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National Labor Relations Board v. Lehigh Lumber Co.

August 14, 1981


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


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:

"Dear Frank:

"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:

"Dear Frank:

"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:

"Dear Frank:

"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 ...

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