On June 1, 1975, Administrative Law Court Bernard Ries issued the attached Decision in this proceeding. Thereafter, General Counsel and Charging Party filed exceptions and supporting briefs, and Respondent filed cross-exceptions with a supporting and answering brief.

Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.

The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, *fn1 and conclusions *fn2 of the Administrative Law Court and to adopt his recommended Order.

the Hearst Corporation , 151 NLRB 834 (1965).

ORDER

Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommended Order of the Administrative Law Court and hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety.

ALJ: Bernard Ries

ALJ-DECISION:

STATEMENT OF THE CASE

Bernard Ries, Administrative Law Judge: This case was heard in Memphis, Tennessee, on March 12-14, 1975, pursuant to a charge filed on July 31, 1974, and amended on August 6, 1974, and a complaint issued on November 22, 1974, and amended on January 8, 1975, and again amended at the hearing.

The complaint alleges that Respondent violated Section 8(a)(5) and (1) of the National Labor Relations Act by instituting, on or about July 31, 1974, a polygraph test for its employees without bargaining in good faith with Hotel & Restaurant Employees and Bartenders International Union, Local 847, the certified exclusive bargaining representative of certain of Respondent's employees. In its answer, Respondent denies the critical allegations of the complaint. As a remedy for the alleged unlawful unilateral action, General Counsel requests, inter alia , reinstatement and backpay for 36 unit employees who refused to take the polygraph test and were discharged for so refusing. *fn1

Upon the entire record, *fn2 and after due consideration of the briefs filed on or about April 25 by General Counsel, the Charging Party, and Respondent, I hereby make the following:

FINDINGS OF FACT

I. THE BUSINESS OF THE RESPONDENT

Respondent is a corporation which, at all material times, has operated a hospital and extended care facility in Memphis, Tennessee. *fn3 During the 12 months preceding issuance of the complaint, Respondent received gross revenues for services rendered to patients at its Memphis location in an amount exceeding $100,000. The answer admits that Respondent has been and is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act.

II. THE LABOR ORGANIZATION INVOLVED

Respondent admits, and I find, that the Charging Party, Hotel & Restaurant Employees and Bartenders International Union, Local 847 ("the Union"), has been and is a labor organization within the meaning of Section 2(5) of the Act.

III. THE ALLEGED UNFAIR LABOR PRACTICES

Respondent's hospital is a six-floor building, containing more than 84 patient rooms and the institutional facilities normally found in a hospital. The patients are generally older people, most of them not ambulatory. The primary type of surgical procedure performed is a retinal detachment operation, of which there are some 40-45 each week. The patients on whom such operations are performed are usually diabetics in poor physical condition. The hospital is owned and operated by Medicenters of America, Inc., which has 26 such facilities in 18 states. Vice president of operations for the parent corporation is James Morris. G.L. Miles, who reports directly to Morris, is the administrator of the Memphis facility.

The hospital employs about 170 employees. In September 1973, the Union was certified as the bargaining representative of the hospital's 75-80 service and maintenance employees, including such job classifications as housekeeping and maintenance employees, and excluding such categories as licensed nurses and physical therapists. About 10 bargaining sessions were held between October 1973-January 1974, and apparently substantial progress was made, but no contract resulted -- the "big holdup," according to administrator Miles, was the Respondent's refusal to accede to the Union's demand for a dues checkoff provision.

Union activity was relatively dormant until June 10, 1974, when the Union established a picket line outside the hospital, manned primarily by off-duty employees. The picket line was still in operation as of the hearing. July 1, 1974, *fn4 marked the beginning of a series of acts of vandalism at the hospital. On that day, and throughout the month of July, toilets in the rooms of patients were stopped up with such foreign matter as rocks, gauze, plastic containers, and other medical supplies, causing the toilets to overflow when flushed. The overflow often ran onto the floor and seeped into the carpeting in the patients' rooms. In about half the incidents, dismantling of the toilets was required in order to remove the objects.

On July 1, five toilets were stopped up. That same evening, three tires on the hospital station wagon, parked in the hospital parking lot, were slashed; the following evening, the slashed tires having been replaced, all four tires on the station wagon were cut; on the weekend of July 6-8, two replacement tires on the vehicle were slashed while parked for safekeeping at an employee's home.

On July 12, a visitor's automobile was maliciously vandalized during the day, and 24 tires on 11 cars parked in the lot were slashed that night. On the same day, responding to a complaint from the chief anesthesiologist that the operating rooms were becoming overheated, at a time when three operations were in progress, Miles discovered that a section of the freon line on the air-conditioning unit had been broken off.

During this period, Miles also received reports that a number of employees had received communications from unidentified callers, threatening harm if the employees did not support the Union.

The problems presented were, patently, serious ones. The overflow of human waste from the toilets, seeping into the carpets, created the possibility of infection of the debilitated patients and, as well, caused sickening odors, provoked complaints from patients and relatives, and required nurses, housekeeping employees, and maintenance men to devote a substantial amount of time to cleaning up the spillage and unclogging the toilets. The damage to the automobiles was costly; the hospital had no insurance covering automobiles in the parking lot, and paid over $1000 for tire replacements for the vandalism of July 12 alone. The broken air-conditioning line in the surgical suites, in the words of the chief anesthesiologist, "definitely places the patient in extreme danger with possible fatal results."

Miles cast about for solutions to the sabotage. He consulted with Morris, his superior. the police were repeatedly summoned. On July 5, additional security measures relating to access to the building were instituted and arrangements were made to have a guard stand watch in the parking lot at all times. On July 8, floor supervisors received instructions to secure all small nursing supplies which might be flushed down a toilet and to issue them to employees only as the need arose; to assign nursing aides by room number; and personally to flush each toilet on their floor at the beginning and end of each shift. *fn5 After the tire-slashing incident, the hospital offered a $500 reward for information about the persons "involved in the slashing of automobile tires beginning July 1, 1974." The Union offered a similar reward.

Sometime in July, *fn6 Miles talked to Judith Ullery, director of nursing, about the possibility of using polygraph tests to identify the employees responsible for the vandalism. Mrs. Ullery, whose husband was then undergoing polygraph training, suggested that Miles contact a Lieutenant Harlan, a police officer who administered polygraph tests during off-duty hours. Miles spoke to Harlan that same day, telling him about "the problem that we had at the hospital regarding the stopped-up commodes, the vandalism, the threats of bodily harm to some of our personnel," and asked him if he could work out some type of polygraph examination capable of detecting the culprits. Harlan said he would contact Miles later.

Miles thereafter, and on several occasions during the next few weeks, discussed with Morris the possibility of introducing the lie detector examination. They both considered it a serious step, and noted the possibility that the entire staff might walk out in protest of such a measure. During this period, Miles also had several conversations "in the parking lot" with Rozelle Fields, secretary-treasurer and business agent of the Union, in which Miles discussed the vandalism, but did not tell Fields that a polygraph program was under consideration.

On July 17, an employee named Clarence Crawford swore out warrants for the arrest of employees Brenda Jackson and Betty Williams, charging them with malicious mischief in connection with the stopping of commodes. On that day, Ullery had attended an interview between Crawford and a police investigator in which Crawford had allegedly stated that he had seen Jackson and Williams drop objects in toilets, and that Union Business Agent Fields had allegedly told Craford that he knew a "firm that could 'fix' the air-conditioner so it would be hot in surgery again." Later that day, Crawford allegedly identified to Ullery another employee, then walking the picket line, as one who had asked Fields at a union meeting on July 16 if he would like her to go back to stopping up commodes. On July 18, Miles took a written statement from Crawford in which Crawford again implicated certain employees and Fields in the vandalism.

Around July 18 or 19, Miles met with Harlan and they discussed the type of polygraph test that would suit Respondent's purposes and the costs of such a program. *fn7 Harlan assured Miles that the test would identify the employees involved in the vandalism. In the ensuing days, Miles and Morris discussed the ramifications of the matter, including the possibility of a mass walkout of employees and the anticipated reaction of physicians in the Memphis community. During the week of July 22, Miles purchased additional disposable linen and dietary supplies (adding these to a stock accumulated a few months earlier in anticipation of a possible strike) and discussed with Morris a contingency plan of hiring temporary personnel from local employment agencies.

The trial of Jackson and Williams was scheduled for Friday, July 26. Miles credibly testified that he made no firm commitment for Harlan's services prior to that date because he thought that conviction of the two employees would serve as a deterrent to further vandalism. At the trial, however, which Miles and Morris attended, complainant Crawford gave testimony that Williams and Jackson had only accidentally dropped some paper towels in the toilets, and they were acquitted.

Over the weekend, Miles and Morris again discussed the matter, and, in Miles' words, "[we] pretty well formulated our plans to get the polygraph." Miles also testified that the "final plan and formulated around the 23 or 24th," and that on the "24th and 25th the drafts [of the notice to employees, set out infra] were being prepared."

It should be noted that as of the weekend ending Sunday, July 28, there had been no automobile vandalism since July 12. Miles had, as of that time, continued to receive reports that staff employees were being threatened by telephone, although he was unspecific as to time and number, and in the "latter part of July," mrs. Ullery received a letter signed by "a friend" telling her to be careful because she was in grave danger and also warning Miles to watch out for himself.

The testimony as to the extent to which the toilets continued to be sabotaged in the latter part of July is, to say the least, confusing. It appears that no accurate record of the incidents was maintained. Miles kept a "rough" count as he received reports of stoppages each day, but his records were incomplete. On direct examination, Miles testified that there had been a total of 64 commode stoppages in July, that they occurred on a "daily" basis, and that during the period in which he looked into the subject of polygraph testing, there were "at least two or three a day or more." In an affidavit given on August 23, 1974, however, Miles had set the figure for the month at a total of 63, with more than 50 stoppages having occurred by July 12. *fn8

Mrs. Ullery testified that, starting on July 1, there had been two or three stoppages a day, and around July 12, she came to work and found that "something like 30 or 40 commodes had been clogged.... That's an estimate, but it was a large amount of commodes." She further testified that the vandalism had subsided for a few days after the supervisory procedures were posted on July 8, but increased in incidence thereafter to "two or three" a day until the polygraph tests were administered. Janet Green, a nursing assistant testifying for Respondent, said "every night there would be anywhere from eight to ten commodes stopped up," that "some nights" the figure would be "as high as 12 commodes or more," and that the average per day was "[anywhere] from eight to twelve" all the way through July.

I regard Green's testimony as incredible, not only because of its startling inconsistency with that given by Miles and Ullery, but also because her demeanor and the content of her testimony left me with the firm impression that her indignation about the misdeeds of other employees (there were no more problems "[after] this other bunch left") led her into exaggeration. Although the statement given by Crawford to Miles on July 18 suggests that the commode problem had ceased by July 16 -- in the statement Crawford says that at a union meeting on July 16, a nurse's aide had asked Business Agent Fields "if he would like her to go back to stopping up commodes," to which Fields assertedly replied, "No, we have done enough of that. We do not want to work our maintenance men to [sic] hard" -- I found Mrs. Ullery to be a most impressive witness, and one what was closer to the scene than Miles, and I believe her testimony, and that of Miles, that the toilet sabotage continued, perhaps at a rate of 2 or 3 a day, up until the end of July.

Miles credibly testified that he feared that the July 26 dismissal of charges against Williams and Jackson would foment a new wave of vandalism. Over the weekend of July 27-28, Morris told Miles that the final decision on the polygraph testing was up to Miles, and Miles finally, but with reluctance, decided to set the wheels in motion.

On Monday, July 29, at about 10 a.m., after discussing its contents with the hospital's labor Counsel, Miles had the following notice posted on the hospital bulletin boards:

TO ALL EMPLOYEES AND PROSPECTIVE EMPLOYEES The Mid-South Hospital is implementing a Security System within the hospital complex. We do this to protect our employees from unfair accusations. Due to events, past and present which you are all aware of, we are implementing a Polygraph Program as a step in increasing internal security and protection of our present employees and patients against unlawful actions. The polygraph examination is simple, takes little time, and is not uncomfortable or embarrassing in any way. No question will be asked about your personal or private life; furthermore, no inquiries will be made about protected concerted activities, if any, in support of a labor organization. Your participation in the Polygraph Program is a condition of your continued employment. Since this program will benefit all concerned, we expect and appreciate your full cooperation.

Sincerely,

G. L. Miles, Administrator

Also posted was a schedule setting out the times at which employees would take the tests, which were to begin at 8 a.m. on Wednesday, July 31, and continue until Tuesday, August 6. All 166 employees of Respondent, both unit and non-unit and including supervisory personnel, were required to take the examination.

Prior to posting the notice, Miles did not notify or otherwise consult with

Union Business Agent Fields about the decision to implement the polygraph examination. He testified that he did not do so because: I felt like that Mr. Fields and the union was responsible for all my problems out there, for the sabotage and the widespread vandalism, that it would not be easy to negotiate with Mr. Fields in it because of this. *fn9

Shortly after 10 a.m. on Monday, Fields received a call from a hospital employee who told him about the posted notice. At about 11 or 11:30 a.m., Fields went to Miles' office and raised with Miles the question of the reinstatement of Jackson and Williams, who had been suspended when the warrants for their arrest had been issued. Miles testified that he told Fields that the matter of their involvement in the vandalism was under "further investigation" and he would not take them off suspension. *fn10

The remainder of the conversation is controverted. Fields says that he then "informed Mr. Miles that it had been brought to my attention that a polygraph test was going to be instituted at the company on July the 31st. He said that's correct, and that was the extent of our conversation. We didn't elaborate, we didn't go into further details." On cross-examination, however, Fields conceded that the discussion had not been so abbreviated. He admitted, consistent with the testimony of Miles, discussed below, that Miles had displayed to him a number of objects which had been retrieved from the toilets.

Miles testified to a substantially different conversation regarding the polygraph tests. He said that he, not Fields, brought up the subject of polygraph testing: "I mentioned to Mr. Fields that we were going to do the polygraph on Wednesday." In response, according to Miles, Fields said that if that was the case, Fields would have to cancel a planned trip to Washington. Fields further allegedly said that "under no circumstances would the Union agree to polygraph examinations; the International wouldn't allow it; it's unconstitutional; it can't be used in a court of law; and [the Union] would never under any circumstances agree to a polygraph." A discussion of the sabotage followed, with Miles saying, "Well, what else could I do? I can't find out who is doing the violence here." Miles then displayed to Fields "some of the paraphernalia of the items that were taken out of the commodes." Fields repeated that "under no circumstances" would he allow the employees to take the test, and he thereupon left, saying something like, "Well, I'll see you Wednesday morning with my Counsel."

I find Miles' account to be more persuasive, not only because he seemed to be on honest witness, but also because of the following circumstances. Fields, as noted, stated on direct that the polygraph test was only casually mentioned and that was the "extent of our conversation," but admitted on cross that Miles had shown him some items retrieved from the toilets. But such a conversation, limited to a reference to the polygraph test followed by a wordless display of the foreign matter found in the commodes, is unrealistic; if they reached the point of looking at the materials used for sabotage, there must have been some contextual conversation. I also cannot believe that Fields, a facile and authoritative speaker, failed to register a protest against the planned testing; as he noted elsewhere, "I'm always against polygraph tests." It might well be surmised, in fact, that Fields did not make his visit to Miles that morning simply to discuss the reinstatement of Jackson and Williams, but more probably to voice his opposition to the polygraph testing, of which he had just been informed. And as for Miles' testimony, and Fields' specific denial, that the latter said he would return on Wednesday morning, while Miles did not mention this in his pretrial affidavit, his testimony was corroborated by Director of Nursing Ullery, whom I considered to be an extremely convincing witness. She testified that Miles told her at 8 a.m. Wednesday morning that "Mr. Fields was coming over and he [Miles] was hoping that maybe this could be prevented. He said that he thought maybe Mr. Fields had something to offer, that we might not have to do this." *fn11 Miles obviously would not have said this to Ullery had Fields not given him a prior indication that he would indeed return on Wednesday morning. Fields testified that when he left the hospital on Monday, he called his Counsel, Michael Alder, but was informed by Adler's secretary that Adler was out of town, and that Adler did not return his call until noon on Tuesday, July 30, at which time Fields and Adler agreed to meet at the hospital on the morning of July 31. *fn12

On Wednesday, July 31, the day on which the testing was to begin, Fields and Adler came to Miles' office about 8 a.m. The testimony relating to the events occurring in the next few hours is also in serious conflict. After carefully reviewing the relevant testimony and noting the substantial contradictions between the accounts given by Fields and Adler, and because I felt that Miles testified sincerely and that Fields, as indicated above, was not as inclined to give a straightforward account, I believe that the conversation followed the general outline testified to by Miles.

According to Miles, Adler stated that he was there to discuss the polygraph examination. Saying that he "didn't see where I had any other choice," Miles showed Adler some of the sabotage material which he had preserved. *fn13 Miles explained to Adler the nature of the problems the Respondent had been experiencing, and reiterated that he didn't know "any other way to clear out the persons involved."

Adler asked for a week to "work this thing out and then, after a week, if we can't, then give your polygraph." When Miles then asked Fields if he agreed with that request, Fields said, "No, no, no. We'd never agree to the polygraph examination. Never under any circumstances would we agree to the polygraph examination." *fn14 Miles then turned to Adler and asked if the Union would stand responsible for any damage if the testing was canceled. Fields refused the proposition. Miles said that if the Union would not accept responsibility, and the testing was cancelled, it would be "Katie-bar-the-door as far as the sabotage of the building. They will tear us apart and you know it."

Miles then asked for an adjournment in order to call his Counsel, Kenneth Henderson. Adler and Fields repaired to the cafeteria and waited for Henderson, who arrived 45 minutes later. They spoke together for 10 minutes. *fn15

After Henderson conferred with Adler and Fields, he spoke to Miles, who told him that he could not cancel the test without an assumption of liability by the Union. Henderson again spoke briefly to Adler and Fields and then departed. *fn16

The examination began between noon and 1 p.m. that day. *fn17 The test consisted of 10 questions put to the employees, which are reproduced below:

1. Is your last name ?

2. Do you actually know anyone stealing from this hospital?

3. Have you ever stolen money or merchandise from this hospital?

4. Have you done any vandalism to this hospital or harm to any of its employees?

5. Do you ever drink coffee?

6. Have you ever stolen narcotics from this hospital?

7. Do you have any hospital property or equipment at your house that you should not have?

8. Did you ever drink alcoholic beverages during working hours?

9. Have you ever used a system to cheat this hospital?

10. Are you trying to withhold any information from me here today? Miles testified that while he had not expressed to polygraph operator Harlan any concern about certain of the topics covered by the examination (such as the theft of narcotics), Harlan had included in the test some questions which are routinely incorporated into hospital polygraph examinations.

There were 38 employees who refused to take the examination and were discharged (two of these later agreed to submit to the test and were reinstated without loss of benefits). Miles spoke to each employee who refused to take the test, urging them to take it and trying to pacify any fears they might have. Certain employees asked if they might have a friend or Counsel present during the administration of the test and Miles said that would be alright. *fn18

The Union made no further attempt to consult with Miles on this matter after July 31, although the testing was scheduled over a 6-day period. On July 31, the Union filed the charge in this case. On three occasions since July 31, the Respondent has notified the Union in writing of contemplated changes in terms and conditions of employment (relating to wages, the clocking system, scheduling, and insurance benefits) and has invited bargaining on these matters.

Miles credibly testified that the authorization given him by Vice President Morris to introduce the polygraph testing extended only to the situation faced by the hospital in July 1974.

Analysis and Conclusions

The initial question presented is whether the institution of the polygraph examination was embraced by the statutory phrase "terms and conditions of employment," *fn19 and was, consequently, a mandatory subject of bargaining.

So far as the record shows, prior to July 31, 1974, Respondent had never required its employees to submit en masse to a mechanical testing procedure (or any other wholesale procedure) for the purpose of identifying employees who might have committed various offenses against the hospital or their fellow workers. The notice announcing the polygraph test specifically stated that participation in the program "is a condition of your continued employment," and, as we have seen, it was fully contemplated that refusal to submit to the examination would automatically result in discharge.

Passing, for the moment, the significance of the fact that a penalty attached to a refusal to submit to the examination, it is evident that a change of this nature in the method by which Respondent investigated suspected employee misconduct is a change in the "terms and conditions" of employment at the hospital.

As suggested by Miles' interview with Clarence Crawford, Respondent's traditional method of investigation was the customary one - interrogating employees and, if appropriate, taking statements from them. The polygraph test instituted on July 31 employs a mechanical apparatus which measures changes in the systolic blood pressure, pulse, and respiration. See 3A Wigmore, Evidence SEC. 999 (Chadbourn rev. 1970). The validity of the polygraph test has never been sufficiently established to warrant its admission as evidence in Federal criminal trials, U.S. v. Cochran, 499 F.2d 380, 393 (C.A. 5, 1974), and the controversy over its use has raged for the better part of this century, see Frye v. U.S., 293 F. 1013 (C.A.D.C., 1923). Despite scientific uncertainty about the reliability of the test, Miles testified that the polygraph expert assured him that the technique would definitely identify those persons who had engaged in misconduct, *fn20 and it may be assumed that Miles would have relied heavily on the results of the test in separating the guilty from the innocent.

Against such a background, it may fairly be said that this sort of change in an employer's investigatory method, substantially varying both the mode of investigation and the character of proof on which an employee's continued job security might hinge, is a bargainable change in the terms and conditions of his employment. The existing technique for investigating and determining guilt of misconduct involved the application of human skill, judgment, and experience. Onto this scale, and perhaps in lieu of naked human assessment, Respondent was introducing a chart based on variations in bodily functions, which, as indicated, has never been considered sufficiently trustworthy to be deemed probative in criminal proceedings. The employees' jobs were on the other scale.

This analysis leads me to believe that the rest itself substantially altered the existing terms and conditions of employment and constituted a subject of mandatory bargaining. By way of analogy, the Board has held that the mere change from a system of oral warnings to one of written warnings is a mandatory bargaining subject, on the theory that memorialization of warnings tends to provide a firmer foundation for, and thus increase an employee's exposure to, future discipline. Amoco Chemicals Corporation, 211 NLRB 618 (1974) (Member Kennedy dissenting); The Colonial Press, Inc., 204 NLRB 852, 861-862 (1973). Also apposite are cases holding that changes in the mechanics of the grievance procedure -- the process by which an employee attempts to challenge the imposition of discipline -- are mandatory subjects of bargaining. City Packing Company and Trinity Packing Company, 98 NLRB 1261 (1952); Bethlehem Steel Company, 136 NLRB 1500 (1962); The Celotex Corporation, 146 NLRB 48 (1964), enfd. in pert. part, 364 F.2d 552 (C.A. 5, 1966). Further relevant here is the passage from a law review comment quoted with approval by the Supreme Court in N.L.R.B. v. J. Weingarten, Inc., 420 U.S. 251 (1975): the quantum of proof that the employer considers sufficient to support disciplinary action is of concern to the entire bargaining unit. A slow accretion of custom and practice may come to control the handling of disciplinary disputes. If, for example, the employer adopts a practice of considering a foreman's unsubstantiated statements sufficient to support disciplinary action, employee protection against unwarranted punishment is affected. The presence of a union steward allows protection of this interest by the bargaining representative.

The Respondent contends, however, that the use of a lie detector test is simply an "exercise of the hospital's inherent right to investigate, interrogate employees, and gather facts relating to misconduct," citing such cases as Texaco, Inc., Houston Producing Division, 68 NLRB 361 (1967), Jacobe-Pearson Ford, Inc., 172 NLRB 594 (1968), and Illinois Bell Telephone Company, 192 NLRB 834 (1971). I do not think, however, that those cases stand for the proposition that a significant alteration in the method used by an employer to elicit evidence from employees which may convict them of misconduct is not a change in their terms and conditions of employment. *fn21

An employer's "inherent" right to conduct his business has been cabined in many ways by the Act. His "inherent" right to discharge employees is subject to bargaining about the manner in which he does so and the causes on which the discharge may be premised, as well as procedures enabling the employee to challenge the employer's justification for meting out, in a given case, this industrial equivalent of capital punishment. It might as well be argued that the adoption by an employer of a system to denote the number of penalty points to be assigned to absences and tardiness, found to be a mandatory subject in Wellman Industries, Inc., 211 NLRB 639 (1974), or the abandonment of a rule that an employee acquitted of misconduct in a criminal trial will not be discharged for the same offense, involve "inherent" employer rights and therefore are not mandatory bargaining subjects.

In Fibreboard Paper Products Corp. v. N.L.R.B., 379 U.S. 203 (1964), the Supreme Court held that what might indiscriminately be labeled an employer's "inherent" right to subcontract work was, in the circumstances of the case, a matter about which the employer was required to bargain; Court noted that this constraint "would not significantly abridge [the employer's] freedom to manage the business" (379 U.S. at 213). In his concurring opinion, Justice Stewart sought to define the kind of managerial prerogative which, although its exercise may affect employee job security, is nevertheless subject to unfettered employer discretion. He described that enclave of discretion as "managerial decisions which lie at the core of entrepreneurial control," such as "[decisions] concerning the volume and kind of advertising expenditures, product design, the manner of financing and sales," "[decisions] concerning the commitment of investment capital and the basic scope of the enterprise," and "those management decisions which are fundamental to the basic direction of a corporate enterprise or which impinge only indirectly upon employment security" (379 U.S. at 223). *fn22

The institution of a polygraph test is not entrepreneurial in character, is not fundamental to the basic direction of the enterprise, and does not impinge only indirectly upon employment security. It is, rather, a change in an important facet of the workaday life of employees, a change in personnel policy freighted with potentially serious implications for the employees which in no way touches the discretionary "core of entrepreneurial control."

Furthermore, the mandatory across-the-board use of a controversial mechanical device for testing whether employees, even though not specifically under suspicion, have engaged in a broad range of misconduct might give rise to a number of salient considerations and questions (apart from the severity of the punishment for refusing to submit to it) *fn23 which suggest the "amendability of such subjects to the collective bargaining process," Fibreboard Paper Products, supra at 211, and which further suggest dimensions of the new procedure which qualitatively differentiate it from the routine individual interrogation of suspected miscreants.

The fact that the penalty for refusing to submit to the test was discharge is an additional reason for characterizing the initiation of this new procedure as a "term" or "condition" of employment within the meaning of Section 8(d). In Fibreboard Paper Products Corp., supra, at 210, Court stated: A stipulation with respect to the contracting out of work performed by members of the bargaining unit might appropriately be called a 'condition of employment.' The words even more plainly cover termination of employment which, as the facts of this case indicate, necessarily results from the contracting out of work performed by members of the established bargaining unit. Thus, Court held that both the contracting out of work and the termination of employment resulting therefrom may be deemed "conditions" of employment.

In his concurring opinion, Justice Stewart pointed out that a distinction might theoretically be drawn between imposing "conditions" on employment, on the one hand, and the "more fundamental question whether there is to be employment at all," on the other. He nonetheless effectively conceded (379 U.S. at 222) that the law and irrevocably moved toward requiring bargaining about those terms of employment which affect job security and tenure of employment, citing such cases as N.L.R.B. v. W.C. Bachelder, Receiver for Hoosier Veneer Co., 120 F.2d 574 (C.A. 7, 1942) (freedom from discriminatory discharge); N.L.R.B. v. Westinghouse Air Brake Co., 120 F.2d 1004 (C.A. 3, 1941) (seniority rights); and Inland Steel Company v. N.L.R.B., 170 F.2d 247 (C.A. 7, 1948) (imposition of a compulsory retirement age). It appears to follow ineluctably that if an employer must bargain about the discharge of employees, he is also obligated to bargain about the establishment of requirements which, if disobeyed, result in discharge. *fn24

Board precedent further compels the conclusion that the promulgation of a new prerequisite of continued employment, with which an employee must comply or sacrifice his employment, is a "term" or "condition" of that employment which is subject to the bargaining obligation.

A decision squarely in point is Laney & Duke Storage Warehouse Co., Inc., 151 NLRB 248 (1965) enfd. in pertinent part, 369 F.2d 859 (C.A. 5, 1966). In the words of Court of appeals (at 865-866; emphasis supplied): On January 24, 1964, the company distributed to some employees an 'employment application' with instructions to fill it out and return it. The four-page form called for extensive personal data about the 'applicant,' of the nature generally required for personnel files of a business. But it also required the 'applicant' to agree to take mental examinations or polygraph tests at the company's request or resign upon refusal to do so, to agree that his employment would be probationary for a period of six months and if laid off that he would be considered for reemployment only for a period of 60 days, and to agree to accept present and future policies, rules and regulations of the company including transfer from one department to another at the direction of the company. See LeRoy Machine Co., Inc., 147 NLRB 1431, 1438-39, holding a requirement that tardy and absentee employees take physical examinations is a condition of employment. As a matter of business judgment the company was entitled unilaterally to require information from present employees but not by unilateral action to require answers the giving of which changed or affected conditions of employment. Since the application forms affected conditions of employment, they were a legitimate subject of collective bargaining. The unilateral action of the company relating thereto constituted a refusal to bargain

In the case referred to above by the Fifth Circuit, LeRoy Machine Co., Inc., 147 NLRB 1431 (1964), the employer notified 19 of its 170 employees that their attendance record was poor, and ordered them to undergo a physical examination. Four employees who failed to comply were warned that continued noncompliance would result in disciplinary action. The Board held that the "requirement that employees with bad absentee records submit to a physical examination by a physician of their choice at the Respondent's expense, subject to disciplinary action if they refused," was a mandatory subject of bargaining (147 NLRB at 1432).

Other cases involving promulgation of plant rules, with concemitant penalties for their breach, provide additional support for this conclusion.

In Coinmeco, Inc., 200 NLRB 294 (1972), the Board stated: The record shows that sometime in November 1971,... Respondent Coinmeco put into effect a list of 30 rules, the violation of which subjected the offender to discipline which could even result in discharge.... In view of the fact that the Sheet Metal Workers was the majority representative of Coinmeco's employees at that time, this unilateral activity on the part of Coinmeco was in violation of Section 8(a)(5) and (1) of the Act. In Tiidee Products, Inc., 176 NLRB 969 (1969), enfd. 440 F.2d 298 (C.A.D.C., 1970), the Board and court of appeals affirmed a Trial Examiner's Decision holding (176 NLRB at 976): "Nor is it necessary to determine which, if any, of the rules constitute mandatory subjects of collective bargaining. The fact that penalties were prescribed for breaches thereof sufficiently affected the conditions of employment to make them mandatory subjects of bargaining." In Murphy Diesel Company, 184 NLRB 757 (1970), enfd. 454 F.2d 303 (C.A. 7, 1971), the employer changed its shop rules with regard to absences and tardiness, requiring the submission of excuses on certain forms within 2 days after the default and establishing a seven-step graduated disciplinary system for recidivists. The Board adopted the Trial Examiner's conclusion that the new requirements, all of which exposed the employees to a jeopardy which had not prevailed under the preexisting rules, "vitally affected employee tenure and conditions generally" (184 NLRB at 763) and were therefore matters which were not subject to unilateral employer control. Accord, Miller Brewing Company, 166 NLRB 831 (1967), enfd. 408 F.2d 12 (C.A. 9, 1969); Donna Lee Sportswear, 174 NLRB 318, 337 (1969), enfd. 435 F.2d 559 (C.A. 3, 1971); General Electric Company, 192 NLRB 68, 72 (1971), enfd. 466 F.2d 1177 (C.A. 6, 1972).

The foregoing cases, as well as the underlying purposes of Section 8(a)(5), indicate that the introduction of new employment-related rules and requirements, disobedience to which may result in forfeiture of employment, are bargainable "conditions" of employment within the pale of Section 8(d). The required bargaining, furthermore, does not comprehend merely the magnitude or propriety of the penalty, but, as well, the content and incidents of the rule giving rise to the penalty, for the simple reason that there can be no intelligent or fruitful bargaining about the sanction without the possibility of discussion, modification, and compromise regarding the rule which triggers the sanction.

Nor does the fact that the examination was put into effect to combat one sustained eruption of vandalism compel a different result. *fn25 This "one-shot" characteristic was also true in LeRoy Machine Co., Inc., supra, and it is equally inherent in Fiberboard -type cases, where the subcontracting is a one-time affair, resulting in termination of a given number of employees and not necessarily affecting the on-going working conditions of any other employees.

On the foregoing analysis, I conclude that the adoption by Respondent of a requirement that employees must submit to a polygraph examination constituted a change in their "conditions" of employment within the meaning of Section 8(d), and was a mandatory subject of bargaining to which the statutory obligations imposed by Section 8(a)(5) adhered.

Turning, then, to the question whether Respondent, in violation of Section 8(a)(5), failed to satisfy its statutory bargaining obligation with respect to the institution of the polygraph test, I conclude that, as Respondent argues, prevailing Board law requires a holding that it did not so violate the Act.

The statute requires that an employer must afford the bargaining representative of his employees an opportunity to negotiate about a proposed change in conditions of employment, after which, if the employer is not persuaded to abandon or modify his plan, he is free to put it into effect. N.L.R.B. v. Katz, 369 U.S. 736, 743 (1962); Town & County Manufacturing Company, Inc. and Town and Country Sales Company, Inc., 136 NLRB 1022, 1027 (1963), enfd. 316 F.2d 846 (C.A. 5). At the threshold, however, I must differ with that part of the General Counsel's argument which contends that "it is the duty of the employer seeking to effect a change in working conditions to notify the employees' bargaining representative of such a proposal...." While this appears to be a sound and optimally desirable requirement, the Board has adopted a more pragmatic approach in a number of cases and has held that where a union had actual notice of an employer's intentions at a time when there was sufficient opportunity to bargain prior to implementation of the change, the employer may not be faulted for failing to afford formal notification.

In U.S. Lingerie Corporation, 170 NLRB 750 (1968), the evidence disclosed that the employer had actively dissembled in treating with the union about its plans to relocate, but information of the proposed more nonetheless came to the attention of the union. The full Board held (170 NLRB at 751-752): Although it is true that Respondent was less than candid in answering questions from Union representatives and from employees as to whether the plant was being closed or moved, the foregoing evidence demonstrates that, in fact, the Union had sufficient notice of Respondent's intended move to place upon it the burden of demanding bargaining if it wished to preserve its rights to bargain about the decision to move and the effect of such decision upon the employees' terms and conditions of employment.

In Hartmann Luggage Company, 173 NLRB 1254 (1968), the employer had announced to its employees on a Thursday morning that certain employees would be laid off effective the following Monday. At noon on Thursday, just as in this case, an employee called the union business agent and notified him of the layoff. The Trial Examiner's Decision, adopted by the Board, stated (173 NLRB at 1255-1256): I find that inasmuch as the Union actually received notice of the proposed layoffs, Respondent's failure to give formal notification directly to the Union under these circumstances does not render ineffectual or inoperative the notice actually received by it. While only 4-1/2 *fn26 days' notice was given prior to effecting the layoffs, I find that in a matter so crucial as layoffs such time was adequate to alert and afford the Union an opportunity to protest and/or request consultation in the matter.

Subsequently, in a case much like the instant one, the Board affirmed a Trial Examiner who found adequate notice where, on April 28, the employer posted an announcement to employees of new rules to take effect May 1 and, by chance, the union representative was handed a copy of the notice while visiting the employer's office on April 28 about another matter. Holiday Inn Central, 181 NLRB 997 (1970). Accord, Humble Oil & Refining Co., 161 NLRB 714 (1966); Motoresearch Co., 138 NLRB 1490 (1962).

It is thus apparent that Respondent's failure to give notice to the Union is not, in the current state of the law, in and of itself a breach of the bargaining duty. The question becomes, rather, whether the Union was afforded a sufficient opportunity to bargain over the proposed testing.

The answer to this question, as to many other questions arising under the Act, requires an examination of all the attendant circumstances. The Board has held that on receipt of adequate notice, the burden shifts to the union to pursue the matter, if it wishes to do so. In American Buslines, Inc., 164 NLRB 1055 (1967), the Board held applicable to the unilateral action doctrine the language used by the Supreme Court in a different context in the early case of N.L.R.B. v. Columbian Enameling & Stamping Co. 306 U.S. 292, 297, that "the statute does not compel [the employer] to seek out his employees or request their participation in negotiations for purposes of collective bargaining... To put the employer in default here the employees must at least have signified their desire to negotiate." More recently, in Kentron of Hawaii, 214 NLRB No. 116 (1974), the Board cited and paraphrased the American Buslines test as follows: When an employer notifies a union of proposed changes in terms and conditions of employment, it is incumbent upon the union to act with due diligence in requesting bargaining. Furthermore, as the Board held in American Buslines, a union which receives timely notice must take advantage of that notice if it is to preserve its bargaining rights; in that case, "the Union failed to prosecute its right to engage in such discussion but contented itself by protesting the contemplated promotions in its letter dated February 10 and by subsequently filing a refusal-to-bargain charge" (164 NLRB at 1056). Such a failure of prosecution constitutes a waiver of a union's right to bargain.

The evidence in the instant case shows that Respondent stood ready -- indeed, in a meaningful sense, eager -- to bargain about the polygraph examination and that the Union was content to do nothing but protest. In the first place, although at the hearing Miles was less than clear in his own mind about when he made the "final" decision to administer the test, I am convinced that, whatever that elusive concept may comprehend, the decision did not become "final" until the tests were actually given. It is my firm impression that while Miles sincerely believed that the acquittal of Jackson and Williams on July 26 would give aid, comfort, and encouragement to the saboteurs, provoking even more widespread vandalism, he also harbored a remote hope that the Union might somehow render the testing unnecessary.

I have no doubt that Miles finally determined to order the testing with the most profound reluctance. He was understandably concerned about the possibility of a mass walkout of employees, and dubious about the reaction of the Memphis medical community. He also, and I think this a not insubstantial factor, was embarking on a project which would cost the hospital nearly $6,000 to complete. Considering these circumstances, plus the fact that Respondent's agreement with the polygraph examiner was based strictly on a fee of $35 per administered test and involved no other financial commitment, I feel certain that at the time the notice and testing schedule were posted, Respondent was fully prepared to bargain on the matter with the Union and in no sense presented the Union with a fait accompli. *fn27

The Union, however, showed no inclination to do anything but object. I have found that when Fields visited Miles on the morning of July 29, Ields indicated vehement opposition to the testing, saying, among other things, that the Union would never agree to it. After Miles invited discussion of an alternative ("Well, what else could I do? I can't find out who is doing the violence here") and showed Fields some of the materials taken from the toilets, Fields simply repeated his opposition and departed, saying he would return on Wednesday morning.

The record shows that a polygraph program was in existence at that time at St. Jude's Hospital in Memphis, covering employees represented by Fields and the Union. The program was the product of negotiations between St. Jude's and the Union. *fn28 Presumably, as a result of this experience, Fields was not uninformed about the operation of a polygraph examination and possessed some background which would enable him intelligently to discuss the subject.

He chose, however, to solicit no information about Respondent's planned testing, to advance no reasoned arguments against its implementation, and to proffer no suggestions or comments about the manner in which the program would be executed. He did not ask to meet again later that day so that he might, in the interim, collect his thoughts or formulate a counterproposal, nor did he ask to meet the following morning or afternoon for further discussions which might better inform the Union about the program or lead to a compromise. Fields simply voiced his complete hostility to the program and left Miles' office. *fn29

The events of Wednesday, July 31, indicated no change of attitude by either party. The union representatives did not even appear at the hospital until the time that the testing was scheduled to commence. Miles temporarily postponed the commencement of the testing in the hope that some accommodation might be reached which would obviate the need for the program.

Fields agreed at the hearing that, during their discussion, Miles appeared to be "looking for a way out." But again, the union representatives did not intimate that they wished to bargain, in the common acceptation of that word, about the program. They made no inquiries about the nature of the testing, about the questions to be put to employees, or about any other relevant datum. Instead, they simply expressed a total refusal to consider the possibility of instituting the testing and asked for a delay, in Fields' words, "so that we may orientate our people as to what a polygraph test is... so we could talk to the people involved." *fn30

I do not view the statutory bargaining duty as requiring an employer to allot additional time for such a purpose. Miles was nonetheless willing to consider granting a delay, as all witnesses agreed, presumably in order to allow Fields to familiarize the employees with the test, as requested, if the Union would act as guarantor against vandalism, a proposition which the Union found unacceptable.

I believe, in short, that Miles was as responsive to the Union as the Union's demonstrated position required him to be, and, as I understand the Board law, that is all that is necessary. *fn31 If the Union had truly wished to bargain on the matter, a desire not evidenced in this record, it was strangely sluggish in reacting to Respondent's proposed countermeasure against what Miles conceived, and so explained to Fields on the morning of July 29, to be a crisis situation. The Union waited nearly 2 days after receiving notice before it approached Miles again, and then arrived at the moment the testing was set to begin. During that period, it could have been formulating questions or preparing counterproposals. However, at the second meeting with Miles, as at the first, the Union made no effort to either probe the mechanics or the implications of the test, or to suggest alternatives -- it simply reiterated its unrelenting opposition to the testing, with Fields, as he conceded, "saying a week wasn't going to work anything out." *fn32 That unyielding resistance continued to manifest itself thereafter, for although the testing was to be conducted for a 6-day period, and a union sincerely interested in bargaining about the program might well have attempted to do so even as it was in progress, the Union never sought further consultation; it simply field a charge.

I therefore conclude, upon an appraisal of the particular facts presented here in the light of controlling Board doctrine, that the Respondent did not, in violation of Section 8(a)(5), refuse to bargain about the implementation of the polygraph program. In so concluding, I should point out that the Respondent's failure to provide the Union with earlier notice of the testing is less than compatible with the collective-bargaining process envisioned by the Act, and I think that, in another case, the delay occasioned by the absence of such notice might well require finding a violation.

Thus, if the lack of formal notice of an important modification in conditions of employment resulted in a union having only a few days' actual notice of the change, and if the union, on becoming aware of the contemplated change, promptly made an effort to bargain about the matter, indicated a sincere desire to do so, particularized the nature of its concerns, and reasonably pointed out a need for additional time to engage in research and to prepare and present questions, positions, or a counterproposal, the statutory duty to refrain from unilateral action would most likely require the employer to grant an additional appropriate amount of time for such preparation and consultation. That, however, as I have indicated above, is not this case.

CONCLUSIONS OF LAW

1. The Respondent is engaged in commerce within the meaning of Section 2(6) and (7) of the Act.

2. Hotel & Restaurant Employees and Bartenders International Union, Local 847, is a labor organization within the meaning of Section 2(5) of the Act.

3. The Respondent has not engaged in the unfair labor practices alleged in the amended complaint.

Upon the basis of the foregoing findings and conclusions, and upon the entire record in the case pursuant to Section 10(c) of the Act, I hereby issue the following recommended:

ORDER *fn33

It is hereby ordered that the amended complaint issued herein against Respondent Medicenter, Mid-South Hospital, Memphis, Tennessee, be, and it hereby is, dismissed.