. Not having received the signed contract in March 1965, the president of Decorel sent a letter to the secretary-treasurer of the local on April 9 in which he said: "We still have not received the contracts for Mundelein. Also, the employees have not received their hospitalization benefits. When will these be ready?" On April 13, Decorel's president received a response from Jacobs. After referring to the inquiry in Decorel's letter concerning the International's countersignature, Jacobs wrote, "In this connection, as you well know, there are matters which require discussion between the parties." He then proceeded to list three instances in which Decorel had allegedly failed to implement the terms of the new contract. Following this listing, he wrote, "I would think that an immediate meeting is required for the purpose of determining our current status."*fn8 Decorel responded to Jacobs' letter on April 16. After first questioning his authority to discuss "routine matters" on behalf of the local, Decorel's president concluded:

One thing is clear. We negotiated a contract with local 18-B in good faith and its President initialed that contract. There is no need for "an early meeting . . . to clarify the situation." Returning a signed contract to us is all the clarification that is needed.*fn9

In the Board's view, this response by Decorel constituted a refusal to bargain.

On May 7, 1965, Decorel and the International entered into a consent election agreement, setting May 21 as the date that the employees would vote pursuant to their decertification petition. Although Decorel communicated in writing with its employees on a number of occasions prior to the election, the examiner, in findings adopted by the Board, focused on two paragraphs of a letter dated May 13 from the company to the employees concerning the question of insurance benefits:

In December, some employees asked for a better insurance program and we heartily agreed. We proposed a policy that was better than any union plan. After the union found they could not talk you or the Company into accepting their inferior Plan "B", then they offered to match the Equitable benefits through their company, with Decorel paying the premiums. BUT, there is still no evidence that they can or will.

Many employees have asked what happens if the union is voted out. Then the previously offered Equitable insurance program will immediately be put into ...

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