Sullivan Dry Dock & Repair Corp.

In the Matter of SULLIVAN DRY DOCK & REPAIR CORPORATION and LOCAL 13, INDUSTRIAL UNION OF MARINE & SHIPBUILDING WORKERS OF AMERICA, C. I. O. Case No. 2-C-5726.-Decided Ap7il 23, 194¢6 DECISION AND ORDER On September 1, 1945, the Trial Examiner issued his Intermediate Report in the above-entitled proceeding, finding that the respondent had engaged in and was engaging in certain unfair labor practices, and recommending that it cease and desist therefrom and take cer- tain affirmative action. as set forth in the copy of the Intermediate Report attached hereto. Thereafter, the respondent filed exceptions to the Intermediate Report and a supporting brief. The Board has considered 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 brief filed by the respondent, and the entire record in the case, and hereby adopts the findings, conclu- sions, and recommendations of the Trial Examiner. ORDER Upon the entire record in the case, and pursuant to Section 10 (c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the respondent, Sullivan Dry Dock & Repair Corporation, Brooklyn, New York. and its officers, agents, successors, and assigns, shall : 1. Cease and desist from : (a) Discouraging membership in Local 13, Industrial Union of Marine & Shipbuilding Workers of America, affiliated with the Con- gress of Industrial Organizations, or any other labor organization, by discriminating in regard to any term or condition of employment of any of its employees; (b) Refusing to bargain collectively with Local 13, Industrial Union of Marine & Shipbuilding Workers of America, affiliated with the Con- 67 N L R. B, No 81. 627 628 DECISIONS OF NATIONAL LABOR RELATIONS BOARD gress of Industrial Organizations, as the exclusive representative of the respondent's employees in the bargaining unit of timekeepers, by deciding on and taking action unilaterally, without prior consultation with said organization, in regard to any term or condition of employ- ment affecting them. 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act : (a) Make whole the timekeepers who were employed by the respond- ent in December 1944 for the loss suffered by reason of the respondent's discrimination against them, by payment to each of them of a sum of money equal to the Christmas bonus which he normally would have received ; (b) Bargain collectively with Local 13, Industrial Union of Marine & Shipbuilding Workers of America, affiliated with the Congress of Industrial Organizations, as the exclusive representative of all the re- spondent's employees in the bargaining unit of timekeepers, with re- spect to all terms and conditions of employment affecting them; (c) Post at the Brooklyn Yard copies of the notice attached hereto, marked "Appendix A." Copies of said notice, to be furnished by the Regional Director for the Second Region, shall, after being duly signed by the respondent's representative, be posted by the respondent immediately upon receipt thereof, and maintained by it for 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 respondent 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 this Order, what steps the respondent has taken to comply herewith. 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, we hereby notify our employees that : We will bargain collectively with Local 13, Industrial Union of Marine & Shipbuilding Workers of America, affiliated with the Congress of Industrial Organizations, as the exclusive representa- tive of all employees in the bargaining unit described herein with respect to all terms and conditions of employment affecting them. The bargaining unit is: All timekeepers employed at our Brooklyn Yard, excluding the chief timekeeper, the night assistant chief timekeeper, the day assistant chief timekeeper, and all other super- SULLIVAN DRY DOCK & REPAIR CORPORATION 629 visory employees with authority to hire, promote, discharge, dis- cipline, or otherwise effect changes in the status of employees, or effectively recommend such action. We will make whole the timekeepers who were employed by us in December 1944 for the loss suffered by reason of our discrimi- nation against them, by payment to each of them of a sum of money equal to the Christmas bonus which he normally would have received. All our employees are free to become or remain members of the above -named union or any other labor organization . We will not discriminate in regard to any term or condition of employment against any employee because of membership in or activity on behalf of any such labor organization. S LLIVAN DRY DOCK & REPAIR CORPORATION, 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. INTERMEDIATE REPORT Mr. Jerome I. Macht, for the Board. Mr. J. Read Smith, of Brooklyn, N. Y., for the Respondent. Mr. Herman Ro.sesr f eld, of New York, N. Y, for the Union STATEMENT OF THE CASE The National Labor Relations Board, herein called the Board, by its Regional Director for the Second Region (New York, New York), issued its complaint dated June 6, 1945, against Sullivan Dry Dock & Repair Corporation, Brooklyn, New York, herein called the Respondent. The complaint alleges that the Respond- ent has engaged in and was engaging in unfair labor practices within the meaning of Section 8 (1), (3), and (5), of the National Labor Relations Act, 49 Stat. 449, herein called the Act. It was issued upon charges filed with the Board by Local 13, Industrial Union of Marine & Shipbuilding Workers of America, affiliated with the Congress of Industrial Organizations, herein called the Union. Copies of the complaint and notice of hearing thereon were served upon the Respondent and the Union. With respect to the unfair labor practices the complaint in substance alleges that the Respondent: (1) discriminated against its timekeeping employees after they had designated the Union as their collective bargaining representative, by the unilateral action of the Respondent on December 22, 1944, in withholding payment of a Christmas bonus to the timekeepers ; and (2) refused to bargain collectively with the Union concerning this matter, by having taken this action without prior consultation with the Union, and by refusing subsequently the Union's request to negotiate an agreement with reference to payment of this bonus 630 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Respondent filed an answer dated June 16, 1945, denying the commission of any unfair labor practices. Pursuant to notice, a hearing was held in New York, New York, on June 28 and 29, 1945, before Melton Boyd, the undersigned Trial Examiner duly designated by the Chief Trial Examiner. The Board, the Respond, ent, and the Union were represented by counsel. All parties participated in the hearing, and each was afforded full opportunity to be heard, to examine and cross- examine witnesses, and to introduce evidence bearing upon the issues. At the conclusion of the Board's case, the Board's counsel moved to conform the plead- ings to the proof with respect to formal matters, and without objection this motion was granted. At that time, and again at the conclusion of all the evidence, the Respondent's counsel moved to dismiss the complaint Ruling on this motion was reserved, and is made herein. At the conclusion of the hearing, at the Trial Examiner's request, the Board, the Union, and the Respondent presented oral argument. Subsequently the Respondent filed a brief with the Trial Examiner. Upon the entire record in the case and from his observations of the witnesses, the Trial Examiner makes the following : FINDINGS OF FACT 1 1. THE BUSINESS OF THE RESPONDENT Sullivan Dry Dock & Repair Corporation is a New York corporation. It has its principal office and place of business, known as the Brooklyn Yard, in Brooklyn, New York. At its Brooklyn Yard it is engaged in the manufacture of propeller wheels and other similar products, and in the repair and converting of ships. During the past year in these operations, the Respondent's production of propeller wheels and related products was valued in excess of $50,000, all of which was transported in interstate commerce to points outside the State of New York ; the value of its services in ship repair and conversion was in excess of $1,000,000, and was performed on ships which operate in foreign and inter- coastal waters. i The Respondent concedes that it is engaged in commerce within the meaning of the Act. It. THE ORGANIZATION INVOLVED Local 13, Industrial Union of Marine & Shipbuilding Workers of America, affiliated with the Congress of Industrial Organizations, is a labor organization admitting to membership employees of the Respondent. III. THE UNFAIR LABOR PRACTICES A. Question of representation Since 1941, the Union has been the bargaining representative of the production and maintenance employees in the Brooklyn Yard. In March 1944, the Union filed with the Board its petition for certification as bargaining representative of the timekeepers, exclusive of supervisors. Subsequently the Board directed an election,' which was conducted on June 12, 1944. Nineteen votes were cast : 18 for, 1 against, the Union. 1 Except where conflicts and inconsistencies in the testimony are discussed and resolved, the findings of fact herein are made on undisputed evidence. The next following Sections I and II are based on allegations in the complaint which were admitted in the answer and on stipulations of facts at the hearing. 2 56 N. L. R. B. 582. SULLIVAN DRY DOCK & REPAIR CORPORATION 631 B. The unit; majority The election was conducted among employees in the following unit: All the Company's timekeepers, excluding the chief timekeeper, the night assistant timekeeper, the day assistant chief timekeeper, and all other super- visory employees with authority to hire, promote, discharge, discipline, or otherwise effect changes in the status of employees, or effectively recommend such action. The Board found in that proceeding, as does the Trial Examiner in the present case, that such unit was and is appropriate for the purposes of collective bar- gaining. The Respondent concedes the appropriateness of this unit. On June 21, the Board certified the Union to be the exclusive bargaining repre- sentative of all employees in this unit. The Respondent concedes, and the Trial Examiner finds, that the Union then and thereafter continued to represent a ma- jority of these employees and to serve as their certified collective bargaining representative. C. Contract negotiations Shortly thereafter, the Union began negotiations with the Respondent. John J. King, an officer and the acting business agent of the Local, assisted by two timekeepers, submitted to the Respondent a proposed bargaining agreement. In their first two conferences, the parties reached an accord on some clauses. Other matters, about which there was disagreement, were discussed with a conciliator of the United States Department of Labor. On August 11, he certified these disputed matters as a dispute case to the National War Labor Board, herein called NWLB, which in turn referred them to its Shipbuilding Commission for determi- nation. Pending the final determination of these matters, the Union and the Respondent withheld giving any effect to the terms they had agreed upon. D. Directive of Shipbuilding Commission On November 11, the Shipbuilding Commission issued its directive order with reference to these matters in dispute.' Among other provisions, it ordered that the "grievance procedure shall be patterned after the grievance procedure for production employees," and prescribed an increased wage scale retroactive to August 11. The Respondent immediately appealed from the determination of the Shipbuilding Commission to NWLB, which action operated to suspend the direc- tive order pending a review of the case.' E. Christmas bonus In previous years the Respondent had followed the practice of awarding an annual bonus to its office clerical employees and to its supervisory employees working both in the office and in the yard. The amount paid each employee was equal to his base pay for a 40-hour week. The bonus was paid immediately before Christmas, and was referred to as a Christmas bonus. In 1943, the bonus was "charged upon the company' s books as additional com- pensation to such persons [to whom it was paid] respectively, for the fiscal year which commenced October 1, 1943." This entry appeared in the minutes of the 8 N. W. L. B. case No. 111-8919-D (25-1701-D). ' In May 1945 , following the affirmance by NWLB of the directive order, its terms and the terms agreed to by the parties in August were given effect for the first time as a consummated bargaining agreement. 632 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Board of Directors, which recited further "The chairman told the meeting that it appeared that for some years past it had been the practice of the company to pay one week's compensation during the month of December, to executives, office em- ployees and personnel generally composing the supervisory group." Testifying to the character of the bonus, J. Read Smith, the Respondent's attorney and labor relations officer, stated "A Christmas bonus is considered wages, as a rule. It is remuneration. Under the Wage Stabilization Act itself, it is considered remuneration, unless it is a gift . . . It has been in existence for such a period of time that it has been, under the interpretation of the Wage Stabilization Act, an integral part of the wage structure. As a matter of fact, we have deducted with-holding taxes and so forth from it when we paid it. In other words, the Company did not pay any gift tax . . Smith is one of the Respondent's managing officials, and the one who in fact counselled the with- holding of the bonus to the timekeepers in 1944 hereinafter discussed. It is apparent that the Respondent's officers, after enactment of the Wage Stabilization Act in 1942, considered the bonus to be a part of the total annual compensation due the class of employees to whom it had been paid The Trial Examiner, considering the permissive provisions of the Wage Stabilization Act then governing the payment of annual bonuses regularly paid,' finds the Christ- mas bonus was an integral part of the Respondent's wage structure for this class of employees and, as such, a term of their employment in 1944. F. Bonus payment in 1944 On December 22, 1944, the Respondent paid the Christmas bonus to the class of employees who had received it in previous years, except, however, for the timekee ers. Explaining this action, the Respondent called as witness Smith, its present attorney, and Gerard M. McAllister, its president who formerly had been its attorney and labor relations officer. Reconciling their testimony, it appears that the management was about to follow its practice of paying the bonus when a discussion arose as to whether to pay it to the non-supervisory timekeepers' All were cognizant that these time- keepers were represented by the Union, that the Union and the Respondent were in disagreement as to the wage rates, that the Respondent had appealed from the directive of the Shipbuilding Commission fixing a wage schedule, and that the timekeepers were then being paid their pre-existing rates. Smith advised the other managing officials that the bonus should not be paid to the timekeepers, and acting on his advice it was not paid to them. There was no evidence of economy considerations having weighed in this decision. Both Smith and McAllister testified that this action was taken because the directive of the Shipbuilding Commission, issued on November 11, provided for an increase in i See NWLB General Oi der No 10 ; adopted November 6, 1942 ( 7 Fed. Reg. 915), amended September 12, 1944 ( 9 Fed Reg. 11575 ). In NWLB Release B-1824, issued November 13, 1944, it was stated "The National War Labor Board calls to the attention of employers and labor unions the rules governing the payment of Christmas or year-end bonuses . . . Under General Order No . 10, an employer may pay to his employees a bonus in the same amount that was paid to the employee during the preceding bonus year. If the bonus has been computed on a percentage or other similar basis, the same method of computation may be used this year even though it may result in the payment of a greater sum . 1 1 21 War Labor Reports 1 6 With respect to the remaining employees who received it, no action of the Board of Directors was taken in 1944 approving the payment of the bonus . The fact that such formal action was taken in 1943 may be explained by the circumstances that McAllister had become the Respondent 's president shortly before that time. SULLIVAN DRY DOCK & REPAIR CORPORATION 633 the wage scale for timekeepers, and that Smith had stated that the Respondent might violate the Wage Stabilization Act if it proceeded to pay the bonus to the timekeepers when their wage scale was increased by the directive. It is apparent from the testimony of Smith and McAllister that this was spe- cious rationalizing on their part in providing an excuse for not paying the bonus to the timekeepers. They acknowledged that the increased wage scale prescribed by the directive was not being paid at that time, and that the Re- spondent's appeal from the directive suspended its operative effect. Notwith- standing the pendency of their appeal, they admitted that they did not inquire of either the Shipbuilding Commission or NWLB concerning the propriety of paying the bonus Each admitted he knew that General Order No. 10 excepted regularly paid bonuses from the operations of the Wage Stabilization Act. If there remained any uncertainty in their minds, it would have been dispelled by the interpretative bulletin of NWLB, issued on November 13, noted above. The Trial Examiner finds the Respondent entertained no honest doubt con- cerning its right under the Wage Stabilization Act to pay this bonus to the timekeepers. G. Union's protest When informed that the Respondent had withheld the bonus from the time- keepers, the Union' s spokesman, King, on December 26, telephoned Smith and protested the Respondent's action. King, in talking with Smith, requested that the Respondent pay the bonus to the timekeepers, as it had in previous years, and explained that the Respondent's action in 1944 after the timekeepers had joined the Union made it appear to them that they were being the objects of discrimination because of their Union affiliation Smith denied that any dis- crimination was intended, reminded King that the proposed contract made no provision for payment of the bonus, stated that its payment was optional with the company, and stated further that the company believed its payment of the bonus to the timekeepers in 1944 would constitute a violation of the Wage Stabilization Act. During the first week of January 1945, King, accompanied by members of the grievance committee for the production and maintenance employees, presented to the Respondent as a grievance the non-payment of the bonus to the timekeep- ers. Smith, acting for the Respondent, refused to entertain the matter, point- ing out that it was not a grievance within the ambit of the production-mainte- nance employees' contract. King contended that the directive order of the Shipbuilding Commission required, by the grievance procedure prescribed therein, that the grievances of timekeepers be adjusted in this manner. In the third week in January, during another meeting with Smith, called to consider griev- ances of the production-maintenance employees, King requested the Respondent to reconsider the rejected matter. Smith again refused. King then proposed that an arbitrator be appointed, as provided in the production- maintenance em- ployees' contract, to arbitrate the matter Smith would not consent to this. Thereafter, about February 1, the Respondent's refusal to arbitrate the matter was submitted to a Federal conciliator. This conference was attended by King, accompanied by the timekeepers' steward, and by Smith and a conciliator. Smith maintained the position that the Respondent had no obligation to arbi- trate the matter because it was not within the ambit of the production- mainte- nance employees' contract. The principal issue remained unsettled. During these various conferences the only proposal made by the company was that the payment of a bonus in 1945 might be made the subject of bargaining for a con- 634 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tract for that year, at the same time insisting that the 1944 bonus would not be paid. No attempt was made by the Union to have this matter referred to NWLR as a supplemental dispute, relating to the issues then pending before it, but instead it filed its charge in the present case. H. Findings in conclusion Stripped of unessential details, did the Respondent's action in withholding the bonus from the timekeepers, without prior consultation with the Union which was their collective bargaining representative, constitute illegal discrimination, or a refusal to bargain, or both? 1. Discrimination to discourage union membership The discrimination proscribed by Section 8 (3) of the Act, "to encourage or discourage membership in any labor organization," may relate to "hire or tenure of employment" or to "any term or condition of employment." In its nature, simply stated, such discrimination is different treatment accorded employees than what they normally would have received but for their relations with a union. In this instance the treatment was manifest in the payment of the Christmas bonus. As found above, this bonus was deemed to be an integral part of the wage structure for the class of employees who had been receiving it over a period of years. When withheld from the timekeepers in 1944, the Respondent's action was in fact a change in the terms of their employment. While the Respondent's attorney conceded in his testimony that the bonus was a part of the wage structure, and makes no contrary contention in his brief, he did state in his testimony with apparent inconsistency that he did "not think the employees have a right to compel the company to pay it." At the same time, in his testimony he expressed uncertainty as to whether the payment of the bonus in 1944 was entirely within the discretion of the Respondent, although on December 26 he had told the Union that it was within the Respondent's discre. Lion to continue it or discontinue it. Assuming in this instance, contrary to the facts which the totality of the evidence establishes, that it was a gratuity or that it was a premium payment conditioned on either profits or extra efforts, never- theless a bonus of such character may be the fulcrum of discrimination. "These words [of Section 8 (3) of the Act] are not limited so as to outlaw discrimina- tion only where there is in existence a formal contract or relation of employ- ment between employer and employee. They embrace, as well, all elements of the employment relationship which in fact customarily attend employment and with respect to which an employer's discrimination may as readily be the means of interfering with employees' right of self-organization as if these elements were precise terms of a written contract of employment." 7 The disparate treatment accorded the timekeepers, in contrast to the remaining employees (including timekeepers' supervisors) in the class who previously had received the bonus, is obvious, and constitutes a well-recognized form of dis- crimination.8 Not only was their treatment in contrast, but it also was a depar- ture from the normal practices which were continued with reference to others in the benefited class. 7Y. L R. B. v. Waterman Steamship Corporation, 309 U S 206, 218; compare Valley Mould it Iron Corp v N L. R B., 116 F (2d) 760, 762-63^(C C A 7) 6 See Young Engineering Company, 57 N L R B 1221, enf'd without opinion (C C A. 7) May 23, 1945, Duke Manufacturing Co. 14-C-977, enf'd without opinion (C. C. A. 8) March 12, 1945. Interstate Steamship Company, 36 N. L. It. B. 1307. SULLIVAN DRY DOCK & REPAIR CORPORATION 635 The Respondent endeavored to evade the consequences of the discriminatory treatment, by stating that it acted under the legal compulsions of the Wage Stabilization Act. As found above, this asserted reason had no merit. General Order No. 10 clearly exempted such bonuses from the limitations of that statute.9 The Respondent contends further, in its brief, that if it be assumed that its coun- sel was incorrect in his advice that the payment of the bonus was prohibited, the fact that it followed that advice precludes an inference of "intention . . . to . . . discourage membership in the Union " This contention is at fault in several respects. First, the natural consequences which would be expected to flow from the Respondent's unilateral action was the discouragement of self-organization of employees. This effect was reasonably known and, without anything done to abate it, must be presumed to be intended Under such circumstances it is unnecessary to find affirmatively a motive to interfere with unionization ; in fact, such motive may be absent '0 Absent a positive legal duty to take action that might have the effect of discrimination, the Respondent cannot rely on the "exigencies of the moment" or "business reasons" to violate the Act, and in fact may not excuse any "infraction of the statute"" Second, in this instance, as hereinafter discussed. the Respondent's action was taken without prior con- sultation with the Union. Such bargaining procedure was clearly open to it. Failing to bargain on this hatter when such was its duty, and absent any statu- tory obligation to alter employment terms that would have relieved it from this duty, the unilateral change in terms lacked legal sanction and violated the Act." The Respondent's erroneous rationale of its duty, if its action was guided by bad advice, did not abate the natural effect of its intended act and disparate treatment. Third, factually, at the time it withheld the bonus the Respondent 9 On September 4, 1944 , the N. W L. B. released its decision issued July 26, 1944, In Thomas Sommerville Company , Case No 111-6266-HO, 18 War Labor Reports 152 , wherein it held that the employer was obliged to pay in full a Christmas bonus withheld in part from employees in a unit following their designation of a bargaining representative, while it continued to pay the bonus in full to other employees . Previously , the N W. L. B. had increased the wages of the represented employees in an order which provided for retro- active payment. ( Case No. 111-2896-D, 12 War Labor Reports 286.) The company had diminished the bonus to the represented employees in an amount equal to the retroactive payment The company contended that the bonus was a gratuity , that it was not an integral part of the wage structure , that it had refused the Union 's request to include provision for the bonus in an agreement, and that the employees in the unit had acquired a different status by reason of their representation by a bargaining agent. In effect, the N W. L B held that the diminution of the bonus was a decrease in compensation in vio- lation of Executive Order 9250 , and ordered provision for its payment in full to be Incor- porated in the agreement between the parties In the present case the Respondent's attorney , in argument , stated he did not know of this decision until after the Respondent i ook its action. In view of the findings made herein, it is immaterial whether he knew of this decision 10 Republic Aviation Corporation v. N L R. B ; N. L R. B v LeTourneau Company of Geoigia, 324 U S 793 . The Supreme Court noted in its opinion that "the discharges of the stewards, however, were found not to be motivated by opposition to the particular union , or we deduce, to unionism ," and "the Board determined that there was no union bias or discrimination by the company in enforcing the rule," but nevertheless found the treatment of the employees discriminatory in violation of Section 8 (3) of the Act. 11 N L R B v. Star Publishing Company , 97 F (2d) 465, 470 ( C C. A. 9 ) ; N L R. B. v. John Englehorn & Sons . 134 F. ( 2d) 553, 557-58 (C C. A. 3 ) ; General Motors Cor- poration, 59 N 1. R B 1143, enf d 150 F (2d) 201 (C C A 3). 12 General Motors Corporation, 59 N L R B 1143 , enf'd in 150 F (2d) 201 ( C C A. 3). In that case the Board adopted the findings and conclusions of the Trial Examiner who stated, "Unilateral changes in employment status made by an employer based on the exercise of the right to act collectively , are repugnant to the basic purposes of the Act, are per se at variance with the interdiction of Section 8 (3) against discrimination in regard to hire, tenure , and conditions of employment , and [are] an inevitable deterrent to, and interference with , the exercise of the right to self-organization guaranteed In Section 7 " See the following subdivision 2 Refusal to bargain 636 DECISIONS OF NATIONAL LABOR RELATIONS BOARD did not claim that its action was based alone on its rationale of duty under the Wage Stabilization Act. Although- attempting in his testimony to establish the Respondent's duty under the Wage Stabilization Act as an inseparable part of his advice, Smith disclosed that his opinion necessarily hinged on the fact that the timekeepers constituted a unit then being represented by the Union. In his conversation with King on December 26, he pointed out that these men had joined the Union, that the Union had negotiated for a contract, that the intended contract made no provision for the Christmas bonus, and therefore the company was left with the choice of paying it or not paying it. In a letter sent to the Regional Office of the Board, dated January 10, 1945, Smith reviewed the previous representation proceeding, referred to above, wherein the Union had sought successfully to set off the timekeepers as a unit from the office clerical employees, and stated, "Among other reasons, the company felt that since its timekeepers were no longer considered 'office employees,' they should not be included with them in receiving the Christmas bonus." Sepaiately in his letter, he offered as a further reason that its payment might be deemed to be in violation of the Wage Stabilization Act. Thus, it is clear, and the Trial Examiner finds, that the Re- spondent was motivated in withholding this bonus by the fact that the time- keepers had acquired the status of employees represented by the Union in bar- gaining for better terms and conditions of work If the Respondent had an honest doubt concerning its obligation under the Wage Stabilization Act, which the Trial Examiner finds it did not have, the statement made contemporaneous with its act disclosed that nevertheless it intended to depart from its normal treatment of the timekeepers for the reason that they were then represented by the Union. Anticipating that these em- ployees, separated in a bargaining unit from the remaining office employees, would soon be- benefited with bettered terms and conditions of employment, the Respondent decided unilaterally to accord them different treatment than had been normal ; it pretended to be apprehensive of its liabilities under the Wage Stabilization Act to provide a pretext for its action. It took this action in total disregard of its affirmative duty to bargain with the Union with respect to all terms or conditions of employment affecting the employees in the unit. The immediate effect as testified to by King was inevitable, that the represented employees considered themselves to be the victims of reprisal and discrimina- tion. In consequence, the Union's prestige as a bargaining agent, for those whom it represented and others who might seek its representation, was impaired ; the incentive for self-organization was deterred. The Trial Examiner finds that the Respondent discouraged membership in the Union by having discriminated in regard to the terms of employment of the timekeepers when it withheld their Christmas bonus in 1944, and thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed them in Section 7 of the Act. 2. Refusal to bargain It is the essence of the Respondent's contention that there was no violation of Section 8 (5) of the Act, since it was sot incumbent upon the employer in this case to initiate bargaining negotiations with the employees' representative concerning a change in a term of employment about which no demand had been made. As stated by its counsel in oral argument, "If there is not a demand or request, there cannot be a refusal." The wording of the Act does not require nor intend such a limited construction. "Unlike mathematical symbols, the phrasing of such social legislation as this seldom attains more than approximate precision of definition. That is why all relevant aids are summoned to determine meaning. Of compelling consideration SULLIVAN DRY DOCK & REPAIR CORPORATION 637 is the fact that words acquire scope and function from the history of events which they summarize." " In the opening sentence of the Act, Congress found that "the refusal by employers to accept the procedure of collective bargaining leads to strikes and other forms of industrial strife and unrest " It declared it "to be the policy of the United States to eliminate the causes of certain sub- stantial obstructions to the free flow of commerce . . . by encouraging the prac- tice and procedure of collective bargaining . .. " If the "practice and procedure of collective bargaining" is the approved means of avoiding these evils that beset labor relations , then it is a constriction of its organic act to construe the refusal to bargain as meaning only the rejection of a demand , i. e. that the procedure of bargaining can exist and therefore can be refused, only when a demand has been made. It is patent that no such limited construction was intended. "The Wagner Act did not undertake the impossible task of specifying in precise and unmistakable language each incident which would constitute an unfair labor practice On the contrary, that Act left to the Board the work of applying the Act's general prohibitory language in the light of infinite combinations of events which might be charged as violative of its terms." " In this respect, the Board is charged with the duty to look beyond the statute to the practices that were known to Congress when it prohibited practices in derogation of Section 7 of the Act. Therein it recognized the right of employees "to bargain collectively", which contemplates as its corollary a like duty on the part of the employer an affirmative duty to use the procedure of collective bargaining in establishing "rates of pay, wages, hours of employment or other conditions of employment", and a negative duty not to act in this respect unilaterally" The scope of the proscription in Section 8 (5) is coextensive with the full enjoyment of this right, and performance of this duty. As the Supreme Court stated in another connection, "Collective bargaining was not defined by the statute which provided for it, but it generally has been con- sidered to absorb and give statutory approval to the philosophy of bargaining as worked out in the labor movement in the United States s 18 The traditional concept of bargaining considers that whomever is "to be affected by a proposed change of conditions should be consulted, and the innovator must carry the burden of convincing others at each stage in the process of change that what is being done is right"" In the Railway Labor Act of 1926, as well as in the 1934 Act. Congress explicitly adopted this principle of collective bargaining which pre- cludes the employer from changing rates of pay, rules and working conditions except after notice to and negotiations with the bargaining representative.'8 The National War Labor Board likewise recognized the duty of employers in this respect, before instituting a proposed change" The literature of the law and practices of labor relations is replete with statements of this principle20 1" Phelps Dodge Corporation v N L. R B , 313 U S 177, at 185-86 14 Republic Aviation Corporation v N. L. R. B. , N L. R B v LeTourneau Company of Georgia, 324 U S 793 , 16 L R. R 300 15 The correlation of rights and duties , stated and implied in the Act , was first recognized by the Supreme Court in N L R B v Jones & Laughlin Steel Corpoiation, 301 U S 1, at page 44, where it linked the affirmative duty to bargain with the selected representative with "the negative duty to treat with no other " 19 Order of Railway Telegraphers v. Railway Express Agency, Inc, 321 U S 342, at page 346 The Court continues, "Hence effective collective bargaining has been generally con- ceded to include the right of the representatives of the unit to be consulted and to bargain about the exceptional as well as the routine . " [Italics supplied 1 17 This statement by Mr Justice Brandeis was made in 1918. Elciency by Consent, Louis D Brandeis, Industrial Management (February 1918). pages 108-09 18 Section 6 45 U S C , sec 156 , 44 Stat 582 (1926), 48 Stat 1197 (1934) 19 R, erside and Dan River Cotton Mills, Inc. Case No. 2664-CS-D (June 29, 1944), 14 L R R 585 20 See Ma)ority Rule in Collective Bargaining , Ruth Weyand, Columbia Law Review, Vol. XLV, 556 at 579, wherein it is stated , " . . the presence of a designated statutory 638 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In the case of John J. Oughton, et at., trading as The Windsor Manufacturing Company,n the Board considered the unilateral action of the employer in length- ening the work-week, in a situation where the employees had designated an exclusive bargaining representative that had not endeavored to bargain on this matter. In this connection the Board stated, "The respondent, also, by putting into effect an increase in hours in January 1939 without consulting with or notifying the Union, refused to bargain within the meaning of the Act We do not here pass upon any question as to the business necessities which may have prompted the respondents to effect . the increase in hours of labor It is the respondents' failure to give prior notice or to consult with the Union regarding these matters and not the . increase in hours, themselves, which we have scrutinized " 22 In the more familiar situation ; which the liespondent herein contends is the only type of situation contemplated in Section 8 (5), where the chosen representative has endeavored to bargain and, without consultation with it, the employer alters the terms that were the subject-matter of the bargaining effort, the Board and the Courts uniformly have held such unilateral action to be a refusal to bargain.23 It is patent, and the Trial Examiner finds, that the Respondent failed to notify the Union and to afford it opportunity to negotiate concerning the payment of bargaining representative . . precludes [the employer] from making unilateral disposi- tion of any matter properly the subject of collective bargaining without first bargaining about the proposed change with the statutory representative . . Even though the union has not yet approached him for collective bargaining conferences lie must notify the union of the contemplated change and offer to bargain with it about the matter . . Any change effected by an emplo.Nor unilaterally and without consultation with the union, subsequent to the election by his employees of a bargaining representative, is inconsistent with the premise on which the collective bargaining relationship rests and therefore constitutes a refusal to bargain collectively, in untarr labor practice under Section 8 (5) of the National Labor Relations Act Also, in Scope of Collective Bargaining, Neil W Chamberlain, .11 Quarterly Journal of Economics, Vol. LVIII, May 1944, 359 at 378, it is stated, "Since the element of mutuality [inherent in the joint endeavor to determine the terms of the rela- tionship] requires that each party negotiate with the other before taking any action in any field of joint concern, it follows that direction of the collective bargaining process to particular issues does not rest solely with the Union. Rather, the party wishing to alter the terms of relationship is the one obliged to notify the other of its wishes and to pro- pose negotiations. The burden of initiating discussions on particular issues may thus rest with the employer, and this not only in those instances when he is seeking to curtail the union's prerogatives or its members' perquisites , but also when he proposes to extend them. Once joint concern is established, any unilateral action is barred " Compare The Contents of Collective Agreements, Sumner H. Slichter, Society for Advancement of Man- agement Journal , Vol 3, No. 1 (January 1938 ), 13 at 19 ("Don't `short circuit' the Union ") , The Dynamics of Industrial Democracy, Clinton S Golden and Harold J Rut- tenberg ( 1942 ), 102-03 (" . to side-step it [the Union] , in whole or in part, almost certainly leads to industrial strife") 2120 N. L.R.B 301. 22 Ibid . page 318. The Board 's findings and conclusions were enforced in Oughton, et al. v. N. L. R. B., 118 F. (2d) 486 (C C. A. 3). The Court stated, "During the period when the bargaining representative ' s majority admittedly still continued, the employers made a wage cut and a change in the weekly hours of work not only without notifying the bar- gaining agent in advance of their intended action but even without informing the agent of the action taken . Both matters were eminently proper subjects for collective bargain- ing . . . Yet , the employers deliberately by-passed their employees' own chosen repre- sentative for collective bargaining This conduct, in particular, could not have been other than in impairment of the Union's prestige among the petitioners ' employees and, there- fore, destructive of the union's membership whether or not it was so intended by the peti- tioners " 23 Matter of The Louisville Refining Company, 4 N. L. R B. 844, 860 , enforced, 102 F ('24) 678 ( C C. A. 6 ), certiorari denied, 308 U S. 568 , Matter of Chicago Apparatus Co , 12 N. L R. B . 1002, 1008-1012, enforced , 116 F ( 2d) 753 , 756-759 (C. C. A 7 ; Matter of SULLIVAN DRY DOCK & REPAIR CORPORATION 639 the Christmas bonus to the timekeepers in 1944, and that it elected to act uni- laterally in disregard of its affirmative duty to utilize the procedure of collective bargaining, thereby refusing to bargain collectively in violation of Section 8 (5) of the Act. As found above, this bonus constituted one of the elements of compensation to the timekeepers, and as such a term of their employment. The Respondent urges that there was no violation, because a contrary intention is shown by the fact that it had bargained with the Union in apparent good faith with respect to other matters that were the subject of contract negotiations. A restatement of this argument disapproves it : the fact of having bargained or of bargaining in good faith on certain matters, does not provide an excuse for refusing to bargain with respect to other appropriate matters. The fact remains that the Respondent chose not to make the timekeepers' bonus payment the subject of baigamiug The Union was confronted with the Respondent's act as an accomplished fact. The alternative to acquiescence in the unilateral act was to demand that the normal practice be restored. Practically, this meant payment of the bonus. When the Union made its request on December 26 that the bonus be paid, the respondent pointed out that it had the prerogative to act as it chose in the matter, since the Union had been remiss in failing to make the 1944 bonus the subject of the contract negotiations ; it offered a legalistic pretext for its position by asserting that it might incur liability under the Wage Stabilization Act if it paid the bonus. At no time did it propose to prove the correctness of this last contention, nor offer practical reasons for not paying the bonus other than its right to act as it chose. Both stated reasons postulated that it was relieved of the obligation to bargain ; in both it was wrong Later, when the Union en- deavored to reintroduce the issue, ineptly using the grievance procedure of the production-maintenance workers' agreement, the Respondent rightly pointed out the error of utilizing this procedure but continued to avoid bargaining on the principal issue. It is clear, and the Trial Examiner finds, that in response to the efforts of the Union to negotiate on the matter of paying the bonus, the Respondent continued to treat it as a closed issue.' Although the instances of the Union's demands were separable in time from the unilateral act of the Respondent, the conduct of the Respondent which violated the rights of its em- ployees extended from the time of its election to exclude the bonus from the scope of collective bargaining. By deciding its action without consultation with the Union, and by refusing to negotiate with the Union concerning it after re- Whittier Mills Company, 15 N. L. R B. 457, 465-466, enforced, 111 F (2d) 474, 478-479 (C. C A 5) , Matter of George P Pilling & Son Co , 16 N. L. R B. 650, 655-659, enforced, 119 F. (2d) 32, 36, 38 (C C. A. 3) ; Matter of Wilson & Co , 19 N L. R B 990, 999-1000, enforced, 115 F (2d) 759, 763 (C C A 7) , Matter of John J Oughton, et at, 20 N. L R. B. 301, 318, enforced, 118 F (2d) 494, 498 (C. C A 3), certiorari denied 315 U S 797; Matter of Inland Lime & Stone Co , 24 N L R B 758, 769, 772, enforced, 119 F (2d) 20, 22 (C. C A. 7) , Matter of Schmidt Baking Co , 27 N. L R. B 864, 868-870, enforced, 122 F. (2d) 162 (C. C. A 4) , Matter of Aluminum Ore Company, 39 N. L. R B. 1286, 1295-1299, enforced, 131 F. (2d) 485, 487 (C C. A 7) ; Matter of Great Southern Truck- ing Company, 34 N L, R B 1068, enforced 127 F (2d) 180, 186 (C. C A. 4), certiorari denied 317 U S 652; Matter of The Barrett Company, 41 N L. R B 1327, enforced, 135 F (2d) 959, 961 (C C A 7) ; Matter of Crown Can Company, 42 N L R B 1160, enforced, 138 F (2d) 263, 267 (C. C A 8), certiorari denied 321 U. S. 769; Matter of Consolidated Aircraft Corporation, 47 N. L R B. 694, enforced 141 F (2d) 758, 787 (C C. A. 9) ; Matter of South Carolina Granite Company, et at, 58 N L. it. B. 1448, 1462-1464. m General Motors Corporation, 59 N. L R B. 1143, enforced in 150 F. (2d) 201 (C C. A. 3). Also see N. L. R B. v Westinghouse Air Brake Co , 120 F. (2d) 1004, at 1006 (C C. A. 3), wherein the Court states, " . . the vanity of bargaining where the employer has fore- closed in advance any possibility of agreement is patent." Compare Medo Photo Supply Corporation v. N. L R B , 321 U. S 678, 684 640 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ceiving the Union's request, the Respondent refused to bargain collectively with respect to the bonus payable to the timekeepers in 1944. The Trial Examiner finds further, that in its refusal to bargain collectively with the Union, the Respondent undermined the prestige of the Union as an effective bargaining representative of the employees, and thereby interfered with, restrained and coerced its employees in the exercise of the rights guaranteed them in Section 7 of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The undersigned finds that the activities of the respondents set forth in Section III above, occurring in connection with their operations described in Section I above, have a close, intimate, and substantial relation to trade, traffic, and com- merce 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 Respondent has engaged in unfair labor practices, it will be recommended that it cease and desist therefrom, and take certain affirmative action designed to effectuate the policies of the Act. In order to remedy the effects of such unfair labor practices, it is necessary that the practices obtaining before the illegal conduct be restored. Therefore, it will be recommended that the Respondent pay to each of the timekeepers employed in December 1944 the Christmas bonus which normally would have been paid them, according to the rate of pay made effective as of that date by the directive of the National War Labor Board 2' It will be recommended further that the Respondent refrain from making decisions and taking action unilaterally, without prior consultation with the Union, in regard to any term or condition of employ- ment relating to employees represented by the Union. Upon the basis of the foregoing findings of fact and upon the entire record in the case, the Trial Examiner makes the following : CONCLUSIONS OF LAW 1. Local 13, Industrial Union of Marine & Shipbuilding Workers of Anieuca, affiliated with the Congress of Industrial Organizations, is a labor organization within the meaning of Section 2 (5) of the Act. 2 All the Company's timekeepers employed at the Brooklyn Yard, excluding the chief timekeeper, the night assistant timekeeper, the day assistant chief timekeeper, and all other supervisory employees with authority to hire, promote, discharge, discipline or otherwise effect changes in the status of employees, or effectively recommend such action, at all times material herein constituted, and now constitute, a unit appropriate for the purposes of collective bargaining within the meaning of Section 9 (b) of the Act. 3. Local 13, Industrial Union of Marine & Shipbuilding Workers of America, C. I. 0., at all times material herein was, and is now, the exclusive representa- tive of all employees in the aforesaid appropriate unit for the purpose of collective 25 See footnote 5, supra. If, instead of the wage rate specified by the N. W. L B direc- tive, the former rate is used, the order herein would vary the normal formula which provided for payment according to the rate of pay effective as of the date of computation. Further, adopting the former rate at this time in effect would be in derogation of the retroactive clause of the N. W. L B directive Compare Condenser Corporation of America, 22 N L R B 347, 454, Henry K Phelps, Jr., et al, 45 N L R. B 1163, 1170, 1211 SULLIVAN DRY DOCK & REPAIR CORPORATION 641 bargaining with respect to rates of pay, wages, hours of employment and other conditions of employment, by virtue of Section 9 (a) of the Act. 4 By discriminating in regard to the terms and conditions of employment of the employees in the appropriate unit, thereby discouraging membership in Local 13, Industrial Union of Marine & Shipbuilding Workers of America, C I 0, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (3) of the Act. 5 By refusing to bargain collectively with Local 13, Industrial Union of Marine & Shipbuilding Workers of America, C I 0, with respect to all terms and condi- tions of employment affecting the employees in the appropriate unit, the Respond- ent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (5) of the Act. 6. By interfering with, restraining and coercing its employees in the rights guaranteed in Section 7 of the Act, the Respondent has engaged in and is en- gaging in unfair labor practices within the meaning of Section 8 (1) of the Act. 7. 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 foregoing findings of fact and conclusions of law, the Trial Examiner recommends that the Respondent. Sullivan Dry Dock & Repair Corporation, Brooklyn, New York, its agents, successors and assigns shall: 1. Cease and desist from : (a) Discouraging membership in Local 13, Industrial Union of Marine & Ship- building Workers of America. affiliated with the Congress of Industrial Organi- zations, or any other labor organization, by discriminating in any manner in regard to the hire, tenure, or any term or condition of employment; (b) Refusing to bargain collectively with Local 13, Industrial Union of Marine & Shipbuilding Workers of America, affiliated with the Congress of Industrial Organizations, as the exclusive representative of the Respondent's employees in the bargaining unit for timekeepers, by deciding on and taking action unilaterally, without prior consultation with the Union, in regard to any term or condition of employment affecting them ; (c) In any other manner interfering with, restraining or coercing its em- ployees in the exercise of the rights to self-organization, to form, join, or assist Local 13, Industrial Union of Marine & Shipbuilding Workers of America, affiliated with the Congress of Industrial Organizations, or any other organization, to bargain collectively through representatives of their choosing and to engage in concerted activities for the purposes of collective bargaining, or other mutual aid or protection. 2 Take the following affirmative action which the undersigned finds will effectuate the policies of the Act : (a) Make whole all timekeeping employees for the loss suffered by them as a result of discrimination in December 1944, by paying to each timekeeper then employed the Christmas bonus which normally would have been paid him according to the rate of pay made effective as of that date by the directive of the National War Labor Board ; (b) Bargain collectively with Local 13, Industrial Union of Marine & Ship- building Workers of America, affiliated with the Congress of Industrial Organiza- tions, as the exclusive representative of the employees in the bargaining unit of timekeepers, with respect to all terms and conditions of employment affecting them ; 692143-46-vol 67-42 642 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (c) Post at its Brooklyn Yard, copies of the notice attached hereto marked Appendix A. Copies of said notice to be furnished by the Regional Director of the Second Region, shall, after being duly signed by the Respondent's representa- tive, be posted by the Respondent immediately upon receipt thereof, and main- tained by it for sixty (60) consecutive days thereafter in conspicuous places, including all places where notices to employees are customarily posted. Reason- able steps shall be taken by the Respondent 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 therewith. It is further recommended that unless on or before ten (10) days from the receipt of this Intermediate Report the Respondent notifies said Regional Director in writing that it has complied with the foregoing recommendations, the National Labor Relations Board issue an order requiring the Respondent to take the action aforesaid. As provided in Section 33 of Article II of the Rules and Regulations of the National Labor Relations Board-Series 3, as amended, effective July 12, 1044- any party may within fifteen (15) days from the date of the entry of the order transferring the case to the Board, pursuant to Section 32 of Article II of said Rules and Regulations, file with the Board, Itochambeau Building, Washington 25, D. C., an original and four copies of a statement in writing setting forth such exceptions to the Intermediate Report or to any other part of the record or pro- ceeding (including rulings upon all motions or objections) as he relies upon, together with the original and four copies of a brief in support thereof Immedi- ately upon the filing of such statement of exceptions or brief, or both, the counsel for the party or the Board filing the same shall serve a copy thereof upon each of the other parties and shall file a copy with the Regional Director. As further provided in said Section 33, 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 the order transferring the case to the Board. MELTON BOYD, Trial Examiner. Dated September 1, 1945.