The Hinde & Dauch Paper Co.

THE HINDE & DAUCH PAPER COMPANY 847 THE HINDE & DAUCH PAPER COMPANY and UNITED PAPER WORKERS OF AMERICA, CIO. Case No. 5-CA-543. May 8, 1953 DECISION AND ORDER On November 28, 1952, Trial Examiner Henry J. Kent issued his Intermediate Report in the above-entitled proceeding, finding that the Respondent had not engaged in the unfair labor practices alleged in the complaint and recommending that the complaint be dismissed, as set forth in the copy of the Inter, mediate Report attached hereto. Thereafter, the General Counsel and the Respondent filed exceptions to the Inter- mediate Report and supporting briefs. The General Counsel and Respondent also requested oral argument. These requests are hereby denied as the record and briefs adequately present the issues and positions of the parties. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Intermediate Report, the exceptions and briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner with the additions and modifications noted below. We agree with the Trial Examiner that the Respondent did not refuse to bargain in good faith with the Union, the certified bargaining representative of Respondent's employees, in viola- tion of Section 8 (a) (5) and (1) of the Act. As fully discussed in the Intermediate Report, the Respondent honored the union certification as it was required to do,' and bargained with it in good faith, reaching an agreement on October 16, 1951, notwithstanding the fact that the Respondent had grounds for believing that a majority of its employees had repudiated the Union as their bargaining representative. Moreover, following execution of the foregoing agreement , the Respondent continued to recognize the Union as the exclusive representative until the end of the certification year. Without actually questioning the Respondent's good -faith doubt of the Union's majority, the General Counsel nevertheless contends that the Respondent failed to perform its bargaining obligation in two respects: (1) Initially, by refusing during the certification year to grant the Union a contract extending beyond the certification year, because it doubted the Union's majority; and (2) by refusing during the 12th month of the certification year to negotiate a new agreement to take effect after the concurrent expiration of the initial agreement and the certifica- tion year. We are not persuaded that either of these contentions should prevail in view of the special facts and circumstances of this case. I Under the Board's 1-year certification rule, a certified union's-majority status, in the absence of unusual circumstances, is conclusively presumed to continue for 1 year following certification. Lift Trucks, Inc., 75 NLRB 988. 104 NLRB No. 111. 848 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The record discloses that the duration of the contract was only one of several matters in dispute, which the parties them- selves later resolved in the agreement they ultimately con- summated. The Respondent, having been informed by a majority of its employees 3 months after the Union's certification and shortly after the second contract negotiation meeting that they no longer desired to be represented by the Union, insisted on a contract term expiring at the end of the certification year. The Union, on the other hand, demanded a 1-year contract. The Board has held that the term of a contract, like its substantive provisions, is a bargainable matter.t If it is in- sisted upon in bad faith or to achieve an illegal purpose, the employer or the labor organization, as the case may be, plainly violates its bargaining obligation. Here, however, the record is clear that the Respondent acted in good faith and for no unlawful purpose in proposing that the contract termi- nate at the end of the certification year. Indeed, the apparent reason for the Respondent's proposal was to afford its em- ployees an opportunity at an appropriate time to express their desires in a Board proceeding, as to whether the Union should continue after the expiration of the certification year to represent them as their bargaining representative. Were we to agree with Member Styles, the necessary result would be to require the employees to forego the right, which the Act gives them, to reject their bargaining representative at the end of the certification year. Moreover, it would, in our view, place an unwarranted limitation upon the right of the employer to bargain about the term of the contract; surely a well-founded doubt that the Union is the majority representative is as "legitimate" a reason for permitting bargaining about the duration of the contract as economic considerations of one sort or another. Accordingly, we find that the Respondent did not violate the Act in refusing in good faith to agree to a contract term extending beyond the certification year. The same considerations impel us to find that the Respondent also did not fail to perform its bargaining obligation when it refused during the 12th month of the certification year3 to negotiate a new agreement to become effective after the con- current expiration of the original agreement and the certifica- tion year. As discussed in the Intermediate Report, the Respondent was willing to, and did in fact, recognize the Union as the exclusive bargaining representative during and for the entire certification year, but because of its good-faith doubt of the Union's majority status, it refused to negotiate a new agreement extending beyond the end of the certification year.4 2St. Joseph Stock Yards, Co., 2 NLRB 39, 55; Chicago Typographical Union, 86 NLRB 1041, 1043. s The Trial Examiner inadvertently stated in the section of his Intermediate Report entitled "Conclusions" that the Respondent "was justified in refusing to bargain with the Union after the end of the year following its certification." 4 In our opinion, the Tennessee Egg case, 93 NLRB 846, relied upon by Member Houston, is clearly distinguishable. There the Board found that the alleged loss of majority--upon which the employer in that case sought to justify his refusal to bargain - -"was caused by the Respondent's unfair labor practices," and that in any event the defections were not shown THE HINDE & DAUCH PAPER COMPANY 849 Any other position would have deprived Respondent's employees of their right to determine at an appropriate time whether they desired to be represented any longer by the Union. We therefore conclude that the Respondent did not violate Section 8 (a) (5) and (1) of the Act. Accordingly, we shall dismiss the complaint in its entirety. ORDER Upon the entire record in the case and pursuant to Section 10 (c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the com- plaint herein against The Hinde & Dauch Paper Company, Richmond, Virginia, be, and it hereby is, dismissed. Member John M. Houston, dissenting in part: I agree with the majority that, in the circumstances of this case, the Respondent did not violate Section 8 (a) (5) and (1) of the Act by refusing in good faith to agree to a contract term which would continue beyond the first year of the Union's certification. Such an unfair labor practice finding is clearly foreclosed by the fact that, duration of contracts being bargainable, the Union agreed to the Respondent's proposal to limit the term of the contract to the remaining period of the certification. However, I am not convinced, as is the majority, that the Respondent had exhausted its bargaining obligation by entering into a short-term contract and was thereafter privileged during the certification year to refuse to negotiate concerning a new agreement to succeed this contract which was about to expire. It is admitted that the Respondent rejected the Union's request to reopen negotiations only because it doubted the Union's majority. For this reason, my colleagues exonerate the Re- spondent. In my opinion, the majority's decision is making a serious inroad upon well-settled Board precedent. There can be no question that the Union's demand to negotiate a new agreement to succeed the then expiring agreement was not premature. This agreement had only a month to run. In addition, the Union's demand was made at a time during the first year of the Union's certification when the Board has consistently held that, in the absence of unusual circum- stances, the certified Union's majority status was conclusively presumed.5 Indeed, in recognition of this very principle, the Board in the Tennessee Egg case,6 rejected an employer's to be "sufficient to destroy the Union's majority." Also distinguishable from the present case is the Everist case, 103 NLRB 308, relied upon by Member Styles. There, unlike here. the Respondent throughout the course of negotiations dealt with the union in bad faith. Chairman Herzog is not disturbed by the assertion of inconsistency between this decision and Centr-O-Cast (100 NLRB 1507), having concluded that that case was wrongly decided. 5 The Board and the courts have generally held that, except in unusual circumstances, not here present, the certification of a bargaining representative remains effective for a reason- able period of time, customarily 1 year. Lift Trucks, Inc., 75 NLRB 998; The Belden Brick Co., 83 NLRB 465. 6 Tennessee Egg Company. 93 NLRB W. enfd. 201 F. 2d 370 (C. A. 6). 850 DECISIONS OF NATIONAL LABOR RELATIONS BOARD defense that it refused to bargain with a certified union be- cause it then doubted the union's majority status. There, as here, the employer near the close of the certification year refused to renegotiate an agreement which was about to ter- minate shortly after the close of the certification year. Yet, in the face of the Board's contrary holdings,? my colleagues are effecting an unwarranted revision in the hitherto accepted version of unusual circumstances, and are permitting the Respondent in the present case to rely on an asserted loss of majority to justify its refusal to bargain with the certified union during the first year of the Union's certification. We are all aware of the salutary purpose the Board's 1-year certification rule is designed to serve in the administration of the Act. Only recently the Board, in the Centr-O-Cast case,8 reaffirmed its adherence to this rule because it achieves "the dual purpose of encouraging the execution of a collective- bargaining contract and enhancing the stability of industrial relations." Consistent with this doctrine, the Board announced in the Centr-O-Cast case its policy of dismissing all repre- sentation and decertification petitions filed in the 12th month of a union's certification, instead of keeping such peti- tions in an inactive status during that month. In so doing, the Board observed that the "mere retention on file of such petitions, although unprocessed, cannot but detract from the full import of a Board certification, which should be permitted to run its complete 1-year course before any question of the representative status of the certified union is given formal cognizance by the Board." Accordingly, I would find that the Respondent, in violation of Section 8 (a) (5) and (1) of the Act, failed to satisfy its statutory bargaining obligation in refusing to negotiate concerning a new agreement with the Union. Member Paul L. Styles, dissenting: Contrary to the majority, I would find that the Respondent violated Section 8 (a) (5) and (1) of the Act by refusing to sign an initial contract with the Union extending beyond the certi- fication year. The Union was certified on January 2, 1951. The Respondent took the position in the ensuing negotiations with the Union for an initial contract that it was privileged to refuse to bargain for a contract extending beyond the certification year, in view of the evidence at hand that the Union had lost its majority status a few months after its certification. Conse- quently, the Respondent insisted, as a condition of signing any agreement, that the Union agree to a January 2, 1952, ter- mination date. After several months of negotiation over this and other issues, the parties finally executed a 3-month contract ending with the certification year. The Trial Ex- aminer failed to find that the Respondent's insistence on limiting the term of the contract to the balance of the certifi- 7 The Belden Brick Co., 83 NLRB 465; The Mengel Company, 80 NLRB 705. BCentr-O-Cast & Engineering Company, 100 NLRB 1507. THE HINDE & DAUCH PAPER COMPANY 851 cation year violated Section 8 (a) (5) of the Act. The General Counsel excepts to the Trial Examiner's failure to make such a finding. I find merit in this exception. The Board's rule requiring employers to honor a union's certificate for a period of at least 1 year, regardless of any good-faith belief by the employer that the union is no longer the choice of the majority of his employees,9 has the salutary purpose of imparting a degree of stability to labor relations. In my opinion, the fulfillment of this purpose would be gravely jeopardized by permitting an employer to insist, albeit in good faith, that any contract signed during the life of the certification must expire with it. In endowing certifications with a minimum 1 -year term, the Board was fully cognizant of the nearly universal practice in industry to bargain for contracts of at least 1 year's duration. It was in the light of that practice that the 1 -year rule was determined by the Board to be reasonable. In those cases where the parties reached agreement during the certification year, the effect of the 1 -year rule was to stabilize labor relations for varying periods in excess of 1 year, depending on the term of the contract and the date of its execution in relation to the end of the certification year. Such contracts have consistently been held by the Board to bar any action during the term of the contract on representation petitions, whether filed before or after the execution of the contract. io By such rulings the Board encouraged employers and certified unions to execute contracts extending beyond the certification year, thereby effectuating the policy of the Act to stabilize labor relations. However, the decision of the majority in the instant case is bound to have an opposite effect. Employers who would normally enter into contracts with recently certified unions for 1 year or longer, will be encouraged, if they have evidence of substantial defections from the union, to adopt a procrustean policy of insisting on adjusting the term of the contract to the life of the certification. A premium will thereby be placed on dilatory tactics in bargaining; for, the longer the period of negotiation, the shorter the term of the contract. u Newly certified unions will be under pressure to accept the Employer's first contract proposal, however unsatisfactory, lest they get only a short-term contract or no contract at all. Moreover, the decision of the majority will nullify the salutary effect of numerous Board decisions finding that, 9Celanese Corporation of America, 95 NLRB 664. 10 Where the petition is filed before the execution of the contract, it would be barred because it would perforce have been filed during the certification year, a period during which the certified union is protected from rival claims. See De Vry Corporation, 73 NLRB 1145; Centr-O-Cast & Engineering Co., 100 NLRB 1507. Where filed during the term of the contract, the petition would be barred to the extent required by the Board 's familiar "con- tract- bar" rules. ii See L. G. Everist, Inc., 103 NLRB 308, where Members Houston and Murdock joined me in finding that the respondent 's refusal to sign an agreement because its term extended beyond the certification year was evidence of bad faith in bargaining . It was there stated that any other view would "encourage recalcitrant employers to engage in dilatory tactics in reaching final agreement in order to reduce the term of the contract to a fraction of the certification year." 852 DECISIONS OF NATIONAL LABOR RELATIONS BOARD notwithstanding the union ' s loss of majority status, an em- ployer's refusal to bargain for a contract which of necessity would have extended beyond the certification year violated Section 8 ( a) (5) of the Act 12 In all these cases the Board issued its usual bargaining order , which, without limitation, required the employer to bargain with the certified union and embody any understanding reached in written agreement. Em- ployers, who in the future are faced with a bargaining request during the waning months of a certification year by a union whose majority status they have reason to doubt , will be more astute than the employers in the cases last cited . Instead of categorically refusing to bargain , they will achieve the same result without incurring any risk of violating the Act by agreeing to bargain only for a contract of a few weeks ' duration. For all these reasons , I would find that the insistence of the Respondent in the instant case, as a condition of executing any contract , that its initial contract terminate with the certi- fication year is per se violative of Section 8 (a) (5) of the Act." In this view of the case, it is not necessary to decide whether the Respondent in addition violated Section 8 (a) (5) of the Act by refusing , in December 1951, to bargain for a second contract to take effect after the end of the certification year. 12 The Belden Brick Co., 83 NLRB 465 (refusal to bargain for second contract 7 weeks before certification year expired ); The Mengel Company, 80 NLRB 705 (refusal to bargain for second contract during the latter part of certification year ); Tennessee Egg Company, 93 NLRB 846, 849, enfd. 201 F . 2d 370 (C. A. 6) (refusal to bargain for second contract 6 weeks before end of certification year ); Globe Automatic Sprinkler , 95 NLRB 253, enf denied 199 F. 2d 64 (C. A. 3) (refusal to bargain for initial contract during last month of certification year). igln so holding, I do not mean to imply that an employer 's insistence for economic, or other legitimate, reasons upon a short-term initial contract with a certified union would violate the Act. The vice of the Respondent 's conduct here is that the only reason for its position was the Union 's alleged loss of majority. Intermediate Report and Recommended Order STATEMENT OF THE CASE The complaint herein dated June 6, 1952 , alleges that the Respondent has engaged in unfair labor practices affecting commerce within the meaning of Section 8 (a) (5) and (1) and Section 2 (6) and ( 7) of the National Labor Relations Act, as amended , 61 Stat. 136, by in substance refusing to bargain on July 1. 1951 , and thereafter with United Paper Workers of America, CIO, the certified and Charging Union herein. The Respondent 's answer admits the factual allegations in the complaint regarding its busi- ness operations , concedes that it is engaged in commerce within the meaning of the Act, but denies that it has engaged in the unfair labor practices alleged. The answer further avers , in substance, by way of affirmative defenses that: (1) Local No. 686 of the Charging Union (the local with which the employees are allegedly affiliated) has failed to comply with the filing requirements of Section 9 (f). (g), and (h) of the Act; i and (2) the amended charge upon which the complaint is based will not support the issuance of the within complaint, at least in respect to certain allegations , because the said amended charge i By letter dated July 14, 1952, the Regional Director , among other things stated: This office has no record as to the compliance of Local No 686 with the filing requirements of the Act . We have been administratively advised that Local No. 686 is merely a numerical designation reserved for the establishment of such a local, but that it has no officers, bylaws, or other attributes of a functioning labor organization. THE HINDE & DAUCH PAPER COMPANY 853 relates to matters which allegedly occurred more than 6 months before the filing of the said charge.2 Additionally, the Respondent filed three preliminary motions with its complaint: (1) A motion for a bill of particulars; (2) a motion to dismiss the complaint because Local No. 686 of the Charging Union has failed to comply with the filing requirements of Section 9 (f), (g), and (h) of the Act; 5 and (3) a motion to dismiss the allegations in the complaint relating to matters alleged to have occurred more than 6 months prior to May 28, 1952, the date of filing of an amended charge. The motions were assigned to Trial Examiner Leff for consideration and ruling before the hearing. He denied the motion for a bill of particulars for lack of specificity in respect to the information desired. He denied the motion to dismiss based on the ground that Local No. 686 had failed to comply with the filing requirements of Section 9 (f), (g), and (h) of the Act with- out prejudice to the offer of proof at the hearing regarding the status of the said local as a labor organization. He denied the motion to dismiss the allegations based on averments in- cluded in the amended charge for the reason that the complaint could issue on the basis of the original charge and cited Cathey Lumber Company, 86 NLRB 157, and Ferro Stamping and Manufacturing Co., 93 NLRB 1459, in support of this ruling. The Respondent also made application for and received certain subpenas duces tecum be- fore the hearing for the apparent purpose among other things of seeking to adduce evidence regarding compliance by the national Charging Union and its local, No. 686, with the filing re- quirements of Section 9 (f), (g), and (h) of the Act. On July 25, 1952, counsel for the General Counsel and the Regional Director for the Fifth Region filed a petition to revoke such subpenas directed to the General Counsel and the said Regional Director for the asserted reason that questions concerning compliance with the above- mentioned filing requirements are matters for administrative determination and there- fore not litigable at a Board hearing. The petition to revoke the subpenas directed to the General Counsel and Regional Director was granted by Mr. Leff. Pursuant to notice, a hearing was held before me at Richmond, Virginia, on August 4, 5. 6, and 7, 1952. The GeneralCounsel and theRespondent each participated in the hearing and were offered opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues. At the opening of the hearing counsel renewed his motion for a bill of particulars The undersigned ordered the General Counsel tomakeapreliminary statement outlining the nature of his case, whereupon the Respondent moved for a continuance for further preparation. The motion for a continuance was denied without prejudice to renewal at the close of the General Counsel's presentation, at which time the undersigned granted a continuance of 1 day to which the Respondent's counsel objected on the grounds it was insufficient to permit further prepara- tion of his case but he then proceeded to present his defense forthwith. 4 Also, at the opening of the hearing counsel for Respondent moved to set aside Trial Ex- aminer Leffs order revoking the subpenas directed to the General Counsel and the Regional Director on the ground, among others, set forth in his answer opposing the petition to revoke, that the petition to revoke was filed before the said subpenas were served. 5 In my opinion the petition to revoke the said subpenas was improvidently filed and Mr. Lefts order revoking 2 The original charge filed on January 2, 1952 , alleges a refusal to bargain on and after December 1, 1951. The amended charge filed on May 28, 1952, avers a refusal to bargain on and after July 1, 1951. The complaint alleges refusals to bargain after July 1, 1951. The fact that the charge alleges violations which occurred partially prior to the 6-month period preceding the filing and service of the charge does not vitiate the complaint within the meaning of Section 10 (b) of the Act. See, Lloyd A. Fry Roofing Co., 85 NLRB 1222, 1228. S As previously noted in footnote 1, above, the Regional Director in effect certified that there was no record of compliance by Local No. 686 and further stated in substance that he had administratively determined that it was not functioning as an established labor organization and therefore not required to comply with the filing requirements. 4 The principal factual issue involved concerned only a refusal to bargain with the Union. The Respondent's industrial relations director who participated at all bargaining conferences on behalf of the Respondent was present during the presentation of the case-in-chief by the General Counsel . Therefore in my opinion there was no substantial ground for requiring a more lengthy continuance. 5 The record shows that the subpenas were not served until July 28, 1952, and that the amended petition to revoke was filed and served by mail on July 25, 1952. 283230 0 - 54 - 55 854 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the said subpenas was reversed.6 However , later in the hearing the undersigned granted motions to quash the subpenas served on the General Counsel , the secretary- treasurer of the Charging Union, and three of its national representatives for the reason that the evidence sought to adduce went to matters of compliance with the filing requirements of section 9 (f), (g), and (h) of the Act and was therefore not litigable at a Board hearing . 7 At the hearing I also granted a petition to revoke a subpena duces tecum seeking compliance information served on Maurice Tobm, the Secretary of Labor for the United States , which petition to re- voke had been duly filed on his behalf by counsel for Secretary Tobin. Because the Regional Director had certified in effect that the purported Local No 686 had never been in compliance I ruled over objections from the General Counsel that evidence would be received tending to show its status and functioning as a labor organization. At the conclusion of the hearing the General Counsel presented oral argument . He also moved to conform the pleadings to the proof in respect to formal matters , which motion is hereby granted. The Respondent was granted 20 days in which to file a brief. The time was later extended to October 8, 1952, and his brief has been duly received. 8 Upon the entire record in the case, and from my observation of the witnesses , I make the following: FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT Hinde & Dauch Paper Company , an Ohio corporation , with its principal office and place of business at Sandusky , Ohio, operates plants in several States of the United States, one of which, and the only one involved in the instant case , is at Richmond , Virginia. At the Richmond plant the Respondent engaged in the manufacture and sale of shipping boxes 'In connection with these operations the Respondent annually purchases goods, materials, equipment , and supplies of a value in excess of $100,000 , of which over 50 percent represents shipments received from points outside the Commonwealth of Virginia . During a similar period it manufactures finished products of a value in excess of $100,000, of which approxi- mately 50 percent is represented by shipments to points outside the Commonwealth of Virginia. The Respondent admits and I find that it is engaged in commerce within the meaning of the Act. . II. THE LABOR ORGANIZATION INVOLVED United Paper Workers of America, CIO, is a labor organization admitting to membership employees of the Respondent. 6 It is a fair inference and the undersigned concludes and finds that Trial Examiner Leff reasonably assumed that a petition to revoke subpenas would not issue until service of the subpenas had been made , and that Mr. Leff had not received the answer of the Respondent in opposition to the petition before ruling on the matter. 7N. L. R . B. v. Greensboro Coca Cola Bottling Company , 180 F . 2d 840 (C. A. 4); N. L. R. B. v. Red Rock Co., 187 F . 2d 76 (C. A. 5). SOn October 17, 1952, the parties filed a written stipulation with the undersigned to correct numerous errors in the reporter 's transcript. Noisy building construction operations in close proximity to the place of hearing were carried on continuously during the hearing making it almost impossible at times to hear the testimony of witnesses , arguments by counsel, and rulings of the Trial Examiner , thus accounting for the errors for the reporter was a competent reporter , who in other circumstances would have delivered an entirely accurate record. In view of this explanation, the undersigned has not corrected apparent ambiguities and errors in his rulings appearing in the record, because on the whole the parties were not misled by them. It is hereby ordered that the record be corrected in accordance with the said stipulation, two copies of which have been physically entered in the record and marked Trial Examiner's Exhibit No. 1. THE HINDE & DAUCH PAPER COMPANY 855 III. FINDINGS AND CONCLUSIONS RELATING TO THE ALLEGED UNFAIR LABOR PRACTICES A. Sequence of material events 1. Background of labor relations According to the credited and undenied testimony of D. C. Valentine, the Respondent's di- rector of industrial relations, the Respondent operates 17 plants in various States of the United States, 15 of which have been organized by labor unions ; that 9 of these organized plants, in- cluding the Richmond plant , were organized by the Charging Union herein; and that although the Respondent has been dealing with labor unions since 1937 , it never has been found guilty of committing any unfair labor practices. 2. The organizational activities at the Richmond plant The parties are in agreement that the Union commenced an organizational campaign at the plant prior to December 1950, that a stipulated consent election was conducted by a Board agent on December 14, 1950, 9 and that on January 2, 1951, the Board certified the United Paper Workers of America, CIO, the Charging Union herein, as exclusive representative for the employees in the unit described as follows: All employees at the Richmond , Virginia plant of the Hinde & Dauch Paper Company, ex- cluding office and clerical employees , store clerks, guards, watchmen, foremen and supervisors as defined in the Act. Following the certification , and on some day before January 10 , 1951, according to the credited and undenied testimony of Jonathan Orcutt, Respondent 's production manager, Robert Turner, an international representative of the Union , passed out handbills at the plant an- nouncing that a meeting would be held on January 10, 1951, to elect temporary officers for a local union comprised of employees at the Richmond , Virginia, plant and also to select a committee to assist "your" union representatives in negotiating a collective -bargaining con- tract with the Respondent. to The record fails to show whether the proposed meeting to or- ganize the proposed local was ever held, but Frank Grasso , secretary- treasurer of the parent union, and Thomas Linn, the international representative currently in charge of the Union's affairs in the area, each testified without substantial contradiction that no local has been formed among the Respondent 's employees , and that no charter has ever been issued to such an organization. The record also shows that no employee affiliates of the parent organization participated in any of the bargaining negotiations subsequently held or participated in settling grievances. 3. The bargaining negotiations On January 10, 1951, Turner. currently the international representative of the Union in charge of the Hinde & Dauch matter, by letter dated January 10, 1951. requested the Re- spdndent to set a date for the commencement of negotiations on some day after February 1, 1951. The Respondent replied to Turner's letter on January 17 and requested Turner to sug- gest a date for the meeting , whereupon Turner on February 8 suggested the date of February 19, 1952, for the first proposed bargaining meeting and in the same letter requested the Re- spondent to address all further communications of union concern to Thomas Linn, another international representative of the Union. tt On February 12 the Respondent notified Linn that the date of February 19 would be satisfactory and also requested Linn to name the em- ployee representatives who would participate in the meeting in order that the Respondent could fix a time for the meeting which would least interfere with plant operations . The pro- posed meeting for February 19 was never held . On that day, Linn by letter asserted that Re- 9The tally of ballots cast shows that there were approximately 81 eligible voters in the bargaining unit, that 2 void ballots were cast, and that 41 votes were cast for the Union and 40 against the Union. ioOrcutt credibly testified without contradiction that Turner had given Orcutt one of these handbills on this occasion. Turner was not called to testify at the hearing. 11 Shortly after this time, Turner was transferred to work for the Union in another area and Linn thereafter functioned as the Union's spokesman at substantially all bargaining meetings held in the future. 856 DECISIONS Of NATIONAL LABOR RELATIONS BOARD spondent's request for the names of employee-members on a bargaining committee was con- trary to law and requested that the parties meet on March 13.12 This date was unsatisfactory to the Respondent who telegraphed Linn a request that the date be advanced to February 28. This last mentioned date was unsatisfactory to the Union , whereupon the Respondent suggested and Linn agreed that the parties meet for the first bargaining conference on March 15, 1951, nearly 21 months after certification. is At the first meeting on March 15. 1951, the Respondent was represented by Valentine, its industrial relations director , and Jonathan Orcutt, the plant production manager Linn and Caesar Guazzo , an attorney for the parent union, attended it on behalf of the Union. The parties are in agreement that little of consequence happened at the meeting , and that after Linn handed Valentine a copy of a proposed collective-bargaining agreement for the plant,14 which Valentine agreed to consider, the meeting ended with an understanding that they would meet for further negotiations on April 3, 1951 The April 3 meeting lasted about 11 hours . Valentine and Orcutt were present to represent the Company and Linn and Scott, area director for the Union, represented the Union. At this and all other meetings Valentine acted as spokesman for the Company and Linn as spokesman for the Union. No employee affiliated with the Union attended this or any other bargaining meeting thereafter held . The principal topic for discussion at the meeting was wages and there is no disagreement that Valentine asserted in substance that the Company asserted that it could grant no wage increases presently because it had earlier effectuated wage increases before the current wage freeze was effective , which increases exceeded by 6 percent any in- creases permissible under the General Wage Regulations of the Federal Government. The meeting ended with an agreement to meet again on April 18. Meanwhile, before the April 18 meeting was held, J. E. Hanes, a machine operator in the plant, circulated a petition among the employees in the bargaining unit prior to or about April 1, 1951, which in substance asserted that the signers did not wish to be represented by the Union. This petition was signed by 48 employees in the unit. According to Hanes' further credited and uncontroverted testimony he mailed the petition to the Board's Regional Office at Baltimore, Maryland, early in April, that on or about April 9, 1951, he wrote a letter to the said Board's office calling attention to the submission of the petition and also stating that no reply had been received. On April 10, the Regional Director by letter acknowledged receiving the petition, but explained that it did not appear who had sponsored it and also because no return address had been furnished , no reply had been sent, and that because the Union had been certified as majority representation on January 2, 1951, a petition for decertification could not be processed before January 2, 1952. Hanes further credibly testified without contradiction that he initiated the drafting and circulation of the petition among the employees , that he had never discussed the matter with any supervisor at the plant before engaging in these activities , that soon after he had mailed the various documents mentioned above he handed copies of them to Plant Production Manager Orcutt on occasions when the latter passed Hanes' working station at the plant, and that he and Orcutt never entered into a discussion concerning them at the time because there was too much noise in the plant to permit conversation and for the further reason that Hanes' job required constant attention of the machine he was operating . Orcutt corroborated Hanes' above version and testified that he, Orcutt, mailed the various documents that Hanes handed to him to Valentine soon after he, Orcutt, had received them. The complaint does not allege and the record as a whole fails to show convincingly that the Respondent engaged in any conduct constituting independent acts of interference, restraint, or coercion with the right of employees to organize freely. Consequently, the above testimony by Hanes and Orcutt regarding the sponsorship and circulation of the above -named petition is credited and found to be true. it Valentine credibly testified without contradiction that employee committee members sat in bargaining conferences with this same Union 's representatives at other plants of the Respondent and that there was nothing unusual about the Respondent's request for such information. is it will be noted that the delay in beginning negotiations must be attributed to the Union and was primarily due to the changed assignments of union representatives in the area, for it appears that the Respondent was willing to meet at any time on reasonable notice. 1a The formal introductory paragraph of this proposed agreement reads as follows: This agreement, entered into this day of 1951 between the Hinde and Dauch Paper Company, an Ohio Corporation of Richmond, Virginia, hereinafter called the Company and the United Paper Workers of America, CIO, on behalf of its affiliated Local Union No. , hereinafter called the Union. THE HINDE & DAUCH PAPER COMPANY 857 After Valentine received the so-called Hanes' decertification petition and the letters sent to or received from the Regional Director , the Respondent sent the following letter dated April 13, 1951, to Linn: We have been advised by our Richmond employees that a majority of them do not want the United Paperworkers of America--CIO to represent them as their bargaining Agent It is our desire to obtain a clarificationon this matter , and, therefore, we are request- ing an opinion from our attorneys In view of this development we wish to postpone our scheduled meeting for next Wednesday , April 18, 1951. On April 19, Mr. Linn telegraphed Respondent: Unless the Company agrees to resume negotiations immediately , we will interpret this as a refusal to bargain on the part of the Company . Will appreciate an immediate reply as to your position. On April 20, the Company wrote Mr. Linn that its letter of April 13 explained its position. Thereafter, on April 25, the Company asked Linn to advise if he could meet on May 9, and Linn telegraphed his acceptance. Meanwhile, on May 4, the Company wrote its employees as follows: TO OUR EMPLOYEES: A few days ago your Company was advised by some of the employees that a petition, which had been signed by 48 out of the 83 employees presently in the bargaining unit, had been sent to the National Labor Relations Board stating that they no longer wished to be represented by the United Paperworkers of America, CIO, and wanted to know what could be done about it. We were advised that the National Labor Relations Board replied that since the United Paperworkers of America. CIO won the election, they were certified as the bargaining agent for one year and that the Board could not consider the petition at this time even though a majority of the employees had signified they no longer wanted this union to represent them. Upon receiving the above information, your Company made an investigation of this ruling by the National Labor Relations Board and believes it to be correct; that is, even though a majority of our employees no longer wish to have the United Paperworkers of America, CIO, represent them, there is nothing that can be done about the matter at this time. Therefore, your Company must bargain with this union as your representa- tive It is a situation over which your Company has no control and if it refused to bar- gain with the UPA-CIO it would probably be ordered to do so by the National Labor Relations Board. Those of you who do not wish to join the Union need not do so; nor is it necessary for you to pay any dues or fees whatever. Those who wish to become members of the Union may do so; the choice is a matter for you as individuals. So far as the union is concerned, recent decisions indicate that even if you do not join now but decide to join at a later date, you cannot be discriminated against with respect to admission, or in the amount of dues or fees. So far as the Company is concerned, it is not necessary to join the Union or pay dues in order to work here. The May 9 meeting previously arranged for was duly held. Valentine and Orcutt attended as representatives of the Respondent while Linn and "Ted" du Cuennois, assistant State director for the CIO, were present as union representatives . At this meeting the Respondent submitted a counterproposal in the form of a complete draft of a proposed agreement. The opening paragraph of the proposed agreement states, among other things , that the agreement is between The Hinde & Dauch Paper Company, an Ohio corporation of Richmond, Virginia, hereinafter called the Company, and United Paper Workers of America, CIO, on behalf of its affiliated Local Union No --, 15 hereinafter called the Union. The termination i5Later on June 5, 1951, according to the credited and uncontradicted testimony of Valen- tine, Linn informed Valentine that Local No 686 would be the number of the Hinde & Dauch local after it was established. 858 DECISIONS OF NATIONAL LABOR RELATIONS BOARD clause in the same proposal reads. "All the terms set forth in this agreement shall be effective from 1951 to January 2, 1952." The meeting lasted about one and a half hours but according to Valentine 's credited and undenied testimony he offered to meet every day during the balance of this week, and to continue the negotiations thereafter until an agreement was reached . The Union , however, pleaded pressure of other business and the meeting ended without any concrete results with an understanding that negotiations would resume on May 22 Valentine ' s plane was grounded due to bad weather on the 22nd , whereupon Valentine called du Cuennois and suggested a meeting on the 23rd, but Linn was unavailable to meet on that day and the date of May 28 was mutually agreed upon. On May 28, Valentine and Orcutt were present for the Respondent and Linn and du Cuennois for the Union. The various articles were each discussed and the parties were in agreement on some but unable to agree on the other provisions . The parties are in agreement that Linn objected to the termination date of January 2, 1952, and that the Respondent was adamant in insisting that it would sign no agreement for a longer term. Pursuant to agreement , the parties met again on June 5 and 6, 1951 . At these meetings many items previously in dispute were agreed on such as rates of pay governing in case of transfers and promotions , overtime rates for Saturday and Sunday work, shift differentials, leave of absence, and adjustment of grievances This meeting on June 6 terminated with a statement by Linn that he would request the services of the Federal Mediation and Con- ciliation Service for the next meeting, but insofar as the record shows this agency did not participate in any of the later negotiations. On June 21, Valentine, Orcutt, and B. G. McAbery, an assistant to Valentine in the in- dustrial relations department , met as Respondent' s representatives with Frank Grasso, secretary-treasurer of the Union, and Linn for another bargaining conference. The meeting was fruitless. According to Valentine's credited and undenied testimony, Grasso proposed that if the Company would agree to some form of union security and enter into a contract for a term of 1 year an agreement could be consummated on that same day, and that if the Respondent would not accede to a union-security provision the Union would retaliate by starting trouble at one of the Respondent's other plants. 16 The Respondent refused to agree to either of the Union ' s counterproposals and the negotiations were broken off with no under- standing that they would be resumed at a later date Subsequently, on August 31, 1951, the Respondent wrote to Linn and advised Linn that under the provision of the Revised General Wage Regulations of the Federal Government, dated August 17, 1951, it was permitted to grant a wage increase of 2 cents an hour, and that it would grant the increase effective as ofSeptember4 if approved by Linn on or before Septem- ber 8. No reply was made to this letter. Thereafter, on September 18, Linn requested a meeting to be held on September 25. The meeting was later held on October 3, by mutual agreement . Meanwhile, the Respondent notified Linn by letter dated September 25, 1951, that it presently could grant a 3-cent an hour cost-of-living wage increase and would do so on Monday of the week in which the offer was accepted by the Union. At the bargaining meeting held on October 3, 1951, the parties agreed to enter into an agree- ment (received in evidence) terminating on January 2, 1952 In substance the terms were the same as those previously agreed upon by the negotiators on June 6 except that, in addition, the Respondent agreed to furnish bulletin board facilities to the Union, grant the 3-cent per hour cost-of-living increase permitted under the recent revision of the Federal wage regu- lations, and to prohibit foremen engaging in overtime work ordinarily performed by rank-and- file employees . This agreement was reduced to writing after the meeting and was signed by Harry E. Scott, area director of the Union, Thomas Linn, and T. D. du Cuennois, State director of the CIO, on behalf of the Union, the signed copy being handed to the Respondent on October 16, 1951. Following the signing of the contract, the Union thereafter on October 24, 1951, invited the plant employees to hold a meeting to formally organize a local . The record fails to show whether the proposed meeting was ever held, but according to the credited testimony i6 Grasso gave no testimony relating to what transpired at this meeting. But, he testified among other things that no local had been set up and chartered at the plant and his testimony in this respect was supported by that given by Linn. In view of the fact that there is no evidence that any local ever functioned as a labor organization at the plant this testimony of Grasso and Linn is credited. THE HINDE & DAUCH PAPER COMPANY 859 of Grasso , secretary-treasurer of the parent union, and Linn, as found above , no local had been formally established before the hearing herem.17 By letter dated October 25, 1952, the Respondent notified the Union that the contract recently signed would not be extended beyond January 2, 1952, but would meet with the Union regarding the matter if the latter desired. Subsequently , another meeting was arranged for and held on December 5, 1951. Meanwhile , although the record is somewhat confusing, Hanes , according to his credited testimony , circulated a second so-called decertification petition among the employees in the unit at the plant in November 1951 which, according to Hanes , was signed by 56 employees and later , sometime in January 1952, was given to Orcutt. The December 5, 1951, meeting was attended by Linn on behalf of the Union and by Valentine, Orcutt, and McAbery for the Respondent . The parties are in substantial agreement that at this meeting Valentine stated in substance that the Respondent had been informed that the Union no longer represented a majority of the employees , that it would not bargain con- cerning a new contract for a term beginning January 2, 1952, until it was assured that the Union represented a majority of the employees but would bargain on any matters covered by the existing agreement for the balance of the term. 18 Thereafter , on December 7, 1951, Linn sent a written request to the Respondent to begin negotiations for a new agreement . The Respondent refused , and on January 2, 1952, the Union filed its original charge alleging a refusal to bargain since December 1, 1951. Valentine further testified that the Respondent intended to file a petition for certification of representatives after January 2, 1952, but withheld filing it because it was informed by counsel that such a petition would not be processed while an unfair labor practice charge was pending B. Conclusions In effect, the issues are: (1) Whether the Respondent refused to bargain with the Union in good faith as contended by the General Counsel; and (2) whether (as contended by the Re- spondent) the Respondent was denied due process by the rulings of the undersigned quashing subpenas served by the Respondent on the General Counsel, the Regional Director for the Fifth Region , the Secretary of Labor for the United States, and certain officers of the Charg- ing Union for the purpose of adducing evidence regarding compliance by the Union with Sec- tion 9 (f), (g), and (h) of the Act. Regarding the alleged refusal to bargain , I am constrained to find that this allegation has not been sustained by a preponderance of the substantial and credible evidence in the record. The delay in consummating a collective -bargaining agreement before October 3, 1951, must be charged to the dilatory tactics of the Union. The delay in the earlier stages, after the Union was certified on January 2, 1951, as majority representative, was due to the changes of union representatives in the plant area, thus delaying the commencement of negotiations for nearly 21 months. The Respondent showed a willingness to meet and negotiate with the Union at all reasonable times and had the Union pressed for negotiations promptly follow- ing the certification it is entirely conceivable that it could have entered into an agreement substantially similar to the agreement signed in October 1951, many months before this agreement was executed , and that consequently many of the employees who, at the election, had designated the Union to represent them may not have become dissatisfied and withdrawn their support from the organization. 17 It will be noted, however, that the contract formally entered into states, in substance among other things , that the agreement was entered into between the Respondent "and its employees at the Richmond, Virginia, plant represented by Local No. 686 and the United Paperworkers of America. CIO, both called the Union." It is also noted that the constitution of the parent union section 8 (b) provides, among other things, that no international repre- sentatives shall have authority to sign a contract with any employer without obtaining the approval of the local union at a meeting called especially for that purpose. I$ Linn testified that as early as October 3, 1951, on the occasion when the parties had negotiated the existing contract he requested the Respondent to bargain for a renewal agree- ment and that at this time as on previous occasions the Respondent insisted the Union was not the majority representative and for this reason would not bargain. Valentine and McAbery deny raising any question of representation at meetings with the Union directly until Decem- ber 5. Under the circumstances, Linn's request to bargain for a new contract when the first agreement had just been signed would seem unusual and he credits the Respondent's witnesses ' testimony as the more credible and reliable. 860 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The record clearly shows that the Respondent had reasonable grounds for believing that the Union had lost its majority, but nevertheless after consulting counsel and learning that it was obligated to bargain at least for the balance of the year following certification it continued to bargain and thereafter signed a written agreement covering a period ending 1 year after the date of certification. Moreover, the record also shows that over a period of years this Respondent recognized its obligation to bargain with labor organizations and that many unions including the Charging Union herein were parties to contracts with the Respond- ent. The record further fails to show that the Respondent was responsible for the disaffec- tion expressed by a majority of its employees toward the Union herein. In view of the fact that the Respondent had reasonable grounds for believing that the Union had lost its majority representation in the certified unit , I am of the opinion that under all the circumstances shown herein, the Respondent was justified in refusing to bargain with the Union after the end of the year following its certification as bargaining representative, unless and until the question concerning the present status of the Union as majority repre-, sentative is resolved in favor of the organization. After all, the Act is primarily concerned with protecting the self-organizational rights of employees. 19 In respect to the second issue raised by the Respondent , I cannot agree that it was, in effect, denied due process by my rulings quashing the subpenas mentioned above. The obvious purpose for serving the subpenas duces tecum on the persons named above was clearly an attempt to litigate the question concerning compliance by the Union with the filing requirements of Section 9 (f), (g), and (h) of the Act. Under the Board's established policy approved by the courts this question of compliance may not be litigated at a Board hearing. 20 It is true, in view of the principles enunciated by the United States Supreme Court in U. S. v. Morgan, 304 U. S. 1, pertaining to the record upon which a decision is based following an administrative hearing, that the Respondent is entitled to more information than appears in the formal record of this case regarding compliance with the filing requirements of Sec- tion 9 (f), (g), and (h) of the Act by the Union. The record, however, fails to show that the Respondent attempted to obtain such information from the affidavit compliance office set up by the Board to furnish such information, but rather sought to consume much time at a formal Board hearing in litigating the issue of compliance. It must be considered that the Board operates under a limited budget and should the issue of compliance be litigated in all representation and complaint cases heard by Board agents it would impede and delay the hearing processes to a material degree resulting in the unnecessary expenditure of large sums of money by the Government and the parties. Since a means of securing such infor- mation is presently available to interested parties, such parties are not precluded from controverting the original conclusions reached by Board agents in respect to compliance be- fore the Board itself, thus affording the parties a fair hearing on the issue involved. Consequently, there is no question pending before me which, in my opinion, would warrant a finding that the Respondent was denied proper information concerning the compliance status of the Union. Upon the basis of all the foregoing and the entire record , I recommend that the complaint herein be dismissed. It is further recommended that unless on or before twenty (20) days from the date of this Intermediate Report and Recommended Order , the parties or either of them file exceptions thereto, the Board issue an order dismissing the complaint. 19 N. L. R. B. v. Globe Automatic Sprinkler Company, 199 F. 2d 64(C. A. 3). 20N. L. R. B. v. Greensboro Coca Cola Bottling Company, 180 F. 2d 840 (C. A. 4); N. L. R. B. v. Red Rock Co., 187 F. 2d 76 (C. A. 5). CRESCENT WHARF AND WAREHOUSE COMPANY AND ITS SUCCESSOR, WEST COAST TERMINALS CO., INC. and JAMES R. McLACHLAN. Case No. 21 -CA-1398. May 8, 1953 DECISION AND ORDER On January 8, 1953, Trial Examiner Wallace E. Royster issued his Intermediate Report in the above -entitled proceeding, finding that Respondent Crescent Wharf and Warehouse Com- 104 NLRB No. 106.