Before STALEY, HASTIE and SMITH, Circuit Judges.
STALEY, C.J.: The National Labor Relations Board has found that the Bethlehem Steel Company (Shipbuilding Division) violated §§ 8(a)(5) and (1) of the National Labor Relations Act.*fn1 The case is here on petitions for review filed by both the company and the charging union, Industrial Union of Marine and Shipbuilding Workers of America, AFL-CIO, and on the cross-petition of the Board for enforcement of its order. The employer asserts that the Board's findings are unwarranted, while the union contends that the Board should have found additional violations.
The circumstances giving rise to this proceeding occurred during the summer of 1959 when Bethlehem and the union were negotiating a new collective bargaining agreement to cover hourly-paid employees at the company's east coast shipyards.*fn2 A prior agreement, executed in 1956, had an expiration date of July 31, 1959. The union made an oral presentation of its bargaining demands on July 7, 1959. These included, among others, a proposed change in the formula for adjusting wages to the cost of living, increases in premium pay and vacation benefits, an extension of the scope of the arbitration clause, and changes which would give an increased emphasis to seniority in determining layoffs. The following day the company presented its proposed new contract (described as the White Book in the record), together with a written statement explaining its position. This detailed plan included elimination of the cost of living adjustment, a reduction in premium pay, limitations on the scope of the arbitration clause, and alterations in the grievance procedure. The latter contained a clause requiring the signature of each employee involved before a grievance could be processed. The reason assigned for this was that "under our current agreement we have been flooded with grievances." The thrust of the company's explanatory statement was that competitive conditions necessitated these proposals. Discussion of the basic wage structure was postponed pending resolution of these issues.
The parties conferred frequently during the next few weeks but there was little progress in the bargaining. The company stressed the economic cost of the union's proposals, while the latter rejected this argument on the ground that the employer was not in a competitive business to any substantial degree. On July 28, 1959, Bethlehem informed the union that if no agreement were reached by July 31 (the termination date of the 1956 contract), it would discontinue the grievance and arbitration procedure provided for in the old contract, would no longer give preferential seniority to union representatives, and would not comply with the union shop and checkoff clauses. Since no agreement was reached by August 1st, this was done.
On August 11, the company informed the union and the employees that it was putting into effect all of its White Book proposals with respect to the hourly-paid unit, except, inter alia, those relating to arbritration, preferential seniority, and the union shop and checkoff. This plan was effectuated August 13, 1959. A strike followed in January 1960, and was still in existence at the time of the hearing before the trial examiner in March of that year.
The trial examiner found that Bethlehem had violated §§ 8(a)(5) and (1) by insisting on the clause requiring the signature of individual employees on grievances. However, he concluded that none of the other acts of the company were unlawful, and further determined that the employer was not guilty of subjective bad faith in its course of conduct throughout the negotiations. The unilateral changes of August 13 were held not to constitute an unfair labor practice because the parties by this time had reached an impasse in bargaining.
Initially, the Board adopted the conclusions and recommendations of the trial examiner. 133 NLRB 1347 (1961). However, in a supplemental decision, 136 NLRB 1500 (1962), it found that the company had also violated § 8(a)(5) by depriving union representatives of their seniority rights and by unilaterally abandoning the grievance procedure of the expired contract and substituting its own procedure in lieu thereof. The Board adhered to its prior conclusion that the totality of Bethlehem's conduct did not evince bad faith bargaining.
At the threshold, Bethlehem urges that it was relieved of any obligation to bargain with the union because the latter's demands covered an inappropriate unit, i.e., one which included personnel classifiable as supervisors, and thus not within the purview of the statute. See 29 U.S.C.A. § 152(3). This challenge relates to the union's proposal that the bargaining unit include both hourly-paid and salaried "snappers." The parties had agreed in the 1956 contract that the former should be included and the latter excluded. Bethlehem now asserts that both are supervisors.
We agree, as did the Board, with the trial examiner that "this is more an apparent that a real issue in this case," and that "placement of the snappers could in no event affect any of the issues raised by the complaint." Indeed, as the examiner noted, "The Respondent also conceded that whether the snappers in question be included in the bargaining unit or excluded, in either event the Union in fact represented a majority of the employees at all times, as it does now." In these circumstances, we think the employer's position is not tenable. Brewery & Beverage Drivers Local 67 v. NLRB, 257 F.2d 194 (C.A.D.C. 1958).
Bethlehem's more fundamental contentions are that its grievance-signatory plan, and its discontinuance of preferential seniority for union officials and abandonment of the grievance and arbitration machinery at the expiration of the 1956 agreement did not violate the statute.
With respect to the grievance-signatory plan, the company advances two arguments: (1) there is no evidence that this was made a condition of reaching agreement; and (2) the proposal is a mandatory subject of bargaining. The record and the findings of the trial examiner make it abundantly clear that Bethlehem vigorously insisted that the substance of this proposal be incorporated in any new labor contract. But the employer urges that at no time did it state that this was a sine qua non of agreement. It says that since, as hereinafter more fully discussed, the Board found that there was an impasse on all disputed matters, it could not have concluded that insistence on this particular clause barred an accord.
The argument does not withstand analysis. It was not necessary for the Board to find that the company's insistence on this proposal was the sole cause of the failure to reach agreement. If the proposal is not a mandatory bargaining subject, insistence upon it was a per se violation of the duty to bargain. NLRB v. Wooster Division of Borg-Warner Corp ., 356 U.S. 342 (1958); NLRB v. Davison, - F.2d - (C.A. 4, May 28, 1963).Any other rule would permit insistence upon a non-mandatory item so long as there were any disputes as to mandatory topics. As the Supreme Court held in Borg-Warner, supra at 349:
"We agree with the Board that such conduct insistence on a non-mandatory topic is, in substance, a refusal to bargain about the subjects that are within the scope of mandatory bargaining."
We turn now to the second aspect of the employer's argument on this point, i.e., the proposal is a mandatory bargaining subject. In accordance with § 8(d) of the Act,*fn3 the Supreme Court has defined mandatory subjects as those within the phrase "wages, hours, and other terms and conditions of employment." NLRB v. Katz, 369 U.S. 736 (1962); NLRB v. Wooster Division of Borg-Warner Corp., supra . It is clear to us that Bethlehem's proposal does not come within the scope of that phrase. Although at first glance it might appear to be a "condition of employment," actually the effect ...