Paul Stevens

86 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ULTIMATE FINDINGS AND CONCLUSIONS In summary, the undersigned finds and concludes: 1. Office Employees International Union, Local 33, AFL, is a labor organization within the meaning of the Act. 2. Hancock Trucking, Inc., is engaged in commerce within the meaning of the Act. 3. By its interrogation of, and threats to, William Taylor on September 29, 1953, Respondent interfered with, restrained, and coerced employees in the exercise of rights guaranteed in Section 7 of the Act and thus engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (1) of the Act. 4. The aforesaid unfair labor practices occurring in connection with the opera- tions of Respondent's business, have a close, intimate, and substantial relation to trade, traffic and commerce among the several States and tend to lead to labor dis- putes burdening and obstructing commerce and the free flow of commerce. 5. The evidence adduced does not establish that Respondent engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (3) of the Act. [Recommendations omitted from publication.] Appendix A NOTICE TO ALL EMPLOYEES Pursuant to the recommendations of a trial examiner of the National Labor Rela- tions Board and in order to effectuate the policies of the National Labor Relations Act, we hereby notify our employees that: WE WILL NOT discourage self-organization or concerted activities among em- ployees for their mutual aid and protection as guaranteed in Section 7 of the Act by interrogating employees concerning, or by threatening employees with economic reprisals because of, such activities. All our employees are free to become, remain, or to refrain from becoming or remaining members of any labor organization except to the extent that such right may be affected by an agreement in conformity with Section 8 (a) (3) of the National Labor Relations Act. HANCOCK TRUCKING, INC., 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. PAUL STEVENS, RECEIVER OF CAROLINA SCENIC STAGES, A CORPORATION; CAROLINA SCENIC STAGES, AS A CORPORATION AND AS DEBTOR IN POS- SESSION; AND HAMISH TURNER and BROTHERHOOD OF RAILROAD TRAINMEN, F. L. PICOTrE LODGE No. 1038. Case No. 11-CA-54!. July 9,1954 Decision and Order On November 23, 1953, Trial Examiner Eugene F. Frey issued his Intermediate Report in the above-entitled proceeding, finding that the Respondents had engaged in and were engaging in certain unfair labor practices and recommending that they cease and desist there- from and take certain affirmative action as set forth in the copy of the Intermediate Report attached hereto. Thereafter, the Respond- 109 NLRB No. 17. PAUL STEVENS 87 ents filed exceptions to the Intermediate Report and the Respondent Receiver filed a brief in support of its exceptions. 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 In- termediate Report, the Respondents' exceptions and brief, and the entire record in this case,' and hereby adopts the findings, conclu- sions, and recommendations of the Trial Examiner,2 with the follow- ing additions and modifications : We agree with the Trial Examiner that the Receiver during its control of the Company, committed violations of Section 8 (a) (5) and (1) of the Act, and that thereafter the Company operating as Debtor in Possession, under chapter 11 of the Bankruptcy Act, as amended, also violated Section 8 (a) (5) of the Act. We disagree, however, with the Trial Examiner's recommendations in so far as they require the Receiver, the Debtor in Possession, the Company, and Turner, as an individual, to "jointly" remedy the unfair labor practices. The legal control and possession of the Company by the Receiver and the Debtor has been successive and several rather than joint. It is obvious that a party who has no control of the Company would have no authority to sign a bargaining contract covering the Company's employees. Thus, an order requiring parties who have no control of the Company to bargain jointly with the party in control would be impossible of enforcement. We shall therefore modify the Trial Examiner's recommendations to the extent that our order shall require that the Debtor in Possession,3 the Receiver, a Trustee in Bankruptcy under another proceeding,4 the Company, or Hamish Turner, whenever in possession and control of the Company's opera- tions, shall remedy the unfair labor practices found herein. Order Upon the entire record in this case, and pursuant to Section 10 (c) of the National Labor Relations Act, as amended, the National Labor Relations Board orders Carolina Scenic Stages, either as a corpora- tion or Debtor in Possession, its Receiver or Trustee in Bankruptcy, or Hamish Turner, whenever any of the foregoing are in possession 3 The Receiver 's request for oral argument is denied , because the record, exceptions, and brief, in our opinion, adequately present the issues and the positions of the parties. 2 There is an obvious typographical error on p 94, par 4 of the Intermediate Report. It reads that the original charge herein was served on "December 17, 1953 " The correct date is "December 17, 1952." This inadvertence affects neither the validity of the Trial Examiner's conclusions nor our concurrence therein. s Although the Debtor was in possession of Company at the time of the hearing, there was pending an appeal in the United States Court of Appeals for the Fourth Circuit by the Receiver and a creditor challenging the Debtor 's right of possession. 4 The Receiver 's brief discloses that since the hearing a creditor has filed a petition to force the Company into bankruptcy under another chapter of the Bankruptcy Act. 88 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and control of the Company's operations, their officers, agents or their successors, and assigns, shall : 1. Cease and desist from : (a) Refusing to bargain collectively with Brotherhood of Rail- road Trainmen, F. L. Picotte Lodge No. 1038, as the exclusive repre- sentative of all employees in the appropriate unit with respect to rates of pay, wages, hours of employment, and other conditions of employment. (b) Dealing or seeking to deal with the employees individually in respect to rates of pay, wages, hours of employment, and other condi- tions of employment, in derogation of their duly designated collec- tive-bargaining agent; warning or threatening employees that they would not bargain collectively, or sign a bargaining contract, with the employees' duly designated bargaining representative; threaten- ing employees with a sale of the business and loss of their employ- ment if they engage in concerted activity for purposes of collective bargaining or other mutual aid or protection. (c) In any other manner interfering with, restraining, or coercing employees in the exercise of the right to self-organization, to form labor organizations, to join or assist Brotherhood of Railroad Train- men, F. L. Picotte Lodge No. 1038, or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, or 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) Upon request, bargain collectively with Brotherhood of Rail- road Trainmen, F. L. Picotte Lodge No. 1038, as the exclusive repre- sentative of the employees in the appropriate unit and, if an under- standing is reached, embody such understanding in a signed agreement. (b) Post at the main office and garage of the Company in Spartan- burg, South Carolina, and at all ticket agencies, bus terminals, garages, and other places of business maintained by or for the Company in the States of South Carolina, North Carolina, and Georgia, copies of the notice attached hereto and marked "Appendix A." 5 Copies of said notice, to be furnished by the Regional Director for the Eleventh Re- gion, shall, after being duly signed by a representative of Carolina Scenic Stages, either as a corporation or Debtor in Possession, or by a 6 In the event that this Order is enforced by a decree of a United States Court of Appeals, there shall be substituted for the words "Pursuant to a Decision and Order" the words "Pursuant to a Dec*ee of the United States Court of Appeals, Enforcing an Order." PAUL STEVENS 89 representative of its Receiver or Trustee in Bankruptcy, or by Hamish 't'urner whenever any of the foregoing are in possession and control of the Company's operation, be posted immediately upon receipt thereof and be maintained for sixty (60) consecutive days thereafter in con- spicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the party in possession and control of the Company's operations to insure that said notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director for the Eleventh Region, in writ- ing, within ten (10) days from the date of this Order, what steps they have taken to comply therewith. CHAIRMAN FARMER took no part in the consideration of the above Decision and Order. Appendix A NOTICE To ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that : WE WILL bargain collectively, upon request, with Brotherhood of Railroad Trainmen, F. L. Picotte Lodge No. 1038, as the ex- clusive representative of all employees in the bargaining unit described below, with respect to rates of pay, wages, hours of em- ployment, and other conditions of employment and, if an under- standing is reached, embody such understanding in a signed agree- ment. The bargaining unit is : All busdrivers employed in the systemwide operations of Carolina Scenic Stages, with headquarters located in Spar- tanburg, South Carolina, excluding clerical and mainte- nance employees, the traffic manager, dispatcher-inspectors, and all other supervisory employees as defined in the Act. WE WILL NOT deal or seek to deal with our employees individu- ally in respect to rates of pay, wages, hours of employment, and other conditions of employment in derogation of their duly desig- nated collective-bargaining representative; warn or threaten our employees that we will not bargain collectively, or sign a bargain- ing contract, with their duly designated collective-bargaining representative ; threaten our employees with a sale of our business and loss of their employment if they engage in concerted activity for purposes of collective bargaining or other mutual aid or protection. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of the right to self -organiza- 90 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tion, to form labor organizations, to join or assist Brotherhood of Railroad Trainmen, F. L. Picotte Lodge No. 1038, or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for purposes of collective bargaining or other mutual aid or pro- tection, or to refrain from any or all of such activities, except to the extent that such right may be affected by an agreement re- quiring membership in a labor organization as a condition of employment, as authorized in Section 8 (a) (3) of the Act. All our employees are free to become, remain, or refrain from becom- ing members of the above-named Union, or any other labor organiza- tion, except to the extent that such right may be affected by an agree- ment in conformity with Section 8 (a) (3) of the Act. CAROLINA SCENIC STAGES Dated---------------- By-=----------------------------------- (Party in Possession) (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 The issues in this case are whether (1) Paul Stevens, Receiver of Carolina Scenic Stages, a corporation (hereinafter called the Receiver), Carolina Scenic Stages, as a corporation and as Debtor in Possession (hereinafter called the Company and the Debtor), and Hamish Turner (hereinafter called Turner),' have failed and refused to bargain collectively with Brotherhood of Railroad Trainmen, F. L. Picotte Lodge No. 1038 (hereinafter called the Union), as the statutory bargaining representative of the Company's employees in an appropriate unit described below, in violation of Section 8 (a) (5) and (1) and Section 2 (6) and (7) of the National Labor Rela- tions Act, as amended, 61 Stat. 136, hereinafter referred to as the Act; and (2) whether said Respondents interfered with, restrained, and coerced the Company's em- ployees by various threats of reprisal and promises of benefits, and dealing or attempting to bargain with them individually, in violation of Section 8 (a) (1) of the Act. The original complaint alleging violation of Section 8 (a) (5) as against the Receiver was issued May 1, 1953, by the General Counsel of the National Labor Relations Board (herein called General Counsel and the Board) through the Regional Director of the Board for the Eleventh Region (Winston-Salem, North Carolina), on the basis of a charge duly filed by the Union. Copies of the original complaint and the charge, with notice of hearing thereon, were duly served upon the Receiver and the Union. The Receiver's answer admitted the jurisdictional allega- tions of the complaint, the representation proceedings before the Board in Case No. 10-RC-1929 and the certification of the Union as statutory bargaining agent therein, the Union's request to bargain, and the appropriate unit, but denied the commission of any unfair labor practices. As an affirmative defense, the Receiver claims he has always been willing to bargain and has bargained with the Union in good faith but subject always to his restricted powers as Receiver of the Company. Pursuant to notice, hearings were held on June 22, July 20, 22, and 23, 1953, at Spartanburg, South Carolina, before the undersigned Trial Examiner, in which all parties participated, the General Counsel and the Respondents being represented by counsel and the Union by several international representatives. All parties were accorded full opportunity to be heard, to examine and cross-examine witnesses, to introduce relevant evidence bearing on the issues, to present oral argument, and to file briefs, proposed findings of fact, and conclusions of law. 1 The names of the Respondents appear as amended at the hearing. PAUL STEVENS 91 At the outset of the hearing, General Counsel's motion to amend the complaint to add allegations of independent violations of Section 8 (a) (1) by the Receiver was granted without objection; the Receiver amended his answer to deny the new allegations. General Counsel's motion to amend the complaint to add the Company, the Company as Debtor in Possession, and Hamish Turner, its president, as parties respondent, was granted without objection, but as it appeared that the new parties were not in court and had never received notice of the charge or complaint as amended, the Trial Examiner continued the hearing until July 13, 1953, to enable proper service of the amended complaint and notice of hearing thereon upon all parties. The amended complaint, with an amended charge and amended notice of hearing thereon, having been duly served on all parties, the hearing was resumed on July 20, 1953,2 at which time the Company, the Debtor, and Turner were permitted over objection of General Counsel to file a joint answer, in which they admitted certain bankruptcy proceedings in the United States district court affecting the Com- pany, admitted the jurisdictional allegations, denied the Union's status as a labor organization, admitted its certification in the representation proceeding aforesaid but denied that the certification had any effect as to the Company, the Debor, or Turner, and denied the representation proceedings and the commission of any unfair labor practices. As affirmative defenses, they claimed they were not parties to or bound by the representation proceedings, are not bound by any acts of the Receiver, and that they have bargained in good faith with the Union ever since the Company took back its business as Debtor in Possession. At the close of General Counsel's case, a motion of the Company, the Debtor, and Turner to dismiss the amended complaint on the merits was denied. The Trial Examiner reserved decision upon a similar motion of the same parties at the close of the entire case; that motion is now denied for reasons set forth hereafter in this Report. General Counsel's motion at the close of the case to conform the pleadings to the proof in matters of minor variance was granted over objection. Oral argu- ment was presented by General Counsel and counsel for the Company, the Debtor, and Turner, counsel for these Respondents also filed a brief 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 THE COMPANY The Company is and has been at all times material herein a South Carolina corporation, having its principal office and place of business in Spartanburg, South Carolina, where it is engaged in the operation of motor coach transportation facili- ties for public service. In the course of its business it annually transports a substan- tial number of passengers and a substantial amount of light express over routes within the States of South Carolina, North Carolina, and Georgia, to points and places within those and other States It conducts its business under certificates of authorization from the Interstate Commerce Commission, and also subject to regu- lations of the public utility commissions of South Carolina, North Carolina, and Georgia. In the course of its business, the Company maintains and operates places of business in Anderson and Columbia, South Carolina, Charlotte and Asheville, North Carolina, and Augusta, Georgia. In the operation of its transportation sys- tem, it causes large amounts of materials, supplies, equipment, and fuel to be bought, transported, and delivered in interstate commerce to its principal headquarters in South Carolina from points without that State. All Respondents concede, and I find on the above facts, that the Company is and has been an instrumentality of interstate commerce and is engaged in commerce within the meaning of Section 2 (6) of the Act. If. THE LABOR ORGANIZATIONS INVOLVED Brotherhood of Railroad Trainmen, F. L. Picotte Lodge No. 1038, is a labor organization within the meaning of Section 2 (5) of the Act which admits to mem- bership employees of the Company. III. THE UNFAIR LABOR PRACTICES A. Preliminary history In August 1951, a creditor of the Company filed a complaint in the Court of Common Pleas, Seventh Judicial District, county of Spartanburg, South Carolina, 2 The hearing was continued for another week at the request of counsel for the Company, the Debtor, and Turner. 92 DECISIONS OF NATIONAL LABOR RELATIONS BOARD against the Company and Respondent Turner, who was then and still is its president and majority stockholder , for the appointment of a receiver of the Company and its business, claiming that the Company was in imminent danger of insolvency. At a hearing before the court on August 22, 1951 , the Company and Turner admitted the material allegations of the complaint and joined in the prayer for appointment of a receiver. On August 24, 1951, the court (Hon. Bruce Littlejohn ) appointed Respondent Paul Stevens and one Frank C. Martel as coreceivers of the affairs and assets of the Company , with authority, among other things, to conserve the corporate assets and take charge of and operate the business of the Company as a going con- cern. The order of appointment vested the receivers with complete and exclusive possession and control of all the corporate assets. Frank C. Martel declining to serve as receiver, the court on August 30, 1951, appointed Stevens as receiver of the Company, with the rights, responsibilities , and liabilities set forth in the order of August 24, 1951. Thereafter the Receiver operated the business until May 22, 1953, when he was ouster' under circumstances set forth below. The primary purpose of the receivership was the protection of the creditors of the Company. On May 26, 1952, the Union filed a petition with the Board under Section 9 of the Act in Case No. 10-RC-1929 seeking certification as the bargaining representa- tive of employees of the Company in an appropriate unit described below. At an election by secret ballot held August 28, 1952, a majority of the employees in the unit aforesaid selected the Union as their bargaining agent, and on September 8, 1952, the Union was formally certified as the exclusive bargaining representative of said employees pursuant to Section 9 (a) of the Act. On assuming his duties , the Receiver employed Fred Paulson as general manager of the Company, until his ouster on May 22, 1953. The Receiver also employed Hamish Turner, its president, as traffic manager until May 1 , 1952, when he termi- nated Turner's employment after disagreements between them over the Receiver's management of the business. In or about October 1952, Turner filed an original petition in the State court receivership proceedings mentioned above, seeking the removal of the Receiver on grounds of misconduct and misfeasance . The Receiver filed a return to the petition, defending his administration and giving a partial accounting thereof. The case was argued on December 19, 1952, and the State court' issued its order on January 2, 1953, overruling Turner's contentions and dismissing the petition. On May 22, 1953, the Company, acting through its president , Turner, filed a peti- tic n in the United States District Court for the Western District of South Carolina, Spartanburg Division, praying that it be continued in possession of its property and assets and be permitted to operate the business as a going concern through its duly authorized officers and directors and under the supervision and direction of said court, and that it be permitted to make an arrangement with its creditors under chapter 11 of the Bankruptcy Act (11 USCA sec. 701 , et seq. ). On the same date, the district court issued an order which , among other things , approved the petition, continued the Company , as Debtor, in possession of its property, and authorized it to continue its business as a going concern "under the supervision of this Court and in accordance with the direction of its duly authorized officers and directors, with authority to expend reasonable amounts to meet current operating expenses." The order also directed the Receiver to turn over all property and assets in his posses- sion to the Company, as debtor in possession . The Receiver duly complied with the order, and since May 22, 1953 , the Debtor has controlled its property and oper- ated its business as a going concern through its officers and directors , including Tur- ner, under the supervision of the United States district court. In that same period, the Receiver has had no control over the property, or connection with the business, of the Company. A creditor of the Company appealed to the Court of Appeals for the Fourth Circuit from the order of May 22, 1953 , aforesaid, which appeal is now pending. The same creditor on May 26, 1953, moved the distr :,t court for an order of super- sedeas staying the operation of its order of May 22, 1953, pending the appeal. The district court denied that application by order dated June 4, 1953, in the bankruptcy proceeding. Thereafter, the Receiver moved the district court for an order vacating so much of its order of May 22, 1953, aforesaid, as had placed the Company in possession of the business and assets, and had required the Receiver to turn the same over to the Company as debtor in possession . After hearing argument , the district 3 Hon Joseph It Moss, resident judge of the Sixth Circuit, heard the matter and issued the order, as Judge Littlejohn of the Seventh Circuit had disqualified himself to hear the application PAUL STEVENS 93 court on June 23, 1953, issued its order denying the motion. The Receiver has appealed from that order to the Court of Appeals for the Fourth Circuit, which appeal is now pending. B. The refusal to bargain by the Receiver' As the Union won the election in the representation proceeding and was there- after certified by the Board as the bargaining representative on September 8, 1952, as found above, I find that, by virtue of Section 9 (a) of the Act, the Union has been at all times since September 8, 1952, and now is the exclusive representative of all employees of the Company in the appropriate unit described below, for the purposes of collective bargaining with respect to rates of pay, wages, hours of employment, and other conditions of employment. In its Decision and Direction of Election dated July 31, 1952, in the representation proceeding, the Board found that all busdrivers employed in the systemwide opera- tions of the Company, with headquarters located in Spartanburg, South Carolina, excluding clerical and maintenance employees, the traffic manager, dispatcher- inspectors, and all other 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. The Receiver admits that said unit is approriate, and as the other Respondents have adduced no evidence which would warrant a contrary finding, I consider myself bound by the prior finding of the Board, and I therefore find that the unit described above presently constitutes a unit appropriate for purposes of col- lective bargaining within the meaning of Section 9 (b) of the Act. On September 30, 1952, a union committee consisting of J. A. Hite, James Frank- lin Hay, and Boyd Loftis, drivers of the Company, accompanied by J. W. Brennan, a Grand Lodge representative of the Union, met with Fred Paulson, general manager of the Company, at the Company office in Spartanburg, South Carolina, where they presented a proposed collective-bargaining agreement to him, and discussed its pro- visions with him as set forth below. the Receiver admits, and I find, that the Union on September 30, 1952, requested the Receiver to bargain collectively with it as the statutory bargaining representative of the employees in the appropriate unit found above with respect to rates of pay, wages, hours of employment, and other conditions of employment. At the September 30 conference, Paulson read over the proposed contract. He said he could not agree to the phrase "successors and assigns" after the name of the Company at the head of the contract, because "you will have to see" Judge Little- john (judge of the State court who had appointed the Receiver). In reading the proposed wage scales he said, 'We can't pay that kind of money" and recited some figures to show that the Company was in the "red." He also stated that he had brought the Company "out of the red" to the extent of some thousands of dollars, saying that it showed a profit of about $6,000 for the first 6 months of 1952. After Paulson objected to other provisions not specified in the record, Brennan asked Paulson if he had authority to negotiate and sign a contract, and Paulson said, "No," that the Receiver's authority would not permit him to sign a contract without securing permission of the State court which appointed him. Brennan asked how long that would take, and Paulson said the judge was sick, and he did not know when he would be available, but as soon as he was, the Receiver would present the proposal to him and secure his approval or disapproval. In the course of the discussion, Brennan did most of the talking for the Union, and once Paulson told him to "keep still and let the committee talk because I am going to deal with them anyhow." Paulson also told the committee that it was foolish to be paying dues to the Union when they could deal with him by themselves without the Union. He also referred to his past ex- periences in the transportation business, stating that a labor organization had tried to organize another bus company with which he was connected, and he had con- vinced the drivers they would be better off without a labor union, and they formed their own organization. The union representatives left the conference with the understanding from Paulson that he would notify Brennan as soon as he secured the State court's decision on the proposed contract' 4 The findings in thie section are bused on admissions in the answer of the Receiver, and uncontradicted and credited testimony of J A Hite, James Franklin Hay, Boyd Loftis, J. W. Brennan, L. A. Odom, and the proceedings in Case No. 10-RC-1929, of which I take judicial notice. 6 Paulson did not testify at the hearing. His services were terminated on May 22, 1953, and he has since been in Chicago. The Receiver did not produce him at the hearing for lack of funds to bring him from Chicago ; nor was any attempt made to take his deposi- tions in that city. 94 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On October 16, 1952, Brennan wrote Paulson a letter, in which he referred to the September 30 conference, and stated that he had heard nothing from Paulson or any other official of the Company , and would like to receive "some information in this matter." Paulson forwarded the letter to the Receiver on October 20, 1952, advising that he was turning the matter over to L. A . Odom, attorney for the Receiver, for handling. Paulson sent copies of the transmittal letter to Brennan and Committee- man Hite. i On November 10, 1952, Brennan had a conference with Jesse Sprinkle, an agent of the South Carolina Mediation Board, and Commissioner Beck, of the Federal Mediation and Conciliation Service, in Spartanburg, for the purpose of arranging a conference with Messrs . Paulson and Odom Brennan learned from the conciliators of the action instituted by Turner in the State court to oust the Receiver , and was advised by them that the Receiver took the position that there was no purpose in meeting with the Union until that litigation was ended . On November 11, 1952, Brennan talked to Odom on the telephone , reported what he had been told by the conciliators of the Receiver's position , and asked Odom to give him a letter to that effect. Odom agreed and that afternoon gave Brennan a letter, signed by himself, confirming his statements to the conciliators the day before and to Brennan that day as to the delay in the bargaining negotiations . The letter recited the existence of the receivership since August 1951, and the fact that Turner had started suit about 6 weeks before to remove the Receiver for malfeasance , misfeasance , etc. The letter noted that Turner's complaint charged, among other things, that General Manager Paulson, "by his abuse of employees , etc., has caused the drivers to organize them- selves into a union " The letter then stated: You can readily see from the above that until this suit is adjudicated, that neither the Receiver nor the General Manager is in position to discuss a negoti- ation with any degree of finality . Moreover, any steps we might take in this matter would be subject to Court approval , and if taken at this time, might affect in one way or another the outcome of this suit. As soon as the Receiver and the General Manager are in position to discuss a negotiation with you, I am confident that they will not hesitate in any way whatever to do so promptly. The Union filed its original charge herein on December 12, 1952, and a copy thereof was served on the Receiver at the Company's office in Spartanburg on December 17, 1953. On December 15, 1952, Mr. Odom had a conference with the union committee in his office in Spartanburg , in which he told them that Turner was trying to get control of the Company in court proceedings, and for that reason the Receiver was not in a position to make any settlement with the Union , but that if the litigation resulted in favor of the Receiver, he would sit down and negotiate a contract with the Union. On December 17, 1952, Committeeman Hite met Paulson at the Spartanburg garage as he was parking his bus, and Paulson told him he thought "we would be able to have a contract before Christmas." On January 1, 1953, Committeemen Hite and Loftis had a talk with Paulson at the Spartanburg garage, in which Paulson told them that it was needless to pay dues to the Union, that he thought the grievance committee and he could handle any grievances that came up by themselves. On January 6, 1953, Paulson delivered to Committeeman Hite for his information a copy of the order of January 2 , 1953, signed by Judge Moss of the State court in the ouster proceeding by Turner above mentioned . On January 10, 1953, Hite de- livered the order to Brennan in Spartanburg , and advised him that Paulson had told Hite he was ready to sit down and negotiate a contract, since the court order left the Receiver in possession of the business . Brennan at once called Paulson, who said he would meet with Brennan on January 15, 1953. When the union committee and Brennan met with Paulson at his office in Spartan- burg on that date, the parties reviewed the Union's contract proposals clause by clause. At the outset, Paulson announced he had authority to negotiate a contract with the exception of money matters which would have to be referred to the Receiver, and he refused to discuss any clauses involving payment of money, such as pay, uni- forms, etc . He would not agree to the phrase "successor and assigns" following the Company's name at the head of the contract, nor to October 1, 1952, as the proposed effective date of the contract, he wanted changes in the preamble . He also doubted whether he could agree to the union-shop clause (article 1). Other terms of the contract were discussed, but no agreement was reached on any of them . The meet- ing was continued on January 16, when the parties went over the contract clauses PAUL STEVENS 95 again without reaching any agreement . On money provisions , Paulson again main- tained that only the Receiver had authority to decide whether the drivers should receive any more compensation. Through the efforts of State Mediator Sprinkle, another meeting of the parties was held at the same place on January 19, 1952, Sprinkle was also present. The parties went over the contract clause by clause. Paulson withdrew his objections to the opening clause stating the names of the parties and the preamble . Paulson again said he had no authority as to money matters, and for that reason the parties did not discuss or agree on any clauses involving money; 6 for the same reason Paulson refused to agree upon an effective date for the contract (heading clause and article XII). In the union-shop clause, Paulson wanted 60 days instead of 30, and no agree- ment was reached, as he wanted to consider that clause further. There was tentative agreement on a provision for use of extra operators (article VI, section 1) with modifications proposed by Paulson. The parties agreed on the union proposals relating to seniority (article VII), pick of runs (article VIII), leave of absence (article IX) with a small modification, and to certain general rules (article X) with the exception of those involving payment for operators held away from home and' checkoff of union dues, which were left open because Paulson claimed they involved' money. Paulson agreed to the proposals relating to investigations of charges of mis- conduct before firing (article XI), except for those which reserved the rights of the employee and Union to take legal action after an adverse decision of the highest company official, and which provided for restoration of back pay and rights lost by an improper penalty or discharge. During this conference, Paulson gave the union representatives a page from some other union contract to look over , but there was no discussion of its provisions; neither that page nor its provisions are in the record. At the close of the meeting, the parties agreed that Paulson would confer with the Receiver on January 22, 1953, about the Union's money proposals, and would call Brennan. On January 22, Brennan waited in Spartanburg for Paulson to call him, and when he received no call , he called Paulson at his office and asked what he had done about the money matters. When Paulson did not reply directly, Brennan asked if Paulson had spoken to the Receiver. Paulson replied he did not know what he was going to do about it. Brennan asked Paulson to let him speak to the Receiver if he was in the office, and Paulson replied he was there but Brennan could not talk to him. Brennan then asked Paulson to request the Receiver to meet with Brennan at his office, and Paulson replied the Receiver was not available for Brennan to talk to and would not talk to him. Brennan finally asked about the money matters again, and Paulson said he would call Brennan at his hotel later. Paulson did not call him, but later in the day Attorney Odom called Brennan and told him that neither Paul- son, the Receiver, nor he, Odom, nor anybody else had any authority to enter into an agreement covering wages, hours, and working conditions for the drivers, and that he would have to see the judge of the State court before they could have any more conferences. On January 23, 1953 , the union committee and Brennan decided to submit the question of a strike to the union members for a vote. Thereafter the drivers voted to go on strike, and on February 5, 1953, the committee and Brennan informed State- Mediator Sprinkle of the result . Sprinkle said he would contact Odom. On Febru- ary 6, 24, and 27, 1953, Brennan received reports from Sprinkle indicating he was unsuccessful in arranging further conferences with the Receiver . The drivers went on strike at midnight, February 26, 1953, and at the same time Brennan advised the Receiver by telegram that they were striking in protest over the Receiver's refusal to bargain with them. Another meeting was arranged by Mediator Sprinkle at Odom's office on March 6, 1953, at which Odom and Paulson represented the Receiver , and the union commit- tee, Brennan, and Pierce appeared for the Union. Odom and Paulson produced some charts showing the financial status of the Company , and explained that it showed losses. There was no discussion of contract terms, as Odom said the Receiver could not discuss the contract until it was submitted to the State court; he told the union representative he would discuss with the court the question whether the Re- ceiver could negotiate a contract, and would also submit the Union 's proposed con- tract to the court for its approval or disapproval. During the balance of March, the State mediator tried unsuccessfully to arrange further meetings between the parties. O Articles II, III, IV, V, VI, and X, containing 23 clauses , involved payment of money. There were 12 articles , plus heading clause and preamble, containing 48 clauses all told, la- the contract 96 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On April 1, 1953, Brennan called Odom on the telephone to ask whether another conference could be arranged . Odom replied in the negative , saying there was no further move on his part. On April 7 and 14, 1953, J. B. Pierce, president of the local Union and a representative of the parent organization, tried to arrange a fur- ther conference with the Receiver's attorney, both by direct contact with Odom and through the State mediator, but was unsuccessful, he learned only that the Receiver's position had not changed , and that the Union's contract proposals had not been submitted to the State court. The Union made no further attempt to contact the Receiver until May 18, 1953, when Brennan saw a copy of the Receiver 's answer to the original complaint herein, in which the Receiver claimed he was willing and ready to bargain , "subject to" his "restricted" powers as Receiver. Brennan contacted State Mediator Sprinkle, who arranged a meeting with Paulson and Odom on May 19, 1953, at Odom's office. The Union was represented by Brennan and Pierce , and Sprinkle was also present. The meeting was short. The existing strike was discussed , with the union repre- sentatives suggesting that the parties agree on a settlement of the strike which would send the men back to work pending negotiation and agreement on a bargaining contract ; they asked Odom to make some counterproposal to the Union 's proposals previously submitted . Odom replied in effect that the business was on the verge of being sold , and said that the Receiver could not resume operations even if the drivers worked for lower wages than they had been receiving . He also advised that he was going out of town to confer with a prospective purchaser of all or part of the transit lines of the Company, and he suggested that , if the Union wanted to help Odom in attracting new capital into the business to keep it going, the Union might give him a proposition in writing including a concession on wages which the Union would agree to accept for 12 months, and which Odom could show to anyone who might invest new capital; Brennan refused, saying the Union had already made a proposal, but the Receiver had submitted no counterproposal which Brennan could submit to the drivers. Conclusions as to the Receiver The basic issue at this point is whether the Receiver refused to bargain in good faith with the Union between September 30, 1952, and May 22, 1953. The Receiver makes two general points in his defense: (1) That he has at all times willingly met and conferred with the Union; (2) That, in his position as a receiver operating under State court order a business which was losing money, his powers to bargain with the Union were limited to the extent that he could not agree to or sign any contract which would increase the cost of operating the business , without securing approval of the court. As a corollary, he claims that the Union's contract proposals, if accepted and incorporated in a signed contract, would have increased the operating costs of the business to such an unusual amount as that it would have been futile, and he was therefore not re- quired, to submit such a proposition to the court for approval; he avers that the only type of contract which he could submit to the court with any chance of approval was one which would not involve any increase in the operating costs of the business; and the Union never submitted such a proposal: The crux of the second contention is, in brief, that any agreement reached with the Union would have to be submitted by the Receiver to the court for approval before it could become binding on him. As to the Receiver's first contention, the record shows that his general manager, Paulson, and his attorney, L. A. Odom, either conferred or had telephone discussions with the Union's representatives at least 8 or 9 times during the above period. There is no substantial proof of any deliberate attempts to avoid discussions with the Union. However, the fact that the Receiver's agents met willingly and conferred at length with the Union does not necessarily establish good -faith bargaining. Mere participation in meetings with the Union and protestations of willingness to bargain do not alone fulfill the requirements of Section 8 (a) (5) and 8 (d) of the Act, for these are only the surface indicia of bargaining. Bargaining in good faith by an employer involves a duty on his part to enter into discussions with an open and fair mind and a sincere purpose to find a basis for agreement with the Union on wages, hours, and working conditions. In applying this definition to any situation, the Board examines the employer's conduct as a whole, and does not usually rely on any one factor as conclusive evidence that the employer did or did not genuinely try to 7 These contentions are gleaned from the Receiver's answer as amended and the testi- mony of his counsel, L. A. Odom, at the hearing. PAUL STEVENS 97 reach an agreement.8 Applying these principles, a careful analysis of the course of negotiations between the Receiver and the Union, including certain aspects of the attitude and conduct of the Receiver's agents as they progressed, persuades me that the Receiver's overall conduct fails to meet the tests of true good-faith bargaining. When Paulson, the Receiver's agent, in the September 30 conference with the union representatives, told Brennan, the union spokesman, to "keep still and let the com- mittee talk" because he intended to deal with them anyhow, and told the committee of employees directly that it was foolish for them to pay dues to the Union when they could deal with him directly without the Union, and recounted to them his success in convincing drivers in another bus dompany to reject a labor union and form their own organization, Paulson was thereby attempting to persuade the employees to deal with the Receiver directly and bypass the Union despite its certification by the Board as their statutory bargaining representative. Such conduct was not only clear evidence of a refusal to bargain with the Union as such representative, in violation of Section 8 (a) (5) of the Act, but also constituted interference with, restraint, and coercion of employees in their free choice of a bargaining representative, in violation of Section 8 (a) (1) of the Act 9 At the September 30 conference, Paulson advised the Union that neither he nor the Receiver had authority to sign any contract with the Union without permission of the State court, and he promised that the Receiver would submit the Union's written proposals to the court and would advise the Union when he secured the court's decision. After the handling of the negotiations with the Union had been referred to L. A. Odom, the Receiver's counsel, and the Turner suit for removal of the Receiver had been started, both in October, Attorney Odom confirmed Paulson's statement on November 11, 1952, but broadened the Receiver's position to state that "until this [the Turner] suit is adjudicated, neither the Receiver nor the General Manager is in a position to discuss a negotiation with any degree of finality," and that "any steps we might take in this matter would be subject to Court approval, and if taken at this time, might affect in one way or another the outcome of this suit." The Receiver thus maintained that all discussions involving negotiation of a contract must wait until the removal proceeding in the receivership case was terminated, and that any "steps" (in the negotiation) would be subject to court approval. Odom maintained the same position in a discussion with the union committee on December 15, 1952. In this period and up to the meeting of January 15, 1953, the Receiver thus refused to meet with the Union on this ground. Since the Turner removal petition was filed in the State court receivership suit, the Receiver's contention brings up for consideration the question posed by his second contention, i. e., whether and to what extent, if any, his duty to bargain as prescribed by the Act was affected by the pendency of the State court receivership. I will consider, first, whether the ouster proceeding filed therein suspended his duty to meet and negotiate with the Union, and, second, whether the pendency of the entire proceeding made any agreement reached and signed by him subject to court approval. It is well settled that the Act applies to a receivership. Section 10 (a) of the Act empowers the Board to prevent any "person" from engaging in any unfair labor practice (listed in Section 8) affecting commerce, and Section 2 (1) defines a "person" as including, among others "trustees, trustees in bankruptcy, or receivers." See N. L. R. B. v. Bechelder, Receiver for Hoosier Veneer Company, Etc., 120 F. 2d 574 (C. A. 7), cert. denied 314 U. S. 647. That case involved a receiver ap- pointed by a State court to operate a business under its supervision, as in the case at bar. The Board found, 21 NLRB 907, that whenever the union representative attempted to discuss contract proposals with the receiver, the latter used the receiver- ship as the reason for his refusal to discuss the proposals. The Board held that the receiver could not evade his obligation to recognize the union by setting up the receivership as a bar. The Board specifically concluded that the receiver there violated Section 8 (a) (5) of the Act by refusing to recognize the union as the statutory bargaining representative, and by failing to recommend to the State court that the union be so recognized.1° If the existence of a State court receivership is s Southern Saddlery Company, 90 NLRB 120-5; L L Majure Transport Company V. N. L. R. B., 198 F. 2d 735 (C. A 5), enforcing 95 NLRB 311. 9 See N L R. B v. Union Mfg. Co , 200 F. 2d 656,(C A 5), enforcing 95 NLRB 792. io On petition for enforcement the court of appeals held, not only that the Act applies to a receivership, but that the exclusive nature of the powers entrusted to the Board by the Act, and the designation of the court of appeals as the forum for review of Board orders, required rejection of the contention that exercise of the Board's powers depended on prior leave of the State receivership court, and held that the Board was thus not re- quired to obtain the consent of the State court before issuing a complaint charging unfair labor practices against its receiver. 98 DECISIONS OF NATIONAL LABOR RELATIONS BOARD no defense to a refusal to recognize and deal with a union, then it follows that the Receiver here could not legally refuse to meet and negotiate with the Union during a period when his administration was being questioned and his tenure threatened in the course of the receivership. If the rights guaranteed by the Act were in force, and the obligations placed upon the Receiver by the Act were in effect, throughout his receivership, it follows, a fortiori, that those rights and obligations would not be suspended by reason of some interlocutory move made in the receivership action against the Receiver by a party to that suit, so long as the Receiver continued to operate the business as a going concern and an employing enterprise, pending the interlocutory proceeding, and the receivership was not terminated. I am therefore of the opinion, and I find and conclude, that the Receiver violated Section 8 (a) (5) of the Act by refusing to meet and negotiate with the Union in the above-stated period because of the pendency of the interlocutory ouster proceedings against him in the receivership action. I conclude and find that the Receiver further violated Section 8 (a) (5) and (1) of the Act when his general manager, Paulson, indicated to Committeemen Loftus and Hite on January 1, 1953, that it was needless to pay dues to the Union, and that he thought the grievance committee and he could settle any grievances by them- selves, for these remarks were similar to those made by Paulson to the union com- mittee in the presence of Brennan on September 30, which I have found violative of the Act, and constituted attempts to bypass the Union, and to wean the employees away from the Union and discourage them from continuing it as their bargaining representative. The record shows that Paulson met and negotiated with the Union on January 15, 16, and 19, 1953, at which meetings the parties reached complete or partial agree- ment on 8 clauses of the Union's proposals, and continued to disagree on 4 others. However, there was no discussion whatever of portions or 'all of 9 articles and 26 sections contained therein, which dealt directly or indirectly with money matters, because Paulson maintained that he had no authority to discuss money clauses, that only the Receiver had such authority. But on January 22, when the Union asked him to discuss the money proposals with the Receiver, or let the Receiver talk directly to the Union on those subjects, Paulson refused. It is well settled that, in bargaining with the representative of his employees, an employer must be represented at the bargaining table by persons having full authority to make a conclusive agree- ment with the bargaining agent, and the failure to bargain through a representative with such authority is evidential of an unlawful refusal to bargain." I therefore find that the Receiver's failure to be represented at the bargaining sessions by an agent having authority to negotiate and agree upon clauses involving money pay- ments, which are normally among the most vital matters involved in collective bar- gaining, his failure to appear and bargain with the Union personally when he alone had authority to made decisions on such matters, and his refusal to even talk with the union agent on that subject on January 22, 1953, are further evidence of his failure to bargain in good faith with the Union. In addition, the statements of his attorney, Odom, to the union agent on that date, disclaiming any authority in the Receiver to enter into a collective-bargaining agreement, and postponing any further conferences until he spoke to the judge of the State court, represented a reversal of the Receiver's stated willingness to meet and bargain with the Union after the dis- missal of the Turner ouster proceeding, which further demonstrates the Receiver's desire to evade sincere and conclusive bargaining with the Union. At the March meeting, although Odom showed the Union some charts and figures indicating the business had sustained losses, he refused to discuss any contract pro- posals until they could be submitted to the State court. The Receiver maintained the same position during April, when the Union was unsuccessful in securing further conferences with him or his agents. Odom explained that he never submitted the Union's contract proposals to the State court, for the reason that those proposals, if accepted, would have cost the Company about $189,000 a year more in operating expenses, which it could not afford, as it was already losing money. He claims that the only "reasonable" contract which the Receiver would have signed and submitted to the court was one which did not cost the Company any more money, i. e., a con- tract involving only existing wages, hours, and working conditions; and he claimed that the Union never offered such a proposition. But these contentions do not justify the Receiver's position. In the first place, the Union's written proposals were initial demands, which ordinarily serve as the basis for further give-and-take bargaining. There is nothing in the record to indicate that the Union would have remained 11 See Sussex. Hats, Inc., 85 NLRB 399 ; Paterson Steel & Forge Company, 96 NLRB 129. PAUL STEVENS 99 adamant on any of them during the conferences, if the Receiver had made real counterproposals. On the contrary, it is clear that neither side considered them final demands, for they bargained over them (except money clauses) in the Janu- ary conferences, in which they agreed on certain proposals as submitted by the Union, and compromised on others. Secondly, whether or not the Union's proposals on money were rockbottom demands, if the Receiver had been sincere in his conten- tion that he could do nothing about them without permission from the State court, good faith in the circumstances would have dictated that he submit them to the court for its instructions at the earliest possible moment, so that he could return to the Union with such instructions and bargain from that point forward. But the Receiver never submitted them to the court. At most, as Odom testified, they were submitted "informally" to the court, but Odom does not say when he did so, nor does he give the details of the "informal" discussion, nor the court's response or views thereon. I am compelled to conclude that the Receiver's failure to submit the Union's pro- posals to the State court, as Paulson had promised in the first bargaining session, and to secure that court's recommendations thereon, and his refusal to bargain further on contract terms in March and April in apparent reliance upon the very absence of such submission and instructions from the court which his own inaction created, present further convincing evidence that he was continuing to evade sincere and effective bargaining with the Union, in violation of the Act. The Receiver also argues that the Union's demands, if accepted, would have been too costly to win judicial approval, and that this justified his refusal to submit them to the court. But that claim is beside the point, because under the law the Receiver was not bound to accept them, but only to bargain over them in good faith. It is also speculative, for the Receiver never put it to the test by submitting the demands to the court. Further, it is untenable because it is inconsistent with his theory of his limited powers as a receiver, and would make a farce of the bargaining process. Assuming, without conceding, that he could not legally have signed any contract without approval of the court, I fail to see how his limited powers encompassed the right to arrogate to himself the initial determination as to what proposals might re- ceive favorable consideration by the court, and then to refuse to submit any proposals until the Union acceded to his conception of a proper proposal. Under this argu- ment, the Receiver would have complete control over the procurement of the final judicial approval which he claims was a sine qua non to a binding contract. This would make the bargaining process here a one-way street, so to speak, leaving the Union at the mercy of the Receiver, with no choice but to give in to the Receiver's idea of what might be acceptable to the court. This situation is the antithesis of true collective bargaining. Another indication of bad-faith bargaining lies in the Receiver's failure to submit any definite counterproposals during bargaining sessions which stretched over 5 months, although the Union invited counterproposals. Paulson's submission of an unidentified page from another union contract to the Union on January 19 to "look over," without any discussion of its provisions, cannot be considered a bona fide counterproposal. When the Union at the final May 19 conference requested some counterproposal, the Receiver evaded by arguing that the business was about to be sold, and that operations could not be resumed even if the drivers worked for reduced wages, and countered by requesting the Union to submit another proposal with wage concessions, but indicated that this would be used, not for bargaining purposes, but as an inducement to attract new capital to keep the business going.12 By avoiding the submission of a definite counterproposal, from which both parties could continue give-and-take bargaining, the Receiver made it difficult, if not impossible, for the parties to work toward a true meeting of the minds. Under the circumstances, the Receiver's insistence that the Union make all the proposals, and his failure to submit definite counterproposals, even after the area of disagreement between the parties had been narrowed somewhat in the January conferences, further indicates that he was evading bona fide bargaining looking to a conclusive agreement with the Union. The Receiver's argument that he has always been ready to sign and submit to the State court any contract submitted by the Union which did not increase operating costs, but that he could not pay more than existing wages and other monetary bene- "I find no substantial evidence of a definite counterproposal in Odom's general testi- mony that he told the Union that the Receiver would sign and submit to the State court any "reasonable" proposal which would not cost the Receiver more money He does not state when he made this "proposal" , and there is no proof that the Receiver ever went to the trouble of submitting to the Union a written counterproposal containing the old wage scales and monetary benefits plus the nonmonetary provisions upon which Paulson and the Union reached tentative agreement in January. 334811-55-vol 109-8 100 DECISIONS OF NATIONAL LABOR RELATIONS BOARD fits because the business was always "in the red," is basically a plea of inability to pay more money. In the course of bargaining, the Receiver was entitled to take that position and adhere to it, provided his insistence thereon was not in bad faith; and if a bona fide adherence to that position resulted in a genuine impasse in the bargain- ing, it might support a conclusion that he had fulfilled his bargaining obligations in that respect. However, his entire conduct as disclosed by the record does not support that conclusion. Paulson, in the first conference with the Union, indicated that the Receiver could not pay the amounts involved in the wage scales in the Union's de- mands, because the business was not making money. However, he also boasted that he had brought the business out of the "red" to some extent. Nevertheless, he evaded further discussion of money matters by claiming that the Receiver alone had author- ity to discuss and decide them; and the Receiver thereafter prevented further discus- sion of money claims by his failure and refusal to appear personally at any bargain- ing conferences with the Union. This conduct effectively precluded any real discus- sion of the Receiver's ability to pay increased wages or other benefits costing more money. It was not until the last conferences in March and May 1953, that Odom entered into any real discussion of that subject, when he explained the Company's continuing losses and showed the Union the accountants' reports to support his state- ments. By that time the financial condition of the business had deteriorated to an extent which supported his position. I feel that the Receiver's reliance on his in- ability to pay at that late date in the bargaining came with bad grace and is indica- tive of bad faith, where it appears that he had unlawfully evaded and forestalled any genuine bargaining on that point during 1952, when the business appeared to be recovering to some extent from its financial ills under his supervision, and the situa- tion might have been more conducive to genuine and perhaps conclusive bargaining on money matters.13 After careful consideration of the Receiver's entire conduct as found above, I conclude and find that he has since September 30, 1952, refused to bargain in good faith to the extent found above with the Union as the statutory bargaining represen- tative of his employees in an appropriate unit, in violation of Section 8 (a) (5) of the Act, and that by such conduct he has interfered with, restrained, and coerced his employees in the exercise of rights guaranteed to them by Section 7 of the Act, in violation of Section 8 (a) (1) of the Act. It is clear that the Receiver's unlawful conduct found above prevented the bar- gaining negotiations from reaching the point of an agreement upon a definitive contract which could be signed and submitted to the State court for approval. Therefore, I deem it unnecessary to consider or decide the question of the extent, if any, to which the Receiver's obligations under the Act to sign and operate under a binding bargaining contract after an agreement on terms was reached, are affected or limited by his powers as a State court receiver of a business which has never reached a state of complete solvency during his incumbency. Other conduct of the Receiver On September 15, 1952, driver Roy Morgan had a conversation with James Gosnell, head dispatcher of the Company at the Spartanburg terminal. Morgan complained to Gosnell about a run to which he had been assigned, stating that he did not want it, that he had been working for the Company 10 years and should not receive that run, and suggested that it be assigned a younger man. Gosnell insisted that the new run "went" with Morgan's regular run. Morgan then said, "It looks like we will have a union some day, and we will have seniority rights and sign out on the runs we are supposed to get." Gosnell replied that the men did not have a contract then, and the Company was not going to sign a contract. This 13 The documentary evidence adduced by the Receiver shows that the business never completely emerged from its financial, difficulties during his regime. However, although the Company was in debt about a million dollars when he took office, and he was enabled to maintain operations largely through funds advanced by certain creditors, he succeeded in showing a small net profit in 1952, and reduced outstanding obligations by about $200,000, largely through liquidation of capital assets. In its order of January 2, 1953, denying the Turner ouster application, the State court reviewed the financial accounting of the Receiver for his administration during 1952, and concluded that in that year the business had shown "vast improvement" and reflected "unusual progress." Although the business was never out of financial difficulty during the receivership, the whole record does not warrant the conclusion that its condition was so hopeless, at least in 1952, as to make any bargaining on money matters futile. It is significant that neither the State court nor the Federal court has ordered the business liquidated ( at least up to July 23 , 1953). PAUL STEVENS 101 -finding is based on credited and uncontradicted testimony of Morgan ; Gosnell did not testify. Gosnell, as head dispatcher, assigned runs to drivers at Spartanburg, and the regular dispatchers took orders from him. In the representation proceeding the Board excluded dispatcher-inspectors from the appropriate unit. I find that Gosnell was a supervisor for the Receiver when he made the above statements. This discussion took place just a week after the Union was certified as the exclusive bargaining agent of the drivers, and about 2 weeks before the Union's request for bargaining and its first meeting with Paulson . Gosnell's remarks were occasioned by Morgan's complaint about disregard of his seniority and his statements indicating .that, with a union, his seniority rights would be protected . I have found above that the Receiver on September 30, 1952, embarked on a course of unlawful conduct during which he successfully evaded conclusive bargaining with the Union and an agreement on terms which would lead to the signing of a contract . In this context, I am inclined to consider Gosnell's remarks to Morgan as more than an isolated or idle expression of opinion , but rather as a clear warning, which turned out to be prophetic, that the Receiver would not carry out his duty of bargaining collectively with the Union to the extent of signing a contract . His remarks were thus calculated to discourage continued adherence of the employees to the Union, and I conclude and find that by these remarks, the Receiver coerced and restrained employees in the exercise of rights guaranteed them by Section 7 of the Act, in violation of Section 8 (a) (1) of the Act" On January 3, 1953, driver James Franklin Hay, a union committeeman, had a conversation with Kenneth Conrad, an employee of the Receiver, at the Charlotte, North Carolina, garage of the Company, in which they discussed the rumor that the drivers were going on strike. Hay said he believed the men would strike unless something was done to stop it. Conrad replied "they are not going to do anything to try to stop it because Mr. Brennan is trying to represent them , and he is too hard to get along with , and they will not talk to him but probably would consider talking to somebody else representing the Brotherhood." This finding is based on the credited testimony of Hay and the admissions of Conrad. Conrad did not identify "they" during the talk, but Hay testified , and it is clear, that the two men were talking about the then existing management of the Company , i. e., the Receiver. Conrad's remarks clearly indicated that management preferred not to deal with Brennan, the main spokesman for the Union and its members in previous conferences with management , but would prefer to deal with someone else . This statement was consonant with Paulson's remarks to Brennan and the union committee at the first conference of the parties, indicating that he preferred to talk to the committee instead of Brennan , which I have already found violative of Section 8 (a) (1) of the Act. I find that Conrad's remarks were similarly coercive . The only question is, whether Conrad was a supervisor or speaking for management when he made them. Conrad was "traffic passenger agent" before and during the receivership. As part of his duties before the receivership , he had hired at least one ticket agent for the Company. During the receivership , his duties involved the auditing and collection of money from ticket agents of the Company , who had been put on a commission basis as independent contractors when the Receiver took over the business ; the Company took on new agents on his recommendation . Conrad changed them when necessary, and picked locations for new agencies ; when agents failed to remit funds , he would audit the agency, and management usually terminated the agency on his recommendations. Hay testified that Conrad was traffic manager of the Company at the time of the aforesaid talk. Conrad denied this, saying there was no traffic manager during the receivership after Turner, the last traffic manager, left the receiver's employ on May 1 , 1952. He admits, however , that Paulson "acted" as traffic manager in June 1952, handling the "important stuff," and that he (Conrad ) performed some of the duties of that job, such as drawing up bus schedules and schedules of bus fares and tariffs . He claimed that he had no authority to put the schedules into effect , and had no control over the drivers, but admitted that the traffic manager of a bus company usually does have control over drivers. He admits that he would transmit orders to dispatchers from Paulson when so ordered . Another of his duties under both the Receiver and the Debtor was that of assigning independent checkers to observe the drivers on their general conduct toward the public and their collections ; after the checker's report was handed in , Conrad would talk to the driver on orders of Paulson or Turner about any discrepancies in his collections or other deficiencies indicated by the report. "In the amended complaint, this conduct is alleged only as a violation of Sec- tion 8 (a) (1). 102 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In the representation proceeding the Board excluded the traffic manager from the appropriate unit as being a supervisor, and I have made the same exclusion in my finding of the unit herein. Conrad did not vote in the election, he claims he was then traveling as passenger agent. In his testimony which will be considered below, driver Frank Lee Nesbitt also described Conrad as traffic manager. Paulson testi- fied on June 23, 1952, in the representation proceeding (to which the Receiver was a party and in which he was represented by his present counsel), that the Receiver employed a traffic manager who worked directly under Paulson, that the duties of the traffic manager involved the preparation of bus routes and schedules for the drivers, and that he exercised control over the drivers through the dispatchers and inspectors. The Receiver did not cross-examine Paulson or attempt to contra- dict his testimony in that proceeding by calling Conrad or otherwise. On all of the above facts and circumstances, I find that Conrad, among other things, performed some of the duties of traffic manager and exercised supervisory powers over employees during the receivership, and that his position and activities were such as to justify the employees in believing that he was acting and speaking for the management, and that his remarks to Hay as found above are chargeable to the Receiver.15 I find that the Receiver thereby further violated Section 8 (a) ( I ) of the Act. I find from the credited testimony of driver Nesbitt and the admissions of Conrad that on or about February 13, 1953, Conrad told Nesbitt at the Company's bus sta- tion in Rock Hill, South Carolina, that he knew the drivers were underpaid, that they could get a raise to 5 or 51/2 cents a mile in pay if their grievance committee would go to Paulson about it, but that Paulson would not deal with Brennan because of the way in which Brennan had talked to Paulson at a meeting in Spartanburg. I find that by this remark, which was of the same tenor as his coercive remarks to Hay on January 3, 1953, and Paulson's coercive remarks to the union committee on September 30, 1952, as found above, the Receiver further violated Section 8 (a) (1) of the Act. I find from credited and uncontradicted testimony of driver G. C. Glance that about 2 weeks before the strike of February 27, 1953, Glance had a talk with Head Dispatcher Gosnell in the Spartanburg terminal, in the course of which they dis- cussed a union to which Glance had belonged while working elsewhere, and Gosnell told Glance that the Company did not believe in a union, and that they (meaning management) would not sign with the Brotherhood or any other union; and that about a week before the strike, Glance was told by General Manager Paulson at the same terminal that "if the boys do strike, we won't do anything, only close the doors, and the company will be sold piece by piece." I conclude that the remarks of both Gosnell and Paulson were coercive, and find that the Receiver thereby fur- ther violated Section 8 (a) (1) of the Act.16 About a week before the strike, driver J. E. Reid had a talk with Paulson at the Spartanburg terminal, in which Paulson told Reid he thought the drivers had done the wrong thing by joining the Union, that he did not see any reason why "we can't talk to your committee of men," mentioning Hite, Hay, and Loftis, the members of the union grievance committee, "and settle this thing between ourselves." He also said that "we don't need a union," and that, as far as Brennan, who represented the Union, was concerned, "we don't intend to deal with him." These findings are based on credited and uncontradicted testimony of Reid. Paulson's remarks were clearly coercive, as they indicated that the Receiver would not deal with the agent of the Union whom the men had chosen to represent them in bargaining with the Receiver, and were calculated to persuade the employees to bargain directly with management without the certified bargaining representative of their own choice. I find that the Receiver thereby further violated Section 8 (a) (1) of the Act. 15 Sioux City Brewing Company, 82 NLRB 1061, 1063; Connecticut Chemical Research Corporation, 98 NLRB 160 19I make no finding of violation of the Act by the Receiver on the basis of the talk which driver W W Cohen had with Night Foreman Mechanic U. R (Kokomo) Harrison at Spartanburg in May 1953, because Cohen's testimony is self-contradictory and equivo- cal• on direct, he said that he told Harrison that the Receiver had threatened to "board up" the business before giving the men a raise, but he admits he never saw the Receiver in person, and does not state when or where the Receiver made such statements; and on cross-examination, Cohen says that Harrison made the above statement about the Receiver Harrison did not testify on this subject at all, but despite this I do not consider Cohen's self-contradictory testimony as substantial evidence warranting a finding of violation of the Act PAUL STEVENS 103 Negotiations Between the Union and the Company, as Debtor in Possession, and Turner 17 On May 22, 1953 , Pierce learned of the turnover order issued by the United States district court that day in the bankruptcy proceeding , and late that evening he called Turner , who verified the fact that he had regained possession of the busi- ness and said he planned to resume operations on a limited scale and expand them as fast as he could. Pierce told Turner he represented the Union and requested that Turner meet with him to negotiate a contract . Turner said he would be glad to meet with him, but he had had the business in his hands only a few hours and was very busy preparing to resume partial operations, and that he had Attorney Perrin helping him, and would have Perrin call Pierce and arrange a meeting. Turner called Perrin promptly, and Perrin called Pierce on May 23 and arranged a meeting for May 25 , 1953.18 The meeting of May 25 was held in the office of Perrin , Perrin and Ward, in Spartanburg, South Carolina , with the union committee , Brennan and Pierce repre- senting the Union, and Attorneys P. T. Perrin and L. W. Perrin, Jr., and J Nat Hamrick, acting for the Company and Turner . One of the Perrins questioned the committee regarding the wages , vacation pay, bonuses , and other benefits the drivers had received from the Company prior to the receivership , and asked whether they would go back to work under those terms. Brennan asked Perrin if that was his counterproposal and if he was ready to negotiate an agreement. Perrin indicated he was still seeking information , and showed them a copy of an agreement, which the union representatives examined and found to be substantially similar to the pro- posals they had previously submitted to the Receiver. Perrin asked them if the Union wanted to present that as its proposal and they said that they did, and were ready to negotiate . Perrin said he was not ready to negotiate , as he had not received all the Company records from the Receiver , but was getting in touch with Mr. Odom, and as soon as he did receive them, the Company was ready and anxious to bargain and reach a settlement with the Union and would get in touch with the Union . Either at this meeting or shortly after, Brennan learned from Perrin that he expected to get the Receiver 's records from Odom on June 1, 1953. On May 26 , 1953, Brennan had a talk with Turner at the Company garage in Spartanburg, in which he asked Turner to sit down and negotiate with the Union, settle the strike, put the men back to work and thus remove the picket lines. Turner replied that he was willing to negotiate , but that he had employed Attorney Perrin to advise him, and if Brennan desired , he would call Perrin and have him get in touch with Brennan and meet with him.19 On May 27, 1953, Brennan received from the striking drivers a newspaper clip- ping purporting to state that the strike would end on a Friday and that the Company's buses would resume service on a limited schedule 20 Brennan at once showed the -clipping to Turner at the Spartanburg garage, and asked him to settle the strike and make some arrangements about the strikers , saying that the drivers were ready to start work. Turner denied he had made any statements contained in the news article, and told Brennan he would not discuss the matter with him, that Brennan would have to see his attorney. On June 2, 1953 , Brennan called L W. Perrin , Jr., on the telephone , and was ad- vised by Perrin that he had received only part of the Receiver 's records from Odom 21 and therefore could not yet arrange to meet with the Union, but as soon as he received all of them, he would call Brennan and arrange a date for a conference. 17 The findings in this section are based on credited testimony of Hite, Pierce , Brennan, 'Conrad , and Turner and documentary proof, except where otherwise noted. 18 Pierce called Turner back the same day after Perrin had called him , and made another request for a bargaining conference so that the buses could be put back in operation. Turner replied that he was too busy then to see Pierce , and told him to call his attorney. 19These findings are based on the credited and mutually corroborative testimony of Turner Edwin Byars , and U R. Harrison. I do not credit the testimony of Brennan that Turner refused to do anything except to work at the business, for fear of becoming involved in unfair labor practices ; in view of Turner's prior willingness to talk to the Union through his attorney , Perrin's meeting with the Umon as found above , and the willingness of his new attorneys to talk with the Union later , as found below , it appears unlikely that Turner would on this one occasion abruptly refuse to consider negotiation. 20 Turner resumed partial operation of the buslines on May 30, 1053. 21 Perrin had been unable to meet with Odom on June 1, as previously arranged , because -of a court engagement, but they did meet on June 2 104 DECISIONS OF NATIONAL LABOR RELATIONS BOARD When Brennan asked when that would be, Perrin said he did not know, as there was considerable work to be done, and it would be some time before he would be- in a position to meet with the Union. On June 8, 1953, Pierce had a conference with the two Perrins at the suggestion: of L. W. Perrin, Jr., in their office. The elder Perrin said he had been employed by Turner to advise him whether Turner and the Company could properly negotiate a contract with the Union, since the election and certification of the Union had oc- curred during the incumbency of the Receiver .22 Perrin said he had been unable to^ find any parallel cases . He said he did not know whether the Union represented the drivers, and proposed that the Union agree to withdraw the pending unfair labor- practice charges and arrange with the Board to have the existing certification set aside and a new consent election held, to see whether the Union represented a majority of the Company's drivers. He suggested that the parties thus "wipe the slate clean and start over again ." Pierce said he could not agree to that proposal, as it would not be proper. Perrin told him not to give his answer then , but to call him back and give his answer the next day , so that he could advise his clients' Pierce did not call Perrin back , but Perrin called Pierce on June 12, requesting Pierce's answer. Pierce said the Union could not agree to the proposal , as it had already been certified as bargaining agent for the drivers. He suggested that Perrin talk to S. F. Conrow, deputy president of the Union and director of its bus depart- ment, who had come to Spartanburg a few days before. Perrin talked to Conrow and Pierce later that day at his office , making substantially the same propositions as he had previously to Pierce . He also told the union agents that in his opinion the Board election and the existing certification of the Union did not apply to the Debtor and Turner, and that he intended to give that opinion to his clients the next day. On June 16, 1953, Attorney J. Nat Hamrick called Conrow and they talked at Conrow's hotel in Spartanburg to try to settle the controversy . Hamrick said he would like to sit down and bargain and thought "we would be in much better position. to do so if we would withdraw the charges" ; he referred to the situation as "trying to bargain in good faith with a `whip over your head .' " Conrow suggested that they forget about the "whip" and get to the meat of the dispute and try to settle it. Hamrick asked Conrow to agree to postpone the hearing in this case , scheduled for June 22, for 10 days because of his other court engagements , and said that if the. Union agreed, Turner would be in a "better mood to sit down and discuss terms of the settlement" and negotiate with the Union." On July 8, 1953, Pierce called Hamrick to arrange a meeting. Hamrick was out, but called back the next morning and told Conrow , who was with Pierce , that he would do his best to arrange another conference between the parties, and would advise Conrow . The next day State Mediator Sprinkle advised the Union 's repre- sentatives a meeting had been arranged for Saturday, July 11 , 1953, at Attorney Thomas A. Wofford 's office in Greenville, South Carolina. 22 This was one of the first questions Turner raised with his attorneys when he resumed' possession of the Company . They said that before they could advise on that point, they would have to learn the background events to that date , and after several attempts they secured that data from Odom, attorney for the Receiver . Turner also instructed them to arrange a meeting with the Union in order to settle the problem and get the men back to work. 23 Although Pierce testified that his discussion was "off-the -record" at the request of Perrin , I do not consider that this made Perrin 's remarks on behalf of the Debtor and' Turner privileged or unavailable for consideration by the Board , in the same sense that settlement negotiations between private litigants are held inadmissible against any party on the issues in litigation The Perrins were talking with the Union on Turner 's specific instructions to discuss the problem and get the men back to work . Perrin's proposals to settle the whole controversy involved a cancellation of the representation proceedings and a status and bargaining rights accorded the Union under the Act, which the Union had no power to waive Only the Board has power to set aside an existing certification, and the discussions here were not in the presence of, or under the auspices of, any Board agent, nor even of a State or Federal mediator The rights and status of the Union under discussion were not private rights, but rights granted under a statute affected with a public interest. 2; This was also an "off -the-record" discussion , but I consider it evidential for reasons stated in the preceding footnote. PAUL STEVENS 105 At that meeting Attorneys Wofford and Hamrick, Turner, the union committee, Conrow, Pierce, and State Mediator Sprinkle were present.25 At the outset, Conrow, as principal spokesman for the Union, produced the con- tract proposals previously submitted to the Receiver, and asked that the parties discuss them and try to agree on contract terms. After some discussion, Conrow asked if anyone on the management side had authority to sign a bargaining contract covering the drivers. Wofford, the principal spokesman for the Debtor and Turner, said that in his opinion no one had such authority; he and Hamrick stated that, as they interpreted the law, any contract signed by the Company, as debtor in posses- sion , with the Union would have to be approved by the Federal court, since no arrangement between the Debtor and its creditors had been approved in the bank- ruptcy proceedings; they said the Debtor would sit down and negotiate a contract with the Union as soon as Turner received confirmation in those proceedings of his proposed arrangement with creditors." Because of the attorneys' opinion, there was no discussion of the Union's contract proposals. The parties then discussed settlement of the strike. After considering certain union proposals in general dis- cussion, and in separate private conferences of the parties, both sides tentatively agreed that the Debtor would take back striking drivers at their former wages, hours, and working conditions, without loss of seniority; that grievances would be dis- cussed with a grievance committee of the Union, and that when the Federal court had passed upon the proposed arrangement with creditors in the bankruptcy pro- ceeding, the Debtor would sit down and negotiate a bargaining contract with the Union.3z The union representatives desired to remain in conference to work out the "mechanics" of the settlement agreement, reduce it to writing, and sign it at once, but Turner said he wanted to check his seniority rosters first to determine which drivers he would take back at once, as he only needed about 21 drivers at the time, and 55 were on strike. The parties agreed to reconvene at Wofford's office on Monday, July 13, 1953, to work out the details of reinstatement of the drivers, and prepare and sign the settlement agreement. At a 2-hour conference in Hamrick's office28 on July 13, with the same representa- tives present (except Attorney Wofford), there was further discussion of the settle- ment agreement . Conrow insisted on a signed agreement, but Turner, acting on advice of counsel, insisted that he could not legally sign any settlement agreement or negotiate any bargaining contract with the Union during the pending of the bankruptcy proceedings. Conrow stated that if he could not get a signed contract, he was not interested in details of settlement. This was the last conference between the parties. Conclusions as to the Debtor and Turner The Debtor and Turner insist that neither are chargeable with or responsible for the untair labor practices of the Receiver. The record shows, and I find, that although Turner was employed by the Receiver as traffic manager up to May 1, 1952, the Receiver had complete control, to the exclusion of Turner and the other officers and stockholders of the Company, of the assets, property, and business of the Company from the date of his appointment in August 1951 up to May 22, 1953, and that after May 1, 1952, Turnei had no part in the representation proceed- ings, nor did he take part in or have any control over the negotiations of the Receiver with the Union, or the Receiver's other conduct found above. He had no contact with the Union until May 22, 1953, the day he regained possession of the business. I conclude and find that neither the Debtor nor Turner are chargeable with or 25 At the beginning of the discussion, Pierce started to keep longhand notes of the con- ference. Wofford asked if the Union wanted a stenographic transcript of the meeting. Turner insisted upon it. Conrow said he did not think it was necessary, but that he wanted a copy of the transcript if Wofford insisted on it A stenographic record was made of the first part of the meeting covering the Union's attempts to discuss terms of a bargaining contract. There is no proof that the stenographic notes were ever transcribed and given to Turner or the Union ; Turner says he never saw them. 20 All parties agreed that the situation before them was a novel one, and that counsel for both sides had been unable to find a similar case reported. 27 Conrow testified that it was agreed that all strikers would be taken back ; Turner testified that he maintained throughout that the Debtor would not take back strikers who had engaged in violence during the strike. I deem it unnecessary to resolve this conflict, in view of other findings herein and the conclusions I have drawn therefrom. as On the morning of July 13, the place of the meeting was changed to Hamrick's office in Rutherfordton, North Carolina, due to his inability to reach Wofford's office in Green- ville at the time originally scheduled 106 DECISIONS OF NATIONAL LABOR RELATIONS BOARD responsible for the unfair labor practices of the Receiver found above I therefore grant the motion of these Respondents to dismiss the amended complaint insofar as it alleges that they violated the Act by a refusal to bargain with the Union and other conduct from September 30, 1952, to May 22, 1953. The liability of the Debtor and Turner to remedy the unfair labor practices of the Receiver is another matter, which will be discussed in the section of this report entitled "The Remedy." I find that the Union, through Pierce's telephone call to Turner on May 22, 1953, requested the Debtor and Turner to bargain collectively with the Union as the statutory bargaining agent of the drivers in the aforesaid appropriate unit. However, I find no violation of the Act in Turner' s response to Pierce on May 22 and 23 that he was busy, having just taken over the business, and suggesting that his attorney would call the Union, nor in his similar suggestions to Brennan on May 26 and 27, 1953, when the latter requested him to bargain over a contract and settle the strike. On May 22, 1953, Turner had regained control of a widespread business which had been idle for some time, and he was occupied with all the admin- istrative problems involved in resumption of bus operations from May 22 until May 30, 1953, when the Debtor resumed partial operation of its lines. The record shows that, as soon as Turner took over the Company, he discussed with his lawyers what he could do to settle the strike, and asked them to advise him as to his legal obligations to bargain with the Union, which had been certified during the regime of the Receiver in proceedings to which the Company, as debtor in possession, and Turner, were not parties. Pending their advice on this point, it was not unreason- able for him to refer the Union's requests for bargaining to them.29 I consider his instructions to his attorneys on May 23 to get in touch with the Union, and the Perrins' meeting with the Union on May 25 and the younger Perrin's discussion with Brennan on June 2, as found above, to be indicative of nothing more than a bona fide attempt in the circumstances to prepare for negotiations with the Union. As for the Perrins' discussions on the latter dates with the Union, it is manifest that before they could give an informed legal opinion to Turner on the Debtor's obligations with respect to the Union, they were entitled to secure background information covering the representation proceedings and the Receiver' s dealings with the Union, and it is clear that they were not in a position to advise Turner and to talk intelligently with the Union until June 8 , due to the delay in securing that data from the Receiver and his attorney.30 At the May 25 meeting with the Union, the Perrins were obviously trying to bring themselves up to date on the nature and extent of the Union's demands, and to learn whether they were the same as those originally presented to the Receiver. I therefore find no violation of the Act in the conduct of the Debtor and Turner, or their attorneys, prior to June 8, 1953. At the June 8 conference with the Union, the attorneys of the Debtor and Turner did not attempt to engage in any bargaining, but only proposed that the parties "wipe the slate clean and start over again," suggesting that the Union withdraw the pending unfair labor practice charges, and arrange to have the Board set aside the certification and hold a new election . The reason for the suggestion was the Debtor's doubt whether the Union represented a majority of the drivers at that time. The basis of this doubt does not appear in the record. However, the Perrins must have learned from the Receiver's records that the certification of the Union had been issued September 8, 1952, and was still in effect. It is well settled by both Board and court decisions that a collective- bargaining status of a labor organ- ization, once achieved by Board certification after resort to the secret election pro- cedure prescribed by the Act, is conclusively presumed to continue , and must be honored, for a reasonable period, usually at least 1 year following certification, in the absence of special or unusual circumstances.31 Furthermore, the Debtor and 29Furthermore, Brennan's requests to bargain on the 26th and 27th lack significance, and really required no answer, for Pierce had made the request for the Union on the 22nd, and the Union had already had an initial conference with the Perrins on the 25th, at which the Perrins had advised Brennan that the Debtor was ready to sit down and negotiate as soon as they got certain records and data from the Receiver. an When Turner regained possession of the business, he found no files or data in the Company's office pertaining to the representation proceeding or the Receiver's dealings with the Union. In view of his longstanding hostility to the Receiver and his adminis- tration of the business, and his long fight in both the State and Federal courts to wrest control of the business from the Receiver, it was only natural that he should give his attorneys the job of getting all pertinent records from the Receiver and his counsel 31 Mid-Continent Petroleum Corporation, 99 NLRB 182, 185 ; Ray Brooks, 98 NLRB 976; N. L. R. B v Poole Foundry & Machine Co., 192 F 2d 740 (C. A. 4), enforcing 95 NLRB 34; N. L. R. B. v. Blair Quarries, Inc., 152 F. 2d 25 (C. A. 4). PAUL STEVENS 107 Turner knew that the great majority of the drivers who had voted for the Union were still on strike, as Pierce pointed out to the Perrins, and this in itself was clear evidence that a majority of the drivers still adhered to the Union.32 I therefore conclude that the Perrins' proposal to "wipe the slate clean and start all over again" was not motivated by a good-faith doubt of the Union's majority status, but rather by a desire to gain time for the Debtor and Turner and to evade collective bargain- ing with the Union. I do not consider it a mere bona fide attempt to settle the strike, because they had already had the benefit of the background data involving the Receiver's dealing with the Union, and had also engaged in legal research before this conference; and their proposals went much further than mere settlement of the strike, but contemplated a total concellation of the rights and status the Union had achieved under the Act. I therefore conclude and find that, in these circum- stances the Debtor's proposals on June 8 and 12 that the Union relinquish the bargaining rights and status which it had achieved through the solemn and tested processes of the Board under the Act was in effect a renunciation of the principle of collective bargaining, which is the keystone of the Act, and evidenced a refusal to bargain in good faith with the Union. The Debtor and Turner contend, however, that the representation proceedings and the certification of the Union therein are not binding on them because they were not parties to that proceeding. I consider that contention without merit, both on the facts and in law. The Debtor and Turner admit that since May 22, 1953, they have operated the business of the Company, using the same facilities, equipment, property, types of personnel, and plants, and under the same franchises, authoriza- tions, and public regulations, as the Receiver used . It is clear from the record, and I find, that there has been a continuity of entity and operations of the Company as an employing enterprise since the Receiver took over the business and up to the hearings herein; the only change occurred in top management, with the substitution of the Receiver for the regular officers and directors of the Company, followed by the reinstatement of the latter on May 22, 1953, to operate the Company as Debtor in Possession under the supervision of the Federal court. Throughout the period in question, the same employer-employee relationship has continued between the drivers in the appropriate unit ' and the business as an employing enterprise ; no essential attribute of the employment relationship was changed. In such circumstances, the Board has held that a successor-employer, who buys out the business of his prede- cessor, is bound by a Board certification affecting the employees of his predecessor, and has in such cases amended its certification to substitute the name of the successor- employer in the proceedings, even though the successor did not participate in the prior Board proceedings which resulted in the certification. In Miller Lumber Com- pany, 90 NLRB 1361, which involved the sale of a business with no essential change in plant, property, equipment, products, or working force, the Board said: Where, as here, no essential attribute of the employment relationship has been changed as a result of the transfer, the certification continues with undiminished vitality to represent the will of the employees with respect to their choice of a bargaining representative, and the consequent obligation to bargain subsists, notwithstanding the change in legal ownership of the business enterprise. Nor is it determinative that the successor-owner did not participate in the prior Board proceeding that resulted in certification of the bargaining repre- sentative. This is but an application of the settled rule that the industrial strife that the Act seeks to avoid or mitigate, and the validly instituted bargaining relationships it seeks to foster, are "no less an object of legislative solicitude where contract, death or operation of law brings about a change of ownership in the employing agency." [Emphasis supplied.] " In N. L. R. B. V. Colten, et al., d/b/a Kiddie Kover Mfg. Co., 105 F. 2d 179 (C. A. 6), the Board sought enforcement of an order directing a copartnership to bargain with a union and reinstate employees . One defense to enforcement was that the partnership had been terminated as an entity by the death of a partner, under opera- tion of law. The Court of Appeals rejected that contention, noting that the Act 32 Amalgamated Meat Cutters and Butcher Workmen of North America (A. F. L.) et al., (The Great Atlantic and Pacific Tea Company), 81 NLRB 1052, 1060. ii The record clearly shows that the drivers went on strike in protest over conduct of the Receiver toward their union representatives which I have found to be in violation of the Act. The drivers were therefore unfair labor practice strikers and still "employees" of the employing enterprise, within the meaning of Section 2 (3) of the Act. 34 See also N. L. R B. v. Blair Quarries, Inc., supra; Stonewall Cotton Mills, 80 NLRB 325 and cases cited therein; N. L. R. B. v. Colten, 105 F. 2d 179, 183 (C. A 6). 108 DECISIONS OF NATIONAL LABOR RELATIONS BOARD was a public law, looking to accomplishment of a public purpose, not a private statute for enforcement of private rights. The court said ( 105 F. 2d at p. 183) : In this view of the Act it seems to us unimportant that the proceedings were styled as against Colten and Colman, copartners, doing business as The Kiddie Kover Company. It is the employing industry that is sought to be regulated and brought within the corrective and remedial provisions of the Act in the interest of industrial peace. The term "co-partners " may not then be regarded as more than a term of description , or as denoting a legal entity which alone is subject to the command of the order . It needs no demonstration that the strife which is sought to be averted is no less an object of legislative solicitude when contract , death, or operation of law brings about change of ownership in the employing agency. Applying these principles , it seems clear, and I conclude that , where the business of the Company, the original employer, has been continued as the same employing enterprise throughout the period covered by the amended complaint, with no essential change except in the personnel comprising top management (and that through operation of law only), the Debtor and Turner are bound by the certification of the Union, and are required to bargain with the Union on the basis thereof. When Attorney Hamrick suggested to the Union on June 16, 1953, that "we" would be in a much better position to bargain if the pending unfair labor practice charges were withdrawn, and intimated that the Debtor could not bargain with a "whip" over his head, and suggested that Turner would be in a better "mood" to negotiate if the Union secured a postponement of the imminent hearing in this case, he was in effect trying to condition bargaining with the Union upon a withdrawal of the pending charges and delay of the Board 's proceedings on the basis of those charges. It has been held that pendency of unfair labor practice charges, and of an unfair labor practice proceeding does not relieve the employer of his duty to bargain's I find that, by instisting upon the above conditions as a prerequisite to bargaining, the Debtor and Turner further unlawfully refused to bargain in good faith with the Union, in violation of Section 8 (a) (5) of the Act. The main defense of the Debtor and Turner is raised by the contentions of their attorneys on July 11 and 13, 1953, that neither the Company, as Debtor in Posses- sion in the pending bankruptcy proceedings , nor Turner, as its president, has author- ity to negotiate or sign a bargaining contract with the Union until the Debtor has secured a confirmation of its proposed arrangement with creditors in the bankruptcy proceeding; and that, if and when such arrangement is accepted by the creditors and confirmed by the court, the Debtor will be ready, willing, and able to negotiate and sign a contract with the Union. They argue that the Debtor in Possession, prior to the confirmation of the arrangement , is not a proper "person" to deal with the Union, but is at most a "temporary employer" operating with limited powers under the order of May 22, 1953, and section 11 of the Bankruptcy Act, as a "claims stakeholder," but without authority to sign any collective -bargaining contract with the employees. They also contend that, after confirmation of the arrangement , any contract signed by the Debtor must still be approved by the Federal court sitting in bankruptcy, to be binding. The Debtor has been operating the business, with Turner in control as president, under an order of the United States district court issued in a proceeding for an arrangement with creditors instituted by the Company under chapter 11 of the Bank- ruptcy Act, as amended , 11 USCA sec. 701 et seq. That statute permits any person who could become a bankrupt under other provisions of the law to file an original petition in the United States district court, alleging insolvency or inability to pay debts as they mature, and setting forth an arrangement with creditors as proposed by the debtor (secs. 722, 723). The court may appoint a receiver of the debtor's property, or continue a trustee in bankruptcy previously appointed, as trustee in possession of such property ; where no receiver or trustee is appointed, the debtor may be continued in possession of his property, with all the title and powers of a trustee appointed under title 11, but subject always to control of the court and to such limitations , restrictions , terms, and conditions as the court may prescribe (secs. 732, 742). Upon authorization by and under control of the court, the receiver, trustee, or debtor in possession has power to operate the business and manage the property of the debtor for such period as the court fixes (sec. 743). In effect, chapter 11 gives the debtor in possession the same type of authority, and places him under the same liabilities, as a trustee in bankruptcy who operates a business under '5 Mason & Hughes, Inc., 86 NLRB 848; Kelco Corporation, 79 NLRB 759, 764, Board order enforced , as modified on other points, 193 F. 2d 642 (C. A. 4). PAUL STEVENS 109 the supervision and control of the United States district court sitting in bankruptcy. The only difference is that under chapter 11 there need not be an existing adjudica- tion of bankruptcy, and the proceeding thereunder contemplates a continuance of the debtor's business. The provisions of chapter 11 are available only to debtors, and the purpose of the proceeding thereunder is to preserve the debtor's equity in his property and business by rehabilitating the business under a plan involving compo- sition or extension of debts which will be fair and equitable and feasible. The plan must modify or extend unsecured debts in an agreed manner and upon specific co-isiderations; it may provide for continuance of the debtor's business with or with- out creditor supervision, and may also provide for reserving jurisdiction of the court for its consummation (secs. 756, 757). It is my opinion that the Debtor, while operating its business under the above provisions of law, particularly section 742 of chapter 11, albeit under the continuing supervision and control of the court, is tantamount to a "trustee" or "trustee in bankruptcy," and therefore comes within the definition of a "person" in Section 2 (1) of the Act. I am further of the opinion that, in view of the nature of the power and authority granted to the Debtor for the operation of its business by the court order of May 22, 1953, and the terms of the arrangement it has proposed for creditors in the pending chapter 11 proceeding, it is also an "employer" within the meaning of Sec- tion 2 (2) of the Act. In the first place, under the order above mentioned, the Debtor is continued in possession of its property and is authorized to "commence and continue the operation of its business as a going concern under the supervision of this Court and in accordance with the direction of its duly authorized officers and directors, with authority to expend reasonable amounts to meet current oper- ating expenses " Under this authority, it has operated the same employing enter- prise as the Receiver did before it, and as the Company itself did before the Receiver, continuing to employ busdrivers, pay them compensation, prescribe their hours and working conditions, and otherwise to direct and supervise them as employees. Every essential attribute of the employment relationship still exists in its operation of the business. In the second place, the arrangement the Debtor has proposed for settle- ment with its creditors contemplates only adjustment and settlement of their claims. The Debtor would issue corporate bonds, secured by mortgage on its franchises and personal property, which will be offered to creditors in exchange for their claims; ,creditors rejecting the bonds would be paid off in quarterly installments. Claims ,of secured creditors including the United States Government would be paid from funds raised by sale of bonds and the mortgage or sale of r-mil estate. Holders of chattel mortgages on rolling stock, whose claims are not in default, would be paid off in accordance with their mortgage terms out of operating revenues. Claims of The five principal stockholders of the Company, including Turner, would be sub- 'ordinated to claims of all other creditors, and they would receive no dividends or other payment from the business until creditors are paid in full. The Debtor would be continued in possession of its property under supervision of the court, the busi- ness to be operated by its officers with such compensation as the court may prescribe. It is significant that this plan provides only for settlement of creditor obligations; there is no provision for alteration of the corporate or capital structure of the Com- pany (aside from issue of secured bonds) or of its management. I have found no case under the Act directly involving a debtor in possession under chapter I 1 of the Bankruptcy Act, but I consider that the above facts and circumstances make the decision of the Court of Appeals for the Third Circuit in N. L. R. B. v. The Baldwin Locomotive Works, 128 F. 2d 39, apposite and controlling. In that case the Board sought enforcement of an order issued against the above corporation in unfair labor practice proceedings charging the corporation with having committed unfair labor practices while operating its business as a debtor in possession in bankruptcy pro- ceedings in which the corporation had filed a reorganization plan under section 77B of the Bankruptcy Act. The case had been instituted after the corporation was dis- ,charged from bankruptcy following court approval of its reorganization plan. In resisting enforcement, the corporation claimed it was not chargeable with unfair labor practices which occurred while it managed its property under court super- vision as debtor in possession. The court of appeals rejected this contention, saying 128 F. 2d p. 43) : Even though some of the unfair labor practices with which the respondent is charged were committed while it was managing and operating its bi!ciness and properties as the debtor in possession under court order, it will hardly be denied that a debtor in possession is responsible for the unfair labor practices which occur during a reorganization. Its status as an employer is no different, so far as the National Labor Relations Act, 29 U. S. C. A. § 151 et seq., is 110 DECISIONS OF NATIONAL LABOR RELATIONS BOARD concerned, than that of any other employer. Court supervision of corporate reorganization affords the operating possessor no freedom from its statutory duty to its employees. The court enforced the Board's order against the corporation because it found that the reorganization had effected no legally significant change in the structure of the corporation, so as to differentiate it from the debtor in possession, insofar as employer-employee relationships were concerned, and that the same employing corporation which entered the bankruptcy proceeding emerged from it with the same management and control intact. The continuity of the employing enterprise as an entity was the salient factor in the decision. The same considerations are applicable here, although in the inverse order. The Debtor and Turner admit that, after the arrangement is confirmed, the Debtor will be obligated under the Act to bargain fully with the Union. If that is so, and it appears that the same manage- ment and control of the business under the Debtor will continue if and when the Debtor is discharged upon confirmation of the arrangement, it seems clear that the Debtor, as Debtor in Possession, should be under the same obligation. I there- fore conclude and find that the Debtor and Turner, by refusing to bargain with the Union because of the pendency of proceedings for an arrangement, and the lack of confirmation of such arrangement, in the United States district court under chapter 11 of the Bankruptcy Act, have refused to bargain with the Union in good faith in violation of Section 8 (a) (5) of the Act. On the basis of the above facts, circumstances, and considerations, and con- sidering the record as a whole, I conclude and find that the Debtor and Turner have refused since June 8, 1953, to bargain in good faith with the Union as the statutory representative of their employees in the appropriate unit set forth above, and have thereby violated Section 8 (a) (5) and (1) of the Act. In reaching this. conclusion I deem it unnecessary to make any determination on the contention, of these Respondents that any contract negotiated and signed with the Union prior to confirmation of the arrangement would be only a temporary employment arrange- ment which might become worthless if the arrangement with creditors fell through, the Company were adjudicated a bankrupt and its business liquidated. This is a purely speculative, in terrorem argument which has no bearing whatever on the issue whether these Respondents in fact violated the Act in the past and are con- tinuing such violations 36 In view of the fact that they have refused even to talk with the Union on contract terms, and thus never reached the point of signing any type of contract, it is likewise unnecessary to consider whether or not any signed' agreement would have to be submitted to the Federal court for approval before the Respondent could operate under it.37 3e Even if the business were finally adjudicated a bankrupt and placed in liquidation under a trustee in bankruptcy, that official would still be an "employer" within the mean- ing of Section 2 (2) of the Act and obligated to bargain with the Union. Cf. Superior Lime it Hydrate Company, 46 NLRB 1299 37I make no finding that the Debtor violated the Act by having stenographic notes made of part of the July 11 conference, inasmuch as the whole conference was not taken down, the idea was inspired by Pierce's taking longhand notes, and was apparently motivated by a desire to help him in that respect, and the notes were apparently never transcribed or used by the Debtor or Turner. When Turner arrived at the Company's offices on May 22, 1953, to take over the business, he learned from some of the striking drivers that they wanted to come back to work That night Turner posted a notice to the drivers at the Spartanburg garage, announcing that operations would resume at once, and stating that all drivers desiring to work were requested to report at once at the main office of the Company, and that the pay would be the same as on the day before the strike started. The same notice was posted in all ticket agencies and other terminals of the Company. None of the notices were mailed or given to individual strikers. Thereafter, some strikers returned to work, and others indicated a willingness to do so, but actually did not because of the strike Turner told all who con- tacted him that they could return any time they desired. Turner testified credibly that he had always been friendly toward his drivers, and that when he regained possession of the business, he wanted them to come back because they were experienced drivers There is no proof of any antiunion animus of the Company or Turner before the receivership, and I have found that neither the Debtor nor Turner committed any unfair labor practices during the incumbency of the Receiver. While Turner's failure to mention the notice or his desire to get the men back to work to Brennan when the latter asked him on May 26 and 27 to settle the strike and get the drivers back to work, raises a suspicion that Turner desired to bypass the Union in soliciting the men to return, I think any unfavorable in- ference from this omission is explained away by the fact that Turner had previously prom- PAUL STEVENS 111 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondents, set forth in section III, above, occurring in •connection with the operations of Respondent Company set forth in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing com- merce and the free flow of commerce. V. THE REMEDY Having found that the Respondents have engaged in unfair labor practices, I will recommend that they jointly and severally cease and desist therefrom and take cer- tain affirmative action to effectuate the policies of the Act. I have found that Respondent Receiver has unlawfully refused to bargain collec- tively with the Union as the exclusive bargaining agent of employees in the appro- priate unit from September 30, 1952, to May 22, 1953, and that Respondents Debtor and Turner have engaged in similar violations of the Act from and after May 22, 1953. At present, the Debtor and Turner are in possession of the business, but since the Receiver is contesting the arrangement proceedings under which they hold pos- session in the Court of Appeals for the Fourth Circuit, and the outcome of that litigation is in doubt, I shall recommend that the Receiver, the Company, both as a corporation and Debtor in Possession, and Turner shall bargain collectively, on request, with the Union as the bargaining representative aforesaid and, if an under- standing is reached, embody such understanding in a signed agreement. I will also recommend that all Respondents jointly and severally cease and desist from refusing to bargain collectively with the Union, and that they also cease and desist from the specific types of coercive conduct found above and from in any other manner interfering with, restraining, and coercing the employees in the exercise of rights guaranteed by Section 7 of the Act. The necessity of the broad order, at least against the Receiver, is indicated by his unlawful refusal to bargain, and his independent acts of interference and coercion found above. Although his acts are not attributable to the Debtor and Turner, nevertheless those Respondents came into possession of the business after those acts were committed and the liability to remedy his unfair labor practices had accrued as to the employing enterprise, and they took over the business as they found it, with all the burdens and liabilities which had come into existence before that event. In view of this, and since they continued to operate the business as an employing enterprise without any significant change so far as the employment relationship was concerned, the coercive effects of the Receiver's un- remedied unfair labor practices can best be dissipated by requiring his successors to take appropriate steps to remedy such practices.38 I shall therefore recommend that the Board order issue against the Debtor and Turner, as well as the Company itself in the event that the Debtor and Turner are discharged after consummation of a confirmed arrangement with creditors and the business is returned to the Company.39 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. Brotherhood of Railroad Trainmen, F. L. Picotte Lodge No. 1038, is a labor organization within the meaning of Section 2 (5) of the Act. 2. Paul Stevens, Receiver of Carolina Scenic Stages, a corporation; Carolina Scenic Stages, as a corporation and as Debtor in Possession under an order of the United States district court in proceedings for an arrangement with creditors of a corporation; and Hamish Turner are each engaged in commerce within the meaning of the Act. 3. All busdrivers employed in the systemwide operations of Carolina Scenic Stages, with headquarters located in Spartanburg, South Carolina, excluding clerical ised Pierce to have his lawyers contact the Union, and had already posed to his lawyers the problem of his liability to recognize and deal with the Union, and was awaiting their opinion. Under all the circumstances, I do not consider Turner's posting of a general notice to drivers requesting their return to work as substantial evidence of a campaign to bypass or undermine the Union, or as inconsistent with his already professed desire to meet and negotiate with the Union. I therefore base no finding of a violation of the Act upon the posting of the notice. Cf. Harcourt and Company, Inc., 98 NLRB 892. ss Pacific American Shipowners Association, et at, 98 NLRB 582, 600 ; N. L. R. B. v. Cot- ten, etc , supra; N. L R. B. v. The Baldwin Locomotive Works, supra. 35 Hoosier Veneer Company, 21 NLRB 907, enforced 120 F. 2d 574 (C. A. 7), motion to modify decree denied 125 F. 2d 387. 112 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and maintenance employees, the traffic manager, dispatcher-inspectors, and all other supervisory employees as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9 (b) of the Act. 4. The above Union was on September 8, 1952, and has been at all times since that date, the exclusive representative of all employees in the unit aforesaid for pur- poses of collective bargaining, within the meaning of Section 9 (a) of the Act. 5. By refusing on September 30, 1952, and thereafter to bargain collectively with the above-named Union as the exclusive bargaining representative of employees in the unit aforesaid, Respondent Receiver has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (5) of the Act. 6. By the above refusal to bargain, and by other conduct found above, thereby interfering with, restraining, and coercing employees in the exercise of rights guaran- teed by Section 7 of the Act, Respondent Receiver has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (1) of the Act. 7. By refusing on and after June 8, 1953, to bargain collectively with the above Union as the exclusive bargaining representative as aforesaid, Respondents Carolina Scenic Stages, as a corporation and as Debtor in, Possession aforesaid, and Hamish Turner have engaged in and are engaging in unfair labor practices within the mean- ing of Section 8 (a) (5) and (1) of the Act. 8. The aforesaid unfair labor practices are unfair labor practices affecting com- merce within the meaning of Section 2 (6) and (7) of the Act. 9. Respondents Carolina Scenic Stages, as a corporation and as Debtor in Pos- session, and Hamish Turner did not commit any unfair labor practices, by refusal to bargain with the Union, or otherwise, prior to May 22, 1953, but said Respondents are and have been since that date responsible for remedying the unfair labor prac- tices engaged in by Respondent Receiver prior to that date. [Recommendations omitted from publication.? HENRY C. GRABOWSKI, TRADING AS DIAMOND PRINTING COMPANY and LOCAL No. 58 , AMALGAMATED LITHOGRAPHERS OF AMERICA, CIO, PETITIONER and LOCAL No. 322, INTERNATIONAL PRINTING PRESSMEN AND ASSISTANTS UNION OF NORTH AMERICA, AFL. Case No. 4- RC-2201. July 9,159.E Decision and Direction of Election Upon a petition duly filed under Section 9 (c) of the National Labor Relations Act, a hearing was held before Julius Topol, hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed.' 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 certain employees of the Employer. 3. Contrary to the Petitioner and the Employer, the Intervenor contends that its current contract with the Employer is a bar to the instant proceeding. On December 8, 1952, the Employer and the Intervenor signed a collective-bargaining contract for 1 year, renew- 1 After the hearing the Petitioner moved to remand the case for the taking of additional testimony pertaining to the Intervenor 's contract-bar contention . In view of our dispo- sition of this contention in paragraph 3, infra, the motion is hereby denied. 109 NLRB No. 20.