Truitt Manufacturing Co.

856 DECISIONS OF NATIONAL LABOR RELATIONS BOARD WE WILL make whole Edward J . Ivers, Jr., for any loss of pay and other incidents of the employment relationship suffered because of the discrimination against him. LOCAL 170, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS , WAREHOUSEMEN AND HELPERS OF AMERICA, AFL, Labor Organization. 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. TRIIITT MANUFACTURING Co. and SHOPMEN'S LOCAL No. 729, INTERNA- TIONAL ASSOCIATION OF BRIDGE, STRUCTURAL AND ORNAMENTAL IRONWORKERS OF AMERICA, A. F. L. Case No. 11-CA-670. November 15, 1954. Decision and Order On June 30, 1954, Trial Examiner John C. Fischer issued his Inter- mediate Report in the above-entitled proceeding, finding that the Re- spondent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the Intermediate Report I attached hereto. Thereafter, the Respondent filed exceptions to the Intermediate Report. The Board has reviewed the Trial Examiner's rulings made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Inter- mediate Report, the exceptions, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner except as modified herein. We agree with the Trial Examiner that the Respondent failed to bargain in good faith with respect to wages in violation of Section 8 (a) (5) of the Act. We do not, however, mean to imply, nor do we adopt the statement of the Trial Examiner,' that the Respondent's failure to substantiate its economic position as to wages obligates the Respondent to accede to the Union's wage demands. On the other hand, it is settled law, that when an employer seeks to justify the refusal of a wage increase upon an economic basis, as did the Re- spondent herein, good-faith bargaining under the Act requires that upon request the employer attempt to substantiate its economic posi- tion by reasonable proof .3 In the present case, we are satisfied that ' The Intermediate Report contains an obvious error which does not affect our conclu- sions herein Thus, in the paragraph entitled "The Remedy " the word "referred" was used instead of "refused." a The Trial Examiner stated in the second paragraph of section j of the Intermediate Report that "an employer cannot refuse a demanded wage increase on the grounds that such increase would put him out of a competitive position , even though he were paying the prevailing wage scale, unless he factually documents this conclusion." a N. L. It. B. v. Jacobs Manufacturing Company, 196 F. 2d 680 (C. A. 2), enfg. 94 NLRB 1214, 1221-2 110 NLRB No. 143. TRUITT MANUFACTURING CO. 857 the Respondent has failed to submit such reasonable proof." We shall, therefore, order that the Respondent bargain collectively with the Union. Order Upon the entire record in the case, and pursuant to Section 10 (c) of the National Labor Relations Apt, the National Labor Relations Board hereby orders that the Respondent, Truitt Manufacturing Co., Greensboro, North Carolina, its officers, agents, successors, and assigns, shall: 1. Cease and desist from : (a) Refusing to bargain collectively with Shopmen's Local No. 729, International Association of Bridge, Structural and Ornamental Iron- workers of America, A. F. L., as the exclusive representative of all the Respondent's production and maintenance employees at its Greens- boro, North Carolina, plant, including checkers, truckdrivers and lead- ermen, but excluding all guards, watchmen, the head shipping clerk and shop clerk, office clerical, professional employees, and supervisors as defined in the Act. (b) Interfering in any other manner with the efforts of Shopmen's Local No. 729, International Association of Bridge, Structural and Ornamental Ironworkers of America, A. F. L., to bargain collectively on behalf of the employees in the aforesaid bargaining unit. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Upon request bargain collectively with Shopmen's Local No. 729, International Association of Bridge, Structural and Ornamental Ironworkers of America, A. F. L., as the exclusive representative of all its employees in the aforesaid bargaining unit, with respect to rates of pay, wages, hours of employment, or other terms or conditions of employment. (b) Upon request furnish Shopmen's Local 729, International As- sociation of Bridge, Structural and Ornamental Ironworkers of Amer- ica, A. F. L., with such statistical and other information as will sub- stantiate the Respondent's position of its economic inability to pay the requested wage increase and will enable the Shopmen's Local No. 729, International Association of Bridge, Structural and Ornamental Iron- workers of America, A. F. L., to discharge its functions as the statutory representative of the employees in the unit found appropriate by the Board. (c) Post at his plant at Greensboro, North Carolina, copies of the notice attached hereto and marked "Appendix A." 5 Copies of said .'Cf. West Fork Cut Glass Company, 90 NLRB 944, 952-3; McLean Arkansas Lumber Company, Inc, 109 NLRB 1022 8 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 Decree of the United States Court of Appeals , Enforcing an Order" 858 DECISIONS OF NATIONAL LABOR RELATIONS BOARD notice to be furnished by the Regional Director for the Eleventh Re- gion shall, after being duly signed by the Respondent, be posted by the Respondent immediately upon receipt thereof, and maintained by it for sixty (60) consecutive days thereafter in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that said notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director for the Eleventh Region in writ- ing, within ten (10) days from the date of this Order, what steps the Respondent has taken to comply herewith. 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, we hereby notify our employees that : WE WILL NOT refuse to bargain collectively with Shopmen's Lo- cal No. 729, International Association of Bridge, Structural and Ornamental Ironworkers of America, A. F. L., as the exclusive representative of all our employees in the appropriate unit described below. WE WILL NOT in any other manner interfere with the efforts of the above-named Union to bargain collectively on behalf of the employees in the unit described below. WE WILL upon request bargain collectively with the above- named Union as the exclusive representative of all our employees in the unit described below with respect to rates of pay, wages, hours of employment, or other terms or conditions of employment. WE WILL upon request furnish the above-named Union with such statistical and other information as will substantiate our po- sition of economic inability to pay the requested wage increase. The bargaining unit is : All production and maintenance employees at our Greens- boro, North Carolina, plant, including checkers, truckdrivers, and leadermen, but excluding all guards, watchmen, the head shipping clerk, and shop clerk, office clerical, professional em- ployees, and supervisors as defined in the Act. TRUITT MANUFACTURING COMPANY, Employer. Dated---------------- By------------------------------------- (Representative ) (Title) This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material. TRUITT MANUFACTURING CO. Intermediate Report and Recommended Order STATEMENT OF THE CASE 859 Upon a charge filed by Shopmen's Local No. 729, International Association of Bridge, Structural and Ornamental Ironworkers of America, A. F. L., a labor organi- zation herein referred to as the Union, the General Counsel of the National Labor Relations Board 1 by the Regional Director for the Eleventh Region (Winston-Salem, North Carolina), on January 30, 1954, issued a complaint against Truitt Manufac- turing Co., herein referred to as the Respondent or the Company, alleging that the Respondent had engaged in and was engaging in unfair labor practices within the meaning of Section 8 (a) (1) and (5) and Section 2 (6) and (7) of the National Labor Relations Act, as amended, 61 Stat. 136, herein called the Act. Copies of the charge, complaint, and notice of hearing were served upon the other parties to the proceeding. With respect to unfair labor practices, the complaint alleges in substance that from on or about September 2, 1953, the Respondent refused, and at all times thereafter has continued to refuse, to bargain with the Union as the exclusive repre- sentative of all of its employees in an appropriate unit, and that since July 27, 1953, the Respondent has refused to grant the wage increases requested by the Union on the ground that it was financially unable to grant such increases. The Respondent, in its answer, admits certain jurisdictional allegations and the appropriateness of the unit as alleged in the complaint, but denies the commission of any unfair labor prac- tices, and affirmatively pleads to certain allegations in the complaint. During the hearing, the complaint was amended by stipulation between counsel for Respondent and counsel for General Counsel that on or about July 27, 1953, and at all times thereafter the Respondent refused to grant the wage increases requested by the Union. Pursuant to notice a hearing was held in Greensboro, North Carolina, on March 16, 1954, before the duly designated Trial Examiner. The General Counsel and the Respondent were represented by counsel' and the Union by its representatives. All parties were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues. The parties were given opportunity to present oral argument before the Trial Examiner and also to file briefs and proposed findings of fact and conclusions of law. Both counsel made oral arguments. A brief has been received from counsel for the Respondent and has been duly considered. On April 8, 1954, General Counsel moved that the Trial Examiner order that the transcript be corrected in certain particulars involving minor typographical errors. There being no objection such corrections are hereby ordered to be accomplished in the official transcript. Upon the record in the case, and upon observation of the demeanor of the wit- nesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The Respondent is a North Carolina corporation maintaining its principal place of business at Greensboro, North Carolina, engaged in the manufacture and sale of plate work, structural steel, and miscellaneous ironwork. During the year 1953, which is representative of all times material herein, Respondent manufactured and sold finished products valued in excess of $1,500,000, more than 50 percent of which, in value, was sold and shipped to customers outside the State of North Carolina. During the same period, the Respondent purchased raw materials, supplies, and equipment valued in excess of $750,000, more than 75 percent of which, in value, originated outside the State of North Carolina and was shipped in interstate com- merce to the Greensboro plant. Respondent concedes, and I find, that it has been engaged and is engaged in commerce within the meaning of the Act. H. THE LABOR ORGANIZATION INVOLVED Shopmen's Local No . 729, International Association of Bridge, Structural and Ornamental Ironworkers of America, A. F. L., is a labor organization within the meaning of the Act. 1 The term General Counsel, as used herein, includes the attorney representing the Gen- eral Counsel at the hearing, and the National Labor Relations Board is referred to as the Board. 860 DECISIONS OF NATIONAL LABOR RELATIONS BOARD III. THE UNFAIR LABOR PRACTICES The Bargaining Negotiations 1. The appropriate unit; representation by the Union of a majority in the appropriate unit It is admitted in the pleadings that all production and maintenance employees at the Greensboro plant, including checkers, truckdrivers, and leadermen, but exclud- ing all guards, watchmen, the head shipping clerk and shop clerk, office clerical, professional employees, and supervisors as defined in the Act, constitute a unit appro- priate for purposes of collective bargaining within the meaning of Section 9 (b) of the Act, as amended. It was further stipulated that at all times here relevant the Union represented a majority of the employees in the above appropriate unit. 2. The alleged refusal to bargain a. The background-the correspondence On October 27, 1950, in an election by secret ballot, conducted under the super- vision of the Regional Director of the Fifth Region of the National Labor Relations Board, a majority of the employees in the unit selected the Union under Section 9 (a) of the Act as their representative for the purposes of collective bargaining. By letter dated June 8, 1953, the Union requested the reopening of the union con- tract for wage negotiations. These negotiations began on August 4, and on Sep- tember 2 the Union wrote the Company that it had rejected a proposal of 2i -cents per hour increase stating: " . . . in the belief your Company can meet the Union's request of ten (10) cents per hour general increase . . . respectfully requests per- mission to have a certified public accountant examine such books, records, financial data, etc. to ascertain or substantiate the Company's position or claim of being un- able to meet the Union's proposal and/or counter proposals of a wage increase in excess of two and one-half cents (.021h) per hour." On September 4, 1953, R. D. Douglas, Jr., attorney for the Company, replied as follows: Truitt Manufacturing Company has received your letter of September 2nd, asking that all financial data, tax records, etc., of the Truitt Mfg. Co. be opened to the Union in order that the Union might determine whether the Company is in a financial position to pay what you refer to as "the Union's request of 10 cents per hour general increase." I have been authorized to state to you that the Company takes the position that confidential financial information concerning the affairs of this Company is not a matter of bargaining or discussing with the Union. The Company's position throughout the recent negotiations and in previous sessions with you and the Union, has been that the question of granting a wage increase concerns our competitive bidding for jobs to keep the plant operating. We have endeavored to point out to you that the average wage of Truitt Manufacturing Co. is already higher than the average wage of all our com- petitors in this area. We have stated many, many times that in bidding for contract work, our bids must be made on the basis of what the labor will cost to perform these jobs and that we simply cannot get the work if our labor costs used in our estimates are higher than those of our competitors. The Union committee has persistently ignored our comparative rates, has made no answer to our exhibits of how we compare with our competitors, and has continued to ask for higher pay, on the grounds that the employees need it, and that we are under the general average of the "Industry," which you apparently define as being all steel plants in the United States. We will be glad at any time to show you our books and records regarding the wages we pay to our employees whom you represent, although we think you have this information already. The Union, on September 14, replied to this letter as follows: We have for acknowledgement your letter of September 4, 1953, in reply to our letter of September 2, 1953, addressed to the Truitt Manufacturing Company. In our letter we pointed out that representatives of the Truitt Manufacturing Company, during lengthy negotiations, claimed the Company was financially unable to grant a general wage increase of ten (10 cents) per hour as proposed TRUITT MANUFACTURING CO. 861 by the Union and we requested that the Company submit its financial records to substantiate its position. In your letter of September 4th, you say that you have been authorized to state that the Company takes the position that confidential financial information concerning the Company's affairs is not a matter of bargaining or discussion with the Union. You also state that the Company has advised the Union's Committee that their present rates are higher than certain of its competitors. In addition, you offer to show the Company's record regarding wages that are now being paid the Company's employees. Please be advised that the Union's Committee is not unmindful of the fact that the metal fabricating industry is highly competitive. The Union's Com- mittee has also taken into consideration a statement made by the Company's, representatives to the effect that some of its competitors are presently paying wage rates as low or lower than the Company is paying its employees. It is the opinion of the Union's Committee that other of the Company's com- petitors are paying wages rates higher than those presently being paid by the Company and that these competitors are still operating and obtaining con- tracts on a profitable basis. The Union does not contend that the financial affairs of the Company are subject to collective bargaining. It does contend, however, that the Company should submit full and complete information with respect to its financial standing and profits during the past few years in order that the Committee, as well as the other members of the Union employed by the Company, can intelligently decide whether or not they should continue to press their request for a general increase of ten (10 cents) per hour. Such financial information is pertinent to collective bargaining. Failure on the part of the Company to furnish such information has the effect of erecting an insur- mountable barrier to a successful conclusion of the bargaining. We respectfully call to your attention a decision of the National Labor Re- lations Board in the matter of Southern Saddlery Company and Local No. 109, United Leather Workers International Union (AFL) Case No. 10-CA-636, July 21, 1950 (90 N. L. R. B. No. 176), (26 LRRM 1322). If the Company still contends that it cannot afford to grant the wage increase of ten (10 cents) per hour requested by the Union, we respectfully request that the Company submit full and complete information and evidence of its financial status to substantiate its claim, including bonafide evidence as to dividends paid' by the Company during the past ten (10) years and the breakdown of its manu- facturing costs. On September 28, the Union again wrote to the Company's counsel , Douglas, requesting favorable and prompt consideration of this letter of September 14, and received the following answer: I have your letter of September 14th and also your letter of September 28th. In both of these letters, you request that the Union be furnished with "full and complete information and evidence of its financial status, including bonafide evidence as to dividends paid by the company during the past ten years and the breakdown of its manufacturing costs." I have read very carefully your letter of September 14th, I am familiar with the NLRB decision in the Southern Saddlery case. The facts in this case are entirely different from the facts in the Truitt-Local 729 negotiations, we have at no time refused to negotiate with you concerning the wages and we are ready to meet with you or your committee at any time. I think it is unnecessary for me to repeat that our refusal to grant your demanded wage increase was based primarily on what such a raise would do to our competitive position in the industry in this area. The Truitt Company is willing to discuss with you at any time the problem of how our wages com- pare with those of our competition. However, the company repeats that the financial status of the company and the information which you have requested in both of your recent letters and a former one, is not pertinent to this dis- cussion and the company declines to give you such information. You have no legal right to such. I also wish to call your attention to another matter. It is my recollection that at our last negotiation session, you were asking for an increase of 5 cents per hour. Your recent letters refer to a 10 cents an hour increase. I do not know whether this is a mistake in transcribing your letters, or whether you have intentionally increased your demand, after we put into effect the 21/2 cents per hour raise which the company offered. 862 DECISIONS OF NATIONAL LABOR RELATIONS BOARD b. The strike As recited, negotiations began on August 4 and at that meeting the Company offered a 21h-cent an hour increase , stating that that would be all it would be able to give at that time and remain in a competitive position. The next meeting was on August 7 when Union Representative Head advised the Company that the men had turned down this increase. As a result of this impasse a strike occurred on August 10, when the men stayed out a week in support of their demand for a wage increase. The next meeting was held, during the strike, on August 12, but the Company remained firm in its offer of a 21-cent per hour increase , and the men returned to work 5 days later. c. The Respondent's contentions Answering the allegations contained in the complaint , the Respondent admits that on or about September 2, 1953 , the Union requested the Respondent to furnish the Union with books, records, and financial data, but it is specifically denied that such information was demanded for the purpose of substantiating the Respondent's posi- tion that it was financially unable to grant the Union 's request for wage increases, as the Respondent had not denied wage increases on such grounds. In his brief Respondent Counsel Douglas contends that "an employer can refuse a demanded wage increase on the grounds that such increase would put him out of a competitive position with other employers in the same business, without being required to disclose his financial books and records to the representative of the employees." Counsel concedes that there is considerable law to the effect that a refusal to grant increases because of inability to pay, carries with it the duty to prove such inability if proof is requested . He argues : "But Respondent contends that refusal on competitive grounds, while admittedly injecting an economic factor into bargaining, has never been held by the Board or any Court, to require disclosure of all financial records. If this were the law, then all friendly bargaining would cease. No employer would dare explain how increased labor costs would make him price his product out of the market ; how competitors would outsell him. For unless he stood ready to open all his confidential financial data to the Union, he could say nothing but "No" to wage demands, and could give no fair, honest reasons. Respondent points out that the competitive approach to the question of wage increases is discussed in nearly every collective bargaining session in the United States, and neither company nor union has ever dreamed that this would lead to disclosure of all financial data." [ Emphasis supplied.] d. General Counsel's contentions General Counsel contends that the Respondent violated Section 8 (a) (5) by failing to substantiate its position that it cannot grant increases requested by the Union because of business conditions . In this connection he cites the case of Jacobs Manufacturing Company, 94 NLRB 1214, enfd. 196 F. 2d 680 (C. A. 2). This case holds that the respondent upon refusing a union's request for a raise in wages on the grounds of business conditions must produce whatever relevant information it has to indicate whether it can or cannot afford to comply with the union's demand. This is required by Section 8 (a) (5) and the good -faith requirement of Section 8 (d) is not satisfied, as the court said, by the bare assertion of a conclusion made upon facts undisclosed and unavailable to the union , which was not acceptable without a presentatidn of sufficient underlying facts to show at least that the conclusion was reached in good faith . The rule, counsel argued, requires whatever relevant infor- mation the respondent has to indicate whether it can or cannot afford to comply with the union's demand. Counsel cited that the court in that case went along with the rationale that the Board had enunciated in Southern Saddlery Company, 90 NLRB 1205, in which the Board said that the validity of the Respondent 's position in a case such as this depended upon the existence of facts peculiarly within its own knowledge , and the respondent is required to furnish the union with sufficient information to enable the latter to understand and discuss intelligently the issues raised by the respondent in opposition to the union 's demands. In the course of refusing to grant the wage increases under discussion here, counsel charged that Respondent made a number of statements of position as to why it could not grant the wage increases requested by the Union , citing President Truitt in his statement that Respondent could not afford to grant the increase because it was under capitalized . He quoted Counsel Douglas as stating that the margin of profit in regard to sales and costs is low and as also saying at the November bar- gaining meeting the Company simply could not get work if our labor costs used in TRUITT MANUFACTURING CO. 863 our estimates are higher than those of our competitors . He contended that the Respondent steadfastly refused to give the Union, in spite of its repeated requests, any accounting or records that would substantiate its assertion . Counsel contended that it is an element of bad -faith bargaining, and shows lack of give and take in bargaining negotiations for Respondent to have prolonged this wage reopening and refused to satisfy the union membership with the production of any relevant docu- ments substantiating its contention that it is unable to grant any wage raises. He contended that the means of preventing 6 or 7 months of fruitless negotiations, lay within the hands of the Respondent to persuade the union membership that the Respondent could not afford to give the requested wage increase thus constituting bad-faith bargaining. e. Two questions There are two questions involved in this case. The first is whether the Company pleaded financial inability as the reason for rejecting the Union's wage demand and having done so may be required to produce his books and records as contended by General Counsel ; and the second is whether an employer can refuse a demanded wage increase on the grounds that such increase would put him out of a "competi- tive position," and then substantiate this plea by demonstrating that he was paying the going area wage scale as contended by Respondent. Under the Act, both the Company, as the Employer of the employees in the ap- propriate unit set forth above, and the Union, as the representative of those em- ployees, were under a duty to bargain collectively with each other (Section 8 (a) (5); 8 (b) (3 )). This obligation includes "the performance of the mutual obli- gation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment , or the negotiation of an agreement , or any question arising thereunder , and the execution of a written contract incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession ...." (Section 8 (d).) f. Testimony of General Counsel's witnesses Julian F. Head, special representative for the International Union, testified that he engaged in bargaining negotiations with Truitt Manufacturing Co. on behalf of its employees after July 27, 1953. On August 1 the employees' shop committee, with himself as the representative , met with the Company to discuss a wage issue. He stated that Mr. Douglas, attorney for the Company, was acting as spokesman at the meeting and "asked us what did we have in mind and I told him that the men were wanting 10 cents or better or 10 cents at the minimum ." In response to this, the Company, by Mr. Douglas, stated that they were paying as much or more as any of their competitors and they offered the Union a 21/2-cent an hour increase, saying that that would be all that they would be able to give at this time. He stated: "they said that that would be almost impossible to do , they stood firm on their position, that since they were paying as much or paying more than competitors, that if they would give more than their offer, well, it would put them out of business or put out of competition of getting business with other competitors ." They met again on August 7: "I told the Company that the men had turned the 21/2 cents down for they felt like they should have more, and the Company took the same position that day as they did in the first meeting ." As a result the men went on strike on August 10 and stayed out a week in support of their request for a substantial wage increase. They met next on August 12 and the officials of the Company again contended that 21/2 cents was all it could give. It appears that no more meetings between the Company and the Union were held, nor any communications transmitted until a meeting of November 24, 1953. Head identified General Counsel's Exhibit No. 3 as a letter written by him to the Company advising the Company that the members had voted rejection of the Company's proposal of 21/2 cents and reiterating their belief that the Company could pay 10 cents; General Counsel's Exhibit No. 4, a letter dated September 4, 1953, from R. D. Douglas to himself which refused the Company's request to be shown books and records; General Counsel's Exhibit No. 5, a letter from the Union to Douglas which requested a reply to its letter of September 14; General Counsel's Exhibit No. 6, a letter of September 28 from Head to Douglas; and followed that with General Counsel's Exhibit No. 7, a letter from Douglas dated September 29, 1953. Head also identified General Counsel's Proposed Exhibit No. 8-A , a single yellow sheet of paper headed "Meeting November 24"; General Counsel's Exhibit No. 8-B, a yellow paper headed "January 13, 1953"; General Counsel's Exhibit No. 8-C, a single yellow sheet of paper headed "January 28 , 1953"; and also General 864 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Counsel's Exhibit No. 8-D, a single yellow sheet of paper headed "February 10." In response to counsel's question Head stated that General Counsel's Exhibits Nos. 8-A through 8-D were notes which he took during the course of meetings with Truitt Manufacturing Co. on the dates indicated. Counsel Douglas objected to the introduction of these exhibits stating that they appeared to be entirely self-serving notes taken by Mr. Head. He argued that in order to refresh his recollection under the Federal and State rules he could consult the notes but for him to offer as official exhibits these notes which he had made, were not proper evidence? Head testified that Mr. Douglas was speaking for the Company in saying that the Company had just completed the yearly audit, that there were several things the auditors found wrong and had made suggestions in ways to cut overhead cost, that some of the office procedure was wrong, some of the changes in the shop should be made, that the Company found the profits in regard to sales and costs was low, that labor cost was high and the Company was struggling under a financial strain, being under capitalized, and that they had just negotiated a loan from a bank to buy new equipment and to buy an additional lot at the back of the plant that was needed. Head stated that Douglas suggested that they continue negotiations later in order to give the Company time to make changes and see "just what the picture would be later on; although, he said he was not going to promise anything except that probably they would in one way or another know whether the Company could give any increase; they would know better at a later date, possibly in January, early January, just what the position of the Company would be in or what the outlook might be." He testified that the next meeting was on January 13 at which time "Mr. Douglas then kind of reviewed the past meeting, the meeting of November 24, and he informed us that the changes suggested by the auditor had been made, but the national outlook seemed predominant in his thinking; he went ahead then-the newspapers at that time were playing up a bad business year outlook, and he went into that, stating about the automobile industry and the steel industry in general, it seems to set the pattern for the whole national picture, and then he quoted several jobs that the Company had been unsuccessful in their bids about the State, and I think he quoted 2 or 3 TVA jobs they had been unsuccessful on and Mr. Truitt, Sr., said somehow or another they just could not seem to estimate the jobs with the other shops for they seem always to come out on the big end of the horn, or some- body could always bid lower; and in spite of that, they said they were going to go out on a limb and offer us an additional 21/2 cents increase at that time on a 90-day conditional basis." Head stated that prior to the meeting of January 28 that he gave Wallace Truitt and Mr. Douglas a copy of the supplemental agreement and asked them to consider 2 The record shows that Julian Head, testifying on behalf of the General Counsel, refreshed his recollection on the stand with notes identified by him as having been made by him during certain contract negotiations. The General Counsel offered these into evi- dence as Exhibits Nos 8-A through 8-D and cited the standaid North Carolina authority on the law of evidence, "North Carolina evidence by D. F. Stansbury." He referred to page 48 of this volume. Page 48 says : "The witness may refresh his memory before the trial, in which case he need not produce in Court the writings used for that purpose. If the writings are In Court, however, or the witness attempts to use them while testifying, the opposite party is entitled to their production for inspection. The writing itself is not admissible in evidence." [Emphasis supplied.] The footnote to this statement cites two North Carolina cases, then says : "But see Carson v. Blount 155 N. C. 103; 72 S E. 90." The Carson v. Blount case allowed the introduction of several book entries of figures showing the prices the defendant had paid for cotton, which figures had just been testi- fied to by a witness The court stated that these exact figures could be used to corroborate the witness. The Respondent contends that Stansbury correctly states the North Carolina law and the Federal law on this matter when he says, "The writing itself is not admissible in evidence," and further contends that the Carson case, in allowing certain figures from an account book to be introduced, is not authority for allowing General Counsel's witness, Head, to introduce notes made by him during collective barggining, not as to exact amounts or figures, but as to general statements alleged to have been made and his interpretation of the general statements The Trial Examiner concurs in Counsel Douglas' interpreta- tion and holds these exhibits inadmissible as evidence. (Cf latest edition of Uniform Rules of Evidence approved by American Bar Association and American Law Institute, Sec. VIII Hearsay, rule 63, par. 4, p. 199.) TRUITT MANUFACTURING CO. 865 it in their next meeting, and "so we met again in January 28; I told the Company the men felt like they had not made any definite offer, since they wanted to put it on a 90-day conditional basis, that if at the end of 90 days the Company could take it away, then the men felt like they was not being offered anything, and they wanted proof if the Company was not making money, they wanted proof to sub- stantiate that claim." In answer to the question as to who wanted proof to substan- tiate that claim Head replied: "the men in the shop wanted proof, because they said if the Company was not making money, then they wanted to help them make money." Stating that the Company would not agree to show proof he testified: "Mr. Douglas said that although the Union had requested the Company's records to substantiate the Company's proof that the Company felt like we didn't have any legal right to such proof or the records of the Company to substantiate that claim, so we then went into a general discussion of business conditions and reasons or ways to improve conditions if the Company was not making money, we wanted to know how; . if the Company were not making money, then the men wanted to make the Company money, because the Company was not paying as high wages as they were elsewhere, and the men were simply wanting to make more money themselves and likewise in making more money they would make the Company money." The next meeting was on February 10 at which time Head testified, "Mr. Douglas went into the charges pending before the Board concerning the wage increase request, and he still maintained that we didn't have no legal right to the increase, and he told me the Company had took another look at their bids or their work schedules and several of the people had withdrawn their plans for jobs and the general picture didn't look good at all, and in face of that the Company was withdrawing the offer of 21/z cents." Head stated, "he kinda reviewed the situa- tion of what we had talked about, the Company's position to give more money would put them out of the competitive picture, they would be unable to get any jobs; and I told him that the men still felt like if the Company was not making money they wanted to know why, and it was hard for the men to see or understand the overhead and all that stuff, if the Company was not making money then they wanted to know, wanted to be shown some proof." Head stated that the Company never did show any exhibits as to how they compared with their competitors, they merely "quoted" and maintained that it was none of the employees' business nor did they have any legal right to such records. Over objections of General Counsel the witness was asked, "Mr. Head, did you at any time during your negotiations with Truitt Manufacturing Company, on behalf of the Union, has the Company ever refused to meet with you and your committee and discuss the issues raised at these meetings." Answer-"No, they, you have always bargained." On cross-examination Head admitted that the Comuany spokesman quoted Caro- lina Steel Company and Peden Steel and Bristol Steel as contended by the Company to show that they were already paying more than their competitors in the area. Head admitted that the Company gave exact names and figures and prices of jobs that it had lost on being underbid, but stated that the Union did not ask for any docu- mentary proof of that. In this connection he stated, "they stood firm on that, with the explanation there that if they gave more then it would put them in a position where they would not be able to get jobs." He stated that on August 7 the Union repeated its demands and the Company took its same position, and the strike fol- lowed on August 10. He added that on August 12, during the strike, "the Company took the same position." At the January 13 meeting the Company repeated its position with regard to its competitive position in bargaining in bidding, and there- after showed actual examples of being underbid. Head stated that the position of the Union was that the Company was in competition with firms in Ohio, West Virginia, and Tennessee areas, and although places like Akron, Cleveland, Pitts- burgh, and Birmingham were named he did not admit them to be areas involved in the wages paid in Charlotte. Questioned on the meaning of "such books, records, financial data, etc.," Head testified; "Well, the main thing we were after, Dick [Douglas], was anything to substantiate the Company's claim that they were not able to give any more than 21h cents; anything relating to the reason why they were not able." Over objections of General Counsel on the ground of immateriality Head was allowed to answer what he meant in his letter of September 2 for "such books, records, financial data, etc- Did you have in mind, or were you asking that a C. P. A. be allowed to inspect the Company's books completely and take what he thought was pertinent, or, were you 338207-55-vol 110-56 866 DECISIONS OF NATIONAL LABOR RELATIONS BOARD asking for the Company to select what it thought was pertinent and furnish that to your C. P. A.?" Head answered, "I think the Company should, or we wanted the Company to furnish proof by records, or anything relating to their claim of being unable of giving any more increase." In answer to Counsel Douglas' question as to whether or not the Union was ask- ing its C. P. A. have access to the books and select pertinent data or whether the Union was asking for the Company to select the data to substantiate its position and furnish such data to the Union, Head answered, "Well, the only way I know to answer that, Dick, is that we were wanting anything relating to the Company's position, any record or what have you, books, accounting sheets, cost expenditures, what not, anything to back the Company's position that they were unable to give any more money. I think all that should be laid before an accountant." In answer to the question as to whether or not it would be the Union's accountant or an accountant supplied by the Company, Head answered, "Well, we never did discuss any of that, simply because the Company said it was none of our business, and we had not discussed anything along that line. Whose or who or what." In further question, "Now, when you speak of full and complete information with respect to its financial standing and profits, did you consider that to mean complete access to the Company's books and financial data?" Answer-"Anything relating to the Company's position that they were not able to give any more money." Again, "Mr. Head, in view of your just having stated that you were asking in these letters for full and complete information and everything in the financial data, if it were necessary, to substantiate the Company's position; since you have explained you wanted everything to substantiate the Company's position, I am asking you if, from start to finish, you have not understood that the Company's position was that it could not raise wages because it would price itself out of competitive bidding." Answer- "There was a statement, Dick, I believe along in conjunction with the negotiations, during the negotiations there was a statement made, well, not only these negotiations, but I believe you will agree with me that Mr. Truitt, Sr., said that the Company had never paid dividends, was under capitalized, they didn't have working capital, and to grant more than the 21/2 cents at this time would simply put them out of business." Question-"Put them out of business because they could not get the bids, is that right?" Answer-"Well, you maintained that position that you were in a com- petitive [position]." - Explaining to Counsel Douglas further, "it is hard for the men to understand about overhead and all that stuff" Head testified, "Yes, and I believe you will recall with me, Dick, that during negotiations the statement was, for the facts were brought out, we were discussing the work operations, etc., and I told you it was hard for a work- ing man to realize the actual cost in operating the plant; I said they see material being processed through the shop, they see it going out, they see trucks back up and freight cars come in and load and these jobs going out and the Company is making money"; and Mr. Truitt spoke up and said, "Well, that is not the case, there is a lot to it than that." In answer to conclusionary question: "Mr. Head, sup- pose you had had access to all of the Company's financial data regarding overhead costs, salaries, expense, everything that you apparently were asking for, could you have analyzed this Company's position with respect to its competitive position if you did not have similar information from the Company's competitors?" Head replied that "we were not bargaining with any other" but admitted having no other information, and added: "I think we could have drawn a conclusion from the data if it was submitted; I think it was possible we could have drawn our conclusion whether the Company was able to pay or not." Testimony of General Counsel's remaining witnesses , set forth below, concluded his case-in-chief. Henry D. Cole, a member of the union negotiating committee, testified that when Head, at the August 4 meeting, was putting forward the question of increase of at least 10 cents Mr. Truitt raised up and said, "it would break the Company up to give up that much pay raise, and it would put them in a precarious position." George F. Beck, a member of the union negotiating committee, testified concern- ing a bargaining meeting occurring after the strike: "We were still asking for an increase greater than two and a half cents per hour, and the Company said then that they could not afford to pay over two and a half cents per hour, and they were talking about the other companies at this time and they said they just could not afford it, that they had been losing money on jobs and said, take for instance the Bethlehem Steel, said they could not compete with them, the big boys, they said." Asked the reason why Truitt could not compete with the big boys Beck answered: "They claimed we were asking for too much money, too much per hour rates." He attributed this statement to President Truitt and he said that Truitt could not com- TRUITT MANUFACTURING CO. 867 pete with companies like that, like Bethlehem Steel, said they were an old company, and they had the capital, and said, "we are just a young company, and we don't have the capital, the working capital, and it would break us up." Beck admitted that after each company officer spoke against a raise of over 21/2 cents, a reason was given, among which was: "Well, competitive business was one." Beck agreed that Douglas, as spokesman , would go ahead and explain it by basing it on "our com- petitive position in business." John W. Sandlin, also a member of the union negotiating committee , testified that at the January meeting they were discussing a 21/2-cent raise for a period of 90 days: "I asked Mr. Truitt, I said at the end of 90 days you can either take it away or leave it there at the end of 90 days, I said, now, what proof are we going to have to put before these men, provided you do take it away, what proof are we going to have that the Company is in financial difficulty that they can't pay it; and Mr. Truitt put in and said; `John, that just goes to show that you don't believe a word I have said' . . . I just stated that the reason why I wanted the proof was that the men were going to ask us at the end of the 90 days and if they do withdraw the two and a half cents, they were going to want to know why." g. Testimony of Respondent's witnesses John R. Truitt, vice president in charge of sales, testified that all of the officers of the Company including its Counsel Douglas got together in preparation to respond to the Union's appeal for a contract wage reopening and decided because of "our competitive position" upon a 21h-cent per hour increase "That was as far as we could possibly go from the competitive angle." Counsel Douglas was made spokes- man of such company policy, and the record shows that to be the formula he used. John Truitt testified that the company wage rates and competitive rates were dis- cussed with the Union stating: "Presenting the picture across the board , we were reasonably unsuccessful in getting the shop committee to consider it (comparative wage data submitted by 4 competitors) favorably or fairly." In discussing particu- lar jobs which had been bid and lost he contended that "the actual evidence of this picture was presented" and denied declining or refusing to give the Union any supporting data of the Company's position . On cross-examination he testified that the Union offered to support its contention that the Company 's competitors were paying higher wage rates and operating at a profit but he answered that these were "fabricating concerns outside of our general area. . . . We have evidence to show we were paying actually higher rates than all but one of these [local area concerns] that one being Carolina Steel, with which we were on par; and I might add, needless to say, they are our chief competition." He admitted that the Union denied the cor- rectness of this contention , charging that Bristol Steel was paying higher wages. He explained that his interest in and chief function was from the sales angle to point out "just where we stood competitively." He cited several specific cases of bids lost on bid sheets prepared by himself but admitted that he did not personally offer and hand them to the Union stating, "they were not offered because they were not asked for." He however admitted that the Company did not present any information on jobs which they had bid upon successfully. Wallace B. Truitt, the purchasing agent, testified that he was present when the comparative rates of pay in the various companies were gone into , and the discus- sion concerning unsuccessful bids. His recital was that John Truitt brought the bids into the conference room at a meeting on January 11, 1953, and when he left for a prior engagement, the meeting was called to order , saying, "this evidence was given to the committee in this fashion , our attorney, Mr. Douglas, took them at random, opened them up with my assistance showing him what was which, read off the bids of our competitors and our bids , and that was the general procedure of that presentation." He stated that there was no refusal to give the Union the documents nor any request for them or for any other documents other than the request made in the Union's correspondence. He testified, as did his brother John, that their father, W. B. Truitt, president of the Company, was an elderly diabetic and may have said, "Well, boys, if we give it to you, we might go broke." Wallace indicated that his father was in a highly nervous state-"his insulin runs up on him, he can't think clearly late in the afternoon-he walked out of the room." He stated that his father's outbursts did not change the official position of the Company- "the competitive position." h. Discussion Actually there are very few factual conflicts and credibility issues involved herein, as both counsel agreed this case is largely a question of legal interpretation of almost 868 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agreed facts. General Counsel contends that the company officials "plead poverty" throwing the decision squarely under the Jacobs case doctrine, supra, while Respond- ent counsel contends that the facts present a new and novel situation which thereby constitutes it a case of "first impression" to the Board and the courts. It is clear that Respondent's officials worked out their theory or formula imme- diately after the Union requested the contract reopening for wage negotiations on June 8, 1953, delegated their attorney to be spokesman, and insofar as possible, followed the formula-no doubt originated by and upon advice of counsel. It was not an afterthought. Their syllogism becomes, however, a non sequitor if the qualification, "admittedly injecting an economic factor into bargaining," vitiates either the major or minor premise. From the evidence recited and relied upon, I find that Company Spokesman Douglas said, after offering 21/2 cents and stating that they were paying as much or more as any of their competitors that "that would be all that they would be able to give at this time"; if they would give more than their offer, it would put them out of competition of getting business with other competitors; that the Company found profits in regard to sales and costs was low; that the labor cost was high and the Com- pany being under capitalized was struggling under a financial strain; that the Company had just negotiated a loan from a bank to buy new equipment and an additional needed lot. I further find that President Truitt said that the Company had never paid dividends, was under capitalized, did not have working capital, and to grant more than 21/2 cents at this time would simply put them out of business, and finally "it would break the Company up to give up that much [ 10 cents] pay raise, it would put them in a precarious position." It is difficult to conceive of economic con- clusions thus expressed more calculated to require financial documentation to a group of working men than are these undenied assertions, nor a case more illustrative of a plea of financial inability to grant a requested wage increase. Accordingly I find that this case falls within the doctrines of Southern Saddlery and the Jacobs case, supra. The general rule applicable to requests for financial data and facts is that such information, if relevant, upon request must be furnished as to all issues properly the subject of collective bargaining so that the collective-bargaining representative may intelligently represent the employees in the appropriate unit. N. L. R. B. v. Yawman & Erbe Manufacturing Co, 187 F. 2d 947 (C. A. 2). The rejection of economic demands because of competitive conditions within an industry with no accompanying effort to prove the assertion or to persuade the Union involved that competition was the real reason for the rejection of the demands was held to be evidence of bad-faith bargaining. Stonewall Cotton Mills, 36 NLRB 261, enfd. as mod. 129 F. 2d 629 (C. A. 5), cert. denied 317 U. S. 667. In West Fork Cut Glass Company, 90 NLRB 944, 952-3, the Board affirmed a finding by a Trial Examiner that when a request for the production of such records as would disclose financial ability or inability to grant a wage increase was rejected, but the company agreed to open its books to a certified public accountant or a dis- interested third party, in view of all the circumstances, bad-faith bargaining had not been established. In his brief to me, Respondent's counsel attempts, unsuccessfully, to distinguish this case from Southern Saddlery and Jacobs cases as follows: In the Saddlery case, the respondent said only that it was financially unable to pay. The Truitt Company said it would have to put itself out of competitive bidding and thus could not get business. In Saddlery, the respondent made no counterproposals, made no "sincere effort to persuade the Union," and did not give sufficient information for the union to discuss the issues raised. The Truitt Company made a counterproposal and offered 21/2 cents; did its best to explain to the Union, and gave figures to show it already paid more than most of its competitors, and showed contracts it had lost by being underbid by competitors paying low wages. In the Jacobs case, the company said it was "futile to discuss" wages because of financial inability to pay, and refused to discuss the other issues at all. The Truitt Corpany met many times to discuss everything the Union wanted to discuss (except show its books). In the Jacobs case, the company should have presented "sufficient underlying facts to show its conclusion was reached in good faith." The Truitt Company gave the Union the pay scales of its competitors in the area, reading from lists at the bargaining table, and comparing its own wages. Later, Truitt told the Union about contracts it had lost from being underbid. TRUITT MANUFACTURING CO. 869 That General Counsel argues that the Truitt Company gave the same reasons as Saddlery and Jacobs-financial inability to pay-yet witness after witness for the General Counsel said that the Company gave its competitive position as its reason, .citing: Julian Head, principal negotiator for the Union, said: They stood firm in their position, that since they were paying as much or paying more than competitors, it would put them out of competition of getting business with other competitors. . and the Company took the same position that day as they did in the first meeting. . he [Douglas] kinda reviewed the situation of what we had talked about, the Company's position to give more money would put them out of the com- petitive picture. . . Yes sir, they stood firm on that, with the explanation that if they gave more then it would put them in a position where they would not be able to get jobs. It is true that there is evidence that W. B. Truitt, president of Respondent Com- pany, said on 1 or 2 occasions , "We would go broke if we gave that raise." How- ever, Respondent contends that the officers of the Company had met, established an official position of the Company, gave its attorney full authority to act as spokesman, and maintained that position throughout many sessions-the same position referred to by the union witnesses-and that 1 or 2 outbursts by an elderly diabetic man whose insulin count was troubling him did not change the Company's bargaining position. Respondent points out that the Company never declined to show the Union its competition figures and its underbid contracts. The evidence shows clearly that while the Company was quoting figures and rates to substantiate the position it had taken, the figures and rates were there at the bargaining table, being read a few feet away from union negotiators, but no request was ever made to see them. Summing up, the Respondent contends that it substantiated its reason for refusing the wage demands by submitting facts and figures, and that the Respondent should not be found to have refused to bargain with the Union. j. Conclusions With Respondent's interpretation of the facts and the law, I find myself not in accord. The courts and Board have made it clear that the detefmination of whether there has been compliance with the obligation to bargain in good faith, depends ultimately on the facts and circumstances of a particular case. The testimonies established an underlying financial inability to meet the Union's demand, and the Company failed to produce books and records to substantiate its conclusions as required under the law as laid down in Yawman and Erbe, supra, and in many-other cases decided by the Board. The phrase "competitive position" as used and relied upon by Respondent amount only to an exercise in legal semantics. Therefore the two questions raised are answered: (1) The Company did plead financial inability as its reason for rejecting the Union's wage demand and failed to produce relevant information to justify such refusal, and (2) an employer cannot refuse a demanded wage increase on the grounds that such increase would put him out of a competitive position, even though he were paying the prevailing area wage scale, unless he factually documents this conclusion. 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 the Respondents 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, the Trial Examiner will recommend that they cease and desist therefrom and take cer- tain affirmative action to effectuate the policies of the Act. It having been found that the Respondent has refused to bargain collectively with the Union as the exclu- sive representative in an appropriate unit, it will be recommended that the Respond- ent upon request bargain collectively with the Union. 870 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Because of the limited scope of the Respondent's refusal to bargain, and because of the absence of any indication that danger of other unfair labor practices is to be anticipated from the Respondent's conduct in the past, we shall not order the Respondent to cease and desist from the commission of any other unfair labor practices. Upon the basis of the foregoing findings of fact, and upon the entire record in the case, the Trial Examiner makes the following: CONCLUSIONS OF LAW 1. Shopmen's Local No. 729, International Association of Bridge, Structural and Ornamental Ironworkers of America, A. F. L., is a labor organization within the meaning of Section 2 (5) of the Act. 2. Truitt Manufacturing Co. is engaged in interstate commerce within the mean- ing of Section 2 (6) and (7) of the Act. 3. All production and maintenance employees, including checkers, truckdrivers and leadermen exclusive of Respondents employed at their Greensboro plant, ex- clusive of office clerical employees, guards, and supervisory employees, constitute a unit appropriate fdr the purpose of collective bargaining within the meaning of Section 9 (b) of the Act. 4. Shopmen's Local No. 729, International Association of Bridge, Structural and Ornamental Ironworkers of America, A. F. L., was on October 27, 1950, and at all times thereafter has been, the exclusive representative of all the employees of such unit for the purposes of collective bargaining within the meaning of Section 9 (a) of the Act. 5. By refusing on July 27, 1953, and at all times thereafter, to bargain collec- tively with Shopmen's Local No. 729, International Association of Bridge, Structural and Ornamental Ironworkers of America, A. F. L., as the exclusive representative of its employees in the appropriate unit, the Respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8 (a) (5) of the Act. 6. By the above conduct which interferes with, restrains, and coerces its employees in the exercise of the rights guaranteed in Section 7 of the Act, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (1) of the Act. 7. The aforesaid labor practices are unfair labor practices within the meaning of Section 2 (6) and (7) of the Act. [Recommendations omitted from publication.] AMERICAN REPUBLICS CORPORATION, PETROLEUM BUILDING DEPART- MENT and STATIONARY ENGINEERS LOCAL UNION No. 707, I. U. OF 0. E., AFL, PETITIONER. Case No. 39-RC-758. November 15,1954 Decision and Order Upon a petition duly filed under Section 9 (c) of the National Labor Relations Act, a hearing was held before John F. Burst, hear- ing 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 : American Republics Corporation, the Employer herein, is a Dela- ware corporation engaged in the production of petroleum and related 'On May 12, 1954, the Petitioner filed with the Board its request for permission to withdraw its petition. The Employer, on May 14, 1954, objected to the Petitioner's re- quest. In view of our disposition of this case, we deem it unnecessary to pass upon this request. 110 NLRB No. 141.