Don Juan Co., Inc.

In the Matter of DON JUAN Co., INC., AND DON JUAN, INC. and UNITED PACKINGHOUSE WORKERS OF AMERICA , CIO, DISTRICT 6 Case No. 2-C-533.Decided August 27, 1948 DECISION AND ORDER On September 9, 1947, Trial Examiner. Isadore Greenberg issued his Intermediate Report in the above-entitled proceeding? finding that the Respondent Don Juan Co., Inc., had engaged in, and was engaging in, certain unfair labor practices, in violation of Section 8 (1) and (3) of the Act,2 and recommending that it cease and desist therefrom and take certain affirmative action; as set forth in the copy of the Inter- mediate Report attached hereto. The Trial Examiner also found that the Respondent Don Juan, Inc., was not an employer of the em- ployees here in question within the meaning of the Act and recoin- mended dismissal of the complaint as to this Respondent. The Trial Examiner further found that the Respondent Don Juan Co., Inc., did not commit unfair labor practices by failing to reinstate employees Holmes, Wilkinson, and Waclaveski after a general lay-off, and he -dismissed the complaint as to employee Mosco, who did not appear at ;the hearing. Thereafter, counsel for the Board and counsel for the Respondent each filed exceptions to the Intermediate Report and supporting briefs. Pursuant to the provisions of Section 3 (b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this proceeding to a three-man panel consisting of the undersigned Board Members.* The Board has reviewed the rulings of the Trial Examiner at the hearing and finds that no prejudicial error was committed. The 1 At the hearing , the Tiial Examiner , without objection , granted a motion made by Hair Goods, Toiletries and Accessories Workeis Union , No. 21906, AFL , herein called the AFL, to intervene in the present proceeding , insofar as its interest therein would appear. The charging Union , herein called the CIO , did not enter an appearance. 2 The piovisions of Section 8 (1) and ( 3) of the National Labor Relations Act, which the Trial Examiner herein found were violated , are continued in Section 8 (a) (1) and 8 (a) (3) of the Act, as amended by the Labor Management Relations Act, 1947. * Houston, Murdock, and Gray. 79 N. L. R. B., No. 20. 154 DON JUAN CO., INC. 155 rulings are hereby affirmed. The Board has considered the Inter- mediate Report, the exceptions and briefs and the entire record in the case, and hereby adopts the findings, conclusions, and recommenda- tions of the Trial Examiner, with the exceptions and additions noted below. 1. Counsel for the Board excepted to the finding of the Trial Exam- iner that Don Juan, Inc., is not an employer of the employees here involved within the meaning of the Act. He contended at the hearing and in his brief that Don Juan, Inc., is such an employer, and that its control of the labor policies of Don Juan Co., Inc., was inherent in the nature of the organization of the two corporations. The record shows that the business in which Don Juan Co., Inc., was engaged-the manufacture and sale of cosmetics under the trade-mark "Don Juan"- was originally carried on by Don Juan, Inc. The right of Don Juan Co., Inc., to the use of its formulas and trade-marks, and the right to its very name,' are derived from a contract, for a term of 15 years, between it and-Don Juan, Inc. The premises occupied by Don Juan Co., Inc., are provided by Don Juan, Inc., pursuant to an oral agree- ment between both companies. W. D. Baker and F. D. Crosby each ,owns 50 percent of the stock of Don Juan, Inc. Baker, Crosby, their immediate families, and Don Juan, Inc., own 2,720 shares of the total of 3,930 shares in Don Juan Co., Inc.; the remaining 1,210 shares are divided among 9 shareholders. At the time of the unfair labor prac- tices alleged in the complaint, Crosby was general manager, secretary, and treasurer of both corporations, and Baker was president of both. Baker and Crosby constituted a majority of the directors in each cor- poration. Don Juan Co., Inc., owes $76,437 to Don Juan, Inc., and total of $149,937 to Crosby as an individual and to corporations which Baker and lie control. Under all these circumstances it is" apparent that both corporations are engaged in a single enterprise conducted by the same 2 individuals. The affairs of Don Juan, Inc., are so iiiter- related and intertwined with those of Don Juan Co., Inc., as to make it an essential party to this proceeding.4 Accordingly, we find, con- trary to the Trial Examiner, that Don Juan, Inc., is an employer of the employees involved herein within the meaning of the Act and that Don Juan, Inc., and Don Juan Co., Inc., are jointly and severally re- sponsible for the unfair labor practices involved in this proceeding. 2. The Trial-Examiner found, and we agree, that the Respondents discriminatorily discharged employees Ramona Wilkinson and Penny Holmes. The Respondents take exception to this finding. They con- 3 By the terms of the contract, Don Juan Co ,_ Inc., agrees to change its name in the event of termination of the contract for any'reason whatsoever 4Federal Engineering Co., Inc, 153 F. (2d) 233; Matter of Ottenheimer Bros., Inc., 67 N. L. R B 78. 156 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tend that these two employees were justifiably discharged pursuant to the terms of their alleged union-shop contract with the AFL. They argue further that if there is any doubt regarding the construction of the language in the contract, the relevant provisions of which are set forth in the Intermediate Report, the interpretation by the contract- ing parties that the contract justified the discharges of Wilkinson and Holmes must prevail. We are persuaded , as was the Trial Examiner , that the contract does not by its terms require membership in the Union as a condition of employment , and that it does not, therefore, justify the discharges. The contract on that score is ambiguous in our opinion . It is estab- lished, moreover , that union-security provisions relied upon in justi- fication for discharges must be expressed in clear and unmistakable language . There is no such obvious language in this contract, and the interpretation of the parties is not a substitute therefor ." Accord- ingly, we will order that Ramona Wilkinson be reinstated and made whole for her loss of wages from the date of her discharge on October 9, 1946, to the date of her reinstatement ; and that Penny Holmes, who has secured other employment and does not desire reinstatement, be made whole for her loss of wages from the date of her discharge on October 9, 1946, to the date on which she secured her other employ- ment. ORDER Upon the entire record in the case, and pursuant to Section 10 (c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondents, Don Juan Co., Inc., and Don Juan, Inc., New York City, and their officers, agents, successors, and assigns, shall: 1. Cease and desist from discouraging membership in United Pack- inghouse Workers of America, CIO, District 6, or-in any other labor organization of their employees, and from encouraging membership in Hair Goods, Toiletries and Accessories Workers Union, No. 21906, AFL, or in any other labor organization of their employees, by dis- criminatorily discharging or in any other manner discriminating in -regard to the hire or tenure of employment or any term or condition of employment of any of their employees. 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act : (a) Offer to Ramona Wilkinson immediate and full reinstatement to her former or a substantially equivalent position, without prejudice to her seniority or other rights and privileges; 5 Matter of Iron Fireman Manufacturing Company, 69 N. L. R. B. 19. DON JUAN CO., INC. 157 (b) Make whole Ramona Wilkinson for any loss of pay she may have suffered by reason of the Respondents' discriminatory discharge on October 9, 1946, by paying her a sum of money equal to the amount she would normally have earned as wages from October 9, 1946, to the date of the Respondents' offer of reinstatement, less her net earn- ings during said period ; (c) Make whole Penny Holmes for any loss of pay she may have suffered by reason of the Respondents' discriminatory discharge on October 9, 1946, by paying her a sum of money equal to the amount she would normally have earned as wages from October 9, 1946, to the date on which she obtained the employment in which she was engaged at the time of the hearing; (d) Post at their plant at New York City copies of the notice attached hereto and marked "Appendix A." 6 Copies of said notice, to be furnished by the Regional Director for the Second Region, shall, after being duly signed by the Respondents' representative, be posted by the Respondents immediately upon receipt thereof, and main- tained by them for sixty (60) consecutive days thereafter, in con- spicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respond- ents to insure that said notices are not altered, defaced, or covered by any other material; (e) Notify the Regional Director for the Second Region in writing, within ten (10) days from the date of this Order, what steps the Respondents have taken to comply herewith. IT IS FURTHER ORDERED that the allegations of the complaint that the Respondents committed unfair labor practices by laying off Ramona Wilkinson, Margarta Caban Waclaveski, Penny Holmes, and Margaret Mosco on or about July 12, 1946, or by thereafter failing to reinstate them on or about August 22, 1946, be, and they hereby are, dismissed. APPENDIX A NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that : WE WILL NOT discourage membership in UNITED PACKINGHOUSE WORKERS OF AMERICA, CIO, DISTRICT 6, or in any other labor organization of our employees or encourage membership in HAIR GOODS, TOILETRIES AND ACCESSORIES WORKERS UNION, No. 21906, 6 In the event that this Order is enforced by a decree of a Circuit Court of Appeals, there shall be inserted before the words, "A DECISION AND ORDER" the words, "A DECREE OF THE UNITED STATES CIRCUIT COURT OF APPEALS ENFORCING." 158 DECISIONS OF NATIONAL LABOR RELATIONS BOARD AFL, or in any other labor organization of our employees, by discharging or in any other manner discriminating in regard to the hire or tenure of employment or any term or condition of em- ployment of any of our employees. WE WILL OFFER to Ramona Wilkinson full and immediate rein- statement to her former or a substantially equivalent position4 without prejudice to any seniority or other rights and privileges previously enjoyed, and make Ramona Wilkinson and Penny Holmes whole for any loss of pay suffered as a result of their discrimina- tory discharge. All our employees are free to become or remain members of the above-named unions or any other labor organization. DON JUAN CO., Ixc., Employer. Dated-------------------------- By------------------------- (Representative ) (Title) DON JUAN, INC., Employer. { By--=----------------------- (Representative) (Title) This notice must remain posted for sixty (60) days from the date hereof, and must not be altered, defaced, or covered by any other material. - - INTERMEDIATE REPORT Mr George Tgiritz, for the Board. Friedman & Friedm an, by Mr. William K. Friedman, of New York, N. Y, for the respondents. Messrs. Arnold Cohen and Jesse Greenwald, of New York, N. Y., for the A. F. of L.1 STATEMENT - OF THE CASE Upon a first amended charge filed on April 7, 1947, by United Packinghouse Workers of America, CIO, District herein called the CIO , the National Labor Relations Board, herein called the Board, by its Regional Director for the Second Region ( New York, New York), issued a complaint dated April 9, 1947, against Don Juan Co ., Inc., and Don Juan, Inc., of New York , New York, herein called the respondents, alleging that the respondents had engaged in and were engaging in unfair labor practices within the meaning of Section 8 ( 1) and (3), and Section 2 (6) and ( 7) of the National Labor Relations Act, 49 Stat . 449, herein called the At. Copies of the complaint, together with notices of hearing thereon, were duly served upon the respondents , the CIO, and the A. F. of L. 1 At the hearing, the Trial Examiner , without objection, granted a motion made by Hair Goods, Toiletries and Accessories Workers Union , No. 21906 ( A. F. of L ), herein called the A . F. of L., to intervene in the present proceeding , insofar as its interest therein would appear. The charging Union, herein called the CIO, did not enter an appearance. DON JUAN CO., INC. 159 With respect to the unfair labor practices, the complaint alleged in substance that in violation of Section 8 (1) and (3) of the Act, the respondents, on July 12, 1946, laid off employees Margarta Caban Waclaveski, Margaret Mosco, Penny Holmes, and Ramona Wilkinson, and on October 10, 1946, discharged Penny Holmes and Ramona Wilkinson, and thereafter refused to reinstate them, because they joined and assisted the CIO, or refused to join or assist the A. F. of L. In their answer, duly filed, the respondents, in addition to denying the allegations of the complaint, alleged that the complaint was "totally deficient" because of "a misjoinder of parties," and demanded that it should therefore be dismissed. Pursuant to notice, a hearing was held at New York, New York, on June 16, 19, 20, and 25, 1947, before the undersigned, the Trial Examiner duly designated by the Chief Trial Examiner. The Board, the respondents, and the A. F. of L. were represented by counsel, the latter also being represented by its president. Full opportunity to be beard, to examine and cross-examine witnesses, and to intro- duce evidence bearing on the issues, was afforded all parties. At the opening of the hearing, the undersigned reserved ruling on a motion of counsel for the respondents to dismiss the complaint on the ground of mis- joinder of parties. The motion was thereafter denied, with leave to renew it at the close of the Board's case. At the close of the Board's case, counsel for the respondents moved to dismiss the complaint on the following grounds : 1. be- cause of a failure of proof ; 2. because, as the respondents contend, the Board having decided the issue of the alleged discriminatory lay-offs in favor of the respondents, in a previous representation hearing, that issue is res judicata 2 The motion was denied. At the close of the hearing, counsel for the respondents renewed the motion to dismiss on all the grounds previously urged,, and the undersigned reserved ruling thereon. As to the respondents' contention that the complaint-is defective because of a "misjoinder of parties," the facts are as follows : The respondent Don Juan, Inc., owns certain formulae for the manufacture of cosmetics and perfumes, and has the exclusive right to the use of the name and trade mark "Don Juan" in connection with the sale of such products. It licenses Don Juan Co., Inc., to manufacture and sell such products under the said for- mulae and name in return for a percentage of the net sales. The record shows that pursuant to the aforesaid agreement, Don Juan Co., Inc., operates a factory for the manufacture of cosmetics and perfumes, in which it employed the in- dividuals named in the complaint. Francis D. Crosby is president and generall manager of both the aforesaid corporations. All of the stock of Don Juan, Inc., is owned (in equal shares) by Crosby and. W. D. Baker. Of the 3.930 outstand- ing shares of stock of Don Juan Co., Inc, Crosby owns 530 shares ; Baker owns 540 shares ; and Don Juan, Inc., owns 1320 shares.' Don Juan Co. Inc., is in- debted to Don Juan, Inc.. in the sum of approximately $76,000. Though it is true that the two corporations have a common president and general manager, that Crosby and Baker are the controlling stockholders of both, and that Don Juan Co., Inc., is indebted to Don Juan, Inc., the fact remains that the two corporations are separate and distinct legal entities. There is no evidence that Don Juan, Inc., exerts any control over the labor policies of Don Juan Co., Inc., or in any other way has the relationship of employer to the employees herein involved Under the circumstances, the undersigned is convinced, and finds, that Don Juan, Inc, is not an employer of the employees here involved. within the meaning of the Act. Consequently, the motion to dismiss the complaint is The above contention is discussed below in the section of this report entitled, "The unfair labor practices.' 3 The rest of the Don Juan Co , Inc., stock is owned by a number of smaller stockholders, none owning more than 180 shares. 160 DECISIONS OF NATIONAL LABOR RELATIONS BOARD granted insofar as the respondent Don Juan, Inc., is concerned. Counsel for the respondents argues that the complaint must be dismissed in its entirety because it alleges that both respondents are employers, and engaged in unfair labor prac- tices. The undersigned finds no merit in this argument. Since, as is hereinafter discussed, the undersigned is persuaded that there was a failure of proof only with respect to Don Juan, Inc., the motion to dismiss the complaint as to Don Juan Co., Inc., is hereby denied. A motion by counsel for the respondents, made at the close of the hearing, to dismiss the complaint insofar as it alleges the discriminatory lay-off of and refusal of reinstatement to Margaret Mosco, was granted' A motion of counsel for the Board, likewise made at the close of the hearing, to conform the pleadings to the proof in regard to minor variances such as dates, spelling, and the like, was granted without objection The parties were afforded opportunity to present oral argument to the under- signed at the close of the hearing, and thereafter to submit briefs and proposed findings of fact and conclusions of law. Oral argument was presented by counsel for the Board and the respondents None of the parties submitted briefs or proposed findings of fact or conclusions of law Upon the entire record in the case, and from his observation of the witnesses, the undersigned makes the following: FINDINGS OF FACT I THE BUSINESS OF THE RESPONDENT DON JUAN CO., INC.' The respondent Don Juan Co., Inc., is a Delaware corporation, having its principal office and place of business in the City of New York, New York, where it is engaged in the manufacture and sale of cosmetics and perfumes. During the year 1946, the respondent purchased for use in the operation of its plant in New York, New York, materials consisting of talc, perfume oils, and other materials, valued at in excess of $600,000, approximately 50 percent of which was shipped to it from points outside the State of New York. During the same year, the respondent produced finished products at its aforesaid plant valued at in excess of $1,000,000, approximately 90 percent of which was sold and shipped to purchasers outside the State of New York. The undersigned finds that the respondent, Don Juan Co., Inc., is engaged in commerce within the meaning of the Act.' ' Mosco did not appear at the hearing to testify in response to a subpena served upon her. The record contains no evidence in support of the allegations of the complaint that she was improperly laid off or refused reinstatement. i The above findings deal only with the business of Don Juan Co., Inc., which will here- inafter be referred to as the respondent . It is deemed unnecessary to make further findings with respect to the business of Don Juan , Inc, since the undersigned has granted a motion to dismiss the complaint as to that corporation 6 On April 11, 1947, a petition for reorganization was filed on behalf of the respondent in the Federal District Court for the Southern District of New York, pursuant to Section 77 B of the Bankruptcy Act. Subsequently, the official referee entered an order providing for the respondent to continue in business , and to have all the powers of a trustee appointed pursuant to Section 44 of the Bankruptcy Act-the debtor ( respondent ) to manage, operate, and conduct its business , employ employees , and to institute , prosecute, defend, adjust, or become party to any action or proceeding at law or in equity in any State or Federal Court as may be necessary for the protection, maintenance, or preservation of its assets. At the hearing, the attorney for the respondent raised some question of his authority to appear for, and to iepresent the respondent without specific authorization from the Court. It has been held that the Board's power to dissipate unfair labor practices is wholly unaffected by [such a] reorganization proceeding" as the one in which the respondent is presently involved , and that the Court' s "leave to the Board to proceed in appropriate manner" is unnecessary. N. L R. B. v. Baldwin Locomotive Works, 128 F. ( 2d) 39, 44 (C. C. A. 3). DON JUAN CO., INC. II. THE ORGANIZATIONS INVOLVED 161 United Packinghouse Workers of America, CIO, District 6, and Bair Goods, Toiletries & Accessories Workers Union, Local 21906, A. F. of L., are both labor organizations admitting to membership employees of the respondent. III. THE UNFAIR LABOR PRACTICES A. The factual background The factory now operated by the respondent ( Don Juan Co ., Inc.) was until June 1945, operated by a partnership doing business under the name Don Juan Company. After the respondent took over the operation of the factory, it con- tinued to give effect to a collective bargaining agreement then in existence be- tween the A. F. of L. and the predecessor partnership . The aforesaid contract, dated June 26, 1944, was by its terms to terminate 2 years thereafter .- Upon its expiration, the respondent (Don Juan Co., Inc. ) entered into a new agreement with the A. F. of t., likewise for a term of 2 years. In March or April 1946, the CIO began to solicit members among the respond- ent's employees , and on June 11, 1946, that union filed with the Board a Petition for Certification of Representatives.? In early June of 1946 , employees Ramona Wilkinson , Penny Holmes, and Margarta Caban Waclaveski 8 joined the CIO s On or about July 12, 1946, the respondent laid off a number of employees," in- cluding Wilkinson , Holmes, and Waclaveski , on that date handing to each of them a letter stating : Due to the fact that orders we are receiving are considerable below normal, we regret that we must lay you off for the time being. When the business situation improves, you will hear from us. The respondent contends that the aforesaid lay-offs were caused by a diminu- tion during that period of the volume of orders received by it. The Board does not contest the bona 11des of the reason advanced by the respondent tor laying off the aforesaid employees . The undersigned accordingly finds that Wilkinson, Holmes, and Waclaveski were laid off on or about July 12, 1946, together with other employees , for legitimate business reasons. B. The alleged disciim,natoip refusal to 9einstate Wiiki,isoii, Holmes, and Waclaveski The Board contends that although the respondent had, in its 1a3-off notices, promised to recall Wilkinson, Holmes, and Waclaveski "when the business situa- Case No. 2-R-6694, 71 N. L R 13 734 s Waclaveski was known by her maiden name, Maigarta Caban, during the period she was employed by the respondent. The above finding is based on the credited, uniefuted testimony of Wilkinson and Holmes, and on a stipulation with respect to Waclaveski Wilkinson testified that she joined the CIO in early June 1946, and Waclaveski's application card for membership in that union bears the (late, "6/4/1946 " Holmes was confused as to the exact date when she joined The undersigned infers that she joined at about the same time as the two others, since hei card is also dated "6/4/1946 " "The respondent employed 125 workers in May 1946; 121 in June 1946, 67 in July -1946; and 65 in August 1946. It is not clear from the record how many employees were laid off on July 12 At one point Crosby testified that a total of 100 were laid off on this occasion, which testimony he later corrected by testifying that "over the preceding months we laid off a hundied employees" 1 162 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tion improves," it thereafter failed to reinstate them in its employ, although its business did improve to the extent that it hired new employees, and that the said failure to reinstate them was based on the respondent's desire to eliminate CIO adherents from among its employees, and thus to ensure the victory of the A. F. of L. in a forthcoming Board-conducted election. The respondent con- tends that it had no discriminatory motive for failing to recall these employees to work, and that it later did reemploy two of them upon their application for reinstatement. The facts with respect to this issue are as follows : Following their affiliation with the CIO in June 1946, Wilkinson and Holmes engaged in open activities'on behalf of that union." Thus, Wilkinson solicited membership for the CIO among the respondent's employees, and succeeded in "signing up" several of them. On July 19 and 24, 1946, Wilkinson attended )Board hearings on the Petition for Certification of Representatives which had been filed by the CIO," at the second of which Wilkinson entered an appearance on the record on behalf of the CIO Holmes also attended the second of the aforesaid hearings, at which she sat together with the CIO representatives. In addition, both Wilkinson and Holmes, after they had been laid off, on several occasions distributed CIO literature to the respondent's employees, in front ,of the respondent's plant. One of the handbills distributed to the respondent's employees, which was passed out to the employees sometime between July 19 and 24, 1946,13 was signed, "Sincerely yours, Ramona Wilkinson and Penny Holmes, for CIO Don Juan Organizing Committee." It is a fair inference from the foregoing, and the undersigned finds, that shortly after the lay-off of July 12, 1946, the respondent learned that Wilkinson and Holmes were active adherents of the CIO. It was stipulated that the respondent caused an advertisement to be inserted in the New York Journal-American on August.22, 1946, soliciting applications for employment in the respondent's plant from "girls [seeking] light, pleasant sitting-down permanent work." A similar advertisement for female employees was also admittedly inserted by the respondent in another New York newspaper on September 9, 1946. The respondent admittedly hired new employees for its plant during August and September 1946, because of "a slight upturn in [its] business that required additional production." 14 Neither Wilkinson, Holmes, nor Waclaveski were recalled to work by the respondent.13 Wilkinson, who saw the respondent's advertisement for help on the morning of August 22, brought it to the attention of Field Representative Ward, of the CIO, and notified him that she had been laid off by the respondent, but had not been recalled to work, despite the fact that the respondent was advertising for new employees. There- upon Ward telephoned to General Manager Crosby, told him that "the people 11 There is no evidence that Waclaveski was active in the CIO, other than affiliating with it 11 On or about June 3, 1946, the respondent received a letter from the CIO, in which the CIO asserted that it represented a majority of the respondent's employees 13 The approximate date of the distribution is fixed by the fact that the handbill invites the employees to attend a meeting "on Wednesday," at which a report is promised "on what happened on our case at the Labor Board . . [at the final hearing to be held] Wednesday morning " The final hearing was held Wednesday, July 24, 1946. It is thus obvious that the leaflet was distributed shortly before July 24, and after July 19 (the date of the first hearing), since from the tenor of the leaflet, the hearing is refeired to as being in progress. 14 The above finding is based on the testimony of the respondent's comptroller, J. J. McLean. 1s The above finding is based on the undenied, credited testimony of Wilkinson and Holmes, and on the stipulated testimony of Waclaveski. 1' DON JUAN CO., INC. 163 that had been laid off were raising a complaint," and threatened to file an unfair labor practice charge with the Board , unless the employees in question were rehired. Crosby answered that "he had some letters on his desk that he was sending out to the people." Ward then informed Wilkinson of what Crosby had said, and advised her to await word from the respondent. About a week later, Wilkinson informed Ward that she had not yet been recalled to work by the respondent, and that the respondent was still advertising for help. The CIO thereupon filed an unfair labor practice charge with the Board, initiating the present proceeding." After investigation of the charge by a Field Examiner of the Board, and communications between that Examiner and counsel for the respondent, the respondent stated that it would be willing to rehire the com- plaining employees if the latter were to apply for reinstatement. Wilkinson, who was advised of this fact by the CIO, thereupon telegraphed to Holmes and Waclaveski, telling them that they were to apply directly to the respondent for reemployment. In the latter part of September 1946, Wilkinson and Holmes did apply for reinstatement in the respondent's employ, and both were rehired. Waclaveski, so far as appears in the record, made no application for reinstate- ment. At the hearing, the respondent's comptroller, J. J. McLean, testified that if the employees named in the complaint had applied for employment in August 3946, at the time the respondent was advertising for help, the respondent would have hired them. General Manager Crosby admittedly testified at the repre- sentation proceeding in Jnly 19-16, with respect to the laid-off employees, that while the respondent had no fixed seniority rule, "obviously we prefer to get back workers that are known to be good rather than new workers we have no knowledge about," and that if the respondent' s business improved "within six to eight weeks," the respondent would "take back" the laid-off employees. In ad- dition, the two contracts in effect between the A. F. of L. and the respondent (or its predecessor partnership), from June 26, 1944, to date, both contain 'sub- stantially identical clauses reading: If the Employer suspends work , partly or fully, he shall upon resumption of work give employment to laid-off workers before engaging any new em- ployees. All workers must report for work within seventy-two (72) hours after mailing or telephoning of notice by either the Union or the Employer. It is apparent from the language of the lay-off notices received by Wilkinson, Holmes, and Waclaveski, to the effect that when the respondent's business im- proved, it would recall them to work ; from the contractual obligation upon the respondent to recall laid-off employees before hiring new ones;" and from the information given to the CIO by Crosby, to the effect that he was about to "send letters" to the laid-off employees ; that the laid-off employees had reasonable grounds to anticipate that they would be called back to work when business con- ditions improved, before new employees were hired by the respondent. There was, therefore, no duty on their part to apply for reinstatement in order to make it reasonably incumbent upon the respondent to reemploy them before taking on new employees. Nor has the respondent cone forward with any explanation "The above findings are based on the undenied , credited testimony of Wilkinson and Ward The charge was filed on August 29, 1946. "There is, of course , no question in a proceeding such as the present one , of enforcing the terns of a collective bargaining contract. The above reference to the terms of the contract betiueen the respondent and the A F of L is made merely to show that the employees had reasonable ground for awaiting 'recall by the respondent, rather than to actively apply for reinstatement 164 DECISIONS OF NATIONAL LABOR RELATIONS BOARD for its failure to recall Wilkinson, Holmes , and Waclaveski . These circumstances give rise to a suspicion , as the Board attorney argues, that by failing to recall the laid-off employees, and by advertising for new help , the respondent was at- tempting to eliminate CIO members from its plant . The burden of proof of es- tablishing that such , in fact, was the motivation for the respondent's failure to recall the old employees, is, however, on the Board . The undersigned is not satisfied that the record herein goes beyond the establishment of suspicious circumstances. Thus, so far as the record shows, the only CIO adherents among the laid-off employees were Wilkinson , Holmes, and Waclaveski. And there is no showing that the respondent was aware of the latter 's CIO affiliation. There is, moreover , no proof that any of the other laid-of ,employees were accorded preferen- tial treatment as compared with Wilkinson , Holmes, or Waclaveski , since, so far as is established , none of the laid-off employees was called back to work Thus, though the respondent may be said to have been remiss in fulfilling its promises (and its contractual duty ) to send for the old employees when business improved, before hiring new ones, the undersigned is of the opinion that the proof fails to support the allegations of the complaint that Wilkinson , Holmes, and Wacla- veski were either laid off, or refused reinstatement , because of their adherence to the CIO. The undersigned will therefore recommend that these allegations of the complaint be dismissed'' C. The discriminatory discharges On or about October 9, 1946, the respondent received a letter from the A. F. of L.18 reading as follows : Please be advised that Ramona Wilkinson and Pennie Holmes have been temporarily suspended from the above Union, and therefore are no longer members of the Union in good standing. Consequently we must ask you, under the terms of the contract that is existing between your company and the Union, to discharge them immediately. Failure to do so will be construed by our Union as a breach of contract and we will be compelled to take action against your company which we sincerely hope will not be necessary On October 9, 1946. Holmes was summoned to General Manager Crosby's office. and was discharged by him, being informed on that, occasion that the respondent had "to let [her] go" because the A. F. of L demanded her discharge. On her return to her home that day, Holmes found a letter awaiting her, from the A. F. of L., informing her that she was charged with "creating dessension (sic) amongst the workers in endeavoring to organize dual unionism," and that she would be "advised by the Executive Board as to date and place of trial." On or about October 11, 1946, the respondent mailed a letter to Wilkinson, which she received (enclosing a copy of the A. F. of L.'s letter to the respondent demanding the discharge of Wilkinson and Holmes) reading as follows : This is to inform you that, in view of the attached copy of the Union letter of October 8, 1946, we are forced to suspend your services temporarily. '$ In view of the above disposition of the issue of the lay-off and subsequent failure to reinstate the three above-named employees, the undersigned does not consider it necessary to pass herein , on the respondent's contention that the aforesaid issue is res yudiceta be- cause of the Board's holding in the representation proceeding hereinbefore referred to, that the laid-off employees did not retain the status of employees 'n The above-mentioned letter is dated October 8, 1946 ; the undersigned infers that it was received the next day. DON JUAN CO., INC. '165 Inclosed please find check for $915 covering final wages due you for Oct. 7th and 8th 2° Thereafter Wilkinson never received any communication fiom the A. F. of L. The respondent justifies these discharges on the ground that the contract be- tween the respondent and the A F. of L is "a union shop contract, if not a closed shop contract," and that, consequently upon being informed by the A. F. of L. that Wilkinson and Holmes were suspended from that union, and that the A. F. of L was demanding their discharge, the respondent had no alternative but to accede to that demand 21 In support of its contention that the contract between it and the A. F. of L. constitutes a "union shop contract, if not a closed shop contract," the respondent points to the following clauses of the agreement : NINTH : The employer shall not enter into any individual contract with any member of the Union nor accept any security from any such member. The .employees of the Employer affected by this agreement shall include all actual shop personnel in the plant, and shall only exclude office workers, executives, salesmen, head foremen, head foreladies, and supervisory laboratory personnel. The above clauses, read together, argues the respondent, constitute a union shop or closed shop agreement. The undersigned does not agree. Clause "NINTH" above set forth, on its face does no more than forbid the respondent to enter into individual contracts with, or accept security from, any member of the A. F. of L. But nowhere in the contract is there to be found any language imposing upon the employees any obligation to join or remain members of the A. F. of L., as a condition of employment by the respondent, or imposing any obligation upon the respondent to hire, or retain in its employ, only members in good standing of the A. F. of L.22 The second of the two clauses above set forth, and pointed to by the respondent, simply defines the unit of employees covered by the agreement. It is true that the contract contains a check-off provision, whereby "the Employer agrees to deduct the initiation fee, when due, and the Union dues from the wages 21 Although the above letter in terms informs Wilkinson that her services were being "suspended temporarily," it is clear from the record and the undersigned finds that she was discharged on October 11. There is no showing that Wilkinson was ever called back to work by the respondent, and in oral argument the respondent's counsel contended that the respondent "got a letter from the union and . . . had to discharge them [Wilkinson and Holmes]." 21 The respondent also contends that it was forced to discharge Wilkinson and Holmes because the "practical results of not adhering to the union's demand . . . [would be] a strike which this employer couldn't afford or stand, and which would definitely have put it out of business at that time " This contention, even if true, does not constitute a defense if the discharges are otherwise illegal. The Board has consistently held, and the Courts have sustained the view that , "The Act prohibits unfair labor practices without regard to the factors causing them . . . It permits no immunity because the employer may think that the exigencies of the moment require infraction of the statute." (N. L R. B v. Star Publishing Co, 97 F. (2d) 465 , 470 (C. C A . 9)). See also • N. L. R. B . v. Gluek Brewing Co, 144 F (2d) 847 (C C A 8). 22 It is to be noted that a clause contained in the preceding agreement , which has expired, between the A. F of L. and the partnership, Don Juan Company, whose plant the re- spondent took over, which might possibly be construed to require A. F. of L membership on the part of the employees, is omitted from the current agreement between the respondent and the A F of L That clause read Eighth : The Employer agrees that when employing new workers that all new workers, to be continued, must obtain a temporary working card within one (1) week after employment and the Union agrees to give such new workers such cards , upon their being qualified therefor. 809095-49-vol 79-12 -166 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of each employee who is a member of the Union, and to pay such dues to the Union monthly." (Emphasis supplied.) However, as the foregoing clause clearly states, it relates only to employees who are members of the A. F. of L., -and can by no stretch of the imagination be construed as imposing an obligation upon employees of the respondent to join the A. F. of L. or to remain members -thereof. On the basis of the entire record, the undersigned concludes and finds that the contract in effect between the respondent and the A. F. of L. in no,way,-requires, as a condition of employment by the respondent, membership in the A. F. of L. on the part of the respondent's employees, and that the said contract is therefore -neither a "closed shop" nor a "union shop" agreement. That being so, the respondent's discharge of Wilkinson and Holmes, at the demand of the A. F. of _L., on the ground that the said employees had ceased to be members in good stand- - ing of that union, is in clear violation of Section 8 (3) of the Act. In view -of the basis upon which the undersigned makes the foregoing finding, it is not -felt necessary to pass herein on the Board counsel's argument that even if 'a '-closed-shop contract were in effect between the respondent and the A. F. of L., the discharge of Wilkinson and Holmes would not, in the circumstances of this case, be justified, in view of the Board's decision in Matter of Rutland Court ,.Owners, Inc., 44 N. L. R. B. 587. On the basis of all the foregoing, the undersigned concludes and finds that the respondent, by its discharge of Ramona Wilkinson on or about October 11, 1946, and of Penny Holmes, on or about October 9, 194(1, discriminated in regard to -their hire and tenure of employment, thereby discouraging, membership in the CIO and encouraging membership in the A. F. of L., and interfering with, restrain- ing, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act .14 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondent set forth in Section III, above, occurring in connection with the operations of the respondent described in Section I, above, 23 Section 8 (3) defines as an unfair labor practice discrimination by an employer "in regard to hire or tenure of employment or any term or condition of employment to encoul- _age or discourage membership in any labor organization ; Provided , that nothing in this Act shall preclude an employer from making an agreement with a labor organization . . . to require, as a condition of employment, membership therein, if such labor organization is the representative of the employees as provided in Section 9 (a), in the appropriate collec- tive bargaining unit covered by such agreement when made " 24 Section 8 (b) (2) of the Labor Management Relations Act, 1947, which is presently in effect, makes it an unfair labor practice for a labor organization or its agents "to cause or attempt to cause an employer to discriminate against an employee in violation of subsec- tion (a) (3) or to discriminate against any employee with respect to whom membership in such organization has been denied or terminated on some grounds other than his failure to tender the periodic dues and the initiation fees uniformly required as a condition of acquir- ing or retaining membership " Were the aforesaid statute in effect at the time of the events herein discussed, it is clear that the A F of L , as well as the respondent, would be guilty of committing unfair labor practices However, the events herein dealt with occurred in October of 1946, prior to enactment of the Labor Management Relations Act, 1947, and Section 102 of that Act reads as follows No provision of this title shall be deemed to make an' unfair labor practice any act which was performed prior to the date of the enactment of this Act which did not constitute an unfair labor practice prior thereto . . . The undersigned therefore concludes that the A. F. of L should not be held to have com- mitted an unfair labor practice by its suspension of Wilkinson and Holmes from membership (though they were paid-up in dues) nor by its demand on the respondent for their discharge. DON JUAN CO., INC. 167 Have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that the respondent has engaged in certain unfair labor practices within the meaning of the Act, it will be recommended that it cease and desist therefrom and take certain affirmative action which the undersigned finds will effectuate the policies of the Act. It has been found above that the respondent's discharge of Ramona Wilkinson and Penny Holmes constituted unfair labor practices under the Act. It will therefore be recommended that the respondent reinstate Wilkinson to her former or a substantially equivalent position,25 without prejudice to her seniority and other rights and privileges. It will also be recommended that the respondent make her whole for any loss of pay she may have suffered by reason of the respondent's discrimination against her by payment to her of a sum of money equal to the amount she would have earned as wages from the date of her dis- charge from the respondent's employ, to the date of the respondent' s offer of reinstatement, less her net earnings during the said period. Holmes testified at the hearing that she did not desire reinstatement to the respondent's employ because she then had "a job and [was] perfectly satisfied with the one [she had]." It will therefore not be recommended that the respondent offer Holmes reinstatement. The undersigned will, however, recommend that the respondent make her whole for any loss of pay she may have suffered- by reason of the respondent's discrimination against her by paying her a sum of money equal to the amount she would have earned as wages during the period from the date of the discrimination against her to the date on which she secured -the job she held at the time of the hearing.2 It will also be recommended that the respondent post appropriate notices to its employees in connection with the foregoing Upon the basis of the foregoing findings of fact and upon the entire record in the case, the undersigned makes the following: CONCLUSIONS OF LAW 1. United Packinghouse Workers of America, CIO, District 6, and Hair Goods, Toiletries and Accessories Workers Union, No 21906, A. F. of L., are both labor organizations within the meaning of Section 2 (5) of the Act 2. By discriminating in regard to the hire and tenure of employment of Ramona Wilkinson and Penny Holmes, thereby discouraging membership in United Pack- inghouse Workers of America, CIO, District 6, and encouraging membership in Hair Goods, Toiletries and Accessories Workers Union, No. 21906, A. F. of L., the respondent has engaged in and is engaging in unfair labor practices within the ,meaninb of Section 8 (3) of the Act. 25 In accordance with the Board's consistent interpretation of the team, the expression "former or substantially equivalent position" is intended to mean "former position wherever possible and if such position is no longer in existence then to a substantially equivalent position " See Matter of The Chase National Bank of the City of New York, Salt Juan, Puerto Rico, Branch, 65 N L R B 827. 26 See Matter of Crossett Lumber Co , 8 N L R. B 440, 497-498 21 See Matter of Kopman-Woracek Shoe Mfg. Co , 66 N L R. B 789, 800. 168 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 3. By said acts , the respondent has interfered with, restrained , and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act, and has engaged in, and is engaging in, unfair labor practices within the meaning of Section 8 (1) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2 ( 6) and (7) of the Act. RECOMMENDATIONS Upon the basis of the above findings of fact and conclusions of law, the under- signed recommends that the respondent, Don Juan Co., Inc., New York, New York, its officers, agents, successors, and assigns shall : 1. Cease and desist from : (a) Discouraging membership in United Packinghouse Workers of America, CIO, District 6, or any other labor organization of its employees, and encourag- ing membership in Hair Goods, Toiletries, and Accessories Workers Union, No. 21906, A. F. of L., or any other organization of its employ ees, by discharging or in any other manner discriminating in regard to the hire or tenure of employ- ment or any term or condition of employment of any of its employees. 2. Take the following affirmative action, which the undersigned finds will effectuate the policies of the Act : (a) Offer to Ramona Wilkinson immediate and full reinstatement to her former or a substantially equivalent position, without prejudice to her seniority and other rights and privileges ; (b) Make whole Ramona Wilkinson and Penny Holmes for any.loss of pay they may have suffered by reason of the respondent's discrimination against them by payment to each of them of a sum of money equal to the amount deter- mined in the manner set forth in the section entitled, "The remedy," above; (c) Post immediately at its plant in New York, New York, copies of the notice attached hereto marked, "Appendix A." Copies of said notice, to be furnished by the Regional Director for the Second Region, after being signed by the respond- ent's representative, shall be posted immediately by the respondent upon re- ceipt thereof and maintained by it for at least sixty (60) consecutive days thereafter, in conspicuous places, including all places where notices to em- ployees are customarily posted. Reasonable steps shall be taken by the respond- ent to insure that said notices are not altered, defaced, or covered by any other material; (d) Notify the Regional Director for the Second Region in writing within ten (10) days from the date of the receipt of this Intermediate Report what steps the respondent has taken to comply herewith. It is further recommended that the complaint be dismissed insofar as it alleges that the respondent committed unfair labor practices by laying off or thereafter failing to reinstate Ramona Wilkinson, Margarta Caban Waclaveski, and Penny Holmes. It is further recommended that, unless on or before ten (10) clays from the date of the receipt of this Intermediate Report, the respondent notifies said Regional Director in writing that it will comply with the foregoing recommenda- tions, the National Labor Relations Board issue an order requiring the respond- ent to take the action aforesaid. As provided in Section 203.46 of the Rules and Regulations of the National Labor Relations Board, Series 5, effective August 22, 1947, any party may, within twenty (20) days from the date of service of the order transferring the case to DON JUAN CO., INC. 169 the Board, pursuant to Section 203.45 of said Rules and Regulations, file with the Board, Rochambeau Building, Washington 25, D. C., an original and six copies of a statement in writing setting forth such exceptions to the Intermediate Report or to any other 'part of the record or proceeding (including rulings upon all motions or objections) as he relies upon, together with the original and six copies of a brief in support thereof ; and any party may, within the same period, file an original and six copies of a brief in support of the Intermediate Report. Immediately upon the filing of such statement of exceptions and/or briefs, the party filing the same shall serve a copy thereof upon each of the other parties. Proof of service on the other parties of all papers filed with the Board shall be promptly made as required by Section 203 85 As further provided in said Sec- tion 203 46, should any party desire permission to argue orally before the Board, request therefor must be made in writing to the Board within ten (10) days from the date of service of the order transferring the case to the Board. In the event no Statement of Exceptions is filed as provided by the aforesaid Rules and Regulations, the findings; conclusions, recommendations and recom- mended order herein contained shall, as provided in Section 203.48 of said Rules and Regulations, be adopted by the Board and become its findings, conclusions and order, and all objections and exceptions thereto shall be deemed waived for all purposes ISADORE GREENBERG, Trial Examiner. Dated September 9, 1947. APPENDIX A NOTICE TO ALL EMPLOYEES Pursuant to the recommendations of a Trial Examiner of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, we hereby notify our employees that : WE WILL NOT discourage membership in UNITED PACKINGHOUSE WORKERS OF AMERICA, CIO, DISTRICT 6, or any other labor organization of our em- ployees, or encourage membership in HAIR Goons, TOILETRIES AND ACCESSORIES WORKERS UNION, No. 21906, A. F. OF L., or any other labor organization of our employees, by discharging or in any manner discriminating in regard to the hire or tenure of employment of any of our employees. WE WILL OFFER to Ramona Wilkinson full and immediate reinstatement to her former or a substantially equivalent position, without prejudice to any seniority or other rights or privileges previously enjoyed, and make Ramona Wilkinson and Penny Holmes whole for any loss of pay suffered as a result of the discrimination. DON JUAN CO., INC., Employer. By ------------------------- (Representative ) (Title) Dated -------------------- This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material.