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Local 259 v. National Labor Relations Board

October 29, 1985


Petition to review and set aside an order of the National Labor Relations Board dismissing a complaint issued by the General Counsel, which alleged that an employer violated sections 8(a)(1), (3) and (5) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1), (3) and (5). Petition denied.

Author: Van Graafeiland

Before KAUFMAN, VAN GRAAFEILAND, Circuit Judges, and POLLACK, District Judge.*fn*

VAN GRAAFEILAND, Circuit Judge :

Local 259, United Automobile, Aerospace and Agricultural Implement Workers of America (the "Union") petitions for review of a National Labor Relations Board order dismissing a complaint issued by NLRB's General Counsel charging violations by Brady-Stannard Motor Co., Inc. (The "employer") of sections 8(a)(1), (3) and (5) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1), (3) and (5). For the reasons that follow, the petition is denied.

In 1979, the employer, and automobile dealership in Brewster, New York, entered into a three-year, union shop contract with the Union covering employees in its service shop. Among other things, the contract prescribed hourly wage rates for the employees involved. However, the earnings of the employer's mechanics could not be computed simply by referring to their hourly rate, because mechanics' earnings were calculated by multiplying their hourly rate by a set number of hours allocated to each task they performed, and this allocated time might vary substantially from the time actually devoted to the task. See American Federation of Television and Radio Artists, Kansas City Local v. NLRB, 129 U.S. App. D.C. 399, 395 F.2d 622 (D.C. Cir. 1986). In other words, a mechanic might earn more than eight hours pay in a day by performing his assigned tasks in less time than was allocated to them.

To complicate matters, time allocations were derived, not from a single source, but from three, the "Factory Book", the "Menu", and the "Chilton Book". The Factory Book set service times for work performed under manufacturers' warranties. The Menu was created by the employer and set service times for a limited number of common tasks such as engine tune-ups. The Chilton Book, a commercially published industry source, was used to calculate all other service times. In most instances, the Chilton Book allocated more time to given tasks than did the Factory Book. An expert witness testified that, for 90% of the tasks, the Chilton Book allocated 30% more time. The Menu allocations generally fell somewhere in between the Factory and the Chilton.

Because the employer was sustaining substantial losses in its service department, it undertook negotiations for a new contract in 1982 with several important goals in mind. One was the complete elimination of the Chilton Book as a source for time allocations. Another was the breaking down of mechanical work into classifications under which less skillful, and therefore lower paid, mechanics would perform work that was of a more menial nature. A third goal was the establishment of an hourly rate with which the employer could live.

The Union was of another mind. It asked for a 12 1/2% increase in the hourly rate, retention of the Chilton Book and an increase in the guaranteed minimum work week from 35 to 40 hours. After six bargaining sessions, an impasse was in the alternative; either a 6% increase in the hourly rate to $9.38, with time allocations based on the Factory Book or Menu and with no guaranteed weekly minimum, or the continuation of the terms of the expired contract for another year. Following rejection of both offers, seventeen service department employees, eight of whom were class A mechanics, went on strike.

Several weeks later, the employer began to hire replacements. Before any were hired, the employer had to make a business judgment. See Vesuvius Crucible Co. v. NLRB, 668 F.2d 162, 167-68 (3d Cir. 1981). In the words of its General Manager, "we needed to hire [replacement] at a fair salary, but it had to be a fair rate of pay, but it had to be less than what we were paying our existing people." At the General Manager's request, the employer's bookkeeper analyzed the company records. She determined from them that, under the expired contract, the earnings of the striking class A mechanics had averaged out to $9.93 an hour. The employer then decided to offer replacement class A mechanics a guaranteed 35-hour week at an hourly rate of $9.75 calculated according to the Factory Book and the Menu. The employer also proceeded with its proposed plan to classify mechanics. It hired three class A replacements at the $9.75 hourly rate and three class B mechanics at an hourly rate of $7.00.

On November 3, 1982, the Union filed charges asserting that the employer had hired replacement employees "at a rate of pay higher than the rate it has offered the Union for the identical work by the regular employees." Thereafter, General Counsel issued a complaint on behalf of the Board alleging that the employer had paid mechanics and "B" part replacements hourly wages in excess of those offered during negotiations and had guaranteed mechanics a weekly minimum wage in excess of what it had offered during negotiations.

On April 25, 1983, the Union filed an amended charge asserting that, on or about February 15, 1983, the employer had refused to offer reinstatement to the striking employees despite their unconditional offer to return to work. An amended complaint incorporating this additional charge was issued on July 20, 1983.

During the hearing before Administrative Law Judge Pacht, counsel for the General Counsel withdrew the allegations of the complaint which referred to class "B" part replacements. It is not clear from the record whether General Counsel had confused class "B" parts employees with class B mechanics. In any event, because the three class B mechanics, whom the employer hired, were being paid an hourly rate of only $7.00, the thrust of General Counsel's charges was against the earnings of the three class A replacements. The employer introduced proof, however, that, although the hourly wage of the class A replacements was more than the employer's highest offer, because of the elimination of the Chilton Book, the replacements' actual earnings were less than what the striking mechanics had earned.

The Administrative Law Judge felt that, although the employer's calculations were made in good faith, the conclusions reached were "imperfect and unreliable" and required a "leap of faith" to accept. However, she did not base her decision on a finding that they were erroneous. Instead, she framed her holding to accord with the allegations of General Counsel's complaint and based it on the stipulated facts that the employer was paying the three grade A mechanics a greater hourly wage rate and a higher minimum wage than was offered to the Union during negotiations. As a result, she held, the employees' economic strike was converted into an unfair labor practice strike.

The Board majority disagreed with the Administrative Law Judge's holding, because it found that the actual wages paid to the strike replacements were consistent with those offered the Union in the employer's final proposal. The Board felt that, because the mechanics' earnings could "vary significantly based on the number of tasks performed, and the number of hours allotted to a task for purposes of calculating wages," an analysis based only on an hourly rate and minimum guarantee was "superficial". The Board preferred to rely on the "clear facts which show that the replacements' actual wages were not higher than those ...

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