NLRB Cases Archive 1960 - 1995, LABOR-RELATIONS 1993-94 CCH-NLRB ¶15,484, THE DETROIT EDISON COMPANY and LOCAL UNION NO. 223, UTILITY WORKERS OF AMERICA, AFL-CIO., (Sep. 26, 1994), National Labor Relations Board, (Sep 26, 1994)

THE DETROIT EDISON COMPANY and LOCAL UNION NO. 223, UTILITY WORKERS OF AMERICA, AFL-CIO.

314 NLRB No. 207.Case No. 7-CA-31623. September 26, 1994 John H. West, Administrative Law Judge..

Before Gould, Stephens and Devaney.

Richard Whiteman, Detroit, Michigan, for General Counsel. Alex J. McLeod, Detroit, Michigan, for Respondent. John Breen, Detroit, Michigan, for Charging Party.

Union Right to Information--Relevancy to Bargaining--Outside Contractors’ Cost.--An employer did not violate its bargaining duty by failing to furnish a union with requested information that dealt with the employer’s cost of hiring outside contractors to perform certain job-related functions. Although it expressed concern for a potential threat to its members’ employment security due to subcontracting, the union conceded that it had no basis for even suspecting that the employer was in breach of its various bargaining contract agreements that related to subcontracting. Therefore, the information requested was not relevant to the union’s duty to protect its members’ bargaining unit interests. Section 8(a)(5).

Back reference: ¶3135.211.

From Text of Board’s Decision

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, [1] and conclusions only to the extent consistent with this Decision and Order.

The sole issue in this case is whether the Respondent violated Section 8 (a)(5) and (1) of the Act by refusing to provide specified information requested by the Union dealing with the cost of the Respondent’s use of outside contractors. The judge found that the Respondent violated the Act and ordered it to promptly furnish the information. For reasons described below, we disagree with the judge and dismiss the complaint in its entirety.

Background

The following facts, more fully described in the judge’s decision, are not substantially in dispute. The Respondent and the Union have had collective-bargaining agreements since the 1940’s. Article VIII, section 5 of the relevant collective-bargaining agreement [2] reads:

Section 5. Outside contractors.

a. If Management proposes to contract work which is regularly and customarily done by the employees in a bargaining unit, and such contracting appears to threaten their security of employment, the chairman or chief steward of the division will be given prior notice thereof.

b. Work will not be contracted out for the purpose of laying off or reducing in classification employees who regularly and customarily do such work. (Reference: Letter by William G. Meese dated June 19, 1969.) [3]

Over the years, the Union has sought by various means to limit the Respondent’s contractual use of outside contractors, including by the filing of grievances. In 1988 the parties entered into a settlement agreement which provided that the Respondent would give quarterly reports to the Union on all agreements with outside contractors that exceeded more than $1000. The Respondent began providing these reports in the third quarter of 1988.

During the 1989 contract negotiations, the Union and the Respondent entered into two side-bar agreements covering outside contractors. One agreement created a joint union-management committee to meet on a semiannual basis to review the use of outside contractors. The other provided, inter alia, that the Respondent “will maintain employment levels in Local 223 represented jobs at no less than a total of 3,000 employees for the period beginning June 5, 1989 and expiring on May 31, 1992.”

The joint committee met three times before the request for information here was made. [4] According to the minutes of these meetings, management pointed out at the first meeting that requesting information as an extension of contract negotiations is different from requesting information as a subcommittee. Management also indicated its concern that information provided in response to numerous requests had never been used by the Union and asked why the Union wanted the information and how it would be used. A union representative stated at that same first meeting that the Union did not ask for information until management claimed that union members were too expensive to use and also expressed concern about management’s bookkeeping practices. The parties continued, at subsequent meetings, to discuss the need to know the true costs of using outside contractors.

In late December 1990, the Union forwarded a letter, dated December 13, 1990, to the Respondent requesting the information at issue. In essence, the Union’s letter, noting remarks by the Respondent that union members were going to have to compete with outside contractors, stated that the Union needed the 19 items of information related to cost analysis, specified in the letter, in order to assess its ability to compete and to represent its members. [5]

By letter dated February 13, 1991, the Respondent denied the Union’s request. The Respondent’s reply, inter alia, cited the information on contracting that had been supplied to the Union on a timely basis since 1988, claimed that the 19 categories of information requested related to nonarbitrable nonbargaining unit activity, and stated that management had no obligation to justify its business decisions to the Union, particularly since the Union’s letter acknowledged that management had not used cost as a justification to contract.

The Judge’s Decision

In concluding that the Respondent violated the Act by failing to provide the requested information, the judge acknowledged that the information was not presumptively relevant because it related to the cost of outside contractors but nevertheless found that the Union has demonstrated that the information is of probable or potential relevance. [6] In arriving at this conclusion, he found that the Respondent itself made the cost of using outside contractors an issue, citing the Meese letter, the Respondent’s agreement to make quarterly reports in 1988, and the side-bar agreement of 1989 that established a joint committee to review the use of outside contractors.

The judge also found that the Respondent made the union members’ wages and benefits a midterm collective-bargaining agreement issue by telling union members that they had to get more competitive with outside contractors and that they could be replaced by $10-an-hour contractors. Thus, he found that the information is relevant because it relates to the preservation of unit work, citing testimony by employee John Breen, the union chairman of the substation division of the unit and a union trustee, that if the Respondent could demonstrate that the Union’s costs were higher, the Union would have to reassess its position on wages and benefits, including a possible midterm modification of the collective-bargaining agreement.

Discussion

We disagree with the judge’s ultimate conclusion, because in our view, he failed to take adequate account of admissions by Union Representative John Breen, in his testimony at the hearing. Those admissions negate the judge’s finding that the requested information was relevant to administration of the current contract, bargaining for possible contract modifications, or any other representative function.

As an initial matter, Breen essentially conceded that the contractual provisions on subcontracting--read in light of the parties’ dealings on the subject over a number of years--permitted the Respondent freely to contract out unit work subject only to the conditions stated in article VIII, section 5 of the agreement. Those were that the Respondent would not contract out unit work “for the purpose of laying off or reducing in classification” any unit employees and that if the Respondent proposed any instance of contracting out that even “appear[ed] to threaten” the unit employees’ “security of employment,” it would give “prior notice” of that proposed subcontracting to the Union. The subcontractor cost data that the Union sought had no apparent connection to either of these provisions, and Breen conceded that the Union was not in the process of formulating any “particular grievance” when it made the information request. He further conceded, under cross-examination, that even if the Union obtained data suggesting that the Respondent was paying more to its subcontractors than it would cost to keep the work in-house, the Union would have no basis for claiming a contract breach. Finally, Breen conceded that the Respondent had not breached either the 1988 agreement settling an unfair labor practice charge alleging unlawful refusal to furnish subcontracting information [7] or the 1989 side-bar agreements pertaining to the subcontracting, and he did not claim that the Union even suspected the Respondent of breaching those agreements. Thus, the cost data lacked even potential relevance to grievances over breach of any of the written agreements between the parties. [8]

Breen’s testimony is also fatal to the judge’s finding that the requested information was relevant to possible modifications of the subcontracting provisions of the collective-bargaining agreement. No midterm reopener provision was in evidence; neither party had announced any intention of asking for midterm negotiations; negotiations for a successor agreement were not due to occur soon, since the contract did not expire until 18 months later--in June 1992. It is therefore understandable why Breen conceded at the hearing that it was “correct” to say that the information request had “nothing to do with contract negotiations.” [9] In sum, the timing of the request and Breen’s testimony makes the finding of relevance on the basis of possible contract modifications insupportable. [10]

Finally, we disagree with the judge’s finding that the Respondent’s conduct in connection with the two 1989 side-bar agreements pertaining to the use of outside subcontractors effectively made the Union’s information requests relevant to “preservation of unit work.” As noted above, in 1989 the Respondent agreed to “maintain employment levels of employees in Local 223 represented jobs at no less than a total of 3000 employees” until expiration of the 1989-1992 collective-bargaining agreement, and it also agreed to establish a joint labor-management committee to review the use of outside contractors, with twice-yearly meetings for this purpose. Breen testified that, during meetings of that committee, representatives of the Respondent commented that it cost less to use outside contractors than to use unit employees and that unit employees needed to “get competitive with the contractors.” It is understandable that these remarks stimulated a desire on the part of the union representatives to attempt to prove that unit employees were “competitive,” and contractor cost data would be relevant to such an attempt. The fact remains, however, that, given the agreements on maintenance of unit employment levels and the Respondent’s acknowledged freedom to make unilateral subcontracting decisions--subject only to the contractual conditions mentioned above--the requested subcontractor cost data simply had no potential linkage to any bargaining which the Union could demand on behalf of the unit employees at or near the time of its information request. Thus, even though Breen testified that the requests were motivated by “our concern” for “the threat to our members’ employment security,” he conceded that no unit member had been laid off or reduced in classification; and he did not identify any basis for suspecting either that the Respondent might be in breach of the 3000-job-level requirement or that any unit employee might suffer a job loss.

In sum, we do not disagree with our dissenting colleague’s view that a union’s representational responsibilities go beyond the formulation of contract proposals; they also encompass, among other things, administration of the current contract and continual monitoring of any threatened incursions on the work being performed by bargaining unit members. But, as shown above, the testimony of Breen, cited by our colleague, concerning fears about reduction of unit employment through attrition and the introduction of subcontracting into “new areas” was shown to have no substance by Breen’s own admissions on cross-examination. By conceding that he had no basis for even suspecting that the Respondent might be in breach of any of the various agreements related to subcontracting--including the agreement to maintain union-represented employment at the 3000-job level--the Union’s agent essentially admitted that his alleged concerns had no objective basis beyond the management representative’s baiting about “cost-competitiveness.” The union representatives were legitimately annoyed by the implication that the employees they represented were overpaid, but a ground for annoyance does not necessarily meet the relevancy standard by which the Board judges a bargaining representative’s requests for information.

For all the foregoing reasons, we find that the Respondent did not violate Section 8(a)(5) and (1) through its refusal to furnish the requested information, and we shall dismiss the complaint in its entirety.

Accordingly, we shall dismiss the complaint in its entirety.

[Dissent]

Member Devaney, dissenting: Contrary to my colleages, I would affirm the judge’s finding that the Respondent violated Section 8(a)(5) and (1) of the Act by refusing the Union’s request for information about the costs of the Respondent’s use of outside contractors.

The Respondent’s use of outside contractors has long been a subject of controversy between the parties. The Respondent’s policy of assigning work to be performed by its own employees or to an outside contractor “on the basis of least cost” was first set forth in a 1969 letter signed by a management official. This letter was specifically cited in the parties’ collective-bargaining agreement effective June 12, 1989, through June 1, 1992. The collective-bargaining agreement also provided that the Respondent would give the Union notice prior to contracting out work if unit employees’ job security was threatened and that work would not be contracted out for the purpose of laying off employees. [11] In settlement of a charge over the Respondent’s refusal to provide information to the Union about use of outside contractors, the Respondent in 1989 agreed to provide the Union quarterly reports concerning the Respondent’s agreements with outside contractors.

In 1989 the parties established a joint committee to review the use of contractors semiannually. At committee meetings, in response to the Respondent’s objections to the Union’s information requests about outside contracting, the Union stated that it sought such information only after the Respondent claimed it was too expensive to use the Union’s members. The Union stated that it was interested in the information simply to prove that it was more economical to use unit employees than contractors.

In various employee meetings during 1989-1991, the Respondent’s supervisors stated that the employees had to get competitive with contractors; that contractors cost less; and that the Respondent would contract out its employees’ work if their productivity did not increase. In November 1990, the Respondent informed the Union that it was going to contract out the inspection of certain circuit breakers, and in February 1991 an outside contractor performed circuit breaker inspections. In July or August 1991, the Union was informed that the Respondent expected to contract out inspection of certain transformers.

In December 1990, the Union made the information request at issue here. Citing the Respondent’s statements that its employees would have to compete with outside contractors and the Respondent’s plans to have outside contractors do work that the Respondent’s employees had always performed, the Union stated its need for information had increased and broadened since the settlement agreement of the last NLRB complaint, as “cost analysis is the linchpin of the Union’s ability to compete.” The Union’s request sought information concerning the costs of having work performed by employees and by outside contractors, including indirect costs, and the way in which the Respondent calculated and allocated these costs. The letters stated that the Union’s concern was to provide the most cost effective in-house work force possible. Employee Breen, who was chairman of a substation division of the bargaining unit, testified that the Respondent’s increase in use of outside contracting had reduced the number of unit employees through attrition and that the Respondent’s contracting had moved into new areas.

I agree with the judge that the information the Union sought was relevant to the Union’s role as collective-bargaining representative. The Respondent itself had made the cost of unit employees versus outside contractors an issue. The only means for the Union to rebut the Respondent’s contentions that using outside contractors was less costly was to have the information showing actual costs. If the information showed that the cost of using unit employees was no greater than that of using outside contractors, the Union would be able to refute the Respondent’s persistent claims that unit employees were more costly than outside contractors. Given the Respondent’s statements in committee meetings that it would not use contractors if it was more economical to use its own employees, the Union’s effective demonstration that use of unit employees is less costly would affect the Respondent’s decisions regarding use of outside contractors. On the other hand, if the information showed that the unit employees’ costs were out of line, the Union could decide whether to propose contract changes, either at that time or during bargaining over a successor contract, to reduce costs associated with utilization of unit employees. Employee Breen’s statement, on which my colleagues rely, that the information requested was not related to formulation of a bargaining position, conceives of bargaining only in the narrowest sense of the term and does not dispose of the Respondent’s obligation to provide the information. Contrary to my colleagues, I do not view Breen’s statement as negating the obvious relevance of the requested information.

Moreover, my colleagues’ assertion that there was no substance to Breen’s fears about reduction of unit employment through attrition and the introduction of subcontracting into new areas is not supported in the record. In fact, the Respondent continually browbeat the Union with threats to contract out additional work and in late 1990 and early 1991 carried out its threats to contract out additional work. Although the Respondent had agreed to retain a specified minimum number of unit employees, it was still possible that there would be an attrition of unit positions above that minimum. Further, the Respondent’s agreement to maintain this minimum number of positions was not permanent but rather was to expire May 31, 1992.

The entire course of the parties’ dealings reflects an ongoing debate between the parties over whether it was more economical to have work performed by the Respondent’s own employees or by outside contractors. Both parties understood that the Respondent’s decisions as to whether to contract out unit work were largely governed by this determination. [12] In attempting to retain work for the employees that it represented, the Union had an enormous stake in this debate. I agree with the judge that the information sought was highly relevant, as it related to preservation of unit work. Accordingly, I would adopt his conclusion that the Respondent’s refusal to provide this information violated Section 8(a)(5) and (1) of the Act.