Leubren Paper Corp.

LEUBREN PAPER CORPORATION 567 LEUBREN PAPER CORPORATION and MARY BRENNER, individually and as Executrix and Trustee under the Last Will and Testament of Louis Brenner , Deceased, doing business as BRENNER PAPER PRODUCTS CO., as suc- cessor in interest to Louis Brenner, doing business as Brenner Paper Products Co.' and PAPER CUTTERS & BOOKBINDERS UNION, LOCAL 119 (MANIFOLD DIVISION), INTERNATIONAL BROTHERHOOD OF BOOKBINDERS, AFL' and PRINTING SPECIALTIES AND PAPER PRODUCTS UNION, NO. 447.' Case No. 2-CA-2099. June 12, 1953 DECISION AND ORDER On March 4, 1953, Trial Examiner A. Bruce Hunt issued his Intermediate Report in the above-entitled proceeding, finding that the Respondents had not engaged in the unfair labor prac- tices alleged in the complaint, and recommending that the complaint be dismissed in its entirety, as set forth in the copy of the Intermediate Report attached hereto. Thereafter, the General Counsel and Local 447 filed exceptions to the Interme- diate Report and the General Counsel filed a supporting brief. The Board has reviewed the rulings made by the Trial Examiner at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Intermediate Report, the exceptions and brief, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner with the following modifications and additions: We agree with the Trial Examiner that the Respondents did not violate Section 8 (a) (1) and (2) of the Act by executing the contract of September 21, 1951, with Local 447. However, in so finding, we rely solely on the following considerations: On July 27, 1951, Local 119 filed a representation petition for a unit of the envelope department employees then employed by Louis Brenner and Respondent Leubren. On August 13, 1951, at a conference attended by representatives of Brenner and Leubren and Local 119, an agent for the Board proposed that the parties agree to a consent election. The employer repre- sentative accepted the proposal; Michaels, secretary for Local 119, alone opposed it, notwithstanding that such an agreement would have expedited the holding of an election upon his petition. Michaels stated that "he did not intend to go through with the petition for certification," and that he was going to file an unfair labor practice charge. Such a charge alleging violations of Section 8 (a) (1) and (5) was filed the same day. Thereafter., on September 21, 1951, upon receipt of satisfactory evidence that Local 447 represented a majority of their employees, Brenner signed a contract with that Local. The 'Herein called Respondents 2 Herein called Local 119. $ Herein called Local 447. 105 NLRB No. 71. 291555 0 - 54 - 37 568 DECISIONS OF NATIONAL LABOR RELATIONS BOARD amended charges, upon which the complaint in the instant case was predicated, did not reiterate the 8 ( a) (5) alleged violation and the General Counsel conceded at the hearing that the 8 (a) (5) charge filed on August 13 was found to be groundless after investigation. The General Counsel contends that this contract violated Section 8 (a) (1) and (2) of the Act because executed during the pendency of the representation question raised by Local 119's petition. However, we find, in agreement with the Trial Exam- iner, that, on August 13, Local 119 had decided to abandon its petition. This is clear from Michaels' refusal to consent to an election on his own petition, his announcement that he did not intend to pursue the petition further, and his simultaneous filing on the same day of a charge which Michaels was no doubt aware would, under the Board's rules, prevent the processing of the petition until the charge was finally disposed of.4 No justification appears for Michaels' refusal to go to a consent election on Local 119's own petition. Accordingly, under the foregoing circumstances, we find, like the Trial Examiner, that at the time of the execution of the contract between the Respondents and Local 447, there was no longer pending any real question concerning representation and that the execution of the contract was therefore not violative of Section 8 (a) (1) and (2) of the Act. [The Board dismissed the complaint.] 4Cf. Eaton Manufacturing Company, 76 NLRB 261 Intermediate Report and Recommended Order STATEMENT OF THE CASE A charge and amended charge having been duly filed, a complaint and notice of hearing thereon having been issued and served by the General Counsel, and answers having been filed by the above-named Corporation, Company, and Local 447, a hearing involving allegations of unfair labor practices in violation of the National Labor Relations Act, 61 Stat. 136, herein called the Act, by said Corporation and Company, herein jointly called the Respondents, was held upon due notice at New York, New York, on November 24, 25, and 26 and December 8, 1952, before the undersigned Trial Examiner. The allegations, in substance, are that the Respondents have contributed and are contributing support to Local 447 by entering into a collective-labor agreement with that organization when a question concerning representation had been raised by the above-named Local 119, and that the Respondents thereby violated Section 8 (a) (1) and (2) of the Act. All parties were represented by counsel or other repre- sentative, were afforded full opportunity to be heard, to examine and cross-examine witnesses, to introduce evidence pertinent to the issues, to argue orally upon the record, and to file briefs and proposed findings and conclusions. A brief was received from the General Counsel and has been considered. The Respondents' and Local 447's motions to dismiss the complaint, made at the close of the hearing and taken under advisement by me, are hereby granted for the reasons appearing below. Upon the entire record inthecaseand from my observation of the single witness, I make the following: FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENTS This case involves certain business operations of Louis Brenner, who died on December 17, 1951. Leubren Paper Corporation, the stock of which was wholly owned by Brenner, was LEUBREN PAPER CORPORATION S69 engaged during 1951 in the purchase and sale of paper and the manufacture of envelopes. Brenner also owned Brenner Papzr Products Co., which he operated as a single proprietorship in the manufacture and sale of announcement cards and the sale of envelopes. Following the death of Brenner, the Company's business has continued. His widow, Mary Brenner, a re- spondent, has owned the business of the Company as his executrix, although she does not actively manage or operate it. In addition to her capacity as executrix, Mrs. Brenner is trustee of an undivided two-thirds interest in the entire estate of Bremner, which includes properties in addition to the Company's assets and the corporate stock, and she was individually bequeathed an undivided one-third interest in the entire estate. The General Counsel contends that at tunes material the Corporation and the Company were operated by Brenner as an integrated enterprise. Loca1447, but not the Respondents, disputes this contention. The 2 organizations have had common places of business, there having been 2 such places in New York City until the summer of 1951 and thereafter at a single location in Long Island City. During the year 1951, some of the machinery which was operated by em- ployees in the bargaining unit mentioned below was owned by the Corporation and some of it by the Company. On August 1, 1951, there were 59 employees in such unit, of whom 54 were on the payroll of the Corporation. On or about August 8, the 5 remaining employees were transferred to the payroll of the Corporation, where they remained until January 1, 1952, at which time all the employees were transferred to the payroll of the Company. During the year 1951, the Company obtained from the Corporation all of the envelopes and approximately one-half of the paper used in the Company's business. Only a small, but unstated, portion of the Corporation's sales was to concerns other than the Company. During that year they had the same comptroller, and at regular intervals the Company's indebtedness to the Corporation for sales to the former was settled by Brenner's drawing a check upon the Company and depositing it to the account of the Corporation. I find, contrary to the contention of Local 447, that at times material the Corporation and the Company were operated as an integrated enterprise. During the year 1951, the Corporation purchased paper and other materials of an unstated total value, of which in excess of $500,000 represented shipments to it directly from points outside the State of New York. During the same year, the Company sold products valued in excess of $500,000, of which 25 percent represented shipments by it directly to points outside the State of New York. Contrary to the contention of Local 447, but in accord with the con- cession of the Respondents, I find that the latter are engaged in commerce within the meaning of the Act. i This is so even if their business activities be regarded, as Local 447 contends, as separate enterprises. Federal Dairy Co., Inc., 91 NLRB 638; Stanislaus Implement and Hardware Company, Limited, 91 NLRB 618. II. THE LABOR ORGANIZATIONS INVOLVED Paper Cutters & Bookbinders Union, Local 119 (Manifold Division), International Brother- hood of Bookbinders, AFL, herein called Local 119, and Printing Specialties and Paper Products Union, No. 447, herein called Local 447, are labor organizations admitting to membership employees of the Respondents. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The issue On July 27, 1951, Local 119 filed with the Regional Office of the Board a petition in which it sought certification by the Board as the representative of employees, as described below. In the petition, Local 447 was named as another labor organization interested in representing the employees. Ofi August 13, Local 119 filed its initial charge, alleging unfair labor prac- tices by the Respondents in violation of Section 8 (a) (1) and (5) of the Act. On September 21, prior to a disposition of the petition or charge by the Regional Office, the Respondents and Local 447 executed a collective-labor agreement, retroactive to August 16, covering the employees whom Local 119 had claimed to represent. There is no issue concerning the ap- propriateness of the unit in the collective-labor agreement, and the General Counsel concedes that Local 447 possessed authorization cards signed by a majority of the employees in such i The facts concerning the Respondents' business were stipulated In two respects the stipulation was incorrectly transcribed by the reporter. Accordingly, it is hereby ordered that the transcript be corrected as follows: First, page 19, line 16, the word "now" is substituted for the word "not " Second, page 23, line 12, the word "Corporation's" is sub- stituted for the word "Company's." 570 DECISIONS OF NATIONAL LABOR RELATIONS BOARD unit, or other evidence that a majority had designated it as their representative, and that this evidence was shown by Local 447 to the Respondents prior to execution of the agreement. Our issue is whether the factual situation requires application of the doctrine established in Midwest Piping and Supply Co., Inc., 63 NLRB 1060, and reiterated in subsequent cases, in- cluding International Harvester Company, 87 NLRB 1123, in the following language: that "an employer unlawfully infringes upon his employees' freedom to select their own bargaining representative if he recognizes and contracts with a labor organization as their exclusive bargaining representative notwithstanding the existence of a valid question as to their repre- sentation." B. The facts The contract between the Respondents and Local 447 covers all employees in the envelope department of the Corporation and the Company. Prior to execution of the contract, those employees were not represented by any labor organization, although other employees of the Company were represented by Local 119. During June 1951, Local 119 began organizational activities among employees in the envelope department. Morris Michaels, secretary of Local 119, testified that the activities were com- menced after he had heard that a labor organization, unidentified, was interested in repre- senting the employees. On July 3 Edward Dillon, a representative of Local 119; wrote to the Company, asserting that Local 119 had been designated by a majority of the employees in the envelope department as their collective-bargaining representative, and asking that a date be fixed for a conference. On July 10 Brenner responded, saying that he had telephoned Dillon to make the appointment, but had heard nothing further from Dillon, and asking that Dillon tele- phone him so that an appointment could be made. On July 18 Michaels called upon Brenner. Michaels testified that he did not offer to prove the claimed majority status by showing to Brenner applications for membership because it was the policy of Local 119 not to show such proof to an employer.2 Michaels gave Brenner a written list of demands on behalf of Local 119.3 Brenner did not grant recognition to Local 119, however, and on July 27 Michaels filed a petition with the Regional Office of the Board.4 The petition recited that Local 447 was also interested in representing the employees in the envelope department. Local 447 was not in compliance with Section 9 (f), (g), and (h) of the Act, however. and consequently was not entitled to a place on the ballot in any election which might be held. The parties stipulated that Local 447 did not anticipate that it would have such a place, but that it expressed to Nathan Cohen, a field examiner in the Regional Office, a lack of objection to an election. 2 Michaels was not asked whether the policy was applied in a situation, such as here, where Local 119 and the employer were under contract covering another unit of employees and there was no evidence of hostility by the employer toward Local 119. 3 The Respondents and Local 447 both objected to testimony by Michaels concerning con- versations with Brenner upon the ground that the latter was deceased in accord with the policy of the Board, the objections were overruled with the statement that the testimony would be scrutinized carefully and that surrounding circumstances would be developed to ascertain whether the testimony was possible of contradiction. Cf. N. L. R. B. v. Wallick & Schalm, 198 F. 2d 477 (C. A. 3). enfg. 95 NLRB 1262 To the extent that Michaals testified that he met with Brenner in the latter's office and presented a list of demands, I believe that his testimony is to be credited. This is so because Brenner's letter of July 10 invited a conference, and Michaels testified that a woman whom he supposed to be Brenner's secretary was present Although it appears from Michaels' testimony that the woman was at work at a desk and did not participate in the conversation, she was not called as a witness by the Respondents or Local 447 to deny that Michaels had visited Brenner. 4Michaels testified that on July 24, nearly a week after he visited Brenner, he and Brenner had a telephone conversation According to Michaels, Brenner said that he had been informed that Local 119 did not represent "any people in the shop" and that he did "not have to negotiate with" it. Michaels testified further that he responded that Brenner had the "right to doubt" the claimed majority status and that he would file a petition with the Board to es- tablish it in an election. Since, according to Michaels, the remarks were made in a telephone conversation to which no one else listened, it was impossible for the Respondents to offer any evidence on the subject and for the General Counsel to offer corroborating testimony. I believe that it is unnecessary to determine whether Brenner made the quoted remarks to Michaels. It is obvious that recognition of Local 119 was denied by the Respondents. That is the significant fact, under our issue here, rather than the circumstances surrounding the denial. LEUBREN PAPER CORPORATION 571 On August 13, a conference was held in the Regional Office. Participating were Field Examiner Cohen on behalf of the Board, Attorney Mildworm on behalf of the Respondents, and Michaels and Vincent C. Aronson, an attorney, on behalf of Local 119. Cohen sought to arrange a consent election at which the employees would vote on the question whether they wished to be represented by Local 119, and Attorney Mildworm said that the Respondents were willing to negotiate with the labor organization which could demonstrate majority status and that he was ready to sign an agreement for a consent election. Such agreement was not executed, however. Michaels, on behalf of Local 119, said that he would not consent to an election, that he did not "intend to go through with the petition for certification," and that he would file a charge alleging that the Respondents had engaged in unfair labor practices. The conference ended, and Mildworm departed. S On that day Michaels filed the initial charge in this proceeding, copies of which were served upon the Respondents on August 16. It alleges that the Respondents violated Section 8 (a) (1) and (5) of the Act by (a) advising the employees that the Respondents would not bargain with Local 119, that the employees should join Local 447, and that the Respondents would negotiate with Local 447, and (b) refusing to bargain with Local 119. Processing of the petition ceased with the filing of the charge. In his brief, the General Counsel asserts that "in accordance with the usual practice of" the Regional Office "further processing of the representation proceeding was held in abeyance" pending action upon the charge. On September 21, prior to a disposition of the charge, the Respondents and Local 447 entered into their contract, retroactive to August 16 and terminating on October 31, 1952. There is no dispute that before execution of the contract. Local 447 showed the Respondents evidence that it possessed majority status. On January 17, 1952, Michaels filed an amended charge alleging violations of Section 8 (a) (1) and (2) of the Act. The earlier alleged violation of Section 8 (a) (5), by refusing to bargain collectively, was not reiterated, but there was a reiteration of the alleged statements by the Respondents to the employees that the Respondents would not bargain with Local 119, that the employees should join Local 447, and that the Respondents would negotiate with the latter labor organization. The amended charge also alleges that the Respondents engaged In unfair labor practices by executing the contract with Local 447 when a question concerning repre- sentation existed by virtue of the petition filed by Local 119, and it is this particular allega- tion alone which is expressed in the unfair labor practices alleged in the complaint. The Re- spondents and Local 447 assert that the original charge, the filing of which terminated processing of the petition, and like portions of the amended charge were groundless . In support of this contention, Local 447 subpenaed certain employees of the General Counsel to testify that their investigation disclosed such groundlessness. The General Counsel filed a petition to revoke the subpenas. I granted the petition after the General Counsel stated that, while he did not concede relevancy, he did not otherwise object to a finding that the original charge and like language in the amended charge had been found after investigation to be groundless. As will be seen, relevancy exists. Accordingly, Ifind that the original charge was groundless. The General Counsel's contention that Michaels acted in good faith in filing that charge is discussed below. C. Conclusions The General Counsel, relying upon the Midwest Piping and related cases , contends that a real question concerning representation of the employees existed when the Respondents and Local 447 executed their contract and that the Respondents arrogated to themselves the right to resolve the question. On the other hand, the Respondents and Local 447 rely upon Eaton Manufacturing Company, 76 NLRB 261, 267, where the Board dismissed a similar allegation of unfair labor practices because the petitioning union had "prevented a prompt determina- tion [ of the representation issue] by filing an unfair labor practice charge ... which we find to be groundless . . . The basic issue is whether there was a real question concerning representation when the contract was executed. With respect to whether the filing of Local 119 's petition had created such question, Local 447 points out that the petition named only the Company as the employer, rather than both the Corporation and the Company. I do not believe that the failure to also name the Corporation constituted a material defect in the petition. It has been found that the Respondents ' business was an integrated enterprise. Moreover , although only 5 of the 59 5 The findings concerning the conference are based upon a stipulation of the parties and the uncontradicted testimony of Michaels. 572 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees in the envelope department were then on the Company's payroll, the petition alleged that there were approximately 50 employees involved, and at the conference in the Regional Office on August 13 Attorney Mildworm offered to enter into a consent- election agreement for a unit of employees in the entire envelope department. I find that with the filing of the petition by Local 119 there existed a real question concerning repre- sentation, and certain additional evidence in that connection is disposed of in the footnote.6 We turn to the issue whether the question concerning representation continued in existence until the execution of the contract. As related, the Respondents and Local 447 rely upon the Eaton case. On the other hand, the General Counsel asserts that that case is inapposite and he argues that (1) in the instant case the original charge was filed by Michaels in good faith, while in the Eaton case the groundless charge was filed in order to thwart and delay processing of the petition; (2) there was no preexisting relationship between the Respondents and Local 447, while in the Eaton case the contract was executed with an incumbent union; and (3) in the Midwest Piping case the Board expressly held : "That no unfair labor practices are found herein on the original complaint does not alter the effect of the respondent's later breach of its neutrality obliga- tion." I do not believe that the Eaton case is inapplicable for the reasons advanced by the General Counsel. With respect to the first reason, as I understand the Board's holding in the Eaton case, the good faith of the charging party in filing a groundless charge is imma- terial. The Trial Examiner had held that the charging union acted in good faith in filing its initial charge. Indeed, he also held that a portion of the complaint, based upon that charge, was supported by the evidence. The Board, in disagreeing that the evidence supported the pertinent allegation of the complaint , characterized the initial charge as "groundless" and ignored the Trial Examiner 's finding of good faith by the charging union.' With respect to the General Counsel's second reason , I see no sound basis for distinguish- ing the Eaton case on the ground that the contracting union there was an incumbent union. while Local 447 and the Respondents had not been under contract. It is true that the Board on occasion has placed emphasis upon a labor organization 's status as an incumbent repre- sentative, as in William Penn Broadcasting Company, 93 NLRB 1104, 94 NLRB 1175, but in 6As related, processing of the petition ceased upon the filing of the original charge. There was no act, such as scheduling the representation case for hearing, from which one would conclude that there had been a determination that Local 119 had demonstrated a substantial interest in the representation proceeding . If such determination was made , it was not in a form susceptible of proof in the instant case. The General Counsel offered in evidence various applications for membership in Local 119, along with a list of names of all employees in the envelope department. The exhibits were received, and there is also testimony by Michaels concerning the applications. The General Counsel requested that the Board and the Trial Examiner find "that a substantial showing of interest was made by the Petitioner CLocal 1191 in the representation case, based upon the testimony of Mr. Michaels, the submission of the [application] cards, the petition and the payroll list of the Employer [Respondents]." I believe that the question of substantial interest is irrelevent here. Cf. J. 1. Case Company, 95 NLRB 1493, affd. N L. R. B. v. J. I. Case Company, 201 F. 2d 597 (C. A. 9), where the Board held that "under the Act a substantial showing of interest by a petitioner is ,[not] es- sential to a determination that a representation question exists" and that the Board's investi- gation of a petitioner's showing of interest "has no bearing on the issue whether a representa- tion question exists." Moreover, we have seen that Attorney Mildworm was agreeable to the conduct of a consent election, and in International Harvester Company, 87 NLRB 1123, 1127, the Board held that an employer , by entering into a consent- election agreement, conceded the existence of a question concerning representation. Finally, for the same reasons , I find to be without merit the contention of Local 447 that the applications for membership in Local 119 were defective because they were applications to that Local's "Finishing Division," which Local 447 alleges to be a separate labor organization from Local 119's "Manifold Division," the petitioning and charging union t In the instant case, the General Counsel sought to establish by the testimony of Michaels that Michaels had acted in good faith in filing the initial charge. There was objection, which was sustained, and an offer of proof by the General Counsel. The material fact is not whether the charging party deliberately filed a groundless charge in order to thwart or delay a deter- mination of representatives, but that the filing of such a charge prevented a prompt deter- mination. In short, it is not the purpose, but'the result, which is material. I should think that Michaels' good faith in filing a groundless charge is as immaterial as would be the bad faith of a person who filed a meritorious charge. LEUBREN PAPER CORPORATION 573 the Eaton case there is no language to indicate that the pertinent holding is to be limited to an incumbent union situation. The issue here, whether a real question concerning repre- sentation existed when the Respondents and Local 447 executed their contract, turns on the earlier conduct of Local 119 in preventing a prompt determination of that question rather than upon Local 447's previous status. With respect to the General Counsel's third reason, it is true that the Board made the quoted holding in the Midwest Piping case. An additional fact, however, is that the Trial Examiner in the Eaton case relied thereon in finding that there had been a violation of the Midwest Piping doctrine, and he was reversed. Under the circumstances, the quoted holding is inapplicable. I find that the Eaton case is controlling. While the Board in that case did not fully disclose its reasoning in dismissing a similar allegation of unfair labor practices on the ground that the petitioning union had "prevented a prompt determination" of the representation issue by filing a "groundless " charge, I should think that the Eaton case does not constitute an ex- ception to the Midwest Piping doctrine. More specifically, I believe that the Eaton case did not present a factual situation where an employer was held to have been warranted in re- solving a question concerning representation in violation of the Midwest Piping doctrine. It presented instead a situation where the filing of a groundless charge had removed that question. Applying the holding in the Eaton case to the facts in the instant case, I find that the question concerning representation which was raised by Local 119's petition did not continue in existence beyond August 13, when that labor organization filed its groundless charge. We have seen that Michaels, on behalf of Local 119, declined to enter into a consent- election agreement and said that he did not "intend to go through with the petition for certi- fication." The filing of the charge followed. Since it was groundless, it affords no support for Michael's refusal to participate with the Respondents in a resolution of the question concern- ing representation which he had initiated. His refusal was tantamount to a withdrawal of his petition.8 There was no longer a real question concerning representation. Consequently, when the Respondents thereafter recognized Local 447, they did not infringe upon the em- ployees' right to make a free choice of representatives in a secret ballot election under the auspices of the Board. For the reasons stated, I find that the Respondents have not engaged in unfair labor practices and I shall recommend that the complaint be dismissed. It is unnecessary to discuss another defense advanced by Local 447, which is mentioned In the footnote.9 Upon the basis of the above findings of fact and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. The operations of the Respondents constitute trade, traffic, and commerce among the several States within the meaning of Section 2 (6) and (7) of the Act. 2. Paper Cutters & Bookbinders Union, Local 119 (Manifold Division), International Broth- erhood of Bookbinders, AFL, and Printing Specialties and Paper Products Union, No. 447, are labor organizations within the meaning of Section 2 (5) of the Act. 3. The allegations of the complaint that the Respondents have engaged in unfair labor practices have not been sustained. [Recommendations omitted from publication ] 8In The Hoover Company, 90 NLRB 1614, 1618, the Board held that an employer violates the Midwest Piping doctrine "only if at the time " recognition is granted to one of two rival unions "the question concerning representation raised by the rival petition still is pending" and that "many things might occur which would remove that question and would render ex- clusive recognition of a majority representative perfectly lawful," as "for example, the rival union might withdraw its petition , or . . . . " 9Local 447, for reasons detailed in the transcript , contends that issuance of the complaint herein contravened the second proviso to Section 10 (c) of the Act The subpenas to personnel of the Board and the General Counsel, and the latter's petition to revoke, which have been mentioned above, related also to this contention by Local 447. In granting the petition, I stated my disagreement with the contention . Since I am recommending thal the complaint be dismissed for another reason , I deem it unnecessary to discuss the contention further.