August 14, 1981
NATIONAL LABOR RELATIONS BOARD
LEHIGH LUMBER COMPANY, INC., SAME V. SAME, ET AL.
Author: Van Dusen
VAN DUSEN, Senior Circuit Judge, sitting as Special Master: -- The National Labor Relations Board ("NLRB") ("petitioner") filed petitions with the United States Court of Appeals for the Third Circuit ("court") on September 23, 1980, for a contempt decree against Lehigh Lumber Company, Inc. ("Lehigh"), Ritter & Smith Company, Inc. ("Ritter"), Brown-Borhek Company, Inc. ("Brown"), and the Lehigh Valley Lumbermen's Association ("Association"). The petitions charged that these companies and the Association ("employers") had violated the court's judgments Nos. 77-2076 (May 16, 1978), 78-2380, 78-2381, 78-1282, and 79-1305. The court consolidated the petitions against the various employers on October 10, 1980, and issued an order to show cause directing the employers to answer the petitions.
Lehigh and Ritter ("respondents") answered the petitions on October 17. On October 22, the court granted the NLRB's motion to delete the Association as a respondent, and, on October 27, 1980, it appointed the undersigned "Master in the above matters to conduct such proceedings as he deems appropriate, and thereafter, file a report and recommendation with the court as to the proper disposition thereof."
The undersigned severed the case against Brown from the case against Lehigh and Ritter with the consent of petitioner.*fn1 See orders of January 14, 1981, and February 2, 1981. This report deals only with the case against Lehigh and Ritter.
The parties, excluding Brown, engaged in discovery and filed pretrial briefs. Evidentiary hearings were held on February 26 and 27 and March 3-5, 1981. The primary issues for the Master and the court are (1) are Lehigh and Ritter in contempt of prior court decrees for failing to bargain in good faith with Local 773, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America ("the Union"), and (2) if so, what types of sanctions are appropriate?*fn2
FINDINGS OF FACT
1. Lehigh and Ritter (respondents) are corporations in the lumber business. The Union represents their truck drivers and certain other of their employees. These two employers bargained with the Union during the mid-1970s in a multi-employer group, the Association. The last contract between the employers and the Union expired on May 1, 1976. The parties negotiated for a new contract through July 1976 without success.
2. The NLRB found that Lehigh and Brown committed unfair labor practices against the Union during and after this period, and ordered Lehigh and Brown to bargain in good faith with the Union. Lehigh Lumber Co., 230 NLRB 1122, 96 LRRM 1047 (July 25, 1977). The court enforced this order without opinion. Lehigh Lumber Co., Inc. v. N.L.R.B., 577 F.2d 727, 99 LRRM 2633 (May 16, 1978), cert. denied, 439 U.S. 928, 99 LRRM 3105 (1978). The Administrative Law Judge's ("ALJ") opinion, 230 NLRB at 1122, provides detailed findings of fact which are binding in this contempt proceeding, since this court enforced the NLRB's order and the judgment became final. Thus, this report recognizes these findings, 230 NLRB at 1122-28, as part of the findings of fact binding in this case.
3. Following the ALJ's decision in the NLRB cases cited above, the Union asked the employers to bargain. The employers' response led to a second NLRB decision, which determined that Lehigh, Ritter, Brown, and the Association had refused to bargain in good faith with, and committed unfair labor practices against, the Union. The ALJ and NLRB rejected the employers' claim that they had dissolved the Association. The ALJ found that the employers had not effectively dissolved the Association and still had a duty to bargain as a group. The NLRB ordered Lehigh, Ritter, Brown, and the Association to bargain in good faith with the Union. Lehigh Lumber Company, 238 NLRB 675, 99 LRRM 1637 (Sept. 29, 1978). The court, without opinion, denied petitions for review by Lehigh, Ritter, and Brown and granted the NLRB's petition for enforcement against the Association in a consolidated proceeding. See Brown-Borhek Co., Inc., et al. v. N.L.R.B., 609 F.2d 500, 502, 503, 108 LRRM 2279 (3d Cir. Nos. 78-2380/81/82, 10/19/79); N.L.R.B. v. Lehigh Valley Lumbermens Association, 609 F.2d 502, 108 LRRM 2279 (3d Cir. No. 79-1305, 10/19/79; Court Exhibit C-2 (copy of judgment order). The ALJ's opinion in the NLRB proceeding, 238 NLRB at 676, made findings of fact, 238 NLRB 676-81, which are binding in this contempt proceeding. Thus, this report recognizes the findings in part III of that opinion as part of the findings of fact controlling in this proceeding.
4. Credibility of Witnesses. The testimony of the NLRB's witnesses, Franklin Caskie, Stephen Banus, and Howard Hontz ("Union witnesses"), was credible. Their testimony was consistent and cross-examination did nothing to diminish or contradict it. Based on these observations and their demeanor, the undersigned specifically credits the testimony of these three witnesses. Some of the testimony of Lehigh's president, Bruce Ferretti, was not credible, based on his demeanor, his evasiveness (see, e.g., Tr. 792-865), his responses on cross-examination, and inconsistencies within his testimony and between his testimony and his deposition, answers to interrogatories, and affidavits. The undersigned specifically disbelieves Ferretti's testimony insofar as it conflicts with the testimony of the NLRB's witnesses, and credits only those portions of his testimony which were consistent with the testimony of the NLRB's witnesses.*fn3 The testimony of John Billman, executive vice president of Ritter, did little to help respondents' case since he failed to deny most of the Union witnesses' testimony. The undersigned, however, does not accept Billman's testimony in certain respects where it conflicts with that of Caskie, Banus, and Hontz, specifically including some of his testimony on transcript ("Tr.") 922, 924, 930-32, 938, 940-41, and 956. This credibility determination is based on Billman's vague and equivocal testimony, his frequent inability to remember, his frequent inability to remember, his responses on cross-examination, and inconsistencies between his testimony and his affidavits, deposition, and Ritter's answers to interrogatories. Some portions of Billman's testimony contradicted or failed to corroborate Ferretti's testimony. These portions of Billman's testimony are credited, particularly since he was testifying against his own interest.
5. Union bargaining agent Caskie sent letters to both Lehigh and Ritter on June 29, 1978, requesting bargaining under the May 16, 1978, judgment of the court, Ritter did not respond and Lehigh's letter was returned marked "will not accept," "Refused." NLRB (Government) Exhibits G-5, G-6; Tr. 10, 12, 16-17, Caskie sent similar letters to Lehigh and Ritter on August 14, 1978, with the same results. G-7, G-8; Tr. 18-20, 26.
6. Caskie then sent a letter requesting bargaining to attorney Louis Busch*fn4 on October 5, 1978, with copies to Lehigh and Ritter. The Union received no response and no further communications between the parties occurred until December 1979, after the October 1979 judgment of the court. G-9; Tr. 27-30 (page 29 follows page 31 in the Master's copy of the transcript), 123-25. See also G-1, No. 4; G-2, answer 4. Ferretti admitted that during 1977-1979, Lehigh had delivered a standing order to the post office to refuse mail from the Union. Tr. 650.
7. Caskie sent letters to Lehigh, Ritter, and Brown on December 10, 1979, requesting bargaining. The letter to Lehigh was returned marked "Refused." G-10, G-11, G-12; Tr. 31-34. Caskie sent a copy to Busch, along with a covering letter, on December 12. Tr. 38-39; G-13. The letters had asked the respondents to contact Caskie "to make the necessary arrangements." Instead, Busch wrote Caskie on December 14 that bargaining sessions "are scheduled to be held" on December 20, 26, 1979, and January 3, 1980. Busch's letter continued, "You or your representative are expected to be there punctually at those times, prepared to make your demands and to negotiate in good faith." G-14; Tr. 39-41. Caskie replied by letter on December 13, 1979, that due to "prior commitments I will be unable to attend... [on] December 20... [and] 26, 1979." Caskie agreed to meet on January 3, 1980. G-15; Tr. 41. The Union consistently attempted to include Brown in the negotiations but was unable to do so because Brown refused to accept its letters and Busch ceased to represent Brown. G-5 through G-14; Tr. 27-34, 38-39, 137-140. Busch's prior conduct in a January 17, 1978, meeting with Caskie and Carl Del Nero, Brown's president, also made future negotiations between the Union and Brown difficult. Busch repeatedly refused to answer Caskie's question asking which companies he was representing, i.e., all the employers or only Brown. Busch refused to answer four or five times, and then he and Del Nero left for 45 minutes to caucus. When they returned, Caskie again asked who Busch represented. Busch repeated many times in a childish, sing-song voice, "Stick around, you might find out." After asking at least five more times, with only this response, Caskie left. Tr. 348-53.
8. Respondents met with the Union on January 3, 1980. Business Agent Hontz and Secretary-Treasurer Banus represented the Union, since the meeting was at 4 P.M. and Caskie's wife had died that morning, Tr. 45. Busch, Ferretti, and Billman represented respondents, and Brown was unrepresented. Federal Mediator Emmett Lance attended. Tr. 364, 368. Respondents caucused for 15 minutes while the Union members waited. Tr. 416-17. Then the Union gave a written proposal, G-16, to respondents, and explained that it contained proposed modifications to the previous, 1973-1976, contract (G-17) and that the Union wished to retain the rest of the contract. Tr. 42-43, 365. The document proposed a wage increase and improvements in benefits. The Union did not propose or insist on an illegal Union security clause at this meeting or at later meetings, contrary to respondents' contentions. The January 3 proposal made clear that the Union wanted a legal clause which required Union membership starting 30 days after beginning to work or the date of the bargaining agreement, whichever was later. The Union explained this to respondents on January 3 and again on July 7, 1980, in G-30. Tr. 75, 441, 460-61.
9. While Hontz was orally reading the proposals, Ferretti repeatedly made faces at the Union members, stuck out his tongue at them, and waved his fingers at them with his thumbs in his ears. Tr. 368-69, 442. The Union representatives continued to answer Busch's questions, and they explained that the initial negotiation would cover a three-year contract beginning April 30, 1976, to be applied retroactively to the employees. The Union stated that if an agreement was reached, they would then negotiate a 1979-1982 contract. Tr. 366-67, 439-40, 452-53. Respondents asked whether the Union would require them to fire the present workers, and the Union replied that it desired that respondents would rehire the previously discharged strikers and also retain their present employees. Tr. 367, 440. The Union also indicated that it would change its Union security clause from seven days to 30 days after employment. Tr. 441, 460-61, 368. Respondents never replied to these explanations. Tr. 366-68, 440-41, and did not ask for explanation of the Union's other proposals. Id.; Tr. 383. Respondents asked for a caucus. Later, they returned and Busch said they would have to evaluate the Union's proposals and that they would contact the Union to schedule another meeting. Banus told Busch to contact Caskie at that time. Tr. 369-70, 385-86, 442, 945.
10. Caskie wrote Busch on February 19, 1981, over six weeks after the January 3 meeting, inquiring about future bargaining. G-18; Tr. 46. Without first contacting Caskie, Busch scheduled a meeting for March 6 in his letter, G-19, dated February 23. Tr. 47. Busch then cancelled the meeting in his March 4 letter due to "the press of business and other commitments." G-20. See also Tr. 48. It appears from the stamp on G-20 that the Union may not have received this letter until March 6, the day of the scheduled meeting.*fn5 On March 6, Caskie replied in G-21 that he had arranged for a March 19 meeting. Tr. 48-49. Caskie testified that he assumed from Busch's past actions in setting dates without prior consultation that this is what Busch wanted the Union to do. Id. Busch replied to G-21 on March 11 in G-22, stating:
"Your Wednesday, March 19, 1980, arrangement for a meeting is unsatisfactory. Please notify Emmett Lance thereof.
"Inasmuch as you have failed to attend any meetings scheduled heretofor I would appreciate your attendance at a meeting set for... April 3, 1980...."
See Tr. 49-50. The undersigned finds as a fact that the tone adopted and statements made in this and other letters from Mr. Busch to the Union, specifically including G-14, G-20, G-22, G-25, G-27, G-29, G-31, G-32, G-34, and G-43, were conscious efforts by Busch to disrupt bargaining through irritating, unfair allegations and were not consistent with bargaining in good faith. See discussions of these letters in Findings 14 and 17 below.
11. Caskie, Hontz, Banus, Lance, Busch, Ferretti, and Billman attended the April 3, 1980, meeting. Respondents arrived 20 minutes late and then caucused for an additional 15-20 minutes. Tr. 51-53. Lance then said that it was respondents' turn for proposals, and Busch begain to read proposals. Tr. 53-54, 370, 423, 443. The Union asked for written proposals and Busch asked if they did not know how to write. Ferretti added that they probably did not, since Teamsters only have an I.Q. of 75. The remarks were repeated during the meeting. Tr. 53, 371, 444. Respondents have not sustained their burden of proving that the Union representatives made threatening statements or gestures to Mr. Ferretti, Mr. Billman, or Mr. Busch on April 3 beforr, during, or after the meeting. See, e.g., Tr. 65-66, 373, 446, 466-67.
12. Respondents' oral proposals on April 3, 1980, sought to delete much of the prior contract (1973-1976), decreasing or eliminating many employee benefits and protections. Respondents offered no explanation for, and asked for no discussion of, their many proposed deletions. Tr. 57-58, 146, 151. The proposals sought to eliminate a number of benefits and protections which had actually been provided to the bargaining unit employees during the contract period, 1976-1979. Examples include health, life, and disability insurance, profitsharing and pension plans, seniority,*fn6 and a provision that employees need not pay for bonds themselves. Neither employer required cash bonds. Also, respondents sought to delete a provision that employees need not pay for lost or damaged equipment, even though Ritter's policy was not to require such payment. There was no evidence that Lehigh had ever required an employee to pay for such loss or damage. Tr. 55, 703-04, 861-62, 866-69, 873-75, 881-82, 946-49; G-58, pp. 67-68, 70-71, 77-78, 87.
13. After respondents presented their proposals, Caskie asked them to reply to the nine Union proposals of January 3, but they simply rejected each proposal without discussion or explanation. After the Union caucused, Caskie told Busch that the Union believed that respondents were bargaining in bad faith and that the Union would meet whenever they would negotiate in good faith. As the Union representatives left, Busch and Ferretti said in a sarcastic, childish, sing-song voice, "Please don't leave," and they clasped their hands in a prayer-like fashion. The Union members left. Lance did not ask them to stay. Tr. 58-59, 61-65, 155, 424, 428, 444-45, 472.
14. The NLRB's Regional Office notified Busch on May 1, 1980 (G-24) that it was recommending contempt proceedings against respondents. Busch wrote Caskie in G-25 on May 29, claiming an "impasse" existed because the Union "walked out," and due to its "refusal to bargain." The letter stated "a serious question was raised whether you intended to bargain further.... Please notify me in writing what your position is...." Caskie responded in G-26 on May 19, stating: "We are willing to resume negotiations with you at any reasonable time and place." Busch replied with G-27:
"Thank you for your tardy letter dated May 19, 1980.
"Unfair labor practice Charges are to be filed against you as a consequence of your predictably unlawful behavior at the bargaining table. Your attitudes and unlawful conduct remain unchanged from nearly four years ago....
"Your refusal to bargain further and your walk-out of the meeting on April 3, 1980,... has been duly noted."
Caskie replied on June 16, 1980, with G-28, stating "the Local Union is ready, willing and able to meet with you to negotiate in good fatih... I would suggest that you contact the Federal Mediator and make the necessary arrangements for the meeting." Busch replied with G-29 on June 27, 1980, stating:
"It is apparent in your letter dated June 16, 1980, that you are persisting in imposing certain pre-conductions upon any future. negotiations.
"You have been served notice... by unfair labor practice Charges filed against you... that your actions are unlawful.
"If it is your position that Local 773 does not intend to bargain any further, kindly send me a letter disclaiming interest therein."
Caskie responded on July 7, 1980 (G-30), insisting the Union was setting no pre-conditions to bargaining and suggesting that Busch "contact the Federal Mediator in order to schedule a meeting." Busch sent G-31 to Caskie on July 16:
"This will constitute your only warning that you are now personally liable in an action for defamation.... I shall expect an immediate apology and a full and complete retraction in writing from you sent to my personal attention.
"As you should be aware, your self-serving attempts to avoid statutory liability for past unlawful acts and unfair labor practices wherein you refused to bargain in good faith are completely ineffective.
"More than three months have elapsed since you refused to bargain and you walked out on our April 3, 1980, meeting. You have failed to respond to any of our proposals during that interim.
"If it is presently your position that you are now withdrawing your unlawful demands and pre-conditions to future negotiations and that you do not intend to repeat your unlawful conduct, we would welcome your changed attitude toward collective bargaining. Your past performance, however, is not encouraging.
"If you have any bona fide intent in continuing negotiations send two tentative dates."
Caskie did not reply, since he expected Busch to contact Lance as Caskie had twice suggested. The NLRB then filed its petitions for contempt with the court on August 25, 1980. Busch sent G-32 to Caskie on September 3, stating:
"... the union failed and refused to offer any counter-proposals to the proposals made at our April 3, 1980, negotiating meeting and instead walked out of the meeting....
"... one must conclude that you no longer intend to proceed with negotiations unlawfully fully or otherwise. Please confirm that conclusion by return mail to myself."
On September 5, in G-33, Caskie sent two tentative meeting dates to Busch. On September 9, Busch agreed to meet both dates, September 29 and October 6, Tr. 66, 69-75, 78-84.
15. Caskie, Hontz, Busch, Ferretti, and Billman attended the September 29, 1980, meeting. The Union and respondents were in separate rooms (as they were on October 6 and November 13), with Lance relaying communications. Caskie asked for the April 3 proposals in writing. Busch refused, stating that Caskie should have requested this in a letter. Caskie then submitted the Union's response to those proposals. He decreased the Union's wage demands in a written proposal, G-36, and told Lance to inform Busch that the Union would not agree to delete the provisions of the old contract, since it wanted to retain its provisions. Respondents then submitted a largely illegible, handwriten proposal, G-37, repeating all of their previous demands for deletions, with only two changes: (1) two personal holidays replacing two specified holidays, and (2) four weeks of vacation after 35 years. The old contract gave four weeks after 30 years. Tr. 84-91, 93, 99, 248-49, 272-73, 754; G-35.
16. On October 6, 1980, with the same people present, the Union responded to G-37 with another written proposal, G-38. It accepted respondents' proposed change in defining local delivery drivers, which lowered some drivers' wages. It also changed its vacation proposal from four weeks after 15 years to four weeks after 17 years, but it stated through Lance that it wished to retain the rest of the old language. Respondents did not reply to this proposal. Tr. 93-95, 282-83.
17. After exchanging letters G-39 through G-43, the same representatives of the parties met on November 13, 1980. Respondents said they could not move from their position, and they completely rejected the Union's October 6 proposal.*fn7 They said they would contact Lance to arrange the next meetings, but no other meetings have been held. Tr. 95-102, 754; G-44.
18. Without notice to the Union, Lehigh gave bargaining unit employees cost of living wage increases on December 4, 1978 (between 17 and 23 cents per hour), and October 1, 1979 (between 18 and 25 cents per hour), and merit raises to six unit employees on March 26, 1979 (ranging from 16 to 42 cents per hour). Lehigh granted combination cost of living and merit increases (ranging from 21 to 32 cents per hour) to unit employees on March 24, 1980, while it was negotiating with the Union. G-1, Interrogatory 5; G-2, Answer 5. These raises were not automatic or by established formula. G-57, pages 165-67; Tr. 808-09. Similarly, without notice to the Union, Ritter granted a general wage increase (between 35 and 40 cents per hour) to unit employees on May 1, 1980. G-3, Interrogatory 22; G-4, Answer 22. Lehigh and Ritter never discussed any of these wage increases or bargained about them with the Union. Tr. 102-03.
ConclusionS OF LAW
1. Lehigh had notice and actual knowledge of the May 16, 1978, judgment of the court, requiring it to bargain in a multi-employer unit with the Union. G-1, Interrogatory 1; G-2, Answer 1. That judgment has been in force and effective since its entry.
2. Lehigh and Ritter had notice and actual knowledge of the October 19, 1979, judgment of the court. The judgment has been in force and effective since that date. Although the NLRB's cross-petition for enforcement against Lehigh and Ritter was not explicitly granted in the judgment order, the order denied their petitions for review and granted the cross-petition for enforcement against the Association. Since the judgment would be meaningless unless it required Lehigh and Ritter to bargain with the Union, it appears that the judgment was intended to require them to bargain.*fn8 The petitions had been consolidated and the Association was merely a group of employers including Lehigh and Ritter. Since Lehigh and Ritter were legally identified with the Association and it had no legal existence apart from its members, the judgment binds them and they must obey the NLRB's order or be in contempt of this court. Lehigh and Ritter admitted that the judgment was in full force and effect and binding on them. NLRB contempt petition (No. 80-2346), PP II, III(B), (C); respondent's Answers (No. 80-2346), PP II, III(B), (C). Thus, they waived any challenge to the scope of this judgment and cannot now contest whether it is binding on them.
Of course, it is not sufficient that respondents lost in challenging the NLRB's order. If respondents are not under an order of this court, they cannot be in contempt of this court. The October 19, 1979, order of this court did, however, order Lehigh and Ritter to bargain in good faith with the Union.
Another factor supporting this interpretation of the judgment is that all parties to this proceeding have understood and believed that it required Hehigh and Ritter to bargain. N.L.R.B. v. J.P. Stevens & Co., Inc., 563 F.2d 8, 14 n.6, 96 LRRM 2150 (2d Cir. 1977), cert. denied, 434 U.S. 1064, 97 LRRM 2747 (1978). See generally "BOARD'S PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW" 28-34.
3. The NLRB has met its burden of proving by clear and convincing evidence that respondents engaged in contemptuous conduct. Schauffler v. Local 1291, Internat'l Longshoremen's Ass'n, 292 F.2d 182, 189-90, 48 LRRM 2434 (3d Cir. 1961). The judgments of this court required Lehigh and Ritter to bargain collectively in good faith with the Union. Section 8(d) of the National Labor Relations Act states:
"[T]o bargain collectively 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 conditions 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...."
29 U.S.C. § 158(d) (1976). Respondents did not meet this obligation due to their delay, lack of cooperation, unwillingness to discuss proposals, and the unreasonableness of their demands, and their demonstrated intent not to reach an agreement. See N.L.R.B. v. W.R. Hall Distributor, 341 F.2d 359, 362, 58 LRRM 2378 (10th Cir. 1965); International Telephone and Telegraph Corp. v. N.L.R.B., 382 F.2d 366, 373, 65 LRRM 3002 (3d Cir. 1967), cert. denied, 389 U.S. 1039, 67 LRRM 2231 (1968). Specifically, respondents failed to respond to the Union's requests for bargaining and to meet with the Union at reasonable times, and unilaterally granted wage increases without notice to or bargaining with the Union. It is not necessary to decide whether the wage increases were per se bargaining in bad faith since respondents' conduct, viewed as a whole, clearly and convincingly demonstrates a failure to bargain in good faith in contempt of court judgments, as described in the above findings and these conclusions.
4. After the May 16, 1978, court judgment, the Union attempted to begin negotiating with respondents. Lehigh refused the Union's letters without adequate justification, and Ritter and Mr. Busch never replied to the letters the Union sent to them. This was a bad faith refusal to bargain by Lehigh (Ritter was not yet under a court judgment). Lehigh and Ritter unduly delayed meeting with the Union after the January 3, 1980, meeting and after the April 3, 1980, meeting. This too was bargaining in bad faith. Lehigh and Ritter are foreclosed from arguing that the Association had dissolved when they allegedly withdrew, since this issue was decided against them in the prior proceedings. A genuine impasse does justify unilateral withdrawal from a multi-employer unit under this court's decision in N.L.R.B. v. Beck Engraving Co., Inc., 522 F.2d 475, 483, 90 LRRM 2089 (3d Cir. 1975).*fn9 The ALJ in the second NLRB proceeding, however, found that no impasse had occurred. 238 NLRB at 679. Thus, Lehigh and Ritter could not unilaterally withdraw from the Association.
5.Respondents delayed the start of the January 3 and April 3, 1980, meetings. They also made derisive gestures and faces at the Union members. Respondents' proposals for 1976-1979 attempted to withdraw (1) many benefits in the 1973-1976 contract, and (2) many benefits which had actually been given to their workers during that period. Respondents showed no willingness to compromise in any meaningful way, and they rejected every Union proposal, even those which called for simply keeping the old contract language. Thus, respondents demonstrated an intent not to reach an agreement with the Union.
6. Respondents also demonstrated bad faith by failing to notify the Union of their unilateral wage increases. Since some of the wages were for periods during the 1976-1979 proposed contract, respondents should have offered them to the Union as part of the negotiations. As to raises after the 1976-1979 contract period, respondents should have notified the Union prior to granting the raises and bargained over them if the Union so requested.
7. Respondents make many contentions which are irrelevant to these proceedings for have previously been decided against them. Their claims that the NLRB's and the court's decisions were invalid (1) for failure to include or obtain jurisdiction over certain parties, (2) were overbroad or vague, and (3) were at the time impossible to comply with, were all decided against them in the underlying proceedings and cannot be relitigated now. Similarly, the contention that the Association received no notice of the judgments is irrelevant since it is not a party now and the NLRB is not seeking a contempt decree against it. Whether or not respondents' employees want the Union to represent them is also irrelevant. Until respondents have bargained in good faith with the Union for a reasonable period, they will not have satisfied this court's orders. Until that time, any lack of a majority by the Union is irrelevant. Labor Board v. Warren Company, 350 U.S. 107, 112, 37 LRRM 2170 (1955). In short, respondents' challenges to the court's judgments should be rejected. They have failed to bargain in good faith with the Union in contempt of this court.
In view of the Facts and Conclusions stated above, the Master recommends that the court enter a judgment holding Lehigh and Ritter in contempt of the abovementioned orders of this court.
The undersigned recommends that the following sanctions be imposed upon Lehigh and Ritter in order to purge themselves of contempt. Respondents Lehigh and Ritter should be ordered to:
(1) fully comply with and obey the May 16, 1978, and October 19, 1979, judgments of the court and each provision of the NLRB's orders thereby enforced;
(2) upon the Union's request, bargain collectively in good faith with the Union as the exclusive representative of respondents' bargaining unit employees in the appropriate multi-employer unit, and if they reach an understanding, sign a written agreement setting forth such understanding;
(3) not withdraw recognition from the Union without order of the NLRB or this court;
(4) submit to the Union a full, written counter-proposal within 15 days from entry of the court's order;
(5) consult with the officials of the Union and set an initial bargaining date, within 25 days from entry of the court's order and proceed to bargain at reasonably regular intervals during regular business hours until respondents and the Union have considered all contract proposals on mandatory subjects and acted on them;
(6) make no changes in wages, hours, or working conditions without notifying the Union and giving it a reasonable opportunity to bargain over such changes;
(7) require any individuals or agents who they authorize to negotiate for them to read this order and to sign a written statement that they have read and understood it, and provide a copy of such statement to the Director of the Board's Fourth Regional Office;
(8) immediately post in conspicuous places, including all places where notices to employees customarily are posted, for 60 consecutive days, copies of the contempt adjudication and appropriate notices, in the form prescribed by the NLRB, signed by respondents, stating that the court has held them in civil contempt for violating, disobeying, and failing and refusing to comply with the judgments of this court and that they will take the steps ordered by the court, and respondents shall maintain said notices and copies of the contempt adjudication in legible condition throughout the posting period, and shall assure that they are not altered, defaced, or covered by any other material;
(9) mail to each of their current employees and to all former employees whom they have employed since the entry of the court's judgments mentioned herein a copy of the signed notice and of the contempt adjudication, and send to the Director of the Board's Fourth Region a list of the names and addresses of all employees and former employees to whom said documents were mailed;
(10) file a sworn statement with the Clerk of this court and a copy thereof with the Director of the Board's Fourth Region within 10 days after entry of the adjudication and again at the end of the posting period, showing what steps respondents have taken to comply with the court's orders;
(11) pay to the NLRB all costs and expenditures, including attorneys' salaries, incurred by the NLRB in the investigation, preparation, presentation, and final disposition of this proceeding, said amount, unless agreed upon by the parties, to be fixed by the court upon submission by the NLRB of a verified statement of costs and expenses;*fn10
(12) pay the following fines to this court: Lehigh, $5,000.00; Ritter, $500.00;*fn11
(13) pay to this court, for each future violation of its prior judgments or this contempt decree, $4,000.00, and for continuing violations, $900.00 for each day the violation continues, and if both respondents commit such violations they shall each pay said amounts, but if only one respondent commits such violations, only that respondent must pay;
(14) the court may order additional fines and other sanctions, including attachment of the responsible officers and agents of respondents, for any future violations.
The undersigned does not recommend awarding costs or expenses to the Union since such an award is not necessary or justified either to compensate the Union or to punish respondents for their contempt of this court.
Also, it is recommended that the following additional sanction be imposed on Lehigh: Lehigh shall immediately request McKinley Wise, Court Reporter, Suite 301, 1211 Chestnut Street, Philadelphia, Pa. 19107, to transcribe at respondent Lehigh's expense and file ith the Master a transcript of the hearing held in the Master's chambers on February 24, 1981.*fn12 Lehigh shall be granted 60 days from the approval, if made, of this recommendation to secure and file such transcript. For every day beyond such 60 days that the filing of the transcript with the Master is delayed, Busch and Lehigh shall be responsible for a payment of $10.00 per day. Such fine shall be payable to the United States of America.
C. POSSIBLE ADDITIONAL SANCTION
The panel may wish to consider, as an additional sanction, ordering respondents not to use Louis Busch as their negotiator with the Union. This order would not forbid retaining Busch as an attorney and it would bind only Lehigh and Ritter, not Busch. The undersigned has found that Busch acted in such a way that he disrupted the bargaining process, and further finds that his presence at future negotiations would seriously impede bargaining. Lehigh and Ritter were aware that Busch's tactics and antagonistic actions toward the Union, including his letters to Caskie, were disrupting negotiations and yet they condoned and approved of his actions. Thus, respondents were failing to bargain in good faith by continuing to employ Busch as their negotiator. The above findings on credibility credited the testimony of Caskie, Banus, and Hontz about Busch's conduct. Although the NLRB has not requested or ordered such relief; it has no contempt power. Respondents are in contempt of this court, and thus this court may determine the proper sanctions. N.L.R.B. v. Vander Wal, 316 F.2d 631, 52 LRRM 2761 (9th Cir. 1963).
National Labor Relations Board v. Selvin, 527 F.2d 1273, 1277, 90 LRRM 2829 (9th Cir. 1975), upheld the portion of an NLRB order directly restraining an employer's outside negotiator from further unfair labor practices as that employer's agent. In that case, the negotiator was a party before the NLRB. Here, Busch is not a party before this court.However, an appropriate order could direct respondents not to use him as negotiator with the Union.
APPLICATIONS FOR EXPENSES, COSTS, ETC., AND RULINGS ON PREVIOUSLY UNDECIDED MOTIONS
Since petitioner (NLRB) has requested an award of expenses to it under Federal Rule of Civil Procedure 37(a)(4) in accordance with the Master's Memorandum of March 9, 1981 (Document 47), in its Memorandum filed April 29, 1981 (Document 53), it will be given 45 days after the court's ruling on any exception filed to this Report to file with the undersigned a specific application for expenses supported by affidavits.*fn13 Respondents, their counsel Louis Busch, and Ferretti and Billman as individuals are granted 20 days after the filing of such applications to file any answer and objections to such applications, and to request a hearing if so desired. Petitioner's application should include any requests for costs, attorneys' salaries, expenses, etc., to which petitioner contends it is entitled as the prevailing party in this proceeding, as well as expenses claimed under rule 37(a)(4). Respondents may file any answer with objections to petitioner's requests for expenses as prevailing party within 45 days of the filing of such application. If respondents, their counsel, Ferretti, or Billman request a hearing on the rule 37(a)(4) award, such hearing may also deal with the award of expenses to the NLRB as prevailing party.
The Master denies respondents' Motions to Dismiss Petitions and to Grant Relief from Prior Judgments. Respondents' counsel filed several written motions to dismiss and orally renewed the motions several times. The undersigned denied several of the motions but reserved ruling on the latest motion, Tr. 980, and now denies any motions to dismiss which have not previously been denied, in order to dispose of the repetitive motions made by counsel for respondents.
There are also being forwarded to the Clerk the following documents as Appendices to this Report:
Appendix A -- F.R.Civ.P. 37(a)(4) Expenses
Appendix B -- Letter of November 18, 1980, with enclosed order, sent to counsel asking them to confer, in an effort to resolve issues and expedite the litigation, on the morning of December 11 and to meet with the Master on the afternoon of that date to adopt procedures for reaching agreement on as many issues as possible.
Appendix C -- Memorandum of Conference on the afternoon of December 11, 1980, with attachments to that Memorandum (Document 4 on Appendix D below).*fn14
Appendix D -- Index of 55 documents filed with the Master (these 55 documents are being filed with the Clerk).
The NLRB's motion to correct the transcript is granted except for the proposed correction at p. 899 1. 25, which is denied. Also, on page 3 of the motion, "p. 430 1. 24" should read "p. 430 1. 23," "p. 423 1. 23" should read "p. 432 1. 23," and on the last line of the page, "on September" should read "done September."
F.R.CIV.P. 37(a)(4) EXPENSES
On March 9, 1981, the undersigned sent a memorandum to the parties requesting briefs on whether the NLRB should receive discovery expenses from respondents, their counsel, Ferretti, and Billman under Fed.R.Civ.P. 37(a)(4). Document 47. The NLRB's memorandum requesting such expenses (including attorneys' salaries) was received on April 29, and the NLRB sent a copy to counsel for respondents on April 27. Neither respondents nor their counsel ever replied or submitted their own brief on this issue. They never requested a hearing. Thus, respondents, their attorney, Ferretti, and Billman did have "opportunity for hearing" under rule 37(a)(4).
The NLRB's application for expenses under rule 37(a)(4) will be considered as outlined in the Report, with the recommendation to the court that it award such expenses as will later be determined by affidavits or hearing. Unless the panel directs otherwise, and as set forth in the Report, the NLRB shall have 45 days from the filing of this report to submit affidavits setting forth the costs, expenses, and allocable attorneys' salaries which relate to the discovery motions which were granted or denied, and recommending what portion Lehigh, Ritter, and their attorney should each bear. Lehigh, Ritter, and their attorney each have 20 days from filing of the NLRB's affidavits to file affidavits in response and to file briefs suggesting what percentage of the expenses each should pay. They should be aware of the conflict of interest between respondents and their counsel on this issue. They and the NLRB should also include in their briefs a discussion on whether Ferretti, Billman, and attorney Busch should be liable as individuals for all or some portion of the expenses caused by their failure to appear for depositions. See Rule 37(a)(4):
"[T]he court shall... require the party or deponent whose conduct necessitated the motion or the party or attorney advising such conduct or both of them to pay to the moving party and reasonable expenses...."
(Emphasis added.) The briefs may discuss whether any "other circumstances made an award of expenses unjust," under rule 37(a)(4), and whether respondents' and their counsel's discovery motions and opposition to discovery motions which were decided against them were "substantially justified" under rule 37(a)(4).
So that respondents will have an additional opportunity for hearing, they may apply in writing for a hearing on the amount of such expenses within 20 days of the filing of this report. To have such a hearing, their written application must specify exactly what admissible evidence they intend to present on the issue. Hayden Stone, Inc. v. Brode, 508 F.2d 895 (7th Cir. 1974), affirmed sanction orders under rule 37(a)(4) where "determination of the amount of the award was held for a later hearing," id. at 897 (emphasis added). The court stated that, had the party against whom sanctions were granted "desired further hearing after the imposition of sanctions to present additional justification, he could have moved for such hearings." Id. (emphasis in original). See also Persson v. Faestel Investments, Inc., 88 F.R.D. 668, 670 (N.D.Ill. 1980); Addington v. Mid-American Lines, 77 F.R.D. 750, 752 n.1 (W.D.Mo. 1978).
The refusal by respondents, their counsel, Ferretti, and Billman to cooperate in discovery forced the NLRB to file several motions to compel discovery.Document 4, "Memorandum of Conference," recounts discussions at a meeting with the undersigned on December 11, 1980, of respondents' refusals to engage in discovery. Respondents filed motions for protective orders on December 16, 1980. Documents 6-8. The NLRB filed an opposition to the motions and a cross-motion for an order compelling discovery on December 23, 1980. Document 10. The undersigned held a hearing on the motions on January 13, 1981. See Document 11. The NLRB also filed a motion to compel production of documents on January 9, 1981. Document 12. Respondents filed a memorandum on the motions the day of the January 13 hearing. See Document 13. Document 15 is an order denying respondents' motions for protective order and granting in part the motions by the NLRB in Documents 10 and 12. The undersigned had orally granted the NLRB's motion as to certain discovery requests at the hearing, and respondents' counsel agreed to comply with other discovery requests. See two-volume transcript of hearing (Document 37). No parts of the NLRB's motions were denied.
Respondents then requested to take depositions of the NLRB's witnesses, counsel, and regional officers on February 5-6, 1981, the same days the NLRB's depositions of respondents were scheduled. Document 18. Document 19 is a ruling dated January 23 that the NLRB's depositions should proceed first, since its requests had been filed much earlier. Certain discovery requests by respondents caused the NLRB to file Documents 23 and 24, motions for protective orders, on January 28. Document 25 is a letter-ruling on January 29, 1981, granting these motions, holding that the documents need not be produced (except that certain documents were to be delivered to the Master), and granting a protective order as to depositions. On February 4, 1981, respondents' counsel filed the following letter:
"This is a formal re-application for an Order to take Depositions upon Oral Examination of the following:
Peter W. Hirsch, Donald M. Spooner, Stanley R. Zirkin
"Rule 30 and 37 of the Federal Rules of Civil Procedure are herein invoked. Petitioner National Labor Relations Board has refused and will continue to refuse to make discovery to the detriment of Respondents with an adverse effect on the proper preparation of their defense.
"Further, if discovery is refused, Respondents will move this Court to dismiss Petitioner's action for contempt against Respondents inasmuch as it waived any privilege it may have asserted by being the moving party and bringing suit against Respondents."
Document 27. On February 6, the undersigned ruled that Document 27 was not in proper form for a motion since it did not comply with Rule 20 of the Local Rules for the Eastern District of Pennsylvania. See Document 28. Document 9 is the December 19, 1980, ruling that this rule would apply to motions before the Master. Respondents, in an ex parte communication, called the Master and asked for a conference a few days before the evidentiary hearings were to begin. Document 33 set February 24, 1981, as the conference date provided respondents filed a written motion. Document 35 is this motion by respondents, and the conference was held on February 24, 1981. Document 38, dated February 26, notes that this motion to depose the NLRB's attorney, regional director, and compliance officer was denied at the February 24 conference.