National Gas Co.

NATIONAL GAS COMPANY Case No. 14-RC-1778 273 We find, in agreement with the parties, that the following consti- tute a unit appropriate for collective bargaining within the meaning of Section 9 (b) of the Act: All employees at the Employer's bulk plant located at 125 Potomac Street, St. Louis, Missouri, excluding truck drivers, professional em- ployees, guards, and all supervisors as defined in the Act. We shall direct separate elections in the units found appropriate above and in the following voting groups : (a) All production and maintenace employees at the Employer's refinery in East St. Louis, Illinois, including the cafeteria employees, but excluding the office clerical employees, professional employees, guards,11 and all supervisors as defined in the Act. (Case No. 14-RC-1777.) (b) All office clerical employees in the Employer's refinery at East St. Louis, Illinois, excluding all other employees, ' professional em- ployees, confidential employees, guards,12 and all supervisors as defined in the Act. (Case No. 14-RD-55.) [Text of Direction of Elections omitted from publication in this volume.] 11 Excluded under this category are all employees of the guard dep artment. See footnote 11. NATIONAL GAS COMPANY and UNITED GAS, COKE AND CHEMICAL WORKERS, C. I. O. Case No. 14-CA-480. May 27, 1952 Decision and Order On August 3, 1951, Trial Examiner Eugene F. Frey issued his Inter- mediate 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 Inter- mediate Report attached hereto. Thereafter, the Respondent filed exceptions to the Intermediate Report and a supporting brief. The Respondent's request for oral argument is hereby denied because the record, exceptions, and brief, in our opinion, adequately present the issues and the positions of the parties. The Board 1 has reviewed the rulings of the Trial Examiner made at the hearing, and finds that no prejudicial error was committed. I Pursuant to the provisions of Section 3 (b) of the National Labor Relations Act, the Board has delegated its powers in connection with this case to a three -member panel [ Members Houston, Murdock, and Styles]. 99 NLRB No. 44. 274 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The rulings are hereby affirmed. The Board has considered the Intermediate Report, the exceptions and brief, and the entire record in the case, and hereby adopts the findings, conclusions, and recom- mendations of the Trial Examiner only insofar as they are consistent with our findings, conclusions, and order herein set forth. 1. The Trial Examiner found that the Respondent is engaged in commerce within the meaning of the Act. The Respondent excepts to this finding on several grounds. The Respondent contends that its sales of bottled gas to cotton gins that buy, gin, and sell cotton for their own account should not be considered in applying jurisdictional standards established by the Board in the Hollow Tree Lumber Company, 91 NLRB 635, and The Rutledge Paper Products, Inc., 91 NLRB 625. During the period from April 30, 1949, to April 30, 1950, the Re- spondent sold and delivered gas in the amount of $31,242.94 to 44 gins, all located in Missouri, for drying cotton and running engines. Each of these gins annually buys from farmers, gins, and sells cotton valued in excess of $50,000; the total value of cotton handled by them annually exceeds $9,000,000. With s, few exceptions, those gins ship the cotton after ginning to various compresses or warehouses located in Missouri, receiving negotiable warehouse receipts therefor. Title to the cotton rests in the holders of the receipts. These receipts then are sold by the gins to brokers or mill representatives, who either direct the warehouses to ship the cotton or sell it to other buyers who, in turn, direct the shipment of the cotton stored in the warehouses. From 95 to 99 percent of the cotton handled by these compresses is shipped directly from the compresses to points outside Missouri; the remainder is shipped to other warehouses in the State for the purpose of consolidation with other cotton and -reshipment to points outside the State. 'All cotton processed by the above gins and handled by the compresses is eventually shipped directly or indirectly to points outside the State. The Respondent contends that inasmuch as these gins do not ship cotton directly out of State, they are not "enterprises engaged in pro- ducing or handling goods destined for out of State shipment," within the meaning of the jurisdictional formula enunciated in the Hollow Tree Lumber Company case. We do not agree. It is true that the gins do not ship the cotton ginned by them directly out of State, but first send the cotton to compresses or warehouses who store and then ship the cotton in accordance with the instructions of the holders of warehouse receipts. It is likewise true that the warehouse receipts are negotiable instruments and that before the cotton is shipped out of State, title to the cotton might change hands several times. We are nevertheless of the opinion that the cotton processed by these gins meets the test of "goods destined for out-of-State shipment" within the NATIONAL GAS COMPANY 275 formula of the Hollow Tree Lumber case. Admittedly, all cotton processed by the gins eventually enters the stream of commerce. It is further conceded that, except for the pressing of the cotton into bales, the compresses perform no other operation; their primary function is to serve as a warehouse for storage of the cotton ginned by the ginning companies. Had the gins sold their warehouse receipts directly to the representatives of the mills located outside the State, the fact that the cotton was temporarily stored in the warehouses in the State, before final shipment in interstate commerce, would not of itself alter the interstate character of the transaction.2 We would have reached a similar result had the gins, instead of selling the warehouse receipts to mill representatives, sold them to interstate brokers who instructed the warehouses to ship the cotton out of the State. The Board recently held that the fact that a company engaged in strip mining coal did not sell its coal directly to out-of-State customers but marketed it through to interstate brokerage company, which, in turn, sold the coal to the out-of-State customers, did not mean that the operations of the coal producers did not affect interstate commerce .3 The fact remains, how- ever, that in some instances the gins instead of selling warehouse re- ceipts directly to mill representatives located out of State, or to an interstate broker, sold them to an intrastate buyer or broker, who in turn resold the receipts to somebody else, and that the instructions for shipping the cotton out of State were given by the last transferee of the warehouse receipt. Again, we do not believe that these intermediate transactions which involve only changes in the title to cotton destined for out-of-State shipment affect the interstate character of the ginning business. The argument that the transfer of title is a decisive element in determining the nature of a transaction for jurisdictional purposes has been considered by the Board and rejected.4 Upon the entire record we find that the Respondent's sales to the gins, who buy, process, and sell cotton for their own account in the manner described above, constitute sales to enterprises engaged in producing or handling goods destined for out-of-State shipment and' therefore fall within the jurisdictional formula set ,forth in the Board's decision in the Hollow Tree Lumber Company case. The Respondent further contends that its sales to the additional six "agent" cotton gins in the amount of $5,661.45 should not be taken into account for the further reason that these six gins merely per- formed the intrastate service of ginning and selling the cotton as agents for farmers who own it. We do not agree. The only difference between this method of handling the cotton and the method used by 2 Longhorn Sash and Door Company, 79 NLRB 430; Santa Cruz Packing Company v. N. L R. B , 303 U S. 453. t B. H. Swaney, Inc., 95 NLRB 546. A Longhorn Sash and Door Company, 79 NLRB 1436 ; N. L. R. B. v. Sunshine Mining Co, 110 F. 2d 780 (C A. 9), cert. denied 312 U. S. 678; B. H. Swaney, Inc., supra. 276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the other gins, is that in the case of "agent" gins the warehouse re- 'ceipts are made out to the farmers instead of to the gins. Thus, the ,only difference is a matter of title to the cotton, which, in our opinion, ,does not make the Respondent's sales to these gins so removed in their effect upon the interstate commerce as to make them irrevelant in determining jurisdiction. It is the Respondent's contention that the commerce data placed in the record by the General Counsel covering the period from April 30, 1949, to April 30, 1950, should be disregarded and the jurisdic- tional issue determined on the basis of the commerce data, dated from March 15, 1950, to March 15, 1951, placed in evidence by the Re- spondent. It is argued that the commerce data for the period used by the General Counsel is too remote, as most of the alleged unfair labor practices occurred after that period. We do not agree. The original charge was filed by the Union on May 12, 1950. The complaint as amended alleged in substance the commission of unfair labor practices since about April 3, 1950. Most of the unfair labor practices, as found by the Trial Examiner, occurred chiefly from May through July 1950, in the intervening months between the 1949-50 and the 1950-51 gin- ning seasons. Jurisdiction therefore could have been determined by the Regional Office of the Board either upon the commerce data for the season immediately preceding the commission of the alleged un- fair labor practices which was from April 30, 1949, to April 30, 1950, or the commerce data for the season following the commission of the .alleged unfair labor practices. Without deciding that the commerce data for the later season submitted by the Respondent is irrevelant, we find that, from the point of view of practical administration of the Act, the reliance upon the commerce data for the year immediately preceding the commission of the alleged unfair labor practices was appropriate in this case. We therefore shall take into account in our determination of the issue of jurisdiction, the commerce data for the period beginning from April 30, 1949, to April 30, 1950. The Respondent contends that its sales to the Kroger Co. should not be taken into account in applying the jurisdictional standards established by the Board in the hollow Tree Lumber case. We agree. Under the formula laid down in that decision, the Board by implica- tion and in practice has excluded sales to local units operating as integral parts of multistate enterprises from the types of sales to be taken into account in applying the standards established in that case unless, of course, such a local unit itself has sufficient inflow or outflow to warrant assertion of jurisdiction over it. The commerce data adduced in evidence shows that during the period from April 30, 1949, to April 30, 1950, the Respondent had a .direct inflow of materials valued at approximately $150,000 annually, which is 30 percent of the minimum requirement of the Board for the NATIONAL GAS COMPANY 277 assertion of jurisdiction on that basis. In addition, the Respondent furnished goods and services to interstate water and rail carriers, to a public utility, to a number of enterprises, each of which annually processes or handles more than $25,000 worth of goods destined for shipment to points outside the State of Missouri, in a total amount $41,015.95, which is approximately 82 percent of the $50,000 minimum indirect outflow requirement for local enterprises furnishing services and materials to such concerns engaged in interstate commerce. The combination of 30 percent of direct inflow requirement and 82 percent of the indirect outflow requirement exceeds 100 percent and thus war- rants the assertion of jurisdiction under our policy.5 Upon the entire record we find, as did the Trial Examiner, that Respondent `vas and is engaged in commerce within the meaning of the Act and that it will effectuate the policies of the Act for the Board to assert jurisdiction in this case. 2. The alleged refusal to bargain prior to the strike: The Trial Examineii found that "the Respondent was not required to negotiate with the Union regarding the shutdown of [the installation depart- ment] for bona fide economic reasons, and the discharge of employees incidental thereto," but that the Respondent was "not relieved of its duty to bargain about other employment or provision for the displaced employees." The Trial Examiner also found that the Respondent did not bargain with the Union on that issue in good faith, thereby violating Section 8 (a) (5) of the Act. In the absence of any exception thereto and without passing on the merits thereof, we adopt the Trial Examiner's finding that the Respondent was under no obligation to bargain with the Union with respect to the discontinuance of the installation department. We also adopt the Trial Examiner's conclusion that the Respondent was nevertheless bound to bargain with the Union in good faith about the reemployment of the installation men to be displaced by the discon- tinuance of the installation department. Unlike the Trial Examiner, however, we believe that the Respondent fulfilled its obligation in that respect. We base our conclusion on the following evidentary facts found by the Trial Examiner. At the May 2 meeting with the Union, Respondent's Vice-President Layton, while maintaining that the decision to contract out the in- stallation work was not a bargainable matter, readily recognized the interest of the Union in the problem of the displaced men and, in answer to a question from the Union's International Representative Wynn, explained the Respondent's willingness to offset the economic blow to the installation workers by attempting to contract with some of them for installation work and to absorb the others as soon as pos- The Rutledge Paper Products Tnc, supra. 215233-53-19 278 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Bible in other departments of the business. The Union, however, sub- mitted no counterproposal to this suggestion. It merely reiterated its demand for a complete abandonment of the contracting plan and retention of all installation men as employees. Thus, it appears that the precise issue over which the parties reached an impasse at the May 2 meeting did not concern the question of the reemployment of the installation men, but related to the question of whether the Respond- ent's decision to contract out all its installation work should stand or be withdrawn. The Union never withdrew or altered its adamant opposition that the Respondent's plan must be abandoned prior to the strike. In a discussion which occurred at the close of the May 2 meet- ing, Wynn told Layton that the employees would strike over the pro- posed plan to contract out the installation work because the subject was of the greatest importance to them and that when he said they would use every means at their command to fight it, he meant just that. Wynn also said that he wanted to get the contracting plan out of the way "at all costs" and suggested that, if the Respondent would forget about the plan, the Union would be satisfied with the 5-cent wage increase and withdraw its other demands. During his next meeting with Layton, which occurred on May 8 just prior to the union meeting, Wynn advised Layton that he was going to discuss the contracting problem with the employees and asked Layton whether the Respondent still maintained its stand on the plan. Layton replied that the Respondent would adhere to its previous decision. Wynn then said that unless he could advise the employees that the Respondent had changed its position, they would probably take a strike vote and the plant would be shut down the next morning. Immediately after this discussion with Layton, Wynn and the union committee met with the employees and reported to them that "the Respondent had refused to discuss its decision to discontinue the installation department and the Respondent had determined to go ahead and there was nothing the Union could do about it." The union membership then authorized Wynn and the committee to see the Re- spondent again "in an effort to change the decision and, if a satisfactory agreement could not be reached, call a strike." Early in the morning on May 9, Wynn and the committee went to see Layton. Wynn "ad- vised Layton that the men were opposed to the contracting plan and were prepared to stay on strike until the Respondent changed its decision." The strike began on the same day and continued until July 10, 1950. From the above facts, as found by the Trial Examiner, we are con- vinced that the Union called the strike on May 9 solely because the Respondent had refused to reconsider its decision to abolish the in- stallation department rather than because of any refusal to discuss with the Union the matter of reemployment of the displaced installa- NATIONAL GAS COMPANY 279 tion men. The Respondent initiated the discussion as to the reem- ployment of these men at the May 2 meeting, but the Union did' not pursue that subject further, merely insisting at all subsequent meet- ings that the Respondent withdraw its contracting plan. Although subsequent to the May 2 meeting Layton did not refer again to the subject of the reemployment of the men, we believe he had already made a proposal and manifested his willingness to discuss the question, and that it was then up to the Union to take up the subject."' The Union did not do so. Accordingly, we do not agree with the Trial Examiner that Layton's silence indicated bad faith bargaining' -on the part of the Respondent. We predicate our finding on the''fact that the Union made it perfectly clear to Layton that it had at stake a larger issue, i. e., the withdrawal of the contracting plan, and vas not prepared to compromise its position on that by negotiating' with the Respondent concerning the reemployment of the installation men. 3. Discharge of the installation employees: The Trial Examiner found that by discharging the eight installation employees on May 8, the Respondent discriminated against them in violation of Section 8 (a) (3) of the Act. We do not agree. The Respondent discharged the eight installation employees pur- suant to its decision to discontinue the operation of the installation department and to contract out the work of that department to inde- pendent contractors. The Trial Examiner concluded, and we agree, that there is nothing in the record to indicate that in conceiving the plan, in reaching its initial decision, and in announcing it to the em- ployees, the Respondent "was motivated by other than economic' or business considerations." Thus, the Trial Examiner found that the plan was conceived and adopted in April 1950 because the installation department had been operating at a loss; that the factors which contributed to the failure of the department to operate at a profit were : The impossibility to exercise close supervision over the installa- tion crews, slow-down practices of the installation crews, and the increase in competition resulting from the sale and installation' of new appliances by sheet metal contractors, plumbers, etc. The Trial Examiner also found that the Respondent made no secret of the fact that it was considering the plan and in fact discussed it with several installation employees including Malone, president of the 'Union's Local, before April 5. On April 5, 1949, the Respondent sent the Union a letter informing it of the decision and, in the middle' of the same month, the Respondent posted a notice on the bulletin board advising the employees of the Company's decision to contract out the installation work. Despite these findings the Trial Examiner reached the conclusion that the discharge was but part of a discriminatory scheme to remove a large number of employees from the bargaining unit. In so concluding the Trial Examiner relied on the fact (a) 280 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that from May 3 until the strike began on May 9, Layton, Respond- ent's vice president, never raised again the vital subject of reemploy- ment of the installation men but remained silent while meeting with Union Representative Wynn , (b) that the Respondent engaged in a "hasty and secretive institution " of what the Trial Examiner found to be a spurious contracting plan . We do not agree . Layton's fail- ure to refer to this subject again, either in the Respondent 's letter of May 3 to the Union and the installation employees, or in his conferences with Wynn on May 8 and 9, is perfectly understandable when, considered against the background of the Union's adamant in- sistenee upon withdrawal of the contracting plan and lack of interest in discussing reemployment as shown by the Union 's own rejection of Layton's suggestion at the May 2 meeting that the Respondent might absorb the laid-off installation employees in other departments, and its failure to pursue the subject further. Nor can we infer such discriminatory motivation from the Respondent 's failure to keep the Union posted as to its negotiations with the former installation em- ployees for installation contracts which apparently began on or about May 8. The Union and the installation employees were advised by the Respondent as far back as April 5 of its plan to contract out the installation work and of its intention to favor the former installation employees in the awarding of such contracts . The fact that some of the installation employees did not make inquiries about the matter, or that the Respondent preferred to award contracts to certain in- stallation employees and not to all of them, does not in our opinion indicate any discriminatory motivation on the Respondent 's part. The Trial Examiner's conclusion that the discharges were discrim- inatory, moreover, cannot be reconciled with the Respondent's subse- quent conduct in respect to these men . The Respondent's subsequent conduct in reemploying Steinbeck and Malone, after they terminated their contractual relations with the Respondent , and snaking an offer of reemployment to Howell, Davis, A. Duke, and Martin Duke, the other installation men, is wholly inconsistent with the Trial Exam- iner's conclusion that the discharge of the installation men was part of a discriminatory scheme to remove a large number of employees, including three officers of the Union, from the bargaining unit. Upon the entire record, we are not persuaded that the discharge of the eight installation men on May 8 was due to discriminatory reasons and that the Respondent thereby violated Section 8 (a) (3) of the Act. 4.,'The strike : The Trial Examiner found that the May 9 strike was caused by the Respondent 's discharge of the installation men, and that as these discharges were discriminatory the strike was an unfair labor practice strike. We do not agree. NATIONAL GAS COMPANY 281 It has been found that the Respondent discharged the installation employees in furtherance of its decision to discontinue the installation department and that as this decision was prompted by bona fide economic or business reasons, the discharge was not in violation of Section 8 (a) (3). Assuming, therefore, as the Trial Examiner found, that the strike was caused by such discharges, it was not an unfair labor practice strike. If on the other hand, as we have found, the real cause of the strike was the Respondent's refusal to comply with the Union's demand for the withdrawal of its plan for the discontinuance of the installation department, the strike still would be economic.in•its inception, as it has been found that the Respondent committed no violation of the Act in refusing to discuss the plan or by putting it into effect. 5. Unfair labor practices during the strike: The strike which began on May 9 continued at the Hayti and Malden plants until about June 26, and at Sikeston plant until July 10, 1950. As more particularly described in the Intermediate Report, the Respondent during the strike engaged in the following unfair labor practices : (a) The discharge of the strikers: On May 9, the first day of the strike, the Respondent mailed to all striking employees a letter stating that their return to work not later than May 11 was imperative, that "your failure to return will be indicative of the fact that you no longer wish to be employed by [the Company], and consequently you will be permanently replaced" ; and that "in the event of your failure to return to work as directed above, this letter will serve as your discharge notice.," (Emphasis supplied.) As the strikers were engaging in an economic strike, a protected concerted activity, they remained "em- ployees" within the meaning of the Act. The Respondent, therefore, had no right to discharge 6 them because of their participation in the strike even though it had the right to replace the economic strikers in an effort to carry on its business. We find, as did the Trial Exam- iner, that by the issuance of letters advising them that they would be discharged on failure to return to work by May 11 the Respondent violated Section 8 (a) (1) and (3) of theAct.7 (b) The alleged independent contractor agreement: The Trial Examiner found, and we agree, that the Respondent's agreements with its former installation employees for installation of its appliances did not establish a true independent contractor relationship, as they pur- 6 Rockwood Stove Works, 63 NLRB 1297 ; Kallaher and Mee, Inc ., 87 NLRB 410; Happ Brothers Company, Inc., 90 NLRB 1513 ' Assuming, however, that the letters were but a tactical maneuver intended to induce the strikers to abandon the strike and resume work, rather than to terminate the employer- employee relationship, the letters nevertheless were in violation of Section 8 (a) (1) of the Act The purpose and effect of the Respondent 's action in purporting to discharge the strikers, was to restrain them from engaging in the legitimate concerted activity for their mutual aid and protection in violation of the Act . Rockwood Stove Works, supra. 282, DECISIONS OF NATIONAL LABOR RELATIONS BOARD ported to do on their face, and that these men were the Respondent's "employees." In reaching this conclusion we rely upon the following evidentiary facts established by the record and found by the Trial Examiner : (1) The power of the Respondent to terminate the con- tracts at will ; (2) the work performed tinder the contract was formerly a part of the Respondent's regular business and was carried out by the contractors in substantially the same manner and under the same conditions as when they were employees; (3) the Respondent sup- plied the contractors' initial equipment and supplies, and most of the material and supplies used during the operations; (4) the contractors had not previously engaged in independent business but had been employees of the Respondent; (5) in practice, the Respondent controlled the time and sequence of operations by the contractors; (6) in practice, the contractors worked only for the Respondents; (7) the majority of the contractors operated as such only a short time; and (8) on their cessation of contract operations the Respondent took back the equipment it had sold them without loss to the contractors, and reinstated two of them and the helper of one as employees. The foregoing facts, in our opinion, clearly indicate such degree of control in the Respondent over the work of the so-called independent contractors as to make them to all intents and purposes "employees" within the meaning of the Act." The Trial Examiner found that the Respondent by entering into the so-called independent contractor agreements with former installa- tion employees J. W. Smith, Noble C. Malone, John Steinbeck, and Ralph Williams, violated Section 8 (a) (5) and (1) of the Act. These contracts were entered into after the Respondent had, as found above, lawfully severed its employment relationship with these individuals, thereby removing them from the appropriate unit represented by the Union. Moreover, as found above, the Respondent fulfilled its obliga- tion to bargain with the Union in regard to the reemployment of the displaced installation workers. In these circumstances we find that the Respondent did not violate its obligations under the Act by deal- ing with the displaced installation workers individually so long as they remained outside the unit represented by the Union. The Respondent, however, as we have found, failed in its attempt to establish an inde- pendent contractor relationship with the four above-named individuals and.in fact reestablished the preexisting employer-employee relation- ship. Inasmuch as the so-called independent contractors were in fact rehired as employees and as they were performing the same duties and functions they had performed before the abolition of the installation department, we find that upon reemployment they became a part of the appropriate unit. The Respondent, therefore, was thereafter 8 Steinberg and Co., 78 NLRB 211, set aside 182 F. 2d 850 (C. A. 5) ; Nu-Car Carriers, 88 NLRB 75 , enfd. 189 F. 2d 766 (C. A. 3). NATIONAL GAS COMPANY 283 under an obligation, upon request, to bargain with the Union concern- ing the terms and conditions of their employment, notwithstanding the existence of the "independent contractor" agreements.9 Inasmuch as we hereinafter find, in agreement with the Trial Exam- iner, that the Respondent violated Section 8 (a) (5) and (1) of the Act by engaging in unilateral bargaining with its striking employees and by refusing on May 18, 1950, to continue to recognize and deal with the Union on the ground that it had lost its majority status, we find it unnecessary to decide whether the Respondent's conduct in carrying out the terms and conditions of these agreements was violative of its obligations under the Act. In any event, our order hereinafter set forth directing the Respondent to bargain, upon request, with the Union as the exclusive representative of the employees in the appropri- ate unit is broad enough to protect the Union's right to bargain for any individual who may still be working under one of the so-called inde- pendent contractor agreements. (c) Individual bargaining with strikers: Although the Union was engaged in a strike, the Respondent was still under an obligation to bargain with the Union as the employees' exclusive bargaining repre- sentative. The obligation being exclusive, it exacted the negative duty to deal with no other.- Respondent, however, in disregard of its duty and in derogation of the Union's majority status engaged in a series of negotiations with individual employees for the purpose of securing the return of the strikers to work, as well as to set the terms and condi- tions on which they would return to work."' As i more fully set forth in the Intermediate Report, the Respond- ent's officers Moore and Layton on May 13, 17, and 18 met with groups of strikers who were picketing the Hayti plant, and offered to make individual arrangements with the strikers if they returned to work on condition that they abstain from union activities; suggested that the men form their own labor organization and forget the Union, and that in such event the Respondent would once a year sign an agreement with the men instead of the Union; assured the strikers that if they returned to work and had trouble with other strikers the Respondent would see that they were protected. Layton also stated that the Respondent would close the place down and "see it rot," before it would sign another union contract. The Trial Examiner found, and we agree, that these negotiations with individual strikers were in derogation of the Union's majority status and were violative of Section 8 (a) (5) and (1) of the 9 J. I. Case v. N. L. R. B., 321 U. S. 332. io Medo Photo Supply Corporation v. N. L. R B ., 321 U. S. 678. 11 The Respondent did not question the majority status of the Union either at the May 12 meeting with the Union or at any time prior to the May 18 conference with Union Repre- sentative Appelbaum. The Trial Examiner found and we agree that at all times men- tioned in the complaint the Union represented a majority of the Respondent 's employees in an appropriate unit. 284 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Act. This unlawful conduct of the Respondent's officers had a telling effect on the strikers. It undermined the loyalty of the strikers to the Union to such an extent that four of the men returned to work. Lay- ton realized that his tactics had created a definite rift among the mem- bers of the Union and felt no need in further dealing with the Union. (d) Refusal to bargain with the Union: On May 18 Layton met with International Representative Appelbaum in a hotel for the pur- pose of discussing the compromise proposal advanced at the May 12 meeting. At this meeting Layton told Appelbaum in substance that "things have changed," that the Respondent was "through" with the Union and would no longer discuss matters with it, and that Layton did not think the Union any longer represented a majority of the employees. Appelbaum replied that the Union was still willing to try to solve the existing problem. We find, as did the Trial Examiner, that the Respondent's alleged doubt as to the Union's majority status was not advanced in good faith, but rather indicated the rejection by the Respondent of collective bargaining in furtherance of its plan to discredit, weaken, and finally get rid of the Union, and that Layton's remarks to Appelbaum constituted a further refusal to bargain with the Union in violation of Section 8 (a) (5). (e) Interference, restraint, and coercion. The Trial Examiner found, and we agree, that the Respondent's President Moore and Vice-President Layton before, during, and after the strike interfered with, restrained, and coerced the employees in the exercise of the rights guaranteed by the Act in violation of Section 8 (a) (1) of the Act by the following statements and conduct more fully described in the Intermediate Report: (1) Suggesting to employees that they abandon membership in the Union and form an independent labor organiga-, tion; (2) offering to assist employees in the formation of an inde- pendent labor organization; (3) threatening to withhold benefits from employees because of their union affiliation; (4) urging and per- suading employees to abandon the strike and their other legitimate concerted activities; (5) offering to reemploy employees if they ceased their concerted activity; (6) persuading employees to influence other employees to withdraw from the Union and cease concerted activity; (7) threatening to close the business rather than sign another contract with the Union; (8) informing employees that it would never sign another union-shop contract; (9) offering to protect employees finan- cially and otherwise against legitimate union activity if they aban- doned their concerted activity; (10) warning employees that they would not be reinstated unless they renounced and abstained from union affiliation and concerted activity ; (11) threatening employees with discharge and permanent replacement unless they ceased their concerted activity; and (12) threatening to blacklist employees be- cause of their union affiliation and concerted activity. NATIONAL GAS COMPANY 285 6. The effect of the Respondent's unfair labor practices during the strike: The question before us is whether the foregoing unfair labor practices prolonged the strike thereby converting it from economic into an,unfair labor practice strike. The four strikers who returned to work at the Hayti plant remained at work for about 2 days, and then resumed the picketing after talking with the other strikers. On June 26 the strikers at the Sikeston plant conferred with Layton about returning to work and asked Layton to return the whole group to their former jobs "as they were." Layton replied that he could not put them all back as business had fallen off a great deal during the strike, and he had hired new employees, and thus did not have openings for all the strikers. He offered to recall the strikers as the vacancies occurred. The Trial Examiner found the strikers' request to be an unconditional request for reinstatement and that the offer did not cease to be unqualified merely because they contemplated a group return. On July 10 the strikers again offered unconditionally to, return to work. Layton said he could take back two maintenance men, but repeated. his conditional offer of June 26 to the remaining strikers. The Trial Examiner found that Layton's offer of July 10 was likewise qualified and discriminatory. The pick- eting stopped on July 10, 1950. After Layton's meeting with Appel- baum at which he refused to discuss the pending dispute and ques- tioned the Union's majority, the Union made no further request for a conference to negotiate a strike settlement. The strike simply wore itself out and the employees voluntarily abandoned the strike. Some of the strikers returned to employment with the Respondent and others went elsewhere. Thus it appears that by the end of the strike on July 10 the Union, to all practical intents and purposes, had ceased to function as the bargaining agent. Upon the facts above and more fully described in the Intermediate Report, we are convinced, and we find, that the Union's loss of its authority as the bargaining agent was the proximate and natural effect of the Respondent's unlawful course of conduct, which began on the first day of the strike when the Respondent sent out discharge notices to the strikers and extended throughout the strike. It reached its ultimate expression in the Respondent's bar- gaining with individual strikers and Layton's refusal to discuss the natters in dispute with Appelbaum on May 18 on the ground that the Union vas no longer the employee's representative. This unlawful course of conduct by the Respondent was intended to destroy the Union's majority and to undermine its status as the employees, ex- clusive bargaining agent. It also prolonged materially the strike itself thus converting it from an economic strike into an unfair labor practice strike 12 We find it unnecessary to appraise the precise effect 12 Rockwood Stove, 63 NLRB 1297; W1lson & Co Inc., 77 NLRB 959. 286 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of each of the unfair labor practices of the Respondent upon the pro- longation of the strike. Rather, we may reasonably infer that the prolongation and conversion of the strike into an unfair labor practice strike began on May 9 when the Respondent sent out its discharge notices to the strikers. Upon the entire record we find that the strike of the Respondent's employees was converted into an unfair labor practice strike on May 9,1950. THE REMEDY Having found that the Respondent has engaged in unfair labor practices affecting commerce, we shall order that the Respondent cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Having found that the Respondent discriminated against Chester Bennett, Elmer Bennett, Dayton Ford, Robert McVey, Ralph Wil- liams, James Coleman, Wayne Bush, Earl Brewer, and Henry F. White because they engaged in. a protected concerted activity and thereafter were discriminatorily refused reinstatement on June 26, 1950, in violation of Section 8 (a) (1) and (3) of the Act, we shall direct the Respondent to offer to each of these employees who has not been fully reinstated or offered proper reinstatement, immediate and full reinstatement in the manner set forth in the Intermediate Report. It has been found that the strike, economic in its inception, was con- verted into an unfair labor practice strike on May 9. The strikers on that date, therefore, became unfair labor practice strikers, and were not vulnerable to permanent replacement because of their concerted activity. We shall also order that the Respondent make whole each of said employees, including the employees that have been fully reinstated or offered proper reinstatement, for any loss of pay he may have suffered by reason of the Respondent's discrimination against him. Inasmuch as the employees on June 26, 1950, unconditionally requested reinstate- ment, the amount of back pay shall be computed in the manner de- scribed in the Intermediate Report, from that day, rather than from the day of their discriminatory discharges on May 9, 1950, to the date of full reinstatement or a. proper offer of reinstatement as the case may be, because in our opinion the loss of wages may not conclusively be attributed to the discharge until the employees had indicated their willingness to abandon the strike.13 Having found that the Respondent unlawfully refused to bargain collectively with the Union as the exclusive representative of its em- ployees 14 in the appropriate unit described in the Intermediate Re- 13 Massey (fin & Machine Works, 78 NLRB 189; Kallaher and Mee, Inc, 87 NLRB 410. 14 Including J. W. Smith, the only individual presently working under the afore-mentioned so-called independent contractor arrangement. NATIONAL GAS COMPANY 287 port, we shall order the Respondent to bargain, upon request, with the Union as such exclusive representative and, if an understanding is reached, to embody such understanding in a signed agreement 15 As the Respondent has engaged in unfair labor practices in viola- tion of Section 8 (a) (1), (3), and (5) of the Act, and considering the nature, extent, and variety of such practices, such violations per- suasively relate to the other unfair labor practices and the present danger of their commission in the future is to be anticipated from the Respondent's conduct in the past. We shall therefore order the Respondent to cease and desist from such acts and from in ai y other manner interfering with the rights of employees guaranteed by Section 7 of the Act. Since it has been found that the Respondent did not discharge the eight installation men on May 8 for discriminatory reasons, the com- plaint shall be dismissed insofar as it alleges that the Respondent has discriminated with respect to the hire and tenure of employment of these men. Order Upon the entire record in the case and pursuant to Section 10 (c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, National Gas Company, Sikeston, Missouri, its officers, agents, successors, and as- signs shall : 1. Cease and desist from : (a) Discouraging membership in United Gas, Coke and Chemical Workers, C. I. 0., or any other labor organization of its employees, by discriminatorily discharging or refusing to reinstate any of its employees, or in any other manner discriminating in regard to their hire or tenure of employment, or any term or condition of employment. (b) Refusing to bargain collectively with United Gas, Coke and Chemical Workers, C. I. 0., as the exclusive representative of Re- spondent's production and maintenance employees, excluding guards, office, clerical, and supervisory employees as defined in the Act, with respect to rates of pay, wages, hours of employment, and other condi- tions of employment. (c) Any bargaining, negotiation, or other dealing with individual employees in the unit aforesaid regarding their rates of pay, wages, hours of employment, or other conditions of employment, or making any changes, including discharges, in their rates of pay, wages, hours of employment, or other conditions of employment, without consulta- tion and bargaining therein with the Union. 15 The Respondent may not enforce or give effect to the individual contract of employ. ment between it and J W. Smith in derogation of the Union's right to act as his exclusive bargaining representative with respect to rates of pay, wages, hours of employment, and Jther conditions of employment . J. I. Case v. N. L. R B., 321 U. S. 332. 288 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (d) Suggesting to its employees that they abandon their statutory collective bargaining representative and form an unaffiliated labor orgahi^ation and offering to assist in the formation of such organiza- tion; unlawfully soliciting individual employees, where such' em- ployees are represented by a collective bargaining agent, to discontinue or abandon their strike activities; threatening employees with re- prisals, unless they cease to engage in union or concerted activities, or promising benefits if they cease to engage in such activities. (e) In any other manner interfering with, restraining, or coercing its employees in the exercise of their right to self-organization, to form labor organizations, to join or assist United Gas, Coke and Chemical Workers, C. I. 0., or any other labor organization, to bar- gain collectively through representatives of their own choosing, to en- gage in other concerted activity for the purpose of collective bargain- ing or other mutual aid or protection, and to refrain from any or all of such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment, as authorized in Section 8 (a) (3) of the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Offer to Chester Bennett, Elmer Bennett, Dayton Ford, Robert McVey, Ralph Williams, James Coleman, Wayne Bush, and Earl Brewer immediate and full reinstatement to their former or substan- tially equivalent positions, without prejudice to their seniority or other rights and privileges, in the manner set forth in the sections entitled "The Remedy" of this Order and the Intermediate Report. (b) Make whole all the employees mentioned in paragraph (a) above, and Henry F. White, for any loss of pay they may have suffered as a result of Respondent's discrimination against them in the manner set forth in the sections entitled "The Remedy" of this Order and the Intermediate Report. (c) Upon request, make available to the National Labor Relations Board, or its agents, for examination and copying, all payroll records. social security payment records, time cards, personnel records and re- ports, and all other records necessary for a determination of the amounts of back pay due and the right of reinstatement under the terms of the Board's Order. (d) Upon request, bargain collectively with United Gas, Coke and Chemical Workers, C. I. 0., as the exclusive representative of Re- spondent's employees in the appropriate bargaining unit, with respect to rates of pay, wages, hours of employment, and other conditions of employment and, if an understanding is reached, embody such under- standing in a signed agreement. NATIONAL GAS COMPANY 289 (e) Post at its plants in Sikeston, Malden, and Hayti, Missouri, copies of the notice attached hereto and marked "Appendix A." 16 Copies of said notice, to be furnished by the Regional Director for the Fourteenth Region, shall, after being duly signed by Respondent's authorized representative, be posted by 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 Respondent to insure that said notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director for the'Fourteenth Region, in writing, within ten (10) days from the date of this Order, what steps Respondent has taken to comply herewith. IT IS FURTHUR ORDERED that the complaint be, and it hereby is, dis- missed insofar as it alleges that the Respondent discriminated in re- gard to the hire and tenure of employment of Noble C. Malone, James Davis, Orville Howell, Leon Ellsworth, J. W. Smith, Adolph Duke, Martin Ebert Duke, and John Steinbeck, and insofar as it al- leges that the strike of May 9, 1950, was caused by the Respondent's unfair labor practices. Appendix A NOTICE To ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Re- lations Act, we hereby notify our employees that : AVE WILL NOT discourage membership in UNITED GAS, COKE AND CHEMICAL WORKERS, C. I. 0., or in any other labor organiza- tion of our employees, by discriminatorily discharging or refus- ing to reinstate any of our employees, or in any other manner dis- criminating in regard to their hire or tenure of employment, or any term or condition of employment. WE WILL NoT refuse to bargain collectively with UNITED GAS, COKE AND CHEMICAL WORKERS, C. I. 0., as the exclusive represent- ative of our employees in the bargaining unit described below. WE WILL NOT bargain, negotiate, or otherwise deal with our em- ployees individually regarding their rates of pay, wages, hours of employment, or other conditions of employment, or make any changes, including discharges, in their rates of pay, wages, hours of employment, or other conditions of employment, without con- sultation and bargaining thereon with the union named above. 10 In the event that this Order is enforced by a decree of a United States Court of Appeals, there sliall be substituted for the words "Pursuant to a Decision and Order" the words "I'utsuant to a Deciee of the United States Court of Appeals, Enforcing an Order." 290 DECISIONS OF NATIONAL LABOR RELATIONS BOARD WE WILL NOT suggest to our employees that they abandon their collective bargaining representative and form an unaffiliated labor organization and offer to assist in the formation of such organiza- tion; unlawfully solicit individual employees, where such employ- ees are represented by a collective bargaining agent , to discon- tinue or abandon their strike activities ; threaten employees with reprisals unless they cease to engage in union or concerted activ- ities, or promise benefits if they cease to engage in such activities. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organiza- tion, to form labor organizations, to join or assist UNrrED GAS, COKE AND CHEMICAL WORKERS, C. I. 0., or any other labor organ- ization, to bargain collectively through representatives of their own choosing, to engage in other concerted activity for the pur- poses of collective bargaining or other mutual aid or protection, and to refrain from any or all of such activities, except to the ex- tent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8 (a) (3) of the Act aforesaid. WE WILL bargain collectively, upon request, with UNITED GAS, COKE AND CHEMICAL WORKERS, C. 1. 0., as the exclusive represent- ative of our employees in the bargaining unit described below, with respect to rates of pay, wages, 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 production and maintenance employees, excluding guards, office, clerical, and supervisory employees as defined in the Act aforesaid. WE WILL offer the employees named below immediate and full reinstatement to their former or substantially equivalent posi- tions, without prejudice to their seniority and other rights and privileges, and will make them, and Henry F. White, whole for any loss of pay suffered by them as a result of our discrimination against them, in the manner set forth in the section of the Board's decision entitled "The Remedy" : Chester Bennett Ralph Williams Elmer Bennett James Coleman Dayton Ford Wayne Bush Robert McVey Earl Brewer All our employees are free to become or remain members of the above-named union or any other labor organization. We will not dis- criminate in ,regard to the hire or tenure of employment, or any term NATIONAL GAS COMPANY 291 or condition of employment, against any employee because of mem- bership in or activity on behalf of any such labor organization. NATIONAL GAS COMPANY, Employer. Dated -------------------- By --------------------------- (Representative ) ( Title) This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material. Intermediate Report and Recommended Order STATEMENT OF THE CASE Upon an original and three amended charges filed by United Gas, Coke and Chemical Workers, C. I. 0., herein called the Union, the General Counsel for the National Labor Relations Board, herein called the General Counsel and the Board, by the Regional Director for the Fourteenth Region (St. Louis, Missouri), issued an original complaint on December 6, 1950, and an amended complaint on January 23, 1951, against National Gas Company, herein called the Respondent, alleging that Respondent had engaged in and was engaging in unfair labor practices affecting commerce within the meaning of Section 8 (a) (1), (3), and (5) and Section 2 (6) and (7) of the Labor Management Relations Act, 1947, 61 Stat. 136, herein called the Act. Copies of the complaint as amended and all charges, together with notice of hearing thereon, were duly served on Respondent and the Union' With respect to the unfair labor practices, the complaint as amended alleged in substance that (1) since April 18, 1947, the Union has been the exclusive bargaining representative of all Respondent's production and maintenance em- ployees, excluding guards, office, clerical, and supervisory employees, which constitutes an appropriate bargaining unit ; on or about April 3, 1950, and there- after the Union requested Respondent to bargain with it as such representative, but Respondent has refused so to do; (2) on or about May 8, 1950, Respondent discharged 9'named employees, and has failed to reinstate them, because of their membership in and activity on behalf of the Union, and other concerted activity ; (3) from May 8 to June 26, 1950;'Respondent's employees engaged in a strike because of Respondent's unfair labor practices ; on the latter date the employees offered to return to work, but Respondent refused to reinstate 10 named em- ployees because of their union membership and activity, and other concerted activity; and (4) since April 3, 1950, Respondent has interrogated, threatened, and coerced its employees in divers ways; and (5) the above conduct violated Section S (a) (1), (3), and (5) of the Act. Upon motion of Respondent filed December 13, 1950, General Counsel duly furnished Respondent particulars as to the original complaint. On January 19, 1951, Respondent tiled a motion for further particulars as to the complaint, which request was denied by order of February 28, 1951, issued by Trial Ex- aminer Horace A Ruckel, to whom the motion had been referred for decision. The answer of Respondent denied the jurisdiction of the Board, admitted the appropriate unit alleged, the Union's request for bargaining, and that the Union 1 The original complaint was based upon the original charge filed May 19, 1950, and first and second amended charges filed' Tune 8 and December 5, 1950, respectively , the amended complaint was based on all previous charges, a third amended charge filed January 8, 1951 292 DECISIONS OF NATIONAL LABOR RELATIONS BOARD was the statutory representative of its employees in said unit up to May 18, 1950. It also alleged the discharge of nine employees on May 8, 1950, was for economic reasons, in that Respondent on that date discontinued the operation of the department in which these employees had worked. Respondent further admitted the strike of the, employees and the offers of some to return to work, but denied the commission of any unfair labor practices. Pursuant to notice, a hearing was held at Sikeston, Missouri, from April 2 through 7, 1951, before the undersigned Trial Examiner. All parties were rep- resented by counsel, participated in the hearing, and were afforded full oppor- tunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues. At the close of General Counsel's case, the amended complaint was dismissed as to George Rooney and Robert McFall on motion of General Counsel. Respondent's motions to dismiss the complaint for lack of jurisdiction and on the merits were denied, with leave to renew at the close of the case. At the close of the testimony, General Counsel's motion to conform the pleadings to the proofs as to formal matters was granted. Respond- ent's renewed motions to dismiss for lack of jurisdiction and on the merits were taken under advisement by the Trial Examiner : they are disposed of by the findings in this Report. At the conclusion of the hearing ; all parties were afforded an opportunity to present oral argument and submit briefs and pro- posed findings of fact and conblusions of law ; General Counsel and Respondent presented oral argument and have filed briefs with the Trial Examiner! Upon the entire record in the case, and from my observation of the witnesses, I make the following : FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENT Respondent is a Missouri corporation, with its principal office and place of business located in Sikeston, Missouri , where it is engaged in the retail sale and distribution of bottled gas, chiefly butane and propane gas, and gas appli- ances. It operates retail outlets for these products at Sikeston, Malden, and Hayti, all in Missouri. In the course of its business , Respondent annually purchases raw materials, equipment, and supplies valued at approximately $200,000, of which approxi- mately 75 percent is shipped to Respondent's plants in Missouri from points outside that State. The parties stipulated the following -facts regarding the dollar volume of Respondent's business during two periods : first period, April 30, 1949, to April 30, 1950; second period March 15, 1950, to March 15, 19513 Respondent sold and delivered gas to two interstate truck lines, located in Missouri, in the amounts of $502.59 and $453, and to Ark-Mo Power Company, a public utility supplying electric power to customers in Missouri and Arkansas, in the amounts of $122.44 and $108.84. Respondent sold and delivered gas to 44 cotton gins, all located in Missouri, for heating, drying cotton, and running engines, in the following amounts : $31,242.94 and $26,566.75. Each of these gins annually gin, buy from farmers, and sell cotton valued in excess of $50,000; the total annual value of cotton 2 Since the hearing closed, the parties have stipulated certain corrections in the record, which have been allowed by the Trial Examiner ; the record will be considered corrected accordingly, the stipulation has been marked and filed, as a matter of convenience, as General Counsel's Exhibit No 16 2 See General Counsel's Exhibit No. 2, and Respondent's Exhibits Nos. 6 and 7. In each category of sales listed, the first figure represents sales in the first period, the second figure sales in the second period. NATIONAL GAS COMPANY ' 293 handled by them exceeds $9,000,000. With a few exceptions, these gins ship the cotton immediately after ginning to various compresses located in Missouri, receiving negotiable warehouse receipts therefor, which are sold by the gins to brokers or mill representatives. Title to the cotton vests in the buyers of the receipts, who either direct the compresses to ship the cotton, or sell it to other buyers who, in turn, direct the shipment of the cotton. From 95 to 99 percent of the cotton handled by the compresses is shipped directly from the compresses to points outside Missouri ; the remainder is shipped to other com- presses in the State for purpose of consolidation with other cotton and reship- ment to points outside the State. All cotton processed by the above gins and later handled by the compresses is thus destined for and eventually shipped directly or indirectly to-points outside the State.4 Respondent sold and delivered gas for the same purposes to six other cotton gins, all located in Missouri, in the following amounts : $5,661.45 and $3,241.83. Each of these gins annually gin and sell cotton valued between $50,000 and $100,- 000; the total annual value of cotton handled by them exceeds $900,000. With the exception of the fact that these gins do not buy cotton from farmers but merely sell it and remit the proceeds to the farmers, after deducting their ginning charges, the cotton processed by them is handled, and has the same ultimate out-of-State destination, as described in the preceding paragraph.` Respondent sold and delivered to Roberts Gin, Cairo, Illinois, gas in the following amounts : $45198 and $1,01118.` Respondent sold and delivered gas to three milling concerns located in Mis- souri, in the following total amounts : $2,874.31 and $2,285.71. Each of these concerns annually ships goods valued in excess of $25,000 to points outside Mis- souri. Respondent sold and delivered gas to an interstate railway and to Missouri plants of a national grocery chain, in the following amounts : First Period Second Period St. Lpuis & Southwestern Railroad________________ $260. 24 $184 40 The Kroger Company 7____________________________ 867.64 1,189.68 4 Respondent's sales to all of these gins, which buy and process cotton for their own accounts , have been taken into consideration , contrary to Respondent's contention , because they all handle and perform an essential processing operation on goods destined for out-of-State shipment, which clearly brings them within the third class of enterprises listed in Hollow Tree Lumber Company, 91 NLRB 635 , over which the Board would assert jurisdiction directly. See Queens-Premier-TTalltams Fur Dressing Corp, 92 NLRB 42. The fact that the gins do not ship directly across State lines does not prevent the exercise of jurisdiction , for under the Board's recently announced policy , it would take jurisdiction over a firm that sells its product within the State to another firm for shipment by the latter to another State . See Jacksonville Processing Corporation, 93 NLRB 943 Nor is it material that title to the cotton processed by the gins may change hands many times, through the negotiation of warehouse receipts issued therefor , before eventual ship- ment of the product out of the State The gins hold title to the cotton at least during the ginning process which is preliminary but essential to the interstate shipment , and intermediate transfers of title which precede but do not prevent the ultimate shipment out of the State cannot alter the interstate character of the whole transaction. Even if the gins never had title, they would still be within the jurisdiction of the Board, for it has been clearly established that an employer is not required, for jurisdictional purposes, to have title to goods which enter the stream of interstate commerce , it is sufficient that he process the goods See Texsun Citrus Exchange, 82 NLRB 540; N. L R B. v. Bradford Dgeinq Association, 310 U S. 318. i Sales to the "agent " gins are included in the calculations , because they fall within the class of local enterprises over which the Board would exercise jurisdiction , for the reasons stated in footnote 4, above 6 Since this sale is an instance of direct outflow, for convenience of calculation, the figures are doubled so as to represent the same ratio to $50 ,000 as the original figures would bear to $25 ,000, the minimum requirement as to direct outflow. 7 The Board has previously asserted jurisdiction over this concern. Kroger Company, 88 NLRB 194, and 93 NLRB 274. 215233-53-20 294 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The above facts indicate that in the first period Respondent had a direct inflow of materials value at approximately $150,000 annually, which is 30 percent of the minimum requirements of" the Board for assertion of jurisdiction on that basis.' In addition, Respondent furnished services and materials to interstate motor and rail carriers, a public utility, local enterprises each of which process and handle annually more than $25,000 worth of products destined for shipment- out of the State, and local enterprises each of which annually ship more than $25,000 worth of goods directly to points outside the State, in a total amount of $41,883.59, which is approximately 83 percent of the $ 50,000 minimum indirect outflow requirements for local enterprises furnishing services and materials to such concerns engaged in interstate commerce.' The combination of 30 percent of the direct inflow requirement and 83 percent of the indirect outflow require- ment exceeds 100 percent 1D In the second period, Respondent had the same direct inflow of 30 percent of the minimum requirement. Its services and materials furnished to the same customers as in the first period amount to $35,223.30," or approximately 70.4 percent of the minimum indirect outflow requirement. The combination of the two percentages still exceeds the required 100 percent. In both periods Respondent's business clearly exceeded the minimum require- ments set up by the Board's existing policy, and requires the assertion of jurisdiction." Respondent argues, however, that certain changes occurring in the liquid gas industry locally and beyond its control are curtailing its service to cotton gins to an extent which will shortly bring the volume of Respondent's sales -to customers operating in commerce below the minimum requirements of the Board's policy, and that the Board should therefore decline to assert juris- diction. In support of this contention, Respondent adduced proof" that : In recent years the liquid gas producers have required Respondent to buy gas on a ratio basis, i. e., a fixed number of gallons in the winter for every gal- lon during the summer ; that ratio has declined recently to 11/2 to 1, and will .shortly become 1 to 1, so that Respondent will he compelled to buy a constant volume of fuel throughout the year. In turn, Respondent will be forced to ask its customers to take fuel under contract on the same basis, or agree to .accept gas from Respondent only to the extent that Respondent has gas available in the "peak" seasons. This will require the cotton gins, in particular, to install ,storage tanks to accommodate purchases during their "off" season ; under these circumstances, the gins will probably install storage equipment which will enable them to purchase gas directly from the producer in carload lots .at substantial savings. Due to improved methods of operation, many gins are using more liquid gas in their business, particularly in the "peak" seasons ; Respondent will be unable to service these concerns in such seasons because of the limitations imposed on it by the "ratio" system of purchasing ; thus, these gins will likewise install storage equipment to meet their needs, and buy gas direct from the producer. For these reasons, Respondent is already losing some gins as customers and will lose more in the future. However, Respondent does not show how many of its gin customers have installed storage equipment ; and there is no definite proof of their reactions to its new con- 8 Federal Dairy Co , Inc., 91 NLRB 638. ° Hollow Tree Lumber Company, 91 NLRB 635 10 The Rutledge Paper Products Co., 91 NLRB 625. 11 This includes sales of $181.91 to International Shoe Company, over which the Board has repeatedly exercised jurisdiction. 12 See footnote 10 above, and Brooks-Noble Auto Parts & Machine Co , Inc., 94 NLRB 915. 13 Testimony of Kenneth C. Layton NATIONAL GAS COMPANY 295 tract proposals, except that one of the smaller gins has rejected them and converted to another type of fuel. Respondent also shows that: The advent of a natural gas line in the Sikeston area will make inroads on Respondent's business because that fuel is much cheaper than liquid gas; there has been a recent increase in the allocation of natural gas by the Federal Power Com- mission for this area, and the operator of the gas pipeline has plans for exten- sion of its facilities to adjacent areas where it will be available to more of Respondent's customers ; some of Respondent's industrial customers have already switched to natural gas. Respondent claims that cotton gins will probably convert to natural gas as soon as the distributor can assure them an uninter- rupted supply However, it does not indicate how many of its industrial cus- tomers have made the change, when it occurred, how much business it lost thereby, or whether any of these customers are listed in the stipulations of facts offered by the parties. Respondent admits that none of Respondent's gin customers have yet converted to natural gas; one gin tried natural gas, found the supply unsatisfactory and reverted to liquid gas, but is preparing to use natural gas again; however, it does not appear that Respondent has yet lost this customer. There is no proof as to when the local cotton gins will be assured of a continuous supply of natural gas, which is the critical factor in permanent conversion to that fuel. While it appears that six or eight of Respondent's gin customers are near the natural gas pipeline, none of them has converted ; and assuming that the gas facilities may soon be extended, Respondent could- not state which, if any, of its present. customers would be lost to Respondent, or when that loss would occur. It thus appears that the present threat from natural gas facilities is slight, and there is no substan- tial proof that it will definitely affect Respondent's business in the immediate future. Considered together, all of the above facts are at most a prognosti- cation of possible future changes in Respondent's operations affecting commerce. The nature, extent, and time of such changes is highly speculative and uncer- tain, and they cannot afford any justification for a refusal to take jurisdiction over Respondent, in the face of the clear facts and figures regarding Respond- ent's past experience, as found above, which demonstrate that Respondent has been since April 1949 and up to March 15, 1951," at least, clearly within the Board's present jurisdictional requirements. I therefore conclude and find, contrary to Respondent's contention, that Respondent was and is engaged in commerce within the meaning of the Act, and that it will effectuate the policies of the Act to assert jurisdiction in this case II. THE LABOR ORGANIZATION INVOLVED United Gas, Coke and Chemical Workers, C. I. 0., is a labor organization which admits to membership employees of Respondent. III. THE, UNFAIR LABOR PRACTICES A. Past relations between Respondent and the Union Pursuant to an agreement for consent election executed by Respondent and the Union, to election by secret ballot was held by the Regional Director 14 The alleged unfair labor practices occurred about the middle of the combined periods. 15 See Model Dairy. 72 NLRB 544; Hollow Tree Lumber Company, 91 NLRB 635 The Board would have jurisdiction to remedy any unfair labor practices found against Respond- ent, even if at the time of the Board's order it was established that the Respondent had withdrawn entirely from interstate commerce See N L R. B v. Cowell Portland Cement Co , 148 F. 2d 237, 241, enforcing as modified 40 NLRB 652, cert den 326 U S. 735 296 DECISIONS OF NATIONAL LABOR RELATIONS BOARD for the Fourteenth Region among Respondent's employees, as a result of which said Regional Director issued a consent determination of representa- tive on April 18, 1947, in Case No 14-R-1731, in which he certified the Union as the exclusive bargaining representative of Respondent's employees in an appropriate unit consisting of all production and maintenance employees, ex- cluding office, clerical, and supervisory employees (as defined in the Act prior to the amendment of 1947). Upon a petition filed by the Union pursuant to Section 9 (e) of the Act in Case No. 14-UA-883, the same Regional Director certified on April 30, 1948, that a majority of the employees in the above unit had authorized Loral 340 of the Union at Sikeston to make an agreement with Respondent re- quiring membership in the Union as a-condition of employment as provided in Section 8 (a) (3) of the Act. Within a few days after the initial certification of the Union in April 1947, Repondent and the Union negotiated and executed a 1-year collective bargain- ing contract which provided for a checkoff of union dues . In April 1948 the parties negotiated and executed a similar 1-year contract. On April 24, 1949, the parties executed a similar 1-year contract, containing a union-security clause, which was to remain in effect until April 23, 1950, and thereafter until canceled by either party on 60 days' notice.18 The 1947 and 1948 contracts were executed after only one or two meetings between the parties; the 1949 contract required two bargaining sessions and was finally settled and executed at a third meeting before a member of the Federal Mediation and Conciliation Service. During the operation of these contracts, the relations between Respondent and the Union were amicable ; only one grievance arose, which was settled informally ; during the operation of the 1949 contract, which did not contain a checkoff pro- vision, Respondent cooperated fully with the Union in correcting the delin- quencies of several employees who were behind in their union dues 11 B. The alleged refusal to bargain 1. The appropriate unit ; the Union's majority status The amended complaint alleges, the Respondent's answer admits, and I there- fore find, that all production and maintenance employees of Respondent, ex- cluding guards, office , clerical, and supervisory employees as defined in the Act, constitute a unit appropriate for purposes of collective bargaining within the meaning of Section 9 (b) of the Act. Respondent also concedes that the Union was the statutory representative of the employees in the unit from April 18, 1947, to May 18, 1950. The latter date was the occasion of Layton's final con- ference with Joseph Appelbaum, a representative of the Union, at St. Louis, at which Layton told Appelbaum, among other things, that he did not think the Union represented a majority of the employees any more Respondent and the Union operated between April 24, 1949, and April 23, 1950, under a contract containing a union-security provision, which in effect gave the Union a potential 100 percent membership among the employees in the unit to the extent permitted by the Act. Since Respondent adduced no proof that the Union had in fact lost its majority status before or after the latter date, it must be presumed that such status continued indefinitely thereafter" This presumption is strengthened 16 General Counsel's Exhibit No. 5 19 These findings are based on stipulated facts and the uncontradicted testimony of Layton 18 It is well settled that a union's representative status established by Board certifica- tion is conclusively presumed to continue for a reasonable time, usually 1 year after certification, and indefinitely thereafter until rebutted. Toolcraft Corporation, 92 NLRB 655; United States Gypsum Company, 90 NLRB 964; Poole Foundry and Machine Com- pany, 95 NLRB 34. NATIONAL GAS COMPANY 297 by the fact that all Respondent's employees in the unit, following a strike vote at a meeting called by the Union on May 8, 1950, went on strike at all plants on May 9, 1950, and a majority of them remained on strike at least until June 26,1950.'8 I therefore find that at all times mentioned in the amended complaint, and since April 18, 1947, the Union has represented a majority of Respondent's employees in the above unit, and the Union therefore was and is the exclusive representative of all said employees, within the meaning of Section 9 (a) of the Act. 2. The request to bargain ; the May 2 negotiations ; the termination of the installation employees In the negotiations set forth below, the principal correspondents and actors were Kenneth C. Layton, vice president, for Respondent, and William M. Wynn, international representative, for the Union. By letter dated February 10, 1950, the Union notified Respondent that it desired to modify the existing contract of April 24,1949, and requested Respondent to meet with it to negotiate terms of a new contract, advising that the Union's new proposals would be forwarded shortly2° Shortly thereafter, Layton advised Wynn by telephone that Respondent would be willing to confer with the Union regarding a new contract. By letter dated April 3, 1950, the Union sent a new proposed contract to Respondent, and requested a meeting with Respondent to discuss it.21 By letter of April 7, 1950, Respondent advised the Union that it would meet with the union representatives to discuss the new contract pro- posals on or after April 19, the date to be fixed by the Union.n On April 5, 1950, Respondent sent Local 340 of the Union at Sikeston a letter reading as follows : R2 APRIL 5, 1950. UNITED GAS, COKE & CHEMICAL WORKERS OF AMERICA, Sikeston, Missouri. (ATTENTION : Noble C Malone, President, Local 340 GENTLEMEN : We take this occasion to inform you of the intention of our company to make certain changes in our method of operation which are made necessary and advisable for economic reasons. The change in our method of operation will probably take place within the very near future and consists of the following : "Installation of all equipment and appliances including service during the warranty period and the delivery of gas will be handled by independent contractors instead of direct company employees." The above mentioned change in operations will necessarily entail the termination of our employment of the personnel of our company presently performing those duties We wish to advise you, however, that in contract- ing with independent contractors for this work that we intend to offer the opportunity to our present employees to submit bids and you may rest assured that we shall favor our present employees if they care to submit bids as independent contractors in every reasonable manner. We wish to make it clear to you that the change in operation is brought about simply because of economic conditions which we have carefully "Amalgamated Meat Cutters and Butcher Workmen of North America (The Great Atlantic and Pacific Tea Company), 81 NLRB 1Q52. 20 General Counsel's Exhibit No 6. Under article XV of the 1949 contract, this letter effectively terminated that, contract on April 23, 1950. 21 General Counsel's Exhibit No. 7 22 General Counsel's Exhibit No 8 E2 General Counsel 's Exhibit No. 9. 298 DECISIONS OF NATIONAL LABOR RELATIONS BOARD analyzed before making this decision and if you should desire to be supplied with any additional information in connection with the matter, please feel free to call upon us. Very truly yours, NATIONAL GAS COMPANY, KENNETH C. LAYTON, Vice-President. A copy of this letter was sent to Wynn at the Union's office in St. Louis, Missouri. On April 10, 1950, the Union replied to the letters of April 5 and 7 as follows : Z' Mr. KENNETH C. LAYTON, Plant Mgr., National Gas Company, Sikeston, Missouri. DEAR MR. LAYTON : Am in receipt of your letter of April 7th, informing us that you are willing to meet to discuss the proposed changes in the present Union contract after April 20th. Of course, I am very much interested in the letter which you sent out April 5th, in regard to contracting the work out. I am meeting with your employees on Friday, April 14th, and after that meeting I will get in touch with you for a meeting with the Committee and myself. Very truly yours, /s/ William Wynn, WILLIAM WYNN, International Representative. On April 14,1950, Wynn talked with Layton at Respondent's office in Sikeston, just before attending a meeting of the employees, and arranged with Layton to hold a bargaining conference on April 20, which was 4 days before the expiration of the 1949 contract. However, Layton suffered an injury shortly before and arranged with Wynn to hold the conference on May 2, 1950. During their discussion on April 14, 1950, Wynn told Layton he wished' to advise Layton of the Union's position regarding Respondent's proposal to con- tract out the installation work, and to obtain some information about the plan prior to meeting with the employees. He told Layton that the Union could not "go along" with Respondent's plan which would result in the loss of jobs by eight members of the Union, and that the Union was opposed to that type of operation. Layton explained that the Union already knew about Respondent's poor competitive position among liquid gas distributors in southeast Missouri, which was a reason for the change, and that Respondent had come to that decision after careful investigation. He said Respondent felt the decision to. contract out this work was a management prerogative, but also felt that it was proper to notify the Union of the decision. Layton also said that, although Respondent had made a careful study of the new plan, its feasibility in Re- spondent's operations was still an unknown quantity, and Respondent was will- ing to discuss it with the Union, but he felt that the only way Respondent could ascertain whether it was advantageous for the Company was by actual experience in the use of independent contractors. Layton also mentioned Respondent's tentative idea of taking care of the employees displaced under the plan by making independent contracts with some of them for the installation work. Wynn reiterated the Union's opposition to any plan which would result in the loss of jobs by members of the Union, and said that it would fight the change with every means at its command. 21 Respondent's Exhibit No. 1. NATIONAL GAS COMPANY 299 The first bargaining conference between Respondent and the Union was held on the afternoon of May 2, 1950, at Respondent's office in Sikeston. The Union was represented by Wynn and a committee of Local 340 consisting of Noble C Malone, president of the Local, Chester (Jack) Bennett, Gene Campbell, and Dayton Ford. Respondent was actively represented by Layton ; James Ward, manager of its Hayti branch, and Earl Corlew, manager of its Malden branch, were also present but took no part in the discussions. The meeting lasted about 31/ hours. At the outset, before consideration of the proposed contract, Layton reminded Wynn and the union committee that they had already received a letter indicating Respondent's intention to contract out the installation work, and said Respond- ent's stockholders had reached the decision on economic considerations. Wynn replied that the Union could not accept that decision. Layton then said the Company took the position that the matter of discontinuance of the installation department and handling of that work through independent contractors was a management prerogative, and was not a matter for negotiation with the Union ; however, he did not want the Union to feel that Respondent did not care to, discuss it with the Union at all, as Respondent recognized it was a "mutual problem." Layton suggested that, in the interest of reaching some agreement that day on the new contract proposals, the conferees should put aside discussion of the contracting plan for the moment and go through the new contract. This procedure was followed. The conferees took up and discussed the 17 clauses of the new contract one by one, comparing them with similar provisions in the expired contract. The first three articles of the new contract were identical with those in the old agreement and were agreed to with little or no discussion. The new article IV, relating to seniority, was substantially the same as the old clause ; Layton suggested it be modified to provide a more equitable plan under which employees could carry their seniority from one department to another when transferred ; after discussion, the parties agreed that any problems arising on this subject could be handled under the grievance machinery, and Layton then agreed to accept the clause as proposed. At first, Layton would not accede to the union demand for increased overtime, holiday, and Sunday pay contained in new article V, but after discussion he agreed to accept the new clause, contingent upon agreement of the parties on all other clauses. New articles VI and 'VII, relating to grievance procedure and protection of rights of employees called to military service, were accepted by Respondent as proposed by the Union. Article VIII of the new contract contained the Union's proposals for increased wages for employees in all departments, including the installation department. Wynn suggested that the Company might approve the clause as submitted, and they could settle the whole contract at that meeting. Layton referred to Re- spondent's decision to contract out the installation work (which would have deleted the installation department from the wage schedule), and said there was not much use in discussing the wages of the installation men, as Respondent had decided on that plan. After some discussion, Layton and Wynn agreed that since the wage problem was tied in with other conditions the Union wanted changed, it would be better to discuss the remaining clauses, and then come back to wages. Article IX of the new contract contained the same union-security clause as in the expired contract. Layton said Respondent did not favor a "union shop," reminding Wynn that they had run into difficulty on that point in the negotiation of the previous contract. Wynn pointed out that Respondent had operated for a year under a union-shop agreement without misunderstandings or bad.feelings. 300 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Layton finally agreed to accept the union-shop clause again , if agreement was reached on all other terms of the contract . Article X of the ilew contract provided for checkoff of union dues . There had been no checkoff provision in the previous contract , and Layton objected to it because of Respondent 's difficulties in administering the clause in an earlier- contract . When the parties could not agree on the clause, it was decided to pass it for the moment and return to it later during the discussion of wages. After discussion , the parties agreed on changes in proposed articles XI, XII, XIII, XIV, and XV which represented compromises between the terms of the old contract and the new union demands. Layton concurred in the idea of termination or severance pay, as provided in new article XVI, but said he thought Respondent could work out a more liberal severance pay arrangement for later consideration by the Union ; on the basis of this representation , the terms of that clause were left open for later discussion, so that the parties could return to a discussion of wages. After discussion, Re- spondent acceded to article XVII, providing for termination of the contract on substantially the same terms as in the prior agreement ; however, the no-strike clause in this provision related only to the period of negotiation of a new contract after cancellation or expiration of the existing contract, in contrast to the broad no-strike clause in the old contract which had been applicable throughout the effective period of that instrument. The parties then resumed discussion of the wage proposals , and Respondent's plan for contracting the installation work was again brought up by Wynn. Layton reiterated Respondent's decision to go ahead with the plan , and Wynn asked him how many of the installation men would have work with the Company under it Layton replied that he recognized the long service of these men with the Company, and their family obligations , and said that Respondent would attempt to make contracts with any of them who were interested , as suggested in Respondent's letter of April 5, 1950. He also stated that for several months Respondent had not been replacing employees who resigned , thus keeping its force at a minimum, in hope that some of the installation men could be retained to do maintenance work, which Respondent intended to carry on with its own employees. Layton suggested that Respondent could place the installation employees , who did not become independent contractors , on a preferential hiring list from which they would be called for maintenance work as needed, and Respondent was willing that they should retain all their seniority when so rehired Wynn asked Layton how many installation employees could continue that work for Respondent under the new plan, and Layton replied that two or three could be used as independent contractors . Wynn asked Layton for a copy of Respondent's proposed contract under which the installation work would be performed , but Layton did not have a contract form available nor did he give Wynn any information on the plan . The union men asked Layton whether the new plan also involved the gas delivery work, inasmuch as the letter of April 5 had mentioned that phase of the work. Layton replied that Respond- ent considered it impractical at the moment to contract out any work but the installation of new equipment , and that no change in the gas delivery department was contemplated at that time. At this point, the discussions were susrended for a short time during which Wynn and the union committee held a private conference After the recess, the Union proposed a new wage scale for employees in all departments , including installation , which was 20 percent less "across the board" than its original de- mands, but still 10 percent above existing rates Wynn said the Union would take the reduced pay increase and accept Respondent's idea as to a liberal termination NATIONAL GAS COMPANY 301 pay clause , if Respondent would abandon its contracting plan and accept the check- off. Layton declined to accept this proposal . Wynn then said the parties should quit "sparring around, " that no agreement could be reached on the contract until the matter of contracting the installation work was disposed of, that the entire matter hinged on the contracting plan, and that the Union would not stand for any change in Respondent's operation which would result in eight union members losing their jobs , and would fight the change with all available means. Just before adjournment of the meeting , Wynn requested that Respondent reconsider its decision and take no immediate steps to carry out the plan, in order to give the Union a chance to discuss the problem among its members, and work out a solution satisfactory to both parties . Layton replied that he would discuss the Union's last proposal with his directors, and would advise Wynn of their decision , and that Respondent would not take any definite action on the contracting plan until he had notified the Union . At the end of the meeting , Layton and Wynn tentatively agreed upon May 15 as the date for the next bargaining conference. Immediately after the meeting closed, Layton called Wynn into his private office and asked Wynn if the employees would strike over the contracting of the installation work, and Wynn replied that that was their intention, because the subject was of the greatest importance to them, and that when he said they would use every'means at their command to fight it , he meant just that. Wynn then said he wanted to get the contract plan out of the way "at all costs," and suggested that if Respondent would forget about the plan, Wynn would persuade the employees to accept a 5-cent an hour increase , abandon their new demands and make a new contract in the terms of the old one, with the exception of the 5-cent increase. Layton said he could not agree to that without discussing it with his directors 25 That evening Layton discussed the contracting plan further with Ward and Corlew, his branch managers, J. E. Moore, Jr ., president of Respondent, and Leonard Colley , se6retary and general office manager of Respondent The next morning, May 3, 1950 , Layton called a special meeting of Respondent's board of directors, which was attended by three of them : Moore, Layton , and Colley. Verona Moore, the fourth director and wife of J. E. Moore, Jr , was not present ; she is not active in the affairs of Respondent Layton reported to the directors, that it appeared the Union 's prime motive was to have the contracting plan dropped ; he outlined Wynn's final private proposal to Layton and his sentiment, indicated at the meeting , that the contract could be settled quickly if the contract- ing plan was abandoned . After discussion ( the details of which do not appear in the record ) the directors decided to proceed with their plan to contract the installation work and abolish that department . Late that afternoon Layton prepared and mailed a letter to Wynn, reading in pertinent part as follows : WILLIAM WYNN, Int'l. Representative, United Gas Coke and Chemical Workers, St. Louis, Missouri. DEAR BILL: As I promised , I am notifying you of our decision to contract our installation work. As I have repeatedly said, we do not consider this matter to be a bargain- able issue, but do recognize your wish to be kept informed of our contemplated operations. 25 The above findings are based on uncontradicted documentary evidence and a com- posite of credited testimony of Layton, Ward, Corlew, Wynn, Chester Bennet, and Ford. Testimony in the record which conflicts with these findings is not credited. 302 DECISIONS OF NATIONAL LABOR RELATIONS BOARD We sincerely feel that this is the best approach to this situation , and that it represents the most economical type of operation that we can effect. Very truly yours, NATIONAL GAB COMPANY, /s/ Kenneth C. Layton, KENNETH C. LAYTON, Vice President. kcl/s Enclosure Layton enclosed in the letter a mimeographed notice of the same date, also prepared by him, which stated : MAY 3, 1950. Effective Monday, May 8th, 1950 the National Gas Company will discontinue the regular installation of appliances and equipment. This of course means that effective as of this date your services will no longer be required. Work of this type will be handled in the future by independent contractors. Your past service to the company is appreciated, and if you require a service letter we will be glad to furnish it to you. If there are any questions concerning this matter, I will be glad to discuss them with you. Your final check which will be available Wednesday, May 10th will include all of your work through May 7th plus any vacation time you would be normally due, less any money due the company on advances or unsecured accounts. Very truly yours, NATIONAL GAS COMPANY, /s/ Kenneth C. Layton, KENNETH C. LAYTON, • Vice President. At the same time Layton caused a copy of this notice to be mailed or delivered to each installation employee ; the installation men at the Hayti branch found their copies in the time-card rack, where they had been placed by Ward on orders from Layton." 3. The strike of May 9, 1950 Upon receipt of Respondent's letter of May 3, Wynn called a meeting of Re- spondent's employees at Sikeston on Monday evening, May 8, 1950. Just prior to the meeting, Wynn advised Layton in the latter's office that he was going to discuss the contracting problem with the employees, and asked Layton whether Respondent still maintained its stand on the contracting problem, and whether Layton would not try to work out the problem with the Union. Layton replied that Respondent would adhere to its previous decision. Wynn then said that unless he could advise the employees that Respondent had changed its position, they would probably take a strike vote, and the plant would be shut down the next morning. Layton replied that he would regret it if they struck, but if that was their attitude, they could go ahead and strike ; the Company would stick to its decision. Wynn asked Layton for figures and other details of the proposed contracting arrangement. Layton said the figures had not yet been compiled, as Respondent was still exploring that subject. Wynn asked Layton to meet "These findings are based on General Counsel's Exhibits Nos. 10 and 11, and credited testimony of Layton and Ward. NATIONAL GAS COMPANY 303 with him after the employees' meeting, saying the men did not want to strike, as that would hurt both the employees and Respondent, but wished to try and work out the problem with Respondent first. Layton said he would not be avail- able for a conference that evening. Wynn then suggested a meeting about 7 a. in. Tuesday ; when Layton demurred at 'the early hour, Wynn said the matter was serious, for if there was a strike vote that night, and the Union did not give Respondent a chance to' arrange another meeting to settle the dispute, there would be a strike. Layton did not suggest or agree to another meeting. Im- mediately after this discussion, Wynn and the union committee met with the employees and reported to them that Respondent had refused to discuss its decision to discontinue the installation department, that Respondent had deter- mined to go ahead with the plan, and there was nothing the Union could do about it. The union membership authorized Wynn and the committee to discuss it further with Respondent in an effort to change the decision and, if a satis- factory agreement could not be reached, to call a strike. Early Tuesday morning, May 9, 1950, as the employees were reporting for work, Wynn and a union committee, consisting of the two Bennetts and Dayton Ford, met,Layton in his office. Wynn advised Layton that the men were opposed to the contracting plan and were prepared to stay on strike- until Respondent changed its decision, but were still willing to sit down and negotiate a satisfastory settlement. Layton replied that there was nothing Respondent could do if that was their attitude, and that Respondent had definitely decided to go ahead with its plan. The employees at Sikeston did not report to work, and started to picket the plant. All employees at the Hayti and Malden plants went on strike the same day. The strike continued at all plants until about June 26, 1950, and at Sikeston -until July 10, 1950.' 4. The meeting of May 12, 1950 On May 9, 1950, shortly after the strike started, Arthur Hale, a member of the Federal Mediation and Conciliation Service, U. S. Department of Labor, had a short discussion with Layton at Sikeston about the strike. The details of the conversation are not in the record. On May 12, 1950, Hale came to .Sikeston and arranged and presided at a meeting that afternoon in Respondent's office between Layton, Wynn, Joseph Appelbaum, another representative of the Union from St. Louis, and the two Bennetts and Ford from Local 340. At the outset Hale asked the parties whether Respondent would be willing to put the installation men back to work, discuss and settle with the Union the problem of contracting out that work, and then work out and sign a new contract with the Union. The Union was agreeable to this, but Layton in effect rejected the suggestion, saying Respondent would be willing to talk about the matter as long as the Union desired, but its position on the contracting plan remained the same, that the decision on that subject was a management prerogative, and was not negotiable, and Respondent would continue with its plan because it needed actual experience to determine whether the plan was advantageous for the Company. He also said he felt that this decision was "in line," because the Union had never presented any counterproposition which could be compared as to cost with the contracting plan, and had never indicated that it would accept any modification of that plan, and thus he could see no reason for putting these men back to work and then be faced with another shutdown after another bargaining session ; any arrangement to put the former installation men back 27 These findings are based on credited testimony of Layton, Wynn, Ward, Howell, and Chester Bennett. 304 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to work would only be "borrowing trouble." Layton added that he could see no reason why they could not continue contract negotiations regarding the remainder of Respondent's operations which were covered by the contract and involved most of its employees.2' Wynn stated that the Union had an interest in Respond- ent's problems and appreciated its difficulties, and that he felt the employees could go a long way toward straightening out the problems without the necessity of contracting out the installation work. Appelbaum then referred to negoti- ations the Union had held with LaClede Gas Light Company in St. Louis, Mis- souri, regarding its procurement of a large installation job by independent contract, in an effort to indicate that independent contracting was not the solu- tion for Respondent.20 At this point, the conciliator suggested that Respondent allow. one independent contractor to do its installation work -on a trial basis, to ascertain how it worked out over a period of time such as 1 year, and that Respondent rehire the installation men during that period. Layton said he thought that was "something that I could be sold on," and said Respondent would be willing to try that plan for a year, at the end of which period it could com- pare the cost figures on performance of installation work by independent con- tract and by it own employees. Wynn asked Layton how any of Respondent's employees could arrange to handle the installation work on a contract basis, and Layton replied that if any former employees were interested in becoming independent contractors, he would see that they were financed, and they could use company trucks ; that could be worked out and was not a problem. During this discussion, Layton pointed out that one independent contractor would re- place two installation employees, I. e., an installation man and his helper ; the contractor would also have to hire a helper, who might well he a displaced installation helper, especially if the contractor was a former installation em- ployee. Appelbaum would not agree to this suggestion, taking the position that the Union could not agree to anything that would cost any union member his job. He said he thought he could show Layton where Respondent's thinking on the plan was wrong, but when Layton asked for facts supporting his contention. Appelbaum produced none, repeating that Respondent was wrong in its view, and "at least the Union could take no other position." Layton told the con- ciliator that if the Union would not compromise on the contracting plan, where Respondent had gone more than halfway by agreeing to use only one independent contractor, he did not see how they could come to any understanding, and Respondent could not see its way clear to go beyond Hale's suggestion At the close of the meeting, the union representatives suggested another meeting at which the parties might attempt to resolve the dispute. Layton said he would take it under consideration. Layton also asked about the bargaining meeting tentatively scheduled for May 15. Wynn replied that the Union would not attend any further meetings for discussion of the contract until the con- tracting problem was settled and the strike discontinued. This was the last formal meeting between Respondent and the Union ; neither party made later overtures to resume contract negotiations 30 "The discontinuance of the installation department affected only 8 employees out of a total of about 30 in the 3 plants. 29 Appelbaum produced no figures or details regarding the St. Louis case to support his contention Wynn testified credibly, and I find, that LaClede Gas Light Company con- tracted out the entire installation job to an independent contractor, after discussion with Local 6 of the Union at St. Louis, none of the installation work was performed by members of the Union as employees of LaClede 30 These findings are based on a composite of credited testimony of Layton, Wynn, Appelbaum, Ford, and the two Bennetts. Testimony of any of these witnesses in conflict with the findings is not credited NATIONAL GAS COMPANY 5. Contentions of the parties 305 The principal issue raised by the pleadings, the record, and the arguments of counsel is whether Respondent 's decision to contract out its installation work and discontinue its installation department was a subject on which it was required to bargain with the Union, on request, before carrying out the decision. The corollary issue is: Assuming the shutdown was a bargainable matter, whether Respondent in fact refused to bargain with the Union thereon. In urging the affirmative on both issues, General Counsel contends that, although Respondent appeared to bargain with the Union on many provisions of a new contract at their sole bargaining session, such bargaining was not bona fide be- cause it was prefaced by Respondent's adamant and illegal refusal to bargain on the contracting issue, which refusal was part and parcel of a predetermined course of conduct designed to discredit and eventually aet rid of the Union in Respondent's plants On the other hand, Respondent argues that it was under no legal obligation to bargain with the Union concerning the discontinuance of a department of its business and contracting out the work therein for economic reasons ; and even if obligated to bargain thereon, Respondent fully discharged that duty and also engaged in bona fide bargaining on all provisions of a new contract. The legality of the discharge of the employees in the discontinued department is directly affected by the resolution of these issues. The principal issue stated above is primarily a legal problem and will be considered first. Section 7 of the Act establishes the right of employees, among other things, to bargain collectively through representatives of their own choosing Under Section 9 (a) of the Act, the bargaining agent selected liy the majority of employees in an appropriate unit is constituted the exclusive representative of all employees in the unit for purposes of collective bargaining "in respect to rates of pay, wages, hours of emplyoment, or other conditions of employment " It has been held that termination of employment by discharge is an action affecting a "condition of employment" or the "tenure of employment," and is therefore a proper subject for collective bargaining, upon the theory that by such action the employee loses his job at the command of the employer. and the effect upon the "conditions" of employment is that the employment, or the man's tenure of his job, is terminated.' If this reasoning is valid as to discharge of individual employees, it would appear to apply a fortiori, to employer actions resulting in the termination of groups of employees, where the impact and results of the discharges are greater and more widespread However, the Board has consistently held that an employer is not required to consult or bargain with a union regarding a major change in its operations effected for nondiscriminatory reasons. In the early case of Brown-McLaren Manufacturing Company, 31 NLRB 984, the Board absolved the employer of any duty to bargain with a union regarding the removal or transfer of operations from one plant to another, where the move was brought about by a bona fide desire to avoid continued operation at a loss at the first plant, which was occasioned in part by the refusal of the union to agree to a reduction in wages. The Board found that the economic factors which dictated the removal of operations were beyond the control of the employer. In re !llahaiirnq Mivinq Corn pony, 61 NLIiIl 792, the Board held that an employer who contracted out the operation of certain mines for economic reasons, and thereafter refused to bargain with the union regarding the workers 31 See Inland Steel Co . v N L R B , 1'70 F 2d 247 (C A 7). enforcing 77 NLRB 1, cert. den. 336 U. S 960 It should be noted that, by section 11 of arhrle VII of the union- security contract of April 23. 1949 (General Counsel's Exhibit No 5). Respandent here, like the employer in the Inland Steel case, had recognized that the dicoharge of an em- ployee was a subject for discussion under the grievance procedure set up by the contract 306 DECISIONS OF NATIONAL LABOR RELATIONS BOARD in those mines, did not thereby violate the Act, notwithstanding the fact that former employees of the employer in those• mines had been included in a cer- tified appropriate unit, and the employer and union had made prior collective bargaining contracts covering such employees. In reversing the Trial Examiner on this point, the Board said (61 NLRB 792, at page 803) : Since changing conditions in industry necessitate revision of bargaining units which will best effectuate the policies of the Act; the Board has never held that once it has established an appropriate unit for bargaining pur- poses, an employer may not in good faith, without regard to union organi- zation of employees, change his business structure, sell or contract out a portion of his operations, or make any like change which might affect the constituency of the appropriate unit without first consulting the bargain- ing representative of the employees affected by the proposed business change. In re Walter Holm ,& Company, 87 NLRB 1169, the Board held that an employer's sudden unilateral discontinuance of its trucking operations, and concomitant discharge of the drivers engaged therein, for economic reasons, without prior consultation with the union, did not violate the Act. In reaching that con- clusion, the Board specifically found that the discontinuance of the operation was for nondiscriminatory reasons, and then said (87 NLRB at page 1172) ; "And Section 8 (a) (5) does not require an employer to consult with its em- ployees' representative as a prerequisite to going out of business for nondis- criminatory reasons," citing the Mahoning Mining case. At first glance, these cases appear to support Respondent's contention that its refusal to bargain with the Union regarding the proposed contracting out of its installation work, and the contemporaneous discharge of its installation employees, was justified and did not constitute a refusal to bargain within Section 8 (a) (5) of the Act. On that premise the discharge of the installation employees must be considered nondiscriminatory, and would not constitute a violation of Section 8 (a) (3) of the Act. However, in view of the secondary issues litigated herein, Respondent's bare decision to shut down a department and discharge the workers therein cannot be considered in vacuo. General Counsel argues that the decision, Respond- ent's attitude thereon during the negotiations, and the subsequent discharge of the employees, were only part of a discriminatory scheme to discredit and finally get rid of the Union. He claims that the scheme comprised the following steps : (1) The decision of April 5, 1950, to contract out the installation work, discontinue that department, and discharge the employees therein; (2) the refusal to bargain with the Union thereon after April 5, 1950; (3) the actual discharges of those employees on May 8, 1950; (4) the resultant precipitation of the strike of May 9, 1950; (5) negotiation of ostensible but spurious inde- pendent contracts with individual employees for the installation work before and during the bargaining negotiations and the strike; (6) coercive statements to striking employees during the strike designed to break the strike and dis- credit the Union; (7) individual bargaining with employees in derogation of its duty to bargain with the Union as their statutory representative. This contention requires careful analysis of the factors leading to Respondent's decision for the shutdown, the manner in which it carried out its contracting plan, and an appraisal of its bargaining at the meetings of May 2 and 12 in the NATIONAL GAS COMPANY 307 light of its contemporaneous and later conduct toward its employees during the contract negotiations and the strike.' 6. The evolution of the contracting plan Respondent first began to consider the possibility of contracting out part of its operations in the latter part of 1949 . For some time before, its new business department, which handles the sale and installation of new gas appliances, had been operating at a loss for several reasons. Respondent had found it impossible to exercise close supervision over the work of its installation crews, who operated over an area comprising more than six counties, because it was impractical to hire a supervisor for every installation crew of two men ; consequently, Respond- ent was forced to rely upon occasional inspection of the work of the crews, but could not thereby, assure efficient use of working time by the men ; as a result, the labor cost of installation work tended to remain constant , despite fluctuations in the volume of new business, due to slow-down practices of the installation crews during slack periods designed to assure them full workweeks and often overtime pay ; Respondent's attempts to correct these practices through appeals to the Union proved unsuccessful. In addition, Respondent was encountering increased competition locally in the sale of new appliances. Respondent's price for a gas heating furnace included the cost of installation, which in turn included the cost of sheet metal work that is performed for Respondent by sheet metal contractors under contract ; the selling price thus included Respondent's markup on the appliance and the sheet metal contractor's profit on his work. In these sales, Respondent cannot compete with the sheet metal contractors who also directly sell and install appliances, but at an over-all price which includes only the actual cost of the appliances, the contractor making his profit on the sheet metal work involved in the installation ; the dealer's markup on the appliance is thus eliminated . For the same reasons, Respondent was finding it difficult to compete with independent plumbers in the sale and installation of gas water heaters. Furthermore, Respondent is in competition with an increasing number of small concerns selling gas heating appliances, many of which are family-owned and -operated businesses , such as hardware and general stores, with small invest- ments, low overhead and upkeep, whose proprietors can afford to sell and install appliances at cut rates. To compete with these concerns, Respondent would have to install a complete sheet metal department or attempt to procure that work on a fixed-fee basis, both of which plans were explored and found costly and impractical. As a result of these conditions, Layton started in December 1949 to investigate the practices and experience of major oil companies, large fuel distributors, and other firms in the handling of various operations through the use of independent contractors, and ascertained that many concerns found that plan economical both for the installation of equipment and delivery of products to customers. As a result, Respondent also investigated the feasibility of contracting out the delivery of gas and servicing of equipment, but concluded that it would be impractical to handle those operations through independent con- sr The applicable rule has been stated by the Board as follows : "We recognize that an employer may lawfully discontinue or reduce operations for any reason whatsoever, good or bad, sound or unsound , in its sole discretion , and without censorship from this Board, provided only that the Employer's action is not motivated by a purpose to interfere with and defeat its employees' union activities . If the latter is the true purpose, it is unlaw- ful " Pepsi Cola Bottling Company of Montgomery, 72 NLRB 601, 602 , and see Eva-Ray Dress Manufacturing Company, Inc, 88 NLRB 361. In the Mahoning Mining and Walter Holm cases, cited above, the Board examined the circumstances surrounding the change in the employer's operations , in determining the issue of discriminatory motive rel non. 1 308 DECISIONS OF NATIONAL LABOR RELATIONS, BOARD tractors, because of the high degree of control over such operations required to maintain satisfactory service, which did not lend itself to an independent con- tractor setup. However, Respondent finally decided to contract out the installa- tion of its new gas appliances because it concluded that it could thereby effect ,in over-all saving of approximately 15 percent in the actual cost of installation ; it would also eliminate the cost of public liability insurance, which would be borne by the contractors, and Respondent's direct liability to customers for neg- ligence of its employees In reaching this decision, Respondent acted upon the advice of counsel, both with respect to the legality of the proposed change and the independent contractor plan, and its duty to bargain with the Union regarding the change of operations. Respondent's officers reached the decision to proceed with the plan in the latter part of March 1950, but the official letter announcing the decision was not sent to the Union until April 5, 1950: Respondent delayed publication of the decision awaiting final approval of the plan by its counsel, which was apparently not forthcoming until that date. About the middle of April, Respondent posted a notice to employees on the bulletin boards in all plants, stating the decision to contract out the installation work and advising that Respondent was also considering the possibility of handling gas delivery by that method During its study of the contracting plan, Respondent made no secret of the fact that it was considering the plan involving discontinuance of its instal- lation department and possibly other operations. Malone, the installation man at Malden, and installation men at the other plants, learned of it and discussed it among themselves early in 1950, and as a result, Malone broached the sub- ject to Layton several months before he received the letter of April 5, 1950. At that discussion, Layton asked Malone what he thought about the plan, and Malone replied he did not know whether "we could make a go of it" (apparently meaning, as independent contractors) but was willing to talk about it. There Has some mention of the prices at which Malone, as a contractor, could make installations, but no definite figures were submitted by him nor was any con- clusion reached on the subject at that time; nor did Layton indicate that Respond- dent had reached any decision on the plan. After Respondent posted the notice on the bulletin boards in April, and before the strike, Dayton Ford, gas deliveryman it Sikeston, asked Layton for data on the proposed contracting of gas delivery. Layton replied that he had no data,on. it, but promised to notify him when he nad something definite ; he never discussed it further with Ford.33 In the same period, when Ralph Williams, night mechanic at Sikeston, asked Layton for details about the contracting plan, Layton replied that he had no figures then, no contracts had been prepared, and he did not know just how he would do it. Layton asked Martin E Duke, installation man at Sikeston, what he thought about the plan, and when Duke expressed his ignorance about the matter, but said he thought the men would know more about it when it was put "on the table" in discussion with the employees and their union leaders, Layton replied that it would never be "put on the table." 34 I find nothing in the above facts to indicate that Respondent, in its investi- gation of the feasibility of contracting the installation work, or in reaching its initial decision to take that step, was motivated by other than economic or business considerations. There is no conduct of Respondent up to and including the announcement of the decision on the bulletin boards about April 15, 1950, 33 Respondent gave up the idea of contracting out the gas delivery work before its nego- tiations with the Union on May 2, 1950. 34 These findings are based on the credited testimony of Layton, Malone, Ford, Bush, Martin E. Duke, Chester Bennett, and Ralph Williams. NATIONAL GAS COMPANY 309 which substantially indicates any antipathy toward , or scheme to get rid of, the Union ,5 When Layton indicated to Wynn, the union agent, on April 14, 1950, that Respondent would not bargain with the Union over its decision to contract out the work, Layton learned for the first time from Wynn that the Union was definitely opposed to the contracting plan and would fight it. Respondent had experienced a strike of its employees in 1947 which was settled after charges were filed by the Union,3' and Layton could reasonably have inferred from Wynn's statement on April 14 that the Union might call a strike if Respondent pro- ceeded with its contract plan . In fact, a week before the strike, Moore, president of Respondent, asked Ralph Williams, night mechanic , and Clark Mattison, janitor, at the Sikeston shop one night, whether they thought the men would strike. Williams said he did not know. The record also shows that at least after Respondent posted its announcement of the decision to discontinue the installation department, there was discussion among some of the employees about the possibility of a strike. Moreover, it is a fair inference that in an organ- ization of about 30 employees , Respondent's officers and managers were cog- nizant of such discussion.' I therefore find that between April 14 and May 2, 1950, Respondent knew that the employees were discussing the possibility of a strike if Respondent discontinued its installation department and terminated the jobs of the installation men. Turning to the events of May 2, 1950 , I am unable to agree with General Counsel's contention that Respondent's conduct during the bargaining session of that date of itself evidences a lack of good faith in dealing with the Union. I have concluded , as a matter of law, that Respondent was not obligated to bar- gain with the Union on its decision to contract the installation work. It follows that Layton's insistence throughout the meeting that the decision was a manage- ment prerogative and not negotiable as such. does not constitute a refusal to bargain, nor does it taint the bargaining on other issues . Layton had previously explained to Wynn the economic reasons which led Respondent to its decision, and I do not consider his failure on May 2 to repeat or further explain those reasons as indicative of bad faith , particularly when the Union did not question the need for the contract plan , produced no arguments or facts in' an attempt to convince Respondent that the plan was economically unsound , and proposed no definite substitute. However, Respondent was still obligated to bargain with the Union re- garding the reemployment of the workers who would be displaced by operation of the plan " I am persuaded that Respondent fulfilled its obligation in this regard at the meeting of May 2. While Layton maintained the decision to con- tract was not negotiable, he readily discussed its effects with the Union, recog- nizing it was a "mutual problem." In answer to Wynn's questions, he explained 35 The history of amicable relations with the Union since 1947 overweighs any sinister inference which might be drawn from Layton 's early discussion of the contracting plan with Malone, president of the local Union, or from Layton's equivocal statement to Wil- liams that he was prohibited by some law from negotiating on the contracting plan with the Union , or even from his remark to Martin E. Duke that the plan would never be laid "on the table" for discussion with the Union ; the latter remark obviously stemmed from advice of counsel. 36 Respondent executed a settlement agreement on April 4, 1947, in Case No. 14-C-1277, which was approved by the Fourteenth Regional Director and provided only for reinstate- ment of 16 named employees , without back pay or posting of` notices ( General Counsel's Exhibit No. 4). 37 See Quest-Shop Mark Brassiere Company, Inc., 80 ,NLRB 1149, 1150. 5 Brown-McLaren Manufacturting Company, 34 NLRB 984; Syncro Maehine Company, Inc., 62 NLRB 985. 215233-53-21 p 310 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Respondent's willingness to offset the economic blow to the installation workers by attempting to contract with some of them for that work, and its plan to absorb the others as soon as possible in other departments of the business. The Union submitted no counterproposals to these suggestions ; it merely reiterated its demand for complete abandonment of the contracting idea and for retention of all installation men as employees. Layton's suggestions for taking care of these employees was consistent with the offer contained in Respondent's initial announcement of the plan to the Union in April, and also indicated a proper regard for their welfare. Such conduct is more indicative of sincerity than of bad faith in bargaining. Aside from the contracting issue and the effects of the plan, the record indi- cates that there was bona fide bargaining on other contract provisions: the parties discussed and arrived at agreement on most of the union proposals, subject only to reaching agreement on the whole contract (which included proposed wage increases for the installation men). Moreover, the parties followed the same method of bargaining they had used in their negotiation of three previous contracts : the Union submitted a new contract form at the outset, which was discussed by the parties paragraph by paragraph, the Respondent offering some oral counterproposals which were discussed ; Respondent rejected some proposals, accepted some as offered, and reached a compromise with the Union on others. There was no deviation by Respondent from the previous method of bargaining which would warrant an inference of bad faith. Con- sidered as a whole, the open meeting of May 2 presents a picture of bona fide and progressive bargaining between the parties which broke down only when the parties reached an impasse at the end over the contracting issue. However, neither party closed the door to further discussion in an effort to eliminate the impasse : a date for another bargaining meeting was tentatively fixed, and Respondent promised to reconsider its decision on the installation department and advise the Union before taking definite action thereon. Immediately after the meeting, Respondent learned of the anxiety of the Union to avoid the,dis- continuance of that department "at all costs," when Wynn indicated to Layton that the Union would probably yield on practically all its demands if Respondent would abandon its plan. When Layton reported this fact to the directors the next morning, they immediately decided after a short discussion to proceed with the contracting plan, authorizing Layton to take the necessary steps. The same day he sent the notices to the eight installation employees, termi- nating their employment effective the next Monday, May 8, ,1950, and at the same time sent the letter to Wynn reaffirming Respondent's decision to proceed with its plan. Although the notices to the employees were effective 5 days hence, they constituted the first definite step toward consummation of the plan, and when Layton issued them, without advising the Union beforehand, he in effect broke his promise of the previous day to Wynn and the union committee. The breach of this promise on a matter he knew to be of vital importance to the Union, raises some doubt as to the bona fides of the promise itself, and Layton's motive in making it. However, I cannot resolve that doubt into a finding of bad faith bargaining, first, because Respondent was not legally bound to bargain with the Union about its decision to shut down a department and, secondly, because Layton did not learn until after the meeting of Wynn's anxiety to have the contracting plan abandoned ; and it was only after Layton reported that attitude to the directors the next morning, that they determined to go ahead with the plan. Even then, Layton did not utterly flout the Union; he NATIONAL GAS COMPANY 311 disregarded his promise only to the extent of advising the Union of the decision to go ahead simultaneously with, rather than before, the sending of the termi- nation notices. Indeed, in a technical sense, it can be said that the Union still received notice of the decision before the first step in execution of the plan became effective, as the termination of the installation employees took effect May 8; and Wynn told Layton on the telephone on May 4 that he had received Respondent's letter of May 3, was disappointed in Respondent's decision, and was going to meet with the employees shortly to discuss it further. The Union thus received some advance notice of the terminations ; it was not suddenly pre- sented with a fait accompli. I therefore do not regard Respondent's deviation from its promise of May 2 as substantial evidence in itself of a refusal to bargain, nor as sufficient to warrant the conclusion that Respondent's entire dealing with the Union on May 2, 1950, was in bad faith. Although Respondent knew, when it sent out the termination notices, that the Union would fight the contract plan and that Respondent was risking a strike if it went ahead with the plan, this is far from saying, as General Counsel con- tends, that by this move Respondent was deliberately precipitating a strike in order to discredit the Union ; that conclusion would also require the assumption that Respondent was consciously inviting a possible shutdown of its whole busi- ness (which in fact occurred) in order to undermine the Union. At this point, I cannot lightly infer the existence of such an intent, in the face of the substantial proof that Respondent's original conception of the' plan arose from economic considerations, and that those considerations were made known to the Union before the installation employees were discharged. As evidence of bad faith, General Counsel points to Respondent's omission to advise the installation employees or the Union, at the time of their discharge, of its plan to absorb them in its maintenance operations.39 Layton had already explained the plan to the Union on May 2, and it would have been consistent and indicative of continued good faith to mention it in the termination notices to the employees directly concerned. At the hearing, Layton attempted to explain this omission by saying that, although he recognized the terminated employees were entitled to be advised of Respondent's plans for their reemployment, he did not think it proper to mention that in their notices, because he considered it a "condition of their employment, and as such should be properly discussed with union representatives" and "not with the individual employee." This explana- tion is not convincing, because he did not mention the subject in his letter of May 3 to the Union ; if he had done so, he would have avoided the appearance of ignoring the Union. The omission of this important subject from Respondent's first letter to the Union after the contract negotiations broke down, in sudden contrast to Layton's open discussion of the problem with the Union the day before, is a persuasive indication that Respondent's attitude toward the Union had changed, and that on May 3, 1950, it was no longer desirous of talking with the Union on a matter which it was obligated to discuss with that organization. This sudden change of attitude raises the question whether Respondent's conduct on and after that date was motivated by other than business reasons. This leads to a consideration of the manner in which Respondent proceeded subsequently to make contracts with certain employees regarding the installation work, and its relations with those men under the contracts. r Layton and Ward testified credibly, and I find, that at the time of the negotiations in May, Respondent had accumulated a 2-year backlog of field maintenance work to be per- formed on company-owned equipment ; little of this work had been done since May 1950, and at the time of the hearing the Company still had a substantial backlog thereof. 312 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 7. The contracts for installation work 4° General Counsel argues that Respondent made contracts with four employees which in form appeared to set up a true independent contractor relationship, but in substance and actual practice gave Respondent such control over the opera- tions of the contractors that they remained in fact "employees" of Respondent. The Employer argues the converse of the proposition. In determining whether an employer-employee relation or that of independent contractor exists, the Board has consistently applied the "right-of-control" test, under which it has been held that an employee relationship exists where the person for whom the services are performed reserves the right (even if not exercised) to control the manner and means by which the result is accomplished ; conversely, an independent contractor relationship exists where the control is merely limited to the result to be accomplished and does not apply to the method and manner of services rendered. In ascertaining the degree and nature of the control exercised, the Board has considered all relevant facts showing the background of the parties, the circumstances under which the contract relationship was created, its relation to the employer's business, the manner in which the parties carried out the contract, the permanence of the arrangement, and similar factors. 41 The notice of May 3 to the installation men terminated their services "effective May 8th, 1950," and advised that they would be paid for work performed through May 7; in effect they were off the payroll at the close of business on May 7 and were no longer employees on May 8, so far as Respondent's records were con- cerned. On the morning of May 8, 1950, Malone was advised by Corlew, manager at Malden, at the request of Layton, that Respondent was having a meeting that day at Sikeston with men interested in contracting for the installation work, and that Malone should go to Sikeston if he was interested. Malone met Layton at Sikeston that morning, and submitted a bid for the work, consisting of a list of rates at which he proposed to install appliances. The same day Layton extended invitations, through Ward, manager at Hayti, to J. W. Smith, installation man, and Clifford James, service and installation man, both at Hayti, to s';e him about the contracting. That afternoon, Malone, Smith, and James met with Layton at Sikeston, where all four reviewed and discussed the price list which Malone had submitted to Layton earlier that day ; the three employees had previously discussed and agreed upon these figures among themselves. After some bargaining on the rates, Layton told the men the prices appeared acceptable as submitted, but the Company desired to consider them further. There was some discussion of other terms of a contract, and the conditions under which the installation work would be done, and Layton made notes thereof for the purpose of preparing a contract. Layton had a contract form prepared on May 9, the day the strike started, and personally took it to St. Louis the morning of May 10, where it was reviewed by Respondent's counsel to make sure that it set forth a true independent contractor relationship; certain clauses were added by counsel to achieve this result. Layton brought the corrected draft back to Sikeston that afternoon and had it prepared in final 40 The findings in this subsection are based on credited testimony of Layton, Malone, and williams, except where otherwise noted. Testimony of these and other witnesses in con- flict with the findings is not credited. Smith, Steinberk, and James, .who were ,involved in the contracting arrangements and operations, did not testify ; James is still employed by Respondent, and'Smith has likewise continued as an employee, though under the guise of a contractor, as will appear below. 41 Steinberg & Company, 78 NLRB 211, 221-223; Alaska Salmon Industry, Ine., '81 NLRB 1335, 1338 ;and other cases cited In' Waiter Holm & Company, 87 NLR11 1169, at 1172; N. L. R B. V. Nu-Car Carriers, Inc., 88 NLRB 75, order enforced 189 F. 2d 756 (C. A. 3) decided June 13, 1951. NATIONAL GAS COMPANY 313 form.42 As soon as he returned, he had Ward and Corlew get in touch , with the three men and advise them that the rates they submitted were acceptable, that the contract form was ready, and Respondent was in a position to enter into contracts with them. Smith signed the first contract on the evening of May 12, 1950. Malone signed his about June 1, 1950. There is no proof that James signed the contract, or ever became an independent contractor. John Steinbeck, former installation man at Sikeston, signed a contract on June 1 or 2, 1950. Ralph Williams, maintenance man at Sikeston, signed a contract sometime after the strike ended on July 10, 1950. Although Layton claimed Respondent had all the installation men in mind as possible independent contractors, which would be consistent with Respondent's April 5 letter to the Union, he admitted that when Respondent first decided to contract the work, he had Malone, Smith, and Steinbeck' particularly in mind. There is no proof that he invited any but Malone, Smith, and James to the first contract discussion on May 8.44 Layton testified he had known Malone for a long time and trusted him. Although Malone was at the initial discussion of May 8, and learned on the 10th that Respondent was ready to sign a contract with him, he did not sign up for several weeks ; in the interim he participated in the picketing at Malden. During that period Layton and Moore asked him on one occasion if he wanted to sign the contract, but he hesitated, saying that because of his position as president of the Union, be would have to wait until the strike was settled. He asked Layton to hold a position as contractor open for him at Malden until after the strike was over, and Layton agreed to do so, saying that if Malone decided on it, he should come to the office and sign up. Smith stopped work when the strike started on May 9, but never took part in the picketing; he signed the first installation contract on May 12, 1950, under circumstances which will be discussed below, started work thereunder about May 28, 1950, and is still handling installation work at Hayti under the contract. It is evident from the above facts that when Respondent decided on the contracting plan, it had already chosen the particular employees with whom it desired to make independent contracts. This finding is further supported by Layton's admission that, although he claimed Respondent was much interested in the stability of the persons with whom it contracted," he made no investigation of the financial ability and re- sources of Malone, Smith or Steinbeck to ascertain whether they could operate as^_independent contractors. Layton knew that Smith was a man of modest means, and did not ask him for any financial statement, because he knew he could furnish none. There is no proof that he required such statements from the other two. Malone and Steinbeck, like Smith, had been hourly paid employees of Respondent, and there is no proof that they were any more affluent than Smith. Furthermore, Respondent executed the contract with Smith without first ascertaining whether he would be an acceptable risk to the Fidelity and Casualty Company, which was the only insurance company willing to insure u General Counsel's Exhibit No. 13. ,a The record does not show when Layton conferred with Steinbeck about his contract. s+ The polite but vague offer In the termination notice of May 3 to discuss with the termi- nated employees "any questions concerning this matter" could not reasonably be construed as an offer to discuss a contract ; nor was it considered such by the displaced men: as will appear below, Howell reproached Moore at Hayti on May 13 for not giving the employeev -a fair chance to bid on the installation work ; as this occurred after Layton's negotiation of a contract with Malone, Smith, and James, on the 8th, and Smith's execution of the first contract on the 12th, It Is obvious that the other installation employees were cognizant of these facts and felt they had been deliberately overlooked. +a Layton contradicted himself on this point on redirect examination, when he admitted that during the Investigation of the contracting' plan, Respondent neglected to consider the ability of a capable workman to operate his own business , which was the major weak- ness in the independent contract plan. 314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD contractors in this type of work.'8 That Respondent was motivated in selection of these men by reasons other than their business ability is also demonstrated by Layton's admission that, after Respondent's directors gave him authority to proceed with the contracting plan, his principal, efforts involved,the procure- ment of bids from only three men, and he "assured" himself "of the support. of the individuals involved." Since Smith never took part in the strike activities, of which Respondent- was aware from May 9 onward, and Malone was apparently willing to operate at once under a contract, were it not for his position in the Union, it is clear that the "support" Respondent expected from these men involved a willingness to ally themselves with Respondent in its plan to carry out, the installation work by independent contracts despite the Union's opposition ; none of the usual business considerations in dealing with independent contractors was involved." The above facts impel the belief that Respondent was guided in dealing with these men, not by its original economic motive, but by a recently formed intent to operate at least part of its business without the necessity of consultation or negotiation with a labor organization, in contrast to its practice and obligation under the recently expired union contract. The circumstances under which Smith, Malone, Williams, and Steinbeck signed their contracts are also enlightening. Smith signed his contract on the evening of May 12, 1950, at the Sikeston office. Before signing, he went over its terms with Layton ; only one change was made, at Smith's request, in the per- centage of installation charges Respondent was entitled to retain in order to guarantee performance by the contractor.98 Smith had never seen a copy of the contract before, and prior to signing he did not have independent advice of counsel as to its terms and effect. In entering into the contract, he was clearly accept- ing without question substantially' all of the terms and conditions stipulated by Respondent. In the absence of contrary testimony by Layton and the other contractors on that subject, it is a reasonable inference, and I find on the basis thereof, that Malone, Williams, and Steinbeck executed the same contract under similar conditions ; in fact, Williams testified credibly, and I find, that when he arranged with Layton to undertake work under a contract, Layton already had the schedule of rates worked out (obviously the price list attached to Smith's contract) ; there was apparently no bargaining between them on the rates. or other terms. All of these circumstances indicate an absence of that dealing at arm's length which usually accompanies the-creation of true independent contract relationships. The spurious nature of the contract arrangement is further indicated by the clear proof that, after the contracts were signed, each contractor was set up in business with equipment and material supplied by Respondent, upon terms fixed, and through financing secured, by Respondent. When each man signed his contract, Layton agreed to sell him a company truck, and the heavy equipment, material, and supplies necessary to enable him to start operations ; the contractor contributed only the few hand tools he already owned. Layton fixed the price of the truck, equipment, and supplies, caused to be prepared a promissory note to Respondent for that amount, together with a blanket chattel mortgage cover- 49 It is significant that Layton made sure to protect both Respondent and the loan com- pany which financed Smith's purchase of truck and equipment from Respondent, by having Smith sign a blanket chattel mortgage which covered not only the property he bought from Respondent, but also a stock of hand tools he already owned, and any other equipment he might use in his business. 47 The same conclusion applies to Clifford James : he had -formerly been a service and installation man at Hayti, but was brought by Respondent into the office there as chief clerk at the time of the strike, and was thus removed from the bargaining unit; the record does not disclose why he did not sign or operate under a contract. 48 Paragraph 5 of General Counsel's Exhibit No. 13. NATIONAL,, GAS COMPANY 315 ing the, truck, tools, equipment, and supplies, and had these papers signed by the contractor and endorsed by Respondent over to Delta Loan Finance Corporation; which then paid Respondent the entire purchase price. The finance company was chosen by Layton ; it was the concern through which Respondent' s instal- lation sales of gas appliances were financed. None of the contractors put any money into the business, or made any down payments to Respondent on the purchase price." In all cases, except that of Steinbeck, the whole transaction was handled in Respondent's office ; Steinbeck alone visited the finance company before signing his loan papers, to arrange for the amalgamation of an existing unpaid personal loan into the total amount of his note and mortgage. The above facts further indicate that Respondent was the dominant figure in the contracting arrangements, and that the men selected by Respondent to play the part of osten- sible independent contractors had little or no voice in making the arrangements, and were entirely dependent upon Respondent for their start in the installation business . Moreover, these facts further support the finding above that these men were not chosen by Respondent for their business stability or financial ability to do the work, but for other reasons. It should also be noted that the sale and financial arragements outlined above apparently had been conceived by Respond- ent sometime before Smith signed his contract on the 12th,60 for Layton told the union representatives at the Hale meeting that afternoon, as found above, that if any former employees desired to try contracting, Respondent would see that they were financed, and they could use company trucks." The doubt raised by the above facts as to authenticity of the contractual relations created between Respondent and its former employees requires a careful scrutiny of the terms of the contracts and the manner in which the parties operated thereunder. Certain terms of the contract are indicative of an independent contractor relationship. The contractor is bound to install appliances at fixed rates on 30 out of 32 types of installation ; an hourly rate is fixed on only 2 general types of work. The fiat rate also covers necessary service on the appliance during a ]-year warranty period. These rates are fixed, regardless of the amount of time consumed in either installation or service. The contractor can hire any employees he desires, and they operate under, his exclusive control. He is also required to make installation in accordance with rules of the National Board of Fire, Underwriters, Underwriters Laboratory specifications, and local build- ing codes and standard trade practices; none of these standards was specially fixed or controlled by Respondent, but must be followed whether the work is done by Respondent's employees or independent contractors. Many other provisions of the contract, both in their terms and in the practical construction the parties gave them by their operations thereunder, persuasively indicate that the "contractors" continued to operate in fact as employees, subject at all times to the substantial control and supervision of Respondent. Thus, although the contract provides that the contractor shall furnish all tools, special equipment, pipe, fittings, materials, and transportation necessary to perform any installation or service job, without requirement that he procure them from Respondent, in practice each contractor started operations with a truck, equip- ment, and supplies sold to him by Respondent; and during the contract, he purchased substantially all his pipe, fittings, and other supplies from Respondent, procuring them from the same stockroom as when he had been an installation 40 Smith received some cash in addition to the price of his truck , etc., out of his $1,500 loan ; and Williams, at least, paid the insurance premiums on his truck out of his loan. 60 The record does not indicate whether Layton discussed the question of use of company trucks and equipment with Malone , Smith, and James on the Sth. 51 The bona' lldt's•,of this offer to the Union will be considered below. 316 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employee. Although the contractor was required to produce public liability insurance at his own expense,62 Respondent specifically provided in paragraph 8 of the contract that: In order to safe-guard the Company from any expense made necessary by any acts of negligence on the part of the Contractor in the performance of work contemplated under this agreement, the Contractor agrees that the insurance policies obtained by him shall specifically protect not only the Contractor but also the Company. It is significant that, although under paragraph 9 Respondent purported to give the contractor the right to work for others, who would presumably be protected against negligence of the contractor by virtue of the independent contractor relationship, Respondent was not content to rely on, that relationship, but insisted upon specific protection for itself in the contractor's insurance coverage. While paragraph 9 purported to give the contractor the right to contract with others and in effect to refuse to handle work orders for Respond- ent, in practice the contractors actually worked for no one but Respondent, and in addition, the contractor received his work orders from the same clerk of Respondent as when he was an employee, and that clerk usually scheduled the time and sequence of installations as before.63 In this connection, it should be noted that, despite the apparent freedom of operation given the contractors by paragraphs 2, 3, 9, and 10 of the contract, Respondent still retained an effec- tive control over the contractor's operations through paragraph 12 of the con- tract which provided that the contract could be canceled by either party on 15 days' written notice; in effect the contract could be terminated at will by Respondent without liability if it were dissatisfied with the contractor's opera- tions; in practice, Respondent once threatened to use this clause against Steinbeck when he failed to make an installation at a time desired by Respond- ent; on that occasion, Layton angrily told Steinbeck that if he did not do as Respondent wanted him to, Respondent would get someone else who would 64 "in the case of Williams, Layton arranged to secure his liability insurance : only one company would issue coverage in this type of work, and then only for persons of responsi- bility ; when Respondent performed its own installation work, that company wrote the public liability coverage for Respondent ; when Williams undertook to contract with Respondent, he had no independent means nor substantial experience in installation-work, and was obviously not a person of responsibility; nevertheless the insurance carrier wrote coverage on Williams after Layton had arranged for the local insurance agent to talk with Williams ; under the circumstances, it is a fair inferemve that the coverage was written at the instigation of Respondent and on the basis of Respondent's responsibility and past relations with the carrier. 53 This finding is based on the credited testimony of Williams. I attach no significance to Malone's testimony that he took time off from work under his contract when he pleased, without clearing with Respondent ; he did this only once, and it does not appear that this vacation involved any refusal to perform work for Respondent in order to work for others. Nor do I credit Layton's vague testimony that the contractors at times worked for others. 54 This finding is based on the uncontradicted and credible testimony of Earl Brewer. I discredit the general testimony of Layton that Respondent avoided control over the time of installations by the contractors : Williams testified credibly that, while he had the right under the contract to work for others, in practice he worked only for Respondent, feeling that, in view of the Steinbeck incident, if be refused to perform any work order issued by Respondent, he would not receive further orders from that source. Since there is no substantial evidence that the contractors worked for others, or developed other sources of business, it is apparent that a refusal of Repondent to give a contractor work orders would have put him out of business. Another indication that Respondent made the final decision as to whether a contractor would carry out a work order, lies in Layton's own testimony that when Williams and Steinbeck balked at installation of some natural gas lines, Respondent did not require them to perform the work on their Drotest8- tion that they would lose honey thereon under the terni§ of their contracts. NATIONAL GAS COMPANY 317 There are other factors militating against the existence of a true independent contractor relationship . First, it is significant that, the contractors performed for Respondent precisely the same installation and service work which Respond-, ent previously performed with its own employees as part of its regular business. Second, it does not appear that any. of the four contractors had ever before operated independently in this or other lines of work ; the contracts with Respondent apparently represented their first venture into the field of private enterprise. Third, while Layton, professed to, be vitally interested in contracting with men who had the ability to do the work , he made a contract after the strike ended with Williams , his former mechanic and gas delivery man, who knew so little about installation work that Layton had to accompany him at the start to show him how to make proper installations. Fourth, the contracting operations of three of the four contractors lasted only a short while. Malone gave it up after 21/2 months , partly because he felt he had more responsi- bility as a contractor but earned no more money than while working as an instal- lation employee. Williams stopped contract work after about 2 months because he could not make enough money as a contractor . Steinbeck ceased operations about January 20, 1951 , for reasons not disclosed in the record . When each contractor decided to cease work under his contract , Respondent readily took back his truck, equipment, and materials , assumed the payments on his loan, and procured his release from that debt ; each contractor was thus cleared of any, obligation arising from his contract operations. Furthermore, when Wil- liams quit, Respondent took him back as an installation man, and also hired as his helper Cranvell Matison , who had been William's last helper while operating under contract. In changing from a contractor to an employee status, Williams suffered no loss of working time . As an employee he continued to receive work orders from the same clerk who issued them to him as contractor , handled installations the same way, and continued to use the same truck which he had operated as contractor. The only substantial change in his method of operation was the elimination of the billing procedure by which he had been paid under his contract. When Malone gave up contracting, Respondent offered him a job and took him back as a serviceman at Sikeston 66 The above facts constitute substantial evidence that the independent con- tractor relationships set up by Respondent were spurious and at most temporary expedients devised primarily to operate during the period of the strike and pending its outcome. This conclusion is also supported by Layton's remarks to Adolph Duke in September or October 1950, when the latter came in about a job. When Duke ( who was still a union member ) asked about the contracting plan, Layton replied that he did not know, that Respondent had not acquired enough experience to decide whether it was good or bad , that if it was good it would be retained, and if bad , it would be discontinued, but that he thought it would soon be "cut out." By that time, Malone and Williams had quit con- tracting and were back on the payroll. The strike had ended July 10, 1950. Since Steinbeck quit on January 20, 1951, Respondent has performed all its installation and service operations at Sikeston and Malden with its own em- ployees, operating at the time of the hearing with three at Sikeston and two at Malden."' I am convinced, and find, that at the time of Layton's remarks to Adolph Duke, Respondent had practically abandoned the contracting plan. The compensation of these men on their return to the payroll will be discussed below. 6e See General Counsel 's Exhibit No. 14 . It is significant that only J. W. Smith, who never took part in the strike against Respondent , has appeared able to continue operations under his contract ; he performs all of the installation and service work originating out of the Hayti branch. 318 DECISIONS OF ' NATIONAL LABOR RELATIONS BOARD Tested by the standards set forth in the cases cited above,67 I am convinced that the factors denoting,an employee status far outweigh those indicating an independent contractor relationship. In reaching this conclusion, I rely- principally on these factors: (1) The power of Respondent to terminate the contracts at will, (2) the work performed under contract was formerly part of Respondent's regular business, and was carried out by the contractors in substantially the same manner and under the same conditions as when they were employees, (3) Respondent supplied the contractor's initial equipment- and supplies, and most of the material and supplies used during their opera- tions, (4) the contractors were not previously engaged in independent busi- ness, but were employees of Respondent, (5) in practice, Respondent con- trolled the time and sequence of operations by the contractors, (6) in practice, the contractors worked only for Respondent, (7) the majority of the con- tractors operated as' such only a short time, and (8) on their cessation- of contract operations, Respondent took back the equipment it sold them without loss to the contractors, and reinstated two of them, and the helper of one, as employees, with one man performing the identical work as under his contract. On the basis of all the above facts and circumstances, I conclude and find that Smith, Malone, Steinbeck, and Williams were in fact "employees" of Respondent during the periods they purported to operate under the so-called "independent contracts," and that those "contracts" were but cloaks designed- to give them the appearance of bona fide contractors while they actually continued as employees. This deceptive conduct, when considered in the light of (1) the Union's expressed anxiety on May 2 to eliminate the contracting plan at any price, (2) the quick decision of Respondent's directors the next morning to proceed with the plan, (3) the prompt implementation of that decision by issuance of the termination notices the same day, (4) the hasty negotiation and preparation of contracts with specially selected employees, and execution of the first contract immediately after the inconclusive meet- ing with the Federal conciliator, all during the first week of the strike, and (5) Respondent's failure after May 2, 1950, to discuss with the Union or the terminated employees its previously announced plans to reemploy them at other work, raises a strong suspicion bordering upon certainty that, while Respondent originally conceived a bona fide independent contracting plan for economic reasons, it put into effect on and after May 3, 1950, an ostensible but spurious arrangement with selected and trusted employees, of whose "sup- port" it was assured, in order to remove a large group of employees from the bargaining unit and a substantial portion of its business from the sphere of collective bargaining with the Union, as an initial step in a campaign to discredit and undermine the Union. Any doubts about the nature and purpose of Respondent's course of conduct are dispelled by its attitude after May 2, 1950, on the subject of other employ- ment of the employees who would be displaced by the discontinuance of the installation department. In contrast to his offers of May 2 on this -subject. which the Union did not directly reject in stating its opposition to the whole contracting plan, Layton did not mention the subject in his May 3 letter to the Union, nor in his telephone conversation with Wynn on May 4, nor his discussions with the latter on May 8 and 9, the eve of the strike. While his remarks at the meeting of May 12, as found above, particularly his favorable reception of the Federal conciliator's compromise proposal, appear to be consistent with Respond- ent's professed desire to provide for the displaced installation men, his state- 67 See footnote 41 above. NATIONAL GAS COMPANY 319 ments must be appraised in the light of the significant facts that he had already reached substantial agreement' on the 8th with Malone, Smith,. and James on basic terms of a contract, and had advised them• on the 10th that itheir rates were acceptable and Respondent was ready, to sign°c6ntracts,with them. , Layton had told, Wynn on May 2 that Respondent would use two or three contractors for the installation work ; and the first three contracts were made with Malone, Smith, and Steinbeck, whom Respondent-had long had in mind for that purpose. Thus, when Layton told the conferees on the 12th that he would consider using one con- tractor for a year, and would rehire the remaining installation men, and also assured Wynn that Respondent would finance any men interested in undertaking contract work, Respondent had aready filled its need for contractors. Layton kept silent about this fact, as well as his earlier negotiations with Malone, Smith, and James. These circumstances lead me to believe that Layton's remarks to Hale and Wynn were made in order to maintain a consistent outward appearance. of bona fide bargaining and a desire to compromise with the Union and work out a solution which would take care of all displaced employees, while at the same time concealing from the Union the fact that the contract arrangements were practically completed. Layton's secretiveness on this vital subject, which he had previously been willing to discuss with the Union, is a clear indication of bad faith bargaining on that date. As I have found above, while Respondent was not required to negotiate with the Union regarding the shutdown of part of its plant for bona fide economic reasons, and the discharge of employees incidental thereto, it was not thereby relieved of its duty to bargain about other employment or provision for the displaced employees. I have concluded that it fulfilled that duty at the May 2 bargaining session, when the Union rejected its contract proposals, thus creating an impasse. However, the existence of the impasse did not destroy the authority of the Union as the statutory representative of the employees to act within the sphere of its representation, nor the right of the employees to seek by collective action (either further negotiation or a strike) to persuade the employer to accede to their demands ; consequently, the impasse did not relieve Respondent, from its continuing duty to bargain with the Union on reemployment of displaced workers, and to take no action which the employees might interpret as a "disparagement of the collective bargaining process," or which might amount to a withdrawal of recognition of the Union's representative status or to an undermining of its authority.68 Furthermore, the impasse was broken by the strike of May 9, 1950, and thereafter the fulfillment of the em- ployer's duty to bargain in good faith became doubly important"' Considering the facts that Layton did not mention the subject of reemployment of the installa- tion employees in his May 3 letter to the Union announcing their forthcoming discharge, nor in his discussions with Wynn on May 4, 8, and 9, I am convinced that Respondent's silence on the, subject from May 3 onward, which was clearly deliberate, and particularly Layton's "surface" bargaining thereon at the May 12 meeting, was indicative of bad faith bargaining, and evidenced a design and intent to stall the Union and avoid any conclusive bargaining with it regarding these employees, while Respondent proceeded furtively with its spurious con- tracting arrangement in furtherance of its plan to free itself of legitimate union concern with a part of its business and its relations with the employees engaged therein. I therefore conclude and find that, Respondent has failed and refused to bargain in good faith with the Union since May 3, 1950, and has thereby violated Section 8 (a) (5) and (1) of the Act. 68 Central Metallic Casket Company , 91 NLRB 572. 69 Jeffrey-De Witt Insulator Company v . N. L. R. B., 91 F. 2d 134 (C. A. 4), cert. den., 802 U. S. 731. 320 DECISIONS OF NATIONAL -LABOR RELATIONS BOARD Respondent's sudden and illegal refusal to bargain with the Union after May 2, 1950, on the vital subject of reemployment of the installation employees, con- sidered in conjunction with its hasty and secretive institution of the false con' tracting plan, as found above, further convinces me that Respondent engaged on and after May 3, 1950, in a discriminatory scheme to remove a large number of employees, including three officers of the Union, from the bargaining unit, thus avoiding the necessity of bargaining with the Union regarding those em- ployees and the operations in which they were engaged, with the purpose of discrediting and undermining the Union. Inasmuch as the discharge of the eight installation employees, and the subsequent creation of the false contractual relationships with three of them and Williams, was part of the discriminatory scheme, it follows that the discharges themselves were discriminatory. I there- fore conclude and find that, by its discharge on May 8, 1950, of Noble C Malone, James Davis, J. W. Smith, Adolph Duke, Martin Ebert Duke, John Steinbeck, Leon Ellsworth, and Orville Howell, Respondent discriminated against said employees in regard to their tenure of employment in order to discourage mem- bership in the Union, and thereby violated Section 8 (a) (3) of the Act. In addition, such discharges interfered with, restrained, and coerced employees in the exercise of rights guaranteed by Section 7 of the Act, in violation of Section 8 (a) (1) of the Act. The above conclusions are bolstered by other evidence which indicates that; even before the strike, Respondent was evincing definite hostility toward the Union and trying to discredit it in the eyes of the employees. About a week before the strike began, when Moore, president of Respondent, asked Williams and Mattison if they thought the men would strike, as found above, he also asked them why they did not stop paying their money into the international union and form an independent union of their own. Williams re- plied that he did not think much of that idea because the employees could pay dues to the international union which could handle some matters for them which the men themselves could not handle BO Moore's statement to these men, though in the form of a question, was in effect a suggestion that they abandon their present bargaining representative, and form a labor organization of their own. As such, the suggestion was a form of coercion calculated to discourage continued affiliation with the Union, and to interfere with employees in their choice of representatives. I conclude and find that Respondent thereby violated Section 8 (a) (1) of the Act. On a later occasion, still before the strike, Williams overheard Moore tell Mattison one night in Moore's office, that Moore knew the men neeeded more money, and he would like to give it to them, but he could not do so "because you belong to a damned union" 81 This remark clearly implied that the employees would fare better financially without a union, was calculated to discourage union membership, and therefore violated Section 8 (a) (1) of the Act6, The credible testimony of Wynn, Howell, Malone, and Chester Bennett indi- cates, and I find on the basis thereof, that the employees struck on May 9, 1950, because of Respondent's discharge of the installation employees in furtherance of GO This finding is based on the credible testimony of Williams . Mattison, presently employed by Respondent , was not called to testify. I do not credit Moore's categorical denial of the incident. . 61 This finding is based on the credited testimony of Williams, corroborated in part by that of Moore. 621 have not considered these remarks as evidential on the issue of the bona fides of Respondent's bargaining on May 2, 1950, as the record does not clearly indicate that Moore made them Before the meeting of that date with the Union. NATIONAL GAS COMPANY 321 tits contracting plan. As I have found those discharges were discriminatory, it is clear that the strike was caused by Respondent 's unfair, labor practices." C. Interference, restraint, and coercion during and after the strike On May 9, 1950, the day the strike started, Respondent mailed to all striking ,employees, except the installation men, a letter requesting their return to work, as follows : 04 MAY 9, 1950. (Name of employee) DEAR SIR : In order to continue the operation of National Gas Company, it is imperative that you return to work not later than 8: 30 a. in. Thursday, May 11th, 1950. Your failure to return will be indicative of the fact that you no longer wish to be employed by the National Gas Company and consequently you will be permanently replaced. In the event of your failure to return to work as directed above, this letter will serve as your discharge notice and any money due you can be obtained by calling at the office. Very truly yours, NATIONAL GAS COMPANY, /s/ Kenneth C. Layton, KENNETH C. LAYTON, Vice President. As found above, the employees struck in protest against Respondent's discrimi- natory discharge of the installation employees. This was a legitimate concerted activity involving a "labor dispute" within the meaning of Section 2 (9) of the 'Act, and the strikers became unfair labor practice strikers. While engaged in 42 While certain testimony of Wynn, Chester Bennett, Howell , and Layton, relied on by Respondent, tends to indicate that the strike was called because the Union could not persuade Respondent to abandon its contract plan and work out a satisfactory agreement regarding continuance of the installation department , this testimony must be considered in connection with the findings above that Wynn told Layton on April 14 and May 2, 1950, that the Union would not accept any plan involving a change of Respondent's operations which would result in loss of employment by eight members of the Union. Since the discontinuance of the installation department and contracting out of the work thereof would result directly in the loss of jobs, it was natural for Wynn to focus his attack on the underlying contract plan, in an attempt to persuade Respondent to abandon it, for this would achieve the Union's prime objective, the retention of the Installation men in their jobs. That the Union was not particularly interested In the shutdown of operations, purely as an economic problem, is indicated by the facts that (1) the union leaders did not marshall or present any real arguments against the plan on May 2, but only at the conference of May 12, after the discharges had occurred and the strike was underway, and (2) when the negotiations of May 2 reached an impasse over the institu- tion of the contract plan , the Union did not then threaten an immediate strike, or take a strike vote, which is explained by the circumstances that, at the close of that meeting, both parties left the door open for further discussion , that the Union had not specifically rejected Respondent's tentative proposals for other employment of the displaced men in maintenance jobs, and that Respondent gave no Indication as to when the installation 'men would be terminated ; the Union was thus led to believe that it had time for further consideration of the proposals, and that the jobs of the installation men were in no Immediate danger. However, as soon as Respondent terminated these men effective May 8, 1950, the Union acted by calling a strike vote of the members that night , and initiated the strike the next morning, immediately after the men had been discharged. I am satisfied from a consideration of all pertinent evidence on this point , and I find, that the actual discharges were the proximate cause of the strike. 64 General Counsel's Exhibit No. 12. 322 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that concerted activity, they remained "employees" within the meaning of.Section 2 (3) of the Act and were not vulnerable to discharge by permanent replacement because of their concerted activity. Therefore, when Respondent, by its letters of May 9, 1950, requested their return to work by May 11, 1950, under penalty of discharge and permanent replacement, it was penalizing them for their legiti- mate concerted activity, in derogation of their statutory rights to engage in'that activity. I find that, by the issuance of such letters, Respondent further violated Section 8 (a) (1) and (3) of the Act.85 On Saturday, May 13, 1950, while all the Hayti employees m (except Smith) were picketing the Hayti plant, Moore, president of Respondent, drove up to the plant in the gas delivery truck formerly driven by McVey, one of the picketers, and had a conversation with the group. In response to some remark about Moore's driving the truck, Moore told them Respondent was going to operate the trucks whether the men liked it or not. He also told them "don't be, kidding yourself about this strike," and "the other time that we had a strike, we did not know what we were getting into, this time we went into it with our eyes wide open ; we contacted some of the best labor lawyers in the United States, and they tell us we can contract this work out and the Union can't do anything about it." He further said "Personally, I don't believe in the Union ; so far as they are concerned, they are not going to run my business." He then said that if the men wanted to come back to work, and work "straight time," without a contract, he would be glad to sign an "agreement" with them, and if they wanted to make "big checks," they could work day and night, and put in long hours, but Respondent would not pay them time and a half for overtime 87 Orville Howell complained to Moore that the employees at Hayti had not received a fair chance tt bid on the contracting work, as no one from the Company had talked to them about it since they got the first notice from the Company.° Moore replied that if the men were interested in that, he would talk to Layton and send him down to Hayti to see what could be worked out. Moore's offer to make individual arrangements with the employees if they returned to work, at rates of pay less favorable than those included in their last bargaining contract, were in effect solicitations of individual employees to abandon the strike, as well as attempts at individual bargaining with employees in the appropriate unit, all in derogation of Respondent's duty to deal with their statutory representative, and constituted a refusal to bargain in violation of Section 8 (a) (5) of the Act, and an interference with employees in viola- tion of Section 8 (a) (1) of the Act70 Moore's statements to the strikers that he did not "believe in the Union, and that it was "not going to run my business" clearly indicated Respondent's hostility to the Union, and its desire to operate its business without further dealings with that organization. When coupled with Moore's illegal individual bargaining offers to the employees, these remarks 65 Rockwood Stove Works, 63 NLRB 1297; Kallaher cf Mee, Inc., 87 NLRB 410; Happ Brothers Company, Inc., 90 NLRB 1513. e° Orville Howell, Wallace White, Henry F. White, Robert McVey, Gene Campbell, and James Davis. Henry F. White is the correct name of the "Fred White" named in the amended complaint. 67 Under the expired 1949 contract, the employees had received time and a half overtime pay after 40 hours. 68 Apparently referring to the April 5 letter, General Counsel's Exhibit No. 9. 00 These findings are based on the preponderant, credible, and mutually corroborative testimony of Howell, McVey, Wallace, and Henry F. White. Moore admitted Howell's testimony about the bids on the contracting work, merely placing that portion of the dis- cussion on May 16. I do not credit his categorical denials of the remainder of the discus- sion. 70 See footnote 58 above, and The Cincinnati Steel Castings Company, 86 NLRB 592, 595,596. NATIONAL GAS COMPANY 323 were calculated to dissuade the employees from bargaining through their chosen representative, and further interfered with their right of free choice of such representative, in violation of Section 8 (a) (1) of the Act", On the afternoon of Tuesday, May 16, 1950, while the same six employees were congregated in front of the plant at Hayti, Layton and Moore called them into the' garage for a discussion. Layton did most of the talking. In response to a query from one of the men, Layton said "I think I can tell you how you boys can go back to work," " and then explained that he thought he could put them all back to work under the old contract terms, with all seniority rights, if they would break up the picket line, but that he would have to check with his lawyer to make sure, and would return to let them know the next day. He also said that the employees at Sikeston were getting tired of picketing, and if those at Hayti would stop picketing and return to work, the picket lines at Sikeston and Malden would also break up. Layton further said that he did not believe in a union, that they might be alright up North in a factory where the men could be watched, but were not "worth a damn" down South. He suggested, however, that if the men wanted a union, they should get one of their own and forget about the one they were in, and that Respondent would sign an agreement with the men once a year. He further said that he would close the place down and "see it rot" before he would sign another union-shop contract. Moore told the strikers that there was no use "kidding themselves," that the Union would starve them to death, and that he had been out with union business agents in St. Louis, who did not ride in Buick automobiles (as he did), but drove around in Cadillac convertible automobiles, and were spending union members' money up there. Moore and Layton returned to Hayti on May 17, 1950, and had anothed meeting about 11 a. m. in the garage with the employees. One of the strikers, Gene Campbell, said that the Hayti men were ready to go back to work, because they were dissatisfied with the progress of the strike at Sikeston, where the strikers had not been able to shut down operations, that the men at Hayti were broke, and had debts to pay, but they received no funds from the Union as promised, and they felt they had been "let down" by the Union at Sikeston, they had no officers" or representation in the Union and were not going to support it any longer." Layton and Moore said the men might as well go back to work, as the Union was not getting them anywhere but in trouble, and would starve them. Layton said that, so far as he was concerned, the men could have been working right along, and need never have quit, and that they could punch a time clock in the next 30 minutes and go back to work. However, he warned them that if they went back to work and stopped picketing, they would have trouble with the Sikeston employees, who would set up a picket line, which they would have to cross going to work, and they would be called "scabs." Moore then said that "Moore's offer to have Layton talk with the men about submission of bids on the in- stallation work is further evidence of Respondent's bad faith in dealing with the Union, similar to Layton's deceptive remarks to the union representatives the day before. I find no violation of the Act in Moore's equivocal remarks to the men "don't be kidding yourself about this strike," and "this time we went into it with our eyes open" ; he explained this by reference to the legal advice Respondent had received regarding its right to contract part of the work without consultation with the Union. 'r' Moore had apparently had a previous talk with the strikers, at which some of them asked if he could figure out a way for them to go back to work. Moore promised to have Layton come down and talk to them about it. 48 Layton says Howell acted as the spokesman for the strikers ; and since, the other strikers did not make the same statements, but merely indicated they desired to,return to work, it is apparent that Campbell was speaking mainly for himself. As will appear below, Campbell dropped out of the picketing activity and remained at work with Respond- ent after May 19, 1950. 324 DECISIONS OF' NATIONAL LABOR RELATIONS BOARD 'if the Hayti men had any trouble with the employees from Sikeston , and if any- thing happened to the Hayti 'men, "they will be paid for," and "your fines will also be paid." 44 Wallace White indicated his fear that the Union might evict them from membership if they went back to work, and he raised the-question of forming their own union in that event. The strikers disagreed on this subject, and discussed it in front of Layton, Moore, and Ward : Henry F. White, McVey, and Campbell indicated they favored leaving the Union; Wallace White was doubtful, saying the men needed a union at Hayti for their protection; Howell said there were not enough employees at Hayti to form a labor organization, and Campbell then suggested creation of a fund of their own for social and benefit purposes. Henry F. White asked Layton if they could have their own organization at Hayti, and Layton replied that he had talked to his lawyer on the subject, and discovered it would cost the men a lot of money to form their own union, and then suggested that "the best thing we can do about this union is just get an agreement between ourselves," which would be signed yearly, and not have a union "between you and the company," but that this would have to wait until the dispute with the Union was over. Layton also suggested that the men form their own benefit fund, in which they could deposit their money for their own use instead of paying it into the Union. With regard to formation of their own union, Layton suggested that the men should see a lawyer skilled in labor matters ; when the men asked if they could talk to his attorney, he hesitated, saying he would get the name of a laywer for them 7 Layton then said he ' would put the men back at their old jobs, with the same pay and seniority as before, except for Howell and Davis, (the terminated installation men), to whom he offered jobs as maintenance men with the same pay and seniority as they enjoyed in their previous jobs. Howell asked Layton how the in- stallation work would be handled, and Layton replied that Respondent would contract out that work as planned, and that J. W. Smith would be the con- tractor at Hayti. The meeting ended about noon, and the strikers went to lunch. About 1 p. in., McVey, Campbell, and the two Whites returned to work in accordance with Layton's offer, but neither Howell nor Davis returned.76 The men who returned remained at work through Friday, May 19, 1950; that afternoon Howell and Davis, who had resumed picketing after the May 17 con- ference, and some of the strikers from Sikeston spoke to the Whites and McVey, and induced them to resume picketing. Campbell stayed at work as a salesman, filling a vacancy which had occurred during the strike. That afternoon or Saturday morning, Moore called Wallace White and McVey into the garage, 74 While Moore said he did not know the meaning of the phrase "they will be paid for," his testimony indicates that it referred to a warning which a local deputy sheriff had previously given the Hayti strikers ( whether at the request of the Respondent does not appear ), advising them of their right to picket peacefully , but warning them to refrain from stopping company trucks, accosting customers , and the like. It is obvious that Moore's whole remark was intended to reassure the Hayti strikers that they would be protected by the Company against activities of other striking employees if they went back to work , and had trouble with the remaining strikers. as On advice of counsel , he never kept this promise. 46 The findings as to the events of May 16 and 17 are based on a composite of the credible testimony of Howell , McVey, Wallace and Henry F. White, which is corroborated in part by that of Layton, Moore, and Ward. Although the witnesses for General Counsel placed these events on May 15 and 16, respectively , I credit the testimony of Respondent's witnesses on the exact dates, because the two Whites testified credibly that the four strikers who returned stayed at work 2% days , and that Howell and other union men persuaded them late Friday afternoon •or that evening to resume picketing . This would indicate that the group returned to work Wednesday , the 17th , which is consistent with the facts that Layton 's offer was made about noon that day and that the men punched their time clocks about 1 p. m. To the extent that categorical denials and other testimony by Layton , Moore, and Ward conflict with these findings, such testimony is not credited. NATIONAL GAS COMPANY 325 and asked why they resumed picketing. White said that he had been on "both sides of the fence, and I got on one side and I was going to stay there regardless of what happened." Moore told them they were "good men," and he hated to see them leave, but said that if they did not return to work, he was going to replace them permanently, that he was going to run the business as he pleased, and the Union was not going to do anything about it, and that "if you boys go back, to hell with the rest of them." " Layton's offer on May 16 and 17 to return the strikers to work under the terse of their old contract, and to rehire Howell and Davis, who had been discriminatorily discharged, at other work, all conditioned on abstention from union activity, constituted further attempts at illegal individual bargaining with, and coercion of, employees, in violation of both Section 8 (a) (1) and (5) of the Act." I further find that the following remarks of Layton on the 16th were each independent violations of Section 8 (a) (1) : (a) The suggestion that if the employees at Hayti ceased picketing and returned to work, the picket lines at Sikeston and Malden would also break up; (b) the statement that Layton did not believe in a union, that they were "not worth a damn" in the South;" (c) the suggestion that the men form their own labor organi- zation and forget the present Union, and that Respondent would sign an agreement with the men once a year; (d) the statement that he would close the place down and "see it rot" before he would sign another union-shop contract. In addition, Moore's statement that the Union would starve the men to death, and that union agents used their members' money to purchase ex- pensive automobiles, was a disparagement of the Union, in violation of Sec- tion 8 (a) (1) of the Act. I further find that the following remarks of Layton and Moore on the 17th constitute independent violations of Section 8 (a) (1) of the Act: (a) Moore's assurance to the Hayti employees to the effect that if they returned to work and had trouble with the Sikeston strikers and if anything happened to the Hayti men, Respondent would see that they were protected, and their fines would be paid; (b) Layton's suggestion that the employees form their own benefit fund instead of paying money to the Union, that they dispense with a union "between you and the company," and his offer to get them a lawyer to aid them in forming their own union; and (c) Layton's offer to sign a yearly agreement with the employees instead of the Union. In addition, Moore's remarks to White and McVey on May 19 or 20 '(a) that he would run the business as he pleased and the Union was not going to,do anything about it, and that "if you go back, to hell with the rest of them," and (b) his threat that they would be replaced permanently (thus losing their Jobs) if they did not return to work (and thus cease their con- certed activity), were likewise coercive and in violation of Section 8 (a) (1) of the Act. These coercive remarks of Layton and Moore to the Hayti strikers, at the moment when they appeared to be wavering in their loyalty to the Union, had a telling effect, for they undermined that loyalty to such an extent that four of them returned to work. That Layton felt certain his tactics had created a definite rift among the members of the Union is indicated by his remarks to Union Representative Appelbaum on May 18, the day before the Sikeston strikers persuaded the Hayti men to resume picketing. On or about May 13, 1950, Layton had sent Wynn a telegram at St. Louis, which stated in substance "These findings are based on the credited testimony of Wallace and Henry F. White, corroborated in part by that of Moore. 18 See footnote 70 above, and Palmer Manufacturing Corporation, 94 NLRB 1477. Tf In its context, this remark appears to be more than mere opinion protected by Section 8 (c) of the Act. 215233-53-22 326 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that "your proposal" was not acceptable to Respondent, but it would be will- ing to discuss some modifications8° Appelbaum called Layton on the tele- phone to ask what he meant by "modifications." Layton said he would discuss that when he came to St. Louis in the near future. On the morning of the 18th, Layton wired the Union that he would be in St. Louis that day ; on ar- rival he called Appelbaum and met him at a hotel (Wynn being out of town). At this talk, Layton bluntly told Appelbaum in substance that "things have changed," that Respondent was "through" with the Union and would no longer discuss matters with it, and that Layton did not think the Union any longer represented a majority of the employees. Appelbaum replied that the Union was still willing to try to solve the existing problem, but if that was the posi- tion of Respondent, the Union would continue its legitimate efforts to settle the matter in a manner satisfactory to the Union, and also the Company. This was the last discussion between Respondent and the union representatives regarding the pending dispute. It is clear, from the sequence of events, that Layton's change of attitude toward the Union, and his new doubt of its major- ity status, was caused by Respondent's coercive and illegal tactics of May 13, 16, and 17, related above. Even in the absence of such coercive conduct, Re- spondent's sudden questioning of the majority status of the Union with which it had negotiated three successive contracts after its certification, in itself would render its good faith suspect. I am convinced that Respondent's doubt was not bona fide, but rather indicated a rejection by Respondent of the col- lective bargaining principle in furtherance of its plan to discredit, weaken, and finally get rid of the Union. I conclude and find that by Layton's remarks to Appelbaum on May 18, 1950, Respondent further refused to bargain with the Union, in violation of Section 8 (a) (5) and (1) of the Act. On May 18, 1950, while Elmer Bennett was on the picket line at Sikeston, he spoke to a customer of Respondent entering the company office. Shortly after, Moore approached Bennett outside the office, told him not to talk to any- one who came into the office, and advised him to go home because he did not have a job there any longer. It'is not clear from the record whether Respond- ent started hiring replacements for the strikers on or before this date, nor whether Bennett's job had been filled' However, regardless of that, Moore's remark was coercive in that it clearly implied Bennett no longer had his job because of his participation in the strike ; and since the strike was caused by Respondent's unfair labor practices, Bennett and all the other strikers were still "employees" within the meaning of Section 2 (3) of the Act, and as such immune from discharge for their concerted activity.' I find that by Moore's remark to Bennett, Respondent further violated Section 8 (a) (1) of the Act. On a date about 2 weeks after the strike started, while Earl Brewer was picket- ing at Sikeston with Clark Mattison, Layton drove up in a gas delivery truck, stopped and asked the two men "Why don't you boys come on back in and go to work?" Brewer answered "Kenneth, I just can't go in like that." Layton then said "I'll guarantee you there will be no trouble" and that "there won't be any- thing happen." He also said "about 2 or 3 guys are leading this" and "I will 80 This is Appelbaum's uncontradicted version of the wording of the telegram. The record does not indicate the specific union proposal to which Layton referred ; the original tele- gram was not produced. Wynn could only recall that the wire mentioned further discussion of the contracting plan. Since it was sent the day after the Hale meeting, it is a reason- able Inference that Layton had reference to the compromise proposal made by Hale. B1 Layton testified only that Bennett's job as meter reader was filled at some unspecified date during the strike by B. W. Gunn. s, See cases in footnote 65 above. The above findings are based on the credited testimony of Elmer Bennett, which is corroborated by that of Moore. NATIONAL GAS COMPANY 327 break it up." ' Layton's remarks were a solicitation to individual employees to return to work and thus violated Section 8 (a) (5) and (1) of the Act; his assurance that Respondent would protect them against the Union if they returned, and his threat to "break up" the strike, were calculated to discourage concerted .activity and adherence to the Union, and also violated Section 8 (a) (1) of the Act. On an occasion about the first of June 1950, while Brewer was picketing at the Hayti plant, Moore approached Brewer and asked "Did you see about a job in the gas company this morning at Sikeston? We are hiring new men there now, putting them on every day." Brewer replied he did not know about it, and asked who was being hired. Moore said he did not know, but reiterated "we are putting them on every day." Brewer then said "I don't know how long this thing is going to drag along," to which Moore replied "Well, I can tell you, you will be walking out there in 1952." Moore's first remarks amount to an individual solicitation of ,Brewer to come back to work in violation of Section 8 (a) (5) and (1) of the Act. His final remark prophesying the length of the strike clearly implied Re- spondent's determination not to take back any men as long as they engaged in the concerted activity fostered by the Union. As such, the remarks were clearly coercive and violated Section 8 (a) (1) of the Act $' After the strike ended on July 10, 1950, Respondent continued to express to the employees its determination not to recognize or deal with the Union, nor to have any labor organization in its plants, and coerced its employees in other ways. As the employees returned to work at Sikeston after the strike, Layton inter- viewed them in the office. He told each man in substance that he had had enough of the trouble with the Union, that from then on he was going to be "the boss" and wanted it clearly understood that he would run the business. When each employee asked if there would still' be a union in the plant, Layton replied that Respondent felt the men did not need a union,' as the Company was too small for it ; that a union would serve no practical purpose there, as the men were free to come and talk to him as their boss whenever they wanted to. He also told them that he would never sign another union contract. Several of the men asked if new employees would have to belong to the Union," and Layton replied he did not know, reminding them there was no union contract then in effect, and he did not know whether the Union still represented a majority of the workers, but he presumed that if the new employees objected to a union, there might be an election, but he rather doubted it. He also told the men that if there was an election , he did not want any employees "teaming up against me," that if they did, he would not like it, and would know which side they were 'm These findings are based on the credited testimony of Brewer . Layton's categorical denial is not credited. Mattison did not testify. ' These findings are based on the credited testimony of Brewer, corroborated in large part by that of Moore. General Counsel's Exhibit No. 14 indicates that the first new permanent employee, Satterfield, was hired at Sikeston on June 1, 1950. I make no finding of violation of the Act on the basis of Moore's remarks to Brewer on the picket line at Sikeston sometime after June 1, 1950, in which Moore gave his opinion as to the past earnings of the men with Respondent and the futility of the strike from a monetary standpoint, as these remarks appear to be mere expressions of opinion protected by Section 8 (c) of the Act. In view of the findings of numerous other violations of Section 8 (a) (1), I make no finding on the basis of Moore's equivocal remark to Brewer that he had "got enough of the damned thing, I just broke it up." as In making these remarks to Williams , he mentioned the filing of the charges herein against the Company, alleging, in part, that it was trying to "knock out" (Layton's words) the Union, and commented, "Now they are right, this company don't consider it needs an organization." I" They apparently referred to the 1949 union-shop contract. 328 DECISIONS OF ,NATIONAL LABOR RELATIONS BOARD ,on, and they would know how he felt about it. He also said that a lot of the strikers had been "so dirty," that he would sit up to midnight for 6 months, if necessary, to see that they did not get jobs in southeast Missouri." Layton's remarks that he was going to be "boss" and would run the business, that a union was not needed in the plant, that the employees could talk to him directly, and that he would never sign another union contract, further demonstrated Respond- ent's determination not to recognize the Union, to operate henceforth without any labor organization, and to deal only with employees individually, and constituted a clear refusal to bargain collectively, and an attempt to persuade employees to substitute individual for collective bargaining and to abandon the Union, all in violation of Section 8 (a) (5) and (1) of the Act. His expresed doubt about the Union's majority status was not bona fide, but clearly induced by Respond- ent's prior coercive tactics against the Union and its members, and was like- wise coercive. His admonition to the employees not to "team up against me" in any future election under pain of his displeasure constituted, in the context, illegal warnings to vote against union affiliation and a thinly veiled threat of dire consequences if they voted for it. The same is true of his threats, in effect, to blacklist the strikers in retaliation for their union activity. I con- clude and find that Respondent, by each of the above remarks, further violated Section 8 (a) (1) of the Act. Layton admitted that when Adolph Duke interviewed him about a job in September or October 1950, he told Duke he would like him to come back to work, but reminded him that Respondent had taken on new employees and was just getting over the effects of a very crippling strike ; that "we have had meetings and private discussions with several of the men here, and the feeling is good" ; that "we are in harmony, and it has been agreed among us that we can have only a single purpose, and that is to the advancement of the company, that there can be no middle ground, that everyone has to work to the company's best interests," and he told Duke "I'd want you to have made the choice before you came to work for us, that you were either for us or against us." Duke -testified credibly that Layton told him that from now on, anybody who worked for him had to be against him or for him ; that Layton was strictly antiunion, and those who were not "for him" would not work. It is clear from these remarks that Layton plainly gave Duke (whether he be considered an "employee" or applicant for work) the choice of becoming completely subservient to Re- .spondent's desires and interests, to the exclusion of all union and other concerted activity, as a condition of reemployment, or adhering to the Union and fore- going reemployment. I conclude and find that by these remarks Respondent violated Section 8 (a) (1) of the Act. They also clarify further the dis- criminatory nature of the campaign upon which Respondent embarked on May 3, 1950, and demonstrate its clear hostility to the Union and its rejection of the collective bargaining principle. 87 These findings are based on the credible and mutually corroborative testimony of Williams, Brewer, and Bush, as corroborated in large part by admissions of Layton. Wil- liam Sutton, plant manager at Sikeston , was present at several of the discussions with the men, but was not called by Respondent to testify. I have not credited Layton's categorical denials of many of the statements attributed to him by the above witnesses , because Layton impressed me as a ready and fluent talker, inclined to be voluble , verbose and at times argumentative in his testimony ; from his de- meanor on the stand and manner of testifying , I cannot conceive of him being as taciturn at the meetings with the employees on and after May 16, as his denials would indicate. I have therefore credited so much of his testimony on the events of those days as appears consistent with testimony of other witnesses whose testimony has been credited. NATIONAL GAS 'COMPANY ' 329' D. Individual bargadning with employees Aside from the instances, of individual dealing with employees in violation of the Act, as found above, Respondent further violated Section 8 (a) (1) and (5) -of the Act by the following individual bargaining with rehired employees and .unilateral changes in terms of their employment which had been the subject of the-pending bargaining negotiations:' (a) Ralph, Williams was employed before the strike as night mechanic, or maintenance man, at Sikeston, at a rate of 95 cents an hour, with time and a half overtime pay after 40 hours. Layton took him back on July 12, 1950, after the strike, at the same work but at a monthly wage of $180, working 45 hours a week without overtime pay ; lie was paid twice a month, in contrast to weekly payments every Friday under the union contract. Up to the time of the hearing, he had received no vacation pay ; under the contract, he would have been entitled to a week's vacation with pay, having completed 1 year of service. Under his new pay arrangement, he received about $500 a year less than under the union ,contract. (b) Wayne Bush was employed before the strike as a gas delivery truck driver at Sikeston, with the same pay rate and terms as Williams. After Layton rehired him at the same job on July 15, 1950, he worked a 45-hour week (in- -eluding half a clay Saturday) without overtime pay, and was paid $190 a month, in bimonthly installments. At the time of rehiring, Layton also mentioned the possibility of additional compensation from a profit-sharing plan, but he has received nothing from that source. (c) Earl Brewer worked before the strike as a shop maintenance man and mechanic at Sikeston, at 95 cents an hour with overtime after 40 hours, wages payable weekly. After the strike he was rehired at the same job, but worked a 45-hour week with no overtime, receiving $192.50 a month, payable in bi- monthly installments ; at this rate of compensation, he receives between $600 and $700 less per year than under the union contract. (d) When Noble C. Malone gave up contracting and returned as an employee, as found above, he was taken back as a serviceman at Sikeston, at $220 a month payable $110 twice a month ; he also received several small "bonus" checks, in the nature of a profit-sharing arrangement. Prior to the strike, he had received $55 per week as installation and service man ; he said that under the new arrange- ment,-his total yearly pay, including bonuses, totaled less than he received under the union contract (e) Martin E Duke-Prior to the strike, he had performed installation work at Sikeston at the contract rate of 95 cents an hour, with overtime after 40 hours ; he was paid weekly. After the strike, he was reemployed as a plant maintenance man at $190 a month, payable in bimonthly installments ; he was raised to $197.50 a month late in 1950 and to $200 a month at the beginning of 1951. At the start of his reemployment, he was given small bonus checks for several months, but had received none in the last 2 months before the hearing. Counting the bonus checks, his total take-home pay after reemployment was about the same as prior to the strike."D 88 See May Department Stores Co. v. N. L. R. B., 326 U. S. 3T6; Medo Photo Supply Corp. v. N. L. R. B., 321 U. S. 678; Central Metallic Casket Co., 91 NLRB 572; N. L. It. B. v. The Blanton Company, 121 F. 2d 564 (C A. 8). The findings as to each employee are based on his uncontradicted and credited testimony. 89 Although Duke's refusal on July 15, 1950, to accept any employment with Respondent obviates an order for reinstatement and tolls his back pay as of that date, he was still an "employee" within Section 2 (3) of the Act, whether he be considered a former employee whose work ceased as a result of the labor dispute, or an applicant for employ- ment. See Briggs Manufacturing Company, 75 NLRB 569, 571. Respondent apparently placed him in the latter category, for Layton did 'not accept his first refusal of employ- ment, but later Importuned him to return until he was reemployed in August. 3 30 DECISIONS OF NATIONAL LABOR RELATIONS BOARD E. The offers of reinstatement I have found that the strike of May 9, 1950, was an unfair labor practice strike from its inception, caused by Respondent's discriminatory discharge of eight installation employees as part of its discriminatory campaign against the Union. It is Well settled' that the employees so discharged are uncondi- tionally entitled to immediate and full reinstatement to their former or sub- stantially equivalent positions ; it is also settled that the unfair labor practice strikers were engaging in a protected concerted activity, and retained their status as employees during the strike; upon -unconditional applications for their positions, they are entitled to full reinstatement, and the Employer is required to discharge any replacements hired during the strike to the extent necessary to effect such reinstatement" Respondent's offers of reinstatement will be considered in the light of these rules. On June 26, 1950, the striking employees"' conferred with Layton at Sikeston about returning to work. Chester Bennett, the union steward, speaking for the group, told Layton the men had decided they wanted their jobs back, and requested Layton to return the whole group to their former jobs "as they were." Layton told them that he could not put them all back to work at that time, as business had fallen off a great deal during the strike, and he had hired new employees, and thus did not have openings for all of the strikers. He offered, however, to recall the strikers according to their old seniority status as vacancies occurred ; he also said he would first have to consult his lawyer about the offer. Bennett agreed to this arrangement, saying that employees not immediately rehired would continue picketing. Layton asked Bennett whether employees taken back would be allowed to cross the picket line, and Bennett said he would discuss that with Wynn and let Layton know." There is no proof that Bennett reported back to Layton after talking with Wynn, nor that any of the strikers returned to work pursuant to Layton's offer of that date. I conclude and find that the group offer of the employees to abandon the strike' and return to work was unqualified except for the legitimate condition that the whole group be returned to work en masse ; the offer did not cease to be unconditional merely because it contemplated a group return'8 When Layton offered to recall the strikers only as vacancies occurred, and refused in effect to displace new employees in order to reinstate all the strikers, he was further discriminating against the striking employees because of their legitimate concerted activity, in violation of Section 8 (a) (3) and (1) of the Act 94 Obviously, his proposal was less than the unconditional offer of reinstatement required under the Act "° On July 10, 1950, through Chester Bennett, the strikers again offered uncondi- tionally to return to work. Layton said he could take back Brewer and Williams, maintenance men, at their old jobs, but he repeated his conditional offer of June 9* N. L. R. B. v. Mackay Radio A Telegraph Co., 304 U. S. 333; N. L. R. B. v. Remington Rand, Inc, 130 F 2d 919, 928 (C. A. 2) ; Eagle-Picher Mining f Smelting Company v. N. L. R. B., 119 F. 2d 903 (C. A. 8) ; Rapid Roller Co. v. N. L. R B., 126 F. 2d 452 (C. A. 7), cert. den. 317 U. S. 650 ; N. L. R. B. v. Poultrymen'a Service Corporation, 138 P. 2d 204 (C. A. 3). 91 The group included Chester Bennett, Elmer Bennett , Adolph Duke, James Coleman, Earl Brewer, Ralph Williams , Dayton Ford , and Wayne Bush, from Sikeston , Howell, McVey, and Henry F. White from Hayti, and others not named in the record. sz These findings are based on a composite of the credited testimony of Chester and Elmer Bennett, Henry F. White, McVey, Howell, and Layton. 13 Draper Corporation, 52 NLRB 1477 , 1479 , and cases there cited, reversed on other grounds, 145 F. 2d 199 (C. A. 4) ; Rockwood Stove Works, 63 NLRB 1297, 1298 ; N. L. R. B. v. Poultrymen's Service Corporation, 138 F. 2d 204 ( C. A. 3) ; Spencer Auto Electric, Inc., 73 NLRB 1416. "' See cases in preceding footnote. 95 N. L. R. B. v. Poultrymen's Service Corporation, supra. NATIONAL GAS COMPANY 331, 26 to the remaining strikers. His July 10 offer was likewise qualified and discriminatory. 'The picketing stopped July 10, 1950. Ralph Williams was reinstated July 12, 1950, Wayne Bush on July 15, 1950, and Brewer on an unspecified date after the strike ended, each to his former job, but with lower pay and different terms of employment, as found above. During the strike, Chester Bennett, Elmer Bennett, Dayton Ford, and James Coleman were replaced at Sikeston by new employees, and Respondent has never offered them proper reinstatement. Henry F. White and Robert M; ;Vey were replaced at Hayti by new men during the strike ; White was reinstated to his old job on August 1, 19,50; McVey applied for reinstatement at Hayti on an unspecified date after termination of the strike, but has never been reinstated. Orville Howell-He was discriminatorily discharged on May 8, 1950 , but has never been offered proper unconditional reinstatement . Respondent's offer of May 17, 1950, to rehire him as a maintenance man was not an adequate offer : it did not involve reinstatement to his old job, which had not been filled ," and the maintenance work offered to him consisted of irregular, seasonal work involving the repair , painting, and other maintenance of company-owned tanks, pipes, and equipment located on customers' premises ; this work had been done intermit- tently by installation and other employees in the past ; none of it had been per- formed by Hayti employees at least since February 1950; since the strike, it has been carried on by the employees only after they are caught up with their regular work ; moreover, it had not been previously treated by Respondent as a definite category or department of work, for it was not mentioned as such in the 1949 union contract ; it was clearly not substantial, continuous work for the specific performance of which Respondent hired men, but rather intermittent, temporary work performed by employees in addition to their regular duties. I am not satisfied by the record that maintenance work, as such, was employ- ment substantially equivalent to that which Howell had done before his dis- charge 87 James Davis-He was an installation helper to Howell at Hayti and was illegally discharged with the latter on May 8, 1950. Layton offered him a main- tenance job with Howell on May 17, 1950, but he has never been offered un- conditional reinstatement. Martin E. Duke and Adolph Duke-Following their discriminatory discharges on May 8, 1950, Respondent offered them reemployment on July 15, 1950, but without specifying the jobs; since the installation work at Sikeston was then being performed by Steinbeck under the guise of an independent contractor, it is reasonable to infer, and I find, that the offer to the Dukes did not involve a re- turn to their former installation jobs ; nor does it appear whether the jobs sa J. W. Smith and Howell had been the installation men at Hayti before the strike. Smith did not start work under his installation "contract" until about May 28, 1950. At the time of the hearing, Smith was still operating at Hayti under the "contract," apparently handling all the installation work which he and Howell had performed before the strike. eT See, The Warren Company, Incorporated, 90 NLRB 689. I do not credit Layton's testimony that his offer to keep Howell on as a maintenance man would afford him the same pay, seniority, and other privileges as installation man. Layton's theory that both types of work fell in the same department under the 1949 contract Is belied by the fact that article VIII, section 1 of the contract lists only a "service and installation depart- ment" with a single set of pay rates ; there Is no mention of a "maintenance department." "Maintenance" and "service" work are not the same, for Layton testified that "service" work involved service on customer-owned gas appliances, and Ward testified that "main- tenance" work covered only company-owned equipment in the field. Moreover, Layton contradicted his own theory by his testimony that In making his offer to absorb the displaced installation workers, he had in mind the creation of a new maintenance depart- ment, 332 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Layton had in mind for them were substantially equivalent positions. How ever, at the time of the offer, the Dukes refused reemployment with Respondent in any capacity for personal reasons. While it is not clear that Respondent's offer was a proper unconditional offer of reinstatement to their former or sub- stantially equivalent positions, I am of opinion that their refusal to accept em- ployment of ahy kind absolves Respondent of any further obligation in, this respect ' John Steinbeek-Following his discriminatory discharge on May 8, 1950, he worked for Respondent under the false independent contractor arrangement from about June 1, 1950, to January 20, 1951, when he voluntarily ceased opera- tions, grid took a job in another State. It does not appear that Respondent has ever offered him reinstatement. J. W. Smith-Since his discriminatory discharge on May 8, 1950, Smith has performed installation work for Respondent under the spurious independent, contract arrangement from about May 28, 1950, to the date of the hearing. Al- though he did not take part in the strike, and has continued the contracting arrangement, the fact of his discriminatory discharge requires that he still be treated as an "employee" within the meaning of Section 2 (3) of the Act, en- titled to reinstatement and back pay. This is necessary particularly because of the recommendation hereafter that Howell be offered full reinstatement, and that Respondent cancel the false contracting arrangement with Smith in grder to restore the status quo: ante for purposes of proper evaluation of the respgctive rights of Howell and Smith to reinstatement at Hayti. There is no proof that Respondent has ever offered to return Smith to his former position as an installa-, tion employee. Noble C. Malone-After Malone ceased operations under his installation con- tract, he was rehired by Respondent about November 1, 1950, as a serviceman at Sikeston, and worked in that capacity until January 20, 1951, when he voluntarily quit to take other employment. At that time Respondent did not offer him re-, instatement as an installation employee, although Respondent has since per- formed installation work at Sikeston and Malden with its own employees. Prior to his discriminatory discharge, Malone had performed both service and in- stallation work at Malden. It is clear that Malone was rehired to perform only one phase of the work he had done before the strike ; and he was taken back at lower pay and under unilaterally changed terms of employment, as found:abisve. I find that Malone has not been offered proper reinstatement. Leon Ellsworth-He had been helper to Malone on installation work at Malden before the strike and continued in that capacity as an employee of Malone, while the latter operated under his contract. Layton testified without contradiction, and I find, that Malone discharged Ellsworth for drinking on the job during the course of the contract, and at some unspecified time thereafter, Ellsworth applied to Layton for employment, but was refused a job on the strength of his discharge by Malone. Malone did not testify on the point. Ellsworth did not testify at the hearing. Under these circumstances, I do not consider that the purposes of the Act would be effectuated by requiring Respondent to offer Ellsworth reinstatement at this time. ^ See Federal Stores Division of Spiegel, Inc, 91 NLRB 647 Martin E. Duke was later hired by Respondent about August 15, 1950, to perform plant and truck maintenance work, which he did until January 20, 1951, at which time Steinbeck ceased performing installation work under contract at Sikeston ; since that date, Duke has performed both maintenance and installation' work there for Respondent . Adolph Duke never returned to work for Respondent , although he received other offers In August and September or October 1950. NATIONAL GAS COMPANY IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE 333 The-activities of Respondent set forth in Section III, above, occurring in con- nection with the operations of Respondent set forth in Section 1, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and, tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE, REMEDY Having found that Respondent engaged in certain unfair labor practices, the undersigned will recommend that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. I have found that Respondent discriminated against Noble C. Malone, James Davis, Orville Howell, Leon Ellsworth, J. W. Smith, Adolph Duke, Martin Ebert Duke, and John Steinbeck by discharging them, and by refusing reinstatement to all but Adolph Duke and Martin Ebert Duke, in order to discourage mem- bership in the Union. I shall recommend that Respondent offer each of said employees, who has not been fully reinstated or offered proper reinstatement,9D immediate and full reinstatement to his former or substantially equivalent position, without prejudice to his seniority and other rights and privileges. I have also found that the unfair labor practice strikers, Chester Bennett, Elmer Bennett, Dayton Ford, Robert McVey, Ralph Williams, James Coleman, Wayne BtIsh,`Earl Brewer, and Henry F. White were discriminatorily refused rein- statement by Respondent on June 26, 1950. I shall recommend that Respondent offer each of these employees, who has not been fully reinstated or offered proper reinstatement,' immediate and full reinstatement to his former or substantially equivalent position, without prejudice to his seniority and other rights and privileges, and that Respondent dismiss, if necessary, any employees hired since May 9, 1950, to replace any of these employees. If, after such dismissal, there are insufficient positions remaining for all these employees,2 the avail- able positions shall be distributed among them, without discrimination because of their union membership, activity, or participation in the strike, under such system of seniority or other nondiscriminatory practice as heretofore has been ,applied in the conduct of Respondent's business ; those employees for whom no r.; employment is immediately available after such distribution, shall be placed on a preferential hiring list with priority determined among them by such system of seniority or other nondiscriminatory practice as heretofore has been applied in the conduct of Respondent's business, and thereafter, in accordance with such list, shall be offered reinstatement as positions become available, and before other persons are hired for such work. I shall also recommend that Respondent make each of said employees, includ- ing• each already fully reinstated or offered proper reinstatement, whole for any loss of pay he may have suffered by reason of Respondent's discrimination against him. The loss of pay for each employee shall be computed on the basis of each separate calendar quarter or portion thereof during the period from Respondent's discriminatory action to the date of full reinstatement or a proper "For reasons stated above, Leon Ellsworth, Adolph Duke, and Martin Ebert Duke need not ha offered reinstatement. I Henry P. White appears to have been properly reinstated, obviating any offer. 2 General Counsel's Exhibit No. 14 indicates that, at the time of the hearing, Respondent was operating with only 19 employees in the appropriate unit in all plants. The record contains other evidence of some curtailment of Respondent's operations 334 DECISIONS OF NATIONAL LABOR RELATIONS BOARD offer of reinstatement, as the case may be.8 The quarterly periods, hereinafter called "quarters," shall begin with the first day of January, April, July, and October. Loss of pay shall be determined by deducting from a sum equal to that which each employee would normally have earned for each quarter or portion thereof, his net earnings,' if any, in other employment during that period. Earnings in one particular quarter shall have no effect upon the back- pay liability for any other quarter. It is also recommended that Respondent be ordered to make available to the Board upon request payroll and other records to facilitate the checking of the amount of back pay due.' I have found that Respondent initiated and operated the false "independent contract" arrangement with Smith and three other employees as part of its discriminatory scheme and plan against the Union. Inasmuch as Smith is the only employee still operating under that arrangement, and in pursuance thereof is handling at the Hayti plant all installation and service work formerly handled by himself, Howell, and Davis, all discriminatorily discharged employees, I shall recommend that Respondent forthwith cancel, cease operating under, or giving any effect to, its contract of May 12, 1950, with J. W. Smith, in order that those discharged employees may be offered proper reinstatement. Having found that Respondent refused to bargain collectively with the Union as the exclusive representative of its employees in the appropriate unit described above, I will recommend that Respondent bargain collectively, upon request, with the Union, as such exclusive representative, and if an understanding is reached, embody such understanding in a signed agreement. I have found that Respondent, by the illegal acts related above, has violated Section 8 (a) (1), (3), and (5) of the Act. Considering the nature, extent, and variety of such acts, I aW of opinion that the commission by Respondent in the future of such acts and other related unfair labor practices may reason- ably be anticipated from its conduct in the past. I shall therefore recommend that Respondent cease and desist from such acts and from in any other manner infringing upon the rights of employees guaranteed by Section 7 of the Act. On the foregoing findings of fact and the entire record in the case, I make the following : CONCLUSIONS OF LAW 1. United Gas; Coke and Chemical Workers, C. I. 0., is a labor organization within the meaning of Section 2 (5) of the Act. 2. All production and maintenance employees of Respondent, excluding guards,- office, clerical, and supervisory employees as defined in the Act, constitute a unit appropriate for purposes of collective bargaining within the meaning of Section 9 (b) of the Act. 3. The Union named above was on April 18, 1947, and has been at all times thereafter, the exclusive representative of all employees in the unit aforesaid for purposes of collective bargaining within the meaning of Section 9 (a) of the Act. 8 For the discharged installation employees, the period starts on May 8. 1950, the date of their discharges. For the strikers, it begins from the date, following their unconditional offer to return on June 26, 1950, when each was or would be entitled to reinstatement in accordance with the reinstatement formula described above, to the date of Respondent's offer of reinstatement. As to Martin E. Duke and Adolph Duke, the period is tolled on July 15, 1950; as to Henry F. White, it ends on August 1, 1950; as to Leon Ellsworth, it should end on the date when be was discharged for cause by Malone while working for the latter under his false "contract." 4 See, Crossett Lumber Company, 8 NLRB 440; Republic Steel Corporation v. N. L. R. R., 311 U. S. 7. In the cases of Smith, Malone, Steinbeck, and Williams, their net earnings received from their installation contracts with Respondent are also deductible. OP. W. Woolworth Company;• 90 NLRB 289. 'CHICAGO RETORT AND FIRE BRICK DIVISION, LACLEDE-CHRISTY CO.335 4. By its refusal to bargain collectively with the Union as the exclusive rep- resentative of its employees in said unit , Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (5) of the Act. 5. By its discriminatory discharge of certain employees named above, and its discriminatory refusal to reinstate those employees 'and other striking em- ployees named above, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (3) of the Act. 6. By the above refusal to bargain and discrimination , as well as by other conduct found above, Respondent has interfered with, restrained , and coerced its employees in the exercise of rights guaranteed by Section 7 of the Act, and has thereby engaged in and is engaging in unfair labor practices within the meaning of Section 8 ( a) (1) of the Act. 7. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2 (6) and (7) of the Act. [Recommendations omitted from publication in this volume.] CHICAGO RETORT AND FrRE BRICK DIVISION or LACLEDE-CHRISTY COM- PANY and DISTRICT No. 132, INTERNATIONAL ASSOCIATION OF MA- CHINISTS, AFL, PETITIONER. Cases Nos. 13-RC-2285,13-RC-2286, and 13-RC-2287. May 27, 1952 Decision and Order Upon petitions duly filed under Section 9 (c) of the National Labor Relations Act, a consolidated hearing was held before Irving W. Fried- man, hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed. 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 [Members Houston, Murdock, and Styles]. Upon the entire record in this case, the Board finds : 1. The Employer is engaged in commerce within the meaning of the Act. 2. The labor organizations involved claim to represent employees of the Employer. 3. No question affecting commerce exists concerning the representa- tion of employees of the Employer within the meaning of Section 9 (c) (1) and Section 2 (6) and (7) of the Act, for the following reasons: The Petitioner seeks to represent at the Employer's Ottawa plant separate units of (1) "all machine repair, machinists, welders, and machine set-up employees, automobile mechanics and helpers, and their apprentices" (petition No. 13-RC-2285), ( 2) all electricians and their helpers (petition No. 13-RC-2286), and (3) all carpenters, their 99 NLRB No. 53.