NLRB Cases Archive 1960 - 1995, LABOR-RELATIONS 1993-94 CCH-NLRB ¶15,434, FAIRHAVEN PROPERTIES, INC. et al. and LOCAL 32B-32J, SERVICE EMPLOYEES INTERNATIONAL UNION, AFL-CIO., (Aug. 17, 1994), National Labor Relations Board, (Aug 17, 1994)

FAIRHAVEN PROPERTIES, INC. et al. and LOCAL 32B-32J, SERVICE EMPLOYEES INTERNATIONAL UNION, AFL-CIO.

314 NLRB No. 125.Case Nos. 29-CA-16346, -16382, -16555 and -16808. August 17, 1994 Raymond P. Green, Administrative Law Judge..

Before Stephens, Devaney and Browning.

Bargaining Proceedings--Surface Bargaining--Totality of Conduct.--Taking into account the totality of an employer’s conduct during bargaining negotiations, the NLRB determined that the employer engaged in surface bargaining for the purpose of avoiding an agreement with a union. The employer’s list of proposals included conduct that would violate the Act, its list of 43 proposals was a sudden and major departure from the employer’s previous bargaining position, and the employer sought to undermine the union by dealing directly with employees and pleading poverty. Section 8(a)(5).

Back reference: ¶3085.5913.

Refusal to Bargain--Good Faith Bargaining--Employer’s Evasive Tactics.--In an attempt to avoid reaching a binding collective bargaining agreement with a union, an employer violated its bargaining duty by committing several unfair labor practices that evidenced its bad faith during negotiations. These unlawful acts included making direct offers of terms and conditions of employment to employees, failing to timely furnish financial information to a union after pleading poverty, failing to timely furnish the union with a list of the names and addresses of striker replacements and unilaterally ceasing to make fringe benefit payments to unit employees who had not joined a strike. Section 8(a)(5).

Back reference: ¶3085.591.

Interference--Evidence of Union Animus--Threat and Promises.--In an attempt to rid itself of a union during bargaining negotiations, an employer committed unfair labor practices designed to interfere with its employees’ enthusiasm for the union. These unlawful acts that evidenced the employer’s union animus included soliciting employees to get rid of the union and driving a company vehicle in such a manner as to threaten a striker with physical harm. Section 8(a)(1).

Back reference: ¶3710.125.

Strikes and Strikers--Fact Finding--Unfair Labor Practice.--On the facts, a strike was an unfair labor practice strike from its inception because an employer was not bargaining in good faith during contract negotiations and due to the employer’s unlawful solicitation of employee withdrawal of support for the union. Section 8(a)(5).

From Text of Board’s Decision

The National Labor Relations Board has considered the decision and record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, [1] and conclusions only to the extent consistent with this Decision and Order.

After a full review of the facts and the relevant law, we have, in summary, made the following decisions. We find that the named Respondents are a single employer, not a joint employer as found by the judge. We adopt the judge’s finding that the Respondent’s solicitation of employees to abandon the Union was an unlawful interrogation, but find that it also constituted an unlawful inducement to abandon the Union and an unlawful attempt to bypass the Union. We find that the strike was an unfair labor practice strike from its inception. We adopt the judge’s finding that the Respondent unilaterally ceased making benefit funds contributions. We modify the judge’s finding that the Respondent unlawfully refused to furnish the Union with financial information. We adopt the judge’s finding that the Respondent unlawfully delayed furnishing the Union with the names and addresses of replacements. We adopt, with additional reasoning, the judge’s finding that the Respondent threatened picketing employees with physical harm. Finally, we reverse the judge and find that the Respondent engaged in surface bargaining, reverse the judge’s finding that the parties were at impasse, and enter an appropriate remedy and Order.

The facts are largely undisputed and are for the most part fully set forth in the judge’s decision; what is disputed are the conclusions to be drawn from the facts. Because we are, however, substantially modifying the judge’s conclusions, we shall restate the facts to make clear the factual basis for our decision. Additional details are provided in our discussion of the separate complaint allegations.

I. Background Facts

A. Single Employer

The complaint alleges, the answer admits, and we find that the Companies named in the case caption are a single employer. [2] The parties do not dispute unit scope or composition; we find that the appropriate and recognized collective-bargaining unit comprises all service employees (including superintendents, assistant superintendents, handymen, and porters) employed by the Respondent at the seven named apartment complexes.

B. Past Practice

The normal practice for negotiating new bargaining agreements has been for the Service Employees International Union to reach a pattern agreement with an association of New York City apartment owners. The Union then formulated a proposed pattern agreement for Long Island apartment owners based on the New York City agreement but with somewhat lower wages and benefits. During the latest negotiations, a New York City pattern agreement had been reached somewhat in 1991, and the Union sent the proposed pattern Long Island contract to the Respondent. Although the Respondent in the past had signed the proffered Long Island pattern agreement, [3] this time, after several months of no definite response, the Respondent requested individual bargaining.

C. First Session

The parties first met on January 19, 1992, [4] Attorney Ira Sturm was chief spokesman for the Union; also present were union and employee representatives. Vice President Robert Lippolis was chief spokesman for the Respondent at this and the next two sessions; also present was Henry Nelkin, another official of the Respondent. Although, beginning during the fourth session, Attorney Neil Frank became the Respondent’s chief spokesman, Lippolis and Nelkin were present for most, if not all, bargaining sessions. [5]

During the first session, the Respondent made five major proposals: a 1-year wage freeze, the right to subcontract, reduction by half of the number of free apartments given superintendents and assistant superintendents, the right to reduce staffing from the current level of 27 or 28 to 24, and no retroactivity. The Union took the position that the Respondent should sign the pattern agreement.

D. February 6 Events

On February 6, between the first and second bargaining sessions, [6] Supervisor Anton Vuklevic asked groups of employees in at least two of the Respondent’s locations to sign a paper stating they wanted to get rid of the Union. Vuklevic told employees that, if they got rid of the Union, their wages and benefits, except for the pension plan, would remain the same. The employees refused. The judge correctly found that the Respondent did not put on any witnesses to rebut this testimony. The judge, however, failed to find that Henry Nelkin was present for management at each of these employee meetings and that the witnesses identified 15 employees (over 50 percent of the unit) by name as being present.

E. Second Session

The second session was held on February 10. The Respondent reiterated its five points. The judge credited testimony that Lippolis said the Respondent was losing money and could not afford to pay what they were paying. Sturm, for the Union, asked for the Respondent’s financial records. The parties also discussed reduction in staffing. Lippolis said that the Respondent wanted a reduction to 24 employees from the current staff of 27 or 28. Sturm stated that all the employees were busy and asked if the Respondent was going to contract out to compensate for reduced staff. Lippolis said that the Respondent did not intend to contract out any bargaining unit work. He, however, would not agree to a no-subcontracting provision.

F. Third Session

At the third session, held February 20, the parties reiterated their positions. Lippolis stated that the Respondent wanted to reduce the staff to 24 employees. He also proposed the elimination of major renovation and construction work. Sturm said the Union probably would have no problem with that because it was not traditional bargaining unit work. Lippolis additionally stated that the Respondent might be willing to sign the pattern agreement if the concessions the Respondent sought were put into a rider. Also, the Union notified the Respondent of the possibility of a strike. At this session, Sturm demanded that the Respondent allow the Union to examine its financial records, including the receipts and expense journals for the past 6 months. February 24, the following Monday, was set as a deadline for the Respondent to answer the demand. The Respondent at no time furnished the Union with its books or other specific financial information.

G. The Strike

On February 25, the Union called a strike. The unit employees at the Hicksville complex were not asked to strike and continued to work. The Union claimed the strike was an unfair labor practice strike based on the Respondent’s February 6 meetings with employees. According to the uncontradicted testimony of James Edwards, a union business agent, he went to each apartment location prior to the strike and spoke to unit employees as a group. He informed them of what had happened in negotiations and explained that, because the Employer had gone around with the February 6 paper to oust the Union, if the Union called a strike, it would be due to the Employer’s attempt to break the Union. He further explained that in an unfair labor practice strike employees could return to work, but if it were a normal, economic strike, their jobs would not be as protected. [7]

Employee witnesses corroborated Edwards’ testimony that they were aware before striking of the Respondent’s February 6 conduct. Louis Quintana testified on cross-examination that he went on strike because of the unfair labor practice, problems in contract negotiations, and the Union informed him the Employer was not bargaining in good faith. Although he was not present the day the strike was explained, Michael Walbeck testified that fellow employees told him that the reason for the strike was the Employer’s letter to sign the Union away. In addition, Pedro Correa testified that one of the reasons he went on strike was because of the Employer’s note that employees did not want any further Union.

Also Edwards testified that throughout the course of the strike the Union used its “unfair” picket signs, not its “on strike” signs. Similarly, leaflets handed out by the strikers stated the Employer “unlawfully intimidated our members in an attempt to have them disavow their Union.”

H. Fourth Session

On February 21, the Respondent retained Neil Frank to conduct its negotiations. Frank telephoned Sturm and arranged a bargaining session for February 27. At that meeting Frank presented a list containing 43 numbered proposals. The union representatives briefly examined the list and left within 5 minutes.

Of the 43 proposals, 8 related to or expanded on the 5 proposals the Respondent made during the first 3 bargaining sessions, 2 rejected new provisions sought by the Union, 10 rejected provisions the Union sought to carry over from the prior agreement, and 15 would reduce or eliminate established or proposed wage and hour benefits. Of the remaining items, two involved contract provisions that the Respondent stated were inapplicable and one that the Respondent stated were inapplicable and that the Respondent did not understand, one proposed changing the arbitration proceedings, one stated second and third year wages were open, and one agreed to revised contributions to the health and welfare fund. The remaining two items are of special relevance to this proceeding. Item 1 on the list stated:

The Company does not claim inability to pay. It makes these proposals in view of the recession, the affect [sic] on its ability to rent apartments to make a fair profit, and the availability of people willing [sic] to work at current wages. [Original emphasis.]

Item 4 stated:

Company will not checkoff dues or contribute to Welfare Fund, Pension Fund, Education Fund, Pre-Paid Legal plan or Annuity Fund until a contract is agreed to.

Among the proposals, the Respondent sought to eliminate the following: restrictions on subcontracting, the employees’ limited right to strike if unit work is performed by nonunit personnel, daily overtime, employees’ entitlement to 2 days off per week, the requirement that hours shall not be reduced, and the provision that the employer shall strive to provide 16 hours off between shifts.

I. Cessation of Funds Payments

In accord with item 4 on the list of 43 proposals, the Respondent, on February 27, ceased making payments to the welfare, pension, and annuity funds for all employees, including the five Hicksville employees who never went on strike. [8] The Respondent also failed to make the fund payments for those employees who subsequently abandoned the strike and returned to work. The Respondent’s chief negotiator, Frank, admitted that it did so to pressure the Union by starving the funds. [9] In May, the Respondent restored, retroactively, payments to the welfare (health) fund for those, and only those, employees who never struck; returning strikers were put on the Respondent’s own health plan.

J. Fifth Session

After some intermediate correspondence, the parties next met on April 15. [10] Sturm, the Union’s chief spokesman, asked why the Respondent continued to insist on a wage freeze when it no longer claimed inability to pay. Frank responded that the rent rolls were down. Frank said that it was not that the Respondent could not afford a raise, but that it just did not want to pay it. Frank testified that he said, “[I]f we put an ad in the paper, we would have 500 people lined up out at any of these projects looking for those jobs. And those people are getting paid, they would work for a hell of a lot less. And they would work for a hell of a lot less benefits. So why should we pay much more than what I believe and the Company believes is the market rate.” [11]

At that meeting Sturm asked for a list of the names and addresses of the replacement employees. Frank refused. Sturm requested information about the substitute health plan, which the Respondent furnished in due course. Frank stated that retroactivity applied to the entire contract, not just to wages as Sturm had believed. They also briefly discussed checkoff.

Frank stated that the Respondent wanted to reduce the employee complement to 18 rather than the previous request for a reduction to 24. Frank rejected Sturm’s suggestion that the staff reduction be done through attrition. In response to Sturm’s question, Frank said that none of the bargaining unit work would be contracted out. Nelkin, however, shook his head. After Frank and Nelkin conferred, they told Sturm they wanted to preserve the option to subcontract unit work. Sturm complained that the proposal to eliminate all restrictions on subcontracting differed from the discussions at earlier meetings, which had limited subcontracting to construction work and in the context of a fixed number of unit employees. The parties then turned to discussing the contracting out of construction work.

Sturm next asked Frank to go through the list of 43 proposals to state what the Respondent really wanted. After Frank had stated a number of items, Sturm interrupted to ask what the Respondent really wanted. Frank said that they wanted to know if the Union was willing to modify the pattern agreement. Sturm replied that the Union had started with modest proposals and that he wanted to hear what the Respondent wanted before he made concessions. Frank continued but did not finish listing the items the Respondent wanted. [12]

K. Sixth Session

At the next session, held on May 5, the Respondent stated it would restore welfare fund payments for those employees who never struck. [13] The parties briefly discussed profits. Frank stated that, although the Respondent was operating at a profit, it was lower than the previous year. Frank refused to disclose the numbers. Frank, while holding up some papers, said he had some new proposals but that he was not going to submit them until the Union made a counterprosal. Sturm replied that he had started negotiations in good faith, that there had been a few serious but solvable problems on the table, that the Respondent had added numerous other items, and that, if Frank had a new proposal, he should put it on the table to see if they could make some progress. Frank replied that he was not going to present his proposal unless the Union modified its position. Sturm replied that he could do the same thing--come in with a two-inch thick set of proposals--but he had not. He said he came in with minimal proposals and that he wanted to discuss the real issues, the four or five original proposals. Sturm said that to present proposals in this posture would require him to bargain against himself. The session closed with discussions about welfare fund payments; Frank agreed that the Respondent would pay at the current rates.

L. Withdrawal of Some Proposals

By letter dated May 29, the Respondent withdrew its proposals to eliminate its responsibility for unpaid dues; to amend the no strike clause; to delete the requirement that the Respondent pay the wages of the grievant and one witness at arbitration; to eliminate the Employer’s duty to strive to provide 16 hours off between shifts; to pay straight time, rather than time and a half, for holiday work; and to eliminate time off to vote. By letter dated July 23, the Respondent additionally withdrew proposals to eliminate the employee’s birthday as a holiday; to eliminate the provision requiring vacancies to be listed with the state employment bureau; and to eliminate the agreement to negotiate over any provision changed by government decree. [14]

M. Alleged Threat to Strikers

The judge credited evidence that on July 18 Henry Nelkin recklessly drove a pickup truck over a curb, passing closely to where Pedro Correa was picketing. The judge, however, failed to describe the testimony supporting this finding.

Pedro Correa testified that, when he was picketing at the Woodbury apartments on July 18, he heard a sudden noise about 11:45 a.m., saw Nelkin in a pickup truck on the grass and the sidewalk, and had to move his chair to avoid being hit. Michael Walbeck, another striker, testified that on July 18 Nelkin jumped the curb with his white Toyota pickup almost hitting the picketing employees and causing Correa to jump or fall back.

Instead of producing Nelkin, the Respondent called Lippolis who testified that he took a white Toyota pickup that Nelkin usually drives to a repair shop on July 18 at 8:30 a.m. and that the repair statement indicated the truck was picked up the following Monday, July 20. He also testified that he and Nelkin toured properties the rest of the day in his black Pathfinder. The Respondent also called John Chementi, a superintendent at Woodbury apartments. Chementi testified that Nelkin could not have jumped the curb without causing property damage and that he received no reports of and observed no property damage on July 18.

N. Seventh Session

After Sturm had a conversation with Frank in which Frank stated that he was serious about resolving their problems, the parties agreed to meet on August 11. They began that session by discussing staffing at length. Frank said that at that time they had 18 rank-and-file employees (but later said it might be as high as 21) and that was the staffing they wanted. Sturm said that the Respondent had had 27 employees and that they had been kept busy. Frank admitted there had been work for everybody. Frank said they had seven replacements and, if they resolved the problem, the Respondent would be willing to take back seven of the strikers. This would have resulted in three strikers not being immediately reinstated. At that point, Sturm offered to reduce the staffing to 21, so all the strikers could be reinstated, and said he would be willing to go to the Union for permission for such a reduction. [15] Frank said that he wanted only 18 employees.

The parties also discussed subcontracting of construction work. Sturm said that the only way he could get it approved by the Union and achieve the same result was to change the recognition clause to exclude this type of work. Frank rejected this in favor of changing the no-subcontracting clause. The parties also briefly discussed taking away free apartments for assistant superintendents. Sturm expressed concern about assistant superintendents being on call. Frank said that only the superintendents would be responsible for these emergency calls. The meeting closed because Frank had to be elsewhere.

O. Final Session

The final session was held on August 20. Sturm opened the meeting by asking for the names of the subcontractors performing construction and renovation work and the rates they paid. Sturm took the position that the work remained bargaining unit work, which entitled the Union to the information. Frank replied that he would take it up with his client.

After a break, Sturm asked Frank to tell him exactly what was important to the Respondent. Frank replied as follows: the wage freeze; subcontracting; no check-off or fund contributions, except welfare; no retroactivity; contract to be dated when signed; substitute the American Arbitration Association or the Federal Mediation and Conciliation Service for the office of contract arbitration; amend the subcontracting clause to permit major repair work; eliminate the cost of living adjustment; eliminate the increase in the meal allowance; rejection of Union’s language on paternity leave; no free apartments for assistant superintendents; rejection of the establishment of a committee to study self-insuring disability and unemployment; eliminate the perfect attendance bonus; no increase in contributions to the legal and training funds; objection to wages for the super rider (special wage premiums for and other provisions for superintendents); and negotiation of the second and third year wages.

Sturm asked Frank what the problem was with paternity-maternity leave as it was a no-cost item. Frank replied it was a new benefit and he did not want to give it. Frank testified that he said, “We don’t want to give you anything new, I mean that it is not my purpose of being here to give you more, my purpose is to give you less.” After a lengthy caucus by the union representatives, Sturm told Frank the Respondent was just wasting their time. The union representatives then left.

By letter dated September 30, the Respondent belatedly furnished the names and addresses of the replacement employees and withdrew most of its proposal on the sale or transfer of buildings and its proposed elimination of the maintenance of wage differentials. [16]

II. Discussion

A. Alleged Solicitation to Abandon the Union

We agree with the judge that the Respondent coercively interrogated employees in violation of Section 8(a)(1) of the Act when its supervisors on several occasions on February 6 solicited employees to sign a petition to oust the Union. The Respondent has not excepted to this finding. We additionally find that the supervisors’ activities constituted an unlawful solicitation of employees to abandon the Union, a classic violation of Section 8(a)(1) of the Act. See, e.g., Medo Photo Supply Corp. v. NLRB, [8 LC ¶51,176] 321 U.S. 678, 686 (1944).

Contrary to the judge, however, we find that the Respondent, through its supervisors’ activities, also violated Section 8(a)(5) and (1) of the Act by bypassing the Union in an attempt to seek to deal directly with the employees. Between the first and second bargaining sessions, the Respondent’s supervisors, in soliciting employees to abandon the Union, offered the employees a continuation of the existing terms and conditions of employment, except for pension benefits. In contrast, during the first bargaining session, the Respondent made different proposals to the Union, including a wage freeze and a reduction in staff.

Contrary to the judge’s statement in footnote 6 of his decision, we find that the holding in Schmidt-Tiago Construction Co., [1986-87 CCH NLRB ¶18,941] 286 NLRB 342, 364 (1987), is on point. It is well settled that the Act requires an employer to meet and bargain exclusively with the bargaining representative of its employees, and that an employer who bypasses the bargaining representative to make offers regarding the terms and conditions of employment directly to employees violates Section 8(a)(5) and (1) of the Act. Medo Photo Supply Corp. v. NLRB, supra at 683, 684, Allied-Signal, Inc., [1992-93 CCH NLRB ¶17,305] 307 NLRB 752 (1992). It is not necessary that the employer actually bargain with the employees. The question turns on whether the employer’s direct solicitation of employee sentiment over working conditions is likely to erode the union’s position as exclusive representative. Modern Merchandising, [1987-88 CCH NLRB ¶18,960] 284 NLRB 1377, 1379 (1987). Here the Respondent made an offer directly to employees about working terms conditioned on the employees’ abandonment of the Union. Clearly, such an attempt to deal with the employees was intended to undermine the Union as the employees’ exclusive bargaining representative. Accordingly, we find that the Respondent unlawfully sought to bypass the Union in violation of Section 8(a)(5) and (1) of the Act.

B. Alleged Unfair Labor Practice Strike

We disagree with the judge’s finding that it is unnecessary to decide whether the strike is an unfair labor practice strike or an economic strike. [17] Although the judge recognized that employee witnesses uniformly testified that they decided to strike in protest of the Respondent’s February 6 unfair labor practices (sec. A, above), the judge stated that this could be a pretext seized on to “convert” an economic strike to an unfair labor practice strike. The judge also relied on the Respondent’s statements that the workers hired to replace the strikers were only temporary replacements and that strikers would be reinstated on request.

Contrary to the judge, we find it necessary to decide whether the strike is an economic or unfair labor practice strike because under Board precedent unfair labor practice strikers are entitled to special remedial provisions, even if there is no allegation regarding denial of reinstatement. Lucky 7 Limousine, [1993-94 CCH NLRB ¶15,108] 312 NLRB 770 (1993); Beaird Industries, [1992-93 CCH NLRB ¶17,917] 311 NLRB 768 (1993). Moreover, the Respondent’s statement that the replacements it has hired are temporary replacements would not itself preclude the Respondent from subsequently hiring those or other workers as permanent replacements.

The judge’s use of the term “convert” suggests that the judge has mistakenly applied the standard for determining whether an economic strike has converted to an unfair labor practice strike rather than the standard for determining whether a strike has been an unfair labor practice strike from its inception. An economic strike will be found to have converted to an unfair labor practice strike if it has been shown that the employer’s unfair labor practices have prolonged the strike. C-Line Express, [1988-89 CCH NLRB ¶15,337] 292 NLRB 638 (1989). In contrast, a strike will be found to be an unfair labor practice strike from its inception if the employer’s unlawful conduct has played a part in the decision to strike. C & E Stores, [1975-76 CCH NLRB ¶16,564] 221 NLRB 1321, 1322 (1976); Larand Leisurelies, Inc., [1994 CCH NLRB ¶26,902] 213 NLRB 197, 198 (1974). A strike may be an unfair labor practice strike even though it also has economic objectives. NLRB v. Fitzgerald Mills Corp., [46 LC ¶18,025] 313 F.2d 260, 269 (2d Cir. 1963), cert. denied [48 LC ¶18,528] 375 U.S. 834 (1963).

In this case it is evident that the Respondent’s February 6 unfair labor practices played a part in the employees’ decision to strike. Throughout that month the Union’s business agent, James Edwards, kept all unit employees informed of the negotiations. When he spoke to the employees prior to the strike, he explained that, if there was a strike, it would be for the Respondent’s attempt to break the Union on February 6. He also explained to the employees that, in an unfair labor practice strike, their jobs would be protected, and they would have the option of returning to work, but that, if it were an economic strike, they would not have the same protections. Employees confirmed they were aware of the February 6 unfair labor practices prior to striking. Furthermore, the strikers’ picket signs and leaflets were consistent with an unfair labor practice strike.

For the foregoing reasons, we find that the employees went on strike in part because of the Respondent’s unlawful conduct on February 6 and that the strike was an unfair labor practice strike from its inception. Accordingly, we shall enter an appropriate remedial order to protect the strikers’ prospective reinstatement rights.

C. Alleged Unilateral Changes

At the outset of the fourth bargaining session the Respondent submitted its list of 43 proposals. The fourth proposal stated that the Respondent would not contribute to any benefit funds until a contract was signed. In accord with that announcement, the Respondent ceased contributions to the funds for all employees, including those who never struck and those who later returned from the strike. [18]

The judge found that the Respondent unilaterally ceased to make contributions to the welfare, pension, and annuity funds on behalf of those employees who returned from the strike, and unilaterally ceased to make contributions to the pension and annuity funds on behalf of those employees who never struck, in violation of Section 8(a)(5) and (1) of the Act. No party has filed exceptions to these findings; accordingly, we shall adopt them.

D. Alleged Refusal to Furnish Financial Information

We agree with the judge that the Respondent unlawfully refused to furnish the Union with requested financial information, but only in regard to the second and third bargaining sessions. In support of the Respondent’s bargaining proposals, the Respondent’s spokesman, Lippolis, claimed an inability to pay. As found by the judge, Lippolis first made the claim at the second bargaining session. The Union’s chief negotiator, Sturm, asked to see the Respondent’s books but, according to his testimony, he did not push the issue. At the third session, Sturm asked why the Respondent was asking for givebacks when in the past it had signed the pattern agreement. Lippolis said because they could not afford it. Sturm again asked to see the Respondent’s books, specifically requesting the receipts and expense journals for the past 6 months. According to Sturm, Lippolis responded, “I’ll show you mine, if you show me yours.” Sturm said he was not the one claiming poverty. Lippolis said he had to get permission. Sturm explained that, if he was claiming poverty, the law required him to produce the books. Lippolis replied that he would let Sturm know the following Monday, February 24. The Respondent did not answer on that date and never produced the books.

We agree with the judge that the Respondent asserted an inability to pay and was therefore obligated to show its books to the Union. IN NLRB v. Truitt Mfg. Co., [30 LC ¶69,932] 351 U.S. 149, 152-153 (1956), the court stated, “If such an argument [an inability to pay] is important enough to present in the give and take of bargaining, it is important enough to require some sort of proof of its accuracy.” See also the Board’s discussion in Nielsen Lithographing Co., [1991-92 CCH NLRB ¶16,992] 305 NLRB 697 (1991), affd. sub nom. Graphic Communications Local 508 v. NLRB, [123 LC ¶10,433] 977 F.2d 1169 (7th Cir. 1992). [19] Accordingly, we agree with the judge that the Respondent violated Section 8(a)(5) and (1) of the Act by refusing to furnish financial information to the Union after claiming an inability to pay. [20]

We disagree with the judge, however, that the Respondent’s subsequent withdrawal of the claim of inability to pay was not a “retraction” sufficient to obviate the Respondent’s obligation to furnish the financial information. [21]

In this regard, at the fourth bargaining session, held on February 27, the Respondent’s new negotiator, Frank, submitted a list of 43 proposed items. The first sentence of the first item stated, “The Company does not claim inability to pay” (emphasis in original). Although Frank continued to claim that the economy was poor, the rent rolls were down, and the profits were less than they had been, the Union acceded to the Respondent’s claim that it was no longer pleading poverty. As the Union’s negotiator, Sturm, testified, it was “obvious” to the Union that the Respondent was no longer claiming poverty. In light of the Union’s admission that the Respondent was no longer claiming the inability to pay, we find that the Respondent’s withdrawal of its claim was effective and that, accordingly, its obligation to provide information requested in response to its claim of inability to pay ceased. [22]

Accordingly, we find that, as of the February 27 withdrawal of its claimed inability to pay, the Respondent was no longer under any obligation to show its books to the Union. In these circumstances, we shall order the Respondent to cease and desist from any refusal to furnish financial information when claiming an inability to pay, but shall not enter an affirmative order that the Respondent now furnish that information. Because, however, the Respondent’s earlier refusal violated the Act, the refusal is one factor to be considered in deciding whether the Respondent engaged in overall bad-faith bargaining.

E. Alleged Refusal to Furnish Information About Replacements

During the April 15 bargaining session the Union asked the Respondent for a list of names and addresses of striker replacements. The Respondent refused and did not furnish the information until its September 30 letter to the Union. The judge found, and we agree, that the Respondent violated Section 8(a)(5) and (1) of the Act by failing timely to furnish the information. The Respondent has not excepted to this finding.

F. Alleged Threat to Strikers

The judge credited evidence that, on July 18, Henry Nelkin recklessly drove a pickup truck over a curb, passing closely to where Pedro Correa was picketing. We agree with the judge’s finding that Nelkin did so with an intent to threaten a striker in violation of Section 8(a)(1) of the Act. [23] In face of the direct and credited testimony of strikers Correa and Walbeck, we find the Respondent’s witnesses’ circumstantial evidence is unpersuasive. In addition, we draw an adverse inference from the Respondent’s failure to call Nelkin (or to explain the failure) and infer that Nelkin’s testimony would have supported that of the strikers, See, e.g., International Automated Machines, [1987-88 CCH NLRB ¶19,076] 285 NLRB 1122 (1987). Accordingly, we affirm the judge’s 8(a)(1) finding.

G. Alleged Surface Bargaining

The judge dismissed the complaint allegation that the Respondent engaged in bad-faith bargaining with no intention of reaching an agreement. We reverse. Section 8(d) of the Act requires “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 ... but such obligation does not compel either party to agree to a proposal or require the making of a concession.” In deciding whether an employer has engaged in surface or bad-faith bargaining, the Board examines the totality of the employer’s conduct, both at and away from the bargaining table. Overnite Transportation Co., [1989-90 CCH NLRB ¶15,749] 296 NLRB 669, 671 (1989), enfd. [119 LC ¶10,872] 938 F.2d 815 (7th Cir. 1991). Good-faith bargaining “pre-supposes a desire to reach ultimate agreement, to enter into a collective bargaining contract.” NLRB v. Insurance Agents’ Union, [39 LC ¶66,239] 361 U.S. 477, 485 (1960). If the employer’s overall conduct is designed to frustrate this goal, the Board will find that the employer has engaged in surface bargaining. For the following reasons, we find that the totality of the Respondent’s conduct evinced an intent to avoid its obligation to bargain in good faith with the Union.

1. Almost at the outset of negotiations, the Respondent, on February 6, attempted to bypass the Union by offering the employees a continuation of existing terms and conditions of employment (except pensions) if they abandoned the Union. In doing so, the Respondent not only engaged in one of the indicia of bad faith listed in Atlanta Hilton & Tower, [1984-85 CCH NLRB ¶16,703] 271 NLRB 1600, 1603 (1984), [24] but did so in a direct attempt to get rid of the Union. Such activity at the outset of negotiations is the antithesis of good-faith bargaining. [25]

2. Despite the Respondent’s blatant attempt to get rid of the Union, the parties continued to meet and bargain. The Respondent’s original five proposals were further defined and narrowed. During the second and third session, the Respondent stated that its subcontracting concerns were limited to renovation and construction work and assured the Union it would not contract out unit work. It also expressed a willingness to agree to the proposed pattern agreement as a whole if its five proposals were added as a rider.

Although some progress was made during the second and third sessions, substantial time was devoted to the Respondent’s claim of inability to pay and its refusal to permit the Union to examine its financial records. After the Union demanded to see the Respondent’s books, the Respondent at the fourth session withdrew its claim of poverty, effectively conceding that the claim had been falsely made. We have found that the Respondent’s refusal to timely furnish the financial information while claiming poverty violated the Act. We also find it is a factor indicative of bad-faith bargaining. “Good-faith bargaining necessarily requires that claims made by either bargainer should be honest claims.” NLRB v. Truitt Mfg. Co., 351 U.S. 149, 152 (1956). The making of false claims does not serve any legitimate purpose, but instead serves to impede progress at the bargaining table.

3. At the beginning of the fourth bargaining session, the Respondent submitted its list of 43 proposals, substantially changing the issues on the bargaining table. Although the Board does not evaluate whether particular proposals are acceptable or unacceptable, the Board will “examine proposals when appropriate and consider whether, on the basis of objective factors, a demand is clearly designed to frustrate agreement on a collective-bargaining contract.” Reichhold Chemicals, [1987-88 CCH NLRB ¶19,308] 288 NLRB 69 (1988). We so find in this case.

a. First, the list contains an announcement of an intent to take an action that would violate the Act. Item 4 on the list stated that the Respondent would not make contributions to the benefit funds “until a contract is agreed to,” a plan the Respondent immediately put into effect. By its own terms, the item was not a contract proposal; rather, it indicated that the cessation in contributions would end when an agreement was reached. As found above, the implementation was a unilateral change in violation of Section 8(a)(5) and (1) of the Act. Such a unilateral change in a mandatory subject of bargaining is one of the indicia of surface bargaining listed in Atlanta Hilton & Tower, supra, 271 NLRB at 1603.

Although employers and unions are permitted a wide latitude in their choices of bargaining tactics, an announced intention to violate the Act goes beyond permissible tactics. Compare NLRB v. Insurance Agents’ Union, supra, 361 U.S. 477, in which the Supreme Court, in finding that a union’s engaging in a slowdown was not an impermissible economic tactic, drew the distinction between lawful but unprotected activity and unlawful activity.

In addition, in NLRB v. Katz, [45 LC ¶17,625] 369 U.S. 736 (1962), the court was careful to note that the availability of economic weaponry under Insurance Agents is subject to one crucial qualification--the party utilizing it must at the same time be engaged in lawful bargaining. Thus, while recalling that in Insurance Agents it found that the Board may not decide the legitimacy of economic pressure tactics “in support of genuine negotiations,” Katz made clear that the Board “is authorized to order the cessation of behavior which is in effect a refusal to negotiate.” 369 U.S. at 747. In sum, although the Respondent’s ultimatum was ostensibly aimed at impelling the Union’s acceptance of the Respondent’s contract proposals, this threatened termination of a benefit in the midst of negotiations was not a lawful, good-faith measure to bring the parties into agreement.

b. Second, the list of 43 proposals was a sudden, unexplained, and major departure from the Respondent’s previous position. Although some of the 43 items related to the previous five proposals, most were new proposals asking for substantially greater concessions.

As stated above, the Board does not evaluate the acceptability of particular proposals, but we will examine proposals to determine, on an objective basis, whether they are designed to frustrate reaching an agreement. Similarly, while a party is normally free to change its negotiating position in response to a change in bargaining strength, [26] we will also examine changes in bargaining position to determine if they are designed to impede agreement. In this case, it is clear that the Respondent’s 43 proposals, when viewed in the totality of the circumstances, constitute merely another tactic to frustrate reaching an agreement.

The Respondent made the 43 proposals only 2 days into the strike, when it had not hired any replacements and when no strikers had returned to work. Thus, the Respondent had insufficient time to evaluate in any rational way the strike’s impact or effectiveness, and there is no rational basis for finding a shift in strength to justify the Respondent’s change in position between the third bargaining session on February 20 and the fourth session on February 27. Compare Hendrick Mfg., supra, in which the employer toughened its bargaining position but did so only after it had weathered a strike for several months and learned that it was able to operate with fewer personnel at lower wage rates.

In addition, the Respondent’s negotiator, Frank, testified that he “had to go back and make up additional proposals, which I hoped later on I could trade off to some concessions by the union.” This constitutes the sole record justification for proposing such dramatic changes in the Respondent’s bargaining position.

We are fully aware that making proposals to be bargained away is a common bargaining tactic. Here, however, in the ensuing negotiations, Sturm called Frank’s bluff by repeatedly requesting Frank to state what the Respondent really wanted. In response, Frank resisted the requests, kept most of the list on the table, and demanded that the Union first make concessions. In the face of Sturm’s repeated requests to discuss the real issues, the Respondent’s continued insistence on most of the items, which were designed to be bargained away, is not indicative of the advancement of a “sincerely held” position, but indicates that the Respondent’s true, but unstated, intent was to create road-blocks to prevent reaching an agreement.

c. In concluding that the Respondent did not engage in bad-faith bargaining, the judge found that the Union “made absolutely no concessions of its own” and that the Union’s position “from the first to the last day” was that the Respondent should sign the pattern agreement. The judge also found that, although the Respondent “made regressive proposals,” the failure to reach agreement was not caused by the Respondent because “the Union’s representative entered these negotiations with, if not a closed mind, a mind that was not particularly open.” We find that the judge’s statements about the parties’ negotiating stances mischaracterized the evidence.

The Union’s spokesman, Sturm, repeatedly tried to get the Respondent to discuss the real issues. Whenever the core (original five) issues were discussed, the Union engaged in meaningful negotiations. For example, the parties at several sessions discussed subcontracting, one of the Respondent’s original proposals. At the February 10 session Lippolis assured Sturm that the Respondent did not intend to contract out unit work. At the April 15 session, Frank gave a similar assurance, at first. After conferring with Nelkin, however, Frank told Sturm that the Respondent wanted to preserve its option of unrestricted contracting out. Frank did not explain why, even though the Respondent’s only stated concern was to subcontract renovation and construction work. At the August 11 session, Sturm offered to change the recognition clause to exclude construction work, explaining that he thought this was the only way to obtain the Union’s approval. Frank replied he wanted to change the no subcontracting clause. The Respondent’s lack of clarity and vacillation on subcontracting contrasts with Sturm’s search for a solution.

The parties at times also discussed staffing levels. During the first three sessions, the Respondent stated it wanted a reduction to 24 employees. Later it said it wanted only 18. At the August 11 sessions, Sturm offered to reduce staffing to 21 from the prestrike level of 27 employees. [27] Sturm said he was willing to go to the Union for approval of such a reduction. Frank insisted on only 18 employees. Contrary to the judge, we find that Sturm’s proposal to reduce staffing by nearly 23 percent was a substantial concession.

At the August 11 session, the parties also briefly discussed eliminating free apartments for assistant superintendents. In reply to Sturm’s questions, Frank stated that only superintendents would be responsible for emergency calls. Sturm did not reject the proposal. Thus, progress appeared to be made on this issue as well. The evidence shows that, far from a rigid insistence on the pattern agreement, the Union was willing to discuss the issues, to seek solutions, and to make concessions.

4. Although the Respondent’s representatives appeared regularly at the bargaining table and made efforts to bring the Union to the bargaining table, we are persuaded by the totality of the evidence that the Respondent was not negotiating in good faith with a view to trying to reach a collective-bargaining agreement. Thus, the Respondent, at the outset of negotiations, sought to undermine the Union by bypassing the Union and attempting to deal directly with the employees and to persuade the employees to abandon the Union. When that tactic failed, the Respondent deceptively plead poverty during the second and third sessions. When the Union demanded to see its books, the Respondent abandoned that tactic. Instead, the Respondent pursued a different tactic; it submitted its list of 43 proposals demanding substantial additional concessions by the Union. That tactic included the announcements and the implementation of the unilateral and unlawful cessation of benefit fund contributions to nonstriking employees. Although the Respondent designed the proposals to be bargained away for concessions by the Union, the Respondent misleadingly continued to insist on most of the proposals even though the Union repeatedly attempted to get the Respondent to negotiate about the real issues.

In view of the evidence that the Union was willing to discuss the issues, to seek solutions, and to make meaningful concessions, we can only conclude that the Respondent’s overall strategy was to avoid reaching an agreement. Accordingly, we find that the Respondent has engaged in surface bargaining in violation of Section 8(a)(5) and (1) of the Act.

H. Other Issues

In footnote 5 of his decision, the judge referred to testimony by the Respondent’s negotiator, Frank, that the parties never got beyond the issues that led to impasse on August 20. In the antepenultimate sentence of his remedy discussion, the judge found that the parties were at impasse. We expressly disavow any finding or implication that the parties were at impasse. The matter was not raised by the parties or litigated at the hearing. In addition, in light of our finding that the Respondent engaged in bad-faith bargaining, there can be no impasse. United Contractors, [1979-80 CCH NLRB ¶16,120] 244 NLRB 72 (1979), enfd 631 F.2d 735 (7th Cir. 1980).