Home Beneficial Life Insurance Co., Inc.

In the Matter of HoME BENEFICIAL LIFE INSURANCE CO., INC. and AMERICAN FEDERATION OF INDUSTRIAL AND ORDINARY INSURANCE AGENTS' UNION, LOCALS Nos. 21703, 21753, 22947, 22874, 23419, 23378, 23262 AND 23451, A. F. L. Case No. 5-C-1840.-Decid'ed June 26, 1946 DECISION AND ORDER On September 28, 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 certain affirmative action, as set forth in the copy of the Intermediate Report attached hereto. Thereafter, the respondent filed exceptions to the Intermediate Report and supporting briefs; counsel for the Union also filed a brief. On May 16, 1946, the Board at Washington, D. C., heard oral argument in which the respondent and the Union par- ticipated. The Board has reviewed the Trial Examiner's rulings made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Intermediate Re- port, the exceptions and briefs of the parties, the contentions advanced at the oral argument before the Board, and the entire record in the case, and hereby adopts the findings, conclusions, and recommenda- tions of the Trial Examiner with the following exceptions and modi- fications. 1. We agree with the Trial Examiner that the conduct of the Wash- ington and Norfolk agents in ceasing work in protest against the re- porting rule and the conduct of the agents in the other district offices in striking in sympathy, constituted concerted activity within the meaning of Section 7 of the Act. The Trial Examiner also found, as more fully set forth in the Inter- mediate Report, that by discharging the striking Washington and Norfolk agents on October 13 and 20, 1944, respectively, and by threatening to cancel and by cancelling the licenses of the striking agents in the other district offices on October 30, 1944, the respondent 69 N. L. R. B., No. 5. 32 HOME BENEFICIAL LIFE INSURANCE CO., INC. 33 discriminated with respect to their hire and tenure of employment in violation of Section 8 (3) of the Act; he accordingly recommended that the respondent be required to make the striking agents whole for loss of wages incurred from the respective dates on which the respond- ent took the above-mentioned action. Unlike the Trial Examiner, we are of the opinion that the respondent's conduct did not violate Section 8 (3) of the Act and that the agents are not entitled to back pay dating from said conduct. The agents, having ceased work as a result of a current labor dispute, remained employees within the mean- ing of Section 2 (3) of the Act. The discharges and the cancellations of the licenses had no actual effect upon the tenure of the strikers to whom they were directed. As we have previously observed in similar cases, such conduct was primarily intended, not to effectuate a per- manent termination of the employer-employee relationship, but as a tactical maneuver designed to induce the agents to abandon the strike and resume work.' 2. We agree with the Trial Examiner's findings that on November 11 and 28, 1944, unconditional requests for reinstatement were made on behalf of all the striking agents and that, although jobs were then available, the respondent refused to reinstate the strikers because they had engaged in the concerted and union activity of striking. By thus failing and refusing to reinstate the agents when they offered to abandon the strike, thereby in effect discharging them, we find that the respondent interfered with, restrained, and coerced the employees in the exercise of their rights guaranteed in Section 7 of the Act and thereby violated Section 8 (1). We also find that the respondent's conduct in thus discriminating in regard to the hire and tenure of employment of the strikers discouraged membership in the Union and hence also constituted a violation of Section 8 (3) of the Act. Whether the respondent's discriminatory conduct be viewed as a viola- t ion of Section 8 (1) or a violation of Section 8 (3), we find that the effectuation of the policies of the Act requires their reinstatement to their former or substantially equivalent positions, as set forth in the Intermediate Report, with back pay from November 11, 1944. 3. We agree with the Trial Examiner that there is nothing in the negotiations of December 9 and 10, 1944, which warrants us as a matter of law or policy to decline to proceed upon charges filed by the Union herein. In its oral argument before the Board, the respondent con- tended that the memorandum of December 10, 1944, should be re- garded by the Board as a binding of settlement agreement because it was so recognized by the War Labor Board in a compliance proceed- I Matter of Majestic Manufacturing Company, 64 N L R . B. 950 ; Matter of Rockwood Stove Works, 63 N. L. R. B. 1297 ; Matter of American Manufacturing Company, Inc., 7 N L. it. B. 375. 701592-47-vol. 69--4 34 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ing pending before it. On February 1, 1945, the Regional War Labor Board for the Fourth Region issued its "Corrected Finding"in which it found that the agreements reached between the parties with respect to arbitration and maintenance of membership, constituted compliance with its Directive Order of May 3, 1944, as affirmed by the National War Labor Board on October 5, 1(944. The Board recommended that "these agreements be placed into immediate effect ... with the ap- propriate changes in terminology made necessary by the lapse in time and the absence of a complete contract." The Board dismissed the compliance proceedings. It thus appears that the War Labor Board had before it the sole issue of whether the respondent had complied with a Directive Order relating to arbitration and maintenance of membership. The War Labor Board, in its "Corrected Finding," quoted above, expressly recognized that there was no complete contract in existence between the parties. We find no merit in the respondent's contention. 4. The Trial Examiner found that by requesting agents individu- ally to sign a statement that they would abide by the rules of the Company, without having previously consulted the Union, the re- spondent violated Section 8 (1) of the Act. No compulsion was exer- cised to have these statements signed, and the practice was discon- tinued when some of the agents refused to sign. The respondent excepts to the Trial Examiner's finding and in support of its exception cites Matter of Emerson Electric Manufacturing Co., 13 N. L. R. B. 448, where under similar circumstances we held such con- duct not to be violative of the Act. Under the particular circum- stances surrounding the respondent's conduct in seeking to have these statements signed, we are of the opinion that there is merit to the respondent's exception and the Trial Examiner's finding is hereby reversed in this respect. 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, Home Beneficial Life Insur- ance Co., Inc., Richmond, Virginia, and its officers, agents, successors, and assigns shall: 1. Cease and desist from : (a) Discouraging membership in American Federation of Indus- trial Ordinary Life Insurance Agents' Union, Locals Nos. 21703, 21753, 22947, 22874, 23419, 23378, 23262, 23451, American Federation of Labor, or any other labor organization of its employees, by dis- criminatorily discharging or refusing to reinstate any of its em- ployees or by discriminating in any other manner in regard to their H01VIE BENEFICIAL LIFE INSURANCE CO., INC. 35 hire or tenure of employment, or any term or condition of employ- ment ; (b) Interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form labor organizations, to join or assist American Federation of Industrial and Ordinary Insurance Agents' Union, Locals Nos. 21703, 21753, 22947, 22874, 23419, 23378, 23262, 23451, American Federation of Labor, or any other labor organization, to bargain collectively through representa- tives of their own choosing, and to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protec- tion, as guaranteed in Section 7 of the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Unless it has already done so. offer to the employees listed in Appendix A, attached to the Intermediate Report herein, full anct immediate reinstatement to their former or substantially equivalent positions, without prejudice to their seniority or other rights and privileges ; (b) Make whole the said employees for any loss of pay suffered by reason of the respondent's discrimination against them, by pay- ment to each of them of a sum of money equal to the amount which each normally would have earned as wages from November 11, 1944, to the date of reinstatement or the respondent's offer of reinstatement, less his net earnings during said period ; (c) Post at its home office and in its district and suboffices involved in this proceeding, copies of the notice attached to Intermediate Report and marked "Appendix A." 2 Copies of said notice, to be furnished by the Regional Director for the Fifth 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, in- eluding 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 Fifth Region in writing, within ten (10) days from the date of this Order, what steps the respondent has taken to comply herewith. AND IT IS FIIRTI3ER ORDERED that the complaint be, and it hereby is, dismissed with respect to the allegations that the respondent com- mitted unfair labor practices by : Urging, persuading and warning its employees to refrain from becoming or remaining members of the Union; "Said notice, however, shall be, and it hereby is, amended by striking from the first paragraph thereof the words "THE RECOMMENDATIONS OF A TRIAL EXAMINER" and substituting in lieu thereof words "A DECISION AND ORDER" 36 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Making disparaging and derogatory remarks about labor organ- izations, their leadership and purposes; Abusing and physically assaulting its employees because of their membership in and activities on behalf of the Union; Attempting to weaken and destroy the Union as the representative of its employees for the purpose of collective bargaining; Requiring its employees, as a condition of returning to work after having engaged in concerted activities, to affirm their loyalty to re- spondent. INTERMEDIATE REPORT Mr. Marvin C. Wahl, for the Board. Messrs. C. Justin Moore, Archibald G. Robertson, and Mrs. Sal ah G. Dale, of Richmond, Va., for the respondent. Mr. George L. Russ, of Washington, D. C., for the Union. STATEMENT OF THE CASE Upon charges duly filed by American Federation of Industrial and Ordinary Insurance Agents' Union, Locals Nos. 21703, 21753, 22947, 22874, 23419, 23378, 23262 and 23451, A. F. L., herein called the Union, the National Labor Relations Board , herein called the Board , by the Regional Director for the Fifth Region (Baltimore, Md.), issued its complaint dated May 17, 1945, against Home Bene- ficial Life Insurance Co, Inc., Richmond, Virginia, herein called the respondent, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting commerce within the meaning of Section 8 (1) and (3) and Section 2 (6) and ( 7) of the National Labor Relations Act, 49 Stat . 449, herein called the Act. With respect to the unfair labor practices, the complaint alleged in substance, (1) that beginning about August 4, 1944 , the respondent interfered with, re- strained, and coerced its employees in the exercise of rights guaranteed in the Act, by ( a) various acts of persuasion , threats, disparagement , and interrogation concerning the Union and the employees' union activities ; ( b) procuring an in- junction to restrain employees of the respondent 's Petersburg district office who were engaged in a labor dispute with the respondent, from engaging in lawful union activities ; ( c) requesting the Insurance Commissioners of the District of Columbia and the State of Tennessee and Virginia to cancel the insurance licenses of certain of the respondent's employees for the reason that said em- ployees were engaged in a labor dispute with the respondent ; ( 2) that on various dates between October 13 and October 30, 1944, the respondent discharged and thereafter refused to reinstate employees at its Washington , D. C., Norfolk, Petersburg, Lynchburg, Staunton and Portsmouth , Virginia, and Knoxville, Ten- nessee, district offices, for the reason that those employees had joined or assisted the Union or engaged in concerted activities for the purposes of collective bargain- ing or other mutual aid or protection ;' (3) that about November 11, 1944, em- ployees of the respondent 's Baltimore, Maryland, district office, who had about October 27, 1944, ceased work and gone on strike as a consequence of the respond- ent's aforesaid unfair labor practices, unconditionally requested reinstatement, but such reinstatement was denied for the reason that those employees had joined or assisted the Union and engaged in concerted activities! ' The complaint conceded that some of these employees were subsequently reemployed. $ The complaint conceded that some of these employees were subsequently reemployed. HOME BENEFICIAL LIFE INSURANCE CO., INC. 37 On June 11, 1945, the respondent filed its answer in which it admitted certain allegations of the complaint but denied that its activities affected commerce, denied that it had engaged in the unfair labor practices alleged in the complaint, and set up certain affirmative defenses, more fully referred to hereinafter. Upon due notice, a hearing was held at Washington, D. C, Baltimore, Maryland, and Richmond, Virginia, from June 22 to July 30, 1945, before Charles W. Schneider, the undersigned Trial Examiner duly designated by the Chief Trial Examiner. The Board and the respondent were represented by counsel and the Union by its representative All parties participated in the hearing. Full opportunity was afforded to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues. During the course of the hearing, both the complaint and the answer were amended without objection. A motion by counsel for the Board to strike certain portions of the answer was denied. During the hearing, upon motion by counsel for the Board, the complaint was further amended by striking the name of A. Bogratz , named in the complaint as having been discriminatorily discharged and refused reinstatement . This matter, and other circumstances surrounding it, are more fully discussed later in the report. A motion by counsel for the respondent, made at the end of the hearing to conform the pleadings to the proof, was granted. All parties were afforded opportunity to argue the issues orally before, and to submit briefs to, the under- signed. Upon the record thus made, and from his observation of the witnesses, the undersigned makes, in addition to the above , the following: FINDINGS OF FACT I THE BUSINESS OF THE RESPONDENT Home Beneficial Life Insurance Co., Inc., the respondent, is a Virginia corpora- tion having its main office in Richmond, Virginia. The respondent is engaged in the sale of ordinary and industrial life, and health and accident, insurance. It maintains approximately 26 district offices located in the District of Columbia and in the States of Virginia, Delaware, Maryland, and Tennessee. In its district offices, in addition to managerial, supervisory, and clerical personnel, the respondent employs approximately 760 agents to sell insurance, collect premiums, and to service policies. The present proceedings involve agents employed in 10 district offices located in the District of Columbia and the States of Maryland, Virginia and Tennessee. As of December 31, 1944, the respondent had in force approximately 1,035,484 insurance policies with a total face value of $205,006,213 00. The respondent's gross receipts from premiums in 1944 were $11,121,873.56, of which $2,224,374 71 was collected by the district offices involved in these proceedings.' The respondent's business is directed by officers and directors located at the home office in Richmond All terms and conditions of insurance policies are determined, investigations made, and applications for policies and loans ultimately acted upon, at the home office Thus, all policies, and all checks for death claims are issued by the home office and transmitted from there through the district offices to the policyholders 8 Since December 31, 1944, the respondent's business has apparently increased. Thus, according to the testimony of Wyatt Smith , its treasurer, as of the end of June 1945, the respondent had outstanding 1,086 ,626 policies, on which weekly premiums totalled $220,- 399 99, and weekly disbursements to policy -holders $52 ,200 00. 38 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The respondent is capitalized at $1,000,000, and as of December 31, 1944, its assets were approximately $22,000,000.00, among which were the following: Mortgage loans on real estate-State of Virginia --------- $5, 477, 595 95 Real Estate-Virginia ---------------------------------- 186,505 70 Cash on deposit-Virginia ------------------------------ 939,691.68 Cash on deposit-Mai yland------------------------------ 3, 000. 00 State bonds-Virginia and West Virginia________________ 18,000.00 Bonds of political subdivisions -------------------------- 261, 000.00 Bonds of foreign governments___________________________ 147,000. 03 U S. Government bonds________________________________ 8,247,332 36 Railroad and Equipment securities__________________ ___ 1, 529, 234. 50 Public utility bonds and stocks__________________________ 2, 599, 000.430 Industrial bonds and stocks_____________________________ 1,719,400 00 The respondent's policy obligations are reinsured with the Lincoln National Life Insurance Co. of Ft. Wayne, Indiana. All reinsurance documents are sent to that company's home office. The amount of such reinsurance in force as of December 31, 1944, was $565,055.00. The respondent employs the Retail Credit Company of Atlanta, Georgia, to render inspection reports concerning the finan- cial and character status of applicants for insurance During 1944 approxi- mately $6,600 00 was paid by the respondent to that company for such services 6 The respondent denies that it is engaged in, or that its activities affect, com- merce, and contends that these activities are not within the jurisdiction of the Board. However, the business of the respondent is conducted mainly across State lines, an operation manifestly dependent upon the constant employment of interstate communication and transportation facilities. Indeed, without these services the respondent would be unable to conduct its business. The respondent is thus a participant in, and a contributor to, the stream of commerce ceaselessly flowing from State to State. Whatever their effect, these activities of the re- spondent constitute transactions in interstate commerce. In United States v. Southeastern Underwriters Association,' the United States Supreme Court con- cluded that organizations which engaged in the writing of fire insurance were engaged in commerce. That decision appears to be apposite here. However, whether this respondent be so engaged or not, it is clear that its activities have, and have had, a substantial effect upon commerce. As will more fully appear hereinafter, a labor dispute among the respondent's employees in the District of Columbia led to disputes and work stoppages among employees in the States of Virginia, Maryland, and Tennessee, with necessary effect upon the agencies and instrumentalities utilized by the respondent in conducting its business across State lines. In addition, the respondent's widespread financial investments in industrial, transportation, and public utility, securities constitute a substantial credit factor in interstate or affected enterprises. It is therefore found, contrary to the respondent's contention, that the respond- ent is engaged in commerce, and that, in any event, its activities affect commerce within the meaning of the Act." 4 These subdivisions are located in the States of California, Florida, Kentucky, Maryland, New York, North Carolina, Pennsylvania, New Jersey, Virginia and West Virginia. H The above findings are based upon a stipulation of the parties and upon testimony of Wyatt Smith, the respondent's treasurer, A J Watkins, its vice president, and J. Randolph Tucker, its general counsel. 6 322 U S 533, 567-8 'Polish National Alliance v. N. L. R B , 322 U. S 643 ; U. S v. Underwriters Associa- tion, supra. HOME BENEFICIAL LIFE INSURANCE CO., INC. 39 Ii. THE ORGANIZATION INVOLVED American Federation of Industrial and Ordinary Insurance Agents' Union, Locals Nos 21703, 21753, 22947, 22874, 23419, 23378, 23262, and 23451. American Federation of Labor, is a labor organization admitting to membership employees of the respondent III. THE UNFAIR LABOR PRACTICES 8 A Backgi ound The agents who sell and service the respondent's policies of insurance are attached to some 26 district offices of the respondent in the District of Columbia and the States of Virginia, Maryland, Tennessee, and Delaware. These agents are employees of the respondent. With the exception of ordinary insurance, on which premiums are payable in quarterly, semiannual or annual installments, the premiums on the respondent's policies are payable weekly Collections are normally made by the agent, who calls on the policyholder at the latter's home. The present proceedings arise out of a dispute between the respondent and certain of its agents as to the number of days they should be required to report at the District offices. Because of their activities in connection with this dispute, the Washington and Norfolk agents were discharged. Within 2 weeks thereafter, the agents in the respondent's Petersburg, Lynchburg, Staunton, and Portsmouth, Virginia, Knoxville, Tennessee, and Baltimore, Maryland, district offices went on strike in support of the Washington and Norfolk agents As of the date of all material events herein, the Union was the exclusive collec- tive bargaining representative of all the employees involved in the dispute by reason of elections in which the employees selected the Union, followed by cer- tifications by the Board, or by its Regional Directors. The representative status of the Union is not disputed. Since May 23, 1940, written collective bargaining contracts existed between the respondent and the Union. On January 22, 1943, the parties commenced negotiations for a new contract to replace the then current one, which had, according to its terms, expired on December 5, 1942. By a "gentlemen's" agreement the parties agreed to continue operation under the terms of the expired contract pending negotiation of a renewal. This understanding was not, however, reduced to writing. The nego- tiations for a new contract extended over the period from January to August 1943, but the parties were unable to reach agreement. On October 6, 1943, conciliation having failed, the controversy was submitted to the National War Labor Board. The disputed issues involved the Union's demands for (1) in- creased collection commissions, (2) an arbitration clause, and ( 3) maintenance of union membership B. The dispute over the reporting-in rule 1. The nature and history of the rule The great bulk of the work of the respondent's agents, requiring, as it does, personal contact with policyholders and potential clients at their homes, is performed away from the district offices. A company rule of long standing, however, requires that most agents report at the district offices certain mornings each week, prior to starting on their routes, or debits (as they are called)', in 8 Except where otherwise indicated, the findings herein are based on admitted or undis- puted facts or upon credible and substantially uncontradicted testimony. 40 DECISIONS OF NATIONAL LABOR RELATIONS BOARD order to receive instructions and leads , turn in collections, to report claims and to pick up policies, checks and forms for delivery to, or relating to policyholders. Prior to 1938, the agents had been required to report 6 days a week , Monday through Saturday . In 1938, however, through negotiation with the Union, the agents were excused from reporting on Saturday. The 5-day reporting require- ment was incorporated in both the 1940 and 1941 bargaining contracts. This rule has not been strictly applied, however. Thus, some agents with suburban or rural debits are not required to report 5 days per week. Similarly, some agents for whom such regular reporting would be impracticable, are excused. 2. The dispute Many of the agents use their automobiles to cover their debits. When, follow- ing the outbreak of war, rationing restrictions limited the consumption of gaso- line and rubber, the agents sought to secure modification of the reporting rule in order to permit fewer report days . Among other arguments, the agents contended that daily reporting resulted in the consumption of gasoline and tires needed to cover the debits. ' During the 1943 contract negotiations , the Union had reiterated the request for modification of the report rule . The respondent, however, consistently declined to effect a general modification of the rule, con- tending that it was necessary for the proper functioning of the business . During the course of the contract negotiations, the Union apparently abandoned its request " Nothing further occurred until sometime in the early part of 1944, when a number of agents in the Washington No. 1 district office were granted permission to report only 3 days per week. This relaxation was followed by agitation in July 1944 for a general modification of the report rule. The partial modification was then rescinded and those agents who had temporarily enjoyed fewer report days were required to return to the 5-day arrangement." 3. The August negotiations ; the referral to the N. W. L. B. On August 4, 1944, while the contract dispute was still pending before the N. W. L B., Ralph Boyer, secretary-treasurer of the Union , accompanied by delegates from the Washington , Petersburg and Lynchburg union locals, met with representatives of the respondent to discuss the request for modification of the report rule." After exhaustive discussion on both sides the respondent again declined to modify the rule Following that conference the Union, under date of August 8, 1944, in accordance with the provisions of the War Labor Disputes Act,13 filed notices with the Board , the N. W. L. B., and the Secretary ° Insurance was classified by ration authorities as a non-essential occupation , thus limit- ing the agents to a maximum of 325 gallons of extra gasoline per month . This allotment the agents contended was insufficient Attempts by the Union to secure greater allotments from ration authorities were unsuccessful , For reasons indicated hereinafter , the under- signed finds it unnecessary to pass upon the merits of the Union's arguments to the respond- en t. 10 Thus, the issue was not among those submitted to the N. W L B, and a skeleton draft of contract submitted to the N. W. L . B to illustrate the terms upon which the parties were in agreement , contains the 5-day reporting clause found in the 1940 and 1941 contracts 11 The respondent contended, and the manager of the Washington No. 1 office, J. M. Wright, testified, that the modification was rescinded because it proved to be impractical. The undersigned finds it unnecessary to determine either the reasons for the rescission or the merits of the arrangement. 4 Also involved in the discussion was the discharge of an agent named Shorten. His dis- charge is not an issue in the present proceedings. 1357 Stat. 163. HOME BENEFICIAL LIFE INSURANCE CO., INC. 41 of Labor, requesting that a strike vote be taken among the respondent's agents at Washington, Baltimore, Knoxville, Lynchburg, Petersburg, Portsmouth, Roanoke and Staunton. Under date of August 15, 1944, the Union's application for a strike ballot was denied on the ground that the respondent was not a war contractor within the meaning of the War Labor Disputes Act. The Union then invoked conciliation, and a further conference between repre- sentatives of the Union and the respondent was held on August 21, 1944. U. S. Conciliator Thomas B Morton presided at this conference Boyer informed the respondent's representatives that in view of the ruling that the War Labor Disputes Act was inapplicable to the dispute, the agents were apparently free to strike at any time they chose. Boyer indicated that a work stoppage might therefore occur. Nevertheless, no agreement was reached at this meeting. The parties having reached an apparent impasse, Conciliator Morton reported that conciliation had failed and the case was certified to the N. W. L. B. The N. W. L. B. then notified the Union that if a strike occurred, the N. W. L. B. would suspend action upon the dispute relating to the report days. This statement apparently had a quieting effect for a time. The agents took no further action until early in October. 4 The October 9 and 10 telegrams On October 5, 1944, however, the Washington local held a meeting at which, after discussion of the situation, Secretary-Treasurer Boyer was instructed to send the following telegram to the respondent. Boyer sent the telegram on October 9. THIS IS TO ADVISE THAT THE HOME BENEFICIAL AGENTS OF WASHINGTON OFFICES NOS. 1 and 2 IN AN EFFORT TO COOPERATE WITH THE GOVERNMENT'S GASOLINE CONSERVATION PROGRAM HAVE VOTED TO TEMPORARILY REPORT TO THEIR RESPECTIVE OFFICES ON ONLY WEDNESDAY AND THURSDAY OF EACH WEEK. THIS ACTION WILL TAKE EFFECT ON OCTOBER 10. On the same afternoon the respondent wired back the following message: YOUR WIRE THE RULES OF THE COMPANY REQUIRE AGENTS TO REPORT EVERY DAY EXCEPT SATURDAYS AND HOLIDAYS. THE COMPANY AFTER FULL DISCUSSION WITH THE AGENTS FOUND IT NECESSARY TO REFUSE YOUR REQUEST FOR MODIFICATION OF THIS RULE. ANY WILLFUL AND DELIBERATE VIOLATION OF THIS RULE ON AND AFTER OCTOBER ELEVENTH WILL RESULT IN DISMISSSAL On the same day Conciliator Morton was informed of the exchange of tele- grams. Morton then arranged for a conference between the parties for October 12. On Tuesday, October 10, 1944, the Washington agents did not report at the district office. On October 11 they did report On that morning the acting manager of the office read to the agents the respondent's telegram of October 9. The Union then consulted Herbert S. Thatcher, its counsel, who advised that it was doubtful that the activity contemplated in the Union's telegram of October 9 was within the protection of the Act, and further advised that the agents should either continue to obey the reporting rule wholly or else cease work completely. 5. The Washington vote to strike About noon on October 12, 1944, the Washington local held another meeting at which a committee was selected to attend the conference with the respond- 42 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ent's representatives on that day The local then voted unanimously to authorize the conference committee to call a strike as of October 13 in the event it was unable to effect a satisfactory agreement with the respondent.' 6. The October 12 conference On the evening of October 12, Boyer and Attorney Thatcher , accompanied by the committee from the Washington local, met with representatives of the respondent. Conciliator Morton presided at this meeting. After a full dis- cussion of the reporting issue the respondent 's representatives again declined to modify the rule. During this discussion they reiterated their position that agents not reporting after October 11 would be discharged . The Union repre- sentatives then withdrew for a private discussion and asked Thatcher what their legal rights would be if they went on strike on October 13 Thatcher informed the men that such action would constitute concerted activity pro- tected by the Act and that the respondent could not legally discharge them for so doing. The representatives then instructed Thatcher to inform the respond- ent that they were going on strike the following morning. They then returned to the conference, where Thatcher stated to the respondent 's representatives that the Washington agents would not report for work on the following day and would thereby be engaging in•concerted activity over the reporting dispute Thatcher further made it clear that the activity would consist of a complete work stoppage. Tucker, the respondent's general counsel , responded that if the employees were going on strike, Thatcher should not be "technical," and reiterated that anyone who failed to report for work on October 13 would be discharged. The conference then terminated. C. The discharges 1. At Washington On the morning of October 13, 1944, Thatcher sent the following telegram to the respondent: AS COMPANY WAS INFORMED LAST NIGHT, ''MEMBERS OF UNION OR OTHER AGENTS WHO DO NOT REPORT FOR DUTY DO SO FOR PURPOSE, BY CONCERTED ACTION, OF ENFORCING DEMANDS FOR RELIEF FROM SITUATION CREATED BY GAS SHORTAGE. IF ANY AGENT IS OR HAS BEEN DISCHARGED , AGENTS THEREAFTER FAILING TO REPORT DO SO TO SUPPORT SUCH DISCHARGED AGENT BY CONCERTED ACTION, IN ADDITION TO PURPOSE OF ENFORCING AFORESAID DEMAND. COMPANY WILL BE HELD RESPONSIBLE UNDER WAGNER ACT FOR ALL DISCHARGES UNDER FOREGOING CIRCUMSTANCES 16 The finding as to the vote to strike is based on the testimony of the following agents who attended the meeting. Franklin , Payne , Keiling, Louk, Robertson , Henderson , Clayton, Laughlin, Walton , Keebler, Omohundro , Jenkins , Atwell, and Decatur. These agents testi- fied that the men voted to cease work completely R. G, Medlin , an agent for the respond- ent at the time of the meeting, and who was present at the meeting, testified , as a witness for the respondent , that the men voted to "Stay out of work on Friday , October 13 " Median 's testimony was that he understood that the men were to continue to work their debits on Friday , but merely to fail to report to the office . Although there is evidence, dis- cussed hereinafter , that some of the agents worked on Friday, but did not report , the un- dersigned concludes that the weight of the evidence is contrary to Medlin 's understanding. Two motions were made, one to continue working in accordance with the terms of the Union's October 9 telegram , the other to engage in a complete work stoppage. After dis- cussion on both motions , the former was ruled out of order, and the latter carried. The undersigned concludes that Medlin confused the two motions , It is found that the agents voted a complete work stoppage. HOME BENEFICIAL LIFE INSURANCE CO., INC. 43 On the same morning the bulk of the Washington agents went on strike and ceased to work. All agents who failed to report at the office that morning were discharged by the respondent. Upon the application of the respondent, the Insurance Commissioner of the District of Columbia cancelled the authority of such agents to represent the respondent in the sale of insurance. Several agents who reported on October 13 and 16, but who thereafter joined the strike and ceased to work were also discharged for not reporting, and their licenses were likewise cancelled. Evidence was introduced by the respondent to show that some of the agents who did not report on October 13, assertedly for the reason that they were on strike, and who were discharged and their licenses cancelled, did some work on their debits after October 12. This evidence is discussed at a later point in the report. At various times following the discharge of the Washington agents, the re- spondent sent letters to its policyholders serviced by discharged agents, urging them to transmit their premiums to the district office and offering a 10 percent discount for premiums so paid. These letters stated, in part, that A number of our agents . . . have wilfully and deliberately refused to observe rules of the Company made to safeguard its policyholders and give them proper service, thereby causing the termination of the services of those agents. Until those discharged agents shall be replaced, an agent may not call upon you for your premium. 2. At Norfolk On October 13, the date of the work stoppage at Washington, the Norfolk agents held a union meeting at which they voted, as the Washington agents had done during the previous week, to continue to work their debits, but to report at the district office only 2 days a week, Wednesday and Thursday. Within a half hour thereafter, C. V Nordstrom, manager of the Norfolk office, was in- formed of the proposed action and conveyed it to the home office. In con- formance to the resolution most of the Norfolk agents did not report to the office on Monday, October 16, and Tuesday, October 17, although they worked their debits. On October 18, when the agents reported to the office, Manager Nordstrom, upon instructions from the home office, read to them the Union's October 9 tele- gram to the respondent respecting the Washington agents and the respondent's reply thereto. In addition, Nordstrom read to the agents a letter from the home office to the effect that wilful violation of the 5-day reporting rule on and after October 18 would result in dismissal and cancellation of the agent's license. The agents reported and worked on both October 18 and 19. On the evening of October 19, at a special meeting of the Norfolk local attended by substantially all the Norfolk agents, a representative of the Washington local informed the agents of the events which had occurred in Washington. The Norfolk agents then voted to go on strike on October 20.16 On October 20, 15 of the Norfolk agents, those named in the complaint as having been discriminatorily discharged, did not report for work and went on strike Although a majority of the agents had voted to strike at the October 19 '6 The finding as to the date of this meeting is based on the testimony of agents Handley, Burnett, Hardy, McCleer, Osborne, and Yates, who were called as witnesses for the re- spondent. These agents were present at the meeting but did not participate in the strike. Lloyd Weatherly, president of the Norfolk local, testified that this meeting was held on October 17. The undersigned concludes that Weatherly was mistaken in the date. 44 DECISIONS OF NATIONAL LABOR RELATIONS BOARD meeting, 17 of them failed to join the strike. Because of their action in failing to report, the striking agents were discharged. and, upon the application of the respondent, their licenses were cancelled by the Insurance Commissioner of the State of Virginia. At various times following the discharge of the Norfolk agents the respondent sent to its Norfolk policyholders letters similar to those sent to the Washington policyholders, referred to in the previous subsection. D. The strikes in the other district offices On October 19, following a meeting of the Petersburg local at which a sub- stantial majority of the Petersburg agents voted to cease work, 14 of the 287 Petersburg agents went on strike in support of the Washington agents, in protest against their discharge and to secure their reinstatement. Thereafter, between October 19 and October 30, the local unions in Knoxville, Lynchburg, Staunton, Baltimore, and Portsmouth. went on strike in support of the Washington and Norfolk discharges or to compel their reinstatement.16 Following the occurrence of the strikes, upon instructions from the home office, the striking agents in the Petersburg, Kno.rmlle, and Lynchburg districts were notified by their superintendents that if they did not return to work by October 30, their insurance licenses would be canceled. Upon the application of the respond- ent, the licenses of the agents who remained on strike after October 30 were canceled by the Insurance Commissioners of Virginia and Tennessee. In each instance the application for cancelation stated as the reason for the request : Discharged due to wilful and deliberate violation of this Company's rules. The respondent's reason for canceling the licenses was that these agents had gone on strike and no longer had authority to represent the respondent. Due to an oversight, the licenses of the Baltimore, Staunton, and Portsmouth agents were not canceled, although it was the respondent's intention to cancel them. During the strikes the respondent sent to policyholders serviced by these agents letters similar to those sent to the policyholders in Washington and Norfolk, except that these letters did not state that the agents had been discharged. They referred to them as having "determined to discontinue the collection of insurance premiums from our policyholders," and said that "Until these agents are replaced an agent may not call on you for your premium." E. Attempts to settle the dispute During the month of October, while the various work stoppages related above were taking place, two other events had occurred : (1) On October 19 the N. W. L. B. notified the parties of its final decision on the contract dispute. The directive order of the N W. L B." denied the Union's request for an increase in collection commissions, granted a limited form of arbitration, and awarded maintenance of membership as to those employees who were union members on May 25, 1944; (2) On October 20, the New Case Committee of the N. W. L. B. returned the reporting rule dispute to the U. S. Conciliation Service .. . for further efforts to resolve the dispute in accordance with the contract and the recent directive order . . . 16 The dates of these strikes , which were decided upon by majority vote at union meet- ings, were as follows : Knoxville, October 20; Lynchburg, October 23; Staunton, October 27 , Baltimore, October 27 ; Portsmouth, October 30. 17 Affirming the order of the Regional N. W. L. B., which the respondent had appealed to the National Board. HOME BENEFICIAL LIFE INSURANCE CO., INC. 45 and suggested that Since the recent action of the [N. W. L B.] disposed of the . . . previous case, the Committee believes that the grievance procedure established in accordance with those orders should be utilized to dispose of this issue. (a) The October and November negotiations At the instance of Conciliator Morton, Boyer, Tucker and Morton met in Rich- mond on October 31 to explore the possibilities of settlement of the dispute. Boyer suggested that if a contract were executed he felt that the reporting dispute mulct be worked out on the respondent's terms After some preliminary explora- tion of possible bases of settlement, a further meeting was arranged for Novem- ber 3. At the October meeting Boyer indicated that the Union would abandon the demand for modification of the report rule, and the subsequent negotiations were conducted upon that basis Pursuant to the above arrangements, Conciliator Moi ton and representatives of the Union and the respondent met on November 3. Although the contract issues had been disposed of by the N W L B. directive order, the respondent's repre- sentatives indicated dissatisfaction with the terms of the directive regarding arbitration and maintenance of membership and presented a draft of a contract modifying them.1s The union representatives indicated a willingness to consider modifications of the directive if a satisfactory settlement of the stoppage could be arrived at, and they outlined the terms which they thought would be satisfac- tory to the agents. The respondent's representatives agreed to discuss those terms with the home office officials, and a further meeting was arranged for November 7. At the November 7 meeting the union representatives agreed to recommend to the local unions modification of the N. W. L. B arbitration and union security provisions provided reinstatement terms satisfactory to the agents could be secured. A further conference was arranged for November 10 so that delegates from the local unions could approve or disapprove the terms of settlement. The November 10 conference was held as arranged. Delegates from the local unions empowered to effect a settlement attended. The respondent's terms pro- viding, in part, for the reinstatement of all employees who had concertedly ceased to report after October 12, were presented to the delegates.19 The respondent's proposals were unsatisfactory to the local delegates , but the discussions never theless continued through that day. lB These modifications would have ( 1) made unai bitrable the discharge of an agent, (2) changed the effective date of the maintenance of membership provision so as to permit "loyal" agents ( those who had not engaged in the work stoppage ) to withdraw from the Union iS These terns were, in substance , ( 1) that the N. W. L. B directive should be modified so that ( a) discharges would be non -arbitrable except for the question of the respondent's good faith ; (b) the union security provision was to be inapplicable to employees who had not engaged In the work stoppage unless , after the date of the contract , they became mem- bers of , or reaffirmed their membership in, the Union ; and in any event , agents were to have an additional escape period within which to withdraw from the Union ; and (2) that, since the agents were paid on a collection basis and since some of the debits had become run down during the period of the work stoppage , the returning agents should be entitled to draw wages , during the first 4 weeks of reemployment , equivalent to their average pay prior to the strikes. After 4 weeks this piovision was to be abandoned and compensation determined In the same manner as prior to the stoppage The advances were presumably to be repaid. 46 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (b) The requests for reinstatement and the refusals That evening the union representatives held a caucus at which they decided to reject the propsals and, if no satisfactory terms for reinstatement were arrived at on the following day, to offer unconditionally to return to work. The conference resumed on the following day. No agreement could be arrived at Russ, the union president, then announced that the men were unwilling to sign the proposed agreement, but that they desired to return to work. He further stated that it was the position of the delegates that the proposed contract was not in compliance with the N. W. L. B. directive order, that the agents were willing to let their legal claims be adjudicated by the proper governmental agen- cies, and that in the meantime all the agents were tendering their services to the respondent unconditionally and were prepared to resume work on Monday, No- vember 13. Tucker, for the respondent, replied that such a solution would not be satis- factory to the respondent; that if the controversy was to be settled it should be a complete settlement of all issues relating to the contract and reinstatement and free of further litigation, and that without such a total solution the respond- ent was unwilling to reemploy any of the agents who had ceased work. Concili- ator Morton then requested the parties to reduce their positions to writing, and the conference terminated. At the time of the request for reinstatement no new employees had been hired to fill the debits of any of the discharged or striking employees and all their positions were at that time vacant. 20 On November 14, 1944, the Union filed charges of unfair labor practices against the respondent in connection with the discharges and the failure to reinstate. On November 28, 1944, Boyer, Secretary Treasurer of the Union, sent the following telegram to the respondent: According to information which has reached me, your Company has changed its position with respect to the agents being returned to their respective jobs. This is to advise that the Industrial Insurance Agents Council is the bargaining representative for these employees and that all of these employees are ready, willing and able to resume their respective jobs immediately without any reservations. In order to avoid further confusion, I request that your Company advise this Council by telegram just what change, if any, there is from the Company's position taken in conference on November 11, 1944. The respondent's position not having changed since November 11, this tele- gram was not answered. However, between November 13 and December 10, 1944, some 36 agents, mostly in Baltimore, Knoxville and Petersburg, who applied for reinstatement individually were reemployed by the respondent?' (c) The December negotiations; the memorandum of settlement On December 7, 1944, William Humphrey, a Field Examiner for the Board, conferred with representatives of the Union and of the respondent In regard 20 There is one exception to the above statement . On November 11, C. C . Philips, a new employee, was hired to fill the debit of W. D, Chaplin, a striker . The record does not dis- close, however, whether Philips was hired prior to the request for reinstatement. W W. Waters, manager of the Staunton office, testified that he had heard that Chaplin had died during the course of the hearing 21 This finding Is based on the respondent's answer The reinstatements were as follows : Baltimore 13, Knoxville 7, Petersburg 7, Lynchburg 4, Staunton 2, Portsmouth 2. HOME BENEFICIAL LIFE INSURANCE CO., INC. 47 to the charges of unfair labor practices which had been filed by the Union. After a lengthy discussion of the positions of both sides, Humphrey expressed the opinion that the differences between the parties were not substantial, and suggested that negotiations be resumed in an effort to settle the dispute. The parties agreed to do so. Upon the insistence of the respondent, the Union also agreed that its negotiating committee be empowered to make a final and bind- ing agreement without the necessity of submitting the agreement to the various locals for ratification. Thereafter, each of the various locals elected a dele- gate empowered to attend the negotiations as a representative of the local and to make a final and binding agreement. On Saturday, December 9, President Russ and Secretary-Treasurer Boyer, representatives of the respondent, and the delegates from the locals, resumed negotiations in Richmond. Conciliator Morton also attended. The eight local delegates chose three of their number to sit at the conference table with Russ and Boyer and act as spokesmen for the whole group of delegates $2 The nego- tiations continued through the whole day of the 9th without tangible result and were resumed on the morning of Sunday the 10th. Late in the afternoon of the 10th, because of the confusion caused by the movement of delegates in and out of the conference room, and upon the suggestion of Preston, one of the respondent's representatives, Preston, Tucker, Russ and Boyer retired to a small office across the hall in an effort to work out their differences. One of the principal difficulties in the way of agreement was the matter of replacements. Some new employees had been hired by the respondent since November 11 to fill the debits of striking and discharged agents. The respondent refused to make those debits available to the strikers and dischargees. This situation was most acute at Norfolk where all but a few debits had been filled by replacements. After extended discussion between Preston, Tucker, Russ and Boyer, a settlement was proposed whereby agents for whom no acceptable debits were available would be placed on a preferential hiring list for a period of 6 months. Russ expressed doubt that this proposal would be acceptable to the delegates but agreed to recommend its acceptance if agreement could be reached on all other terms On the other issues the quartet arrived at apparent agree- ment. Russ then suggested that the various proposals be reduced to writing in order that he could have something concrete to show to the men Preston, Tucker, Russ and Boyer then returned to the conference room where a memor- andum was dictated incorporating the terms on which Preston, Tucker, Russ and Boyer were in agreement, and including the preferential hiring clause After the typed memorandum was brought into the conference room, corrections and material revisions were made and the document sent back to be retyped. While this dictation, typing and revising were taking place, the delegates were wandering about the building, and were in and out of the conference room. Sometime during this period Fedder, the Baltimore delegate, telephoned to Hershfield, an agent in Baltimore, and said : "As far as I can see, we will go back to work." In response to Hershfield's query as to whether the delegates had secured a contract, Fedder replied, "Contract or no contract you get your men back to work in the morning" While the redraft was being typed, Russ instructed the delegates to return to their hotel and arranged for a caucus that evening for the purpose of discussing and voting on the proposals s2 By the time n The selection was apparently made in a private caucus of the delegates, The respond- ent's representatives appear to have been unaware of the role of these three delegates 2 It is not clear whether these arrangements were made in the presence of the respond- ent's representatives. They testified that they were not aware of them. The undersigned accepts this testimony, but finds that the arrangements were made substantially as related above. 48 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the second draft of the memorandum had been brought in, around 6 p. in , all the union representatives except Russ and Boyer had left the conference. When the second draft was ready, either Preston or Morton suggested that it be initialed Russ, Morton and Watkins, the respondent's vice president, then signed their names on the margin. Following the signing, however, Russ indicated dissatis- faction with the clause defining the agents to which the terms should be applic- able, and suggested a substantial alteration. This was agreed upon and the change was made in ink on the second draft. Russ again expressed his concern over the situation at Norfolk, and as to whether the settlement contemplated by the memorandum would affect the rights of the Norfolk dischargees under the Act. Preston assured him that it would not and suggested that he submit the memorandum to Thatcher, the union attorney. Russ expressed his intention to ,do so on the following day. It was agreed that Tucker would draft two agree- ments, one for settlement of the strike, the other a collective bargaining contract, and that the parties would have another meeting in Richmond tentatively on December 15, to sign those agreements. Russ then said that after he had consulted Thatcher on Monday he would again contact the respondent respecting these arrangements. The conference then terminated. The respondent's repre- sentatives were under the impression that they had arrived at a final agreement. The union delegates, however, regarded the memorandum as a proposal for settlement, upon which they would be given opportunity to deliberate and either to accept or to reject .24 Later that evening the union delegates, and Russ and Boyer, met to discuss the memorandum. Following the discussion a vote was taken as to whether to accept. The vote resulted in a tie-four in favor of acceptance, four opposed. Russ then suggested that the delegates return home and submit the question to each of the locals. Under date of December 13, Russ wrote the respondent of these events, stated that the response of all the locals could not be ascertained until Thursday afternoon, December 14, and suggested that in the meantime the respondent refrain from putting into effect any of the proposed terms. During the early part of that week, meetings of the eight locals were held to vote on whether to accept the settlement. Two locals voted to accept ; six voted to reject. On the afternoon of December 14, Russ, through Conciliator Morton, notified Tucker that the locals had rejected the proposals. Russ inquired whether he and Boyer should come to Richmond from Washington on the following day. Tucker replied that if they were not prepared to sign the contracts there was no reason for making the trip. 24 The testimony is in conflict as to the understanding of the parties at this meeting re- garding the finality or tentativeness of the terms of the memorandum . Thus, the testi- mony of the local delegates , and of Russ and Boyer, is that several statements were made during the drafting of the memorandum , indicating that the delegates would meet later in the evening and vote upon whether to accept the memorandum. As has been stated, the respondent's representatives were not aware of these arrangements . While the respond- ent's witnesses did not specifically deny that these statements were actually made, they unequivocally testified that they had not heard such statements ; that they understood that a final and binding agreement had been reached when the conference terminated , and that they did not know that the delegates regarded the memorandum as tentative . The under- signed is convinced, from his observation of the witnesses, that this conflict is the result of honest misunderstanding on both sides and that the parties , although anticipating mutual acceptance of the memorandum , had not in fact arrived at a meeting of the minds Other than this conflict in understanding there is little substantial dispute as to the occur. yenees at the December 10 conference HOME BENEFICIAL LIFE INSURANCE CO., INC. 49 (d) The reinstatement of the strikers Before the local delegates left Richmond on the night of December 10, Russ advised the delegates of the striking locals that, irrespective of whether the memorandum was accepted, those who wished to should present themselves at their respective offices and make themselves available for work. During the following week most of the agents in those cities applied for reinstatement. Those whose debits were still vacant or for whom there were other acceptable debits were reinstated, some at the time of the request, some later. Some took whatever they could get. Several were offered reinstatement to their old debits but declined for various reasons. Several had secured other employment and were unable to get releases. For others no acceptable debits were available. In returning to work, however, the agents made it clear that they were not return- ing pursuant to the December 10 proposals. Nevertheless, in reinstating them the respondent followed some, but not all, the provisions contained in the pro- posals. The Norfolk and Washington agents, however, did not apply for rein- statement at this time, presumably for the reason that application was futile in view of the Union's rejection of the settlement. F. Concluding findings as to discrimination The foregoing findings establish the following facts: After attempts to nego- tiate a reduction in the number of reporting days had failed, the agents, through the Union, sought to have a strike vote taken in accordance with the provisions of the War Labor Disputes Act. This application was denied on the ground i hat that Act was inapplicable to the dispute. When, however, the agents there- after contemplated strike action, they were informed that the N. W. L. B. would not act upon the dispute in the event of a strike. Such action was then aban- doned for some 5 weeks, after which the device of not reporting was decided upon as an alternative to striking This maneuver, designed to avoid going on strike, immediately evoked a threat of discharge from the respondent. The agents were also advised by their attorney that there was doubt that their contemplated action constituted protected concerted activity Further attempts to negotiate an adjustment being unsuccessful,•the Washington agents then chose the only remaining alternative to obeying the report rule, and went on strike. The respondent thereupon discharged them The Norfolk agents were discharged under similar circumstances. It is thus apparent that the Washington and Norfolk agents were discharged for concertedly ceasing to work in protest against the reporting rule. The agents in other district offices then went on strike in protest against the discharges, and the licenses of some of them were canceled because of the strike On November 11, the employees abandoned the strike and requested reinstatement, which the respondent declined As has been indicated, the respondent denied the commission of unfair labor practices by any of the above actions. The respondent's contentions will be discussed seriatum. The respondent's primary contention appears to be that the 5-day reporting rule is administratively necessary to the operation of its business ; that for such reason the rule could not be the subject of lawful concerted activity; and that the respondent was therefore free to discharge the Washington and Norfolk agents for engaging in a strike to secure modification of the rule. Thus, the respondent sought to prove the administrative necessity of the rule and its vital connection with the conduct of its business. The undersigned is of the 701592-47-vol 69-5 50 DECISIONS OF NATIONAL LABOR RELATIONS BOARD opinion, however, that the necessity for, or the reasonableness of, the rule, are not material to the present issues. Otherwise, the legality of concerted activity arising out of a labor dispute would be dependent upon the intrinsic propriety of the working conditions which are the subject of dispute It is not the function of the Board, however, to determine what terms and conditions of employment shall be established by an employer. The relevant question here is not the reasonableness of or necessity for the report rule, but whether it constituted a term or condition of employment. The undersigned finds that it did, that it therefore was a proper subject for concerted activity within the protection of thq Act ; and that the respondent could not lawfully discharge employees for engaging in such activity. No statute or countervailing principle of public policy is cited witch would make unlawful the act of peacefully and conceitedly refusing to work in protest against such a term of employment" The respondent introduced evidence indicating that a minority of the Wash- ington agents, although not reporting at the office on October 13, did some work on their debits This evidence might be interpreted as indicating that the Wash- ington agents did not go on strike, but instead sought to continue working on their own terms. If that conclusion were justified, a question might arise as to whether such activity is entitled to any protection under the Act. The undersigned finds it unnecessary, however, for reasons to be related, to decide that precise question. First, the act ion of some of the men in working on the 13th was not the reason why those, or any other, agents were discharged The evidence that they worked was not ascertained until sometime later. The respondent's reason for the discharges was that, as it supposed, the men were concertedly ceasing to work in protest against the report rule, and the respondent, as has been related, believed that it had a right to discharge them for so doing The discharges were therefore effected because the agents were apparently engaging in activity of such character as, as has been previously found, to be protected by the Act. Discharges made upon such motives constitute unfair labor prac- tices ' Since the conduct of the agents after the discharges was not the cause of the discharges, it is immaterial whether any of the Washington strikers worked on October 13 or thereafter. It is consequently unnecessary to determine what the result would have been had they been discharged for such action. It is clear, moreover, that the Washington agents voted to engage in a complete work stop- page, and a majority of them refrained from working. In no event could the action of a minority who continued to work affect the rights of those who were bona-fidely on strike." 25 Over objection by counsel for the Board, the undersigned admitted a substantial amount of evidence offered to prove the reasonableness of the 5-day report rule There- after, further evidence on the same point was excluded as cumulative and irrelevant 26 The facts negate any inference that the respondent was under a misapprehension as to the character of the activity at the time of the discharge Thus, the respondent was in- formed on the night of October 12 that the Washington agents would cease work the next morning In Norfolk all the agents ceased to work, but all were nevertheless discharged. In addition, several Washington agents who both reported and worked on October 13 and 16, but who joined the strike during the day of the 16th and ceased to work, were dis- charged and their licenses canceled for not reporting on the morning of the 17th. None of the facts indicating that any of the Washington agents worked on or after the 13th, although not reporting, were discovered until after the discharges had taken place It is evident, therefore, that all the discharges were effected because the respondent believed that the agents had concertedly ceased to work 2P Of the agents who allegedly worked on or after October 13, though not reporting, some admitted having done so ; some denied it For the reasons indicated above, the under- signed finds it unnecessary to determine whether those who denied having worked did so or not. However, at most, the evidence would indicate that these agents made total collec- tions of varying amounts, some as little as 78 cents Mistakes in entering dates in collec- tion books (not uncommon) may account for some. The total collections are so small as to HOME BENEFICIAL LIFE INSURANCE CO., INC. 51 The respondent additionally contended, in justification of the Washington and Norfolk discharges, that those agents, by striking, violated the Union's con- tract with the respondent. The respondent's position is that the 1941 contract was extended by the parties and was in existence at the time of the strikes. It is conceded by the Union that the contract was extended to October 1943, at which time the contract issue was submitted to the N. W. L. B. In the undersigned's opinion, the evidence, although disputed, establishes that the extension was ter- minated at the time of this submission. The N. W. L B. proceedings had in fact arisen from the inability of the parties to reach an agreement. In any event, however, the 1941 contract contained no clause by which the union covenanted not to strike if the respondent declined to agree to modification during its term.`B There was thus no legal or contractual impediment to a strike of the Washing- ton and Norfolk agents. As a result of the unfair labor practices in the discharge of the Washington and Norfolk agents, the agents in the other district offices went on strike. Be- cause of that action, the licenses of some of these agents were canceled. The re- spondent denied, however, that those men were discharged, or that the cancela- tions were discriminatory. With respect to the question of discharge, the re- spondent's conduct points in two directions. Thus, its applications to the vari- ous insurance authorities for cancelation of the licenses, stated unequivocally that the men had been discharged. The respondent's answer refers to them as "former agents," and states that their licenses were canceled "because none of them] were any longer employed by it as agents with authority to bind re- spondent by contracts of insurance, or to collect premiums due respondent on insurance policies and because so long as these licenses were outstanding these persons were falsely held out to the public as having authority to act for Re- spondent." In addition the men were refused reinstatement on November 11. These facts thus indicate that all the agents were discharged. Other actions of the respondent indicate, however, that it did not intend to sever the employ- ment relationship of the striking agents outside Washington and Norfolk. Thus, the respondent's letters to the policyholders located outside Washington and Norfolk state that the agents in those localities "have determined to discontinue the collections of insurance premiums." The letter to the Washington and Nor- folk policyholders, however, indicated that the agents in those localities had been discharged, and those agents were so notified. The other agents, however, were merely informed that unless they returned to work their licenses would be canceled. In addition, following November 13, agents outside Washington and Norfolk who individually applied for reinstatement, were reinstated. Upon this contradictory conduct, the undersigned concludes that the respondent did indicate that they were casual in character and hardly sufficient to warrant the inference that these agents were attempting to carry on their work on their own terms. The average debit approximates $300 in collections per week. Those who admitted having worked offered varying explanations. Thus, several paid sick claims which had accrued earlier in the week, for which they had been provided com- pany money, and which they felt under moial obligation to pay, several had not attended the October 12 union meeting and were not informed of the strike until October 15. One delivered an ordinary policy on October 13 and collected the premium, for the reason that had he not done so at the time, the respondent would have charged him with the medical examiner's fee. This agent likewise collected a premium on the same day on an industrial policy which could otherwise have lapsed. The undersigned concludes that these various actions are not, under the circumstances, to be construed as anything more than casual acts of employment designed to prevent hardship or inequity. ^ The inclusion of such a clause was proposed by the respondent during the negotiation of the 1941 contract. The Union indicated a willingness to incorporate it if a union se- curity clause was provided The respondent declined to agree to such a provision and the proposal was abandoned. 52 DECISIONS OF NATIONAL LABOR RELATIONS BOARD not intend to sever permanently the employment relationship of the agents who went on strike in support of the discharged employees, and concludes that they were not in fact discharged. However, the agents, who could not be aware of the respondent's undisclosed intentions, could have concluded from its conduct that they were discharged. The warnings that unless they returned to work their licenses would be canceled, were reasonably interpretable as a threat of severance of the employment relationship. The obvious purpose of the threats of cancela- tion was to induce the agents to abandon their concerted activities. That the respondent did not actually intend to sever the relationship is beside the point. It is therefore found that although the striking agents were not discharged, the respondent threatened them with reprisals unless they abandoned their con- certed activities, and thereafter canceled their licenses in pursuance of the threats. The unlawful discharge of the Washington agents converted what had been an economic strike into an unfair labor practice strike. The stoppages in the other cities resulted wholly or partially from the respondent's unfair labor practices. They were therefore also unfair labor practice strikes. On Novem- ber 11, 1944, and again on November 28, the Union made unconditional applica- tions for reinstatement of all the discharged and striking employees. Although the respondent was obliged to reinstate them upon request, it refused to do so. These refusals constituted additional unfair labor practices which prolonged the strike. The respondent contends that the requests were not unconditional be- cause they included the discharged agents, whom it asserts it was under no obli- gation to reinstate. The latter contention is, as has been seen, without merit. However, whether meritorious or not, the respondent made no offer to, or gave any indication that it would, reinstate the striking, as distinguished from the discharged, agents.2B The respondent also contended that the memorandum of December 10, 1944, was an agreement between the Uniofi and the respondent settling all their dif- ferences, and urges that such agreement constitutes a bar to the present pro- 2e Since these were unfair labor practice strikers, the respondent was required to rein- state them to their former positions upon application even though their places had in the meantime been filled. However, as has been indicated, the positions of all the agents, with one possible exception, were vacant on November 11. The respondent's reason for not accepting the November 11 application for reinstate- ment, despite the fact that it had negotiated for that result, as testified to by Attorney Tucker, is as follows : My explanation of that is this, that we had been engaged in a series of conferences with the object of getting all of our difficulties eliminated and wiped out Those con- ferences originated with the return of the reporting case to conciliation . . . That was followed by my meeting with Mr. Boyer, at which we agreed that we should try to work out all of our differences which included both the making of a contract, a satisfactory contract and the formulation of some method of getting these men back to work. My position was, if we are going to compromise, settle, and wipe out our differ- ences, we are willing to relinquish the position we occupy, and which we think is a proper one, that is, that we have discharged certain men as we think proper. I may have been mistaken, but we thought that was a proper discharge. We were offering, under this conciliation proceeding, to take those discharged men back. We were ask- ing that at the same time the Union sign the contract which we had worked out and which apparently was agreeable to the council representatives. In other words it was a give and take proposition. There seemed to be no percentage in asking the Company to surrender its position, any legal rights which it might have and to receive absolutely nothing in return. HOME BENEFICIAL LIFE INSURANCE CO., INC. 53 ceedings3° However, as has been found heretofore, the undersigned has con- cluded that no meeting of the minds was arrived at on December 10, and the union delegates had not expressed themselves as accepting the terms embodied in the memorandum agreement. Whether that be so or not, however, the memo- randum did not constitute a contract. It was admittedly contemplated that Russ was to submit the memorandum to Thatcher for approval. The actual contract was to consist of two documents to be subsequently drafted ; one an agreement incorporating terms of settlement of the -strike, the other a regular collective bargaining agreement. Both these documents were to be presented for approval and signature on December 15. Neither was ever approved by the Union's rep- resentatives.- Until they had been signed, either party was apparently free to withdraw. It cannot therefore be said that any final agreement was reached on December 10, 1944 Russ notified the respondent not to put any of the terms into effect, and the returning agents disclaimed the benefits of the memorandum. Moreover, even if it be assumed that a final agreement was reached, it was necessarily (as the memorandum itself provided) subject to the approval of the Board. The undersigned is of the opinion that such a settlement, failing, as it does, to provide for complete reinstatement and reimbursement of employees discriminatorily discharged and denied reinstatement, would not effectuate the policies of the Act. The memorandum also provided that the unfair labor prac- lice charges filed on behalf of the Norfolk agents and, if necessary, those filed for the Washington agents, should not be affected by the settlement. The under- signed therefore finds no circumstances in the December 9 and 10 negotiations warranting the Board, either as a matter of law or of policy, in declining to proceed upon the charges filed by the Union " Upon the foregoing facts and upon the entire record in the case, it is found that by each and all of the following acts the respondent discriminated in the hire and tenure of employment of its employees, discouraged membership in the Union, and also interfered with, restrained, and coerced its employees in the exer- cise of the rights guaranteed in Section 7 of the Act: (1) By discharging, on October 13 and 20, 1944, respectively, its Washington, D. C., and Norfolk, Vir- ginia, employees named in Appendix A, hereof, for the reason that they had, through their collective bargaining representative, the Union, expressed an in- tention to, and did, engage in concerted activities with respect to their terms and conditions of employment for the purpose of collective bargaining and other mutual aid and protection; (2) by threatening its employees in Petersburg and Lynchburg, Virginia, and Knoxville, Tennessee, with reprisals unless they aban- doned their concerted activities, and by thereafter imposing such reprisals when the employees did not abandon such activities; and, (3) by failing and refusing, on November 11 and 28, 1944, to reinstate to their positions its employees named in Appendix A hereof, for the reason that they had engaged in the concerted activities referred to above. "Also asserted as reason for finding that the memorandum forclosed further action is that the negotiations , because undertaken pursuant to the suggestion of Field Examiner Humphrey , were under the auspices of the Board This assertion is found to be without merit. No representative of the Board participated in any of the negotiations 31 Further indication of the fact that the memorandum did not constitute a final agree- ment is a contradiction between the terms of the memorandum and those of the draft con- ract subsequently prepared , with respect to terms providing a measure of compensation to the agents for the period of their unemployment. These discrepancies between the memo- randum and the draft are not explained 54 DECISIONS OF NATIONAL LABOR RELATIONS BOARD G. Other issues 1. Picketing Some of the district offices were picketed by the strikers. In a number of cities, the debits were also "picketed." This latter action consisted of approach- ing non-striking agents both at their homes and on their debits and attempting to persuade them to join the strike. Where such persuasion was unsuccessful, the pickets accompanied the non-striking agent as he made his calls, informed the policyholder that the other agents were on strike, and requested that the premiums be paid at the office instead of to the agent. Although witnesses for the respondent, mainly non-striking agents, sought to establish that this action was coercive, all admitted that the pickets made no threats and that there were no suggestions of violence. On several occasions moderately uncomplimentary words were exchanged on both sides, and there is some evidence that a non- striker in Petersburg, Kollman, used threatening language to strikers. The undersigned finds no substantial evidence that the picketing was coercive in character. Two strikers in Norfolk, Taylor and Ealey, while picketing the debit of W. H. Lane, a non-striker, and apparently at the suggestion of Superintendent Ran- sone and Rhodes of the Norfolk office, were arrested upon information sworn out by Lane for disorderly conduct, but the charges were subsequently with- drawn.3' The Board contended that one of the Baltimore strikers, J. Leon, 'nhile picketing the debit of a non-striker, was assaulted by H E. Myers, one of the Baltimore superintendents, but the undersigned finds that the evidence does not support this assertion. No contention is made that any of the striking or discharged agents engaged in conduct which should bar them from reinstatement, and the undersigned finds no evidence of such conduct." 2. The retention of the collection books In several district offices the agents who struck retained their collecton books. Some then refused to surrender these books upon demand by the respondent. On October 31, however, agreement was reached between Thatcher, union counsel, and the respondent, for the surrender of the books and settlement of the agents' accounts, and the books were thereafter, in due course, turned over to the respondent. While it appears clear that a substantial motive for retention of the books was to hinder the collection of debits during the strike, the agents were also motivated by a desire to retain the records until they could be audited and a settlement of their accounts reached with the respondent." The respondent does not contend that the retention of the books bars the reinstatement of any of the agents. However, it apparently contends that the retention should be considered as bearing on the conduct of the strike. While the undersigned does 12 Lane also testified that T L Rowe, a striker , telephoned his home several times and endeavored to induce him to join the strike, and when Lane refused, threatened him. Lane was not molested, however, nor was any other non-striker. 13 Several non-striking agents at Petersburg ( Parrish, Langster and I{ollman ) testified that at the union meeting at which it was voted to strike, Boyer counselled the union mem- bers to use violence, and to engage in other alleged unlawful conduct. The conduct of the strikers in Petersburg was wholly peaceful The undersigned is unable to credit any of this testimony. 34 The collection books constitute the agent 's only record of the status of his debit. Each Thursday the agent turns in his collections at the district office. The collection books are "inspected" (audited) at intervals by checking them against the policyholder's receipt book , and the amounts of money turned in by the agents. HOME BENEFICIAL LIFE INSURANCE CO., INC. 55 not condone the unlawful withholding of property, some justification existed for the retention of the books pending an accounting, and when agreement for such accounting was reached the books were returned to the respondent. It is found that the retention of the books did not make the strike unlawful or bar reinstate- ment of any of the strikers Similarly, at the time they struck, the agents were in possession of some money collected from policyholders. To avoid financial involvement, Boyer advised the agents to purchase money orders with this money and to hold them pending the arrangement of an accounting. Langster, Parrish and Kollrnan whose testi- niony has been referred to in footnote 33, supra, sought to suggest that Boyer advised the Petersburg agents to retain this money unlawfully The undersigned does not credit this testimony. The Petersburg local voted to strike on Tuesday, October 17. On Thursday morning, October 19, the agents turned in their col- lections for the week. The strike became effective at noon that day. It is thus implausible that there was any suggestion or intent to withhold funds for the purpose of harassing the respondent In the other districts, except for Lynch- burg, the stoppages became effective on Friday, the day after the turn-in day for collections, thus negating any suggestion that the agents wilfully withheld company funds.' 3. The Petersburg injunction The complaint alleged that the respondent committed unfair labor practices by filing a bill of complaint in the Hustings Court of the City of Petersburg for the purpose of obtaining an injunction restraining the Petersburg agents from engaging in lawful union activities in connection with the strike. On October 26, prior to the return of the collection books, the respondent procured a mandatory injunction, ex parte, from the said Court, ordering the surrender of the collection books and also enjoining the members of the local union, miter aha, from inter- fering with the business of the respondent. While the order sought and secured by the respondent is interpretable as forbidding any kind of participation in the strike, however peaceful its character, the undersigned finds it unnecessary for the determination of this case, to pass upon the legality of the respondent's actions in connection with the injunction. 4. The individual agreements Upon instructions from the home office, those agents who returned to work before November 13 were presented with the following statement by their super- l isors and requested to sign it: Agreement It is understood and agreed that the terms under which I am reinstated in the employment of the Home Beneficial Life Insurance Company, Inc.-are that I will faithfully abide by the rules of the Company. Witnessed------------------------- Signed-------------------------- So compulsion was exercised. However, all who returned to work up to Novem- ber 13 apparently signed. The agents who returned on or after November 13, however, upon instructions from the Union, refused to sign the Agreement. The home office then rescinded the instructions. Although the Union is admitted to have been the bargaining representative of the agents, it was not consulted with reference to this matter. JL Further evidence in refutation of any such suggestion is the action, referred to here- tofore, of some of the Washington agents in paying sick claims during the period of the strike. 56 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In the opinion of the undersigned, this action by the respondent was an unfair labor practice. The purpose of the device was to secure agreement with the indi- vidual employee to abide by the 5-day reporting and other rules. Under the respondent's construction of the allowable limits of concerted activitiy, the doc- ument constituted a covenant not to engage in such activitiy with respect to the report rule. However, by virtue of its status as the collective bargaining repre- sentative of the agents, only the Union had authority to bind the employees to an agreement respecting terms and conditions of employment. The report rule, as has been established, constituted such a term and condition. It is therefore found that by securing individual agreements with employees respecting terms and conditions of employment, without the consent of the Union, the respondent interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act io 5. The Bogratz letters About February 23, 1945, A. E. Harry, president of the Baltimore local of the Union, received anonymously through the mails a miniature photostatic nega- tive of the following typewritten document on the respondent's letterhead, and purporting to bear the signature of W. A. McCarty, manager of the Baltimore No. 1 district office, in which office Harry was employed. Home Beneficial Life Insurance Company, Inc. Home Of&ce : Richmond, Virginia, Baltimore, Maryland, Feb 19, 1945. Mr. A. J. WATKINS DEAR SIR: As per your request, I will see to it that agent A. Bogratz is not returned to work, with this Company. The union in this district is so weakened now through my efforts, I do not think it will give us any further trouble. The escape clause permitting union agents to resign from the Union before Feb. 20,34 has been very effective in this district, about nine agents have mailed in their resignations. I will make it very unpleasant for those union men who persist in keeping organization of the Union active in this district. I will force them out of the business one at a time. You can count on my cooperation, I will keep you informed of any further developments that might be of interest to you. Yours truly. W. A. MCCARTY. Bogratz, an agent in the Baltimore No. 1 office, was among the strikers whose debits had been filled during the strike. Around January he had been offered several debits in the Baltimore No. 2 office, which he declined. 39 J. I. Case Co. V. N. L. R. B., 321 U S 332 (1944) ; Order of Railway Telegraphers V. Railway Express Agency, 321 U. S 678. The complaint alleges the above conduct as a violation of Section 8 (1), and not as a violation of Section 8 (5) While the latter subsection is clearly applicable, it is also apparent that Inducing employees to enter into individual agreements, instead of with their bargaining agent, is an interference with and a restraint upon the employees' rights under Section 7 This is particularly so where, as here, the purpose of the in. dividuaI agreement is the securing of a covenant not to engage in concerted activity. 37 A new escape date ordered by the N. W. L. B early in 1945. a HOME BENEFICIAL LIFE INSURANCE CO., INC. 57 Upon receipt of this letter, Harry attempted to contact Russ and Boyer, union officials in Washington, but they were out of the city. He then telephoned Ross Madden, the Board's Regional Director in Baltimore. Madden requested that Harry bring the letter to the Board's office, which Harry did When Harry arrived, Madden questioned him as to whether he could suggest who sent the letter. Harry was unable to identify the source, or to recognize the handwriting on the envelope. Madden then suggested that the letter be left with him, to which Harry agreed Madden told Harry that if the letter was used by the Board in the pending proceedings, Harry's connection with it might have to be disclosed. Harry indicated that he had no objection. As Harry left, Madden cautioned him not to disclose the incident to anyone. In accordance with this request, Harry told no one else of having received the letter, nor did he see it again until it was offered in evidence during the present hearing. Following its receipt from Harry, known signatures of McCarty were com- pared with the one on the photostat, and the latter was determined to be appar- ently genuine. On June 26, 1945, on the fourth day of the present hearing, counsel for the Board called McCarty as a witness, displayed to him a photostat of the mini- ature received by Harry, and enlarged to letter size McCarty admitted that the signature was genuine, but denied authorship of the letter. Upon request by counsel for the Board for production of the original of the letter from the respondent's files, counsel for the respondent denounced the document as a forgery. At the close of the hearing that day, following McCarty's denial of authorship of the letter, counsel for the Board and Earle Shawe, the Regional Attorney of the Board's Baltimore office, commenced an investigation to ascertain the source of the document. In the course of this investigation authorship was traced to Bogratz. He confessed to typing the statements on a letterhead of the re- spondent, bearing McCarty's genuine signature, photostating the result, and mailing the negative of the photostat to Harry. Counsel for the Board immedi- ately notified counsel for the respondent of this discovery, and at the next ses- sion of the hearing related the events upon the record, and expressed his apology on behalf of the Board to the respondent and McCarty for the incident. Counsel for the respondent conceded that counsel for the Board had acted in good faith and had been the innocent victim of fraud''" A motion by counsel for the Board to strike Bogratz's name from the list of agents named in the complaint as dis- criminatorily discharged and refused reinstatement, was granted Ruling was reserved by the undersigned, when counsel for the respondent objected, upon a motion by counsel for the Board to strike the letter from the record. From evidence later introduced by the respondent, it was established that early in 1945 the respondent had received anonymously through the mails a miniature photostat of a similar letter addressed to A. J Watkins, the respond- ent's vice-president, and bearing McCarty's apparent signature. Late in April, after investigation and submission to an examiner of questionable documents, the signature was determined to be genuine but the remainder of the letter counterfeit. This information was not conveyed to the Board In May, however, Tucker, during a conversation with Boyer, told the latter that a letter purporting 38 Counsel for the respondent expressed himself as follows : Mr. ROBERTSON. Mr. Examiner, we readily concede, of course, that counsel for the Board presented this letter thinking it was genuine, and presented it in good faith, and we do not, for one moment, think that counsel for the Board is subject to an'? personal criticism for anything that counsel did in the production of that letter. s s r + s w a I think the same thing could have happened to me. 58 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to ascribe anti-union and anti-Semitic expressions to McCarty had been received by the respondent and determined to be fraudulent. Boyer, however, unaware of Harry's receipt of the other document, attached no significance to Tucker's statement. Despite his earlier statements concerning the incident, counsel for the respond- ent, later in the hearing, alleged impropriety in the conduct of the Board relating to the Harry letter and contended that significance should be attached to the fact of Tucker's statement to Boyer and to the further fact that the photostat introduced by the Board was an enlargement of the miniature received by Harry. The undersigned can ascertain no grounds to attribute improper conduct either to Boyer or to the Board, and is convinced that they acted in complete good faith. That the exhibit introduced by the Board was not the original was voluntarily disclosed by counsel for the Board, and the original and its envelope were later produced for inspection and offered in evidence. In conformance to Regional Director Madden's request Harry did not divulge his receipt of the photostat. Boyer was unaware of its existence until it was offered in evidence. No link existed which should have caused hit, to attach significance to Tucker's state- ment Although the Union's unfair labor practice charges were then being investigated by the Regional Office, the respondent did not communicate its in- formation to the Board. Under the circumstances, the undersigned is unable to discern that Boyer's conduct in the case constituted impropriety any ]note than did the respondent's action in failing to communicate its information to the Board. Both omissions were the result of unfortunate coincidence Nor is there any ground for ascribing impropriety to the Board. McCarty was called as a witness, and asked under oath whether he was the author of the letter. When he denied it and the respondent denounced the document as counterfeit, an investigation as to its source was immediately undertaken, and when the fraud was ascertained, the facts were communicated at once to counsel for the respondent. Unless it would have been improper for the Board under any cir- cumstances to have questioned McCarty as to the authenticity of the letter, the undersigned can ascertain no ground for imputing impropriety in the conduct of representatives of the Board or of the Union, and concludes that they were the innocent victims of Bogratz's reprehensible fraud.39 6. Other alleged interference, restraint, and coercion The complaint alleged, inter aha, that the respondent had committed unfair labor practices by : A. Urging, persuading and warning its employees to refrain from becoming or remaining members of the Union; B. Making disparaging and derogatory remarks about labor organizations, their leadership and purposes ; N Although Bogratz's name was stricken from the complaint as one of the employees dis- criminatorily discharged, the undersigned admitted evidence, over objection by counsel for the respondent, of an alleged refusal to reinstate Bogratz, in connection with other evi- dence, for its bearing on whether the memorandum of December 10, 1944, constituted a final and binding settlement, and was adhered to by the respondent. Thus, it was estab- lished that although Bogratz's debit became vacant in March 1945, and the respondent was aware that Bogratz desired it, a new employee was nevertheless hired to fill the position. The undersigned has not, however, considered any evidence relating to Bogratz in any way for the purpose of arriving at a finding herein as to whether the respondent committed un- fair labor practices Such evidence has been totally disregarded for such purpose • During the course of the hearing the undersigned reserved ruling on the admission of the original photostat received by Harry, the envelope in which the photostat was received, and also the enlargement exhibited to McCarty. These exhibits are now admitted into evidence. HOME BENEFICIAL LIFE INSURANCE CO., INC. 59 C. Questioning its employees concerning their membership in and activities on behalf of the Union ; D. Abusing and physically assaulting its employees because of their member- ship in and activities on behalf of the Union ; F. Attempting to weaken and destroy the Union as the representative of its employees for the purpose of collective bargaining ; Although evidence was introduced by the Board in support of some of these allegations, the undersigned does not find it to be substantial, and will recom- mend that such allegations be dismissed. IV THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondent set forth in Section III above, occurring in connection with the operations of the respondent described in Section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and have led and tend to lead to labor disputes burden- ing and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that the respondent has engaged in unfair labor practices, the undersigned will recommend that it cease and desist therefrom and take certain affirmative action necessary to effectuate the policies of the Act. As has been found, the respondent discriminated in regard to the hire and tenure of employment of its employees, discouraged membership in the Union, and otherwise interfered with, restrained, and coerced such employees because they had, through the Union, engaged in concerted activities concerning terms and conditions of employment for the purpose of collective bargaining and other mutual aid and protection. As has been indicated, some of the striking employees were reemployed upon individual application between November 11 and December 10, and most but not all of the remainder were reemployed after December 11. However, of the discharged employees (Washington and Norfolk) none have been reemployed except for a few who repudiated the actions of the others, and were thereupon reinstated to their former debits. Not all the strikers were reinstated to their former debits, however. Many found their former positions filled and took whatever they could get. As has been found, the Washington and Norfolk agents were discriminatorily discharged, and the agents in the other offices involved were unfair labor practice strikers. The respondent was not free to replace unfair labor practice strikers except subject to the right of the strikers to be reinstated to their former posi- tions upon application for reemployment. When application for reinstatement was made on November 11 the respondent was obligated to reinstate all the agents to their former positions irrespective of whether or not they had been replaced. The respondent's refusal to reinstate on that date constituted a discrimination. Thereafter many of the debits were filled. In order that the respondent not be permitted to take advantage of its unfair labor practices, and in order to restore the status quo as of the time of the discriminations, it will be recommended that, unless it has already done so, the respondent offer to the employees named in Appendix A attached hereto (being the employees whom it discharged and dis- criminatorily refused to reinstate) full and unconditional reinstatement to their former or substantially equivalent positions without prejudice to their seniority 60 DECISIONS OF NATIONAL LABOR RELATIONS BOARD or other rights and privileges, discharging, if necessary, any employees hired to fill their positions.40 It will also be recommended that the respondent make whole each of the em- ployees named in Appendix A, for any loss of pay he may have suffered by reason of the discrimination against him. There remains for determination the question as to the date from which the employees should be entitled to back pay. The Washington agents were dis- charged on October 13; the Norfolk agents on October 20. The licenses of striking agents outside those cities were canceled when they did not report for work on October 30. That the discharged employees desired reinstatement and were prepared to abandon the stoppage at the time the other employees went on strike is suggested by the fact that other locals struck to procure their reinstatement. Any offer to return to work on the part of the discharged employees would clearly have been futile ; a conclusion evidenced by the refusal to reinstate on November 11 and again on November 28. Similarly, after October 30, the agents outside Washington and Norfolk whose licenses had been canceled also had reasonable cause to believe that application for reinstatement would have been futile. The respondent's objective conduct indicated that they, also, were discharged. They had no reason to suspect that it was the respondent's undisclosed intention not to sever their employment relationship permanently. The respondent's actions make it impossible to say now what course the men would have followed had the respondent not discriminated against them To say that they might have re- mained on strike, absent the respondent's conduct, is to indulge in pure specula- tion. Having created the quandary, the respondent should not he permitted to profit by it.41 The undersigned will therefore make the following recommendation as to back pay for the employees named in Appendix A: (1) To the Washington and Norfolk agents, back pay during the period from the date of their respective discharges to the date of the respondent's offer of reinstatement, less their net earnings during that period; 42 (2) to the remainder of the agents, back pay during the 40 What is contemplated by this recommendation , is that the positions offered the agents shall be the positions they occupied at the time of going on strike The provision for offer of substantially equivalent jobs is intended merely to provide for the contingency that due to normal and non-discriminatory changes in the respondent 's business, the original positions are no longer in existence. This explanation is necessary in view of the fact that one of the issues raised at the hearing was whether the debits accepted by some of the agents, whose positions were filled , constituted full and substantially equiva- lent reinstatement . The undersigned finds that , the original debits being in existence at the time, such reinstatement was not full and unconditional. 41 See Matter of Industrial Cotton Mills Company, Inc, 50 N. L R. B 855 , 869 There is testimony by Tucker to the effect that at the November 10 and 11 negotiations the delegates demanded compensation for the period of the strike , which the respondent steadfastly refused While this might suggest that up to that point the agents were unwilling to return to work unconditionally , the undersigned does not so construe it, for the following reasons (1) These were negotiations for settlement of the dispute. Demands made under such circumstances are not to be considered as expressions of final position, but as part of the technique of negotiation ; and (2 ) on the•.llth , the men did unconditionally and expressly request reinstatement , when satisfactory terms could not be reached. It is further to be noted , in this connection , that as far back as October 31 the Union had abandoned its demand for modification of the report rule, and the November negotiations were conducted throughout upon that basis. Although the licenses were not canceled in Baltimore , Staunton and Portsmouth, in view of the respondent 's intention to do so there appears to be no sound ground for dis- tinguishing between employees in those cities and those in the others with respect to the remedy. 42 By "net earnings " is meant earnings less expenses , such as for transportation, room, and board , incurred by an employee in connection with obtaining work and working elsewhere than for the respondent , which would not have been incurred but for his HOME BENEFICIAL LIFE INSURANCE CO., INC. 61 period from October 30, 1944, to the date of reinstatement, or the respondent's offer thereof, less their net earnings during that period." Upon the basis of the foregoing findings of fact and upon the entire record in the case, the undersigned makes the following : CONCLUSIONS OF LAW 1. American Federation of Industrial and Ordinary Insurance Agents' Union, Locals Nos. 21703, 21753, 22947, 22874, 23419, 23378, 23262 and 23451, American Federation of Labor, is a labor organization within the meaning of Section 2 (5y of the Act. 2 By discharging and refusing to reinstate, and by threatening and imposing reprisals upon, its employees because they had, through the Union, engaged in concerted activities with respect to their terms and conditions of employment for the purpose of collective bargaining and other mutual aid and protection, the respondent discriminated in regard to hire and tenure of employment, discour- aged membership in American Federation of Industrial and Ordinary Insurance Agents' Union Local Nos. 21703, 21753, 22947, 22874, 23419, 23378, 23262 and 23451, American Federation of Labor, and engaged in unfair labor practices within the meaning of Section 8 (3) of the Act. unlawful discharge and the consequent necessity of his seeking employment elsewhere. See Matter of Crossett Lumber Company, 8 N. L. it . B. 440 . Monies received for work performed upon Federal, State, county , municipal, or other work-relief projects shall be considered as earnings See Republic Steel Corporation v. N. L R. B., 311 U. S 7. 43 As has been related heretofore , there is indication in the testimony that W D Chaplin may have died Chaplet's name is included in Appendix A for the reason that the information may be incorrect . In the event of his death, any back pay due him shall be paid to his executor or administrator. A number of employees named in the complaint as having been discriminatorily dis- charged and refused reinstatement have not been included in Appendix A These deletions are as follows : Washington: T B. Cannon, F. J. Eubank and J P. Murray. Although these agents remained away from work on October 13 and for several days thereafter, and were consequently discharged, they testified that they did not intend by so absenting themselves to join in the work stoppage. Upon making this explanation to the respondent they were reinstated to their former debits prior to November 11. Norfolk: W C. Rouse. According to the undenied testimony of C V Nordstrom, manager of the Norfolk office, Rouse resigned his position on October 16 and received a release, saying that he could not afford to be out of work and did not wish to be involved in any work stoppage. Petersburg The evidence establishes that the following persons named in the complaint did not cease work and go on strike : F H. Parrish , R H Tucker, E C Aldridge, J. C. Kollman. The following persons, named in the complaint but not included in "Appendix A", abandoned the strike and were reinstated to their former debits between October 21 and October 24: J. B. Langster, S Kahner, J L Jennings, R M. Owens, W. C Bullock and W. A Creel. Portsmouth: H. P King and W. L Horton. According to the uncontradicted testimony of W H. Kirkland, Portsmouth manager, neither King nor Horton ceased work or went on strike. Staunton* W. C Norford and J. H. Senger According to the uncontradicted testimony of W. it. Waters, Staunton manager, neither ceased work or went on strike Knoxville: The following Knoxville agents are not included in Appendix A, upon the basis of undenied testimony by G. C Edwards, Knoxville manager, to the effect that they neither ceased work nor went on strike : C J. Parrish, F. C Parrish, J H. Bailey, W. C Riggs , G D. Stanifer, J. W. Springfield , W. P Stanifer, and L Thomas. E H. Payne , a striker , whose license was canceled, resigned on November 8, 1944. However, his resignation is attributable to the labor dispute. As to Payne, the undersigned recommends that the respondent offer him reinstatement without back pay. 62 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 3. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, the respondent has engaged in, and is engaging in, unfair labor practices within the meaning of Section 8 (1) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2 (6) and (7) of the Act. RECOMMENDATIONS Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in the case, the undersigned recommends that the re- spondent, Home Beneficial Life Insurance Co., Inc., Richmond, Virginia, its officers, agents , successors, and assigns shall: 1. Cease and desist from : (a) Discouraging membership in American Federation of Industrial and Ordinary Life Insurance Agents' Union, Locals Nos. 21703, 21753, 22947, 22874, 23419, 23378, 23262, 23451, American Federation of Labor, or any other labor organization of its employees, by discriminating in regard to hire or tenure of employment, or any term or condition of employment; (b) Interfering with, restraining or coercing its employees in the exercise of the right to self-organization, to join labor organizations, to join or assist American Federation of Industrial and Ordinary Insurance Agents' Union, Locals Nos. 21703, 21753, 22947, 22874, 23419, 23378, 23262, 23451, American Federation of Labor, or any other labor organization, to bargain collectively through repre- sentatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, as guaranteed in Section 7 of the Act. 2. Take the following affirmative action which the undersigned finds will effectuate the policies of the Act: (a) Unless it has already done so, offer to the employees named in Appendix A, hereof, full and unconditional reinstatement to their former or substantially equivalent positions without prejudice to their seniority or other rights and privileges ; (b) Make whole each of such employees for any loss of pay suffered by reason of the respondent 's discrimination against him , in the manner set forth in Sec- tion V, above, entitled "The remedy"; (c) Post at its home office and in its district and sub-offices involved in this proceeding, copies of the notice attached hereto and marked Appendix A. Copies of said notice, to be furnished by the Regional Director for the Fifth 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 Fifth Region within ten (10) days from the date of receipt of this Intermediate Report what steps the respondent has taken to comply herewith. It is further recommended that the complaint be dismissed with respect to the allegations that the respondent committed unfair labor practices by : Urging, persuading and warning its employees to refrain from becoming or remaining members of the Union; HOME BENEFICIAL LIFE INSURANCE CO., INC. 63 Making disparaging and derogatory remarks about labor organizations, their leadership and purposes ; Questioning its employees concerning their membership in and activities on behalf of the Union ; Abusing and physically assaulting its employees because of their member- ship in and activities on behalf of the Union ; Attempting to weaken and destroy the Union as the representative of its employees for the purpose of collective bargaining. It is further recommended that unless on or before ten (10 ) days from the receipt of this Intermediate Report, the respondent notifies said Regional Direc- tor in writing that it will comply 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 Rules and Regulations of the Na- tional Labor Relations Board, Series 3, as amended , effective July 12, 1944, any party or counsel for the Board may within fifteen (15) days from the day 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, Rochambeau Build- ing, 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 proceeding ( including rulings upon all motions or objections) as he relies upon, together with the original and four copies of a brief in support thereof. Immediately upon the filing of such statement of exceptions and/or brief, the party or counsel for 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 per- mission to argue orally before the Board , request therefor must be made in writing within ten (10 ) days from the date of the order transferring the case to the Board. CHARLES W. SCHNEIDER, Trial Examiner. Dated September 28, 1945. APPENDIX A NOTICE To ALL EMPLOYEES Pursuant to the Recommendations of a Trial Examiner of the National Labor Relations Board , and in order to effectuate the policies of the National Labor Relations Act, we hereby notify our employees that : WE WILL NOT in any manner interfere with, restrain , or coerce our em- ployees in the exercise of their right to self-organization, to form labor organizations , to join or assist AMERICAN FEDERATION OF INDUSTRIAL AND ORDINARY INSURANCE AGENTS' UNION , LOCALS NOS. 21703, 21753, 22947, 22874, 23419, 23378, 23262, 23451, AMERICAN FEDERATION OF LABOR, or any other labor organization , to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection. WE WILL OFFER to the employees named below immediate and full rein- statement to their former or substantially equivalent positions without preju- dice to any seniority or other rights and privileges previously enjoyed, and make them whole for any loss of pay suffered as a result of the discrimination. 64 DECISIONS OF NATIONAL LABOR RELATIONS BOARD J. S. KEH,ING L. B. JENKINS B. F. CANNON F. D. LUCE R N. FRANKLIN J. H. KEE13LUB J. D. KERwIN G. LouK J R LAUGHLIN L P. BAZZLE W. P. HUGGINS J. A. ROBERTSON J. W. HARRELL E. Al. WALTON C. C. BROCK J. A. ELEY F. M. FRIAS R. H. FOSTER H. C. FUTRELL J. H. JOHNSON J. A. BENNETT M. R. PHILLIPS L. M. NOBLES WASHINGTON E. H. PAYNE T. F. CRABTREE E C. LUMLEY G. L. WINDLE C. S. OMOHUNDRO D. B. MCINTOSH H. E. ATWELL T. JONES W. G. HERDERI J. F. DIXON B. R. MUSGROVE W. E URER W. T. FISHER M. T. HARPER B. H. DECATUR J. F. RICHARDS J. E. HENDERSON B. O. WOOD J. M. HALL Al. C. BACNES J. E. REEVES B. D. BAIL D. WERNER H S QUICK L. L. WRIGHT G. W. CLAYTON NORFOLK A. D. HARRELL W. L. HOS WELL H C POWERS T. L RowE M. V. TAYLOR T. E. TURNER D. L. STEWART L. H. WEATHERLY C. R. WHITE M. A. WILSON PETERSBURG J. A. BAILEY E. L. BRACY C. Y. NOBLES H E. MOORE J. J. PEARSON R. L. MATHIS PORTSMOUTIh D. L. BRINKLEY T. T SKINNER G. C. BRITTLE M. C. WHITE H. B. LAWRENCE W. B. SPEERS W. J. SKINNER R, E. SPURGIN J. H. CROCKER G. O. PARKER W. S. GRANT W. F. PIERCE J. C. BUTTERTON A. L. BURROW D. H ELEY A. L. SKUNDBERG T. R. WEST LYNCHBURG D. H. GREGORY S. A. DUNEVANT R R. BURNETT R. G. SMITH H. JOSEPHSON T. H. DICKERSON G. 0 BIGGS T. Al. RICHARDSON H. T. PATTERSON C. H. RAMSEY H. B. SMITH W. T. MAY F. L TAYLOR E. L KENDRICK B. P. GUTHRIE C. E. STALLARD A. L. GARNER W. E. TATE Al. B. DILLON V. T. WOOD J. L. WELLBORN W. V. WARRINER L L RUDACILLE J. H. SHAFER C W LAWHORNE Z. V. HARVEY E. B. TAYLOR D. N. VAUGHAN R. C REYNOLDS T. D. GUTHRIE C. BAKER HOME BENEFICIAL LIFE INSURANCE CO., INC. STAUNTON 65 H. J. AANEY L. D. DAVIS P M. PUFFENBURGER F. L ARMENTROUT G. It. DEPRIEST W. D. CHAPLIN J. L. RHODES J. M. HANSmN M. C. WICKLINE H. W. SMITH C. C. HARLOW J. C. THACKER KNOXVILLE A. R. BRITTON J. C. KING W. L. WARE F. M. FORD R E. McNEIL H. H. W RIGHT G. W. MILLER C. E MILLS P. T. LEE J. H. WILLIAMS C. C. PETTY R. B. OVERSTREET C O. BRIDGE A. L. RICH W. H. WRIGHT H. E. FLOYD J. H. SANDERS B. M BEELER S. Y. FRANKLIN F J. SWANN E. H. PAYNE P. HATFIELD H T. SWANN O. R. JACOBS G. L. TRENT BALTIMORE B. KOLINSTINE W. H. SIEMS M. E COHEN S. B BECKHES S. O. BRYSON F. M. SANDLER U. FAINGLOS L. A. CHALKER H. RARINOwICH M. NEWBERGER L. A. STAGGE A. J. BADER J. E. DuBELL 1. PLAUT H. FEDDER IT. C. CAMERON F. W. YOUNG H. LEVITT F. J. MARTOCCI G. M. ROSENTHAL H. CAVALIER T. T. POPPLE V. A. BuRx J. W. JETT L. G. KLEMM W. HERSHFIELD L. SCHWAB M. P. MASSIMINI S. R. PERKLE W. F. ROBERTSON H. HARTMAN J. R. GROSS L. FISHER J. P. WALES H LEON J. LEON C. J. FUNK W. B. FINK A. E HARRY C. L. ARSCOTT A. ZUCKERBERG J. PAYMER Al. MORRIS M. A. GOLDBERG S. L WALCx J. W. NEE H. V. ASHE 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 hire or tenure of employment or any term or condition of employment against any employee because of membership in or activity on behalf of any such labor organization. HOME BENEFICIAL LIFE INSURANCE CO., INC, Employer. Dated------------------ By--------------------------- ------------------- (Representative ) ( Title) NOTE.-Any of the above-named employees presently serving in the Armed Forces of the United States will be offered full reinstatement upon application in accordance with the Selective Service Act after discharge from the Armed Forces. This notice must remain posted for 60 days from the date hereof , and must not be altered, defaced, or covered by any other material. 701592-47-vol. 69-6