Morrison Milling Co.

MORRISON MILLING COMPANY Appendix A NOTICE To ALL EMPLOYEES 875 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 engage in any acts in any manner interfering with the efforts of TEXTILE WORKERS UNION OF AMERICA, CIO, to negotiate for or represent the employees in the bargaining unit described below. WE WILL bargain collectively upon request with the above-named union as the exclusive representative of all employees in the bargaining unit described below with respect to wages, rates of pay, hours of employment and other conditions of employment and if an understanding is reached, embody such understanding in a signed agreement. The bargaining unit is: All our production and maintenance employees, excluding executives, office and clerical employees, guards, watchmen, professional employees, and all supervisors. AMERICAN TWINE & FABRIC CORPORATION, Employer. By --------------------------------------------- (Representative) (Title) Dated -------------------- This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material. MORRISON MILLING COMPANY and UNITED PACKINGHOUSE WORKERS OF AMERICA, C. 1. 0. Case No. 16-CA-230. December 09,1951 Decision and Order On March 29, 1951, Trial Examiner Max Goldman issued his Inter- mediate Report in the above-entitled proceeding finding that the Re- spondent 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 Inter- mediate Report attached hereto. Thereafter, the Respondent filed exceptions to the Intermediate Report. The Board 1 has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Inter- mediate Report, the exceptions thereto and the entire record in the case, and, for the reasons set forth below, hereby reverses the Trial Examiner in his holding that the Respondent violated Section 8 (a) (5) and (1) of the Act. i Pursuant to the provisions of Section 3 (b) of the Act, the Board has delegated its powers in connection with this case to a three-member panel [Chairman Herzog and Members Reynolds and Murdock]. 97 NLRB No. 133. 876 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The complaint, as amended, alleges, and the Trial Examiner found, that, beginning about July 8, 1949, the Respondent failed and re- fused to bargain in good faith with the Union as the statutory repre- sentative of the employees: 'The record shows, inter alia, that the Union was certified by the Board on June 17, 1949, as the majority representative, following a Board election, and. that, at all relevant times, it was affiliated with the CIO. This latter organization did not come into compliance with Section 9 (h) of the Act until Decem- ber 22, 1949, approximately 6 months after the Board issued its certi- fication, and 5 months after the Respondent allegedly failed to bargain with the Union in good faith. Accordingly, for the reasons set forth in The Advertiser Company, Inc.,2 we shall dismiss the complaint in its entirety. In doing so, we do not pass.upon the validity of the Trial Examiner's substantive findings. Order The National Labor Relations Board hereby orders that the com- plaint against Morrison Milling Company alleging that the latter vio- lated Section 8 (a) (5) and (1) of the Act be, and the same is, hereby, dismissed. - Intermediate Report and Recommended Order STATEMENT OF THE CASE Upon a charge filed January 11, 1950, by United Packinghouse Workers of America, C. I. 0., herein called the Union , the General Counsel by the Regional Director for the Sixteenth Region ( Fort Worth, Texas ), of the National Labor Relations Board , herein called the Board , issued his complaint dated July 20, 1950, against The Morrison Milling Company , 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 (a) (5) and (1) and Section 2 (6) and (7) of the Labor Management Relations Act, 1947, 6'1 Stat. 136, herein called the Act. Copies of the complaint and the charge , together with notice of hearing, were duly served upon the Respondent and the Union. With respect to unfair labor practices , the complaint as amended 1 alleged in substance that the Respondent beginning on or about July 8, 1949, and on 2 97 NLRB 604 . The Board held in that case that , under the provisions of recently enacted legislation ( Section 18, Public Law 189, 82nd Congress , tat Sess. ), it is precluded from finding an unlawful refusal to bargain to have occurred prior to October 22, 1951 (the legislation 's effective date ), in any case in which the charging union was certified pursuant to a Board proceeding which , like the instant one, would have been invalid under the decision in N. L. if. B. v. Highland Park Mfg . Co. (341 U. S. 322 ), before October 22, 1951. 1 After the close of the hearing, the General Counsel on December 28, 1950, moved to reopen the record for the purpose of amending the complaint alleging the refusal to bargain to have begun upon an earlier date, July 8, 1949, instead of the date alleged in the original complaint, March 9, 1950, explaining that the proceedings were had while the Andrews Company case ( 87 NLRB 379 ) was controlling and that subsequent to the close of the hearing that case had been overruled by New Jersey Carpet Malls, Inc., 92 NLRB 604. The General Counsel further stated that the events occurring during the period between July 8, 1949, and March 9, 1950 , had been developed in the record as background evidence under the authority of Axelson Manufacturing Company, 88 NLRB 761. On January 19, 1951, the MORRISON MILLING COMPANY 877 certain dates thereafter refused and continues to refuse to bargain with the Union. The Respondent's answer denies the commission of unfair labor practices. Pursuant to notice, hearings were held on August 15, 16, 17, 18, and 21, 1950, at Denton, Texas, before the undersigned, the Trial Examiner designated by the Chief Trial Examiner. The General Counsel and the Respondent were represented by counsel and the Union by its representatives. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing upon the issues, was afforded the parties. The General Counsel and the Respondent presented oral argument at the close of the testimony, but although afforded an opportunity none of the parties submitted briefs, pro- posed findings, or conclusions. Upon the entire record in the case, and from his observation of the witnesses, the undersigned makes the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The Respondent is engaged in-the manufacture, distribution, and sale of flour, meal, and commercial feeds at Denton, Texas. During the year ending August 1950, the Respondent purchased for use at the mill raw materials consisting principally of wheat, corn, maize, oats, and barley valued in excess of $100,000, approximately 25 percent of which came from points outside the State of Texas. During the same period, the Respondent sold finished products valued in excess of $100,000, approximately 25 percent of which was shipped to points outside the State of Texas. The Respondent concedes and the undersigned finds that it is engaged in commerce within the meaning of the Act. U. THE LABOR ORGANIZATION INVOLVED United Packinghouse Workers of America, C. I. 0., is a labor organization admitting to membership employees of the Respondent. M. THE UNFAIR LABOR PRACTICES The Refusal to Bargain A. The appropriate unit and the Union's majority statu8 In accordance with the Board's Decision and Direction of Election in Case No. 16-RC-318' the undersigned finds that all production and maintenance em- undersigned issued an order to show cause by February 5, 1951, why the General Counsel's motion should not be granted . No objection having been raised, an order was issued on February 12 granting the motion and providing the Respondent until February 19 to file an amended answer. This order also provided for a further bearing, presentation of oral argument, and the filing of briefs or proposed findings and conclusions or both upon a certain schedule On February 14 the Respondent objected to the granting of the General Counsel's motion to amend the complaint and also stated that the schedule established did not provide it sufficient time. The undersigned thereupon on February 15 extended the time provided in the schedule 1 week so that the Respondent had until February 26 to file an answer . Thereafter there was an exchange of correspondence between the undersigned and the parties the substance of which is a waiver by the General Counsel and the Respondent of a further hearing and the filing of briefs as shown in letters dated March 7 and March 10, respectively . The Respondent also noted its objection to the amendment of the complaint in this correspondence. The undersigned finds no merit to this objection . Although an amended answer was not filed by the Respondent, as suggested by the General Counsel, the undersigned has considered the amendment to the complaint as having been denied. 2 83 NLRB 800. 878 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ployees (including the garage foreman) of the Respondent at its Denton, Texas, mill, including the janitor , seasonal laborers , and "pony packers," but excluding the watchman, the warehouse foremen, the elevator foreman, the packing fore- man, the chief engineer, and all other guards and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9 (b) of the Act. It is also found in accordance with the Board's certification of June 17, 1949, that beginning upon that date and at all times material thereafter, the Union was the representative of the employees within the meaning of Section 9 (a) of the Act in the afore-mentioned appropriate unit for the purposes of collective bargaining with respect to rates of pay, wages, hours of employment , and other conditions of employment. B. The background In December 1948, a number of employees having signed authorization cards, W. L. McMahon, a representative of the Union , wrote the Respondent stating that the Union represented a majority of the employees and requesting recogni- tion. Thereafter, not having heard from the Respondent, McMahon, as he had Indicated he would do in his letter , filed a representation petition with the Board.' A hearing on the petition was held on January 28, 1949, and an election was thereafter conducted by the Board on June 9. About a month prior to the election the Respondent unilaterally granted a wage increase. On the day before the election, E. W. Morrison, Sr., president and principal owner of the Respondent , made two speeches to the employees so arranged in time as to be convenient for the employees on each of the three shifts to attend. The speech which was given to both audiences, according to the credible evidence, made the following significant points and statements of policy : ( 1) The Respondent's, the employees', and the public's interest would be best served by voting against the Union ; ( 2) the Union can only present the employees ' requests to the Respondent but cannot and will not obtain any benefits which the Respond- ent would not grant , and if the Union's requests are refused the Union can only accept the Respondent's decision or call a strike, which strike cannot be success- ful; (3 ) the Respondent will always reserve the right to employ whomever it chooses regardless of union affiliation and it would raze the mil l to the ground before it would enter into a contract with any union which would require discrimination against nonunion employees. The Union was successful at the election and was certified on June 17. The parties arranged their first conference for July 8. Before this conference, how- ever, the Respondent on about the date indicated posted the following notice : JUNE 25, 1949. EMPLOYEES PLEASE TAKE NOTICE The Morrison Milling Co. will not discriminate for or against any employee because of his Union affiliation , or lack of it. No employee will ever be required to carry a Union card , or pay Union dues to work here. THE MORRISON MILLING Co., E. W. MORRISON, President. A See footnote 2. MORRISON MILLING COMPANY 879 C. The refusal to bargain The bargaining discussions between the parties were conducted on behalf of the Respondent by E. W. Morrison, Jr., vice president, and son of the Respondent's president, and John L. Sullivan, the Respondent's attorney. The Union was represented by W. L. McMahon, the Union's field representative, and a committee of the employees. The parties met seven times between July 8 and September 23 without the aid of a conciliator. At-the first meeting on July 8, upon McMahon's inquiry, Sullivan declared that he had authority to bargain and execute a contract on behalf of the Respondent, and Morrison, Jr., explained that he was there as an observer and to assist. McMahon presented the Union's proposed contract, read the articles, and upon Inquiry explained some of the provisions. During the next three meetings on July 22, August 10, and August 12, the parties discussed in detail the Union's proposed contract. Sullivan explained at the first of these meetings that any approval given to a provision was tentative, subject to approval of the entire agreement, and to reopening should other provisions be found having a bearing upon a tentatively approved provision, and that the approval given was one in principle only and subject to rephrasing. At the second .of these meetings, Sullivan stated that the purpose of the discussion was solely to .obtain the Union's views and to give the Union the Respondent's present objections to the proposed contract. The Union sought counterproposals from the Respond- ent at two of these meetings and although the Respondent stated that it would try to have some proposals, none were forthcoming. Among the contract provisions to which the Respondent expressed objection during this group of meetings were (1) the exclusive recognition clause explain- ing that it wanted to retain the right to bargain directly and discuss problems with its employees directly as it had in the past ; (2) the management prerogative provision,' stating that the limitations of "proper cause" and "legitimate reasons" on the respondent's right to effect certain personnel changes were too indefinite ; (3) the individual voluntary checkoff clause (which was not made a condition of employment), Morrison, Jr., stating that he could not agree to a checkoff provi- sion, that the Respondent would not check off union dues, and that it was up to the Union to collect its own dues ; (4) a provision fixing the existing working condi- tions other than those covered by the proposed agreement, or controlled by the management prerogative clause, unless changed by future collective bargaining, explaining that the Respondent wanted to reserve the right to make changes as it saw fit; and (5) an arbitration provision as the end point in the grievance procedure which included a no-strike clause and which provided for employee presentation of the grievance in the first instance and for the Union's participation thereafter as a matter of right, declaring that it was opposed as a matter of policy to an outsider making a decision affecting the business. Tentative agreement in principle was apparently reached on such less significant matters as the preamble, a harmony clause, and provisions for jury duty, leave of absence, and bulletin boards. Sullivan stated that he would go over provisions upon which they did not agree and give them consideration. 4 This provision read : The management of the plant and the direction of the working forces including the right to hire, suspend, or discharge for proper cause, or transfer, and the right to relieve employes from duty because of lack of work, or for other legitimate reasons, is vested exclusively in the Company provided that this shall not be used for the purpose of discrimination against any employe, or to avoid any of the provisions of this agreement. 880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The parties met next on August 26. When McMahon and Sullivan had discussed fixing the date for this meeting on the telephone, McMahon asked if the counter- proposals had been prepared. Sullivan replied that he did not have the proposals prepared at that time but that he would try to have them for the coming meeting. When this meeting opened, counterproposals were not presented but the Respond- ent introduced its handbook of working rules under which the mill was currently operating and which had been developed in the past several years. The Respond- ent asked that the handbook be accepted as part of any contract which might be established. This handbook covered, such matters as working conditions, vaca- tions, hours, and wages, including certain discretionary merit bonuses. McMahon stated that although he was not willing to accept the entire handbook, he would be willing to have some of the sections included in the contract. Morrison, Jr., suggested that the Union go over the handbook and give it consideration for the next meeting. Upon McMahon's inquiry, Sullivan stated that he would try to develop some counterproposals for that meeting, September 2. At the end of August Sullivan wrote McMahon stating that because both he and Morrison, Jr., were busy on other matters, they were unable to prepare counterproposals. Sullivan also pointed out that Morrison, Jr., was expecting to leave town during the morning of September 2 for a 2-week vacation and stated that he would call McMahon upon Morrison's return and that he ex- pected to have some counterproposals at that time. McMahon wrote Sullivan and after reviewing the course of the events, ob- jected to the postponement. The parties then net on September 2, but Mor- rison, Jr., was not present. He was still in town that day, but was busy on some other matters. At this meeting McMahon asked Sullivan if he had any counterproposals and Sullivan replied that he did not. McMahon then asked if he had authority to bargain for,the Respondent, and Sullivan replied that he was the Respondent's legal advisor and was not in a position to bargain as Morrison, Jr., was representing the Respondent. Sullivan stated further that nothing could be accomplished at that meeting in the absence of Morrison, Jr., but that he was willing to discuss the matters and present them to the Re- spondent. The parties resumed their conferences on September 23. At this meeting the Respondent presented its counterproposals consisting of seven rules which the Union did not accept. Rule 1 granted recognition to the International and not to the Local. Rule 2 provided that the Respondent "does not" discriminate because of union membership, church membership, and so on ; while the Union sought language promissory in character such as "will not." Rule 3 related to grievances concerning the working conditions only. It required the employee himself who had the complaint regarding his working conditions to present a statement in writing to the superintendent. It provided further that if a con- ference or adjustment were required, the Union could participate if it was re- quested to do so either by the Respondent or by the employee involved.' The The text of rule 3 is as follows : If an employee has any complaint concerning his working conditions, he shall within two days from the happening of the event out of which the complaint arises present a statement of his complaint in Writing to the Superintendent.. The Superintendent will within two days give the employee a written answer to the complaint. If any conference or adjustments between the Company and the employee are required a representative of the Union, on his own time, may be requested by the employee or the Company to participate in such conference and may be present at any adjustment or settlement of the Complaint. MORRISON MILLING COMPANY 881 Union pointed out that the procedure provided for no ultimate resolution by arbitration or conciliation of an issue as to the working conditions contested in the event the Union and the Respondent were unable to reach an agreement. Rule 4 provided : Subject to the provisions of Rule 2 [the nondiscrimination rule], The Morrison Milling Company reserves the right to terminate the employment of any person in any capacity at any time according to its judgment. Any employee is free to resign at any time with or without notice. This rule did not, as the Union pointed out, subject the Respondent 's action to the grievance procedure which the Respondent proposed. Rule 5 was an enumera- tion of specific conduct for which an employee might be discharged or disci- plined in the Respondent's discretion in addition to the Respondent 's general reservation of power to discharge provided for in the prior rule. Action under this rule, too, would not have been subject to the grievance procedure under rule 3, which was limited, as has been noted, to complaints regarding working conditions. Rule 6 related to shift assignments, transfers, promotions, and layoffs, and reserved for the Respondent's judgment evaluation of the employee's ability which evaluation was made the basis of its action except that if the Respondent should determine that ability was relatively equal in layoff and transfer cases, the Respondent would consider seniority. This rule also ex- pressly excluded from the grievance procedure the Respondent's evaluations as to ability except where it was alleged that the determination was made to dis- criminate because of membership or lack of membership in a labor organization. Rule 7 incorporated the handbook introduced at a prior meeting. The hand- book, as has been pointed out, was a detailed enumeration of the prevailing working conditions including hours, wages, vacations, and discretionary merit bonuses. Upon McMahon's inquiry whether these rules were intended to be in addition to the matters upon which tentative agreement had already been expressed, Morrison, Jr., stated that there had been no tentative agreements reached and that in any event, before anything could be agreed upon with the Union it would have to be approved by his father. McMahon asked why Morrison, Sr., was not present to engage in bargaining, and Sullivan stated that he, Sullivan, was representing the Respondent. Morrison, Jr., also stated that although his -father formulated the policies of the Respondent, he was familiar with those policies and that he had been delegated the responsibility for conducting the bargaining sessions . At the close of the meeting, McMahon asked Sullivan to join him in requesting the aid of the conciliation service and Sullivan replied that if the Union wanted conciliation, the Union would have to make the request. The- Union thereupon requested the aid of the conciliation service, and the next four meetings, which were held on October 13, October 22, October 27, and November 4, were arranged by and held under the auspices of a conciliator. At the first of these meetings, October 13, the Respondent introduced revisions of its rules 1, 3, and 4 to meet some of the Union's objections. Rule 1, as re- vised, recognized the Interpational as agent for the local, which it in turn referred to as the exclusive representative of the employees instead of treating the Inter- national as the representative of the employees as had the prior version of the rule. Rule 3 establishing a grievance procedure, as revised, still related to working conditions only and required the individual employee to commence the grievance by presenting a written statement to the superintendent and permitted the Union to participate in the adjustment of the grievance upon the request of the Respondent or the employee. The revised rule provided that up to, five persons might be designated by the Union to participate in the conference if 882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Union were invited to attend as outlined above." Rule 4 relating to the Respondent's general right to discharge, as revised, iterated the provision pre- sented at the earlier meeting, set forth above, reserving the Respondent's right to discharge according to its own judgment, but added that an employee who. felt that he had been "unjustly" discharged might process a grievance in a manner provided under rule 3? It thus appears that under the Respondent's revised offer that, except where discrimination for union membership or lack of union membership was asserted, no provision was made to subject shift assignments, transfers, promotions, and layoffs to the grievance procedure. It also appears that the Respondent was thus free to act independently as to mat- ters of discharging or disciplining employees under rule 5 and granting merit -bonuses provided for in the handbook under rule 7. The Respondent, in addition, completed its counterproposals at this meeting by presenting rule 8, a holiday- provision, and rule 9, granting a 5-cent an hour wage increase and fixing wage rates for a period of 1 year. On October 22, when the parties reconvened, the conciliator suggested that the parties reread and reconsider the prior proposals to see what common ground could be found. The parties discussed these matters, each side making suggestions, while McMahon took notes of what he believed was the essence of the agreement of the parties. The Respondent, on the other hand, believed that as a result of this exchange and expression of the Respondent's views, the Union was to present in writing its versions and concessions there made, and thereafter present its minimum demands at the following meeting. When the parties resumed on October 27, McMahon presented copies of the proposed agreement based upon his notes which he believed contained the essence of the agreement of the parties. Except for provisions as to wages and the duration, this would have been a complete contract. In the course of the discussion at this meeting, the Union at the Respondent's suggestion made certain concessions and changes in these proposed provisions. The document as revised at the meeting shows, among other provisions, (1) the recognition of the International as agent for the Local, which is described as the exclusive collective bargaining agent (rule 1) ; (2) a reservation to the Respondent of all the rights it had prior to the contract unless thereafter changed by collective bargaining, excepting those rights which it clearly relinquished under the con- tract (rule 2) ; (3) a grievance procedure wh`ich'related to working conditions_ only and which provided that the individual employee who had a complaint con- cerning his working conditions himself should present the matter to his fore- man for adjustment as the first step, and then if he was not satisfied might " The text of revised rule 3 follows : If an employee has any complaint concerning "his working conditions he shall, within two days from the happening of the event out of which the complaint arises present a statement of his complaint in writing to the Superintendent . The Superin- tendent will within two days give the employee a written answer to the complaint. If any conference or adjustments between the Company and the employee are required, a representative of the Union, consisting of one or more persons designated by the Union, not to exceed 5 in number, may be requested by the employee or Company to participate in such conference, and may be present at any adjustment or settlement of the complaint. Such meetings shall be held outside working hours at reasonable times. "The revised version of rule 4 read : Subject to the provisions of Rule 2 [the nondiscrimination rule], The Morrison Milling Company reserves the right to terminate the employment of any person in any capacity at any time according to its judgment. Any employee is free to resign ,at any time with or without notice. If any employee feels he has been unjustly discharged, he may have the_ complaint processed under and in accordance with the provisions of Rule 3. MORRISON MILLING COMPANY 883 have the Union intervene to present the matter in writing to the superintendent, and that ultimately a conference should be held beween the Union and the Respondent if requested by the employee or the Respondent, but which did not provide for arbitration as the end point of the procedure (rule 3) ; (4) a provision that, "The management of the plant and the direction of the working forces including the right to hire, suspend or discharge for cause or to transfer and the right to relieve employes from duty because of lack of work or for other legitimate reasons is vested exclusively in the Company provided that this shall not be used for the purpose of avoiding any of the provisions of this agreement" ; and in addition to this provision an enumeration of grounds of the same general character (but differing in some respects) as were contained in the Respondent's rule 5, presented on September 23, for which an employee might be discharged or otherwise disciplined (rule 4) ; and (5) a seniority provision regarding pro- motions, layoffs, and rehiring where qualifications were equal (rule 5). No provision was made for any form of union security and no provision was made incorporating the handbook as part of the contract. When the presentation of the contract and the discussions were completed, the Respondent, viewing this as the Union's offer, rejected the entire proposal.. The Union thereupon, according to the credible testimony, sought a counter offer and the Respondent stated that it was unwilling to submit any new counterproposals but that it was. reentering the rules, as revised, as its counterproposal. The Union in turn, according to the credible testimony, stated that it was reinstituting, among other matters, the arbitration and the checkoff provisions in its prior offers. At the following meeting on November 4, McMahon asked if the Respondent would agree to arbitration or any form of union security. Morrison, Jr., re plied that the Respondent would not agree to either. Upon McMahon's in- quiry as to whether the Respondent would agree to any contract, Morrison, Jr., replied that the employees' handbook embraced all the employees and it should be incorporated in the contract, and that it should be passed out to all the; employees so that they might know what benefits were being offered by the. Respondent. McMahon also, in the presence of the conciliator, asked Sullivan, if he had authority to negotiate and sign a contract on behalf of the Respond- ent, and Sullivan replied that he was just a "hired hand" and that he could not state the Respondent's position, but that Morrison, Jr., was in a better position. to speak for the Respondent as he was the contact with Morrison, Sr. Morrison,. Jr., then presented revised rules 9 and 10. Rule 9 provided for a 10-cent an hour wage increase to remain in effect for a period of 1 year.' Rule 10 provided for a term of 1 year as the duration of the contract with no right to reopen. Morrison, Jr., stated that he would like to have the Union accept the 10 rules and the handbook as the contract. McMahon indicated that he would have no objection to putting the 10-cent an hour wage increase into effect immediately. No agreement was reached. This was the last meeting attended by the con- ciliator. On November 9, at McMahon's suggestion, he and Morrison, Jr., had an informal meeting with the understanding that neither would be making com- mitments. McMahon then expressed the following views, among others, (1) rejection of the Respondent's rule 4 of October 13, relating to the Respondent's general right to discharge, quoted above, proposing the Union's rule 4 presented at the October 27 meeting related above; (2) disapproval of the Respondent's rule 5 presented on September 23, relating to: the specific conduct for which an 8 This clause did not bring the wages of some of the employees up to the new minimum rates provided for in the Fair Labor Standards Act amendment which had passed both Houses of the Congress by October 19, 1949, and had been enacted on October 26, and which amendment provided that it would become effective in 90 days. 884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employee might be discharged or disciplined, suggesting modifications of some of the enumerated grounds; (3) objection to the Respondent's rule 6 of Sep- tember 23, relating to seniority which expressly excluded from the grievance pro- cedure the Respondent's determinations of an employee's ability in shift assign- ments, transfer, promotion, and layoff cases, except where discrimination for membership or nonmembership in a labor organization was alleged, suggesting in lieu thereof the Union's rule 5 presented at the October 27 meeting sum- marized above; (4) rejection of the Respondent's rule 7 presented at the Sep- tember 23 meeting which incorporated the handbook, including discretionary merit bonuses, suggesting a modification to the effect that the handbook would remain operative unless changed by collective bargaining; (5) a willingness to waive arbitration ; and (6) a request for a checkoff provision. The Respond- ent's rule 9 introduced at the November 4 meeting granting a 10-cent an hour wage increase was not in question and was not discussed. Morrison, Jr., sub- sequently discussed these matters with his father and with Sullivan, and in- formed McMahon that he was sorry but that the Respondent had submitted its final proposals. The Union thereafter filed unfair labor practice charges and at the sug- gestion of the Regional Office, the parties met again. At this meeting on March 16, 1950, the Union undertook to submit its minimum proposals. Shortly thereafter the Union mailed to the Respondent its proposed contract. This document provided, among other things, (1) a management clause under which the Respondent had complete authority to hire, suspend, and lay off for "just cause" or to reduce the working force for lack of work providing that it did not exercise these rights for the purpose of avoiding the provisions of the agreement ; (2) a checkoff clause; (3) a seniority provision governing pro- motions, layoffs, and rehirings, qualifications being equal ; and (4) a grievance procedure without limitation as to subject matter under which a grievance would be presented and processed in the first instance with the participation of the Union as of right, and which included final resolution by arbitration and also a no-strike clause. By letter dated April 4, Morrison, Jr., wrote McMahon rejecting the proposed agreement, stating among other things, that the Respondent would not agree to a checkoff provision. The text of this letter follows : We received the written document you submitted to us which you stated was your final contract proposal to the company. It has been our earnest hope that after the very full discussions we have had of the conflicting views between the company and the union, a brief and satisfactory proposal could be arrived at. In its present form the written agreement which you have submitted is highly objectionable to the company, as you will, of course, understand from the previous discussion, and we have several times rejected and stated that we would not agree to the principle of check-off of union dues. It appears to us that your final proposal does not represent an earnest effort on your part to find some middle ground between the position of the company and the union, and it contains very many provisions which we have stated again and again in our negotiations were unacceptable to us. We regret, therefore, that so far as the written proposal goes, if it is in fact the last and final word of the union, it appears that we are not in agreement. The next day McMahon replied requesting that the Respondent submit its MORRISON MILLING COMPANY 885 minimum counterproposals and suggesting further meetings.9 The Respondent never replied to this request, Morrison, Jr., explaining at the hearing that he considered it a futile gesture. No further conferences were conducted and no further offers were exchanged. D. Conclusions In addition to the preelection speech of Morrison, Sr., showing opposition to the self-organization of the employees, there are several circumstances which reflect upon the Respondent's good faith in its dealings with the Union.' (1) A continuous state of uncertainty was engendered respecting the authority of Sullivan and Morrison, Jr., to represent the Respondent as shown by the following declarations : (a) On July 8, that Sullivan had authority to bargain and to execute a contract on behalf of the Respondent, and that Morrison, Jr., was present as an observer and to assist; (b) on September 2, that Sullivan was only the Respondent's legal advisor and not in a position to bargain in the absence of Morrison, Jr., as he, Morrison, Jr., was representing the Respondent; (c) on September 23, that Sullivan was representing the Respondent and that although Morrison, Jr., knew the Respondent's policies, his father would have to approve a proposed agreement, following which declaration the Respondent failed to grant the Union's request to have Morrison, Sr., appear at the confer- ences or otherwise remove the uncertainty ; and (d) on November 4, that Sullivan was only a "hired hand" and could not state the Respondent's position, and that Morrison, Jr., was in a better position to speak for the Respondent as he was in contact with Morrison, Sr. (2) The Respondent removed the subject of union security from the, area of collective bargaining, when in effectuation of its policy of opposition to the principle of union security-which policy was announced by Morrison, Sr., in his preelection speech in June 1949, when he stated that the Respondent would raze the mill before it would enter into a contract which would require discrimination against nonunion employees, and was emphasized by the notice the Respondent posted shortly after the Union succeeded at the election but before the first bargaining conference, that no person would ever be required to pay union dues as a condition of employment- (a) The Respondent consistently failed to make counter offers concerning and refused to agree to a union-security provision; (b) Morrison, Jr., disclosed during the July -22-August 12 group of meetings that he could not agree to a checkoff provision, and that the Respondent would not check off union dues; and (c) Morrison, Jr., declared at the November 4 meeting that the Respondent would not agree to any form of union security. (3) The Respondent engaged in dilatory tactics by delaying the presentation of counterproposals after repeated requests and Indications that counterproposals could be forthcoming as shown on the The text of this letter follows In our last meeting the Company requested the Union to submit to them an agree- ment in its entirety, which was the minimum that we felt the Union could accept. It was my sincere hope when we submitted this agreement that the Union and the Company could work out something that would be agreeable to both parties. I am sorry that you feel that our proposal did not represent an earnest effort on our part to find some middle ground between the position of the Company and the Union. At all times the Union in the past, and now, is willing to discuss it and try to arrive at an agreement suitable to both parties. I would appreciate it very much if you would draw up a complete agreement the best that the Company, could agree to and submit it to the Union within 10 days for our consideration. We regret that the Union has not been able to reach an agree- ment with the Company, but we are willing now or any time, at your convenience to meet with you to attempt to come to some kind of an agreement acceptable to both parties. 986209-52-vol. 97-57 886 DECISIONS OF NATIONAL LABOR RELATIONS BOARD following- occasions: (a) At the July 22-August 12 group of meetings, when upon the Union's inquiry 'the Respondent stated that it would try to present some counterproposals, but none were produced; (b) in the telephone conversa- tion between McMahon and Sullivan preceding the meeting of August 26, when Sullivan stated that he had not yet prepared the Respondent's counterproposals, but that he would try to have them prepared for the meeting of August 26; (c) at the meeting of August 26, when the Respondent failed to present counter- proposals and Sullivan stated that he would try to develop some for the next meeting, September 2; (d) in Sullivan's letter to McMahon at the end of August, where he stated that he and Morrison, Jr., were too busy on other matters to prepare counterproposals; and (e) at the meeting of September 2 when the Respondent failed to present counterproposals. There are additional factors which warrant consideration in appraising the Respondent's bona fides. At the outset of negotiations during the July 22- August 12 group of meetings, while the Union's proposals were being discussed, the Respondent disclosed its underlying purpose when in objecting to the recog- nition clause it stated that it sought to retain the right to bargain and to discuss problems with its employees as it had in the past, and in opposing a provision subjecting certain working conditions to future bargaining declared that it wanted to reserve the right to make changes as it saw fit. When the Re- spondent presented its counterproposals for the first time, it sought to reserve for its unilateral action the right to discharge at any time according to its own judgment, except for discriminatory purposes, and to discharge or discipline for certain enumerated grounds. It also sought for its own judgment and uni- lateral action the right to make shift assignments, transfers, promotions, and layoffs, except for the purpose of discrimination because of membership or non- membership in a labor organization. In addition, at this meeting, the Respond- ent sought by incorporating in the proposal its handbook presented at a prior conference, to maintain its practice of granting merit bonuses upon a unilateral basis. At the next meeting on October 13, the Respondent revised its proposal concerning its general right to discharge so as to subject its action in this re- spect to the grievance procedure in those cases where it was alleged that the employee was "unjustly" discharged, but maintained its position reserving the right unilaterally to discharge or discipline for given grounds. The Union there- after on October 27, believing that it was about to obtain a contract, yielded in some respects but maintained its position in other respects. The Union sought the right to bargain in the future concerning matter- not covered by the proposed contract, which would have included merit bonuses ; it proposed that the Re- spondent have a right to hire, suspend, and discharge for cause, and to transfer and lay off for lack of work or other legitimate reasons, provided these rights were not used to avoid the provisions of the agreement, and the right to dis- charge or discipline for certain enumerated conduct, which limitations would have served as some protection against undermining of the Union. The Union also, in substance, adopted the Respondent's original grievance provision both as to the procedure and the scope of the subject matter of a grievance, limiting grievances to matters concerning working conditions, and permitting the indi- vidual employee to process his own grievance with the Respondent at all stages of the procedure without the requirement that the Union be present, a position the Union was not obligated to accept under the Act.1° The Respondent rejected this proposal, and reentered its last offer under which it could unilaterally dis- charge or discipline employees for certain enumerated reasons, could grant merit bonuses unilaterally, and except to discriminate because of membership 1° Bethlehem Steel Company, 89 NLRB 341 ; and N. L. R. B. V. Corsicana Cotton Mille, 178 F. 2d 344 (C. A. 5). See also, Shell oil Company, 93 NLRB 161. MORRISON MILLING COMPANY 887 or nonmembership in a labor organization, it could unilaterally order shift assignments , transfers , promotions, and layoffs. It was this position-reserving the right to act unilaterally upon these subjects-that the Respondent insisted upon as a condition to reaching an agreement with the Union. Thus, at the next meeting, on November 4, the Respondent sought to have the Union accept its 10 rules including the handbook. After the informal meeting on November 9, the Respondent declared that it had submitted its final proposals thereby insisting upon its 10 rules including the handbook. The Union made further proposals, and invited proposals and a meeting with Respondent. The Respond- ent declined, maintaining its position for the reason, explained at the hearing, that it considered it a futile gesture. This futility, however, arose out of the Respondent's insistence upon reserving for itself the right unilaterally to dis- charge or discipline employees for enumerated grounds, to grant merit bonuses, and, except to discriminate because of membership or nonmembership in a labor organization, to order shift assignments, transfers, promotions, and layoffs., The Union, on the other hand, as was its right under the Act, resisted a reser- vation of unilateral action in these respects. It is accordingly found that from on or about July 8, 1049, the Respondent has failed to perform its statutory obligation to bargain in violation of Section 8 (a) 15) of the Act, and thereby has interfered with, restrained, and coerced its employees in the exercise of their rights in violation of Section 8 (a) (1).11 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent, set forth in Section III, above, appearing 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 tend to lead to labor disputes burdening and ob- structing commerce and the free flow of commerce. V. THE REMEDY Having found Respondent has engaged in unfair labor practices, the under- signed will recommend that it cease and desist therefrom and take certain af- firmative action to effectuate the policies of the Act. It has been found that Respondent has refused to bargain collectively with the Union, thereby interfering with, restraining, and coercing its employees. It will therefore be recommended that the Respondent cease and desist therefrom and, also, that it bargain collectively with the Union with respect to wages, hours, and other conditions of employment, and if an understanding is reached, embody such understanding in a signed agreement. Upon the basis of the foregoing findings of fact, and upon the entire record in the case, the undersigned makes the following : CONCLUSIONS OF LAW 1. United Packinghouse Workers of America, C. I. 0., is a labor organization within the meaning of Section 2 (5) of the Act. 11 Deena Artware, Incorporated, 86 NLRB 732; United States Gypsum Company, 90 NLRB^ 964;,N. L. R B. V. J. H. Allison and Co, 105 F 2d 766 (C. A. 6), cert denied 335 U. S. 814 N. L. R. B, V. Westinghouse Air Brake Co, 120 F 2d 1004 (C. A. 3) : Wilson t Co v. N. L. R. B., 115 F 2d 759 (C A 8) ; American National Insurance Company, 89 NLRB 185; but see American National Insurance Co. v. N. L. R. B, 27 LRRM 2405 (C. A. 5), decided February 23, 1951; and Electric Railway Employees, ct al v Wisconsin Employment Rela- tions Board, 340 U. S. 383, 408-409. 888 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2. All production and maintenance employees (including the garage fore- man) of the Respondent at its Denton, Texas, mill, including the janitor, seasonal laborers, and "pony packers," but excluding the watchman, the warehouse foremen, the elevator foreman, the packing foreman, the chief engineer, and all other guards and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9 (b) of the Act. 3. United Packinghouse Workers of America, C. I. 0., was on June 17, 1949, and at all times material thereafter has been, the exclusive representative within the meaning of Section 9 (a) of the Act of all the employees in the aforesaid unit for the purposes of collective bargaining. 4. By refusing to bargain collectively with United Packinghouse Workers of America, C. I. 0., as exclusive bargaining representative of the employees in the appropriate unit, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (5) of the Act. 5. By said acts the Respondent has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act, thereby engaging in unfair labor practices within the meaning of Section 8 (a) (1) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting com- merce within the meaning of Section 2 (6) and (7) of the Act. [Recommended Order omitted from publication in this volume.] 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 Labor Management Relations Act, we hereby notify our employees that : WE WILL NOT in any manner interfere with the efforts of UNITED PACK- INGHOUSE WORKERS OF AMERICA, C. I. 0., to bargain collectively with us. All our employees are free to become or remain members of this union or any other labor organization. WE WILL BARGAIN collectively upon request with the above-named union as the exclusive representative of all employees in the bargaining unit described below with respect to rates of pay, hours of employment, or other conditions of employment, and if an understanding is reached, embody such understanding in a signed agreement. The bargaining unit is : All production and maintenance employees (including the garage fore- man) employed at the Denton, Texas, mill, including the janitor, sea- sonal laborers,, and "pony packers," but excluding the watchman, the warehouse foremen, the elevator foreman, the packing foreman, the chief engineer and all other guards and supervisors as defined in the Act. THE MORRISON MILLING C1OMPANY, Employer. By -------------------------------------- (Representative ) (Title) Dated -------------------- This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material.