Montgomery Ward & Co., Inc.

In the Matter of MONTGOMERY WARD & CO., INCORPORATED and UNITED MAIL ORDER, WAREHOUSE AND RETAIL EMPLOYEES UNION, LOCAL 20 (C. I. 0.) Case No. C4022.Decided February 26, 1942. Jurisdiction : general merchandising mail-order industry. Unfair Labor Practices Collective Bargaining: charges of refusal to bargain collectively, dismissed. Employer's refusal to accede to union's minimal demands for preferential shop, seniority, and arbitration held under the circumstances not,to con- stitute a refusal to bargain collectively. Employer's effectuation of wage increases without consulting the union during a period when negotiations with the union were in "suspension" held under the circumstances not to constitute a refusal to bargain collectively. Employer's refusal to divulge details as to its survey of competitive wage rates when placing its wage proposal before the union held under the circumstances not to constitute a refusal to bargain collectively. Practice and Procedure : complaint dismissed. Mr. Stephen M. Reynolds, for the Board. Mr. Stuart S. Ball, Mr. Brooks Wynne, and Mr. Frank J. 'Wright, of Chicago, Ill., for the respondent. Mr. Francis Heisler, and Mr. Leonard Levy, of Chicago, Ill., for the Union. Mr. George Turitz, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon an amended charge duly filed on September 22, 1941,1 by United Mail Order, Warehouse and Retail Employees Union, Local 20 (C. I. 0.), herein called the Union, the-National Labor Relations Board, herein called the Board, by the Regional Director for the Thirteenth Region (Chicago, Illinois), issued its complaint, dated September 23, 1941, against Montgomery Ward & Co., Incorporated, 1 The original charge was filed on May 5, 1941 39 N L R B., No. 41. 229 230 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Chicago, Illinois, herein called the respondent,2 alleging that the re- spondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning-of Section 8 (1) and (5) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the complaint'and notice of hearing thereon, accompanied by 'copies of the amended charge, were duly served upon the respondent and the Union, With respect to the unfair labor practices, the complaint alleged, in'substance, that a majority of, the employees in an appropriate unit at the respondent's Schwinn Warehouse, Chicago, Illinois, had des- ignated the Union as their collective bargaining representative at an election by secret ballot conducted on August 8, 1940, pursuant to a Direction of Election of the Board issued on July 11, 1940; 3 that at all times since August 8, 1940, the Union was the exclusive repre- sentative of all employees in the unit for the purposes of collective bargaining; 4 and that on various specified dates between September 1940 and April 1941 the Union ' had requested the respondent to bargain collectively with it as.such representative, but the respond- ent at all times failed and refused so to do, in that the respondent failed and refused to bargain With the Union as the exclusive repre- sentative of all the employees in the appropriate unit or to make counterproposals to the Union's proposals, granted wage increases to employees in the appropriate unit during the course of negotiations with the Union with respect to wages, and failed and refused to make reasonable efforts to arrive at an agreement with the Union or to negotiate and bargain with the Union in good faith. In its answer ' to the complaint, filed on October 4, 1941, the re- spondent admitted that the Union represented a majority of the re- spondent's employees in an appropriate unit, but denied that the respondent had engaged in the unfair labor practices alleged. Pursuant to notice, a hearing was held at Chicago, Illinois, on October 20 and 21, 1941, before Samuel Edes, the Trial Examiner duly designated by the Chief Trial Examiner. The Board and the respondent were represented by counsel, and the Union by a repre- sentative. The Board, the respondent, and the Union participated- in the hearing` and all parties were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evi- dence bearing on the issues. During the hearing counsel for the Board moved to conform the pleadings with the proof. The motion 2The complaint referred to the respondent as Montgomery Raid & Co During the hearing, the Trial Examiner granted the motion of counsel for the Board to amend the complaint to refer to the respondent by its correct corporate name , Montgomery Ward & Co , incorporated 3 25 N L R B 318 4 The Board so certified .on August 26, 1940 26 N. L. R. B 1347. MONTGOMERY WARD & CO., INCORPORATED 231 was granted. At the conclusion of the hearing the parties presented oral argument on the record before the Trial Examiner, and on November 1, 1941, the respondent filed a brief with the Trial Examiner. On or about December 5, 1941, the Trial Examiner filed his Inter- mediate Report, copies of which were duly served upon the parties, in which he found that the respondent had not engaged in unfair labor practices as alleged in the complaint and recommended that the complaint be dismissed . On or about January 5 , 1942, the Union filed its exceptions to the Intermediate Report, together with a brief, and on or ' about January 7 , 1942, the respondent requested oral argument. On January 27, 1942, pursuant to notice , a hearing was held before the Board at Washington, D. C.; for the purpose of oral argument. The respondent and the Union were represented by coun- sel and participated in the hearing . The Board has considered the brief ' and exceptions to the Intermediate Report and , except as the exceptions are, consistent with the findings , conclusions , and order below, finds them to be without merit. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The respondent , an Illinois corporation having its principal execu- tive offices in Chicago, Illinois, is engaged in the manufacture, purchase, sale, and distribution of general merchandise through mail-order houses and retail stores . The respondent maintains and operates 9 mail-order houses, 4 factories, and over 600 retail stores throughout the United States. During the fiscal year ending January 31, 1940, the -respondent purchased merchandise having a total value of $358,943,(530; in the same period its net sales totaled approximately $463,832,750. This proceeding is concerned solely with activities of the respondent in connection with a warehouse maintained and operated by it at Chicago, Illinois, known as the Schwinn Warehouse. At the Schwinn Warehouse the respondent receives merchandise from factories and vendors for distribution to its retail stores and mail-order customers. The merchandise distributed through the Schwinn Warehouse is received from more than 1,000 vendors, the majority of whom are located outside the State of Illinois . The greater part of such mer- chandise is shipped from the Schwinn Warehouse to points outside the State of Illinois . In addition to mail-order customers , such ship- ments are sent to 374 of the respondent 's retail stores located in 23 States. 232 DECISIONS OF NATIONAL LABOR RELATIONS BOARD IT. THE ORGANIZATION INVOLVED United Mail Order, Warehouse and Retail Employees Union, Local 20, is a labor organization chartered by United Retail, Wholesale, and Department Store Employees of America, herein called the United, which is affiliated with thG- Congress of Industrial Organizations. The Union admits employees of the respondent to membership. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Designation of the Union by a majority of the employees in the appropriate unit. On August 26, 1940, on the basis of an election held on August 8, 1940, the Board, acting pursuant to Section 9 (c) of the Act, certified that the Union had been designated and selected by a majority of all employees of the respondent at its Schwinn Warehouse, Chicago, Illi- nois, including catalog-office employees and excluding supervisory employees on its time-card pay roll, cafeteria employees, ledger, and supervisory pay roll employees, as their representative for the pur- poses of collective bargaining and,that, pursuant to Section 9 (a) of the Act, the Union was the exclusive representative of all such employees for the purposes of collective bargaining.5 The respondent does not, in this proceeding, contest the Union's status as such repre- sentative. Accordingly, we find that at all times from August 8, 1940, to and including April 1941, the Union was the exclusive repre- sentative of all employees in the unit for the purposes of collective bargaining with the respondent in respect to rates of pay, wages, hours of employment, and other conditions of employment. B. The negotiations On August 20, 1940, Leonard Levy, a representative of the Union and regional director of the United, addressed- a" letter to the re- spondent requesting a collective bargaining conference between the Union and the' respondent. _ The respondent agreed and a series of meetings was held. - The first meeting, held on September 16 to 17, 1940, was in the nature of a preliminary conference. At the outset the Union re- quested and was accorded recognition as bargaining representative of the employees in the appropriate unit. Various other' matters were briefly discussed, including demands by the Union for a closed shop and a wage increase. Full discussion, however, was deferred to the 5 26 N L R B 1347 MONTGOMERY WARD & CO., INCORPORATED 233 next meeting, at which the union representatives promised to present a complete list of its demands. The next meeting was held on September 24, 1940. `The Union was represented by Levy, its chief spokesman throughout all the con- ferences with the respondent; Francis Heisler,'its attorney; Sandra G. Slotkin, international representative of the United; and a number of employee-members of the union bargaining committee. The re- spondent's representatives included John A. Barr, its assistant secre- tary in charge of labor relations under the direction of Stuart S. Ball, secretary of the respondent; Sidney Boyden, personnel manager of the respondent's Chicago mail-order house; and Lawrence Jones, personnel manager for all the respondent's mail-order operations. At this meeting Levy presented the following eight demands of the Union for collective bargaining discussion : a "closed" or "union" shop,6 seniority, arbitration, the institution of a regular work day, the 'establishment of a specified policy relating to the reemployment of workers inducted into military service, the adoption of a grievance procedure, the elimination of hardships arising out of the operation of the respondent's vacation policy, and a wage increase of 10 cents' an hour for all employees. The greater part of the meeting, which lasted about 3 hours, was devoted to discussion of the Union's demand for a closed shop. Levy contended that a closed shop "would reduce the friction between the management and the employees." Barr replied that the respondent had considered the proposal but "could not agree to it." The re- spondent, Barr explained, "felt it was the privilege of each employee at the Schwinn Warehouse to either join the Union or, not join the Union, as he personally desired . . .," that since "the law prohib- ited us from requiring that any employee not join the Union . . . it was unfair that the company use its economic power as an employer to force or coerce any employee into the Union . . .," and that "just as the company did not feel that it should compel its employees to belong to any particular church or lodge so it did not,feel that it should compel its employees to belong to any Union." Barr also argued that the closed shop limits an employer's freedom to choose his employees. During the discussion Levy requested Barr to offer "a counter-proposal to our proposal of the union shop," but when asked by Barr what kind of counterproposal the respondent could make to a demand for a closed shop, Levy, as he testified, advised Barr : "I could make a number of proposals if I were the manage- ment but since I was not the management . . . it was not in my "These terms, Levy testified , were used interchangeably * "What we asked of manage- ment was the ruling that all employees of the company be members-of the union or become members of the union and remain members of the union as a condition of employment , and that all new employees shall become members of the union." 234 , 'DECISIONS OF, NATIONAL LABOR RELATIONS BOARD province to make ,a counter-proposal or to be asked what a counter- proposal would be, that this was, within the province of the manage- ment and I was asking a counterproposal from them," Turning then to the matter of seniority, Levy proposed that "all hiring and layoffs shall be guided by length of service . . . that the company's policy . . . . shall be . . . that all employees with a lesser length of service shall be laid off before employees with seniority or longer service shall be laid off . . ." According to Levy, Barr stated that the application of "strict seniority was against company policy, that there were too many factors involved insofar as hiring and-layoffs are concerned, besides seniority, that made it impossible for the management to apply a policy of strict seniority." The governing factors, Barr explained to the union representatives, included "seniority, eligibility, efficiency, flexibility, adaptability, marital status, physical fitness, age . . ." When Barr offered this formula as a "counter-proposal" to the Union's seniority demand, Levy characterized it-as "a mess of words which no man could under- stand," and said that he thought that Barr did not understand it. Barr replied that the respondent had been applying the policy and did understand it. With respect to arbitration, the Union proposed that "in the event of any disagreements between the management and the Union that could not be settled between the management and the Union, . . . such disagreements be presented to an impartial chairman or to an impartial , arbitrator or to some group of people that would be selected by the Union and the management, to decide and agree to select an impartial person to decide these disagreements." The re- spondent refused this demand, explaining, through Barr, that "the company would not allow . . . the rights and privileges of man- agement to pass into the hands of people who were strange to both the management and the employees . . ., that it was the pre- rogative of the company to determine policy and to say whether or not the employees or the management has acted in a proper way; that to allow . . . arbitration . . . would be taking away from the management a prerogative . . which the company would not relinquish . . " i On the subject of the work day, the Union pointed to the fact that the employees were required to work at uncertain hours, and demanded that the respondent- institute "a regular working day" commencing at 8 a. in. and ending at 4: 50 p. m. This demand, according to Levy, was rejected with the explanation that such an arrangement "would be disadvantageous to the company" in view of the irregular "manner in which orders came into the Schwinn Warehouse ..." MONTGOMERY WARD & CO., INCORPORATED 235 ,The demand of the Union with respect to employees inducted into military service was that upon discharge from such service they "be returned to their jobs without loss of seniority . . . and at the rate of pay established at the time of . . . reinstatement . .." To this Barr replied that the respondent "would reemploy, without loss of status, employees who had been . . . in the country's service pro- viding conditions had not so changed in the meantime as to make it . .. impossible or grossly inequitable to do so . . -." The respond- ent, however, would not commit itself beyond what the law required; Barr advised Levy that "the provisions for reemployment that were contained in the Selective Service Act and related Acts was a fair arrangement and that the wording of the statutes fairly represented what our policy would-be in that regard." With respect to the Union's proposal that "a grievance committee' and channels for the solution of grievances" be established there was no substantial controversy. Barr, according to Levy, stated that the management "would welcome the establishment of such a committee" and that it believed the parties "could work out grievances in the Schwinn- Warehouse to the satisfaction of the Union and the management." With respect to vacations, the Union, according to Levy, took exception to the respondent's established practice whereby employees became eligible for vacations on the anniversary date of their em- ployment and were permitted to take their vacations at any time during the 12-month period following the anniversary date. Levy testified that he advised the respondent's representatives that in many cases this worked a "hardship" on employees, since they "might have to wait eighteen or nineteen . . . or sometimes twenty months before [they] could have any vacation . . . in the summer months or in the usual vacation periods." The union representatives, however, proposed no alternative for the respondent's policy, and Barr advised them that the respondent intended to adhere to its existing policy.7 The demand of the Union for a wage increase of 10 cents per hour for all employees was discussed briefly at this meeting. The manage- ment representatives stated that it was the respondent's policy to ' According to Barr, the basis for the Union's objection respecting the vacation policy was that the employees were compelled to take vacations at unseasonable times of the year when, Barr testified, Levy was told that the employees were free to take their vacations at any time during the year following the anniversary date of employment, no further objection was voiced. The sole provision in the proposed contract submitted by the Union to the respondent on October 11 or 12, 1940, was that "Vacations . . now enjoyed by the employees shall be maintained by the Employer " Levy also protested that in particular cases unfair exceptions were made in the application of the respondent's vacation policy. At the hearing Levy admitted that individual grievances with respect to vacations were taken up by the Union with the management and that "some" of the cases were adjusted. - 236 DECISIONS OF NATIONAL LABOR RELATIONS BOARD pay wages at least as high as those paid by its competitors and that the respondent was undertaking a survey of the wage rates of its competitors. Accordingly, the Union was requested and agreed to defer discussion of wages until the survey was completed. Further meetings between the Union and management representa- tives were held on, September 26, October 3, 9, and 30, 1940, and April 23, 1941. During the meetings held on September 26 and October 3, 1940, the Union renewed and urged the respondent to accept its demands. The respondent refused, again detailing the reasons for its objections to various of the proposals. Nor was the Union any more successful in prevailing upon the respondent at the meeting held on October 9, 1940. In addition to those who at- tended the previous meetings, Samuel Wolchok, president of the United, appeared and spoke on behalf of the Union. In order, as Levy testified, "to establish- how closely we can come together in bargaining collectively," Wolchok suggested that the Union might accept the respondent's -seniority policy, if the respondent, in turn, would agree "to arbitrate any differences . . . arising out of the application of this policy." The respondent would not agree, re- peating that it was opposed to arbitration and stating that "negotia- tion was ... a more sound means of working out ... problems ..' .; that any problem that was solved by negotiation was more satis- factorily settled than problems that were settled by arbitration." Other Union demands were also discussed at the meeting, but no agreement was reached. During the course of the discussion, Wol- chok asked Barr "whether or not the company would-sign a contract with the union and enter into an'agreement with the union." Barr replied : "we will sign anything on which we will agree." When further asked by Levy to state the matters as to which the parties could agree, Barr advised the conferees : "We have discussed these questions with you openly and honestly and you know our position on all of the questions which we have discussed ; and on any of those questions which .. . we are in agreement on, we are prepared to enter into a contract with the union." The meeting terminated after Wolchok advised Barr that the Union would submit a written contract to the respondent as the basis for further negotiations. The Union submitted a proposed contract on October 11 or 12. At the following meeting, held on October 30, 1940, each item in the proposed contract was discussed. As a substitute for the Union's prior demand for a closed shop, the contract provided that the respondent would discharge any employee presently a member in the event such employee was expelled or suspended from mem- bership for violation of the agreement or of the Union's constitu- MONTGOMERY WARD & CO., INCORPORATED 237 tion or bylaws s Barr told Levy that this proposal "would not be acceptable to the company for the same reasons . . . advanced in op- position to the closed shop . . ." The union' representatives then asked Barr for a written "counterproposal" on this point. Barr replied that it was "the careful thinking and judgment of the management ... - that the Schwinn Warehouse should be operated as an open shop; . . . I would assume that writing out of a sentence saying that the Schwinn Warehouse would be operated on an open shop basis would not be what [the Union] was asking for because, as I understood the general practice in trade agreements, . . . it was ... to say nothing . . . rather than stating that it was an open shop specifically." With reference to hours, the contract, embodying substantially the prior demand of the Union, provided for a regular work day beginning at 8 a. in. and ending at 4: 50 p. in., with time and a half to be paid for services performed at other hours. The respondent would not agree to pay overtime on the basis of a stipulated work day; it proposed to pay overtime only for work performed in excess ,of a 40-hour week. 1 The testimony is in conflict as to the respondent's position regarding the establishment of a regular work day. Ac- cording to Levy, Barr" rejected the Union's proposal, despite the fact that thereafter the respondent did establish a, regular 8 a. in. to 4: 50 work day in some of the warehouse departments. Barr, however, testified that he told the Union "there was no substantial disagreement between us with regard to hours . . ., that the Union's demand . . . was practically all right with the company, except that the beginning and quitting time probably could not be made effective in all departments." In view of the position taken by Wolchok, in a letter addressed to Ball, secretary of the respondent, shortly after the October 30 meeting, that apart from ""the issues in connection with a preferential shop and seniority . . . other factors can be ironed out with very little controversy," we find, as did the Trial Examiner, that, to the extent that resolution of this conflict is required, Barr's version is to be credited.9 8 The union's representative termed this a "preferential shop " Although not so provided in the contract, Levy stated at the hearing that he understood the "preferential shop" demand to include the provision that "in the event of layoffs non-union members will be laid off first." 9 The fact that the respondent did establish a regular work day in some departments shortly after the October 30 meeting, is not significant, since this was effected in response to the Union's request at a grievance meeting with the respondent's Schwinn warehouse superintendent, Peters. In one of the pamphlets issued to its members, the Union announced that among the "changes . . . brought about by our Union" was the fact that, "for the first time in Schwinn, hours have been regulated . . " In another such pamphlet, the Union advised its members that as a result of its presentation of the matter to the respondent, the management "had agi eed . . . to have a regular starting and stopping time on the receiving dock." 238 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The other-provisions in the contract, dealiiig with seniority, arbi- tration, vacations, grievance procedure, wages, and employees in- ducted into military service, also embodied substantially the de- mands theretofore made by the Union." As to vacations and griev- ance procedure the parties were in substantial accord. On seniority and arbitration, however, the parties again could find no common ground. These points were fully discussed, but, as had been true at the earlier meetings, the respondent would not yield as to either and the Union would accept the respondent's seniority formula only if its demand for arbitration was accepted. At the October 30 meeting, for the first time, the Union's wage proposal received full consideration." The respondent announced that its survey of competitive wage rates had been completed, and that, in view of the facts revealed by the survey, the respondent was prepared to grant wage increases to three categories' of employees, namely, the order fillers, whose wages would be raised from 40 cents per hour to a sliding scale of 40 to 47 cents per hour, and the checkers and the parcel-post packers, whose rates would be raised from 45 cents per hour to a sliding scale of 50 to 56 cents per hour. Ap- proximately 125 of the 200 workers then employed would be affected by the proposed increase. The respondent's representatives dis- closed the names of the concerns covered by the survey, but refused to divulge the wage rates in effect at all the concerns on the ground that some of the figures had been given to the respondent in con- fidence. They stated, further,- that they were unable to give the Union the names of the employees affected by the proposed increase and the amount of the increase each would receive 12 Barr stated that the respondent would be willing to receive and consider any further information the Union might have respecting competitive wage rates for the classifications involved, but that the respondent desired to put the stated increases in effect immediately. Wolchok agreed that the increases should not be held up pending the negotia- tion of a final'agreement on all the subjects under discussion, and the new rates were put into effect on November 1, 1940.13 i° Such differences as appeared were minor in character Thus, in regard to vacations, the contract provided only for the maintenance of the existing practice At an earlier meeting the Union had recognized that its demand for strict seniority could not be applied to all employees : the contract accordingly made provision for the exception of specified categories of workers "Levy testified that the wage question was considered at the October 9 meeting, but the notes of Broian, one of the iespondent's attorneys, which are probably more reliable In this regard, place the discussion at the October 30 meeting ii Fui ther, according to Levy, Barr adx iced the Union that lie did not know whether the respondent would disclose the total pay-roll increase reflected by the proposed raises. Barr testified that the Union was told that such figures had not been computed, but that this would be done and the figures furnished if the Union so desired . We credit the testimony of Barr on this point, as did the Trial Examiner. 11 In a leaflet distributed to the employees on about November 16, 1940, the Union announced : "Montgomery ward has increased wages in the Schw inn warehouse as a MO'NTGOME'RY WARD & CO., INCORP rORATE':D 239 The Union took as its final position that it would "never sign a contract which does not contain either a provision for a closed shop or a provision for arbitration," 14 and the October 30 meeting proved unproductive of an agreement. That night Wolchok and other rep- resentatives of-the Union met with Ball, secretary of the respondent. Little was accomplished. On Wolchok's suggestion, the October 30 meeting was adjourned without arrangements for a future meeting having been made. On November 4, in a letter addressed to Ball, Wolchok, after stating that Ball had been "entirely frank and honest in [his] expressions and opinions," stated : I should like to inquire at this time whether you have a favorable reply to, the issues which we left with you, in connec- tion with a preferential shop and seniority. This is of particular importance. Other factors can be ironed out with very little controversy. - Ball replied : We have reviewed Mr. Barr's report and have approved the posi- tion which Mr. Barr took in the course of his discussions with you. Certainly, however, the door is open to you for further discussions at any time you may desire. All you will have to do is to advise Mr. Barr. of your wishes. No further meeting looking toward the consummation of a col- lective bargaining agreement was had between the parties until 'April 23, 1941. Prior thereto, however, a grievance procedure was initiated and meetings were held at regular intervals between union and management representatives with respect to various grievances relating to bonuses, wage rates paid to individuals, favoritism, the dismissal of employees, lighting facilities, and the like. Many of the matters so handled were successfully adjusted. In a broadside to its members the Union, referring to its grievance meeting with the respondent on December 10, announced : "SCIIWINN UNIT PRESENTS 19 GRIEVANCES-COMPANY CORRECTS 18." ' At the meeting held on April 23, 1941, negotiations for a contract were resumed . However, the preferential shop, seniority, and arbi- tration issues again arose as barriers to an agreement-1,5 Except with result of our negotiations . " and in a leaflet distributed about December 13, it was stated that "the Union negotiated wage increases for a majority of the Schwinn workers." '+ At the time of the hearing , Levy testified , the Union had but one contract with an employer which did not provide for a closed or preferential shop; that contract , however, contained both seniority and arbitration provisions 'L Wages were also discussed at this time . Between November 1, 1940, and April 23, 1941, the respondent had initiated various wage increases in addition to those announced at the previous October 30 meeting Barr admitted that the Union had not been consulted in this matter , but explained that wages had been increased because of the rise in com- petitive wage scales and that the Union had not been consulted because it had "made no request upon the company to ... negotiate wages subsequent to November 1st, 1940." 448105-42-vol. 39-17 240 DECISIONS OF NATIONAL LABOR RELATIONS BOARD respect to grievance questions, no further meetings were held between the parties. C. Concluding findings In the circumstances here disclosed the respondent cannot be said to have violated its statutory duty to bargain collectively with the Union. At the first meeting with the Union's representatives the respondent accorded the Union recognition as exclusive bargaining agent of the employees. Thereafter the respondent, whenever re- quested, inet with the Union and allowed it full opportunity to present its demands and its reasons in support thereof, and at all times it fully explained its own position as to each of the Union's proposals. The respondent indicated, further, the terms upon which it would enter into a collective bargaining agreement and declared its willingness to reduce to writing any agreement reached. The duty imposed by the Act is not limited to the recognition of the representatives of the employees, to the mere meeting and dis- cussion of terms with them, or to the formal expression of a willing-' ness to enter into contractual arrangements. The Board and the courts on frequent occasion have indicated that the difference between the semblance and the substance of collective bargaining may be tested by the extent to which the parties evidence a sincere purpose to explore the total situation and find a basis for agreement.16 The employer must in a very real sense undertake to discover with the Union such common ground as may exist between the parties. On the other hand, satisfaction of the statutory obligation does not require an employer to capitulate to the demands addressed to him 17 The record in this case does not, in our opinion, disclose a failure by the respondent to meet its affirmative responsibility to find a mutual basis of understanding. As a result, at least in part, of the Union's demand for a wage increase, the management undertook a survey of competitive rates of pay, and, when this was completed, presented to the Union its proposal on the subject. The respondent's wage proposal was thereafter put into effect only upon consultation 16 See, for example , Matter of S L. Allen it Company, Inc. and Federal Labor Union Local No 18526 , 1 N. L R B , 714, 728; Matter of Singer Manufacturing Co and United Electrical, Radio it Machine Workers of America, 24 N L R B 444 , enf'd as mod Singer Manufacturing Co v. National Labor Relations Board, 119 F (2d) 131 (C C A 7) cent den , 313 U S. 595; National Labor Relations Board v Reed it Prince Mfg Co , 118 F (2d) 874 (C C. A. 1), cert den , 313 U S 595; National Labor Relations Board v George P Pilling it Son Co., 119 F ( 2d) 32 (C. C. A. 3) ; Globe Cotton Mills v. National Labor Relations Board, 103 F (2d) 91 (C. C. A. 5) ; National Labor Relations Board v The Boss Mfg. Co, 107 F. ( 2d) 574 (C C A 7) ; Wilson it Co v. National Labor Relations Board, 115 F ( 2d) 759 (C. C A. 8). " Art Metal Construction Co. v. National Labor Relations Board. 110 F. (2d) 148 (C C A. 2) ; National Labor Relations Board v. Highland Paik Mfg Co , 110 F (2d) 632 (C (C. C. A. 4) ; National Labor Relations Board v. F, xpress Publishing Co, 111 F C. A 5), mod. in other respects , 312 U. S. 426, ( 2d) 588 MOMPGOVIE'RY WARD, & CO., INCORPORATED 241 and agreement with the Union, which thereafter announced to its membership that the wage increases were the "result of our negotia- tions." The fact that in placing its proposal before the Union the respondent refused to divulge details as to the competitive rates shown by the survey is not significant in the circumstances of this case. There is no indication that such refusal was grounded in a purpose to defeat the negotiations; the respondent, so far as appears, sin- cerely believed the requested information to be confidential. More- over, the Union did not claim that competitive rates were not suffi- ciently known to it as a result of its own organizational experience in the industry. WWTe do not attach importance to the fact that the respondent effected further wage increases after November 1, 1940, without con- sulting the ' Union. However significant this might have been in other circumstances, in this case the increases were put into effect pursuant to normal management policy and with no purpose of by- passing the Union. Moreover, as in Matter of Westchester News- papers, Inc., and Westchester Newspaper Guild, et al.,18 negotiations were in "suspension" at the time. In these circumstances the re- spondent was' under no duty to withhold normal action respecting wages pending consultation with the Union.19 This is especially true since the wage question at no time appeared as an issue in any way determinative of the final course of negotiations. Throughout, the negotiations stood at an impasse for reasons unrelated to any question of wages. As appears from WVolchok's letter to Ball of November 4, the parties were in substantial disagreement only as to the issues arising in connection with the Union's demands for a preferential shop, seniority, and arbitration. These issues were basic to the successful negotiation of an agreement. The respondent would not yield, but-neither would the Union. The respondent was not bound to ^iccede to these minimal demands, and the record does not show that in refusing to yield the respondent was motivated by an unlaw- ful design or insincerity of purpose. On the contrary, that the respondent stood its ground in good faith and would, where it deemed it proper, yield to the demands of the Union, is attested by its amen- ability to the institution of a regular work day, the establishment of a grievance procedure, and the frequent adjustment of grievances at regular meetings held' for that purpose with the Union's repre- sentatives. It appears clear that but for the honestly taken but irreconcilable positions of the parties 'in regard to the preferential shop, seniority, and arbitration, the negotiations would have resulted 18 26 N L B. B. 630 "See National Labor Relations Board v. Sands Manufacturing Co., 306 U S- 332, 343, 344. 242 DECISIONS OF NATIONAL LABOR RELATIONS BOARD .in a mutually satisfactory agreement concerning wages, hours, and other terms and conditions of employment.20 In view of the foregoing, and upon the entire record herein, we find that the respondent did not refuse to bargain collectively with the Union within the meaning of the Act. Upon the foregoing findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. United Mail Order, Warehouse and Retail Employees Union, Local 20 (C." I. 0.), is a labor organization, within the meaning of Section 2 (5) of the Act. - 2. At all times from August 8, 1940, to April 1941, United Mail Order, Warehouse and Retail Employees Union, Local 20 (C. I. 0.), was the exclusive representative of all employees of the respondent at 'its Schwinn Warehouse, Chicago, Illinois, including catalog-office employees and excluding supervisory employees on its time-card pay roll, cafeteria employees, ledger, and supervisory pay-roll employees, for the purposes of collective bargaining within the meaning of Section 9 (a) of'the Act. 3. The operations of • the respondent at its Schwinn Warehouse, Chicago, Illinois, occur in commerce, within the meaning of Section 2 (6) of the Act. 4. The respondent at its Schwinn Warehouse, Chicago, Illinois, has not engaged in unfair labor practices within the meaning of Section 8. (1) or (5) of the Act. ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and pursuant to Section 10 (c) of the National Labor Rela- tions Act, the National Labor Relations Board hereby orders that the complaint against Montgomery Ward & Co., Incorporated, Chi- cago, Illinois, be, and it hereby is, dismissed. CHAIRMAN MILLIS took no part in the consideration of the above Decision and Order. 20 The facts disclosed in this case differ in substantial and decisive respects from the facts in Matter of Montgomery Ward & Company and Warehousemen's Union, Local No 206, et at., 37 N. L R. B. 100, in which the Board found a violation of Suction 8 (1) and (5 ) of the Act Unlike the situation here, the respondent in that case , the Board found , refused to agree to embody understandings with the union in'a signed written con- tract, refused to accord the union exclusive recognition in such contract , refused to discuss freely and fully the demands of the union or to take any affirmative action looking toward the- successful consummation of negotiations , and in a variety of other ways evidenced a want of good faith in negotiations with the union.