Admiar Rubber Co.

In the Matter of ADMIAR RUBBER COMPANY and AMERICAN FEDERATION OF LABOR ON BEHALF OF EMPLOYEES OF COMPANY In the Matter Of IDEAL NOVELTY & Toy COMPANY, INC. and AMERICAN FEDERATION OF LABOR ON BEHALF OF EMPLOYEES OF COMPANY Cases Nos. R-845 and R-846.-Decided October 18, 1938 Doll and Toy Manufacturing hiduslry-Investigation of Representatives: con- troversy concerning representation of employees : controversy concerning appro- priate unit ; rival organizations ; petition for, dismissed, where no question con- cerning representation has arisen in a unit which is appropriate for the purposes of.,collective bargaining-Unit Appropriate for Collective Bargaining: contro- versy as to whether employees of a single employer constitute an appropriate unit in an industry where most employers belong to an association which carries on collective bargaining for them and administers their labor relations generally; history and functioning of employee organization; single union representing practically all employees in industry ; employer organization : group of employers belonging to association which bargains collectively for its members ; history of contractual relationships : system of arbitration created by contract between single union and association of employers ; standardized wages, hours, and working conditions ; conditions prevailing throughout industry in accord with such contract. Mr. Gordon O'Hanlon, for the Board. Mr. George Lion Cohen, by Mr. I. Henry Kutz, of New York City, for the Company. Mr. Murray Frank, of New York City, for the Federal. Mr. Emil Schlesinger, of New York City, for the Playthings Union. Mr. Allan Lind, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE On May 7, 1938, the American Federation of Labor, herein called the A. F. of L.,' filed with the Regional Director for the Second Region (New Yolk City) two separate petitions alleging that ques- ' Although the petition was filed by the A. F of L, Federal Labor Union, Local 20728, affiliated with the A F of L, appeared by counsel at the hearing and participated therein as the petitioner. 9 N. L. R. B., No. 35. 407 408 NATIONAL LABOR RELATIONS BOARD tions affecting commerce had arisen concerning the representation of employees of Admiar Rubber Company, Brooklyn, New York, herein called the Admiar, and of employees of Ideal Novelty & Toy Company, Inc., New York City, herein called the Ideal, and requesting an investi- gation and certification of representatives pursuant to Section 9 (c) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. The Admiar and the Ideal are herein called the Companies when re- ferred to collectively. On May 24, 1938, the National Labor Relations Board, herein called the Board, acting pursuant to Section 9 (c) of the Act, and Article III, Section-3, of National Labor Relations Board Rules and Regulations-Series 1, as amended, ordered an investigation and authorized the Regional Director to conduct it and to provide for an appropriate hearing upon due notice; and acting pursuant to Ar- ticle III, Section 10 (c) (2), of said Rules and Regulations, further ordered that the cases be consolidated for purposes of hearing. On June 2, 1938, the Regional Director issued a notice of hearing; copies of which were duly served upon the Companies, Federal Labor Union, Local 20728, affiliated with the A. F. of L., herein called the Federal, and upon Playthings and Novelty Union, Local Industrial Union No. 223, affiliated with the Committee for Industrial Organi- zation, herein called the Playthings Union, a labor organization claiming to represent employees directly affected by the investigation. Pursuant to notice, a hearing was held on June 15, 16, 17, and 18, 1938, at New York City, before William Seagle, the Trial Examiner duly designated by the Board. The Board, the Companies, the Fed- eral, and the Playthings Union were represented by counsel and par- ticipated in the hearing. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing' on the issues was afforded all parties. During the course of the hearing, the Trial Examiner inade several rulings on motions aid on objec- tions to the admission of evidence. The Board has reviewed these rulings and finds that no prejudicial errors were made. The rulings are hereby affirmed. Thereafter, the Playthings Union and the Com- panies filed briefs with the Board and requested an opportunity for oral argument. On July 21, 1938, oral argument was had before the Board at Washington, D. C. The Companies and the Playthings Union were represented by counsel and participated in the oral argu- ment. The Federal, although duly notified, did not appear at the oral argument. On September 2, 1938, the American Federation of Labor submitted a reply memorandum to the briefs filed by the Com- panies and the Playthings Union and requested leave to file the same. On September 9, 1938, the Board issued an order granting this re- quest. On September 10, 1938, the Playthings Union filed an answer- ing brief to the reply memorandum submitted by the American Federation of Labor. On September 15, 1938, the Board issued an DECISIONS AND ORDERS 409 order granting the Playthings Union's motion to file this additional brief., The Board has considered the briefs filed by all the parties. Upon .the entire record in the case, the Board makes the following: FINDINGS OF FACT 1. 1 HE COMPANIES AND THEIR BUSINESS Admiar Rubber Company is a New York corporation engaged in the manufacture, sale, and distribution of rubber dolls, rubber parts of dolls, and other rubber items. Its manufacturing plant is in Brooklyn, New York. The principal raw materials used by. the Admiar are rubber and, chemicals, of which 90 per cent are shipped to it from sources outside the State of New York. In 1937, the Adiniar Rubber Company sold 90 per cent of its finished products, valued at •$300,000, to the Ideal Novelty & Toy Company, Inc., New York City, its chief custolner. The Ideal Novelty & Toy Company, Inc. is a New York corporation engaged in the manufacture, production, sale, and distribution of dolls and doll parts. Its plant is in New York City. The principal raw materials used by the Ideal consist of wood pulp, glue,, lacquer, chemicals, resin, mohair, human hair, and cotton goods. In 1937, the value of such, raw materials used by the Ideal amounted to $300,000. Approximately 60 per cent of such raw materials were shipped to the Ideal from points outside the State of New York. The value of its finished products amounted to $1,000,000 in 1937, of which approxi- mately 85 per cent were sold and delivered to customers outside the State of New York. Both the Ideal Novelty & Toy Company, Inc. and the Admiar Rub- ber Company are owned by the same stockholders and have the same board of directors. This board of directors determines the policies of both Companies. The toy industry is seasonal and during its slack season the Com- panies, together employ approximately 250 employees. During the busy season the Companies together employ as many as 800 workers. Approximately 250 workers were employed by both Companies at the time of the hearing. H. THE ORGANIZATIONS INVOLVED Federal Labor Union, Local 20728, is a labor organization affiliated with the American Federation of Labor, admitting to its membership all production and maintenance employees, shipping clerks, and ma- chinists employed by the Company, excluding office and supervisory employees. Playthings and Novelty Union, Local Industrial Union No. 223, is a labor organization affiliated with the Committee for Industrial Or- 410 NATIONAL LABOR RELATIONS BOARD ganization . It admits to its membership employees in the doll and toy industry in and around New York City, includingrthe employees of the Companies. III. THE HISTORY OF EMPLOYEE ORGANIZATION Organizational efforts among the employees in the doll and toy industry in New York City and vicinity began in 1910 under the direction of The United Hebrew Trades. Sweatshop conditions, the "contracting of work to individuals, child labor, low wages, long hours, and other similar conditions were prevalent throughout the industry. In 1913 the first organized industry-wide strike to improve these con- ditions was called. The strike was lost by the employees. In 1927 an- other strike was called and lost. A series of strikes in the industry occurred during the period from 1930 to 1933. The employees were unsuccessful in most of these strikes. Lack of unity among the em- ployees was one of the reasons for losing the strikes. In 1933, there were two major Unions in the doll and toy industry in New York City. Both were called the Doll and Toy Workers Union. One was unaffiliated, while the other was affiliated` with the American Federation of Labor. In August 1933, the unaffiliated Union amalgamated with the American Federation of Labor Union, Doll and Toy Workers Union, Local 18230. In September 1933 fol- lowing this amalgamation, the Doll and Toy Workers Union, Local 18230 conducted a successful industry-wide strike, as a result of which it obtained a contract with the Association of Doll Manufacturers of New York City, herein called the Association. This Association represented the larger manufacturers of dolls and doll parts in and around New York City. Shortly after the amalgamation of the two major Unions, repre- senting approximately 1,500 employees in the industry, the employees of the Ideal and the Admiar formed an unaffiliated Union, known as the Ideal and the Admiar Employees Association. In 1935 this Employees Association amalgamated with the Doll and Toy Workers Union, Local 18230. As finally organized, the Doll and Toy Workers Union represented practically all of the 1,800 employees engaged in the doll and toy industry in New York City and vicinity. In June 1937 the members of the Doll and Toy Workers Union, Local 18230, held a meeting at which they voted unanimously to affiliate with the Committee for Industrial Organization. In ac- cordance with the vote the Doll and Toy Workers Union, Local 18230, transferred its affiliation to the Committee for Industrial Organization and became known as Playthings and Novelty Union, L. I. U. #223, affiliated with the Committee for Industrial Organization. In March 1938, the Playthings Union represented approximately 1,800 of the 2,000-doll and toy workers within the vicinity of New York City. DECISIONS AND ORDERS 411 There was only one large manufacturing concern and a number of small concerns, employing two or three persons, whose employees remained unorganized . The number of unorganized workers did not -egceed'250. - Sometime prior to April 1938, the American Federation of Labor chartered a new doll and toy workers union known as the Federal Labor Union, Local 20728. The efforts of the Federal to secure the membership of employees of the Aclmiar and Ideal shops have given rise to the present controversy. IV. THE ASSOCIATION OF DOLL MANUFACTURERS The Association of Doll Manufacturers of New York City was organized in 1933 and at the time of the hearing this Association was composed of about 27 companies engaged in the manufacture of dolls and-doll' parts in and around New York City. The Association represents 50 per cent of such manufacturers. The manufacturers who are members of the Association, employ approximately 90 per cent of the workers engaged in the industry and manufacture ap- proximately 80 per cent of the dolls and doll parts manufactured in New York City and vicinity. The Admiar and the Ideal became members of the Association in 1935. Solomon Eckstein, executive secretary of the Association, testified that the main reason for organizing the Association was to admin- ister the labor relations of its members. He stated that 90 per cent of the Association's time is spent in dealing with labor -relations. The constitution and bylaws of the Association declare that the pur- pose of the organization is: . . . to negotiate and make on behalf of its members collective agreements with other organizations in the industry. A Board of Directors, composed of 11 directors elected by the As- sociation members, formulates its labor policies. The constitution of the Association provides that the Board of Directors has full power to negotiate, make, and enter into collective agreements with labor unions.,-,, The constitution of the Association also prohibits members of the Association from making separate or individual agreements with any labor organization. All members of the Association are bound by the terms and conditions of any collective agreement duly entered into between the Association and any labor organization. The bylaws of the Association provide for the establishment of a Labor Bureau for the benefit of members of the Association to repre- sent them in all questions affecting their relations with their em- 'a The constitution provides that a collective agreement negotiated by the board of directors is subject to ratification by members of the Association at a general or special meeting at which 11 members constitute a auotum 412 NATIONAL LABOR ItELATIONS BOARD ployees and any labor union with which the Association may have a collective agreement . The executive secretary of the Association is in charge of the Labor Bureau and is in command of the active man- agement and business of the Association . He represents the Associ- ation in the adjustment of all labor disputes that may arise between members of the Association and their workers. Minor grievances and disputes between members of the Association and their employees are usually handled and settled by the executive secretary and a repre- sentative of the Union . If, however , the problem is of some im- portance, either because it involves a number of employees, or be- cause it involves a problem of general application , it may be referred to a so-called - Conference Committee on Labor, consisting of five members of the Association. It is evident from the facts set forth above that the Association has taken over practically all of the employer attributes normally exer- cised by the individual employers of the Association in so far as collective bargaining is concerned. V. THE HISTORY OF COLLECTIVE BARGAINING After the strike in 1933, negotiations for a contract between the Association and the Doll and Toy Workers Union, Local 18230, were held under the auspices of the old National Labor Board established under the National Industrial Recovery Act. An agreement was made in September 1933 which settled the strike. This agreement, dated September 29, 1933, was designed as a temporary agreement and provided for a permanent agreement to be entered into between the Association and the Doll and Toy Workers Union prior to January 1, 1934. Such an agreement was negotiated soon after , on October 28, 1933. However, it provided that it was to become effective only if the Doll and Toy Workers Union entered into similar contractual relations with the Regal Doll Manufacturing Company of Trenton, New Jersey. The Doll and Toy Workers Union failed to make such an agreement and the Association declared the contract null and void in accordance with its terms . As a result, a dispute arose between the Association and the Doll and Toy Workers Union. The dispute was brought before the old New York Regional Labor Board under the National Industrial Recovery Act, which finally secured from both sides an agreement to arbitrate . Dr. N. I. Stone, the arbitrator designated by the old New York Regional Labor Board , in a decision, dated March 19, 1934, and supplementary decision , dated April 19, 1934, determined the wages and hours that were to prevail in the industry . On May 26, 1934, a contract was finally consummated be- tween the Association and the Doll and Toy Workers Union. Dr. Stone, as arbitrator , was also instrumental in bringing this result about. DECISIONS AND ORDERS 413. The contract provided for a closed shop and prohibited members of the Association from purchasing or selling parts to companies which operated under non-union conditions. The Playthings Union maintains its own employment bureau from which the members of the Association secure their employees. The contract required members of the Association to exhaust the facilities of an employment bureau maintained by the Union before hiring from any other source. The contract also provided for a uniform system of wages, hours, and working conditions, which became the conditions prevailing through- out the industry. The contract also provided for the settlement of all disputes between the Doll and Toy Workers Union and any employer by a committee known as the Adjustment Board, consisting of three members of the Association and three members of the Union. The decision of the Adjustment Board was to be binding on the parties to any such controversy. If the Adjustment Board failed to agree; the dispute was then to be referred to a permanent arbitrator -known as the Impartial Chairman of the industry. The decision of the chair- man was to be final and binding upon the parties. The contract also prohibited any lock-out or strike, pending the determination of any complaint or grievance. It further provided that if there was a strike and the striking employees did not return to work within 36 hours after the mailing by the employer of a notice of such a strike to the Union, the striking employees were deemed to have abandoned their employment. - The contract, with modifications, was renewed in May 1935 and in 1936. In July 1937, after the Doll and Toy Workers Union became the'Play"things Union, a supplementary agreement was entered into between the Association and Playthings Union whereby the contract was assigned to the Playthings Union and it agreed to carry out its terms. This contract was to expire on July 1, 1938. On May 10, 1938, after several months of negotiations between the Association and the Playthings Union the contract expiring on July 1, 1938, was renewed for a period of 1 year. Dr. Paul Abelson, Impartial Chair- man of the industry, acting in his capacity as arbitrator, served to bring about the renewal of the contract. The Playthings Union also has contracts with approximately 25 other small manufacturers of dolls and doll parts in and around New York City. In accordance with the contract made with the Associa- tion, the terms of such contracts cannot be more favorable to em- ployers who are not members of the Association than the terms accorded the Association. Thus we have a situation whereby prac- tically the entire doll and toy industry in and around New York City is operating under the terms of a single collective bargaining contract. 414 NATIONAL LABOR Itiu,ATIONs BOARD VII. THE PRESENT CONTROVERSY The present controversy arises from a conflict between the Federal and the Playthings Union over the representation of approximately 250 employees of the Admiar and the Ideal. On April 30, 1938, Irving Andacht, the then Playthings Union's chairman of the Ideal shop, went to the A. F. of L. headquarters in New York City and stated that the employees of the Ideal and the Admiar shops wished to affiliate with the American Federation of Labor. By May 7, an apparent majority of the employees in both the Ideal and the Admiar had signed A. F. of L. membership cards 2 and had signed a petition in which they indicated their desire to have the Board hold an election to determine the bargaining representatives of the employees of the two Companies. They also indicated their desire to affiliate with the American Federation of Labor, and to resign from the Playthings Union. On May 7, 1938, Charles Vonie, general organizer of'-the' A. F. of L., acting on this signed petition, filed with the Regional Director the two petitions herein involved. He also notified the two Companies of the proposed change in affiliation of their employes and attempted to enter into negotiations looking toward a contract. The two Companies refused to negotiate on the ground that as mem- bers of the Association they had no right to do so. On May 16, 1938, the Playthings Union began what it contended to be a drive to persuade the employees of the Ideal and Admiar to pay their union dues. Representatives of the Playthings Union evicted 13 employees from each shop, contending that they were in arrears in the payment of their dues and therefore no longer in good standing." The Federal representative appealed to the Regional Office of the Board in protest against these evictions. At a conference held at the Regional Office the Playthings Union offered to allow the 26 employees to return to work if they paid their dues. The Federal insisted upon a return to the status quo and asked that an election be held to determine the representative of the employees. Neither union would concede to the other's viewpoint, and as a result the negotia- tions came to an end without a settlement. On May 26 the majority of the remaining employees in the Admiar and the Ideal went on strike in protest against the evictions of the above-mentioned 26 employees. The two Companies protested the strike to the Playthings Union through the executive secretary of 2 A check of the A. F. of L membership applications made by an agent of the Board in accordance with a stipulation made at the hearing, shows that of the 115 signed applications submitted for employees of the Ideal shop only 62 of the signatures were genuine. Of the 83 signed applications submitted for employees of the Admiar shop, all were genuine, but only 61 were those of employees of the company or otherwise entitled to be counted. 9 The contract between the Association and the Playthings Union provides that the members of the Association shall "employ only good standing members of the Union " DECISIONS AND ORDERS 415 the Association. The Playthings Union thereafter sent letters to practically all of the employees on strike, calling to their attention the provision of the contract"With the Association which' prohibited strikes pending the settlement of any dispute and notified the strikers that if they did not return to work within 36 hours they would lose their employee status. The letters also stated that, "Of course only workers who are good standing members of the Union . . . are entitled to their jobs in the plant." A few employees returned to work, but the majority remained on strike. The Playthings Union then proceeded to fill the places of the striking workers with other workers in accordance with their contractual obligation to the Association. VIII. THE APPROPRIATE UNIT The initial question for our determination, arising from the con- troversy set forth above, is whether the units proposed by the Fed- eral are appropriate for the purposes of collective bargaining. In the A. F. of L.'s separate petitions for investigation and certification of representatives it was stated that the units appropriate for the purpose of collective bargaining consisted of (1) all production employees of the Ideal and, (2) all production employees of the Admiar. At the hearing, the Federal contended that the mainte- nance employees, shipping clerks, and machinists in each of the two Companies should also be included in the' appropriate units. The Playthings Union and the Companies contended that the unit most appropriate for the purposes of collective bargaining consisted of all production workers in the doll and toy industry employed by members of the Association. - While under ordinary circumstances the units claimed by the Federal might be deemed appropriate, the past history and func- tioning of both employee and employer organization in the industry in and around New York City is completely persuasive of the fact that a unit other than that claimed by the Federal is the most appropriate for the purposes of collective bargaining.' The rise of an organization of the employers in an association for the purpose of administering their labor" relations was attended by the organization of their employees along parallel lines. The success and effectiveness of collective bargaining on an industry-wide basis in and around New York City, with the Association representing its employer-members and a single union representing all the employees of the employer-members of the Association, is attested by the fact that since 1934 there has been an orderly functioning of the processes of collective bargaining and the settlement of disputes, in sharp con- ' See Matter of Shipozaaers' Association of the Pacific Coast, et at. and International Longshoremen's and Warehousemen's Union, District No 1, 7 N L R. B. 1002. 416 NATIONAL LABOR RELATIONS BOARD 'trast to the chaotic conditions prevailing prior to 1934. By virtue of such collective bargaining wages and hours have been standardized,; sweatshop conditions, child labor, and other evils, so long prevalent in the industry prior to the attainment of a contract in 1934, have been practically eliminated'; and a system of arbitration has been established which is mutually satisfactory both to employers-and em- ployees and which has 'led to a peaceful solution of the -labor prob- lems arising in the industry. Under these circumstances and in view of the entire record, we are of the opinion that the units claimed to be appropriate by the A. F. of L. and its affiliate, the Federal, are not appropriate. We shall therefore dismiss the petitions of the American Federation of Labor. IX. TEIE QUESTION CONCERNING REPRESENTATION Since, as stated in Section VIII above, we are unable to find an appropriate unit within the scope of those alleged in the petitions filed in this case, we find that no question has been raised concerning the representation of employees of the Companies in an appropriate bargaining unit. Upon the basis of the above findings of fact and the entire record in the case, the Board makes the following : CONCLUSION OF LAW No question, concerning representation of employees of Admiar Rubber Company, Brooklyn, New York, and Ideal Novelty & Toy Company, Inc., New York City, in a unit which is appropriate for the purposes of collective bargaining has arisen, within the meaning of Section 9 (c) of the National Labor Relations Act. ORDER Upon the basis of the foregoing findings of fact-and conclusion of law, the National--Labor Relations Board hereby dismisses the peti- tions for investigation and certification filed by the American Fed- eration of Labor and its affiliate Federal Labor Union,, Local 20728.