ETO v. UNITED FARM WORKERS OF AMERICA AFL CIO (1981)

STATEMENT OF THE CASE

We review a decision of the Agricultural Labor Relations Board (Board) finding that petitioners Eto Farms and Frazier Ranch (the employers) violated Labor Code section 1153, subdivisions (e) and (a) ¹ by failing to bargain in good faith with the United Farm Workers of America, AFL–CIO (the UFW or union) as the exclusive bargaining representative of the employers' agricultural workers.

The Board found the employers had engaged in surface bargaining during 20 negotiating sessions extending over a 13-month period (from Apr. 13, 1976, to May 19, 1977) preceding the unfair labor practice hearing which commenced on May 23, 1977.   The Board, among other things, ordered the employers to commence bargaining in good faith and “[m]ake whole each employee employed ․ at any time between March 10, 1976 and the date [the employers] commence[d] to bargain in good faith and thereafter bargain[ed] to a contract or a bona fide impasse, for all losses of pay and other economic losses sustained by each of them as the result of [the employers'] refusal to bargain․”

The Board also extended the UFW's certification as the employers' exclusive bargaining agent for 12 months from the time the employers begin to bargain in good faith.

The procedural history of this protracted and complex case is as follows:  On January 4, 1977, the general counsel filed formal complaints against the employers alleging they had refused to bargain with the UFW beginning June 24, 1976, had given notice of intention to postpone indefinitely further bargaining beginning July 2, 1976, and had unilaterally raised wages on October 20, 1976.²

The consolidated hearings took place over a six-day period commencing May 23, 1977.   After receiving extensive evidence, both oral and documentary, including written minutes of the last 10 negotiating sessions, the ALO issued a proposed decision and recommended order on August 10, 1977.   The ALO found the employers had violated section 1153, subdivisions (e) and (a) by failing to bargain in good faith between July 2, 1976, and March 15, 1977.   Within this time span, there was an outright refusal to bargain during two periods—July 2 to August 12, 1976;  and October 20, 1976, to March 15, 1977.   Between these two separate periods of no bargaining, some negotiating sessions were held but the ALO found that this was mere “surface bargaining” rather than negotiation with a serious desire to reach agreement.   The ALO recommended application of the make-whole remedy pursuant to section 1160.3 for loss of pay to all employees during the two periods the employers actually refused to bargain.

However, the ALO specifically found that the general counsel had failed to prove bad faith bargaining by the employers during the initial period from January to July 2, 1976, and during the final negotiating period from March 15 to May 19, 1977.

On April 25, 1980, more than two years after the ALO's decision, the Board in a three-to-one decision made sweeping changes in the ALO's decision:  it held the employers had engaged in surface bargaining throughout the entire course of negotiations, i. e., from April 13, 1976, to May 19, 1977.  (Member McCarthy dissented as to the majority's finding of bad faith bargaining during the final two-month period.)   The Board majority concluded that the “totality of the circumstances,” including the employers' initial delay in commencing negotiations, its refusal to bargain in good faith during the interim periods, and its illegal conduct away from the bargaining table evidenced a lack of good faith during the entire bargaining process.   As to the final period, the Board found that the employers had rejected UFW proposals on union security, hiring hall and family members working without “substantive discussion and reasoned bargaining” and that this showed the employers “had not made a significant departure from their past unlawful conduct ․”  (Eto Farms, et al. (1980) 6 A.L.R.B. No. 20 at p. 16, citing McFarland Rose Production (1980) 6 A.L.R.B. No. 18).

The Board also found the employers had failed to provide information concerning wages and fringe benefits within a reasonable time after the union requested such information.   It further found the employers had unilaterally altered wages at various times during the period of negotiations.

The employers filed the instant petition for review of the Board's decision.   On January 16, 1981, this court granted review pursuant to Labor Code section 1160.8.

THE EVIDENCE

Eto Farms, owned by Masaji Eto, is a family proprietorship which for 60 years has grown cauliflower, broccoli, and leaf vegetables on 160 acres in San Luis Obispo County, California.   Frazier Ranch, owned by Buford and Mackie Frazier, father and son, has grown similar crops since 1947 on 225 acres in the Santa Maria Valley.   Eto and Frazier both characterize their farms as family operated with family members traditionally taking active roles in the farming operations.   The employers hire agricultural workers on a seasonal basis.³

The UFW was certified as the collective bargaining representative of Frazier's agricultural employees on December 6, 1975, and of Eto's employees on January 22, 1976.   A UFW representative promptly sent letters to the employers requesting preliminary negotiations and also certain information concerning wages, vacations, health and welfare benefits of their employees.   Neither employer gave prompt responses to the request for information.   On March 10, 1976, the UFW representative telephoned Mr. Dressler, the employers' representative, and the first negotiating meeting was set for April 13, 1976.

During the March 10 telephone conversation, Dressler indicated that the employers were interested in the UFW's “master agreement” ⁴ but did not agree to the union's request to meet promptly for negotiations.   Dressler's firm, which represented both employers in these negotiations, had also served as chief negotiator for the employers in the master agreement negotiations and was therefore familiar with the contents of that agreement.   At the first bargaining session on April 13, the employers' negotiator Mr. Stoll (a partner of Mr. Dressler) said there was some uncertainty about whether the employers would sign the master agreement but that they would “probably end up around there anyway.”   He took a copy of the master agreement to study.

The next meeting was not held until three weeks later on May 4 due to the unavailability of the employers' negotiator.   At that meeting, Stoll announced that the employers had problems with almost every article in the master agreement and wished to “start from scratch.”   The UFW then presented the employers with a new contract proposal, based primarily on the initial proposal used by the union in negotiating the master agreement.

Five short and relatively unfruitful meetings took place between April 13 and June 24, 1976.   On July 2, the employers' negotiator suspended negotiations, ostensibly because he felt that pending jurisdictional negotiations between the UFW and the Teamsters Union would affect the union's bargaining strength.   Unfair labor practice charges were filed by the UFW against the employers on July 29, 1976, alleging an unlawful refusal to bargain.   Meetings resumed at the employers' request on August 12, 1976.

Between August 12 and October 19, 1976, four meetings were held.   Having received a wage proposal from the UFW in early October, the employers announced at the October 19 meeting that an impasse had been reached and that they would institute wage increases they had proposed during the negotiations.   Wages were raised the following day.

There was a brief meeting on December 2 to see if the deadlock could be broken but no further meetings were held until March 15, 1977, because of the employers' continued refusal to meet due to the pending UFW-Teamsters jurisdictional pact meetings and also because the employers' negotiator was involved in other unfair labor practice proceedings.

Negotiations finally resumed on March 15, 1977.⁵  Between this date and May 19, 1977, 10 bargaining sessions were held.   Agreement was reached on many issues but there was continued disagreement on three key issues:  union security (closed versus agency shop), hiring hall, and permitting the employers' family members to do bargaining unit work.

The employers and the union persisted in holding to their positions concerning these three issues.   As to union security, the employers reiterated that many of their workers did not want to join the union;  the employers offered to deduct union dues from wages without requiring all employees to join the union.   The union responded it was not just interested in the money but wanted worker participation in union activities.

As to the hiring hall issue, the employers' representative gave the union a written statement setting forth in detail Eto's objections to a hiring hall:  (1) Eto has always been able to recruit enough workers and believes he can continue to do so;  (2) there are groups of workers at Eto Farms who are friendly or related to each other and a hiring hall might break up this camaraderie;  (3) Eto wants to continue his practice of personally screening his employees;  (4) small farms need flexibility;  (5) there was no established hiring hall in the area and Eto was not confident the union could come up with the workers Eto would need;  (6) Eto was concerned that workers would not travel 40 miles to work from the hiring hall in Santa Maria;  and (7) Eto occasionally hired agricultural students from Cal Poly for seasonal work, and Eto was concerned the hiring hall article would preclude this practice.   Frazier's anti-hiring hall position was based on similar considerations plus Frazier had a satisfactory ongoing arrangement with labor contractor Juan Uvalle.

As to family members working, the employers insisted that there be no limitations on the right of family members to do any kind of work and that the right of young family members to work in the future should be expressly included in the contract.   The union would agree only to family members continuing to do their present type of work.   It wanted to defer the question of what work could be done by the employers' other younger children.   The employers' position was that if they did not get the right of future family members to work included in the present contract they would never get it.

At the final two negotiating sessions on May 18 and 19, just days before the unlawful practice hearing commenced, the union offered the employers a package deal containing concessions on hiring;  the deal was contingent on the employers' acceptance of union proposals on subcontracting, seniority, wages, union security, and the three union benefit plans—the Martin Luther King (MLK), Robert F. Kennedy (RFK), and Juan De La Cruz plans.   The union's concession on hiring for Eto was that the UFW would waive hiring of new workers, provided that before Eto directly hired new employees, the company would request workers from the union facility in Santa Maria.   If the union could not provide qualified workers within 12 hours and no worker had been refused arbitrarily, Eto was free to hire employees directly.   For Frazier, the union offered to waive hiring until the union obtained other contracts in the area.

Other articles included in the union package deal were as follows.   The union made a concession regarding notification of workers 10 days prior to the anticipated recall for work.   On the issue of supervisors and family members performing bargaining unit work, the union repeated it wanted a limitation to the type of work these people now perform.   The subcontracting and union security proposals in the package deal were the same as those offered on March 15, 1977.   On the issue of wages, the union accepted the employers' proposal of 1977.

Included with the package deal was a proposal for the employers to accept the RFK plan and Juan De La Cruz pension plans while deferring the implementation of the MLK fund to the second year of the contract.   The union negotiator Cohen explained that the union was making great concessions, relative to other employers in the state, with its proposals on the deferred operation of the MLK plan and its waiver of the hiring hall.   Stoll replied that he would respond on the next day.

At the final session on May 19, the employers submitted a counterproposal to the union in which they rejected the UFW's hiring proposal, as well as the RFK, MLK and De La Cruz benefit plans.   The employers agreed, however, to notify the union of employee openings and to consider applicants referred by the union on a nondiscriminatory basis.   The employers also agreed not to subcontract to the detriment of the bargaining unit and to apply seniority to promotion.

The employers reiterated their position regarding union security and future family members working.   They directed the union's attention to a UFW contract in San Diego which permitted unlimited work by family members.

The employers stood on their proposal for an agency shop.

The employers proposed Christmas and three other days as holidays;  any work performed on an observed holiday would be at time and a half.   They proposed a vacation schedule calling for workers who complete a qualifying period of 1,000 hours per year to be paid at the rate of two percent of gross earnings.

The union again stated that the workers felt very strong about the hiring hall because they wanted to get away “․ from a history of arbitrary capricious practices by labor contractors and by crew bosses ․”  The employers' negotiator responded that the employer positions on family members working and the hiring hall issue were very strong.   The meeting concluded on a cordial note with Stoll promising to give serious thought to the union's offer.

No further meetings were held before the unfair labor practice hearing.   As we understand it, no collective bargaining agreement has been reached to date.⁶

Apart from the bargaining history summarized above, there were employer acts away from the table whereby the Board found the employers had bypassed the bargaining process and had changed individual employees' wages without consulting with the union.   These facts came to light during the hearings when Eto produced his records.   During the month of June 1976, Eto farms hired Juan Vargas, the nephew of Eto's irrigator, for a summer job without notifying the UFW.   This was Vargas' first job.   He was hired at $2.50 an hour while other workers doing similar work were paid $2.95 an hour.

Eto Farms customarily hired students from Cal Poly at less than full scale.   During September 1976, Eto hired three tractor drivers at $3.50 an hour while the current pay rate was $3.67 an hour.

In April 1977, without notifying the UFW, Eto Farms increased Charles Schimmel's wage to $4.00 an hour from $3.50 per hour for the same work.

Frazier continued, during the period of negotiations, to follow its past practice of dealing with Uvalle, the labor contractor, in deciding whether the workers wanted to be paid at an hourly rate or a piece rate.   The Board found this was a violation of the duty to bargain with the union.

STANDARD OF REVIEW

The standard of review of the Board's decision is whether the Board's findings are supported by substantial evidence on the record considered as a whole (Lab.Code, § 1160.8;  Tex-Cal Land Management, Inc. v. Agricultural Labor Relations Bd. (1979) 24 Cal.3d 335, 346, 156 Cal.Rptr. 1, 595 P.2d 579).   The language in section 1160.8 prescribing the review standard was taken verbatim from NLRA (29 U.S.C. § 160(f)).   The decisions under the federal statute are of precedential value “in fleshing out the parameters of the standard.”  (George Arakelian Farms, Inc. v. Agricultural Labor Relations Bd. (1980) 111 Cal.App.3d 258, 264, 168 Cal.Rptr. 537;  Lab.Code, § 1148.)

The United States Supreme Court has defined the review standard in terms of a fair estimate of the worth of the testimony of witnesses:

“․ courts must now assume more responsibility for the reasonableness and fairness of Labor Board decisions than some courts have shown in the past.   Reviewing courts must be influenced by a feeling that they are not to abdicate the conventional judicial function.   Congress has imposed on them responsibility for assuring that the Board keeps within reasonable grounds.   That responsibility is not less real because it is limited to enforcing the requirement that evidence appear substantial when viewed, on the record as a whole, by courts invested with the authority and enjoying the prestige of the Court of Appeals.   The Board's findings are entitled to respect;  but they must nonetheless be set aside when the record before a Court of Appeals clearly precludes the Board's decision from being justified by a fair estimate of the worth of the testimony of witnesses or its informed judgment on matters within its special competence or both.”  (Universal Camera Corp. v. National Labor Rel. Bd. [hereinafter Universal Camera] (1951) 340 U.S. 474, 490, 71 S.Ct. 456, 466, 95 L.Ed. 456, emphasis added.)

 Although it may be argued that the question of the employer's good or bad faith in surface bargaining cases is a matter within the expertise or special competence of the Board, the Board's decision nonetheless must be based on the evidence presented at the hearing and reasonable inferences to be drawn therefrom.   This is consistent with the rule that the general counsel must prove the unfair labor violation by a preponderance of the evidence (§ 1160.3).

 The requirement of examining the entire administrative record does not authorize the reviewing court to independently weigh the evidence or to choose between two fairly conflicting inferences even though the court would have made a different choice if the matter had been before it de novo (id., at p. 488, 71 S.Ct., at p. 464).   What the rule does mean is that the courts do not adopt or approve inferences or conclusions of the Board that are totally lacking support or are based on suspicion or surmise.

Universal Camera also speaks to the problem before us where the Board's findings differ from the ALO's on the same evidence:

“We do not require that the examiner's findings be given more weight than in reason and the light of judicial experience they deserve.   The ‘substantial evidence’ standard is not modified in any way when the Board and its examiner disagree.   We intend only to recognize that evidence supporting a conclusion may be less substantial when an impartial, experienced examiner who has observed the witnesses and lived with a case has drawn conclusions different from the board's than when he has reached the same conclusion.   The findings of the examiner are to be considered along with the consistency and inherent probability of testimony.   The significance of his report, of course, depends largely on the importance of credibility in the particular case.”  (Id., at p. 496, 71 S.Ct., at p. 469, emphasis added.)

Our California Supreme Court has adopted a similar rule in review of workers' compensation cases:  “[w]hen a referee's finding ․ is supported by solid, credible evidence, it is to be accorded great weight by the Board and should be rejected only on the basis of contrary evidence of considerable substantiality.”  (Lamb v. Workmen's Comp. Appeals Bd. (1974) 11 Cal.3d 274, 281, 113 Cal.Rptr. 162, 520 P.2d 978, emphasis added.)

Pursuant to Universal Camera, the federal courts have held that where the board rejects the examiner's findings, the supporting evidence “must be stronger than would be required in cases where the findings are accepted, since in the former cases the supporting evidence must be deemed substantial when measured against the examiner's contrary findings as well as the opposing evidence.”  (N. L. R. B. v. Interboro Contractors, Inc. (2d Cir. 1967) 388 F.2d 495, 499;  see also Penasquitos Village, Inc. v. N. L. R. B. (9th Cir. 1977) 565 F.2d 1074, 1078.)

The federal rule constitutes a significant “check on arbitrary administrative action,” the importance of which has been recently noted by the California Supreme Court in J. R. Norton Co. v. Agricultural Labor Relations Bd. (1979) 26 Cal.3d 1, 33, 160 Cal.Rptr. 710, 603 P.2d 1306.  (See also George Arakelian Farms, Inc. v. Agricultural Labor Relations Bd., supra, 111 Cal.App.3d at p. 267, 168 Cal.Rptr. 537.) ⁷

GOOD FAITH BARGAINING

The statutory definition of good faith bargaining is set forth in Labor Code section 1155.2, subdivision (a), which provides:

“(a) For purposes of this part, to bargain collectively in good faith is the performance of the mutual obligation of the agricultural employer and the representative of the agricultural employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, or any questions arising thereunder, and the execution of a written contract incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession.”  (Emphasis added.)

This section is the exact counterpart of NLRA section 8, subdivision (a)(5).

Harvard Professor Archibald Cox in his perceptive article entitled The Duty to Bargain in Good Faith, notes the argument that the statutory good faith bargaining formula is too self-contradictory to survive, then goes on to state:

“Either section 8(a)(5) must simply require union recognition and the formalities of negotiation ․ or else it must require that plus the making of objectivity reasonable proposals.   But I think that the [contradictory] statement has meaning even though it borders on paradox.   It would command the Board to reach a judgment mindful of ․ (1) legal pressure upon labor and management to enter into joint agreements ․, and (2) complete freedom from government pressure as to what the terms will be.   That the relative weight to be given each branch of the antimony depends upon fiat is both the strength and weakness of the rule.”  (Cox, The Duty to Bargain in Good Faith (1958) 71 Harv.L.Rev. 1401, 1416, fn. omitted.).

The United States Supreme Court has quoted the following NLRB definition of bargaining in good faith:

“ ‘Collective bargaining is something more than the mere meeting of an employer with the representatives of his employees;  the essential thing is rather the serious intent to adjust differences and to reach an acceptable common ground.’ ”  (N. L. R. B. v. Insurance Agents' International Union (1960) 361 U.S. 477, 485, 80 S.Ct. 419, 425, 4 L.Ed.2d 454.)

 Plainly put, good faith bargaining requires the parties to sincerely endeavor to overcome obstacles or differences existing between them.   Another way of expressing the duty is that it is dependent “upon how a reasonable person might be expected to react to the bargaining attitude developed by those across the table.”  (See Morris, The Developing Labor Law (Supp. 1971–1975) p. 163.)

 In determining whether an employer manifests a serious intent to reach agreement, the totality of circumstances must be examined.

“[T]he question is whether it is to be inferred from the totality of the employer's conduct that he went through the motions of negotiation as an elaborate pretense with no sincere desire to reach an agreement if possible, or that it bargained in good faith but was unable to arrive at an acceptable agreement with the union.”  (National Labor Relations Bd. v. Reed & Prince Mfg. Co. (1st Cir. 1953) 205 F.2d 131, 134.)

 The totality of conduct may include specific acts away from the bargaining table such as unilateral changes in wages or a refusal to furnish information necessary to the fulfillment of the union duty to bargain (see N. L. R. B. v. Katz (1962) 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230).   Such per se violations of the act (§ 1153, subd. (a)) raises a presumption of bad faith;  however, such specific conduct does not automatically foreclose a finding of good faith bargaining.  (Pay'n Save Corp. (1974) 210 N.L.R.B. 311, 325;  Continental Insurance Company v. N. L. R. B. (1974) 495 F.2d 44, 48;  see also Morris, The Developing Labor Law (1971) pp. 322–324.)   Similarly, a finding that an employer engaged in surface bargaining for a certain period of time may support an inference of overall bad faith in bargaining;  however, the inference is not conclusive—it depends upon all of the circumstances.

 The union's conduct may also be considered in determining whether the employer was bargaining in good faith.   For example, in Unoco Apparel, Inc. (1974) 208 N.L.R.B. 601, enforced N. L. R. B. v. Unoco Apparel, Inc. (5th Cir. 1975) 508 F.2d 1368, the NLRB held the employer was not guilty of surface bargaining even though it consistently refused to consider the union's proposals during seven bargaining sessions because the union was equally adamant in refusing to consider the proposals of the employer.  (This holding is particularly pertinent to the case at bench insofar as the final period of negotiations.)

 We also note that an employer's willingness to make concessions has been held an important indicator of good faith.   A correlative rule is that a party's failure to make meaningful concessions during negotiations may be an indication of bad faith.  (N. L. R. B. v. Columbia Tribune Publishing Company (8th Cir. 1974) 495 F.2d 1384;  and see Morris, The Developing Labor Law (Supp. 1971–1975) at p. 168.)   Whether an adamant position on a particular subject constitutes a refusal to bargain, of course, depends on the reasons expressed for the refusal to make a concession.

Nevertheless, the good faith bargaining obligation “does not compel either party to agree to a proposal or require the making of a concession.”  (§ 1155.2, subd. (a).)  Justice Black speaks to this point in H. K. Porter Company v. N. L. R. B. (1970) 397 U.S. 99, 103–104, 90 S.Ct. 821, 823, 25 L.Ed.2d 146:

“The basic theme of the Act was that through collective bargaining the passions, arguments, and struggles of prior years would be channeled into constructive, open discussions leading, it was hoped, to mutual agreement.   But it was recognized from the beginning that agreement might in some cases be impossible, and it was never intended that the Government would in such cases step in, become a party to the negotiations and impose its own views of a desirable settlement.”  (Emphasis added.)

THE EVIDENCE SUPPORTS THE FINDING OF EMPLOYER BAD FAITH FROM MARCH 10 TO JULY 2, 1976

 The Board found the employers had failed to bargain in good faith during the entire period of negotiations, i. e., from April 13, 1976, until May 19, 1977, the date of the last bargaining session before the unfair practice hearing.   The Board ordered the make-whole remedy to commence March 10, 1976, on the theory that the employers should have promptly responded to the union's request for negotiations and information on that date.   As we have noted, the employers concede the sufficiency of the evidence to support the finding of bad faith bargaining and refusal to bargain during the eight months period from July 2, 1976, to March 15, 1977.⁸

Although the employers were entitled to a reasonable time to prepare for negotiations, the record clearly supports an inference that they purposefully delayed the start of negotiations.   The union promptly notified the employers of its certification and requested negotiations in early 1976.   The employers turned the notices and requests over to their counsel Mr. Dressler.   The union negotiator Smith tried on several occasions in late February and early March to contact Dressler by telephone but her calls were never returned.   When she was able to reach him on March 10, they talked about the master agreement, the terms of which were familiar to Dressler and his associates.   At the first session on April 13, the employers still talked about the master agreement.   Finally, on May 4, seven weeks after the first conversation about the master agreement, the employers said they couldn't sign it, but would have to start “from scratch.”   Smith was taken by surprise.

Subsequent events give strength to the inference of employer stalling;  nothing of substance was agreed to during the five sessions from April 13 to July 1, 1976.   Mr. Stoll always seemed to be in a hurry to go elsewhere.   He finally agreed to meet for a two-day session on July 6 and 7;  however, on July 2, he abruptly cancelled the sessions for “economic reasons” because of the Teamster-UFW jurisdictional talks.   Meetings were thereafter resumed but a spurious impasse was soon declared by Stoll even though the record shows there was still room for movement on some key issues.   At the next meeting on December 2, the employers again refused to bargain on the ground of the pending Teamster-UFW talks and because their attorney-negotiator had to attend other proceedings.

The Board correctly ruled that the parties to bargaining sessions must negotiate within the context of existing conditions;  to permit an employer to suspend negotiations pending extrinsic developments would be to subject the bargaining process to intolerable delay and frustration.   Mr. Stoll and his clients could not use the Teamster-UFW talks as an excuse not to negotiate.

We also agree with the Board's conclusion as to the employers' purported excuse for suspending negotiations because Stoll would be attending other proceedings.   The unavailability of the employers' negotiator cannot excuse their refusal to bargain particularly in light of the long delay which had occurred in this case and the fact that Stoll was a member of a law firm which had other attorneys who could have handled the negotiations.   An attorney's busy schedule is no excuse for a party's failure to make some arrangements to be present at negotiating sessions (N. L. R. B. v. Exchange Parts Company (1965) 339 F.2d 829, 831–832).

In finding bad faith bargaining during the initial period, the Board also considered per se violations which had occurred away from the bargaining table such as refusing to furnish employee information to the union promptly after it had been requested in early 1976, and unilaterally raising wages and hiring several employees at less than the prevailing wage rates without notifying the union.

Finally, the fact that the employers did not engage in good faith bargaining from July 2, 1976, to March 15, 1977, also lends support to the inference of employer bad faith during the preceding three months of negotiations.

THE EVIDENCE DOES NOT SUPPORT THE FINDING OF EMPLOYER BAD FAITH DURING THE FINAL PERIOD COMMENCING MARCH 15, 1977

 The Board rejected the ALO's characterization of the final two-month negotiating period as a “discrete unit” of bargaining activity untainted by the employers' prior wrongful conduct.   We quote from the Board's decision herein:

“Surface bargaining is a violation which occurs over an extended period of time;  it cannot be analyzed by examining individual ․ sessions or positions in isolation from the totality of the ․ conduct․  We must scrutinize [the employers'] conduct during the last two months before the [unfair labor practice] hearing in the context of their [prior] pattern of illegal bargaining.   We find that [the] failure to engage in substantive discussion and reasoned bargaining over important contract items shows that [the employers] had not made a significant departure from their past unlawful conduct nor adopted a course of good faith bargaining.”  (Eto Farms, et al., supra, 6 A.L.R.B. No. 20 at pp. 15–16, emphasis added.) 9

As a general proposition, the Board's “totality of the circumstances” approach is legally correct;  it is but another way of stating that the fact finder must consider the entire record in reaching a decision.   However, we agree with dissenting Board member McCarthy that the majority has gone beyond the law in finding bad faith bargaining during the final two month-period by in essence applying a conclusive presumption of continued employer bad faith based on the prior illegal conduct.   Any presumption of continued employer bad faith arising from the prior wrongful conduct is rebuttable by proof of a change of employer attitude toward the bargaining process.   As we shall explain, the record demonstrates this was the case here:  that commencing March 15, 1977, the employers bargained in good faith even though they continued to reject the union's proposals as to union security, hiring hall, and family members working.

The ALO commented:  “[t]here is a Jekyl and Hyde atmosphere which permeates this case.   Away from the bargaining table, [the employers] engaged in some obvious refusals to bargain.   But, once at the table, [they] displayed none of the behavior which has been held to manifest the prohibited state of mind.   This is clearly true during the 1977 bargaining.”  (Emphasis added.)   We agree.

When the negotiations resumed on March 15, 1977, approximately five months had elapsed since the parties had last engaged in bargaining.   The Teamster-UWF jurisdictional dispute had been settled.   The unfair labor practice hearing was scheduled to begin shortly.   At long last, the employers had to face reality;  they were looking down the gun barrel.

Starting on March 15, 1977, the parties met 10 times over a two-month period.   The employers made a commitment to meet a minimum of two days per week.   In addition to the accelerated pace, the meetings often consumed an entire day.   The meetings are characterized by substantial movement on the issues, far greater than at any of the earlier meetings.   Agreement was reached on income tax and credit union withholding, seniority, bulletin board, camp housing, health and safety, mechanization, management rights, travel allowance, leave of absence, location of employer operations, records and pay periods, reporting and standby time, leave of absence right of access, worker security, subcontracting and family housing.   In some instances, the union's proposals were accepted in the language of the master agreement while in others new language was used.

Although no agreement was reached on the issues of union security (closed versus agency shop), the hiring hall, and family members working, there was some movement on the issues of wages, grievance procedures, vacations and paid holidays.

The record demonstrates that the employers fully stated their reasons for rejecting the union's demands on union security, hiring hall and family members working;  they did engage in a “reasoned discussion” of these issues.   As to union security, the employers stated some of their present employees would quit if forced to join the union;  many workers had told the employers they did not want to join the union.   The employers proposed an agency shop where each worker would pay to the union an amount equal to the union dues but would not have to join the union.   The UFW rejected this, stating it was interested in worker participation in union activities and not just in the money.

The employers agreed to some provisions of the union proposal such as checkoff and notification to the union of new employees;  however, both sides were adamant on their respective positions with respect to the closed shop.   Each side compromised to the limit short of capitulating on the issue.   This cannot be deemed bad faith bargaining on the employers' part any more than it should be deemed bad faith bargaining on the union's part (§ 1155.2, subd. (a)).

As to the hiring hall, the employers explained they could not accept this procedure because it was too risky;  they could not rely on strangers out of a hiring hall to harvest their perishable crops;  they needed workers trained in the specific techniques required for harvesting.   The employers stated they had been advised that the hiring hall procedure was not working well in other parts of the state;  this assertion was not contradicted by the union.   The employers also stated they had been advised that the union had agreed to a contract in the Coachella Valley without a hiring hall.   Also, the employers wanted friends among their present workers to be able to work together as they had in the past.   The employers offered to compromise by notifying the union of vacancies in employment and by promising not to discriminate against hiring persons referred to them by the union.

The employers gave the union a list of written objections to the hiring hall.   The union did offer to postpone the commencement of the hiring hall for Frazier until it opened a hall in San Luis Obispo County and had other contracts in that area.   Also, the union offered to let Eto hire its own workers if the union could not provide workers within 12 hours of Eto's request.   Despite these concessions, we believe the parties were at a true impasse on the hiring hall issue;  hence, the employers' failure to concede this point cannot be deemed bad faith bargaining.

As to family members and supervisors doing bargaining work, the union's initial position on March 15, 1977, was that family members and supervisors could not perform bargaining unit work.   The employers argued that having family members do such work was a fundamental basis of their small enterprises.   They explained that “in a pinch” their family members did hoeing, thinning, irrigating and tractor work even if it meant replacing a union worker.   They said the union's proposal would tie their hands.   On March 30, the employers suggested the parties differentiate between family members and supervisors.   They offered to make this concession in return for a union concession that immediate family members be able to do any type of work they deemed necessary.

On several occasions the employers told the union representative that the family member issue was the issue of greatest concern to them because both employers had small operations and had children whom they wanted to work on the ranches.   Cesar Chavez' answer on this issue was that the union would give the employers only what had been given to all other companies in California.

Both sides acknowledged the difficulties of the family member issue.   The union modified its position and agreed to recognize that family members presently working could continue working as they had.   The employers replied that they had young children not yet working but whom they would want to work in the future.   The union said the question of children and grandchildren working in the future should be deferred since they were only negotiating a three-year contract.   The employers argued that they had to get this privilege in the contract or they never would be able to get it in.

On May 19, the last negotiation session before the hearing, the parties again discussed the family worker issue.   The employers asserted and the union acknowledged that the union had a contract with a grower in San Diego which allowed unlimited work by family members.   The employers also repeated their concern that once the employers made a concession on this issue, it was unlikely that the union would agree to remove the prohibition at a future date;  therefore Eto's and Frazier's descendents would be barred forever from doing certain kinds of work.   Because the parties had each reached their “bottom line” on this issue, impasse existed and the employers cannot be held to have bargained in bad faith by refusing to concede the family member issue.

 We also conclude the Board's findings that the employers' per se violations away from the bargaining table tainted the employers' bargaining after March 15, 1977, is conjectural and unwarranted.

The Board held that Eto's failure to provide information on his employees (wages, vacations and paid holidays) for over a year after the union's initial request in January 1976 and Frazier's failure to produce a complete updated list of employees were per se violations of sections 1153, subdivisions (e) and (a).   Unlike the ALO, it also reached the same conclusion with respect to the union's request for information on health, welfare, pension, profit sharing and life insurance plans.   As to the latter information, the evidence shows that although the employers failed to supply this information, the union had no intention of deviating from its master agreement proposals so that it did not need the requested information.

As to wages, vacations and paid holidays, the record shows the employers furnished some information on existing practices at the initial bargaining session in April 1976, and further details became known to the union as the sessions progressed.   Thus, as the ALO reasoned, the issue is whether the information was given to the union with reasonable promptness.   The union's announced strategy was to delay all economic proposals until other items were negotiated.   Although requested many times to make a wage proposal, the union refused to do so until October 3, 1976.   Furthermore, the union never objected to the employers' failure to provide more complete information until the meeting with Chavez on April 14, 1977, which was about one year after the information was requested.   The employers' delay in providing complete information is not a strong indication of bad faith during the final bargaining phase.

The October 20, 1976, wage increase after the contrived impasse is too remote in time to have significance insofar as the employers' subjective intent after March 15, 1977.   As to Eto's earlier wage increase on January 19, 1976, the ALO found it did not violate the Act because it was instituted before the UFW had requested negotiations and it accorded with Eto's established practice of paying workers according to the prevailing rate.   Although the Board also found the January 19, 1976, wage increase was not in violation of the Act since it had not been alleged in the complaint, it nevertheless considered the increase as “background evidence” of Eto's attitude toward bargaining with its employees' representative.  (6 A.L.R.B. No. 20, p. 21.)   Again, the Board's inference from this wage increase that Eto acted in bad faith after March 15, 1977, is simply too conjectural.

Nor can we uphold the Board's finding that Frazier was guilty of bad faith because it bargained directly with employees during 1976 and 1977 by negotiating through labor contractor Uvalle as to whether the employees would be paid for thinning the fields on a contract basis or at an hourly rate.   This had been Frazier's established practice for many years and the union failed to object to this practice.   The ALO had reasoned that the union's failure to object foreclosed the union's right to assert the conduct as an unfair labor practice at the hearing.   The Board disagreed, holding that Frazier violated section 1153, subdivisions (e) and (a) by bypassing the union as a certified representative.   It used this violation as evidence of the employers' bad faith bargaining during the final period.   Again, we hold the Board's inference of bad faith from this conduct is unwarranted.   We agree with the ALO's statement “․ this characterization [of Frazier's practice as a violation of the Act] is more form than substance and does not come to grips with reality.   Frazier merely continued the method of payments which existed prior to the Union's certification.   The only discretion he exercised was determining whether or not a particular field was to be thinned.”

Finally, Eto's isolated wage increases to individual employees during 1977, when viewed in the context of the concessions made by Eto during the 10 bargaining sessions between March 15 and May 19, 1977, cannot be deemed to indicate an evil motive or intent to surreptitiously avoid an overall agreement with the UFW.   The Board was reaching to find any significance from this isolated act insofar as Eto's good faith during the final period.

THE REMEDY

 Because the general counsel failed to meet his burden of proving bad faith bargaining on the part of the employers for the period commencing March 15, 1977, the make-whole remedy imposed by the Board should terminate on that date.   The Board ordered the employers to “[m]ake whole each employee employed in the appropriate bargaining unit at any time between March 10, 1976, and the date [the employer] commences to bargain in good faith and thereafter bargain to a contract or a bona fide impasse, for all losses of pay and other economic losses sustained by each of them as a result of [the] refusal to bargain, as such losses have been defined in Adam Dairy dba Rancho Dos Rio, 4 ALRB No. 24 (1978).”  (First emphasis added.) ¹⁰

 We now consider the propriety of the “open-ended” make-whole remedy imposed by the Board in this case and in routine fashion in refusal to bargain cases.   Even assuming there was substantial evidence to support the Board finding that the negotiating sessions after March 15 were not good faith bargaining, we would not uphold the “open-ended” make-whole remedy imposed under the Board's order.   Because of the importance of this issue, we express our views thereon as an alternate basis for our holding.

In Adam Dairy dba Rancho Dos Rios (1978) 4 A.L.R.B. No. 24, the Board for the first time construed that portion of Labor Code section 1160.3 which states:  “[Where an unfair labor practice has been found] ․ the board ․ shall issue ․ an order requiring such person ․ to take affirmative action, including ․ making employees whole, when the board deems such relief appropriate, for the loss of pay resulting from the employer's refusal to bargain, ․”  By this provision, the California Legislature gave the Board a power which the NLRB determined in a three-to-two decision in 1970 that it did not have under the federal statute.  (See Ex-Cell-O Corporation (1970) 185 N.L.R.B. 107.)

In Adam Dairy, supra, 4 A.L.R.B. No. 24, the Board answered three questions pertinent to the scope of the make-whole remedy:  (1) when is the remedy appropriately applied?  (2) what is included in the term “pay” as it appears in the statute?   and (3) what is the duration of the make-whole period?

Since the statute authorizes the Board to order a make-whole remedy when it “deems such relief appropriate,” the Board concluded the remedy should be applied in every case in which the employees suffers a loss of pay as the result of an employer's refusal to bargain.  (Id., at p. 6, citing Perry Farms, Inc. (1978) 4 A.L.R.B. No. 25.)¹¹

Adam Dairy then decided that the word “pay” as it appears in the statute refers not only to wages paid directly to the employee, but also to other benefits capable of monetary calculation which flow to the employee by virtue of the employment relation.

As to the duration of the make-whole period, the Board decided the appropriate period would be from “the date of the first refusal to bargain until [the employer] begins to bargain in good faith and thereafter bargains to contract or impasse.”  (Adam Dairy, supra, 4 A.L.R.B. No. 24 at p. 16.)   The application of the remedy during this period “directly deprives [the employer] of the immediate economic benefits to be gained by continuing its misconduct, and serves to forestall those effects of delay so destructive to the union's ability to bargain.”  (Id., at pp. 16–17.)

It is the Board's policy as to the duration of the make-whole remedy that causes us concern.   In the present case, in August 1977, the administrative law officer who conducted the hearing and who had the opportunity to personally observe the witnesses concluded the employers had bargained in good faith during the final period of negotiations.   It wasn't until almost three years later (Apr. 25, 1980) that the Board decided otherwise based on the same evidence which was before the ALO.   Understandably, the employers sought judicial review of the Board decision which has taken until now to decide.   If the remedy imposed by the Board in this case were upheld, the employers not only would be saddled with a minimum of four years of make-whole liability but would have a continuing liability thereafter until the Board determined that good faith bargaining commenced.   In our view, the imposition of such a penalty under the circumstances of this case, would be grossly unfair and contrary to the spirit of the ALRA.   The employers would be unduly penalized for exercising their right to seek judicial review of the Board's decision.

 In J. R. Norton Co. v. Agricultural Labor Relations Bd., supra, 26 Cal.3d 1, 160 Cal.Rptr. 710, 603 P.2d 1306, the Supreme Court held in a technical refusal to bargain case that the Board's blanket rule from Perry Farms requiring application of the make-whole remedy in all cases in which an employer is found to have refused to bargain in contravention of Labor Code section 1153, subdivision (e) violated the legislative intent expressed in section 1160.3 giving the Board authority to order make-whole relief when it “deems such relief appropriate.”   The court held that a per se rule requiring make-whole relief whenever an employer ultimately does not prevail in its election challenge is an abuse of the Board's discretion.   While make-whole relief would be appropriate when an employer refuses to bargain for the purpose of delaying the collective bargaining process, it does not follow that such a penalty is justified in every case in which the employer pursues his case in a judicial forum and ultimately does not prevail.  (Id., at pp. 31–38, 160 Cal.Rptr. 710, 603 P.2d 1306.)   We believe the Norton principles are applicable to the continuing make-whole remedy ordered in the present case.   The employers' objectively reasonable relief that they had bargained in good faith with the UFW on the questions of union security, hiring hall and family members working, as found by the ALO in 1977, and the employers' obvious good faith in pursuing judicial review when the Board reached the opposite conclusion in 1980, render the application of a continuing make-whole liability in this case grossly unfair.   It is “a form of punishment for having elected to pursue ․ [the] question beyond the Board and to the courts ․” (id., at p. 35, fn. 19, 160 Cal.Rptr. 710, 603 P.2d 1306, quoting from Ex-Cell-O Corporation, supra, 185 N.L.R.B. 107).

There is a further evil in the Board's interpretation of the make-whole remedy in Adam Dairy.   The automatic application of the remedy in every refusal to bargain case eliminates the employer's right to argue that a contract would not have been reached even if the employer had negotiated in good faith.  (See Comment, Employee Reimbursement for an Employer's Refusal to Bargain:  The Ex-Cell-O Doctrine (1968) 46 Tex.L.Rev. 758.)   For example, in the present case, the Board essentially found that as long as the employers held to their position on the union security, hiring hall and family members working proposals;  they were bargaining in bad faith.   This necessarily means that the Board has rejected the possibility that the parties were at a legitimate impasse over these issues.   If we were to uphold these findings, they undoubtedly would be enforced pragmatically at a subsequent “compliance hearing” as res judicata.¹²  Realistically, only by conceding the union security, hiring hall and family member issues could the employers prove they had commenced bargaining in good faith.   Thus, in the final analysis, the open ended nature of the make-whole remedy is nothing more than a bludgeon to force the employers to make concessions, thereby contravening the legislative policy expressed in Labor Code section 1155.2, subdivision (a), that the obligation to bargain in good faith “does not compel either party to agree to a proposal or require the making of a concession.”

The United States Supreme Court has stated:  “[I]t is ․ clear that the Board may not, either directly or indirectly, compel concessions or otherwise sit in judgment upon the substantive terms of collective bargaining agreements.”   (National Labor Relations Bd. v. American Nat. Ins. Co. (1952) 343 U.S. 395, 405, 72 S.Ct. 824, 830, 96 L.Ed. 1027, emphasis added.)   By utilizing the make-whole remedy to force the employers to capitulate to the UFW on the three issues considered to be of vital importance, the Board has crossed the line between “permissible inference” and “impermissible compulsion.”  (United Steelworkers of America, AFL–CIO v. N. L. R. B., (D.C.Cir.1970) 441 F.2d 1005, 1010.)

The order is modified to require the employers to make whole each employee employed between March 10, 1976, and March 15, 1977, for all losses of pay and other economic loss, as such losses have been defined in Adam Dairy dba Rancho Dos Rios, supra, 4 A.L.R.B. No. 24.   As modified, the order is enforced.

NOTE:  This cause was argued and submitted to a Panel consisting of Justices DONALD R. FRANSON, GEORGE A. HOPPER and GEORGE N. ZENOVICH.   Following the death of Justice HOPPER, all parties stipulated that the cause may be disposed of and the opinion signed by the two remaining Justices on the Panel.

FOOTNOTES

1.   Section 1153, subdivisions (a) and (e) are as follows:“It shall be an unfair labor practice for an agricultural employer to do any of the following:“(a) To interfere with, restrain, or coerce agricultural employees in the exercise of the rights guaranteed in Section 1152.“․“(e) To refuse to bargain collectively in good faith with labor organizations certified pursuant to the provisions of Chapter 5 (commencing with Section 1156) of this part.”

2.   At the unfair labor practice hearing on June 2, 1977, after the general counsel had presented his evidence of the employers' unfair labor practices, the general counsel filed an amended complaint alleging that beginning in January 1976, the employers had failed to bargain in good faith with the UFW as the certified representative of the employers' workers;  the amendment further alleged specific employer acts away from the bargaining table such as unilateral wage changes of certain employees.   It also alleged that during 1976 Frazier had negotiated directly with its employees with regard to their rate and manner of pay without notifying the UFW.   The prayer of the complaint was amended to ask for a make-whole order “for all loss of pay and other benefits to all employees working for [the employers] ․ from January 29, 1976 to the present, resulting from [the employers'] refusal to bargain.”

3.   Eto hires his field workers personally during the thinning and harvest operations.   Because of the small number of employees, Eto does all supervisor work without the aid of a foreman.   Frazier uses Ron Uvalle, a labor contractor, to hire his workers.   Uvalle negotiates the amount and method of payment (field price or hourly wage) between Frazier and the workers.

4.   The master agreement was a collective bargaining contract negotiated earlier in 1976 between the UFW and some 25 other agricultural employers in the Salinas-Santa Barbara area.

5.   The resumption of negotiations on March 15, 1977, marks the commencement of phase three, during which the ALO found employer good faith and the Board found employer bad faith.   The employers vigorously contest the Board's finding of bad faith during this final period of negotiations.

6.   We deny petitioners' motion filed April 2, 1981, to produce additional evidence regarding the conduct of negotiations after the unfair labor practice hearing.   Such evidence is not properly before us in this review proceeding (cf. Gurewitz v. Kinder (1979) 96 Cal.App.3d 460, 467–468, 158 Cal.Rptr. 102).

7.   The Board argues that the more scrupulous standard for review of its decisions where it disagrees with the hearing officer is limited to credibility resolutions based upon testimonial inferences from witness demeanor and is not applicable to derivative inferences drawn from other evidence, citing N. L. R. B. v. Interboro Contractors, Inc., supra, 388 F.2d 495;  Penasquitos Village, Inc. v. N. L. R. B., supra, 565 F.2d 1074;  Abatti Farms, Inc. v. Agricultural Labor Relations Bd. (1980) 107 Cal.App.3d 317, 165 Cal.Rptr. 887;  Royal Packing Co. v. Agricultural Labor Relations Bd. (1980) 101 Cal.App.3d 826, 161 Cal.Rptr. 870;  but cf. George Arakelian Farms, Inc. v. Agricultural Labor Relations Bd., supra, 111 Cal.App.3d 258, 468 Cal.Rptr. 537.   The argument however, is too narrow.   Fact finder credibility resolutions may involve more than witness demeanor;  they also may involve consideration of evidence of a witness' out of court statements which add to or detract from his in court testimony (for example—impeachment by deposition of a witness' in court testimony).   In the present case, transcripts of the last 10 bargaining sessions were received in evidence.   The ALO's detailed findings demonstrate he carefully read and considered the transcripts in evaluating the witnesses' in court testimony on the question of employer good faith.   Thus, the Board's contrary finding of bad faith must be evaluated according to the standard announced in Universal Camera, supra, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456.

8.   Eto also must be deemed to concede, by failing to challenge on review, the finding that he unilaterally changed wages of several employees without notifying the union.

9.   Again at page 15, the Board states, “[the employers'] summary rejection of the UFW's concessions on the hiring hall issue, and the UFW's proposed compromise on bargaining unit work, made without reasoned discussion of the issues, further evidences [the employers'] bad faith.”   At page 16:  “․ the reasons asserted by [the employers] for rejecting the union's compromise proposals on the issues of hiring hall and bargaining union work were of an abstract, categorical nature rather than practical․”We can only wonder if the Board and this court have read the same record!

10.   The Board has agreed, by a letter sent to this court after oral argument, that the conjunctive “and,” as emphasized in the above order, be deleted and the order be modified to read as follows:  “[m]ake whole each employee employed ․ between March 10, 1976, and the date [the employer] commences good faith bargaining which results in either a contract or a bona fide impasse.”  (Emphasis indicates proposed modification in language.)   The purpose of this modification is to clarify the Board's intent that make-whole relief terminates when good faith bargaining commences and not when the contract or impasse is reached.   However, the Board does insist on the retention of the language regarding contract or impasse, because the Board maintains it is only feasible to identify good faith bargaining (as opposed to surface bargaining) by the results of that bargaining.

11.   In Perry Farms, supra, the Board rejected the employer's argument that the remedy should be limited only to those cases where the employer's conduct evidences “a clear and flagrant refusal to bargain for patently frivolous reasons.”  (4 A.L.R.B. No. 25 at p. 8.)   It also rejected the argument that the remedy cannot be applied without a finding that “but for” the employer's refusal to bargain, a contract would have been signed.  (Ibid.)

12.   The Board argues that a determination of make-whole liability will be made at a post review “compliance hearing” as part of the enforcement process.   The hearing would be similar to a back pay hearing under California Administrative Code, title 8, section 20290.   Although the Board and the union argue that the employers would be afforded full due process protections at such a hearing, i. e., notice and the opportunity to prove they had commenced bargaining in good faith, we question the propriety of utilizing the back pay procedure for determining make-whole liability where the liability is of a continuing nature going beyond the original unfair labor practice hearing.   The post review make-whole determination will require more than fixing a dollar amount of liability as in a back pay hearing but will require a totally new adjudication of employer intent and whether a contract or impasse has been reached.   In this situation, the burden of proving an employer violation of the Board's order to bargain in good faith should be on the general counsel, as in any unfair labor practice proceeding (§ 1160.3).

FRANSON, Acting Presiding Justice.

ZENOVICH, J., concurs.