UNITED STATES COURT OF APPEALS

Tenth Circuit

Byron White United States Courthouse

1823 Stout Street

Denver, Colorado 80294

(303) 844-3157

Patrick J. Fisher, Jr. Elisabeth A. Shumaker

Clerk Chief Deputy Clerk

August 6, 1996

TO: ALL RECIPIENTS OF THE CAPTIONED OPINION

RE: 95-9526 Capitol Steel v. NLRB

 July 10, 1996 by The Honorable Carlos F. Lucero

Please be advised of the following correction to the captioned decision:

On pages seven and nine, The National Labor Relations Board was incorrectly

identified.

Enclosed please find a corrected opinion.

Very truly yours,

Patrick Fisher, Clerk

Beth Morris

Deputy Clerk

encl.
PUBLISH

UNITED STATES COURT OF APPEALS

Filed 7/10/96

TENTH CIRCUIT

CAPITOL STEEL AND IRON

COMPANY,

Petitioner,

v.

NATIONAL LABOR RELATIONS

BOARD,

Respondent.

No. 95-9526

PETITION FOR REVIEW OF AN ORDER OF

THE NATIONAL LABOR RELATIONS BOARD

(Board Case Nos. 17-CA-17584 & 17-CA-17721)

Charles W. Ellis (W. Davidson Pardue with him on the briefs) of Lawrence & Ellis, P.A.,

Oklahoma City, Oklahoma, for Petitioner.

Meredith L. Jason (Linda Dreeben with her on the brief) of National Labor Relations

Board, Washington, D.C., for the Respondent.

Before PORFILIO, BARRETT and LUCERO, Circuit Judges.

LUCERO, Circuit Judge.

We are asked to resolve the following question: If a collective bargaining

agreement contains a provision permitting an employer to grant wage increases to any of
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its employees in any amount, is the employer shielded from unfair labor practice charges

based on the grant of such increases, regardless of the timing and manner in which it

bestows them? In the case before us, the National Labor Relations Board (“Board”) held

that although Capitol Steel & Iron Company (“Capitol” or “Company”) had a contractual

right to grant raises without bargaining, it unilaterally granted raises to certain employees

in the midst of the collective bargaining process in such a manner as to violate § 8(a)(1)

and § 8(a)(5) of the National Labor Relations Act. 29 U.S.C. §§ 158(a)(1), (5). 

Exercising jurisdiction under §§ 10 (e) and (f) of the NLRA, 29 U.S.C. §§ 160 (e), (f), we

grant enforcement of the Board’s order.

I

Shopmen’s Local Union No. 620 of the International Association of Bridge,

Structural and Ornamental Iron Workers, AFL-CIO (“Union”) represents Capitol’s

employees. Capitol and the Union agreed to a collective bargaining agreement

(“Agreement”) for the period from September 1, 1993, to August 31, 1994. The

Agreement contained a provision permitting the Company to “pay wages in excess of the

minimum requirements . . . to one or more employees in different amounts to different

employees.” Capitol Steel & Iron Co., 317 N.L.R.B. 809, 810 (1995). The present

dispute arose while the Agreement was in effect, and concerned the wage increase

provision.
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On August 1, 1994, the Company and the Union began to negotiate a new

agreement. Among other proposals, the Union suggested a $1 per hour raise for all

employees. It also sought participation in the International Union’s pension plan. An

officer of the company requested a copy of the “form 5500,” containing information

about the pension fund, and the Union agreed to furnish this information at the next

meeting. The Company agreed to consider the Union’s proposals, and the parties ended

negotiations without setting a date for their next meeting, in light of a pending

decertification election. The Union won that election on August 4, 1994.

The two sides did not meet again until August 30, the penultimate day of the 1993-

1994 Agreement. The Union presented a revised proposal which included an across-theboard wage increase and different minimum wages for different job categories. The

Company rejected the proposed increase and appeared unwilling to negotiate on the

subject. The Company president, John Nesom, took the floor to explain that the

Company had been faring very poorly, so much so that he and his wife had been forced to

invest their own assets in the Company. He stated that the previous year had been

particularly bad. However, Nesom then promised to pass on profits to the employees

when it was possible to do so, and -- in a reversal of his position -- stated that the

Company had been evaluating its situation for the last five months and had decided to

give raises to some employees. Nesom later testified that these raises were given to
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reward employee performance, and to convince the employees “to be on our side” as they

went to the Union meeting to vote on the Company’s proposal. Id. at 811. 

Negotiations went on with some progress on other terms, and continued the

following morning, August 31. At that point, the Union provided the Form 5500 which

the Company had requested. After talks continued for some time, a union official asked

the Company who had gotten raises, how much each had received, and why and when

they had received the increases. Nesom declined to give particulars, merely stating that

two men in the room had received raises; all of the recipients would find out as of their

next paychecks (which were to be distributed on September 9); and the raises were given

out based on the criteria of attitude, attendance and skill.

At the end of the day’s meeting, Nesom asked whether and where the Union

planned to meet to discuss the management’s last proposal. A union official told him the

name of the restaurant where the meeting was to take place, and asked if the Union had

received the Company’s “last best and final offer.” Nesom replied that they had. 

Just after negotiations adjourned, as employees were leaving the plant to go to the

Union meeting, Nesom and Larry Ozment, vice president in charge of production, handed

some of them notices that they had received raises. At the meeting these employees

questioned whether the Union had negotiated the raises and expressed concern that they

would be withdrawn if they voted to reject Capitol’s proposal. David Turnbull, the

International Union’s district representative, replied that the Union had been generally
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informed about the raises but had not agreed to them or retracted its own across-the-board

wage increase proposal. At a certain point, Ozment briefly entered the meeting room and

passed out two more raise notices to two employee members of the Union negotiating

committee. Because the papers were passed from hand to hand en route to their

recipients, others could see their contents.

Later during the same Union meeting, the employees voted to reject the

Company’s latest offer. Turnbull passed this information on to the Company. Spurred by

the appearance of a company representative at the Union meeting, by the Company’s

apparent attempt to influence voting by its distribution of raises just before and during the

meeting, and by its failure to supply specific information on the raises, the group voted to

strike.

That evening, Nesom and Richard Fenner, executive vice president of Capitol,

called each of the employees with the following message:

We have been advised by the Union that Union members have voted

to strike instead of accepting the Company’s contract offer.

We anticipate that a picket line will be placed on the Agnew entrance

to the plant tomorrow morning.

We want you to know you have a right to cross the picket line to

come to work. No one can legally prevent you from doing this if you

choose to.

However, if you decide to not report for work, the Company does

plan to replace any employee who does not clock-in and your job may be

permanently filled by a replacement hired in your absence.

We hope you will choose to come to work. The Company needs you

and your support.
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Capitol Steel, 317 N.L.R.B. at 811-12. When the employees arrived at the Company the

following morning, September 1, Nesom handed them papers bearing the same message.

The Union filed unfair labor practice charges on September 2, charging the

company with violations of §§ 8(a)(1), (3) and (5). The Company continued to refuse to

bargain on wages as the strike wore on. In a letter dated September 15, 1994 and

received the following day, Capitol finally revealed the names of those receiving wages

and the amount of each increase.

The Company rejected two offers to return to work. On September 25, Felipe

Olivas called Ozment and asked to return. Ozment told Olivas that his position had been

filled. On September 27, upon discovering that the NLRB was planning to act on the

unfair labor practice charges, the rest of the employees voted to end their strike. 

However, when Turnbull relayed their offer to return, the Company refused to respond

via a Union intermediary, and ultimately stated that all of the workers’ jobs had been

filled. Meanwhile, one employee had offered to return to work on his own and had been

accepted back.

On October 7, Ozment called employee Ollie Clay and offered him a job. 

Reluctant to return before others with greater seniority than himself, Clay consulted

Turnbull and ultimately decided not to return before those other employees. Turnbull

expressed this to Fenner, and requested that the two sides meet to bargain about the order

of reinstatement. Negotiations about whether the two sides could bargain on this topic
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continued over a number of days, but none of the employees were given back their

positions. The Union eventually amended its unfair labor practice charges to include

charges of failing and refusing to reinstate unfair labor practice strikers upon their

unconditional offers to return to work.

An administrative law judge tried this case in Oklahoma City on January 24, 1995. 

He concluded that: (1) Capitol’s unilateral grant of wage increases, while the Company

refused to negotiate over wage increases, and its failure to timely provide information

about the increases, were unfair labor practices in violation of §§ 8(a)(5) and (1) of the

NLRA; (2) the strike, because it was caused and prolonged by these unfair labor

practices, was an unfair labor practice strike; (3) the Company’s solicitations and threats

to striking workers violated § 8(a)(1); and (4) the Company’s failure to reinstate unfair

labor practice strikers to their jobs immediately following their unconditional offers to

return violated §§ 8(a)(3) and (1). The ALJ recommended that Capitol be ordered to

cease and desist from these unfair labor practices and immediately reinstate the strikers

with backpay. The Company timely filed exceptions to the ALJ’s decision.

The Board affirmed the ALJ’s rulings, findings and conclusions of law and

adopted his recommended order. The Company’s petition for review and the Board’s

cross-application for enforcement followed.
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II
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We first review the Board’s determination that the manner in which the Company

gave wage increases and its failure to provide information on those increases were unfair

labor practices. We grant enforcement if the NLRB correctly interpreted and applied the

law, and if its findings were supported by substantial evidence in the record, considered in

its entirety. Presbyterian/St. Luke’s Medical Center v. NLRB, 723 F.2d 1468, 1471 (10th

Cir. 1983).

A

With respect to the wage increases, Capitol argues that the wage increase provision

in the Agreement gave it the absolute right to increase or decrease any employees’ wages

whenever and however it chose, if those wages remained above the prescribed minimum

of $ 5.50 per hour. It asserts that the exercise of a valid contractual right cannot be the

basis for an unfair labor practice finding. The cases upon which the Company relies for

this premise, however, are not dispositive because they fail to address specifically the

present context: the exercise of an otherwise valid right in a manner designed to

undermine the Union. See NLRB v. United States Postal Service, 8 F.3d 832 (D.C. Cir.

1993) (upholding postal service’s exercise of contractual right to reduce employees’ hours

in response to budget reduction); Ace Beverage Company, 253 N.L.R.B. 951 (1980)

(rejecting union’s attempt to recover vacation benefits for strikers, because employer had

contractual right to refuse to count strike time toward vacaction eligibility); Roeglein

Provision Company, 181 N.L.R.B. 578 (1970) (same). In none of these cases did the
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Board find anti-union motivation in the employer’s exercise of the right at issue, as it did

here. Capitol Steel, 317 N.L.R.B. at 813.

For its part, the Board asserts that by granting a wage increase in a manner

designed to undermine the Union’s status as the employees’ exclusive bargaining

representative, the Company failed to carry out its obligation to bargain in good faith. 

However, like the Company, the Board fails to offer apposite authority. None of the

cases the Board cites to demonstrate the illegality of undermining a union’s status involve

conduct in which the employer claims it is contractually entitled to engage. See Medo

Photo Supply Corp. v. NLRB, 321 U.S. 678 (1944) (no claim that challenged practices

were permitted by existing contract); Szabo v. U.S. Marine Corp., 819 F.2d 714 (7th Cir.

1987) (same); Hedstrom Co. v. NLRB, 629 F.2d 305 (3d Cir. 1980) (same), cert. denied,

450 U.S. 996 (1981); J.P. Stevens & Co. v. NLRB, 623 F.2d 322 (4th Cir. 1980) (same),

cert. denied, 449 U.S. 1077 (1981); Flambeau Plastics Corp. v. NLRB, 401 F.2d 128 (7th

Cir. 1968) (same), cert. denied, 393 U.S. 1019 (1969).

The present dispute captures a tension between two interests central to employeremployee relations under the NLRA: facilitating collective bargaining over mandatory

subjects and enforcing valid contracts. 

The NLRA requires an employer to bargain collectively -- i.e., to meet at

reasonable times and confer in good faith, but not necessarily to reach agreement -- over

wages, among other terms and conditions of employment. 29 U.S.C. §§ 158(a)(5), (d). 
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Generally, an employer violates its duty to bargain in good faith if it makes a unilateral

change in a mandatory bargaining subject -- for instance, unilaterally granting a raise --

without first bargaining in good faith to an impasse. See Litton Financial Printing Div. v.

NLRB, 501 U.S. 190, 198 (1991); Intermountain Rural Elec. Ass’n v. NLRB, 984 F.2d

1562, 1566 (10th Cir. 1993). A unilateral change in conditions of employment which are

under negotiation “is a circumvention of the duty to negotiate which frustrates the

objectives of § 8(a)(5) much as does a flat refusal” to negotiate. NLRB v. Katz, 369 U.S.

736, 743 (1962). By the same token, an employer may violate § 8(a)(5) by making an

otherwise innocuous announcement about working conditions which, due to its timing

and/or manner, reflects a design to undermine the union in its role as the employees’ sole

bargaining representative. Hedstrom, 629 F.2d at 317 (“an employer violates § 8(a)(5)

and (1) if he makes announcements concerning work conditions which, even if they do

not contain material changes from existing conditions, are designed by their timing and

wording to undermine the employees’ bargaining representative.”); Flambeau Plastics,

401 F.2d at 134 (release of company handbook which had been issued in previous

editions in other years violated § 8(a)(5) because it was revised in ways designed to invite

workers “to disregard and bypass the union”). 

It is also well established that unions can waive their right to bargain over wages

or other mandatory bargaining subjects. Robert A. Gorman, Basic Text on Labor Law,

466 (1976). Such a waiver is often expressed by means of an explicit collective
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bargaining agreement provision like the present one. Id. at 469. Generally, it is unsound

to permit a union to claim that a waiver provision is illegal, because the union presumably

forfeited statutory rights in exchange for some concession on the employer’s part, and

therefore it does not undermine the union’s status or the stability of the contract to uphold

the provision. Id. at 466. Waivers of statutory bargaining rights must be “clear and

unmistakable” in order for courts to enforce them. Metropolitan Edison Co. v. NLRB,

460 U.S. 693, 708 (1983); NLRB v. Oklahoma Fixture Co., 79 F.3d 1030, 1037 (10th Cir.

1996).

Although waiver provisions are an acceptable and potentially beneficial part of the

collective bargaining process, it does not follow that we should countenance the

calculated use of such clauses to undermine the process. It is difficult to imagine a

clearer example of an employer granting a benefit in such a manner as to undermine the

collective bargaining process than the present case. The ALJ made the following

findings, which are supported by substantial evidence in the record:

Respondent . . . [granted the increases] unilaterally, while engaged in

collective bargaining with the Union. In that bargaining, Respondent had

refused to make any proposal for a wage increase, had stated that it could

not agree to having any minimum wages set by negotiation, and in virtually

the same breath with its announcement of the unilateral increases, had

stressed its perilous financial condition. Moreover, Nesom misstated how

long the increases had been under consideration . . . . He also mislead [sic]

the Union about when the employees would learn of this increase, telling

the committee that they would learn of it with their next paycheck, due

September 9, and then rushing to personally inform them on August 31.

Most significantly, as Nesom admitted, the increases were

announced in such a way and at such a time as to sway the employees who
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would immediately thereafter vote on Respondent’s “last and final offer.” 

Indeed, the manner in which Ozment passed out the notices to Clay and

Prock at the ratification meeting was calculated to sow dissension and

demean the role of the Union.

Capitol Steel, 317 N.L.R.B. at 813. 

We agree with the Board that the timing and manner in which Capitol gave out

raises to its employees violated its duty to bargain. We presume the Union gained

something in exchange for waiving its right to bargain over wages, and we acknowledge

the importance of the waiver principle to the bargaining process. However, we decline to

endorse the notion that that principle can be implemented to subvert that process. The

provision in question here entitled the Company to implement raises unilaterally during

the term of the contract. However, when the Company undermined the union’s role as the

employees’ sole bargaining agent by raising wages in a manner engineered to influence

employees to vote in its favor at a key moment in the bargaining process, it improperly

exploited that waiver and violated §§ 8(a)(5) and (1) of the NLRA.

B

The Board’s § 8(a)(5) and § 8(a)(1) findings were based not just on the timing and

manner of the wage increases, but on the Company’s failure to timely furnish information

requested by the Union concerning the increases: namely, who, how much, when and

why. The Company argues that the alacrity with which it provided the wage increase

information should be judged in light of the Union’s slow response to its request for the

Form 5500, and suggests that it provided the information as promptly as it could have. 
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The Board counters that in the context of this dispute -- where the information sought was

simple and readily available and the Company had no reason not to hand it over -- the

delay was unreasonably long, and it rejects the contention that the Union’s own delay is

relevant.

An employer must provide the union with information necessary to the

performance of its duties. NLRB v. Acme Industrial Co., 385 U.S. 432, 435-36 (1967). 

This duty requires “an honest effort to provide whatever information is required as

promptly as circumstances allow.” Decker Coal Co., 301 N.L.R.B. 729, 740 (1991). It is

appropriate to consider whether the nature of information is conducive to rapid response,

and whether the information is readily obtainable in the employer’s files, in assessing

whether the employer’s delay is great enough to violate its duty. See, e.g., Tubari, Ltd.,

299 N.L.R.B. 1223, 1228 (1990).

We agree with the Board that the Company’s delay was unreasonably long in this

case. The Union first requested the information on August 30, and did not receive it until

September 16. The information was simple and readily accessible. As the Board pointed

out, the Company apparently was able to produce notices which were passed out to the

employees between the end of the August 31 meeting, at 2 p.m., and the time the

employees left for the Union meeting, at 2:30. Furthermore, during most of the two-week

period of delay, the employees were on strike, “warranting a little extra effort toward

achieving a negotiated resolution.” Capitol Steel, 317 N.L.R.B. at 813. Finally, the
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Union’s sluggishness in providing the Form 5500 does not relieve the Company of its

duty to provide the wage increase information.

III

A strike which is motivated, even in part, by an employer’s unfair labor practices is

an unfair labor practice strike. Harding Glass Indus., Inc. v. NLRB, 672 F.2d 1330, 1338-

39 (10th Cir. 1982). In the instant case, the Board found that the Union’s work stoppage

was an unfair labor practice strike, a finding which is pivotal to the issues discussed in the

following two Parts of this opinion. The Company contests this, because as discussed

above, it denies that its granting of wage increases or refusal to furnish requested

information was an unfair labor practice. We disagree. The Board correctly determined

that unfair labor practices were committed. Furthermore, substantial evidence in the

record supports the finding that the Company’s unfair labor practices motivated the

employees in their decision to strike. Accordingly, we conclude that the Board correctly

identified the Union’s strike as an unfair labor practice strike.

IV

The Board found that by making solicitations and threats to the workers as they

prepared to strike, the Company had violated § 8(a)(1) of the Act. The Company argues

that because the strike was economic in nature and not an unfair labor practice strike, its

communications to the employees were permissible. Our holding that the work stoppage

was an unfair labor practice strike disposes of this argument.
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Because the law prohibits the permanent replacement of unfair labor practice

strikers, NLRB v. International Van Lines, 409 U.S. 48, 50-51 (1972), threatening unfair

labor practice strikers with permanent replacement if they do not return to work

unconditionally is itself a violation of § 8(a)(1). NLRB v. King Radio Corp., 416 F.2d

569, 572-73 (10th Cir. 1969), cert. denied, 397 U.S. 1007 (1970); Storer

Communications, Inc., 294 N.L.R.B. 1056, 1093 (1989). Substantial evidence supports

the finding that the Company gave this message to its employees by phone the night

before the strike, and in writing just before the strike began. We therefore hold that the

Board was correct in finding that these communications violated § 8(a)(1).

V

Finally, Capitol challenges the Board’s conclusion that it violated §§ 8(a)(3) and

(1) of the NLRA by failing to reinstate unfair labor practice strikers when they

unconditionally offered to return to work. See International Van Lines, 409 U.S. at 50-

51; Harding Glass, 672 F.2d at 1338. First, it argues that the employees were not unfair

labor practice strikers. We have already disposed of this issue. Second, Capitol claims

that the employees did not make an unconditional offer to return; by seeking to negotiate

over the order of reinstatement, the employees rendered their offer to return conditional. 

We reject this argument as well.

Substantial evidence supports the Board’s findings that both employee Olivas’

offer to return on September 25 and the Union’s offer, on behalf of the rest of the
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workers, on September 27, were “clearly and unequivocally unconditional.” Capitol

Steel, 317 N.L.R.B. at 814. Capitol’s obligation to reinstate the employees arose

immediately, Pillowtex Corp., 241 N.L.R.B. 40, 48 n. 18 (1979), enf’d, 615 F.2d 917 (5th

Cir. 1980), and thus it cannot be argued that the Union’s request, almost two weeks later,

to discuss the order of reinstatement relieved the Company of its obligation. It was the

Company’s failure to carry out this duty which occasioned the Union’s request. The order

of reinstatement would be a moot consideration if the duty had been properly carried out. 

Capitol “may not rely on later union demands made in response to a situation created by

[its own] failure to reinstate the strikers” as a basis for arguing that the Union’s initial

offer to return was conditional. J.M. Sahlein Music Co., Inc., 299 N.L.R.B. 842, 848

(1990). In any case, because the employees were all entitled to immediate reinstatement,

it is difficult to see how a request to bargain over the order of reinstatement constitutes a

condition. As the Board pointed out, the request was akin to asking for something to

which the Union was already entitled. Capitol Steel, 317 N.L.R.B. at 814. We agree. 

The Company’s failure to reinstate the employees when they offered to return was a

violation of §§ 8(a)(1) and (3) of the Act.

VI

For the reasons stated above, we DENY Capitol’s petition for review and GRANT

enforcement of the Board’s order in all respects.