The Wheland Co.

814 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Wheland Company and United Steelworkers of America, AFL-CIO and Local 176, Allied Industrial Workers of America, AFL-CIO, Party to the Contract. Case No. 10-CA-2734. May 7, 1958 DECISION AND ORDER On May 17, 1957, Trial Examiner Louis Plost issued his Inter- mediate Report in the above-entitled proceeding, finding that the Respondent 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 copy of the Inter- mediate Report attached hereto. Thereafter, the Respondent, the Contracting Party, and the General Counsel filed exceptions to the Intermediate Report and supporting briefs. The General Counsel also filed a reply brief. 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 Inter- mediate Report, the exceptions and briefs, and the entire record in the case, and hereby adopts the findings, conclusions, and recommenda- tions of the Trial Examiner only to the extent that they are consistent with the findings, conclusions, and order hereinafter set forth. 1. For the reasons hereinafter discussed, we agree with the Trial Examiner's conclusion that the Respondent, by recognizing and con- tracting with Allied, gave unlawful assistance to that organization in violation of Section 8 (a) (2) and (1) of the Act. We also find that the Respondent, in violation of the same provisions of the Act, gave further unlawful assistance to Allied by granting preferential seniority to Allied's members in derogation of the rights of other em- ployees in the bargaining unit. The relevant facts in the record are not substantially in dispute, and are as follows : On August 31, 1956, when the Respondent decided to institute changes, the Respondent's operations in Chattanooga, Tennessee, com- prised three divisions : an ordnance division, located at a plant on Signal Mountain Road, where the Respondent manufactured cannon under contracts with the United States Government; a manufacturing division, at a plant on Broad Street, for the machine fabrication of castings and sawmill and oil-drilling equipment; and a foundry divi- sion, also located on Broad Street in a plant adjacent to that of the manufacturing division. The foundry, not directly involved herein, employed 600 to 900 employees, who were and still are represented by the Steelworkers, the Charging Party herein. Manufacturing divi- sion employees, numbering about 160, are in 2 bargaining units : a pro- duction and maintenance unit of about 135 employees represented by 120 NLRB No. 105. THE WHELAND COMPANY 815 International Association of Machinists, and a residual unit of about 25 employees represented by the Steelworkers. Ordnance division employees, 212 or 213 in number, were represented by Allied.' Allied's contract for ordnance division employees was scheduled to expire September 15, 1956, and negotiations for a new agreement were in progress. The contracts of the IAM and the Steelworkers covering their respective units of manufacturing division employees had expira- tion dates falling in November 1956. On August 31, 1956, the Respondent decided to abolish the ordnance and manufacturing divisions and consolidate their operations in a new Wheland Products Division to be located at the Signal Mountain Road plant. The reasons expressed at the hearing for such decision were that the Respondent needed space for its expanding foundry operation, that the Respondent was finishing up existing cannon con- tracts in the already curtailed ordnance operation, and that, by effecting such changes, the Respondent would make space available for the foundry, utilize more fully the space at Signal Mountain Road, and provide an opportunity for improvement in methods and procedures and for expansion of the types of products to be manufac- tured in the consolidated operation. Allied was informed of the decision to consolidate on September 4. On September 5, the Respondent sent letters to all affected employees and, on the same date, conferred with the IAM and the Steelworkers local committee repre- sentatives of the two manufacturing division units to apprise them of its decision. At that conference, according to the uncontradicted testimony of Rector, a Steelworkers committee representative, the Respondent informed the representatives that : The consolidation was a fact; the move of the machine shop (manufacturing division opera- tion) to the Signal Mountain Road plant would begin in a few days; the speed of the move would depend upon how quickly the Govern- ment moved out some of its machinery from the gun plant; as the machines were moved from Broad Street, the men operating them would also move; the employees covered by the IAM's contract would remain under it until completion of the move; and "up until we complete the move, we will call in the Board and have an election to determine what Local will represent you fellows." [Emphasis supplied.] As to the effect the move would have on seniority, the Respondent stated that it would try to protect the seniority of machine-shop employees but that it was a matter for the union which would represent them. On September 10, Allied demanded recognition from the Respond- ent for a unit of all employees of the new WTheland Products Division 1 About a year earlier, bet seen 200 and 250 employees had been laid off by the ordnance division Although these laid-off employees had recall rights under Allied's then existing contract, few had been recalled at the time of the healing 816 DECISIONS OF NATIONAL LABOR RELATIONS BOARD on the ground that the addition of former manufacturing division employees to the group it then represented constituted merely an accretion. The Respondent contacted the Steelworkers' Interna- tional representatives the following day and informed them of Allied's demand and of the Respondent's intention to reject it. The Respondent also urged them to ignore any possible picketing of the foundry in the event Allied struck to enforce its demand, and stated that it intended to notify Allied that the Respondent was not going to sign an agreement with it until an election was held to determine the bargaining agent. The Respondent also told the Steelworkers representatives that it hoped some union would petition for an elec- tion, because the Respondent was in some doubt as to its own right to do so under the circumstances 2 The Steelworkers representatives replied that they were leaving town the next day to go to a CIO convention in California and would consult with their regional director concerning the matter. They stated, however, that they intended to "protect their members." The next day, September 12, the Respondent met with Allied and rejected the demand for recog- nition based upon an accretion theory. Whereupon Allied asked the Respondent whether it would grant recognition if Allied obtained newly signed authorization cards from a majority of all employees designated as part of the new division. The Respondent agreed that it would do so. The next day, Allied submitted cards newly signed by 206 employees who were formerly employed by the ordnance division. It is conceded that no cards were solicited or received from former manufacturing division employees. After checking the cards against the payroll and conducting interviews of 10 percent of the signatories, taken at random, for assurance that they were not coerced into signing, the Respondent accorded recognition to Allied. On September 18, the Respondent and Allied entered into an interim agreement which recognized Allied as the bargaining representative of the Wheland Products Division at the Signal Mountain Road plant and adopted, insofar as practicable, the prior agreement between Allied and the ordnance division. The interim agreement also provided that the Respondent may move employees then working in its former manufacturing division on Broad Street to the Signal Mountain Road plant without regard to seniority, and that employees so moved would not replace employees then working in that plant. It also provided for reopening of the contract in 90 days for the negotiation of new substantive terms. On September 28, the IAM filed a petition in Case No. 10-RC-3660 for an election in a unit of all employees of the new division working -It is clear, however, that under Section 9 (c) (1) (B) of the Act, an employer may file a representation petition when presented with a union 's claim for recognition. THE WHELAND COMPANY 817 at the Signal Mountain Road plant. However, the processing of such petition was suspended by the Regional Director because of the pendency of the charges in the instant case.' By November 15, 1956, the movement of the former manufacturing division operation to the Signal Mountain Road plant was completed. Pursuant to the terms of the interim agreement, negotiations for new substantive provisions were instituted in October, and on January 3, 1957, a new contract was executed. Prior to execution of such contract, the Respondent agreed orally with Allied to establish a new seniority roster under which employees formerly part of the manufacturing division would be given credit of 1 year's seniority for each 2.6623 years actually worked in the old division, while employees formerly with the ordnance division would receive full credit for their past service in that division. It appears that by the time of the hearing in this case, the total number of employees in the new division was reduced from 375 to a little over 300. The Respondent contends, in substance, that, as Allied produced proof that it represented a majority of all employees in the new Wheland Products Division unit, and as no conflicting claim existed for such unit, the Respondent was obligated under the Act to recognize and bargain with Allied. We do not agree. In the recent Novak case,' the Board reaffirmed its adherence to its Midwest Piping doctrine,' stating that "an employer faced with conflicting claims of two or more rival unions which give rise to a real question concerning representation may not recognize one of these unions until its right to be recognized has been finally determined under the special procedures provided in the Act." The Board there pointed out the unreliability of membership cards as evidence of majority representation in the face of conflicting claims. In the present case, the facts related above show, contrary to the Respondent's contention, that the Respondent granted recognition to Allied with full knowledge of the claims of the IAM and the Steelworkers to represent employees in the newly created unit. This is plainly indicated by the statements of the Respondent to repre- sentatives of the IAM and the Steelworkers apprising them of the consolidation and assuring them that the question as to which of the three unions involved would represent the consolidated unit would be resolved by a Board election. The Respondent later reiterated to the Steelworkers representatives that it would not sign an agreement with Allied until the representative of the consolidated unit was de- termined by an election. In these circumstances, the fact that the 8 Pursuant to Section 7 (d) of the Administrative Procedures Act, the Board takes official notice of the pendency and status of the representation proceeding instituted by the IAM. J. S. Abea crombie Company, 83 NLRB 524. A Novak Logging Company, 119 NLRB 1573. ®bfidaoest Piping and Supply Company, Inc., 03 NLRB 1060, 1070. 483142-59-vol. 120-53 818 DECISIONS OF NATIONAL LABOR RELATIONS BOARD TAM and the Steelworkers did not specifically state their claims to representation in the new unit is of no significance. It was clearly unnecessary and the Respondent so understood it. Moreover, shortly after the Respondent recognized Allied, the TAM filed the representa- tion petit on mentioned above for the employees in the Wheland Products Division. It thus appears from the foregoing that the Respondent recognized and entered into a contract with Allied in disregard of the conflicting claims of the TAM and the Steelworkers, the former of which, at least, was clearly sufficient to raise a real question concerning representation in the unit of Wheland Products Division employees. In view of these conflicting claims, the fact that Allied submitted to the Respond- ent authorization cards purportedly signed by a majority of the em- ployees in the new division did not require the Respondent to recognize Allied as the exclusive representative of these employees or justify its action. As previously indicated, membership cards in such circum- stances are not reliable evidence of majority status. Accordingly, we find that the Respondent, by recognizing and con- tracting with Allied as the representative of its employees in the Wheland Products Division, gave unlawful assistance to that organiza- tion within the meaning of Section 8 (a) (2) of the Act and thereby interfered with, restrained, and coerced employees within the meaning of Section 8 (a) (1) of the Act.' 2. Apart from our finding that the Respondent unlawfully recog- nized and bargained with Allied for the unit of Wheland Products Division employees, we further find that the Respondent violated Sec- tion 8 (a) (2) and (1) of the Act by granting preferential seniority to former ordnance division employees upon the basis of their member- ship in, and past representation by, Allied. The General Counsel ex- cep*ed to the Trial Examiner's failure to make any findings concern- ing the allegations of such preferential seniority. The record reveals that the consolidation of the manufacturing and ordnance divisions into the new Wheland Products Division brought with it the question of seniority rights of the employees involved At such time, there was also a real problem of a possible layoff of former ordnance division employees because the Respondent was finishing up its Government contracts for cannon production. Although fully aware of these problems and of the interest of the TAM and the Steel- workers in protecting the job security of former manufacturing divi- sion employees, the Respondent, without discussing the matter with these unions, included in its interim agreement with Allied a provi- sion that former manufacturing division employees who moved to the Signal Mountain Road plant would not replace the former ordnance division employees working there. Implementing this agreement, and 6 Novak Logging Company, supra, and cases cited therein. THE WHELAND COMPANY 819 again without the participation of the IAM and the Steelworkers, the Respondent and Allied thereafter agreed to a formula whereby the former manufacturing division employees were only given credit of 1 year's seniority for each 2.6623 years of service, while the former ordnance division employees received full credit for their service. The Respondent advanced no cogent reason why greater job security was given to the one group over the other.' It is significant, however, that the employees in the preferred group were in the greatest danger of being laid off, that their past representative was Allied, and that virtually all of them had signed new authorization cards for Allied- upon which basis the Respondent recognized Allied for the new unit, whereas no former manufacturing division employee had signed such cards.' The foregoing evidence persuades us that the General Counsel established at least a prima facie case that the Respondent gave un- lawful assistance and support to Allied by granting preferential sen- iority to Allied's members. This evidence the Respondent made no effort to rebut with a reasonable explanation for the disparity of treatment. Accordingly, we find that the Respondent violated Section 8 (a) (2) and (1) of the Act by granting preferential seniority rights to former ordnance division employees over the former manufacturing division employees. THE REMEDY Having found that the Respondent has engaged in certain unfair labor practices, we shall order it to cease and desist therefrom and take affirmative action necessary to effectuate the policies of the Act. We have found, as did the Trial Examiner, that the Respondent, in violation of Section 8 (a) (2) and (1) of the Act, gave unlawful assistance to Allied by recognizing and contracting with it and by granting the former ordnance division employees preferential senior- ity. Accordingly, we shall order the Respondent to withdraw and withhold all recognition from Allied and to cease giving effect to -the interim agreement of September 18, 1956, the contract of January 3, 1957, and any other agreements made pursuant thereto, until such time as that labor organization may be certified by the Board as the exclusive representative of employees in the Wheland Products Divi- sion. Moreover, to dissipate the effects of the preferential seniority, we shall also order the Respondent to abrogate such preferential seniority rights. Except as so indicated, nothing herein shall, how- 7Indeed, if Allied were truly the bargaining representative of both groups in the unit, as it purported to be, it was obligated to represent all employees in the unit equally and without discrimination. 8 As previously indicated, Allied presented authorization cards from 206 of the 212 or 213 former ordnance division employees . 820 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ever, be construed to require the Respondent to vary or abandon any of the terms and conditions of employment established under the aforesaid agreements. 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 Respondent, The Wheland Company, Chattanooga, Tennessee, its officers, agents, successors, and assigns, shall : 1. Cease and desist from : (a) Assisting or supporting Local 176, Allied Industrial Workers of America, AFL-CIO, or any other labor organization, except as authorized by Section 8 (a) (3) of the Act. (b) Recognizing Local 176, Allied Industrial Workers of America, AFL-CIO, as the exclusive representative of the employees of the Respondent in its Wheland Products Division, Signal Mountain Road plant, unless and until said organization shall have been duly certified by the Board as the representative of such employees. (c) Giving effect to any agreements or arrangements with the above-named union granting preferential seniority rights to former ordnance division employees. (d) Giving any effect to its collective-bargaining contracts with Local 176, Allied Industrial Workers of America, AFL-CIO, dated September 18, 1956, and January 3, 1957, or to any extensions, re- newals, modifications, or supplements thereof, unless and until said labor organization has been duly certified by the Board as the rep- resentative of said employees of the Respondent. The Respondent, however, shall not be required to vary or abandon the wages, hours, and conditions of employment now in effect in its relationship with said employees, or to prejudice the assertion by said employees of any rights or privileges they may have acquired by reason of the application of the aforesaid contract or contracts, except with respect to the preferential seniority rights which we hereby order abrogated. (e) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of their right to self-organ- ization, to form, join, or assist any labor organization, to bargain col- lectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all of such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a con- dition of employment, as authorized in Section 8 (a) (3) of the Act. 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act : THE WHELAND COMPANY 821 (a) Withdraw and withhold all recognition from Local 176, Allied Industrial Workers of America, AFL-CIO, as the representative of the employees of the Respondent in the Wheland Products Division for the purpose of dealing with the Respondent concerning griev- ances, labor disputes, wages, rates of pay, hours of employment, or other conditions of employment, unless and until said labor organ- ization is duly certified as such representative by the Board. (b) Abrogate the preferential seniority unlawfully granted to former ordnance division employees by agreement or other arrange- ment with Local 176, Allied Industrial Workers of America, AFL-CIO. (c) Post in its plants in Chattanooga, Tennessee, copies of the notice attached hereto marked "Appendix." I Copies of said notice, to be furnished by the Regional Director for the Tenth Region, shall, after being duly signed by the Respondent's representative, 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 Tenth Region in writing, within ten (10) days from the date of this Order, as to what steps the Respondent has taken to comply herewith. CHAIRMAN LEEDOM, dissenting : The record, in my opinion, does not sustain the allegation of the complaint. There is no dispute as to the basic facts. The Trial Examiner concluded that the Respondent, by recognizing and dealing with Allied as the majority representative of a new unit created by con- solidation of two previously separate operations, gave unlawful assist- ance to Allied in violation of Section 8 (a) (1) and (2) of the Act. Essentially, the Trial Examiner's theory to support this conclusion is that the employees of 1 of the 2 operations, represented in 2 units by the IAM and the Steelworkers prior to the consolidation, were entitled to self-determination on the question of inclusion in the new unit. However, the General Counsel made no attempt to prove that such self-determination rights would survive the consolidation and, indeed, virtually concedes the contrary. Moreover, the record facts do not substantiate the Trial Examiner's theory. I would therefore reject it. The majority nevertheless agrees with the conclusion reached by the Trial Examiner, on the theory that recognition and the contract 9In the event that this Order is enforced by a decree of a United States Court of Ap- peals, 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." 822 DECISIONS OF NATIONAL LABOR RELATIONS BOARD occurred in the context of rival claims and for that reason ran afoul of the Midwest Piping 10 doctrine, recently reaffirmed in the Novak case." To bring the instant case within that doctrine, the majority must overcome the fact that neither the IAM nor the Steelworkers evidenced their interest in the new unit created by the decision to consolidate by specifically claiming to represent or by filing a petition with the Board for such unit, either or both of which steps could have been taken by them. This fact the majority attempts to overcome by construing the Respondent's conduct as a recognition of at least the IAM's claim to representation in the new unit. In my opinion, the majority has failed in this attempt. Inference cannot supplant evi- dence. The most that I can infer from all the facts in the record concerning the Respondent's conduct towards the IAM and the Steel- workers is that the Respondent-whose good faith in effecting the consolidation is not questioned-knew that these 2 unions had some interest in the new unit because of their interest in 1 of the 2 opera- tions to be consolidated, but it did not know, and had no way of know- ing, in the absence of recognition claims made upon it, that they asserted majority interests in such unit. While it is true that initially the Respondent stated that it would seek a Board election as a means of determining the representative of the new unit, it was under no obligation to use that method, absent a rival claim which would itself raise a real question concerning representation in the unit. As I am unable to conclude that a rival claim had been made in the new unit such as would have required the Respondent to maintain a strictly neutral position under our Midwest Piping doctrine, I would find that the Respondent was free to and did recognize and deal with Allied upon clear proof of its majority status in such unit." The majority also finds that the Respondent's agreement to seniority arrangements, under which former ordnance division employees received greater seniority credit than former manufacturing division employees, was in fact intended to give seniority preference to Allied's members and was therefore unlawful assistance. I do not believe that the General Counsel has made a prima facie case upon this allegation of the complaint. Whatever the motivation of Allied may have been- and there is no allegation that Allied violated Section 8 (b) (1) (A) and 8 (b) (2) of the Act-for entering into such an agreement as to seniority, it seems clear to me that the Respondent may have had a legitimate motive for agreeing to cut down the seniority of former manufacturing division employees coming into the Signal Mountain Road plant. Yet the majority draws inferences from a number of facts indicating that the Respondent could have intended to prefer Allied's members, in order of reach the conclusion that it miurst have '.Midwest Piping and Supply Company, Inc., 63 NLRB 1060. ss Novak Logging Company, 119 NLRB 1573. 12 See SiZer Mill Company, 92 NLRB 1680, 1683. THE WHELAND COMPANY 823 been so. As I see it, it is just as reasonable to infer that a legitimate basis existed for the preferential seniority granted to former ordnance ,division employees over the former manufacturing division employees. I would therefore find no merit in the General Counsel's exceptions relating to preferential seniority. For the foregoing reasons, I would dismiss the complaint in its entirety. MEMBER BEAN, dissenting in part : While I agree with my colleagues in the majority that the record contains substantial evidence to support a finding of unlawful assist- ance through the seniority preferences given to former ordnance divi- sion employees on the basis of their membership in Allied, I am in disagreement with the majority as to the disposition of the principal allegation of the complaint and join with Chairman Leedom in that part of his dissenting opinion relating to this issue. APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that: WE WILL NOT assist or support Local 176, Allied Industrial Workers of America, AFL-CIO, or any other labor organiza- tion, except as authorized by Section 8 (a) (3) of the Act. WE WILL NOT recognize Local 176, Allied Industrial Workers of, America, AFL-CIO, as the exclusive representative of the employees in our Wheland Products Division, Signal Mountain Road plant, Chattanooga, Tennessee, for the purpose of dealing with us concerning terms and conditions of employment, unless and until said union is duly certified by the Board as the repre- sentative of such employees. WE WILL NOT give effect to any agreements or arrangements With Local 176, Allied Industrial Workers of America, AFL-CIO, granting preferential seniority rights to our former ordnance division employees. WE WILL NOT give effect to the collective-bargaining contracts dated September 18, 1956, and January 3, 1957, between us and Local 176, Allied Industrial Workers of America, AFL-CIO, or to any extensions, renewals, modifications, or supplements thereof, insofar as such agreements apply to the employees of Wheland Products Division, unless and until the said union is duly certified by the Board as the representative of said em- ployees. The Respondent, however, shall not be required to vary 824 DECISIONS OF NATIONAL LABOR RELATIONS BOARD or abandon the wages, hours, and conditions of employment now in effect in our relationship with said employees, or to prejudice the assertion by said employees of any rights or privileges they may have acquired by reason of the application of the aforesaid agreements, except with respect to the preferential seniority rights which we here order abrogated. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the right to self-organization, to form, join, or assist any labor organization, to bargain collectively through representatives of their own choos- ing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring mem- bership in a labor organization as a condition of employment, as authorized in Section 8 (a) (3) of the Act. WE WILL withdraw and withhold all recognition from Local 176, Allied Industrial Workers of America, AFL-CIO, as the representative of our Wheland Products Division employees for the purpose of dealing with us concerning grievances, labor dis- putes, wages, rates of pay, hours of employment, or other condi- tions of employment, unless and until said union is duly certified as such representative by the Board. WE WILL abrogate the preferential seniority unlawfully granted to former ordnance division employees by agreement or other arrangement with Local 176, Allied Industrial Workers of America, AFL-CIO. All our employees are free to become, remain, or refrain from becom- ing or remaining, members of any labor organization, except to the extent that such right is affected by an agreement, as authorized in Section 8 (a) (3) of the Act. THE WHELAND 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. INTERMEDIATE REPORT STATEMENT OF THE CASE Upon charges filed by United Steelworkers of America, AFL-CIO, herein called the Steelworkers, the General Counsel of the National Labor Relations Board, herein called the Board, by the Regional Director for the Tenth Region (Atlanta, Georgia ), issued a complaint dated January 9, 1957 , against The Wheland Company, Chattanooga , Tennessee, herein called the Respondent, alleging that the Respondent had engaged in and was engaging in unfair labor practices within the meaning of Section 8 (a) (1) and (2) and Section 2 (6) and (7) of the National Labor Relations THE WHELAND COMPANY , 825 Act, as amended, 61 Stat. 136, herein called the Act. Copies of the complaint and the answer together with a notice of hearing were duly served upon the Respondent, the Steelworkers, and the Party to the Contract. With respect to the unfair labor practices the complaint alleged that the Respondent engaged in conduct violative of Section 8 (a) (1) and (2) of the Act by: Recognizing Allied Workers [Local 176, Allied Industrial Workers of America, AFL-CIO, herein called Allied] as the collective bargaining repre- sentative of all production and maintenance employees at the Respondent's Products Division, Signal Mountain Road Plant. Entering into a written bargaining agreement with Allied Workers relative to the employees described above. Providing in the agreement that employees employed at the Respondent's Broad Street Plant moved to Signal Mountain will not replace employees "working in that plant." On January 21, 1957, the Respondent filed an answer in which it admitted the jurisdiction of the Board and denied that it had engaged in any of the alleged unfair labor practices. Pursuant to notice a hearing was held before Louis Plost, the duly designated Trial Examiner, at Chattanooga, Tennessee, February 27, 1957. The General Counsel, the Respondent, the Charging Party, and the Party to the Contract were represented by counsel, who are hereinafter referred to in the names of their prin- cipals. The parties participated in the hearing, were afforded full opportunity to be heard, to examine and cross-examine witnesses, to introduce evidence bearing on the issues, to argue orally on the record, and to file briefs, proposed findings of fact, and conclusions of law with the Trial Examiner. At the conclusion of the evidence in the General Counsel's case-in-chief and again at the close of the hearing the Respondent moved to dismiss the complaint. The Trial Examiner reserved ruling on the motions. The motions are disposed of by the ultimate finding herein. The Trial Examiner granted an unopposed motion by the General Counsel to conform the pleadings to the proof with respect to spellings, names, dates, and similar matters not substantive. The parties waived oral argument. Permission was granted to file briefs, findings of fact, and/or conclusions of law, with the Trial Examiner. Briefs have been received from the Respondent and the General Counsel.' Upon the entire record in the case and from his observation of the witnesses, the Trial Examiner makes the following: FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT The Wheland Company is a Tennessee corporation having its principal place of business in Chattanooga, Tennessee, where it is engaged in the manufacture of castings, oilfield and sawmill equipment, and materials for the United States Govern- ment. During the past year (which is representative) the Respondent sold and shipped various products valued at more than $1,000,000, directly to customers located outside the State of Tennessee. H. THE ORGANIZATIONS INVOLVED United Steelworkers of America , AFL-CIO ( the Charging Party ) and Local 176, Allied Industrial Workers of America, AFL-CIO (Party to the Contract), respec- tively called Steelworkers and Allied, are labor organizations within the meaning of Section 2 (5) of the Act and admit employees of the Respondent to membership. III. THE UNFAIR LABOR PRACTICES The Respondent and the General Counsel stipulated in effect that until August 31, 1956, the Respondent operated at two locations in Chattanooga, Tennessee. One location, known as the Broad Street plant (herein called Broad Street) included a foundry division and a manufacturing division. At the second location, known as the Signal Mountain Road plant (herein called Signal Mountain ), the Respondent exclusively manufactured cannons, under Government contract. " This report was delayed because the transcript was not received until April 12, 1957, due to the illness of Mr. Gary Wight, the reporter. 826 DECISIONS OF NATIONAL LABOR RELATIONS BOARD At Broad Street the production and maintenance employees of the manufacturing division were represented under a collective-bargaining contract by the Interna- tional Association of Machinists, AFL-CIO (herein called IAM) except for a residual unit which was represented by the United Steelworkers of America, AFL-CIO, which also represented the foundry employees in the Broad Street plant. W. B. Frazier, representative of the Steelworkers, testified that the Steelworkers represented from 600 to 900 employees at the Broad Street foundry division, "depending on the extent of operations," and 20 to 30 employees in the manufac- turing division at Broad Street, there being but 1 Steelworkers local. There were also 133 employees at Broad Street represented by the IAM. The Steelworkers' contract with the Respondent covering the residual production and maintenance employees in the Broad Street production department expired November 19, 1956, subject to reopening annually on wage negotiations. On September 4, 1956, the Steelworkers gave notice to terminate the agreement as to wages and its desire to negotiate new wage rates. At Signal Mountain the Respondent and Local 176, Allied Industrial Workers of America, AFL-CIO (herein called Allied) were under contract covering all produc- tion and maintenance employees in that division. This contract expired September 14, 1956. The General Counsel and the Respondent further stipulated that as of August 31, 1956, the foundry division and the manufacturing division at Broad Street were operating "about normal capacity," but that at Signal Mountain operations were "roughly one half normal capacity," the plant "finishing up" a Government cannon contract. Under date of September 5, 1956, the Respondent sent all its manufacturing division and Signal Mountain employees the following letter: To All Employees of the Manufacturing and Ordnance Divisions: I am pleased to announce that the Board of Directors of our company at a special meeting held on August 31, decided that the company would continue to maintain all of its operations in the Chattanooga area rather than moving a portion of them to some other city as has been seriously considered for some months. The contemplated plans for the expansion of the Foundry makes it necessary that the Foundry use all of the South Broad Street property. The change in the demand for our products and the pressures of general competitive conditions have made it necessary that the company re-examine its Manufacturing and Ordnance operations. As they are presently operating, these divisions will not be able to meet competition or provide steady work to all employees. The Board at their meeting decided to abolish the Manufacturing and Ord- nance divisions and to create a new division which will be known as the Wheland Products Division. The new division will occupy the Signal Mountain plant. This move will begin to take place immediately and steps are being made to put the new division into operation at once. This involves a great many changes in methods, techniques, and operation and will take some time to complete. I believe, however, that it does clearly provide the best oppor- tunity for us to continue to provide steady work to all present employees of the Ordnance and Manufacturing divisions, and to possibly recall some laid-off employees. I am sure that you will be pleased to know that there are no further plans to move part of the company's jobs to some other location. There will neces- sarily be a certain amount of confusion while these changes are taking place, but with your full cooperation and assistance we believe you as well as the company will be benefited. As further developments occur, you will be kept advised. Sincerely yours, (Signed) G. P. Street, GORDON P. STREET, President. James E. Black, the Respondent's personnel director, testified that on September 5, 1956, he called a meeting of the committees representing IAM and Steelworkers at the Broad Street plant. He testified: The purpose for-one of the basic purposes for having the meeting was to give these people this letter in advance of it being received by the employees at home in the mail. THE WHELAND COMPANY 827 Black further testified that the above letter was distributed to those present and was discussed; and that one of those present was George Rector, the president of the Steelworkers local, who arrived after the meeting began. Black's account of the meeting was corroborated by Jack D. Raper, the Respond- ent's assistant personnel director. George P. Rector, the president of the Steelworkers local, testified that: He at- tended the meeting called by Black at Broad Street; he came late and did not receive a copy of the letter above referred to at the meeting; and that Black announced the Respondent's plans, telling the assemblage that: It's going to start around this weekend, a-consolidating Machine Shop and the gun plant on Signal Mountain Road, and told us that-says, "I don't know exactly how long it will take to complete this move; it'll be determined by how quick the Government moves out some of their machinery over there," and said, "As we move the machinery from the Machine Shop to the gun plant, with-the men that are operating that machine will also move with the ma- chinery; and up until we complete the move, the men that are under the IAM contract will remain under the contract that they are under now until we have completed the move. Up until we complete the move, we will call in the Board and have an election to determine what Local will represent you fellows, .. . Rector put the date of the meeting as September 11 or 12. Inasmuch as Raper fixed the date of the meeting from notes taken at the time and upon all the evidence considered as a whole the Trial Examiner is persuaded that Rector is in error as to the date and therefore finds that at a meeting held September 5, 1956, the Respondent disclosed its plan of consolidation of certain divisions of its operations to the representatives of the unions representing its employees at Broad Street. John P. Gaither, a member of the Respondent's board of directors and one of the attorneys of record representing it at the hearing, testified that: Following the notice given by Allied that it desired to open its contract with the Respondent for wage and other negotiations, a series of meetings had been held between the Respondent and Allied; on September 4, 1956, the Respondent notified Allied that it had been determined "to consolidate the old Ordnance Division [Signal Mountain cannon plant] and Manufacturing Division, forming an entirely new division"; thereafter at a meeting with Allied: On September 10th we told them that we couldn't negotiate with them as the representative of the new Products Division because they-the employees in that Division-had not selected a bargaining representative. According to Gaither, at this meeting Allied advanced the theory that the con- solidation was merely an expanded unit of those employees Allied already repre- sented at Signal Mountain. A meeting for further discussion was set for September 12. Gaither further testified that on September 11, wishing to notify the Steel- workers of the claim advanced by Allied and having been told by the Steelworkers' local office that W. B. Frazier, its representative, was at a certain restaurant at lunch, he went to the restaurant, located Frazier who was with R. E. Starnes and Mr. Goddard, also Steelworkers representatives. Gaither testified he told them: that we feared that if there was a strike [by Allied], that they might picket the Foundry, that we did not feel that it was any concern of the-of the Foundry Division Union and hoped that they would pay no attention to pickets if they appeared there. The reason we feared the strike, I told them, was that the next morning I was going to tell them that we would not recognize them as an expanded unit of the Ordnance Division. I-I also told them that we hoped that some union would petition for an election, that we felt that the Company was in the middle on this thing; it had had three unions representing three groups of employees, all of whom were now completely integrated into a new division, that we didn't know what union the employees in that new division would select as their represent- ative, and that it seemed to me that the best solution would be for either, first, the three Unions to get together, which seemed impossible, or second, for some Union to petition for an election; that I had investigated the right of the Company to petition for an election under these circumstances and was in some doubt as to whether we had that authority. Frazier told Gaither that the union officials were leaving the next day for the CIO convention, and could not do anything until their return. 828 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Frazier, with respect to the above-related restaurant conversation, testified that Gaither told him of the formation of the Wheland Products Company and that Gaither stated that: They were not going to sign an agreement with the Allied Industrial Workers until such time as an election had been held to determine the bargaining agency, and that-Mr. Gaither said, "We are meeting with the Allied Industrial Workers tomorrow, and we are going to notify them to that effect." He asked us what we thought about an election. We told him that we didn't have time-hadn't had time-to think it over; it was news to us; that- Q. What was news to you?-A. That the Company had consolidated the Ord- the Manufacturing Division and the Ordnance Division and that the question had arisen as to the bargaining agency for this new division of the Company. Frazier told Gaither he would be at the convention, where he would consult with his director on the matter. Frazier's testimony was corroborated by R. E. Starnes, field representative of the Steelworkers present at the restaurant conversation. Gaither testified that on September 12, he again met with the representatives of Allied whom he told that "we would not recognize them as an expanded unit nor would we recognize them as the representatives of the expanded unit"; that Allied then asked: If we present you with brand-new cards signed up by a clear majority of the people in the new Products Division, will you then negotiate with us? Gaither testified that after a recess he agreed to check authorization cards of employees of the new unit which consisted of men already at Signal Mountain and men to be moved from Broad Street who were represented there by the Steel- workers. Gaither testified: If-if they presented us with a clear majority of-of cards for all people who would ultimately be there,- TRIAL EXAMINER: Who would ultimately be there. The WITNESS: -we could continue to negotiate on receipt and verification of such cards. TRIAL EXAMINER: And it made no difference, then, to you or to them whether the people had already arrived and were working at Signal Mountain or whether they were merely tagged to go to Signal Mountain? The WITNESS: That's correct except for one thing:- TRIAL EXAMINER: Yes? The WITNESS: -we did say that "We-we will-this-the contract that we negotiate will be applicable only to those people as they come into this plant,-" However, Gaither testified, at the time cards were presented to the Respondent by Allied to prove their majority in the "rew Products Division" all bore signatures of employees actualy working at Signal Mountain. According to Gaither "They [Allied] did not attempt, as far as I know, to get any cards except in that plant . . because having gotten those, they had a clear majority of all who would ultimately be there." [Emphasis supplied.] On the same day, September 12, and on the day following Allied presented the Respondent with 206 cards signed by employees at Signal Mountain. Gaither testified that at the time the cards were presented operations at Signal Mountain were curtailed to about 50 percent of normal; 2 that at the time Allied presented its cards for recognition there were 212 or 213 production and maintenance employees working in the Signal Mountain plant and that at the time "approximately 200 employees [were] on laid off "status" at Signal Mountain. The Signal Moun- tain employees had been represented by Allied for 6 years. Gaither also testified that few if any employees had been physically transferred from Broad Street to Signal Mountain at the time the cards were submitted. In answer to the General Counsel's question as to such transfers having been made before the cards were submitted, Gaither answered: I-if-I believe that-no, I don't know; I feel-I think they were, but I don't know positively. The cards were submitted on the 12th, and I can't say for sure whether any were over there on the 12th, but I believe there were. 2 This was also stipulated as herein found. THE WHELAND COMPANY 829 Seth C. Smith, assistant personnel director for the Respondent, testified that he received the signed authorization cards from Allied on September 12 and 13, that he compared the signatures on the cards with endorsement signatures on paychecks of the same individuals, and that under instructions from his superiors he segregated 10 percent of the cards at random and then questioned the signer of each of such card regarding the circumstances under which he signed, reporting thereafter to the personnel manager. Smith testified that in each case he asked: 3 -"Were you coerced in any way in signing this card?" and his answer in each case was, "No"; second, "Were you promised anything to sign this card in the way of benefits?" and his answer was, "No"; then, "Were you-is it your desire to be represented by the Allied Industrial Workers in the Products Division?" and that answer was, "Yes." Smith further testified that: At the time he made the check some "300-35" em- ployees were "covered by the Products division," this figure including those at Broad Street yet to be transferred; at the time of the hearing 300 were employed at Signal Mountain; and "four or five" employees in laid-off status at Signal Mountain at the time of the card check have since been recalled. Gaither testified that on September 18, 1956, the Respondent signed a collective- bargaining contract with Allied covering the Signal Mountain employees for the Products Division, but that matters relating to "seniority, job classification, wages and fringe benefits" continued as subjects for final negotiation which were not com- pleted until December 24, 1956. Both of the Steelworkers representatives, Frazier and Starnes, testified they had no knowledge of the contemplated changes at Broad Street and Signal Mountain before Gaither talked with them at the restaurant. Starnes testified that he did not learn of the contract between Allied and the Respondent until his return from the convention on September 26, he then called James E. Black, the Respondent's per- sonnel director with whom he held the following conversation: I told-told him that we had heard that the Wheland Company had signed a contract with the Allied Industrial Workers while we was gone, and I wanted to know from him whether that was true or not or just what happened, and he said, "Yes, that's true." He says, "I don't know whether we did right or wrong, but we did sign a contract with them," and that "We asked them to furnish us with cards showing that they represented the people," and he said that "They furnished us with 206 cards, of which we believe to be valid cards and signa- tures of our employees," and he said, "Based on that, we signed a contract with the Allied Industrial Workers." An interesting feature of the evidence in the instant matter is the absence of any serious contradiction. With the exception of the one error as to a date the Trial Examiner found in Rector's testimony, the Trial Examiner finds all the testimony offered to be virtually undisputed. Resume As found herein, the Ordnance Division (Signal Mountain) employees were represented by Allied; the employees of the Manufacturing Division (Broad Street) were represented by Steelworkers and IAM. On September 4, 1956, the Respondent notified Allied that it had determined to consolidate the ordnance and manufacturing divisions into "an entirely new division." On September 5 the Respondent notified the employees of the manufacturing and ordnance divisions of its contemplated plan to create the new Wheland Products Division, to be housed at Signal Mountain. On September 10 the Respondent told Allied it would not recognize it as the rep- resentative of the employees of the new Products Division, and rejected Allied's con- tention that any new employees moved from Broad Street to Signal Mountain were merely an accretion to the existing unit represented by Allied. On September 11 the Respondent notified the Steelworkers representative of the claim made by Allied, stated it feared a strike, said it "hoped some union would peti- tion for an election," and assured the Steelworkers representatives that it would recog- nize no union as representative of the new unit without an election. On September 12 the Respondent again refused to recognize Allied as the rep- resentative of Wheland Products Division but agreed to deal with Allied for the new unit if Allied presented "brand new cards signed by a majority of the people in the new division." 8 It is not alleged that this poll of employees was violative of the Act. 830 DECISIONS OF NATIONAL LABOR RELATIONS BOARD As the new division had not yet been formed and the employees from Broad Street not yet moved to Signal Mountain , it was agreed that authorization cards could be taken from employees already working at Signal Mountain and from employees to be transferred from Broad Street. On the same day and the following day (September 12 and 13), Allied presented to the Respondent 206 authorization cards. All these cards were signed by em- ployees working at Signal Mountain. Allied had represented the employees at Signal Mountain for some 6 years. No cards were presented from any employees at Broad Street. At the time there were "212 or 213" production and maintenance employees at Signal Mountain; there were also "approximately 200 employees on laid -off status" in that plant. On September 18, the Respondent entered into a contract with Allied for the Wheland Products Division, covering employees then at Signal Mountain and all those who were slated to be transferred from Broad Street. The contract was not completed in all details until December 24. The Respondent gave no notice to the Steelworkers or the IAM. Conclusion The Trial Examiner is convinced that this record does not show that the Respondent, in setting up the Wheland Products Division to be staffed by employees at the time represented by three various unions, was ab initio seeking a way to bypass any of these unions; however, it seems clear to the Trial Examiner that having once embarked on its new enterprise the Respondent quickly thought itself in serious difficulty with Allied . This is clearly evidenced by the Respondent's request to the representatives of Steelworkers that in the event of a strike by Allied, the Steelworkers ignore any picket line. One must not lose sight of the fact that in the discussion in which this request was made, the status of employees not yet in a unit comprising a new organization itself hardly, or not yet, in existence, was being discussed. On all the circumstances herein , including the fear of a strike by Allied, it seems to the Trial Examiner that by agreeing to recognize Allied on a check of authoriza- tion cards, following statements that no recognition would be afforded without an election ; that by first stating that such authorization cards should be from both employees then working at Signal Mountain (and presumably represented by Allied ) and employees at Broad Street who would be transferred to Signal Mountain in due course, and then accepting cards signed exclusively by those then working at the Signal Mountain location, treated as a new unit of a new enterprise (ignoring those in laid-off status), it being clear to the Respondent that those being counted had been members of Allied through a 6-year period, the Respondent not only cleared the road for Allied's recognition but made for easy traveling . Likewise, when the Respondent announced that employees to be transferred into the unit from Broad Street would come under the contract to be negotiated with Allied "as they came into the plant," the Respondent deprived these employees, so blanketed into Allied , of their right to choose a bargaining representative and thereby contributed support to Allied and encouraged membership therein. By entering into a contract with Allied, clearly before the new manufacturing organization had really begun to function and before it had its full complement of designated employees, the Respondent closed out the contractual rights of men slated for a new enterprise and as above found put them under the control of a union clearly favored by the Respondent in the method used to show its right of representation. The Court of Appeals for the Sixth Circuit has held that "an employer cannot, by dealing with a union, constitute it the lawful representative of employees who have not chosen it to represent them." 4 It is axiomatic that, the purpose of the Act being to insure certain rights to employees in relationship with their employer, the chief benefit guaranteed is the right of employees to bargain through a union of their own choosing. In protecting this basic right , the Board has held that a group of employees , previously outside a bargaining unit in which they might appropriately be included , should not be placed in a bargaining unit where they would be a minority without being given the opportunity to express their preference in an election.5 4 Dickey V. N. L. R. B, 217 F 2d 652 (C. A 6). 5 The Zia Company, 108 NLRB 1134. THE WHELAND COMPANY 831 On all the evidence considered as a whole, the Trial Examiner is persuaded that by recognizing Allied on the card check as herein found and by thereafter entering into a contract with Allied as herein found, the Respondent rendered support to Allied contrary to the intent of Section 8 (a) (2) of the Act. Concluding Findings On the entire record the Trial Examiner finds that by its conduct with respect to the card check, its recognition of, and its contract with, Allied, all as herein above found, the Respondent had engaged in conduct violative of Section 8 (a) (1) and (2) and Section 2 (6) and (7) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent, set forth in section III, above, occurring in connection with the operations of the Respondent, described 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 commerce and the free flow of commerce. V. THE REMEDY Since it has been found that the Respondent has engaged in and is engaging in certain unfair labor practices affecting commerce, it shall be recommended that it cease and desist therefrom and take certain affirmative action in order to effectuate the purposes of the Act. Having found that by contributing support to Allied by agreeing to, and recognizing Allied by reason of a card check conducted in such a way as to insure Allied showing a majority of employees within a contemplated unit and by entering into a collective- bargaining agreement with Allied whereby certain prospective members of the said unit were to become subject to its provisions "as they came into the plant," they having already been designated as being among those who ultimately would be selected to work in said unit so covered by the contract, and in order to insure to such employees the full and free exercise of their rights to unions of their own choice as guaranteed in Section 7 of the Act, the Trial Examiner will recommend that the Respondent withdraw all recognition from Allied as the representative of all of the employees of the Respondent in its Wheland Products Division for the purposes of dealing with the Respondent concerning grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of employment until such time as it may be certified by the Board as the proper representative of said employees. The Trial Examiner further recommends that the Respondent cease and desist from giving effect to the contract entered into by the Respondent and Allied, dated September 18, 1956, however, the Trial Examiner further recom- mends that nothing herein shall be deemed to require the Respondent to vary any of the wages, hours, seniority, or other substantial features of its relations with its employees now established under the aforesaid agreement. Upon the foregoing findings of fact and upon the entire record in the case, the Trial Examiner makes the following: CONCLUSIONS OF LAW 1. United Steelworkers of America, AFL-CIO (Charging Party) and Local 176, Allied Industrial Workers of America, AFL-CIO (Party to the Contract) are labor organizations within the meaning of the Act. 2. The Wheland Company is engaged in commerce within the meaning of the Act. 3. By engaging in the conduct as set out in section III, above, with respect to the recognition of Local 176, Allied Industrial Workers of America, AFL-CIO, and entering into a contract with said organization, the Respondent has rendered unlawful assistance to said Local 176, Allied Industrial Workers of America, AFL-CIO, in yiolation of Section 8 (a) (2) of the Act. 4. The foregoing conduct constitutes unfair labor practices which are unfair labor practices affecting commerce within the meaning of Section 2 (6) and (7) of the Act. [Recommendations omitted from publication.]