NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Executive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal errors so that corrections can be included in the bound volumes.

Boehringer Ingelheim Vetmedica, Inc. and United Food and Commercial Workers, District Union Local Two. Case 17–CA–22964

August 13, 2007

DECISION AND ORDER

By Members Schaumber, Kirsanow, and Walsh

On October 21, 2005, Administrative Law Judge Gregory Z. Meyerson issued the attached decision. The Respondent filed exceptions and a supporting brief,[1] the General Counsel filed an answering brief, and the Respondent filed a reply brief.

The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.

The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, and conclusions only to the extent consistent with this Decision and Order.

The judge found that the Respondent violated Section 8(a)(1), (3), and (5) of the Act when it purportedly engaged in direct dealing by presenting locked-out employees with individual no-strike forms, although he found that the lockout was initially lawful. Contrary to the judge, we find that the Respondent did not engage in unlawful direct dealing and that its lockout did not otherwise violate the Act. Accordingly, for the reasons discussed below, we reverse the judge’s decision and dismiss the complaint.

Facts

The material facts are undisputed. Boehringer Ingelheim Vetmedica, Inc. (the Respondent) and United Food and Commercial Workers, District Union Local 2 (the Union) have a more than 20-year history of collective bargaining. The parties were unable to agree on a successor contract before the expiration of their collective-bargaining agreement at midnight, November 12, 2004.[2] Shortly before the agreement’s expiration, unit employees rejected the Respondent’s last, best offer and voted to authorize a strike.

The Union’s strike process is as follows. Bargaining-unit members immediately vote on a strike authorization resolution upon the failure of a contract ratification vote (i.e., if 50 percent or fewer members vote to accept the offer). If a two-thirds majority votes in favor of the strike resolution, and if the International Union subsequently grants approval, the local union president has the authority to call a strike. The judge credited the testimony of union negotiator John Lewis that he had explained this process to the Respondent’s representatives several times.

Lewis telephoned the Respondent’s negotiator, Daniel Nowalk, and informed him of the vote result. In response, Nowalk told Lewis that the Respondent would cease work as of midnight, November 12, when the collective-bargaining agreement expired. During this conversation and several followup conversations, Nowalk asserted that bargaining unit employees were on strike; union representatives insisted that they were not on strike and that the Respondent was locking employees out. Nowalk declined Lewis’ request to continue negotiations and extend the collective-bargaining agreement.[3]

In connection with the Respondent’s decision to cease work as of midnight November 12, its vice president of Biological Research and Development, Dr. Phillip Hayes, testified about the nature of the Respondent’s business. According to Dr. Hayes, the process of manufacturing vaccines and pharmaceuticals for protecting animal health is delicate and requires freedom from interruptions or interference to avoid contamination of the product. Disruption of the manufacturing process could have serious consequences, such as considerable financial loss or the jeopardizing of public health (in the case of food-producing animals). The Respondent was concerned that the potential for employee sabotage or even merely inadequate staffing due to labor unrest could bring about these “potentially catastrophic” consequences. In light of these concerns, the Respondent sought assurances that the Union would not engage in a work stoppage for a certain period of time. The Union declined to provide such assurances.

On November 13, the Respondent gave the Union two options for returning bargaining unit employees to work: (1) the Union could give the Respondent a written no-strike assurance; or (2) employees who wished to work could submit individually signed unconditional offers to return to work. The Union declined both options and reiterated its previously-rejected offer to indefinitely extend the collective-bargaining agreement. Employees reported for their normal work shifts, as the Union had instructed them, and the Respondent presented these employees with no-strike forms,[4] advising them that they would have to sign them if they wished to work. All of the regular employees declined to sign the form, and the Respondent sent them home. The judge found that these conversations generally were businesslike and nonconfrontational, and there is no evidence that the Respondent questioned employees or engaged in substantive discussions with them regarding the terms of its contract proposal.[5] In fact, the Respondent advised employees to seek advice from the Union before deciding whether to sign the form.[6] Subsequently, negotiations resumed. The employees ratified a final collective-bargaining agreement on November 20 and returned to work on November 22.

Legal Principles

Employer lockouts in support of legitimate bargaining demands (i.e., “offensive lockouts”) are lawful. American Ship Building Co. v. NLRB, 380 U.S. 300, 310–313 (1965); NLRB v. Brown, 380 U.S. 278, 284 (1965). Lockouts in anticipation of threatened strikes, which are intended to avoid severe and unusual hardships (i.e., “defensive lockouts”), have also been found to be lawful. See, e.g., cases cited in American Ship Building, supra, 380 U.S. at 307. To find a violation of Section 8(a)(3), the Board must be presented with independent evidence that antiunion animus was a primary motive of the lockout. NLRB v. Brown, supra, 380 U.S. at 288. Proof of an employer’s unlawful motive can convert an initially lawful lockout into an unlawfully motivated lockout that violates the Act. R.E. Dietz Co., 311 NLRB 1259, 1264, 1267 (1993).[7] Further, “a fundamental principle underlying a lawful lockout is that the Union must be informed of the employer’s demands, so that the Union can evaluate whether to accept them and obtain reinstatement.” Dayton Newspapers, Inc., 339 NLRB 650, 656 (2003), enfd. in relevant part 402 F.3d 651 (6th Cir. 2005).

Judge’s Decision

The judge found clear evidence that the Union did not strike and that the Respondent engaged in a lockout. He further found no evidence of antiunion animus. The judge found that there was no allegation or evidence of bad-faith or surface bargaining, and no suggestion that the Respondent was not interested in reaching a successor agreement with the Union (indeed, as noted above, it promptly did so). Therefore, the judge found that the lockout was not unlawful from its inception; in other words, it was not a violation of the Act because it was (at least initially) in furtherance of a legitimate objective.[8]

The judge also found that the lockout did not become unlawful due to any failure by the Respondent to meet its legal obligation to inform the Union of the reasons for the lockout and of what the Union could do to end it. To the contrary, he found that the Respondent’s demands were sufficiently clear, and the Union knew how to end the lockout. The judge, however, found that the lockout became unlawful beginning November 13 when the Respondent presented the no-strike forms to employees. In the judge’s view, the presentation of these forms constituted direct dealing in violation of Section 8(a)(5) because the Respondent sought individual waivers of employees’ Section 7 rights. The judge recognized that seeking such waivers is not unlawful per se, stating that the Board has found such conduct violative of the Act “in certain circumstances.” However, he analogized this case to Dayton Newspapers, supra, and C-E Natco, 272 NLRB 502 (1984), in both of which the Board found unlawful direct dealing in the context of a lockout. In finding that the Respondent’s direct dealing converted a lawful lockout into an unlawful one, the judge reasoned that the lockout at that point became one in furtherance of direct dealing rather than of any legitimate proposal offered to the Union, or protection against an imminent strike. The judge also found that the Respondent’s conduct violated Section 8(a)(3), reasoning that locking out employees for refusing to sign a no-strike form would have a chilling effect on employee willingness to engage in union activity in support of the Union’s contract proposals.[9]

The Respondent excepts to the judge’s findings that it violated Section 8(a)(1), (3), and (5). As explained below, we find merit in these exceptions.

Discussion

There is no dispute that the lockout was lawful at its outset and that it was instituted in furtherance of the Respondent’s legitimate business objectives. Unlike the judge, we find that the Respondent did not engage in unlawful direct dealing. Correspondingly, in the absence of direct dealing or any evidence of unlawful motive, we find that the lockout was lawful throughout its duration.

Contrary to the judge, we find Dayton Newspapers and C-E Natco, supra, distinguishable. In Dayton Newspapers, a senior management official warned employees that if they engaged in a strike, they “[wouldn’t] be working here any more, and that would be it for you.” The same official told employees on the picket line that the union had “cost all you guys your jobs.” When employees reported for work following the union’s unconditional offer of return, management stated that the respondent was “not in need of [the union’s] services,” and that the problem was not with the employees, but with the union. 339 NLRB at 650. The respondent also contacted locked-out employees to schedule one-on-one meetings with managers. During these meetings, the respondent sought individual commitments from employees to work without interruption. Significantly, one employee was asked to agree not to honor any job action called by the union. At the time of these meetings, the respondent had made a vague and general demand for an “acceptable commitment” from the union to make deliveries without disruption, without clarifying to the union what an “acceptable commitment” would involve. Moreover, the respondent had rejected an offer by the union to return employees to work under the same conditions agreed to by individual employees whom the respondent allowed to return to work. The Board found that the respondent engaged in unlawful direct dealing by this conduct. 339 NLRB at 653. The Board concluded that the respondent “went far beyond merely communicating an offer of reinstatement” when it bypassed the union and sought a “broad and open-ended waiver” of employees’ Section 7 rights to support any future union strikes or picketing. Id.

The Board in Dayton Newspapers also found that the respondent’s conduct violated Section 8(a)(3), reasoning that the respondent provided the union with “unclear and changing conditions” for employees’ reinstatement that “became a ‘moving target.’” Id. at 656, 658. As a result of these unclear demands, “the Union was unable to intelligently evaluate its position, and therefore was powerless to end the lockout and obtain reinstatement of the drivers.” Id. at 658.

C-E Natco is also distinguishable. In C-E Natco, the respondent sent letters to locked-out employees that extended individual offers of reinstatement on terms different from those previously offered to the union. The respondent never replied to the union’s subsequent proposal to accept the respondent’s new offer on behalf of all unit employees. The Board found that the respondent violated Section 8(a)(1), (3), and (5) by bargaining individually with employees and conditioning their employment on their willingness to sign a “Letter of Understanding” that was “a clear interference with statutory rights.” 272 NLRB at 506.

Unlike the employers in those cases, the Respondent did not bypass the Union in violation of Section 8(a)(5). Rather, the Respondent timely informed the Union of its intentions, giving it two clear and specific options for ending the lockout. In the face of the Union’s refusal to provide a no-strike assurance, the Respondent allowed employees the opportunity to return to work by providing individual assurances, as referred to in the second option given to the Union. In doing so, the Respondent did nothing to derogate from the Union’s representative status or to undermine its legitimate role. On the contrary, the Respondent told a number of employees to talk to their union representatives before deciding whether to sign the no-strike assurances.[10]

Unlike the employers in Dayton Newspapers and C-E Natco, the Respondent did not offer employees different terms than it had previously offered to the Union. The Respondent did not offer more favorable terms to individual employees, nor did it reject any offer by the Union to return employees to work on the same terms it then agreed to with individual employees.[11] The Respondent did not ask for an “open-ended waiver of rights” as in Dayton Newspapers; rather, the Respondent’s limited request for no-strike assurances referred only to the then-current negotiations for a successor agreement. Finally, unlike the “moving target” that the Board described in Dayton Newspapers, the Respondent did not refuse to clearly define what the Union could do to end the lockout. Indeed, the General Counsel does not except to the judge’s finding that the Union was aware of the Respondent’s clear demands for ending the lockout.

Although not precisely on point, we find the facts of the case before us far more closely analogous to those in U.S. Ecology Corp., 331 NLRB 223 (2000), enfd. mem. 26 Fed.Appx. 435 (6th Cir. 2001), than to either Dayton Newspapers or C-E Natco. In U.S. Ecology, the respondent sent letters to striking employees in response to their questions about returning to work, informing them that they could return to work and “for the time being” receive the same wages and benefits as they had received before the strike. Upon the union’s subsequent offer to return all employees to work under the conditions stated in the letter, the respondent allowed the employees to return to work.

The Board reversed the judge’s finding of unlawful direct dealing, reasoning that the respondent’s communications with individual employees were not likely to erode the union’s position as bargaining representative. 331 NLRB at 226–227. The Board relied in part on the fact that the respondent did not initiate the communications, but rather sent the letter in response to employee inquiries. Id. at 226. The Board agreed with the respondent that the letter merely stated the only employment conditions that the respondent could lawfully offer under the circumstances (because the parties had not bargained to impasse or reached a new agreement).[12] Id.

In this case, the employees did not verbally inquire about returning to work, but they did so nonverbally by presenting themselves for work despite having been informed of the lockout. At that time, the Respondent offered employees an opportunity to return to work. Although the Respondent did not expressly confirm that employees would receive pre-lockout wages and benefits, it in no way suggested that it was offering different wages or benefits. The Respondent’s no-strike form simply was silent on that score, and neither the parties nor the judge suggests that the Respondent sought to bypass the Union in this respect. Indeed, far from eroding the Union’s position as bargaining representative, the Respondent encouraged employees to consult with the Union before deciding whether to accept the Respondent’s offer. Under these circumstances, we find no unlawful direct dealing.

Finally, we do not agree with the judge’s finding that the Respondent’s actions converted the lockout from lawful to unlawful. Rather, we find that the purpose of the lockout at all times remained the Respondent’s desire to avoid a potentially catastrophic work stoppage. Further, we reiterate that the judge found no evidence of antiunion animus, and that there was no allegation or evidence of bad-faith bargaining.[13]

Conclusion

In sum, under the circumstances of this case, we disagree with the judge’s conclusion that the Respondent engaged in direct dealing and thereby converted its lawful lockout into an unlawful one. Further, we find no other evidence of antiunion animus or unlawful motive. Accordingly, we reverse the judge’s finding that the Respondent violated Section 8(a)(1), (3), and (5), and we dismiss the complaint.

ORDER

The complaint is dismissed.

Dated, Washington, D.C. August 13, 2007

Peter C. Schaumber, Member

Peter N. Kirsanow Member

(seal) National Labor Relations Board

Member Walsh, dissenting.

Undisputed evidence supports the judge’s finding that the Respondent bypassed the Union and dealt directly with bargaining unit employees by requiring them to individually sign written no-strike assurances as a condition of working during the Respondent’s lockout. Accordingly, the judge properly found that the Respondent’s conduct violated Section 8(a)(5) and (1) of the Act. The judge’s further finding—that the Respondent’s unlawful conduct converted its lockout, lawful at its inception, into an unlawful lockout—is also supported by the record and settled precedent.

i.

The Respondent and the Union had been engaged in ongoing negotiations for a successor contract when their collective-bargaining agreement expired at midnight, Friday, November 12, 2004. The Respondent commenced a lockout of bargaining unit employees upon the contract’s expiration. When those employees scheduled for weekend or overtime shifts arrived for work early Saturday morning, November 13, the Respondent presented each of them with its no-strike form and the requirement that they sign the form in order to go to work.

The record clearly establishes, as the judge found, that the Respondent never notified the Union of its intent to present the no-strike form to individual employees. In addition, the Respondent neither showed the form to the Union nor offered to negotiate with it over the language of the form prior to presenting the form directly to unit employees.

“It is well settled that the Act requires an employer to meet and bargain exclusively with the bargaining representative of its employees. An employer who deals directly with its unionized employees or with any representative other than the designated bargaining agent regarding terms and conditions of employment violates Section 8(a)(5) and (1).” Armored Transport, Inc., 339 NLRB 374, 376 (2003); Medo Photo Supply Corp. v. NLRB, 321 U.S. 678, 683–684 (1944). The vice of direct dealing with employees, which is forbidden by the principle of exclusive representation set forth in Section 9(a) of the Act, is that it undermines a key goal of national labor policy: stability in collective-bargaining relationships.  The exclusivity principle prevents employers from positioning one faction of employees against another, or against the majority representative itself.  Id. at 683–685.  Further, by requiring the employer to look exclusively to the union to represent the employees’ interests, the Act maximizes the potential effectiveness of that representation by allowing the union to speak with one voice. See Emporium Capwell Co. v. Western Addition Community Organization, 420 U.S. 50, 70 (1975).  This is particularly important when parties are engaged, as here, in negotiations for a collective-bargaining agreement.  See NLRB v. Roll & Hold, 162 F.3d 513, 520 (7th Cir. 1998) (direct dealing makes it more difficult for the union to present a united front during negotiations).

The Respondent’s total exclusion of the Union from its dealings with employees over the no-strike waiver contravened those established principles. There is no doubt that the no-strike waiver was a mandatory subject of bargaining. See, e.g., C-E Natco/C-E Invalco, 272 NLRB 502, 524 (1984) (“[T]he mandatory subjects of collective bargaining include the conditions under which the locked-out unit employees could return to work, and their conditions of employment upon their return and before the execution of a new contract.”).[14] The Respondent’s direct communication with locked-out unit employees, bypassing and excluding the exclusive bargaining representative regarding the conditions under which they could return to work, plainly constitutes unlawful direct dealing. Georgia Power Co., 342 NLRB 192 (2004) (direct dealing found when the employer communicated directly with union-represented employees, to the exclusion of the union, with the aim or effort of establishing or changing terms and conditions of employment or undercutting the union’s role in bargaining), enfd. 427 F.3d 1354 (11th Cir. 2005); Southern California Gas Co., 316 NLRB 979, 982 (1995).

The Respondent had ample opportunity to raise the issues related to the no-strike waiver with the Union but failed to do so. The Respondent’s negotiator, Daniel Nowalk, had several telephone conversations with the Union’s chief negotiator, John D. Lewis, on Friday, November 12, with the contract set to expire that night. But Nowalk never mentioned to Lewis the Respondent’s plan to present the no-strike form to individual employees as they reported for work. The Respondent offers no explanation whatsoever for its failure to raise this issue with the Union.

ii.

On the afternoon of November 13, after engaging in its first round of direct dealing with unit employees, the Respondent offered the Union two options for returning the locked-out employees to work: the Union could execute a written no-strike assurance on behalf of all bargaining unit members, or the Union could permit individual employees to sign individual no-strike waivers. The Union declined both options.[15]

The Respondent’s after-the-fact negotiation with the Union did not cure its unlawful conduct, nor did it mark the end of it. Rather, when the Union declined the Respondent’s offer, the Respondent persisted in direct dealing with individual employees. On Monday morning, November 15, when the bulk of the bargaining unit employees arrived for work as scheduled, the Respondent presented them individually with the no-strike form and the requirement they sign it in order to return to work, even though their bargaining representative had rejected such an arrangement. The Respondent never informed the Union of its plan to continue directly presenting individual employees with the no-strike form, contrary to the majority’s assertion.[16]

When an employer’s bargaining offer is not accepted by the union, the employer may not then directly make the offer to employees. As the Second Circuit Court of Appeals explained in NLRB v. General Electric Co.,[17] direct dealing will be found when the employer has chosen “to deal with the Union through the employees, rather than with the employees through the Union.” That is precisely what the Respondent did here.

The majority’s contention that the Respondent’s conduct did not undermine the Union’s position as exclusive bargaining representative, because its Vice-President Phillip Hayes advised employees to talk with their union representatives before signing the no-strike form, is without factual or legal foundation. Hayes gave this “advice” to only about 7 employees—out of a bargaining unit of 150 employees—who worked at the Respondent’s Cosby Farm location. No such message was conveyed at the Respondent’s St. Joseph location—where almost the entire bargaining unit is employed—when the Respondent presented the bulk of the bargaining unit with the no-strike form. In any event, Hayes’ supposed affirmation of the Union’s representative role notably did not include advising the Union of the Respondent’s plan to present the form directly to employees or showing it the form. These were particularly egregious omissions given Hayes’ role as chief spokesperson for the Respondent’s negotiating committee.

There can be little doubt that the Respondent’s direct dealing with employees concerning the no-strike waiver was likely to erode the Union’s position as exclusive representative. See Central Management Co., 314 NLRB 763, 767 (1994); Allied-Signal, Inc., 307 NLRB 752, 753 (1992). The Respondent’s direct solicitation of individual employees at a critical juncture in negotiations—the contract expired, several key bargaining issues unresolved, and the Respondent having chosen to lock out employees—could only serve to drive a wedge between the Union and the employees it represented. Moreover, Hayes contributed to that corrosive effect through the “advice” the record shows he actually gave to employees: he cautioned them that “as part of their consideration in making their decision [regarding the form], that they should consider [whether] it would be appropriate for them to talk with representatives of their union because the union . . . could find fault with any decision that they might make.”

iii.

The judge properly likened this case to C-E Natco/C-E Invalco[18] and Dayton Newspapers,[19] both of which involved a lockout. In C-E Natco/C-E Invalco, the Board found that the employer unlawfully bargained directly with employees by mailing to their homes individual offers to return to work, which included a no-strike waiver. The employer did not apprise the union of its direct offers to individual employees, and initiated the contact with employees rather than responding to inquiries from them. Those key circumstances parallel those presented in the instant case. In addition, in C-E Natco/C-E Invalco, the Board relied on the fact that the individual offers of reinstatement were different from those that the employer had previously offered to the union. 272 NLRB at 506. Similarly, in the present case, the no-strike waiver that the Respondent presented directly to employees did not match the options it offered to the Union. Even the individual-employee option that the Respondent belatedly presented to the Union was materially different from what it presented to the employees: only the latter contained a penalty for noncompliance.

The key facts in Dayton Newspapers are likewise similar to those presented here. In that case, the employer unlawfully bypassed the union and dealt directly with locked-out employees by initiating individual meetings with each employee and requiring an individual no-strike commitment as a condition for returning to work. The employer did not inform the union of its intent to meet with employees individually, did not discuss the relevant issues with the union beforehand, and did not include the union in the meetings.[20] The majority does not dispute those similarities to the instant case. Rather, the majority distinguishes Dayton Newspapers because there, (1) the aim of the employer’s direct dealing was a broader no-strike waiver than here, and (2) the employer committed several unfair labor practices in addition to direct dealing. That Dayton Newspapers involved more egregious conduct than the instant case is a distinction, but one that does not diminish the essence of the direct-dealing violation in both cases: the employer’s circumvention of the union, at a critical time, eroding the union’s position as exclusive bargaining representative and thereby undermining the collective-bargaining process. See Medo Photo Supply Corp. v. NLRB, supra, 321 U.S. at 684, and discussion above at pp. 2–3.

By contrast, the majority’s attempt to analogize this case to U.S. Ecology Corp.,[21] is wholly unpersuasive. In that case, the employer sent letters to striking workers in response to their questions concerning how they could return to work. The letters answered the strikers’ inquiries, stating that, “for the time being” they could return to work at the pre-strike wage and benefit levels. Although the employer did not send the letter to the union, the Board found the employer’s conduct did not constitute unlawful direct dealing with employees. The Board emphasized that the employer “did not initiate these communications, but instead sent its letter in response to employees’ questions.” 331 NLRB at 226. The Board also observed that the employer could not lawfully offer the strikers any terms other than those that prevailed before the strike, because the parties had not bargained to impasse or reached a new contract. The Board concluded:

We do not believe that, merely by stating (in response to employee inquiries) the only employment conditions it could lawfully offer under the circumstances, the Respondent can reasonably be found to have “eroded the Union’s position as exclusive representative.”

Id.

The differences between that case and the one before us are self-evident: in the present case, there were no employee inquiries; the Respondent plainly initiated the direct contact with employees, unlike the employer in U.S. Ecology. In addition, here, the Respondent was not merely informing the employees of the terms and conditions of employment that it was legally obligated to offer them. The Respondent had no legal obligation to end the lockout or invite individual offers to return to work. Indeed, the no-strike waiver that the Respondent presented to individual employees was something entirely new and, of course, something that the Respondent had not communicated to the Union.

The majority’s contention that the Respondent’s employees “nonverbally” made inquiries, comparable to those in U.S. Ecology, by arriving for their scheduled work shift, is meritless. The employees here were not on strike, but unexpectedly locked out. To suggest that they initiated a dialogue merely by reporting for work is simply wrong.

iv.

The judge’s further finding, that the Respondent’s unlawful direct dealing converted its lockout, lawful at its inception, into an unlawful lockout, is supported by both the evidence and applicable law. Under American Ship Building Co. v. NLRB, 380 U.S. 300 (1965), for a lockout to be permissible it must be for the “sole purpose of bringing economic pressure to bear in support of [the employer’s] legitimate bargaining position,” and not brought with an unlawful motive. Id., at 318, 313. In addition, once the employer has begun a lockout, any subsequent employer action inconsistent with an initially lawful lockout converts the lockout into unlawful conduct. R.E. Dietz Co., 311 NLRB 1259, 1264, 1267 (1993) (lockout became unlawful when employer illegally bargained to impasse over nonmandatory subjects of bargaining). Accord Ancor Concepts, Inc., 323 NLRB 742, 744–745 (1997), enf. denied 166 F.3d 55 (2d Cir. 1999); Field Bridge Associates, 306 NLRB 322, 334 (1992), enfd. sub nom. Local 32B-32J, SEIU v. NLRB, 982 F.2d 845 (2d Cir. 1993), cert. denied 509 U.S. 904 (1993).

In the present case, the Respondent’s direct dealing with its employees over the no-strike waiver rendered the lockout unlawful, for it then depended on the employees’ willingness to abandon their protected right to strike. Simply stated, if employees signed the no-strike form, they would not have been locked out, regardless of the Respondent’s desire to support its legitimate bargaining position. Ultimately, then, the Respondent was locking out employees because of their refusal to sign the no-strike form, the product of the Respondent’s unlawful direct dealing. Accordingly, the Respondent converted the lockout from a lawful effort to support its legitimate bargaining position to an unlawful effort to compel employees to accept the respondent’s unlawful direct dealing. Allen Storage & Moving Co., 342 NLRB 501 (2004) (lockout unlawful because of requirement that employees accept employer’s unlawful conduct in order to end the lockout); Teamsters Local 639 v. NLRB, 924 F.2d 1078, 1085 (D.C. Cir. 1991) (lockout to compel acceptance of unfair labor practice unlawful).

v.

The majority’s unwarranted reversal of the judge’s direct dealing finding is yet another example of my colleagues’ “simply refus[ing] to face up to the key facts” presented. AG Communication Systems Corp., 350 NLRB No. 15, slip op. at 10 (2007) (Member Walsh, dissenting). The majority’s further refusal to consider the effect of that unfair labor practice on the Respondent’s use of a lockout during negotiations cannot be reconciled with the Board’s fundamental duty to oversee a fair process for collective bargaining. See H.K. Porter Co. v. NLRB, 397 U.S. 99, 108 (1970). I dissent.

Dated, Washington, D.C. August 13, 2007

Dennis P. Walsh, Member

National Labor Relations Board

Susan Wade-Wilhoit, Esq., for the General Counsel.

Anthony B. Byergo, Esq., of Kansas City, Missouri, for the Respondent.

Thomas Marshall, Esq., of Kansas City, Kansas, for the Charging Party.

DECISION

Statement of the Case

Gregory Z. Meyerson, Administrative Law Judge. Pursuant to notice, I heard this case in Overland Park, Kansas, on August 16 and 17, 2005. United Food and Commercial Workers, District Union Local Two (the Union or the Charging Party), filed an original and an amended unfair labor practice charge in this case on November 19, 2004, and January 25, 2005, respectively. Based on that charge as amended, The Regional Director for Region 17 of the National Labor Relations Board (the Board) issued a complaint on January 28, 2005. The complaint alleges that Boehringer Ingelheim Vetmedica, Inc., (the Respondent or the Employer) violated Section 8(a)(1), (3), and (5) of the National Labor Relations Act (the Act). The Respondent filed a timely answer to the complaint denying the commission of the alleged unfair labor practices.1

All parties appeared at the hearing, and I provided them with the full opportunity to participate, to introduce relevant evidence, to examine and cross-examine witnesses, and to argue orally and file briefs. Based upon the record, my consideration of the briefs filed by counsel for the General Counsel, counsel for the Respondent, and counsel for the Union, and my observation of the demeanor of the witnesses, I now make the following findings of fact and conclusions of law.2

Findings of Fact

i. jurisdiction

The complaint alleges, the answer admits, and I find that the Respondent is a corporation with an office and place of business in St. Joseph, Missouri, herein called the St. Joseph facility, and a farm in Cosby, Missouri, herein called the Cosby farm, and has been engaged in the manufacture and wholesale distribution of veterinary pharmaceuticals. Further, I find that during the 12-month period ending November 30, 2004, the Respondent, in the course and conduct of its business operations, sold and shipped from its St. Joseph facility goods valued in excess of $50,000 directly to points located outside the State of Missouri.

Accordingly, I conclude that the Respondent is now, and at all times material herein has been, an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.

ii. labor organization

The complaint alleges, the answer admits, and I find that at all times material herein, the Union has been a labor organization within the meaning of Section 2(5) of the Act.

iii. alleged unfair labor practices

A. The Dispute

The Employer and the Union have had a long history of collective-bargaining. Unfortunately, they were not able to reach agreement on the terms of a successor collective-bargaining agreement prior to the expiration of their contract on midnight November 12, 2004.3 Shortly before the expiration of the contract, the employees in the bargaining unit rejected the Employer’s last offer and authorized a strike.

The General Counsel contends that at midnight on that date, the Respondent engaged in a “lockout” of its bargaining unit employees. According to counsel for the General Counsel, this lockout occurred even though the Union had not called a strike, and at a time when the bargaining unit employees were willing to continue working. The General Counsel is not alleging that this lockout was a per se violation of the Act.4 Rather, counsel for the General Counsel alleges that the Respondent violated the Act when, beginning on November 13, it required that any bargaining unit employee who wished to continue working must first sign a written “no-strike assurance.” Allegedly, such conduct constituted unlawful interrogation and interfered with the Section 7 activities of its employees by locking them out for refusing to sign the no-strike assurance. This conduct is alleged as a violation of Section 8(a)(1) of the Act.

Further, the complaint alleges that the Respondent submitted the no-strike form to its employees without first notifying the Union of its desire and intent to offer the form to employees, and without offering to negotiate with the Union over the substance of the form. The General Counsel contends that the Respondent’s actions constituted direct dealing with employees and a refusal to bargain with the Union in violation of Section 8(a)(5) of the Act.

Finally, the General Counsel alleges that the Respondent violated Section 8(a)(3) and (1) of the Act from November 13, 2004, when the lockout became unlawful because of the requirement that employees sign the no-strike form, until November 22, 2004, when employees were allowed to return to work following the ratification of a successor collective-bargaining agreement. The General Counsel seeks a “make whole remedy” for the employees adversely affected during this period of time.

Counsel for the Charging Party submitted a posthearing brief in which he “incorporates and adopts by this reference the arguments, authorities and brief of counsel for the General Counsel.” However, in that same brief, counsel for the Charging Party takes a position that is specifically rejected by the General Counsel. According to counsel for the Charging Party, the Respondent’s lockout of bargaining unit employees was unlawful from its inception, because the Respondent never notified the Union of the reasons for the lockout, or what the Union could do to return the employees to work. As noted above, the General Counsel does not contend that the lockout was a per se violation of the Act, and only became unlawful with the Respondent’s requirement that bargaining unit employees sign the no-strike form in order to continue working.

It is the position of counsel for the Respondent that the actions of the Respondent in ceasing operations on midnight November 12 were in anticipation of a “threatened or eminent strike” called by the Union among the employees in the bargaining unit. Counsel contends that this was nothing more than a “defensive lockout,” which the Board and the courts have long held to constitute a legitimate form of economic pressure. According to counsel, in such circumstances, where the Union had not yet called a strike, the Respondent was not required to permit employees to return to work, even if they provided an unconditional offer not to strike.

Concomitantly, counsel argues that under such a scenario, where the Union has not yet called a strike, but the Employer has locked out the employees, allowing those employees to return upon signing a no-strike form can not be a violation of the Act. He equates this action with the requirement that striking employees, who make an unconditional offer to return to work, foregoing their right to strike, generally must be reinstated, absent a lockout.

Further, counsel for the Respondent argues that the use by employers of a form for employees upon which to indicate their unconditional offers to return to work is a well accepted device to facilitate the employees’ exercise of their Section 7 right to abandon the strike, or to refrain from doing so. He contends that as such, the no-strike form used by the Respondent constitutes neither unlawful interrogation nor direct dealing with employees. Counsel points out that the form in question does not require that employees cease supporting the Union, but merely agree that they are willing to return to work and commit to remain during the course of the current negotiations. In counsel’s view, advising employees that they can return to work, assuming they sign the no-strike form, merely constitutes advising them of their legal rights under the Act, and can not be construed as either direct dealing or a refusal to negotiate with the Union.

B. The Undisputed Facts

With the exception of some minor discrepancies, the facts in this case are undisputed. The Employer and the Union have had a collective-bargaining relationship for over 20 years. Currently, the Union represents the Respondent’s employees in the following unit, which the parties all agree constitutes an appropriate unit for the purposes of collective-bargaining:

All full-time and regular part-time production, maintenance, and warehousing employees, employed by Boehringer Ingelheim Vetmedica Inc., at its facility located at 2621 N. Belt Highway, St. Joseph, Missouri and at its farm facility located in Cosby, Missouri but EXCLUDING guards and supervisors as defined in the Act, and all other employees.

There are approximately 150 employees in the unit, which I concur is a unit appropriate for collective-bargaining purposes.

Phillip Wayne Hayes testified on behalf of the Respondent. Dr. Hayes is the Respondent’s vice president of biological research and development and a doctor of veterinary medicine. His principal duties are to oversee the research and development of new vaccines and pharmaceuticals for the Respondent. He also served as the chief spokesperson for the Respondent’s negotiating committee during the recent collective-bargaining negotiations with the Union.

Dr. Hayes testified at length about the nature of the Respondent’s business. In summary, he testified that the Respondent manufactures vaccines and pharmaceuticals for use in protecting and treating the health of animals. Animals treated with the Respondent’s vaccines and pharmaceuticals include dogs, cats, horses, as well as food producing animals, such as beef cattle, dairy cattle, sheep, and pigs. In the St. Joseph, Missouri area the Respondent employs approximately 425 employees in the manufacturing process at three locations known as the campus, the farm, and the warehouse.

While it is not necessary for the purposes to this decision to go into great detail, Dr. Hayes testified that the manufacture of vaccines is essentially a “fermentation process.” According to Hayes, it is a delicate process, which if interrupted or interfered with can have serious consequences, including a contamination of the vaccine resulting in its complete loss. The Respondent has a fiduciary and regulatory obligation to produce products in a certain way. The consequences of contaminated vaccine could be very significant, which in the case of food producing animals could potentially jeopardize public health. The products manufactured at the St. Joseph sites are exported throughout the Americas, to Europe, and Asia. Also, a complete destruction of a “batch” of product could result in a financial loss in the tens of thousands to a few hundred thousand dollars. At any one time, the Employer may have as many as ten different “batches” of vaccine in production, for a combined value of product in production in excess of one million dollars.

According to Dr. Hayes, it would be a rather simple matter for a disgruntled employee to engage in sabotage and contaminate the product during the manufacturing process. He characterized such a scenario as “regrettable” and “potentially catastrophic.” Similarly, merely failing to follow regulated protocols in the monitoring of animals under experimental treatment could cause a multi-month experiment to be invalidated. Implicit in his testimony was the Respondent’s concern that during a period of labor unrest, where the employees in the bargaining unit had authorized a strike, an unhappy employee might seek to cause financial injury to the Employer by tampering with the product or failing to conduct the monitoring protocols. Even an inability to adequately staff the Respondent’s facilities because of a labor dispute could have similar serious consequences. Hayes testified that under these circumstances, he wanted employees to make an informed decision about whether to report for work following the expiration of the contract at midnight on November 12. According to Hayes, it was with these concerns in mind that employees arriving for work after midnight were asked to sign the no-strike assurance form.

The Union and the Employer had been meeting and negotiating for several weeks prior to the expiration of the contract. Despite considerable efforts, the parties remained divided on several significant issues, principally the use of seniority in promotions, transfers, subcontracting, and work jurisdiction, and the issue of supervisors and nonunit technical employees performing bargaining unit work. As the contract expiration date approached, there was no sign of potential compromise.5 The chief negotiator on behalf of the Union, John D. Lewis, union representative, testified that as the negotiations approached the expiration of the contract, he was of the view that the parties “weren’t getting anywhere and we were not going to get there.” The Respondent’s director of human resources and public relations, and a member of management’s bargaining committee, Daniel Nowalk, testified that on November 9, Lewis asked for the Respondent’s last, best offer so that it could be taken to the bargaining unit members for a vote. Nowalk testified that at this point, as well as throughout the course of negotiations, Lewis explained the procedures that the Union was required to go through prior to calling a strike.

Lewis credibly testified that he repeatedly explained to management’s representatives the mechanics of the ratification/strike process. He explained that the Union would present the Employer’s last, best offer to the members. In order for the contract offer to be ratified, the bargaining unit members voting would have to accept the offer by a vote of 50 percent, plus one. In the event that the offer was rejected, the membership would immediately vote on a strike authorization resolution. In order to authorize the calling of a strike, the vote to authorize a work stoppage required a two-third’s majority of the votes in favor of the resolution. Lewis explained to Nowalk and other management representatives that even following such a resolution, a strike could not be conducted until the International Union had given its approval, and the Local Union president, Tommy Price, had called the membership out on strike. According to Nowalk, in explaining the process, Lewis indicated that even with a strike authorization vote, “the trigger wouldn’t be pulled right away.” However, Nowalk was apparently dissatisfied with Lewis’ explanation, as Lewis never indicated when “the trigger” might be pulled.

On November 11, the Respondent presented the Union with what it characterized as its “last, best, and final offer.” At approximately the same time, according to Dr. Hayes, he asked Lewis whether the Union had any proposals, suggestions, or could offer anything else, which might help bridge the gap between the parties. Lewis responded, “Nothing whatsoever.” Finally, it should be noted that throughout this period of time, neither the Union nor the Employer had expressed any interest in extending the contract, during which the parties could continue to negotiate.

The Union held a meeting for the bargaining unit employees on Friday, November 12, at about 4:30 p.m. The members voted to reject the Employer’s “final” offer, and immediately voted to authorize a strike. Following the tabulation of the votes, Lewis called Nowalk and informed him of the outcome of the votes. In response to the news that the members had voted to authorize a strike, Nowalk advised that the Employer was going to cease work as of midnight that night (the expiration of the contract). There then ensued some back and forth debate between Nowalk and Lewis, with Lewis taking the position that the Respondent was locking out the employees and Nowalk arguing that the employees were on strike. Lewis insisting that the employees were not on strike, asked whether the Employer would agree to extend the contract, and continue to negotiate the following week. Nowalk indicated that the Employer would not agree to extend the contract and was not in a position at that time to schedule further negotiations.

There were several additional telephone conversations that evening between Nowalk and Lewis and between Nowalk and Price. However, the substance of the conversations was the same as in the earlier conversation. Nowalk took the position that the employees were on strike and Lewis and Price contended that the employees were being locked out. The union representatives argued that no strike had been called and could not be until the International Union gave its approval and Price called the employees out on strike. However, neither Lewis nor Price gave Nowalk any assurance of how long it would be before the employees were called out, with Price saying that he would tell Nowalk “if and when there was a strike.”

According to Nowalk’s credible testimony, the following day, Saturday, November 13, he had additional telephone conversations with both Lewis and Price, during which he gave the Union two options for returning the employees to work. The Employer would allow its employees to return to work in the event that either the Union gave a written no-strike assurance on behalf of the bargaining unit members or, alternatively, employees who wished to return would first sign an individual no-strike agreement. Nowalk testified that Price’s only response was to offer to extend the expired contract, which the Employer was not willing to do.6

The following Monday, November 15, as bargaining unit employees reported for work on their regular shifts, the Respondent’s managers presented them with a form to sign, before the employees were to be permitted to work. A small number of employees, who had previously volunteered for overtime or were otherwise scheduled to work over the weekend on Saturday and Sunday, November 13 and 14, were also advised of the Employer’s requirement that they sign the form if they wished to work. The form (GC Exh. 2.), which required a signature, printed name, and date, reads as follows:

I understand that my collective bargaining agent, Local 2 of the United Food and Commercial Workers, has authorized a strike and/or is currently on strike in support of their demands in connection with the current negotiations for a new collective-bargaining agreement. I freely and voluntarily choose NOT to participate in this strike in support of the union’s contract demands.

Therefore, I give Boehringer Ingelheim Vetmedica, Inc., my unconditional offer to return to work. This means that I will not strike or otherwise withhold services or fail to perform my work responsibilities to the fullest of my abilities in support of the union’s demands in connection with the current negotiations for a new collective-bargaining agreement. I understand that if I violate this unconditional offer to return to work, I may be subject to discipline.

It is the position of the Respondent that because of the sensitive nature of its research and development and production process, an unpredictable loss of labor or sabotage could result in huge financial losses, adverse regulatory consequences, and threats to public and animal health. The Respondent contends that since the Union refused to offer a no-strike pledge or even a promise not to strike for a particular period of time, the Respondent had no recourse but to offer individual employees an opportunity to make such a promise, in return for which they would be allowed to return to work. The Respondent acknowledges that it did not notify the Union of its intent to use the no-strike form, nor show it to the Union, nor offer to negotiate over the language of the form, prior to its use. However, as the Respondent points out, by Sunday, November, 14, the Union was familiar with the form. The Union called a meeting of its members on that date, at which Lewis told employees to report for work as normal on Monday, November 15, but not to sign the no-strike form, which form allegedly required that they “give up their union rights.”

For some reason, unknown to the undersigned, when testifying, Lewis seemed reluctant to acknowledge the obvious, that he had seen a copy of the form by the Sunday meeting. In any event, a number of employee witnesses credibly testified so.

It is undisputed that the employees in the bargaining unit who reported to work following the expiration of the old contract were given the opportunity to sign the form. However, none of the regular employees in the bargaining unit did so, and were, therefore, sent home without being permitted to perform their normal work duties.7 The parties so stipulated at the hearing.

As employees reported for work following the expiration of the contract, they were met by various supervisors and agents of the Respondent who informed them directly that unless they signed the form and agreed not to participate in a strike or withhold their services during the current contract negotiations, they would not be permitted to work. For the most