Brewery & Soft Drink Workers, Local 1040

BREWERY AND SOFT DRINK WORKERS, LOCAL 1040 339 Brewery and Soft Drink Workers, Liquor Drivers and New and Used Car Workers, Local 1040, International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America and Standard Auto Equipment Company/Saeco Automotive Warehouse, Inc. and Pepsi-Cola Bottling Company; F&M Schaefer Brewing Company; Dichello Distributors; Gary Beer Dis- tributors, Inc.; The Coca-Cola Bottling Compa- ny of New York; Milford Crane and Machine Company; Fairfield Chrysler Plymouth, Inc.; National Car Rental System-Truck Division; New York Seven-Up Bottling Co., Inc.; Gallo Wine Merchants, Inc.; Earl Scheib; Parts Ware- house; Charles Friedman Company, Inc., Parties in Interest. Case 2-CB-6887 May 5, 1980 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND TRUESDALE On January 12, 1979, Administrative Law Judge Morton D. Friedman issued the attached Decision in this proceeding. Thereafter, the General Counsel filed exceptions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and brief and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge and to adopt his recommended Order. We agree with the Administrative Law Judge's Decision finding that Respondent did not violate Section 8(b)(5) of the Act' by raising its initiation fees for employees employed by Charging Party Standard/Saeco 2 and the other employers named as Parties in Interest.3 As the Administrative Law Judge found, the General Counsel failed to prove t Sec. 8(bX5) states that it is an unfair labor practice for a labor organi- zation To require of employees covered by an agreement authorized under subsection (aX3) the payment, as a condition precedent to becoming a member of such organization, of a fee in an amount which the Board finds excessive or discriminatory under all the circumstances In making such a finding, the Board shall consider, among other rel- evant factors, the practices and customs of labor organizations in the particular industry, and the wages currently paid to the employees affected .... a Standard Auto Equipment Company and Saeco Automotive Ware- house, Inc., operate businesses out of separate facilities, but constitute an integrated business enterprise and a single employer within the meaning of the Act. Accordingly, Standard and Saeco are herein referred to as Standard/Saeco. s Standard/Saeco and the Parties in Interest are parties to separate col- lective-bargaining agreements with Respondent, each contract containing lawful union-shop provisions. All the employers are located in the same geographic area. 249 NLRB No. 39 that Respondent's purpose in raising the fees was to discriminate against nonunion job applicants in favor of union applicants. 4 Under the circum- stances of this case, absent sufficient evidence of discriminatory motive, the Administrative Law Judge correctly dismissed the complaint. In passing, however, we think our reasons for agreeing with the Administrative Law Judge and dismissing the complaint are worth some additional explication. Respondent first began reexamining its initiation fees for all its members in May 1977, when Frank Papcin, who had recently become Respondent's president, and Edward Iulo, who had recently suc- ceeded William Finn as Respondent's secretary- treasurer, discovered a directive from Teamsters Joint Council 64, dated November 18, 1974, con- cerning initiation fees to be charged by Teamsters locals. 5 This directive mandated that all locals' ini- tiation fees for hourly paid employees should be set at a minimum of $25 and a maximum of 50 tdimes the average hourly wage rate. 6 Papcin and ulo learned that Finn, Iulo's predecessor, never reex- amined Respondent's initiation fees in light of the Teamsters directive. Iulo did so and found that other Teamsters locals, which along with Respond- ent were members of the same Joint Council and thus subject to the same directive, charged their members 50 times the hourly wage. Thereupon, lulo obtained seniority lists with hourly rates of pay for each employee and, by late August 1977, announced several initiation fee changes. Thus, at Standard/Saeco, the fee was increased from $50 to $250. In making this determination, Iulo, allegedly acting in conformity with the directive, computed the highest hourly rate at $5/hour and multiplied that figure by 50. However, as the Administrative Law Judge found, the directive focused on the average, not the highest hourly rate. Had ulo used the average figure (of $4.50/hour), the initiation fee would have increased to $225. At Parts Warehouse and at Earl Scheib, Respondent raised the fees from $100 to $200. Employees working for the other contracting employers named as Parties in 4 While Sec. 8(bX5) precludes a labor organization from charging initi- ation fees which are found to be either excessive or discriminatory, at the hearing the General Counsel disclaimed any violation based solely on the excessiveness of Respondent's initiation fees. Rather, the General Counsel argued that the fee increases imposed on new employees at all of the named employers were unlawful because they were discriminatory. By choosing this latter theory, it was incumbent on the General Counsel to prove discriminatory motive, i.e., the fee increases were motivated by Respondent's desire to freeze out nonunion member applicants, thereby monopolizing employment opportunities for union members. s Joint Council 64 is a subordinate unit of the Teamsters International which supervised the operations of Respondent and other Teamsters locals in the area. 6 Papcin and lulo also discovered the minutes of Respondent's execu- tive board and general membership meetings in which Respondent ap- proved the Joint Council directive. 340 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Interest were assessed increases that ranged from 16 to 50 percent. Respondent permitted the em- ployees to pay the initiation fees in $20 weekly in- stallments, thereby lessening any possible financial burden. From the foregoing, it is clear that Respondent's decision to raise fees was part of an overall reeva- luation of its initiation fees at all of the named em- ployers. Indeed the General Counsel concedes as much as he contends that the fee increases were discriminatory at all of the named employers. Under these circumstances, only by examining Re- spondent's actions at all the employers can we de- termine its motive. Having examined Respondent's actions in this way, we are unable to discern any overall plan to create a closed shop as the General Counsel contends. In this connection, we must em- phasize that initiation fees at some employers with whom Respondent had contracts were left intact; fees at other employers were increased by as little as 16 to 50 percent; and all employees subject to the new fees were allowed to pay in installments. Moreover, according to Iulo's undisputed testimo- ny, prior to raising the fees, he learned that three nearby Teamsters locals charged their members 50 times the hourly wage, the highest fees allowable under the directive. While the General Counsel has attempted to prove discriminatory motive by focus- ing only on Respondent's actions at Standard/ Saeco and Parts Warehouse, where the fee in- creases were higher, we cannot make such a find- ing since it is undisputed that Respondent's actions at Standard/Saeco and Parts Warehouse were but a part of an overall review of its initiation fee policy at many employers and, as noted, Respond- ent's actions at many of the employers belie any in- ference of an unlawful motive to freeze out unem- ployed nonmembers. Accordingly, we conclude that the General Counsel has failed to prove his case. 7 Moreover, even were we to examine the fee in- crease at Standard/Saeco in isolation, we would not find that Respondent acted for the discrimina- tory purpose proscribed by Section 8(b)(5). It is un- disputed that, when Iulo explained the need for the fee increase at Standard/Saeco, he told the em- ployees there that: (1) with the higher fee Stand- ard/Saeco could not hire people by offering such low entry wages;" (2) the higher fee would make employees' jobs more secure because it would stop 7 The record does contain some evidence that fee increases at Stand- ard/Saeco and at Parts Warehouse may have deterred some applicants from accepting jobs at these two establishments. Although this evidence may be probative of the excessiveness of the fees it does not establish they were discriminatory. And, as noted previously, the General Counsel dis- claimed a violation based on the possible excessiveness of the fees. 8 The entry level wage at Standard/Saeco was approximately $3.25/ hour. so many people from going in and out of employ- ment; and (3) in order to get new employees to pay the higher fee, Standard/Saeco would have to hire more qualified employees at higher wages. Accord- ing to the General Counsel, Iulo's remarks conclu- sively demonstrate Respondent's unlawful motiva- tion. We cannot agree. As the Administrative Law Judge found, if anything is discernible from these remarks, it is Iulo's belief that the increased fees ul- timately would induce Respondent to raise wages. This, in turn, according to Iulo, would attract more qualified workers willing to make the necessary in- vestment in the higher initiation fees. Viewed this way, Iulo's remarks hardly reflect an unlawful in- tention to create a closed shop and monopolize em- ployment for union members. On the contrary, Iulo's attempt to induce Standard/Saeco to pay higher wages would likely attract nonunion appli- cants, not exclude them.9 Accordingly, we agree with the Administrative Law Judge that the General Counsel failed to prove that Respondent's fee increases were calcu- lated to achieve a closed shop. ° Rather, it appears that Iulo, upon discovering that the fees had re- mained static for some time, adjusted the fees at various rates for each unit of employees in accord- ance with his understanding of the 1974 Teamsters directive. Under these circumstances, the Adminis- trative Law Judge properly dismissed the com- plaint. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and i When seen in context, lulo's remarks are not a reliable indicator of Respondent's reasons for raising fees. Thus, these remarks were made after the fact and were made at a meeting where certain employee union members expressed strong opposition to the fee increase. In this context lulo's remarks say as much about his desire to placate union members- who subsequently voted to eliminate the union-shop clause from their contract-as it does about any intention to create a closed shop. More- over, lulo's reference to job security is itself inconsistent with his other remark that the increase would induce Standard/Saeco to raise wages. Under these circumstances, we need more than these offhand and am- biguous remarks before we can find an 8(a)5) violation and encroach on the Union's general prerogative to set initiation fees for its members. o1 Compare General Longshore Workers, International Longshoremen's Association, Local Union No. 1419 (New Orleans Steamship Association), 186 NLRB 674 (1970); New York Local 11, National Association of Broad- cast Employees and Technicians, AFL-CIO (American Broadcasting Compa- ny, et al.), 164 NLRB 242, 244-245 (1967); Motion Picture Screen Canoon- ists, Local 841, International Alliance Theatrical Stage Employees and Moving Picture Operators of US. and Canada, AFL-CIO (National Broad- casting Company, Inc.), 225 NLRB 994 (1976); Television and Radio Broadcasting Studio Employees, Local 804 (Radio and Television Division of Triangle Publications etr al.), 135 NLRB 632, enfd. 315 F.2d 398 (3d. Cir. 1963). In these cases, unlike here, economic conditions in the industry and unemployment among the union membership supported a finding that, in raising fees, the unions there were seeking to create a closed shop in order to ensure employment for union members. BREWERY AND SOFT DRINK WORKERS, LOCAL 1040 341 hereby orders that the complaint herein be, and it hereby is, dismissed in its entirety. DECISION STATEMENT OF THE CASE MORTON D. FRIEDMAN, Administrative Law Judge: This case was heard at New York City, New York, upon the complaint of the General Counsel issued November 22, 1977, which complaint was based on a charge filed on September 12, 1977, by Standard Auto Equipment Company/Saeco Automotive Warehouse, Inc., herein called Standard/Saeco or the Charging Party. The com- plaint alleges, in substance, that Brewery and Soft Drink Workers, Liquor Drivers and New Used Car Workers, Local 1040, International Brotherhood of Teamsters, Chauffeurs and Helpers, herein called the Respondent or the Union, has violated and is violating Section 8(b)(5) of the Act by raising its initiation fees for the purpose of increasing the job security of members over that of non- members. In its duly filed answer, the Respondent denies the commission of any unfair labor practices. Upon the entire record in this case, and upon due con- sideration of arguments and contentions in the briefs filed by counsel for the General Counsel and the Respondent, and upon my observation of the witnesses I make the fol- lowing: FINDINGS OF FACT 1. THE BUSINESS OF THE CHARGING PARTY Standard and Saeco, both Connecticut corporations, operate businesses out of separate facilities in Stamford, Connecticut, but constitute an integrated business enter- prise and is a single employer within the meaning of the Act, Standard being engaged in the retail and wholesale distribution of auto parts and related products, while Saeco is engaged only in the wholesale distribution of auto parts. During the year immediately preceding the is- suance of the complaint herein, a representative period, Standard/Saeco distributed from their Connecticut places of business products of a value in excess of $1 mil- lion of which products of a value in excess of $500,000 were shipped directly to points in States other than the State of Connecticut. It is admitted, and I find, that Standard/Saeco is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED It is admitted, and I find, that Local 1040 is a labor organization within the meaning of the Act. IIi. THE ALLEGED UNFAIR LABOR PRACTICES A. The Facts Standard/Saeco and the named parties in interest are parties to separate collective-bargaining agreements with Local 1040, each agreement containing lawful union-se- curity provisions requiring membership in Local 1040 as a condition of employment for all employees within the units represented by the Union. Some time before January 1977, William Finn, then the secretary-treasurer of the Respondent, agreed with Standard/Saeco that, during the life of the current col- lective-bargaining contract, the union initiation fee for new Standard/Saeco employees would remain at $50. However, in January 1977, Finn was succeeded by Edward Iulo as secretary-treasurer of the Union. According to lulo, Finn had ignored a directive from Joint Council 64 of the International Teamsters, an um- brella subordinate unit of Teamsters International Union, which supervised the operations of Local 1040 and other Teamsters Locals in the area. This directive, dated No- vember 18, 1974, which is a restatement of a portion of the Teamsters International constitution, mandated that a local's initiation fee for hourly rated employees should be a minimum of $25 and a maximum of 50 times the hourly rate. An executive board of the Respondent herein, on the same date, adopted this formula, and, at the same time, gave the Union's executive officer the power to set the initiation fees pursuant to the formula, for the differ- ent crafts employed by the various employers with whom it had collective-bargaining agreements. Thereaf- ter, according to lulo, Finn, as executive officer of the Union, did nothing to reexamine the initiation fees of new employees employed by the contracting employers. Accordingly, after Iulo was installed as executive officer of the Union in January 1977, he examined the above documents and decided that the Union would conform with the instructions contained therein. On April 27, 1977, Standard/Saeco supplied to the Union a seniority list containing the wage information of its employees who were engaged, basically, as warehouse employees. There was contained in the collective-bar- gaining agreement a provision for a 30-cent-per-hour wage increase to the existing wage which was to be ef- fectuated at a date in August 1977, or shortly thereafter. Thereafter, in August, Iulo examined this seniority list containing the wage information and, after adding on the 30 cents per hour to the then prevailing wage rate, deter- mined that the highest hourly wage among the Respond- ent's hourly paid employees was $5. He thereupon multi- plied the $5 figure by 50 which resulted in a figure of $250 which he decided would be the initiation fee for all of Standard/Saeco's employees. In fact, however, the record reveals that only 3 out of 13 employees employed by Standard/Saeco during that period of time earned as high as $4.75 per hour before the additional 30 cents. Moreover, Standard/Saeco's entry level wage was $3.25. The result of Iulo's determination was that a new em- ployee, coming in at an entry level wage of $3.25 and who earned a gross of $130 per week, was obliged to pay the sum of $250 as initiation fees, which is a 500-per- cent increase over what had been required formerly. Thereafter, lulo notified Standard/Saeco of this increase in the initiation fee but did not inform the union mem- bers of the matter or put it to a vote of the union mem- bers. The record reveals that at that time the average hourly wage of unit employees in the Standard/Saeco in- stallations was $4.20 per hour before the 30-cent-per- 342 DECISIONS OF NATIONAL LABOR RELATIONS BOARD hour wage increase went into effect. Adding on the 30- cent increase the average wage would be approximately $4.50 and not $5 per hour. Carried out to 50 times that amount the new initiation fee would have amounted, at the most, to $225, still a considerable increase over the former initiation fee. It should be noted that the formula used by lulo to fix the new initiation fee was not in ac- cordance with the instructions of the Joint Council, which spoke in terms of average wage whereas lulo used the highest wage possible as a base to fix the initiation fee. After Standard/Saeco and the other employers who were parties to collective-bargaining agreements with Respondent were notified that the initiation fees had been adjusted upward, Gerald Wofsey, the president of Standard/Saeco, sent a written protest to Iulo concern- ing the raise in the initiation fees. He reminded lulo of the promise by former Secretary-Treasurer Finn, at the signing of the current bargaining contract, that the initi- ation fee would remain $50 until the contract term ex- pired. With regard to the other contracting employers, there were only five whose employees initiation fees were not affected. As to these five, Iulo admitted that the fees were not raised and that there was little employ- ee turnover in these shops. With regard to employers in the same industry as Standard/Saeco, at Parts Warehouse the fee was raised 100 percent from $100 to $200, but the entry level wage at that company was $3.76 per hour in contrast to the $3.25 entry level at Standard/Saeco. This increase at Parts Warehouse, however, did materially affect the abil- ity of that company to hire at the entry level wage, ac- cording to Theodore Bobilin, general manager, whose testimony was uncontroverted and whom I credit. The average age of applicants for employment at Parts Ware- house is the low 20's; their education is almost never beyond high school level; their experience with ware- house work of the type offered at Parts Warehouse is virtually nil; and the average duration of employment at Parts Warehouse is approximately a year or two, with a large number staying less than a year.' Thus, the initi- ation fee of $200, though less than that imposed upon new employees of Standard/Saeco, could well have had a deleterious effect on the desirability of employment with Parts Warehouse. The initiation fee for employees of Earl Schieb, an- other automotive parts employer, was also raised from $100 to $200, a 100-percent increase. A proportionate in- crease was likely imposed upon new employees of Charier Friedman Company, Inc., another auto parts dis- tributor. 2 As to the other contracting employers, which were not exempted, the increase in initiation fees ranged, per- centage wise, from 16 percent to 50 percent. These em- ployers, as their names imply, varied in the nature of Applications for employment at Parts Warehouse, introduced in evi- dence through Bobilin, support his testimony as to the age, education, and experience of typical applicants. 2 The record does not reveal what the exact increase was at Friedman, although the preraised initiation fee was $150. There is no logical reason to conclude that Friedman's employees would be granted different treat- ment from employees of the other auto parts companies. their businesses from beverage distributors to auto rental and sales. However, they all employ warehousemen or drivers or driver-salesmen, and they are all located in the same geographical area. Applicants for jobs at Standard/Saeco are generally drawn from the same level of age, education, and experi- ence as are the applicants for positions at Parts Ware- house. The average applicant is 21 years of age, with 11 or 12 years of schooling, and has no experience in the type of work for which such applicant applies or is hired and is usually unemployed at the time the application is made.3 The effect on one individual applicant of the raised ini- tiation is clearly apparent in the case of job applicant Raymond Morehouse who was offered a job at Stand- ard/Saeco at $3.25 per hour. However, when he was told that the initiation fee was $250 to be paid within the time limited to apply for membership, he refused em- ployment. Moreover, it is also clear that the average employee at Standard/Saeco stays no longer than a year to two. Shortly after the various employers were notified on August 9, 1977, of the raise in the initiation fees, Stand- ard/Saeco's employees were visited by lulo because the employees protested a threat of a $25 fine by lulo if they did not attend a scheduled meeting at the union hall in Bridgeport, Conneticut. At the gathering at the ware- house, at which approximately seven employee members were in attendance, Iulo told the employees of the pend- ing increase in initiation fees. When employee Kenneth Cantrell reminded lulo of former Union Executive Finn's commitment that the fee would not be raised during the life of the then current bargaining agreement, lulo pro- ceeded to enumerate several advantages which, he claimed, would result therefrom. He stated that Stand- ard/Saeco would be able to obtain more reliable employ- ees because the employees would think twice about leav- ing after having paid so large an initiation fee. He also stated that the higher fee would enable the Respondent to exert more power to get additional benefits for the members in Standard/Saeco's employ. In answer to a challenge by Cantrell, Iulo stated that at $50 the Union would pretty much leave the matter alone if an employ- ee was improperly discharged but with the $250 initi- ation fee the Union would fight for the dischargee even if it lost.4 Following this gathering, on August 18 at a meeting at union headquarters, lulo stated to Standard/Saeco's em- ployees that the initiation fee was being raised to make the employee-members' "jobs more secure, with so many people going in and out." About 2 weeks later, sometime I From the credited testimony of Terry Rotas, warehouse manager of Standard/Saeco, and credited testimony of employee Steven Holbrook and applicant Raymond Morehouse. ' From credited testimony of Cantrell the content of which was in part either not denied by lulo or specifically admitted by the latter. Although Cantrell is the father of Standard/Saeco's president's son-in-law, and, al- though I would, therefore, under different circumstances, have reserva- tions as to his credibility, his testimony is supported, in part, not only by lulo's admissions and fragmentary denials, but also because Cantrell's tes- timony is supported by the testimony of employee Holbrook, a union member subject to union discipline. Additionally, Holbrook's demeanor was such that he projected an image of forthrightness and reliability which I found convincing. BREWERY AND SOFT DRINK WORKERS, LOCAL 1040 343 at the beginning of September, again in front of the Standard/Saeco shop, Iulo met with the employees. In discussing once more the matter of the initiation fee in- crease lulo told the employees, 'now that the dues [sic] were up, that our jobs were secure, and pretty soon we'd all be able to go in and get a raise, because nobody would take a job for that price and pay two hundred and fifty dollars." 5 At the same meeting, employee Cantrell, who, on Sep- tember 1, had filed a petition with the Board to with- draw the union-shop authority of the Union, asked lulo why the Union had raised the initiation fee before the bargaining agreement had expired. lulo answered to the effect it would enable the Union to force Standard/ Saeco's president to raise the entry wage, which, in turn, would produce better help for the business." Iulo ad- mitted, in testifying, that he knew "that with the higher initiation fee the Company could not logically hire people with low wages."7 B. Discussion and Concluding Findings As noted, the complaint alleges that the increased initi- ation fees for the employees of the several employers, named above, is discriminatory in that, among other things, the purpose for the raises was to increase job se- curity for members of Respondent over nonmembers. Counsel for General Counsel, contending that the facts summarized above prove the allegation of discrimination, specifically disclaims that the newly raised fees were and are excessive. Counsel for General Counsel argues that lulo's actions and his statements made to the employees of Standard/Saeco demonstrate the discriminatory moti- vation in increasing the initiation fees. The Respondent, on the other hand, argues that the General Counsel has failed to prove discriminatory moti- vation in that the recited facts show all lulo did on behalf of the Respondent was to conform to the directive of a higher union body, the Joint Council, and the import of the statements made by Iulo was that the rais- ing of the initiation fees was to induce employee-mem- bers to think twice about leaving their employment (pre- sumably after investing a substantial sum in the initiation fee) and to aid the company to obtain reliable help (again presumably because only those who intended to remain in the company's employ would invest in the high initi- ation fee). These, argues Respondent, are legitimate union interests, because it is to the benefit of all parties to secure industrial stability by eliminating what had been a history of continuous employee turnover. The facts, undenied by Respondent, show that it is customary in the area automotive parts industry to hire, as warehouse and stock helpers, young, undereducated, 5 From the credited testimony of Holbrook. Obviously, Holbrook, as he later corrected himself, referred to initiation fees, not dues, although dues were raised about the same time. 6 From the credited testimony of Cantrell 7 This admission was made on cross-examination and the words used were those of counsel for the General Counsel and were taken from an investigatory affidavit given by lulo. The balance of the sentence in the affidavit reads, "and many whether they were going to stay or not." Al- though taken out of context, when read in context with the rest of the affidavit, the clear meaning of the sentence is not altered from the por- tion quoted when standing alone unskilled, inexperienced individuals who are normally unemployed when applying for work in the industry. It is further established that these same individuals remain in the various employers' employ for an average of no more than 2 years and frequently for only a month to two, and that, in the case of Standard/Saeco and Parts Warehouse the entry level hourly rates are the lowest permitted by the bargaining agreements. Counsel for the General Counsel, through the testimony of applicant Morehouse and of Standard/Saeco's Rota and Parts Warehouse's Bobilin, attempted to show that, because of this condition in the industry, and especially because the starting wage rates are so low (averaging approximately $3.50 per hour), the payment of $200 or $250 initiation fee is such a financial burden to the new employee that the type of applicant for employment the industry nor- mally hires has refused employment, limiting employ- ment in the industry to union members only. This, rea- sons General Counsel, leads to the conclusion that the action of increasing the initiation fees discriminates against nonunion employees8 in favor of union members. However, although the foregoing may well be one of the results in increasing the initiation fees, and, indeed, may have been a foreseeable result, it does not prove dis- criminatory motive. What it may possibly prove is that fees are now excessive. However, as heretofore noted, the General Counsel specifically disclaims any violation based on possible excessiveness. Remaining for consideration, therefore, are the re- marks of lulo which counsel for General Counsel asserts are indicative of the discriminatory motive in the adop- tion of increased initiation fees. It is concluded that Iulo did tell the gathered employees at the first meeting out- side Standard/Saeco's facility that, with the higher initi- ation fee, their employer could not hire people by offer- ing such low entry wages. At the August 18, 1977, meet- ing at the union hall, ulo, in a similar vein, told the members that the higher initiation fee would make their jobs more secure because it would stop so many people from going in and out of employment. Iulo told Ware- house Manager Rotas, about the same time, that in order for new employees to pay the higher fee, the Company would have to hire more qualified employees at higher wages. This same purpose was emphasized by ulo on September 2 at Standard/Saeco's warehouse when, in re- sponse to a question by employee Cantrell, Iulo re- marked that it would help the Union to have Wofsey (Standard/Saeco's president) raise the starting wage in order to obtain better help. Iulo also stated to the group at large on that day that the raise in initiation fee would enable the employees to get a raise "because nobody would take a job at that price [evidently the prevailing wage] and pay $250." It is concluded tht the Respondent's contention with regard to the foregoing has more merit than does the General Counsel's. If, indeed, a motive may be discerned from these remarks of lulo, it is a motive to (a) raise the wages for the benefit of the employees, and perhaps the benefit of the Respondent in the long run, and (b) benefit the employers involved by ensuring a better type of em- R Applicants are employees within the meaning of the Act 344 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ployee and a more stable labor force. Both of these are, indeed, legitimate union concerns. Section 8(b)(5) of the Act, allegedly violated by the Union, does not proscribe a union-caused hardship imposed on employers. Indeed, the complaint herein alleges only discrimination against prospective new employees, which may be a result of the Union's action herein, but has not been proven to be a motivating factor. In coming to this conclusion, due consideration has been given to the fact that lulo, in fixing the new initi- ation fee, relied on a 6-month-old pay roster of Stand- ard/Saeco's employees and that lulo did not follow the Joint Council's directive implicitly in that he fixed the fee based on the highest and not the average rate of pay. However, neither of these facts, even in conjunction with the statements of lulo, proves discriminatory pur- pose in the adoption of the increased fees. They are wholly consistent with the Respondent's avowed pur- pose for the fees as set forth above. Nor is the fact that present members of the Union would not be assessed the higher initiation fee if em- ployed by any of the employers named in the title hereof. As members, they have already paid an initiation fee. To require members to pay an additional initiation fee if they take employment with any of the named em- ployers would be equivalent to the unlawful extraction of an employment fee from the member applicants for employment with these employers. To find, as a matter of law, that union members have to pay an additional ini- tiation fee in order not to discriminate against new em- ployees who are nonmembers would be tantamount to proscribing a raise in initiation fees by unions at any time once an initial initiation fee is established. Lastly, I note that, in the case of the Standard/Saeco employees, the Union lost the election held as a result of the petition filed by employee Kenneth Cantrell. As a result, the 30-day union-security clause of the collective- bargaining agreement is not now, and has not been since the date of the certification of the results of that election, effective and enforceable, and, as far as the record in this case shows, the Standard/Saeco shop is no longer a union shop. Therefore, new employees no longer have to join the Respondent. Accordingly, although this does not render the allegations of the complaint herein moot, for all practical purposes, as far as Standard/Saeco is con- cerned, the raise in initiation fees can no longer affect new employees who do not elect to join the Respondent. Accordingly, by reason of all of the foregoing, it is concluded that the General Counsel has failed to prove his case. CONCLUSIONS OF LAW 1. Standard/Saeco is an employer engaged in com- merce within the meaning of the Act. 2. The Union is a labor organization within the mean- ing of the Act. 3. By raising the initiation fees of the new employees of the named employers, the Respondent has not dis- criminated in favor of its members and against the non- member employees in violation of Section 8(b)(5) of the Act. Upon the foregoing findings of fact and conclusions of law, and upon the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recom- mended: ORDER9 It is ordered that the complaint herein be, and the same hereby is, dismissed. ' In the event n1o exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations (if the National abor Relations Board. the find- ings, conclusions, and recommended Order herein shall. as provided in Sec. 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes