Speigel, Inc.

In the Matter of FEDERAL STORES DIVISION OF SPEIGEL, INC: and RETAIL CLERKS INTERNATIONAL ASSOCIATION, A. F. OF L. and AMALGAMATED CLOTHING WORKERS OF AMERICA, LOCAL UNION No. 81, CIO, PARTY TO THE CONTRACT In the Matter of LEO KATZ, MINDA KATZ, OTTO KATZ, LEEMOND KATZ, PHIL KATES, DOROTHY KATES, ELY ELIAS, BERTHA ELIAS, JULIAN ELIAS AND WALTER L. KEEN, D/B/A LEE'S DEPARTMENT STORE and RETAIL CLERKS INTERNATIONAL ASSOCIATION, A. F. OF 'L. and AMALGAMATED CLOTHING WORKERS OF AMERICA, LOCAL UNION No. 81, CIO, PARTY TO THE CONTRACT Cases Nos. 21-CA-420 and 01-CA-481.-Decided October 4, 1950 DECISION AND ORDER On May 12, 1950, Trial Examiner Isadore Greenberg issued his In- termediate Report in the above-entitled proceeding, finding that Re- spondent Federal and Respondent Lee's had engaged in and were en- gaging in certain unfair labor practices, and recommending that they cease and desist therefrom and take certain affirmative action, as set forth in the copy of the Intermediate Report attached hereto. The Trial Examiner also found that Respondent Lee's had not engaged in certain other unfair labor practices, and recommended dismissal as to them. Thereafter, both Respondents filed exceptions to the Inter- mediate Report and briefs in support thereof. The Board has reviewed the rulings made by the Trial Examiner at the hearing and finds that no prejudicial error was committed. The 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, except insofar as they are inconsistent with this Decision and Order. 1. We agree with the Trial Examiner's finding that the Board has jurisdiction over both Respondents because of their participation in an association-wide bargaining group of employers, whose total vol- 1 After the issuance of the Intermediate Report , the Board received two stipulations entered into by all the parties and providing for certain corrections in the transcript of testimony. The stipulations are hereby approved and made a part of the record. 91 NLRB No. 106. 647 648 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ume of operations substantially affect commerce within the meaning of the Act 2 The record shows that both Respondents and four other department store employers doing business in southern California were members of Credit Stores Association, herein called the Association, whose representative negotiated a contract with the Amalgamated on De- cember 17, 1948, the terms of which apply to all employees of the six employers. The annual total purchases of these employers are in ex- cess of $3,000,000, of which amount in excess of $750,000 is received directly from points outside the State of California.3 In view of the foregoing, and our recent decision in the Federal Dairy case 4 We find. that it will effectuate the policies of the Act to assert jurisdiction over Respondents Federal and Lee's. 2. The Trial Examiner found, and we agree, that both Respondents violated Section 8 (a) (1), (2), and (3) of the Act for the reasons that (1) Federal executed and enforced the contract of December 17, 1948, by unlawfully requiring membership in the Amalgamated as a con- dition of employment, and (2) that Lee's unlawfully enforced the illegal union-security provision. . 3. We agree with the Trial Examiner that Respondent Federal also violated Section 8 (a) (1), (2), and (3) of the Act by discharging employees Silverman and Schwartz because they refused to join the Amalgamated. We also agree with the Trial Examiner's finding that Respondent Federal violated Section 8 (a) (1) and (2) by discharging employee Faruzzi because she refused to permit Federal to deduct dues from her pay in favor of the Amalgamated. As no exceptions were filed, we do not pass upon the Trial Examiner's reasons for refusing to find that Faruzzi's discharge was also a violation of Sec- tion 8 (a) (3).6 4. The Trial Examiner found, and we agree, that Respondent Federal violated Section 8 (a) (1) and (2) of the Act by coercing some of its employees into permitting it to deduct Amalgamated dues from their pay. Respondent Federal contends that the Board's hold- ing in the Salant cases requires the dismissal of this portion of the com- plaint. In that case, the Board held that there was no violation of the Act where a checkoff agreement inured to the benefit of a union that represented an uncoerced majority of the employer's employees. While it is true that the Amalgamated occupied a similar status, the ' Carpenter & Skaer, Inc., at al., 90 NLRB 417, and cases cited therein. These figures include the volume of purchases made by Respondent Federal for its three stores in southern California, all of which are covered by the above contract. 4 Federal Dairy Co., Inc., 91 NLRB No. 107, wherein the Board adopted a minimum direct inflow requirement of $500,000 as a determinative factor in asserting jurisdiction. 5 See Intermediate Report, footnote 32. 6 Salant & Salant, Inc., 88 NLRB 816. 1 FEDERAL STORES DIVISION OF SPEIGEL, INC. 649 instant proceeding may be otherwise distinguished from the Sal ant case. Here the employees did not furnish Federal with voluntary written authorizations for the checkoff. Furthermore, as evidenced by the discriminatory discharge of Faruzzi and the fact that the employees were told by Federal that they could not continue working unless they joined the Amalgamated and paid dues, it is clear that Respondent Federal coerced its employees to accept the checkoff. We have heretofore held that an employer's coercion in deducting dues from its employees is violative of the Act and, as recommended by the Trial Examiner, such employees are entitled to reimbursement for all monies so deducted.7 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 : 1. Respondent Federal Stores Division of Speigel, Inc., of San Francisco, California, and its officers, agents, successors, and assigns, shall : a. Cease and desist from : (1) Entering into, renewing, or enforcing any agreement with Amalgamated Clothing Workers of America, Local Union No. 81, CIO, or any other labor organization, which requires its employees to join, or maintain their membership in, such labor organization as a condition of employment, unless such agreement has been authorized as provided by the National Labor Relations Act, as amended ; (2) Recognizing Amalgamated Clothing Workers of America, Local Union No. 81, CIO, or any successor thereto, as the representa- tive of any of its employees at its stores in the Los Angeles, California, area, for the purposes of dealing with the said Respondent concerning grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of employment unless and until said organization shall have been certified by the National Labor Relations Board; (3) Performing or giving effect to its contract of December 17, 1948, with Amalgamated Clothing Workers of America, Local Union No. 81, CIO, or to any modification, extension, supplement, or renewal thereof or to any other contract, agreement, or understanding entered into with said organization relating to grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of em- 7 Precast Slab and Tile Co ., 88 NLRB 1237. As the Amalgamated is not a respondent in this proceeding, we are unable to accept Respondent Federal's contention that the Amalga- mated should also be held responsible for the reimbursement of dues or any back pay to which some of the employees are entitled. Cf. H. M. Newman, et at., 85 NLRB 727. 650 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ployment unless and until said organization shall have been certified by the National Labor Relations Board; (4) Discharging or threatening to discharge any of its employees, or in any other manner discriminating or threatening to discriminate in regard to hire or tenure of employment or any term or condition of employment to encourage membership in the Amalgamated Cloth- ing Workers of America, Local Union No. 81, CIO, or any other labor organization of its employees, except to the extent that such conduct may be required by a valid agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8 (a) (3) of the Act; (5) Requiring its employees to pay dues to the Amalgamated, or to any other labor organization of its employees, except to the extent that paid-up membership in a labor organization may be required as a condition of employment by a valid agreement, as authorized in Section 8 (a) (3) of the Act; (6) In any other manner interfering with, restraining, or coercing its employees in the exercise of their right to self-organization, to form labor organizations, join or assist Retail Clerks International Association, A. F. of L., or any other labor organization, to bargain collectively through representatives of their own choosing, to engage in concerted activities for the purposes of collective bargaining or other mutual aid of protection, or to refrain from any or all of such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condi- tion of employment, as authorized in Section 8 (a) (3) of the Act. b. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (1) Withdraw and withhold all recognition from Amalgamated, Clothing Workers of America, Local Union No. 81, CIO, as the, representative of any of the employees of the Respondent Federal for-the purposes of dealing with the said Respondent concerning, grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of employment unless and until said organization shall have been certified by the National Labor Relations Board; (2) Make whole Mandil Silverman for any loss of pay he may have suffered by reason of the Respondent Federal's discrimination against him, by payment to him of a sum of money equal to the amount which he normally would have earned in the said Respondent's em- ploy from the date of his discharge to the date (March 7, 1950), when he testified that he did not desire reinstatement in the aforesaid Respondent's employ, less his net earnings during such period, and whatever amount the said Respondent may already have paid him on account thereof; FEDERAL STORES DIVISION OF SPEIGEL, INC. 651 (3) Make whole Nathan 0. Schwartz for any loss of pay he may have suffered by reason of the Respondent Federal's discrimination against him, by payment to him of a sum of money equal to the amount which he normally would have earned in the said Respondent's employ from the date of his discharge to the date when the Respondent Federal offered him reinstatement in its employ, less his net earnings dining such period; (4) Make whole each of its employees, including Marie Margaret Faruzzi, from whose pay deductions of Amalgamated dues were made at any time since December 17, 1948, by reimbursing each of said employees for the amounts thus deducted from their pays; (5) Post at its stores in Los Angeles and Huntington Park, Cali- fornia, copies of the notice attached to the Intermediate Report marked Appendix A.8 Copies of said notice shall be furnished to the Respondent Federal by the Regional Director for the Twenty-first Region, and shall, after being duly signed by a representative of the said Respondent, be posted by it immediately upon receipt thereof, and maintained by it for a period of sixty (60) consecutive days thereafter in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the said Respondent to insure that said notices are not altered, defaced, or covered by any other material; (6) Notify the Regional Director for the Twenty-first Region in writing within ten (10) days from the date of this Order what steps it has taken to comply herewith. 2. Respondents Leo Katz, Minda Katz, Otto Katz, Leemond Katz, Phil Kates, Dorothy Kates, Ely Elias, Bertha Elias, Julian Elias, and Walter L. Keen, doing business as 'Lee's Department Store, Huntington Park, California, and their agents, successors, and assigns, shall : a. Cease and desist from : (1) Renewing or enforcing any agreement with Amalgamated Clothing Workers of America, Local Union No. 81, CIO, or any other labor organization, which requires their employees to join, or main- tain their membership in, such labor organization as a condition of employment, unless such agreement has been authorized as provided by the National Labor Relations Act, as amended; (2) Recognizing Amalgamated Clothing Workers of America, Local Union No. 81, CIO, or any successor thereto as the representa- 8 Said notice, however, shall be, and it hereby is, amended by striking from line 3 thereof the words "The Recommendations of a Trial Examiner " and substituting in lieu thereof the words "Decision and Order." In the event that this order is enforced by a decree of a United States Court of Appeals , there shall be inserted before the words, "Decision and Order" the words , "Decree of the United States Court of Appeals Enforcing." 652 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tive of any of their employees at their store in Huntington Park, Cali- fornia, for the purposes of dealing with the said Respondents concerning grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of employment unless and until said organization shall have been certified by the National Labor Rela- tions Board; (3) Performing or giving effect to their contract of December 17, 1948, with Amalgamated Clothing Workers of America, Local Union No. 81, CIO, or to any modification, extension, supplement, or renewal thereof, or to any other contract, agreement, or understanding entered into with said organization relating to grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of employment unless and until said organization shall have been certi- fied by the National Labor Relations Board; (4) In any other manner interfering with, restraining, or coercing their employees in the exercise of their right to self-organization, to form labor organizations, join or assist Retail Clerks International Association, A. F. of L., or any other labor organizations, to bargain collectively through representatives of their own choosing, to engage in concerted activities for the purposes of collective bargaining or other mutual" aid or protection, or to refrain from any or all of such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condi- tion of employment, as authorized in Section 8 (a) (3) of the Act. b. Take the following affirmative action which the Board finds will effectuate the policies of the Act: (1) Withdraw and withhold all recognition from Amalgamated Clothing Workers of America, Local Union No. 81, CIO, as the rep- resentative of any of their employees, for the purpose of dealing with the said Respondents concerning grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of employment unless and until said organizations shall have been certified by the National Labor Relations Board; (2) Post at their store in Huntington Park, California, copies of the notice attached to the Intermediate Report marked Appendix B.9 Copies of said notice shall be furnished to the said Respondents by the Regional Director for the Twenty-first Region, and shall, after being duly signed by a representative of the said Respondents, be posted by them immediately upon receipt thereof and maintained by This notice , however, shall be and it hereby is, amended by striking from line 3 thereof the words "The recommendations of a Trial Examiner" and substituting in lieu thereof the words "Decision and Order." In the event that this Order is enforced by a decree of a United States Court of Appeals, there shall be inserted before the words, "Decision and Order" the words, "Decree of the United States Court of Appeals Enforcing." FEDERAL STORES DIVISION OF SPEIGEL, INC. 653 them for a period of 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 said Respondents to insure that said notices are not altered, defaced, or covered by any other material ; (3) Notify the Regional Director for the Twenty-first Region in' writing within ten (10) days from the date of this Order what steps they have taken to comply herewith. It is further ordered that the complaint be dismissed insofar as it alleges that the aforesaid Respondents herein referred to collec- tively as the Respondent Lee's, committed unfair labor practices by checking off Amalgamated dues from the pay of their employees. MEMBERS REYNOLDS and MURDOCK took no part in the consideration of the above Decision and Order. INTERMEDIATE REPORT Mr. George H. O'Brien, for the General Counsel. Jesse H. Steinhart, by Mr. S. A. Ladar, of San Francisco, Calif., for the Re- spondent Federal. Latham & Watkins, Theodore J. Elias, and Harold Easton, by Mr. Richard W. Lund, of Los Angeles, Calif., for the Respondent Lee's. Gilbert, Nissen & Irvin, by Messrs. Robert W. Gilbert and William B. Irvin, of Los Angeles, Calif., for the Retail Clerks. Wirin, Okrand & Rissman, by Mr. Robert R. Rissman, of Los Angeles, Calif., for the Amalgamated. STATEMENT OF THE CASE Upon a first amended charge duly filed on May 2, 1949, and another charge duly filed on June 16, 1949, by Retail Clerks International Association, A. F. of L., herein called the Retail Clerks, the General Counsel of the National Labor Rela- tions Board,' by the Regional Director for the Twenty -first Region ( Los Angeles, California ), issued a consolidated complaint dated January 31 , 1950, against Federal Stores Division of Speigel , Inc., of Los Angeles, California , herein called the Respondent Federal, and Leo Katz, Minda Katz, Otto Katz, Leemond Katz, Phil Kates, Dorothy Kates , Ely Elias, Bertha Elias , Julian Elias , and Walter L. Keen. d/b/a Lee's Department Store, of Huntington Park, California , herein called the Respondent Lee's. The complaint alleges that the Respondent Federal and the Respondent Lee's had engaged and were engaging in unfair labor prac- tices affecting commerce within the meaning of Section 8 ( a) (1), (2), and (3) and Section 2 (6) and ( 7) of the National Labor Relations Act, as amended (61 Stat. 136), herein called the Act. Copies of the complaint, the respective charges , and notice of hearing were duly served upon the Respondent Federal, the Respondent Lee's, the Retail Clerks, and the Amalgamated Clothing Work- ers of America , Local Union No . 81, CIO , herein called the Amalgamated. With respect to the unfair labor practices the complaint alleges in substance : (1) that the Respondent Federal and the Respondent Lee's are each engaged in ' The General Counsel and the attorney representing him at the hearing are herein referred to as the General Counsel ; the National Labor Relations Board as the Board. 654 DECISIONS OF NATIONAL LABOR RELATIONS BOARD commerce within the meaning of the Act; (2) that on or about December IT, 1948, the Respondent Federal and the Respondent Lee's entered into a joint writ- ten collective bargaining contract with the Amalgamated, containing a union- shop clause which has not been authorized by an election pursuant to Section 9 (e) of the Act; (3) that at all times since the execution of the aforesaid con- tract, both the Respondents have enforced the contract and have required mem- bership in the Amalgamated as a condition of employment; (4) that at all times since on or about October 30, 1948, both the Respondents have deducted Amalga- mated dues from the pay of their respective employees without the written con- sent of such employees; (5) that the Respondent Federal discharged employees Mandel Silverman and Nathan Schwartz on March 29, 1949, and Marie Faruzzi on April 27, 1949, and the Respondent Lee's discharged employee Maurice W. Jackson on May 1.5, 1949, and have since refused to reinstate them, because these employees had engaged in concerted activities with other employees and because they refused to permit their Employers to deduct union dues from their pay. In their respective answers, duly filed, both the Respondents deny that they are engaged in commerce within the meaning of the Act, or that they have engaged in any of the unfair labor practices alleged in the complaint. Pursuant to notice, a hearing was held on March 7 and 8, 1950, in Los Angeles, California, before the undersigned Trial Examiner. All of the parties were represented by counsel, who were afforded full opportunity to be heard, to ex- amine and cross-examine witnesses, and to introduce evidence pertaining to the issues. At the opening of the hearing counsel for the Respondent Lee's made motions to sever the cases herein consolidated for purpose of hearing, to dis- miss the complaint in its entirety on the ground of nonjoinder of an indispensable party (the Amalgamated), and to strike various paragraphs of the complaint, or in the alternative, to dismiss the entire complaint. These motions were denied! Permission was granted to the Respondent Lee's to file an amended answer and to the Respondent Federal orally to amend its answer on the record. At later stages of the hearing, counsel for the Respondent Lee's renewed his motions to strike various paragraphs of the complaint. Rulings on these mo- tions, as renewed, were reserved. One of the aforesaid motions to strike, which was joined in by counsel for the Respondent Federal and the Amalgamated, was addressed to paragraph,9 of the complaint, which alleges that both Respondents had "interfered with, restrained, coerced and deprived their respective employees of their rights by deducting from the pay of their respective employees monthly union dues with- out the written authorization or consent of their respective employees." " The motion to strike the foregoing paragraph of the complaint was accompanied by a motion to strike all 'testimony taken during the hearing on the issue raised thereby. In support of these motions counsel argue that a violation of Section 2 The cases at bar were properly ordered consolidated for purposes of hearing and no prejudice is shown to have resulted to any of the parties. I am therefore of the opinion that the motion to sever was properly denied . See Seamprufe, Inc., 82 NLRB 892, footnote 4. I find no merit in the contention that the Amalgamated is an indispensable party respondent to this proceeding , and that , since it was not so joined herein , the complaint should be dismissed . Cf. General Electric X-Ray Corporation,, 76 NLRB 64 . 66-67 : Dura- steel Company, 73 NLRB 941, 946 ; and see the specific language in E. L. Bruce Company, 75 NLRB 522 , at 526, dealing with this issue. 3It is admitted by both Respondents that during the period herein material they deducted union dues from the pay of at least some of their respective employees , and remitted such .dues to the Amalgamated, without such "check-off" having been authorized in Writing by the employees so affected. FEDERAL STORES DIVISION OF SPEIGEL, INC. 655 802 of the Act" does not per se constitute the commission of an unfair labor practice, and that consequently, it adds nothing to the complaint to allege such an unauthorized checkoff even in connection with the enforcement of an illegal union-shop clause in a contract. They cite as authority for this con- tention the Board's decision in Salant & Salan.t, Inc., 88 NLRB 816. The Gen- eral Counsel contends that the unauthorized checkoff of union dues by the Respondents amounted to "an act of assistance (to the Amalgamated) inde- pendent of the language of Section 302 of the Act." In any event, he argues further, "the checking off of dues in violation of Section 302 when joined with an n,nlawfal anion shop provision is violative of Sections 8 (a) (1) and (2) of the Act. Compelled membership plus compelled checkoff reinforce each other to assist and support the Union." [ Emphasis in original; brief of General Counsel, p 15.1 For reasons which will appear below in connection with my discussion of this matter, the motions to strike paragraph 9, and all evidence received in support thereof, are hereby denied. The issue with respect to the checkoff of Amalga- mated dues from the pay of Respondents' employees will be dealt with on its merits. In addition to the motions above disposed of, counsel for the Respondent Lee's, at the conclusion of the hearing, renewed a motion to strike from the complaint paragraphs 7, 8, 9, 12, and 14, and the reference in paragraph 19 to Section 8 (a) (2) of the Act. Ruling was reserved thereon. In sum, the motion goes to all portions of the complaint which allege that the Respondent Lee's com- mitted unfair labor practices by entering into and enforcing the union-shop clause in its contract with the Amalgamated. The motion is based on the con- tention that, as to the Respondent Lee's, these allegations are outlawed by the limitation contained in Section 10 (b) of the Act with respect to the issuance of a complaint based upon unfair labor practices occurring more than 6 months prior to the filing and service of a charge. The facts material to this issue are as follow : The contract containing the union-shop clause herein complained of was executed on December 17, 1948, and as is undisputed, was thereafter en- forced by the parties at all times alleged in the complaint. A charge that the Respondent Lee's committed unfair labor practices by illegally assisting the Amalgamated was filed by the Retail Clerks on June 17, 1949, and was served upon the Respondent Lee's on June 21, 1949. Counsel for the Respondent Lee's contends that the 6-month period referred to in Section 1.0 (b) began to run on December 17, 1948, when the contract was executed, and expired on June 17, 1949, 4 days prior to the date (June 21) when the charge was served on it. Consequently, he argues, any allegation that the Respondent Lee's committed unfair " labor practices by entering into and enforcing the alleged illegal contract, is barred by the statute. The General Counsel concedes that no finding of unfair labor practices by the Respondent Lee's may be predicated on the execution of the contract by that Respondent, since the contract was signed more than 6 months prior to the service of the charge upon said Respondent. He urges, however, that the Re- spondent Lee'.s admitted continued enforcement of the illegal union-security clause, which occurred within the 6-month period, constituted unfair labor prac- tices with respect to which findings may properly be made. .4 Section 302 makes it a misdemeanor for an employer willfully to withhold union dues from the pay of employees without having been authorized to do so in writing by each employee on whose account such deductions are made. 656 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In support of his contentions, counsel for the Respondent Lee's cites the Board decision in Goodall Company, 86 NLRB 814. One of the issues in that case was the alleged grant of a wage increase by the employer to the employees in order to discourage membership in a union. The wage increase in question was made effective more than 6 months prior to the filing and service of the charge which instituted the proceeding. The Trial Examiner recommended dismissal of the allegation that the employer's aforesaid conduct constituted an unfair labor practice, on the ground that the statute of limitations embodied in Section 10 (b) of the Act barred the issuance of a complaint based on the wage increase. In so doing, the Trial Examiner considered and rejected the theory that the em- ployer's continued payment of the wage increase during a period less than 6 months prior to the filing of the charge, might be deemed to constitute a con- tinuing violation of the Act which could validly be alleged and found. No ex- ceptions were filed to the foregoing recommendation of the Trial Examiner, and the Board, pursuant to its usual practice, adopted it, without thereby indicating whether or not it agreed with either the reasoning of the Trial Examiner or the result reached.' It is plain, therefore, that the Goodall decision is not a binding precedent on the point here in issue. In any event, the alleged violation of the Act treated in the Goodall case is essentially different from that here encountered. There the unfair labor practice alleged was the granting of a wage increase under circumstances which indicated that the increase was put into effect in order to forestall a union organizational campaign. The gravamen of such an unfair labor practice lies in the timing of the grant and announcement of the wage increase, not in its subsequent payment. The critical interference with the rights of employees takes place when, coincidentally with the organizational campaign, benefits are extended to the employees in order to induce them to refrain from organizing. That the continued payment of such a wage increase is not deemed to constitute an unfair labor practice is clearly indicated by the fact that the Board's customary remedy in such cases does not provide for a rescission of the wage increase.' In the present case, the alleged unfair labor practices consist of the execution and subsequent enforcement of an illegal contract requiring membership in the contracting union as a condition of employment. Obviously, the rights of em- ployees are just as seriously violated.by the continued enforcement of that re- quirement as by its initiation. In other words, unfair labor practices are committed not only at the time such an illegal contract is entered into, but at all subsequent times when it is enforced, or even permitted to continue to exist.` In recognition of this fact, the Board's remedial order, when such unfair labor practices are found, requires that the contract be set aside, and that recognition be withdrawn from the contracting union whose representative status was wrong- fully strengthened by virtue of the illegal contract.' 6 Cf. Gulfport Transport Company, 84 NLRB 613, footnote 3, wherein the Board ex- plicitly stated its disagreement with the Trial Examiner on a certain issue but nevertheless refrained from reversing him on the point because no exception had been filed with respect thereto. 8 See, for example, Williamson-Dickie Mfg. Co ., 35 NLRB 1220 ; Fitzpatrick and Weller, Inc., 46 NLRB 28; Mellin-Quincy Mfg. Co., Inc., 53 NLRB 366. ' In this case, the Respondent Lee's admittedly enforced the union -shop clause in the contract subsequent to its execution . The Board has held that even where such an illegal clause has not been enforced , its "mere existence" acts as a restraint upon those employees who might not wish to join the contracting union. Julius Resnick, Inc., 86 NLRB 38 ; Hager and Sons Hinge Mfg. Co., 80 NLRB 136. 8 Julius Resnick case, supra. FEDERAL STORES DIVISION OF SPEIGEL, INC. 657 The issue here being considered is analogous to that which arises when a contract lawful when entered into is kept in operation after some of its provisions have been declared illegal by subsequent statutory enactment, or when a strike legally called is continued after being prohibited by subsequent legislation. In such cases the courts have held that the continuance in effect, respectively, of the contract and the strike, constituted violations of the statutes in question .0 I am persuaded that although the statute of limitations set forth in Section 10 (b) of the Act precludes any finding of unfair labor practices predicated on the Respondent Lee's execution of the contract with the Amalgamated, the con- tinued enforcement of the aforesaid contract during a period less than 6 months prior to the service of the charge on the Respondent Lee's, constituted conduct on its part which may properly be found to have resulted in unfair labor prac- tices. The Respondent Lee's motion to strike paragraphs 7, 8, 9, 12, and 14, and so much of paragraph 19 as refers to Section 8 (a) (2) of the Act, from the complaint, is therefore denied. Motions were also made at the close of the hearing by counsel for the Re- spondents Lee's and Federal and for the Amalgamated to dismiss the complaint on jurisdictional grounds. Ruling on these motions was reserved. The afore- said motions are disposed of by the findings, conclusions, and recommendations hereinafter made. During the hearing the General Counsel stated his inability to offer evidence at that time in support of paragraph 11 of the complaint, which alleges that the Respondent Lee's discharge of employee Maurice W. Jackson constituted an unfair labor practice. He moved to dismiss the aforesaid allegation without prejudice. This motion was denied, and the motion thereupon made by counsel for the Respondent Lee's to dismiss the aforesaid allegation was granted. Following the testimony of the witness, Marie Faruzzi, counsel for the Re- spondent Federal moved to dismiss paragraph 10 of the complaint insofar as that paragraph alleges that Faruzzi was discharged on or about April 27, 1949, in contravention of the Act. This motion was denied. A motion by the General Counsel to amend paragraph 10 of the complaint by substituting "sometime in March 1949" for "on or about April 27, 1949" as the date of Faruzzi's alleged discriminatory discharge, was granted'° At the conclusion of the hearing the General Counsel's motion to conform the pleadings to the proof with respect to such formal matters as dates and the spelling of names was granted without objection. The parties were afforded opportunity to present oral argument at the close of the hearing, and to submit briefs and proposed findings of fact and conclu- sions of law. Oral argument was waived, in lieu of which the Trial Examiner informally discussed the issues on the record with counsel. Briefs have been received from counsel for the General Counsel, the Respondents Lee's and Fed- eral, and the Retail Clerks. Upon the entire record in the case, and from my observation of the witnesses, I make the following: ° See N. L. R.. B. v. Local 74, United Brotherhood of Carpenters and Joiners of America, A. F. of L., 181 F. 2d 126 (C. A. 6), and United States V. Freight Association, 166 V. S. 290, cited in that opinion. io The issue of Faruzzi 's discharge is discussed in a succeeding section of this Intermediate Report. 658 DECISIONS OF NATIONAL LABOR RELATIONS BOARD FINDINGS OF FACT 1. THE BUSINESS OF THE I{ESPONDENTS The Respondent Federal Stores Division of Speigel, Inc., is, as its name im- plies, a division of Speigel, Inc., a Delaware corporation which has offices in Chicago, Illinois. That corporation directly operates under its own name a chain of department stores throughout the United States. It also owns the "autonomous" chain of retail department stores herein named as Federal Stores Division of Speigel, Inc. This chain consists of 20 stores, of which 19 are lo- cated in the State of California and 1 in the State of Nevada. These stores are operated for Speigel, Inc., under an arrangement whereby the management of the Federal chain is centralized in an executive employed for that purpose on a contract basis." This executive has full charge of all phases of the opera- tions of the stores comprising that chain, and they are operated under his direc- tion as an integrated entity, independent of the administration of the stores directly operated by the owning corporation. In the operations of the aforesaid chain, the Respondent Federal annually purchases merchandise valued at approximately $3,000,000, of which about 45 percent originates from points outside the States of California and Nevada. Ap- proximately 25 percent of its annual purchases is bought in, and shipped to it, from points outside these States ; about 20 percent is purchased from jobbers in the State of California, but was manufactured outside California and Nevada. Practically all of the merchandise purchased and sold by the Federal stores is initially shipped to and warehoused in San Francisco, California, where its principal offices and warehouse are located, from where it is distributed, upon requisition, to the various department stores comprising the chain. Practically all of the merchandise sold by the individual stores is sold locally at retail. The total volume of retail sales of the chain amounts annually to approximately $6,000,000, of which about 80 percent is sold on credit.12 Among the stores operated by the Respondent Federal are two located in Los Angeles, California, and one in a suburb of that city, Huntington Park, Cali- fornia. The employees of these three stores are covered by the contract with the Amalgamated which is here in question. . The Respondent Federal annually purchases merchandise for sale at these three stores valued at from $2.30,000 to $325,00013 Leo Katz, Minda Katz, Otto Katz, Leemond Katz, Phil Kates, Dorothy Kates, Ely Elias, Bertha Elias, Julian Elias, and Walter L. Keen are copartners doing business as Lee's Department Store at Huntington Park, California. They operate a retail department store in that city which sells men's, women's, and children's apparel, jewelry, housewares, shoes, furniture, and appliances. Ap- proximately 60 full-time employees are employed by the Respondent Lee's in its said store. During the year ending November 24, 1948, the Respondent Lee's purchased equipment, materials, supplies, and merchandise valued at approximately $1,000,000, of which 30 percent was shipped to it from points outside the State of California. Its sales are wholly within that State. About 70-75 percent of its sales are on a credit basis. 11 That is, the executive who operates the Federal chain is compensated by a share of the profits produced thereby. 12 The foregoing data as to the Respondent Federal's annual volume of purchases and sates, and the percentages above set forth, apply to the year 1949. 13 The annual volume of sales made by the Respondent Federal's Nevada store amounts to approximately $250,000-$500,000. FEDERAL STORES DIVISION OF SPEIGEL, INC. 659 Both the Respondent Federal and the Respondent Lee's deny the allegations of the complaint that they are engaged in commerce within the meaning of the Act, and each urges that in any event the business in which it is engaged is essentially of such a local nature that the Board should not assert jurisdic- tion over it. The substantial volume of merchandise purchased by each of these Respond- ents and shipped to it across State lines in itself clearly brings both of them under the jurisdiction of the Board " The question which remains is whether the Board, in its (liscretion, should assert the jurisdiction which it undoubtedly has over these Respondents. In his brief, counsel for the Respondent Lee's argues that the business operated by it, being "a typical small retail depart- ment store in a small community, . . . is the usual local business over which the Board regularly declines to assert jurisdiction." He cites a number of cases in which the Board has refused to take jurisdiction over business enter- prises which made interstate purchases of materials and merchandise corn- parable in volume to that shipped to the Respondent Lee's. None of the cases cited, however, involved department stores. Counsel recognizes "that the Board has taken jurisdiction over some department stores," but contends that this has been in cases involving Nation-wide chains of such stores, or where the department stores in question have made "substantial out of state mail order sales, or where they are of such size that their volume of business necessarily must affect interstate commerce to a great degree." Contrary to counsel's contentions, the Board has asserted jurisdiction over "small" department stores which make no out-of-State sales, and the volume of whose out-of-State purchases is even less than that shipped to the Respondent's Lee's." In any event, the Board's practice is to assert jurisdiction over department stores to which a subst.untial volume of merchandise is shipped across State lines, even where the stores involved make all or substantially all of their sales within the State in which they are located." On the basis of the foregoing, I conclude and find that the Respondent Lee's and the Respondent Federal" are both-engaged in commerce within the mean- ing of the Act, and recommend that, "consistent with Board practice with re- spect to department stores, . . . jurisdiction should be exercised [over both Respondents] in this case." 'a The General Counsel urges as an additional reason why the Board should exercise its jurisdiction over both the Respondents herein, the circumstance that they, together with other operators of retail stores, are parties to a collective bargaining contract with the Amalgamated covering a bargaining unit consisting N. L. R. B. v. F'ainblatt, 306 U. S. 601; N. L. R. B. v. Bradford Dyeing Assoc., 310 U. S. 318 ; N. L. R. B. v. Van. De Nannp's Holland-Dutch Bakers, Inc., 152 F. 2d 818 (C. A. 9) J. L. Brandeis if Sons v. N. L. R. B., 142 F. 2d 977 (C. A. 8) ; N. L. R. B. v. McGoigh Bakeries Corp., 153 F. 2d 420 (C. A. 5). 15 E. g., The P. B. Magrane Store, Inc.,, 84 NLRB 345 (one retail department store; total annual sales, $770,000, all intrastate : total annual purchases, $524,000, over 50 percent of which obtained out-of-State) ; Parks-Belk Co., 77 NLRB 429 (one retail store; total sales, all intrastate, $250,000 ; total purchases, $175,000, about 50 percent of which was interstate). 11; 11'hi tney's Department Store, 73 NLRB 1245: May Department Store Co., 71 NLRB 1214 : J. L. Brandeis if Sons, 50 NLRB 325, 47 NLRB 614, 53 NLRB 352; M. E. Blatt Co., 38 NLRB 1210 ; Loveman, Joseph if Loeb, 56 NLRB 752 ; Block and Ku lcl Department Store, 83 NLRB 418. '7 The foregoing discussion applies with even more force to the Respondent Federal which operates a chain of department stores across State lines, than to the Respondent Lee's. 's The P. B. Magrane Store, Inc., supra. 917572-51-vol. 91-43 660 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of all the employees of the employer-signatories of the said contract. The aforesaid contract, which was entered into on December 17, 1945, was pur- portedly executed "by and between signatory members of Credit Stores Asso- ciation . . . as parties of the First Part, and [the Amalgamated], party of the Second Part," and provides for rates of pay and other terms and conditions of employment to apply to all of the employees of the six employers (including the two Respondents herein) who signed the agreement. Frank R. Guyon, the attorney who represented the employer-parties to the contract at the time it was negotiated, and in whose office the contract was minaeograpbed, testified at the hearing that he had been. secretary of Credit Stores Association, which was organized in 1937; that the two Respondents herein, together with other retail credit stores had been members of that association ; and that the organization, whose primary purpose (as revealed in its bylaws) was to represent its mem- hers in relations with labor unions, had ceased to have a formal existence after 1941, but had "been going along for some years, drifting along making use of the name, and so forth. . . He further testified that he had participated in the negotiations leading to the execution of the contract of December 17, 1948, as a representative of the employers, and had drafted the contract and secured the signatures of his clients thereto. The Respondents contend that the Credit Stores Association was not actually in existence in a formal sense when the contract was entered into, and that, therefore, Guyon was acting on behalf of each of the employers individually at the time of the negotiation and execution of the contract. I am of the opinion that it is unnecessary here to resolve the issue whether or not Credit Stores Asso- ciation, as a formal entity, was in existence in 1947. The crucial circumstances relied on by the General Counsel are the facts that the contract was negotiated jointly between a group of employers (acting through their joint attorney, if not an association) and a union, in respect to a unit of employees consisting of all the employees of the employers involved. Identical terms and conditions of employ- ment were agreed upon for all the employees comprising that unit. The point made by the General Counsel is that even if the Board might have some doubt as to whether the Respondent Lee's, viewed in isolation, is the type of business enterprise over which it would wish to assert jurisdiction, the fact that its labor relations were carried on with respect to an appropriate bargain- ing unit consisting-of the employees of a number of retail enterprises, including at least one (the Respondent Federal) which is clearly of a type and size over which which the Board customarily exercises jurisdiction, should persuade the Board not to decline jurisdiction in this case over the Respondent Lee's. I agree with the position of the General Counsel"B II. THE ORGANIZATIONS INVOLVED Retail Clerks International Association, A. F. of L., and the Amalgamated Clothing Workers of America, Local Union No. 81, CIO, are labor organizations admitting to membership employees of the Respondent Federal and the Re- spondent Lee's. 19 Cf. International Typographical Union and the Baltimore Typographical Union, No. 12, 87 NLRB 1215; in which the Board said, "Nor do we consider it material, as the Respondents here suggest, that the record may not establish that the operation of each and every individual employer whose employees form part of the bargaining unit here substantially affects interstate commerce within the meaning of the Act. It is sufficient for our purposes that the record discloses that the employee group comprising the unit, com- prehensively viewed, is composed predominantly of employees whose employers' activities affect interstate commerce." FEDERAL STORES DIVISION OF SPEIGEL, INC. Ill. THE UNFAIR LABOR PRACTICES 661 A. The execution and enforcement of the contract containing a union-security clause It is undisputed that on December 17, 1948, the Respondent Federal and the Respondent Lee's signed a collective bargaining contract with the Amalgamated which by its terms was to remain in effect until January 31, 1951. This contract concededly includes a clause reading as follows : Article V-Mentbersltip In Union -2. Subject to the exceptions specified in paragraph 1 of this Article, all full-time employees at present employed in the classifications specified in Article II shall become members of the signatory Union within fifteen (15) days after the effective date of this agreement or shall be discharged by the Employer. 3. Subject to the exceptions specified in paragraph 1 of this Article, all full-time employees in the classifications specified in Article II and who are hired after the effective date of this agreement shall become members of the signatory Union within 30 days after the date of their employment or shall be discharged by the Employer. The Respondents concede that the foregoing clause in the agreement has been enforced at all time,,, since the contract was executed. It is also admitted by both Respondents that no election, as provided for in Section 9 (e), and re- quired by the proviso to Section 8 (a) (3) of the Act, has been held among the Respondents' employees. Since the aforesaid union-shop clause in the contract was never authorized by the employees through such an election, the signing of the contract by the Respondent Federal," and its subsequent enforce- ment by both the Respondent Federal and the Respondent Lee's clearly consti- tuted unfair labor practices within the meaning of Section 8 (a) (1), (2), and (3) of the Act.21 I therefore find that by executing the aforesaid contract with the Amalgamated on December 17, 1948, and thereafter by keeping it in ex- istence and enforcing it, the Respondent Federal lent illegal support and assist- ance to the Amalgamated in recruiting and maintaining its membership, in violation of Section S (a) (2) of the Act; discriminated in regard to the terms and conditions of employment of its employees, thereby encouraging member- ship in the Amalgamated, in violation of Section 8 (a) (3) of the Act; and by the foregoing conduct interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed by Section 7 of the Act, in violation of Section 8 (a) (1) thereof. I further find that the Respondent Lee's, by keep- ing in existence and enforcing the aforesaid contract with the Amalgamated, at all times since December 22, 1948, lent illegal support and assistance to the Amalgamated in recruiting and maintaining its membership, in violation of Section S (a) (2) of the Act; discriminated in regard to the terms and condi- 20 As has been detailed in a preceding section of this Intermediate Report , the 6-month limitation embodied in Section 10 (b) of the Act bars a finding of unfair labor practices based upon the signing of the illegal contract by the Respondent Lee's. Since the charge initiating this proceeding against the Respondent Federal was filed with the Board and served upon that Respondent within () months after the execution of the contract, no such bar exists with respect to findings based upon the signing of the contract by the Respondent Federal. 22 Julius Resnick, Inc., 86 NLRB 38; Amalgamated Meat Cutters and Butcher Workmen of North America, A. F. of L., 81 NLRB 1052, 1054-1055. 662 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tions of employment of its employees, thereby encouraging membership in the Amalgamated, in violation of Section 8 (a) (3) of the Act; and by the foregoing conduct, interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed by Section 7 of the Act, in violation of Section 8 (a) (1) thereof. In his brief, counsel for the Respondent Lee's advances the argument that the complaint should be dismissed insofar as it alleges unfair labor practices based upon the unauthorized union-shop clause in the contract, because the charge which set this proceeding in motion as against the Respondent Lee's alleges "in only the most general terms a violation of Section 8 (a) (1) and 8 (a) (2), [and] makes no reference to any agreement or union-shop conditions or the lack of any UA election." 22 For the reasons set forth in the Board's detailed discussion of the functions of a charge in Cathcy Lumber Company, 86 NLRB No. 30, I find no merit in the foregoing contention. An additional contention raised by counsel for the Respondent Lee's in his brief is, in sum, as follows: Preceding the execution of the contract here in issue , on December 17, 1948, there was in existence another collective bargaining contract between the same parties, dated January 31, 1947, which by its terms was to remain in effect until January 31, 1949. That agreement contained a union-shop clause identical to the one included in the succeeding contract. Since the former agreement was entered into prior to the enactment of the Taft- Hartley Act, argues counsel, "the union-shop conditions therein were perfectly valid and legally effective after the passage of the Act (Section 102)." In addi- tion, he further contends, "the agreement of December 17, 1948, was merely an amendment of the 1947 agreement upon the wage-reopening. It only changed the wage rates in the 1947 contract. The union security provisions and other terms of the 1947 contract were not changed. . . . Hence the union shop provisions in the December 17, 1948 contract are not illegal." Section 102 of the Act, cited by counsel , answers his argument. That section provides that the performance of any obligation under a collective bargaining agreement entered into prior to June 23, 1947, the (late of enactment of the amended Act, should not constitute an unfair labor practice thereunder, if the performance of such obligation would not have constituted an unfair labor practice under Sec- tion 8 (3) of the Act as it existed before its amendment, unless such agreement was renewed or extended subsequent thereto. The contract signed on December 17, 1948, replaced the preceding contract which by its terms expired on Jan- uary 31, 1949. Thus it was clearly an extension or renewal of the prior contract, if not an entirely new one. Since, therefore, the contract entered into prior to the enactment of the Act as amended was extended or renewed subsequent to the enactment of the amendments, the union-shop clause therein contained falls outside the savings clause of Section 102, and the argument advanced by counsel is, clearly invalid .' 22 The charge in question alleges that the Respondent Lee's, among other things, "has interfered with, restrained and coerced its employees . . . in the exercise of their rights to self organization and to determine bargaining representative of their own choosing in violation of Section 8 (a) (1)" and that it "has dominated, assisted and supported (the Amalgamated] in violation of Section 8 (a)' (2) of the Act." 23 Cf. Salant & Salant, Inc., supra. FEDERAL STORES DIVISION OF SPEIGEL, INC . 663 B. The discharge of employees pnrsnant to the contract by the Respondent Federal 1. Mandil Silverman 21 Silverman was employed by the Respondent Federal as a salesman in one of its Los Angeles stores from about September 1946 to about May 1947, and again from about February 1, 1949, to on or about March 29, 1949, the date of his discharge. During the afternoon of the last day of his employment, Silverman, while at work in the store, was handed an application card for membership in the Amalgamated by District Supervisor Cohen, who was in charge of the Respondent Federal's stores in that area, and was asked to sign it. Silverman refused to do so. Cohen thereupon left Silverman and conferred for a while with Store Manager Sells. The latter then informed Silverman that he (Sells) had been instructed to discharge him for refusing to join the Amalgamated, and told Silverman to get his belongings and leave the store immediately. The foregoing findings are based on the credited testimony of Silverman, which was corroborated by that of the witness Diamond. Cohen admitted that he had instructed Sells to discharge Silverman, and that prior thereto he had asked Silverman to sign an Amalgamated card, which Silverman refused to do. He testified however, that the incident involving the Amalgamated card occurred about a week prior to the date of Silverman's discharge, and that his decision to discharge Silverman on March 29, was prompted by the fact that he (Cohen) had been told that on that date Silverman had brought several organizers of the Retail Clerks into the store, who engaged in disorderly activities therein. Cohen also testified that it was his understanding that Silverman was, at the time of these events, a member of. the Amalgamated, and that when Silverman refused to sign an Amalgamated card as requested, he (Cohen) remarked, "Well, you don't have to. I understand that you are already a member of the union." When asked whether or not he had ordered the discharge of Silverman for re- fusing to sign the Amalgamated card, Cohen answered, "I wouldn't say that. Maybe eventually I might have on that ground. I discharged Mr. Silverman for reasons of bringing strangers into our store and into our office, and dis- rupting our business." In view of the corroborated credible testimony of Sil- verman as to the sequence of events leading to his discharge, and the rather confused account given by Cohen, I regard the former's testimony as giving a more reliable version of those occurrences. As to the motive for Silverman's discharge, I also find Cohen's testimony unconvincing. Cohen admitted that shortly before the date of Silverman's discharge, he had been informed that some of the employees in the store "were not members of the [Amalgamated], and that it would be necessary to see that they (lid join the union." And, ad- mittedly, Cohen did thereafter ask Silverman to sign an Amalgamated applica- tion card, which Silverman refused to do.25 Moreover, on the day following Silverman's discharge, another employee, as is found below, was discharged for his refusal to join the Amalgamated. The preponderance of the evidence con- vinces me, and I find, that Silverman was discharged by the Respondent Federal 24 At the hearing Silverman gave his first name as "\Iandil" ; it is spelled in the pleadings as "Mandel." 25 If, as Cohen asserted, it was his understanding that Silverman was already a member of the Amalgamated, it is difficult to understand why lie found it necessary to ask hint to join that union. 664 DECISIONS OF NATIONAL LABOR RELATIONS BOARD on or about March 29, 1949, because of his refusal to accede to the request of Cohen that he (Silverman) join the Amalgamated. 2. Nathan O. Schwartz Schwartz was employed as a salesman and window trimmer by the Respond- ent Federal in the same Los Angeles store in which Silverman was employed. He was hired in February of 1949, and was discharged on March 30, 1949.26 On the morning of March 30 , several of the employees of the store in a group including Schwartz were told by Store Manager Sells that all of the employees in the store who did not belong to the Amalgamated would have to join that Union in order to retain their jobs . After the group disbanded , Schwartz asked Sells whether it was true that he would be required to join the Union, and Was told that it "was definite and you will have to join ." The following conversation ensued: Schwas tz: Supposing I refuse to join? Sells: In that case you will be fired. Schwartz: Do I take it that I am fired? Sells: You are fired right as of this moment, and what's more, I don't like your attitude.2T On the basis of the undisputed evidence above summarized, I conclude and find that Schwartz was discharged by the Respondent Federal on or about March 30, 1949, because he refused to accede to the Respondent Federal's de- mand that he join the Amalgamated.26 3. Marie Margaret Faruzzi Faruzzi was employed by the Respondent Federal in its above-mentioned store as a cashier, from about June 1948 to about April 27, 1949, on which date she was either discharged, or voluntarily quit her employment in a dispute over a requested wage increase which was refused her. That termination of her employment is not here in issue.' On an unspecified day in March 1949, preceding the final termination of her employment by the Respondent Federal, there was some discussion among employees in the store with respect to the requirement that they join and pay dues to the Amalgamated.3° During that day, Faruzzi was asked several times by Store Manager Sells to "pay the union dues," and Faruzzi consistently re- 26 Although the complaint alleges the date of Schwartz' discharge as on or about March 29, 1949, it was stipulated at the hearing that it took place on March 30. 27 The above findings are based on Schwartz ' undenied credited testimony. 28 The record contains no support for the allegations in the Respondent Federal's answer that Schwartz was discharged because lie had, shortly prior thereto, asked to he transferred to another location because of the limited earning opportunity afforded by his job, and that thereafter Schwartz "showed his dissatisfaction by acts of gross insubordination which led to his discharge." Schwartz ' refusal to join the Amalgamated can hardly be deemed to have constituted insubordination , since the Act protects such a refusal under the circum- stances herein found. 28 As has been set forth in a preliminary section of this Intermediate Report, paragraph 10 of the complaint, which alleges that Faruzzi was illegally discharged "on or about April 27, 1949 ," was amended at the hearing so as to allege that she was so discharged "some time in March 1949." so Faruzzi's testimony with respect to the above was vague, but in the context of the record as a whole , it seems clear that the discussion which she described as "a lot of dif- ference about this union business," refers to the attempts of the Respondent Federal during this period to get the employees of the store to join the Amalgamated. FEDERAL STORES DIVISION OF SPEIGEL, INC. 665 fused to do so. At the end of the day, Sells asked her "for the last time whether [she] was going to pay," and she again refused. Thereupon she was informed that she was discharged, and she left the store. After the store had closed, Faruzzi telephoned to Sells, informed him that since she "needed the job bad enough," she would agree to "pay the dues." Sells told her she could report to work the next morning. She did so, and continued in the employ of the Re- spondent Federal until her final termination in April. From the time of her reinstatement until she left her job, Amalgamated dues were deducted from her pay 81 The evidence above summarized reveals, and I find, that Faruzzi was actually discharged at the end of the day on which the aforesaid events occurred, be- cause of her refusal to pay Amalgamated dues, that she was reinstated only upon her agreement to pay such dues, and that thereafter, to the end of her employment, the union dues were deducted from her pay by the Respondent Federal. The legal issues raised by the aforesaid facts are whether her discharge, short of duration. though it was, constituted an unfair labor practice, and whether the subsequent checkoff of Amalgamated dues from her wages was in violation of the Act. These issues are disposed of in the concluding find- ings which follow. C. Concluding findings with. respect $o the discharges of Silverman, Schwartz, and Faruzzi Since the union-security clause in the Respondent's contract with the Amal- gamated has been found to be illegal, the discharges of Silverman and Schwartz pursuar to that clause. in the contract plainly constituted such discrimination with regard to their tenure of employment, to encourage mem- bership in a labor organization (the Amalgamated), as is prohibited by Sec- tion 8 (a) (3) of the Act. The aforesaid discharges necessarily interfered with, restrained, and coerced the employees of the Respondent Federal in the exercise of the rights guaranteed in Section 7 of the Act, in violation of Section 8 (a) (1) thereof, and by illegally encouraging membership in the Amalgamated, constituted support and assistance to that Union by the Re- spondent Federal, in violation of Section 8 (a) (2) of the Act. I so find. Faruzzi's discharge stands on a slightly different footing. That discharge was effected because she initially refused to yield to her Employer's demand that she pay dues to the Amalgamated. Since there was no valid contract in existence, requiring membership in good standing in the Amalgamated as a condition of employment by the Respondent, the employees had a legal right, if they wished, to refuse to pay dues to that organization. Since Faruzzi was discharged for exercising that right, the Respondent Federal thereby clearly interfered with, restrained, and coerced its employees in the exercise of their right, as guaranteed in Section 7 of the Act, to refrain from assisting a labor organization, in violation of Section 8 (a) (1) of the Act. Conversely, the Respondent's aforesaid conduct constituted illegal support and assistance to the Amalgamated, in violation of Section 8 (a) (2) of the Act. I so find 82 31 The above findings of fact are based on Faruzzi 's undenied , credited testimony. 31 Paragraphs 15 and 19 of the complaint allege that the discharges of Silverman, Schwartz, and Faruzzi constitute unfair labor practices within the meaning of Section 8 (a) (1), (2), and ( 3) of the Act. Since the record does not show whether or not Faruzzi was, during the period above discussed , a member of the Amalgamated , her discharge can- not be held to have been effected to encourage membership in that Union. I therefore make no finding that her discharge constituted a violation of Section 8 (a) (3) of the Act. 666 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In his brief, counsel for the Respondent Federal points to the fact that para- graph 10 of the complaint alleges that Silverman, Schwartz, and Faruzzi were discharged "for the reason that they engaged in concerted activities with other employees for the purposes of collective bargaining and other mutual aid and protection and because they refused to permit the employer to deduct union dues from their compensation." Counsel argues in effect that the aforesaid paragraph of the complaint should be dismissed because the proof fails to support the allegation that these employees were discharged for engaging in concerted- activities. It is true that there is it variance between the complaint and the proof insofar as the former alleges that the three employees in question were discharged because they had engaged in concerted activities. However, I do not believe that this variance is fatal, since the issues with respect to the discharges were made clear at the hearing during the course of presentation of the General Counsel's case, the Respondent did not plead surprise, or request additional time in which to prepare a defense, and the aforesaid issues were fully litigated. D. Concluding findings with respect to the collection of Amalgamated dues from Faruzzi following her reinstatement As we have seen, Faruzzi's payment of dues to the Amalgamated, following her discharge and reinstatement, was far from voluntary. Her submission to the deduction of such dues from her pay was, rather, dictated by the alternatives posed for her by the Respondent Federal, of either yielding to the checkoff or being deprived of her job. I am persuaded that such enforced deduction of union dues from the wages of an employee, when there is no legal obligation on the employee to maintain paid-up membership in the union as a condition of employment, necessarily in- fringes on the right of the employee, as guaranteed by Section 7 of the Act, to refrain from assisting a labor organization, and therefore constitutes unfair labor practices as defined in Section 8 (a) (1) and (2) of the Act. I see no conflict between this conclusion and the Board's holding in Salant d Salant, Inc., SS NLRB 816, which is relied on by the Respondents. In that decision the Board stated that the enactment of Section 302 of the Act, which placed certain limi- tations on the checkoff of union dues, did not "have any impact on the unfair labor practice jurisdiction of this Board under Section 8, so as either to create or not create a per se violation of Section S solely on the basis of a violation of those limitations." The Board concluded that the enactment of Section 302 left undisturbed the application by it of its preexisting criteria for determining whether the checkoff of union dues, under a given set of circumstances, con- stitutes a violation of the broad proscriptions of Section 8 of the Act. It becomes necessary, then, to determine under what circumstances the Board has custom- arily held the checkoff of union dues to constitute an unfair labor practice. The question usually arises, as it does herein, in connection with allegations that an employer has illegally assisted, contributed support to, or dominated a labor organization. The principle generally applied by the Board in such situations is to find that the checkoff was an unfair labor practice if, under all the circum- stances, the employees from whose wages the union dues were deducted may be said to have been coerced by the employer into joining and paying dues to the union in question. Put another way, the rule seems to be that, "the Board normally orders the reimbursement of checkedoff dues only in those cases where FEDERAL STORES DIVISION OF SPEIGEL, INC. 667 the actions of the employer are tantamount to coercing all employees to join the dominated organization." a3 As is indicated by the cases cited, the Board has held that there is nothing inherently violative of the Act in an employer deducting union dues from the pay of employees, even on behalf of a dominated union. The determining factor in deciding whether such conduct constitutes an unfair labor practice is whether the employer coerced the employees into permitting the deduction of dues. In other words, even where the employees are under no legal obligation to pay dues to the union in order to retain their jobs, the employer may still deduct such union dues from their pay if the employees voluntarily permit him to do so, but if the employer, under such circumstances, coerces them into yielding to the checkoff, the checkoff then amounts to an invasion of the employees' rights under the Act. With this principle in mind, it becomes readily apparent that it makes no difference in the result whether the union on whose behalf the dues are checked off has been held to be an employer-dominated organization or merely an illegally assisted one.3' This the Board has recognized in a decision issued subsequent to that in the Salant case. (Precast Slab and Tile Co., 88 NLRB 1237, in which the Board ordered checked-off union initiation fees repaid to em- ployees who were required by their employer to allow such deductions from their pay, although the A. F. of L. union involved was not found to have been employer- dominated.) On the basis of the foregoing, I conclude and find that the Respondent Federal, by coercing Faruzzi into permitting it to deduct Amalgamated dues from her pay on and after the date of her reinstatement, and by deducting such dues from her pay under those circumstances, interfered with, restrained, and coerced her, as well as the rest of its employees, in the exercise of their right, which is guaranteed by Section 7 of the Act, to refrain from assisting a labor organization, thereby committing unfair labor practices in violation of Section 8 (a) (1) of the Act, and in addition, thereby assisting and supporting the Amalgamated in violation of Section 8 (a) (2) of the Act. 33 C. Ray Randal Mfg. Co., 85 NLRB 121 (in which the Board adopted the findings, conclusions, and recommendations of the Trial Examiner without, however, specifically pass- ing on his above-quoted formulation of the rule). For cases in which the Board has applied such a rule, see : Remington Arius Co., Inc., 62 NLRB 611, at 614, in which the Board did not order the employees reimbursed for checked-off dues because, as it pointed out, the circum- stances were such that the employees were not coerced into joining and paying dues to the dominated union ; Louisville Railway Co., 69 NLRB 691. at 702, in which the Board similarly refused to order reimbursement for checked-off dues because "membership [in the dominated organization] was not . . . compelled, and dues were checked off only on individual, voluntary authorization." (Italic supplied.) H. J. Daniels Poultry Co., 65 NLRB 689, at 690, in which similar result was reached because the employer was not found to have "obligated all employees to join and support" the dominated organization ; Pacific Plastic 6 Mfg. Co., Inc., 68 NLRB 52, 58, 96, in which reimbursement for checked-off dues was ordered, the employer having "inserted that its employees remain in good standing with [the dominated union] by payment of dues" ; Supersweet Feed Co., Inc., 62 NLRB 53, 60, 84, in which a similar result was reached because the employers "insisted that their employees remain in good standing with [the dominated organization] by payment of dues, and a number of employees were threatened with discharge, pursuant to the closed-shop provisions of the said contracts, for their failure to do so" ; Cannon 1ffg. Corp., 71 NLRB 1059, 1092, reimbursement ordered where the dues were checked off pursuant to an illegal union-security contract with a dominated union. 34 As to the distinction between an illegally assisted union and a company- dominated one, compare Carpenter Steel Coinpany, 76 NLRB 670, and Hershey Metal Products Company, 76 NLRB 695. 668 DECISIONS OF NATIONAL LABOR RELATIONS BOARD E. The admitted checkoff of Amalga4na.ted dues by the Respondent Federal and the Respondent Lee's, from, the pay of their employees generally As previously noted, both the Respondent Federal i nd the Respondent, Lee's admit that at all times herein material they have checked off Amalgamated dues from the pay of some, though not all, of their respective employees, the em- ployees in question (other than Faruzzi) not being specifically identified in the record. They also admit that such checkoffs were effected without the written authorization of the employees involved. The question remains to be decided whether this general practice of making such dues deductions constituted an unfair labor practice. This issue necessitates further examination into the effect of the Board's decision in the Salant case. There the Board held that although the employer had violated Section 8 (a) (1) and (2) of the Act by entering into and keeping in effect all illegal union-shop contract with a union, it had not committed unfair labor practices by virtue of the provision in such contract for the check-off of union dues." Aside from the circumstances that the Respondent Federal has been found to have discharged two employees be- cause of their refusal to join the Amalgamated, and one because of her refusal to pay dues to that organization, and has been found to have told other employees that membership in the Amalgamated was a condition of their em- ployment, the facts in this case and in the Slant case are essentially identical.9B It might seem, then, as the Respondents argue, that the holding in tile Salant case requires the dismissal of the allegation that the Respondents herein violated the Act by checking off dues on behalf of the Amalgamated. However, in the light of the cases heretofore cited, in which the Board applied the test of whether or not the dues deductions were voluntarily permitted by the em- ployees, the Salant decision, it seems to me, must be read as resting on the assumption that, since the contracting union in that case represented an un- coerced majority of the employees, and since there was no proof that the em- ployer had, aside from keeping in effect an illegal minion-shop contract, coerced the employees into permitting the checkoff of union dues, the employees had voluntarily acceded to the checkoff. That assumption cannot be made here, at least with respect to the Respondent Federal, for that Employer, by discharging and threatening to discharge employees unless they joined and paid dues to the Amalgamated, created a situation by which its employees were necessarily forced to permit Amalgamated dues to he deducted from their pay, under fear of the loss of their jobs. I therefore conclude and find that the Respondent Federal has at all times since December 17, 1948,. coerced some of its employees into se In the case at bar the contract between the parties contains no provision for the checkoff of union dues. 14 Here, as in the Sala nt case , the illegal union-security contract replaced a preceding such contract which was legal because entered into prior to the enactment of the Taft- Hartley amendments to the Act , and these contracts were entered into with a union which, so far as appears , represented an uncoerced majority of the employers ' employees. The record shows that the Respondents herein were parties to collective bargaining contracts with the Amalgamated at least from January 31, 1947 , until December 17, 1948, on which date a new contract was entered into to remain in effect to January 31, 1950 . Although it appears that the Respondents did not, at the time the latter contract was executed, demand or receive from the Amalgamated any proof of the latter's majority status as collective bargaining representative of the employees , and that the Amalgamated has never been certified by the Board as collective bargaining representative of the Respondents' employees, there is no affirmative showing in the record , nor indeed any allegation in the complaint or contention put forward by the General Counsel , that the contract in question was entered into by the Respondents with a union which did not represent an uncoerced majority of the Respondent's employees. . FEDERAL STORES DIVISION OF SPEIGEL, INC. 669 permitting it to deduct Amalgamated dues from their pay, and has thereby; and by making such deductions, interfered with, restrained, and coerced its employees in the exercise of their rights under Section 7 of the Act, in violation of Section 8 (a) (1) thereof, and has thereby given support and assistance to the Amalga- mated, in violation of Section 8 (a) (2) of the Act. Since no such specific acts of coercion were proved to have been committed by the Respondent Lee's against its employees, the checkoff of Amalgamated dues as practiced by it falls in the same category as that held not to constitute an un- fair labor practice in the Salant case, and I shall therefore recommend that the complaint be.dismissed insofar as it alleges that the Respondent Lee's violated the Act by deducting union dues from the pay of its employees. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent Federal and. the Respondent Lee's set forth in Section III, above, occurring in connection with the operations of these Re- spondents described in Section 1, above, 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 Since it has been found that the Respondents have engaged in unfair labor practices, I shall recommend that they cease and desist therefrom and take cer- tain affirmative action in order to effectuate the policies of the Act. I have found that by entering into and thereafter enforcing an agreement with the Amalgamated containing certain illegal provisions, the Respondent Federal has committed unfair labor practices within the meaning of Section 8 (a) (1), (2), and (3) of the Act, and that by enforcing the illegal provisions of its con- tract with the Amalgamated, the Respondent Lee's has committed similar unfair labor practices. I shall therefore recommend that they cease and desist from these unfair labor practices or any like or related conduct 3' As the Board has held, the effect of such coercive conduct would not be eradicated were the Re- spondents permitted to afford the Amalgamated the privilege of enjoying a rep- resentative status strengthened by virtue of the illegal union-shop contract. Therefore, in order to effectuate the purposes and policies of the Act, I shall rec- ommend that the Respondents withdraw recognition from the Amalgamated and cease giving effect to the contract which was executed on December 17, 1948, with that organization, or to any modification , extension , supplement , or renewal thereof, unless and until the Amalgamated has been certified by the Board " Nothing in this recommendation, however, shall be deemed to require the Re- spondents to vary or abandon those wages, hours, seniority, or other substantive 37 Since the Respondents engaged in the conduct herein found to he illegal pursuant to their contract with the Amalgamated , and on the mistaken assumption that they were not engaged in commerce within the meaning of the Act, I am not persuaded that their conduct bespeaks a general attitude of disregard for the rights of their employees, or that it indicates any likelihood of the commission of other unfair labor practices by these Respondents in the future. I do not, therefore, deem it necessary to recommend that they be ordered to cease and desist from in any manner infringing on the rights of their em- ployees. May Department Stores V. N. L. R. B., 326 U. S. 376. 31 In his brief counsel for the Respondent Lee's argues that since only the union-shop provision in the contract has been found illegal , the appropriate remedy is merely to require the parties to cease giving effect to that provision . However, the Board in Julius Resnick, Inc., and in the Salant case, supra, found the remedy above recommended to be appropriate. 670 DECISIONS OF NATIONAL LABOR RELATIONS BOARD features of their relations with their employees established in performance of such contract, or to prejudice the assertion by the employees of any rights they may have under such agreement. I have also found that the Respondent Federal committed unfair labor prac- tices by deducting Amalgamated dues from the wages of some of its employees on and after December 17, 1948. The money which the Respondent Federal thus forced those employees to pay to the Amalgamated to fulfill the Respond- ent's illegal condition of employment was a definite financial loss on the part of the aforesaid employees. I will accordingly recommend that the employees of the Respondent Federal from whose pay Amalgamated dues were deducted on and after December 17, 1948, be made whole by reimbursement of the amounts thus illegally extracted from them. I have found that the Respondent Federal illegally terminated the employment of employee Faruzzi during the month of March 1949. Since her discharge was effected at the close of the day, and she was reinstated to her employment at the beginning of the next day, it is not necessary to recommend the remedy of reinstatement or back pay in her case.39 It has also been found that the Respondent Federal's discharge of Silverman and Schwartz constituted unfair. labor practices under the Act. The record shows that about a week following his discharge Schwartz was offered an equivalent or more desirable position by the Respondent which he refused." It will therefore not be recommended that the Respondent Federal again offer him reinstatement. It will, however, be recommended that the Respondent Federal make Schwartz whole for any loss of pay he may have suffered by reason of its discrimination against him, by payment of a sum of money equal to the amount he would have earned as wages from the date of his discharge to the date of the aforesaid Respondent's offer of reinstatement which he refused, less his net earnings during the said period.' As to Silverman, the record reveals that on or about March 7, 1950, he entered into an agreement with counsel for the Respondent Federal in compromise of his claim against that Respondent arising out of his discharge. At the hearing Silverman testified that he was not asking for any back pay, nor for an offer of reinstatement in the employ of the Respondent Federal. Since the Act estab- lishes a public policy and is enforced in order to effectuate that policy, and not to satisfy any private claims which might arise from violations of the Act, it follows that private agreements in settlement of such personal claims are not effective' to bar the Board from ordering whatever remedy is appropriate to effectuate the public policies of the Act. Consequently, Silverman was asked at the hearing whether his testimony that he was not seeking reemployment by the Respondent Federal was based solely on the private agreement which lie made with that Respondent, and he answered that he did not desire rein- statement in any event. In view of that statement, it will not be recommended that the Respondent Federal offer reinstatement to Silverman. It will be 3° It is understood , of course,- that the recommendation that the Respondent Federal reimburse its employees for Amalgamated dues deducted from their pay, applies to Faruzzi. 40 Although at one point in his testimony Schwartz indicated that he was not definitely offered the aforesaid position , the record as a whole convinces me that a definite offer of the position was made to him. At a subsequent point in his testimony Schwartz testified that in a conversation with a representative of the Respondent he told that representative that he "couldn't take the job [the Respondent] had offered," because he planned to enter into .n business of his own. 11 See Crossett Lumber Company, 8 NLRB 440 , 497-498. FEDERAL STORES DIVISION OF SPEIGEL, INC. 671 recommended, however, that Silverman he made whole for any loss of pay he may. have suffered by reason of the Respondent Federal's discrimination against him, by payment to him of a. sum of .money equal to the amount he would have earned as wages from the date of his discharge to the date (March 7, 1950,) when he testified that he did not desire reinstatement, less his net earnings during the said period 12 It will also be recommended that the Respondents post appropriate notices to their employees in connection with the foregoing. Upon the basis of the foregoing findings of fact, and upon the entire record in the case, I make the following : CONCLUSIONS OF LAN 1. Retail Clerks International Association, A. F. of L., and Amalgamated Clothing Workers of America, Local Union No. 81, CIO, are labor organizations within the meaning of Section 2 (5) of the Act. 2. Federal Stores 'Division of Speigel, Inc., and Leo Katz, Minda Katz, Otto Katz, Leemond Katz, Phil Kates, Dorothy Kates, Ely Elias, Bertha Elias,. Julian Elias, and Walter L. Keen, doing business as Lee's Department Store; are engaged in commerce within the meaning of Section 2 (6) and (7) of the Act. 3. By entering, into its contract with the Amalgamated on December 17, 1948, and thereafter enforcing its illegal provisions, the Respondent Federal com- mitted unfair labor practices within the meaning of Section 8 (a) (1), (2), and (3 ) of the Act. 4. By enforcing the illegal. provisions of its contract with the Amalgamated at all times since December 22, 194S, the Respondent Lee's committed unfair labor practices within the meaning of Section 8 (a) (1), (2), and (3) of the Act. 5. By discriminating in regard to the hire and tenure of employment of Mandil Silverman and Nathan O. Schwartz to encourage membership in the Amalgamated, the Respondent Federal supported and assisted the Amalgamated, and interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed by Section 7 of the Act, thereby engaging in unfair labor practices within the meaning of Section 8 (a) (1), (2), and (3) of the Act. 6. By its discharge of Marie M. Faruzzi, the Respondent Federal interfered with, restrained, and coerced its employees in the exercise of their rights as guaranteed in Section 7 of the Act, and assisted and supported the Amalgamated, thereby engaging in unfair labor practices within the meaning of Section 8 (a) (1) and (2) of the Act. 7. By coercing its employees into permitting it to deduct dues from their pay on behalf of the Amalgamated, on and after December 17, 1948, the Respondent Federal interfered with, restrained, and coerced its employees in the exercise of their rights as guaranteed in Section 7 of the Act, and supported and assisted the Amalgamated, thereby engaging in unfair labor practices within the mean- ing of Section 8 (a) (1) and (2) of the Act. 8. By demanding that its employees become and remain members of the Amal- gamated, and by threatening them with discharge for their failure to do so, the Respondent Federal assisted and supported the Amalgamated, and interfered '2 Although I do not regard the private settlement between Silverman and the Respondent Federal as binding, I see no reason why any amount paid to him pursuant to that agree- ment should not be credited as against anysum found to be due him,. 672 DECISIONS OF NATIONAL LABOR RELATIONS BOARD with, restrained , and coerced its employees in the exercise of the rights guaran- teed by.Section 7 of the Act , thereby engaging in unfair labor practices within the meaning of Section 8 (a) (1) and ( 2) of the Act. 9. All of the aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2 (6) and (7). of the Apt. 10. The Respondent Lee's has not engaged in unfair labor practices by de- ducting Amalgamated dues from the pay of some of its employees. [Recommended Order omitted from publication in this volume.]