J I Case Co.

In the Matter of J I CASE COMPANY and INTERNATIONAL UNION, UNITED AUTOMOBILE, AIRCRAFT & AGRICULTURAL IMPLEMENT WORK- ERS OF AMERICA, C I 0 Case No C-0180 -Decided July 7, 1940 Jurisdiction : faim implement and machinery manufacturing industry Unfair Labor Piactices. Interference, Restaaint, and Coercion urging employees to bargain individually on the basis of previously executed individual contracts Collectwe Bargaining majority established by certification-refusal to bargain collectn ely by refusing to deal with statutory representative designated after execution of valid individual contracts with respect to matters covered by the contracts-execution of valid individual contracts prior to designation of stat- utory representative held not to defer on qualify employer's statutory obligation to deal exclusively with such representative Remedial Orders: upon request to bargain collectively, refrain from enfoicing individual contracts and give notice thereof to contracting employees Unit Appropriate for :Collective Bargaining , production and maintenance em- ployees, excluding pattern makers and pattern makers' apprentices, at one of Company's plants - Mr Isaiah S Dorfman and Mr William J Isaacson, for the Board. Mr. Clark M Robertson, of Milwaukee, Wis , and Mr Ben 1' Reidy, of Rock Island, Ill , for the respondent Mr H D Burcham, of Rock Island, III, for the Union. Mr Marvin C Wahl, of counsel to the Board DECISION AND ORDER STATEMENT OF THE CASE Upon an amended charge duly filed by International Union, United Automobile, Aircraft & Agricultural Implement Workers of America, C. I. 0 , herein called the Union, the National Labor Relations Board, herein called the Board, by the Regional Director for the Thirteenth Region (Chicago, Illinois), issued its complaint and amended com- plaint on March 27 and April 13, 1942, respectively, against J I Case Company, herein called the respondent, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting commerce within the meaning of Section 8 (1) and (5), and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat 449, herem 42 N L R B, No 27 85 86 DECISIONS OF NATIONAL LABOR RELATIONS BOARD called the Act Copies of the complaint, together with notice of hearing thereon, and of the amended complaint were duly served upon the respondent and the Union -..With respect to the unfair labor practices, the amended complaint alleged in substance that the respondent, at its Rock Isli nd,_Illinois, plant (1) since March 7, 1942, has refused to bargain collectively with the Union for the employees in an appropriate unit, although the Union at all times since February 13, 1942, has been the exclusive representative of such employees; (2) since 1937, has offered each of its employees, and has executed with approximately 75 percent of its employees individually, employment contracts, which are unenfoi ce- able and void as to the respondent because they were tendered for the purpose of depriving its employees of their right to self-organization and collective bargaining through representatives of their own choos- ing; and (3) by the foregoing acts has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act On April 13, 1942, the respondent filed its answer to the amended complaint, admitting certain allegations respecting its business, but denying that it had engaged in unfair labor'piactices On the "same day, the respondent, the Union, and the Board entered into a stipula- tion agreeing upon a statement ofr facts to serve as the basis for our Decision and Order herein and expressly waiving further hearing, the issuance of an Intermediate Report of Proposed Findings of Fact, or other procedure before the Board The stipulation provides as follows For the purpose of rendering unnecessary the taking of testi- mony in the above entitled matter, IT IS HEREBY STIPULATED AND AGREED by and between J I Case Company, hereinafter called respondent; International Union, United Automobile, Aircraft & Agricultural Implement Workers of Ameiica, affiliated with the Congress of Industrial Oiganiza- tions, hereinafter called the Union, and Isaiah S Dorfman, Regional Attorney, and William J - Isaacson,-Attoi ney, , for, the Thirteenth Region of the National Labor Relations Board, that the following statement of facts and exhibits attached hereto shall have the same force and effect as though witnesses had testi- fied with respect thereto and said exhibits had been offered and received in formal hearing.' I Upon charges and amended charges duly filed by the Union, the National Labor Relations Board, hereinafter called the Board, by the Regional Director for the Thirteenth Region, issued its J I CASE COMPANY 87 complaint, dated March 27, 1942, and its amended complaint, dated Apiil 9, 1942, against respondent, alleging that iespondent had engaged and was engaging in unfair labor practices affecting commerce within the meaning of Section 8 (1) and (5) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat _449, hereinafter called the Act The complaint accom- panied by notice of hearing, and the amended complaint were duly served upon respondent and the Union Respondent's answer ' dated April 6, 1942, and respondent's amended answer dated April 9, 1942, while admitting various of the allegations contained in the complaint denied that it had engaged or was engaging in unfair labor practices within the meaning of Section 8 (1) and (5) and Section 2 (6) and (7) of the Act The answer and amended answer wen e duly served upon the Board and Union _ II The parties hereto expressly waive further hearing, inter mediate report, proposed findings of fact, and other and further procedure before and of the Board, provided that the -parties hereto may within ten (10) days after the execution of this Stipu- lation file briefs with the Board and ask leave of the Board to argue orally This stipulation and Agreed Statement of Facts, together with first amended charge, complaint and notice of hear- ing, amended complaint, answei, amended answer, and the transcript of the record and exhibits in J I Case Co and Interna- tional Union, United Automobile Aircraft c Agricultural Im- plement Workers of America, C 1 0., Case No R-3394, as well as the Board's Decision and Direction of Election and Certifica- tion of Representatives therein, shall be filed with the Chief Trial Examiner in Washington, D C , and shall constitute the entire record in this proceeding Upon said record the Board may make findings of fact, conclusions of law and issue a decision and order In any proceedings instituted to enforce or review such Board order the record as herein described shall, constitute the entire record III Respondent, a Wisconsin corporation, having its principal place of business in Racine, Wisconsin, and operating several plants in Wisconsin, Iowa, and Illinois, is engaged in the manufacture and sale of farm implements and farm machinery Respondent's plant at Rock Island, Illinois, heieinafter called the plant, is the only plant involved in the instant' proceeding and was- ac- 88 DECISIONS OF NATIONAL LABOR RELATIONS -BOARD quired and placed in operation during 1937 During the, year 1941 respondent purchased law materials and supplies valued at approximately $1,000,000, of which amount approximately 80 per cent was delivered from points outside the State of Illinois Dur- ing the same per rod, respondent sold finished products manufac- tured at the plant in an amount in excess of $2,000,000, of which amount approximately 80 per cent was shipped to points outside the State of Illinois There are at the present time approximately 700 persons employed at the plant, 682 of whom are in the appro- priate unit hereinafter referred to in Paragraph VI Respond- ent admits that its operations as herein described occurred in commerce within the meaning of Section 2 (6) and (7) of the Act IV The Union, affiliated with the Congress of Industrial Ozganl- zations, is a labor oigamzation within the meaning of Section 2 (5) of the Act. V Respondent, by its duly authorized agents, while engaged in the operation of the plant from on or about November, 1937, and at various times thereafter, upon hiing employees or at the commencement of the factory year, offered to each and every one of its employees individually a contract , a representative copy of which is hereto attached as Exhibit "A" 1 and made a part hereof (respondent's current rules referred to therein and made a part thereof, is attached hereto and made a part hereof as Exhibit "B"), and executed said contracts with each of approxi- mately 75 per centuin of its employees individually Flom time to time thereafter at the begs ring of each factory year, certain of said contracts were renewed and certain new contracts entered into The employees executing said contracts were not neces- sai ily the same from time to time , certain employees executed said contracts who had not executed them during the preceding factory year and other employees who had previously executed contracts failed to renew them The percentage of contracts in effect at all times remained approximately as herein set forth. The factory year runs currently from August 1, 1941 up to and including July 31, 1942 There are presently in full force and effect 433 of such contracts between respondent and individual employees, 415 of which are with employees in the unit as de- 'The Exhibits which are referred to in the Stipulation are not set forth in full herein, but are i efeu ed to in our findings of fact, in 0 a, A herev or necessary or material J I CASE COMPANY 89 scribed in Paiagiaph VI helem, which unit consists of 582 employees On December 17, 1941, Febiuaiy 5, 1942, and March 19, 1942, and on each of said dates, respondent mailed to each and all of its employees engaged at the plant a letter over the signatuie of T E Stahl, Woiks Managei, a copy of each of said letters being attached heieto, and made a part heieof, as Exhibits "C", "D", and "E", respectively 2 The Board contends, and respondent denies, that said indi- vidual contiacts now in effect, and each of them, are illegal, unenfoiceable and void as to respondent, as set foith in Para- gi apps 5 and 10 of the complaint in that (1) Each of said individual contracts, and particulaily the employee convenants provided therein, pieclude the employees, and each of them, from exeicismg their rights under the Act Each of said contiacts is, therefore, invalid on its face and unenforceable and void as to iespondent; (2) In addition to (1) herein and regardless whether said contracts are illegal per se, respondent actively utilized said con- tracts as a means of interfering with the self-organization of its employees and preventing collective bai gaining by publicizing to its employees (a) That the contracts were a bar to the selection of a bargain- ing representative under Section 9 (c) of the Act as set forth in Exhibit "C"; (b) That the company would not bargain ninth their duly cer- tified collective bargaining i epresentative as exclusive repre- sentative, respecting wages, horns and working conditions dining the term of said individual conti acts as set forth in Exhibit "E" Ii m the purposes of this Stipulation, the Board does not con- tend that the execution of said contracts was a condition of ein- ployment, di that the status of individual employees was, affected by reason of signing or failing to sign said conti acts VI The parties state that on January 26, 1942, the Boaid, rejecting iespondent's contention therein raised that the contracts heiein- z The letter of December 17 summarized the evidence and arguments which were pie- sented at the hearing in the representation proceeding, including the respondent ' s conten- tion that the individual contracts constituted 'i bar to the proceeding In the letter of February 5, the respondent advised its employees that the Board had directed the holding of an election and that conferences had been held in preparation tbeiefor and urged all eligible employees to vote The letter of Maich 19 stited that the Union had won the election and bad been certified by the Board , that the Union had presented the iespondent with a collective bargaining agreement but the respondent refused to deal with the Union concerning the terms and conditions of employment covered by the individual contracts, And that the Union bad filed charges with the Board 90 DECISIONS OF NATIONAL LABOR RELATIONS BOARD above referred to constitute a bar to a direction of election, issued its Decision and Direction of Election in Case No R-3394, entitled In the Matter of J I Case Co and International Union, United Automobile, Aircraft and Implement Workers of America, C 1 O. (38 N L R B 110), finding, among other things; that in order to insui e to the employees of the plant the full benefit of their right to self organization and otherwise to effectuate the policies of the Act, "all production and maintenance employees, including Charles R (Whitey) Clausen, Johnny Waters, Oliver Gordon, Walter Coghill, Frank De Freeze, and Hank De Vooght, of J I Case Co, Rock Island, Illinois, plant exclusive of office and cleri- cal employees and Paul Eastland, Russel Johnson, Loyd Cousin, and other supervisoiy employees, and pattern makers and pattern makers' apprentices" constitute a unit appropriate for the pur- -poses of collective bargaining with respondent, within the mean- ing of Section 9 (b) of the Act, hereinafter called the unit., For the purposes of this Stipulation respondent does not contest the appropriateness of the unit. VII That on February 13, 1942, a majoiity of the employees in the unit designated the Union as its repi esentative for the purpose of collective bargaining with respondent, such designation having been made pursuant to aforesaid Direction of Election in an elec- tion by secret ballot held on February 13, 1942, and at all times since February 13, 1942, the Union has been the exclusive repre- sentative of all employees in the unit for the purposes of collective bargaining with respect to rates of pay, wages, hours of employ- ment or other conditions of employment VIII On March 7, 1942, Mr. H D Burcham, duly authorized rep- resentative of the Union, in a meeting with Mr T E Stahl, Works Manager of the Rock Island plant and duly authorized representative of respondent, did request respondent to bargain collectively with respect to rates of pay, wages, hours of employ- ment and other conditions of employment with the Union as the exclusive repiesentative of all the employees of respondent in the unit In response thereto, Mr Stahl did fail and refuse to negotiate with the Union as the exclusive iepresentative of all the employees in the unit with iespect to rates of pay, wages, hours of employment or other conditions of employment, declar- ing that respondent could not deal with the Union in any manner J I CASE COMPANY 91 affecting the lights and obligations of respondent and its em- ployees under the individual contracts while the contracts remained in full force and effect Mr Stahl continued that re- spondent would deal with the Union on matters which did not affect the rights of respondent and the employees under the individual contracts, and that it would deal with the Union as the exclusive baigai ni ng agency for all employees in the unit on matters ,i elating to, hours, wages and conditions of employment upon expiration of the individual contracts IX At all times since March 7, 1942, up to and including the mak- ing of this Stipulation and Agreed Statement of Facts, respond- ent has maintained the same position, as described in Paragraph VIII herein, with iespect to the Union's request to bargain collectively. The Board contends, and respondent denies, that respondent has refused, to,bargain collectively with the Union as the exclu- sive representative of its employees within the unit in violation of Section 8 (5) of the Act x Anything to the contraiy herein notwithstanding, the record in this matter may be reopened by the Board upon notice to the parties, piovided, should that occur, that the record will, upon request of any of the parties hereto, be reopened with respect to any or all issues herein XI There is no oral understanding or agreement which varies, alters, or adds to this Stipulation and Agreed Statement of Facts. On April 28, 1942, the respondent filed a brief which the Board has considered Upon the entire record in the case, the Board makes the following: FINDINGS OF FACT I THE BUSINESS OF THE RESPONDENT ` The respondent, J. I Case Company, is a Wisconsin corporation engaged in the manufacture and sale of farm implements and farm machinery It opeiates plants in the States of Wisconsin, Iowa, and Illinois The respondent's plant at Rock Island, Illinois, is involved 92 DECISIONS OF NATIONAL LABOR RELATIONS BOARD in this proceeding Doling 1941 the respondent, in,connection with its operations at Rock Island, puichased raw mateiials and supplies valued at approximately $1,000,000, of which amount 80 percent represented deliveries to Rock Island fiom points outside the State of Illinois. In the same period, the iespondent sold finished prod- ucts which were manufactured at its Rock Island plant in an amount exceeding $2,000,000 of which 80 percent represented shipments to points outside the State, of Illinois At the time of the hearing, the respondent employed approximately 700 peasons at its Rock Island plant The respondent admits that it is engaged in commerce within the meaning of the Act II THE ORGANIZATION INVOLVED International Union, United Automobile. Auciaft & Agiicultural Implement Woikeis of Ameiica is a labor organization affiliated with the Congiess of Industrial Organizations, admitting to membership employees of the respondent - III THE-UNFAIR LABOR, PRACTICES A The refusal to bargain collectively 1 The appiopriate unit The parties stipulated, and we find, that all production and main- tenance employees, including Charles R (Whitey) Clausen, Johnny Waters, Oliver Goidon, Walter Coghill, Flank De Fieeze, and Hank De Vooght, and excluding office and clerical employees and Paul East- land, Russel Johnson, Loyd Cousin, and other supervisory employees, and pattern makers and pattern makeis' apprentices, constitute a unit appropriate foi the pun poses of collective bai gainin g and that such unit insures to employees of the respondent the full benefit of their eight to self -organization and collective baigainmg and otherwise ef- fectuates the policies of the Act 3 2 Representation by the Union of a majority in the appropriate unit On Februaiy 13, 1942, in an election conducted by the Board pur- suant to a Direction of Election ,4 a majority of the employees in the appropriate unit designated the Union as their representative foi the puiposes of collective bargaining with the iespondent with respect to 3 We previously found this unit to be appropriate in Mattel-of J I Case Co and Inter- national Union, United Automobile, Aircraft 5 Agricultural Implement Workers of America (C I 0 ), 38 N L R B 522 4 Idem J I CASE COMPANY 93 sates of pay,'wages, hours of employment, and other conditions of employment On March 3, 1942, the Board certified the Union as such representative' The parties stipulated, and we find, that at all times since February 13, 1942, the Union has been the exclusive repre- sentative of all the employees in the unit heretofore found appro- priate"for the purposes of collective bargaining with respect to rates of pay, wages, hours of employment, and other conditions of employ- ment 't'here are 582 employees in the appropriate unit 3. The refusal to bargain In accordance with the stipulation of the parties, we find that on March 7, 1942, H D. Burcham, a representative of the Union, re- quested T E. Stahl, works manager of the Rock Island plant, to bargain collectively with the Union as exclusive representative of the respondent's employees in the appropriate unit.' Stahl, however, refused to negotiate with the Union as such representative, stating that the respondent "could not deal with the Union in any manner affecting .the rights 'and, obligations of respondent and its employees under the individual contracts while the contracts remained in full force and effect." Stahl asserted that the respondent would deal with the Union on matters which did not affect the rights of the respondent and the employees under the individual contracts and that it would deal with the Union as the exclusive bargaining iepre- sentative for all employees in the unit on matters relating to hours, wages, and -conditions of- employment upon the expiration of the individual contracts 4. The individual employment contracts In November 1937, and at various times thereafter, the respondent, upon lining new employees and at the commencement of each factory year, offered to each employee an individual contract The contracts- in effect at the time of the alleged refusal to bargain were executed on August 1, 1941, or thereafter, for a period ending July 31, 1942 They, like their piedecessors, contained the following provisions The respondent agreed to pay a specified hourly rate or prevailing piece rates to the contracting employee and to maintain such rates for the term of the agreement, to determine new rates in the event that the contracting employee's job changed, to furnish employment as steadily as trade conditions permitted, and to comply with the respondent's rules, 6 the employee agreed to accept the wages, hours, 'Matter of J I Case Co and Inteinational Union, United Automobile, Aircraft J Ago icul- tural Impleneiit Workers of America (C I 0 ), 39 N L it B 412 1The mulls referred to in( Idled lime factors iules, safety, rules, apprentice tiammng, a vacation pl in, and miscellaneous information 94 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and working conditions provided for, to "faithfully and honestly" serve the respondent during the term of the agreement, to preserve the respondent's property, to comply with its iules, and to accept the respondent's "fixed" policy that "quality must be fii st," and that "defective woi k will not be paid for " The respondent- executed such conti acts with appi oximately 73 peicent of its employees At the beginning of each factory year, some existing contracts were renewed, others were entered into for the first time, while some employees failed to renew contracts ex- ecuted by them during the preceding factory year. As of April 13. 1942, 415 of the 582 employees in the appropriate unit had signed individual contracts As stated in the stipulation, it is not contended that the execution of the individual contracts was a condition of employment or that the status of individual employees was affected by ieason of signing or failing to sign the contracts. In accordance with the stipulation of the parties, we find that on December 17, 1941, the day on which the hearing was held in the representation proceeding, and again on March 19, 1942, following its refusal to bargain with the Union concerning matters covered by the individual contracts, the respondent wrote its employees con- cerning its position with respect to such contracts Thus, in its letter - of December 17, it wrote : The Company .. showed to the Board that on the payroll of November 22, 1941, 433 of the employees had exercised their right to make individual contracts with the Company... . Evidence was presented on this point and will be submitted to the Labor Board at Washington for a final determination as will also the Company's request that the proceeding be dismissed on the ground that the Company does not believe that any action should affect its right and the-rights of its employees who have signed individual contracts and indicated that they wish to bargain with the Company on that basis. The Company is giving you this information in accordance with its policy of keeping you informed as to matters which affect the employment relationship existing between you and the Company Material excerpts from the March 19 letter follow : As we^ told you in our letter, of December 17, 433 Case em- ployees have exercised their right to make individual contracts J I CASE COMPANY 95 with the Company. These contracts continue until August 1, 1942, and their validity is not affected by the result of the ballot. Accordingly, when the Committee of the Union came to see the Management of the Rock Island Plant, and presented a collective bargaining contract for all employees, they were advised that the Company could not deal with the Union in any manner which affected the rights and obligations of the Company and its em- ployees under the individual contracts while these contracts were still in effect. The Union has advised the Company that it will not deal with the Company except on the basis of the contract which it pre- sented In other words, the Union has taken the position that the Company must tear up its contracts with its individual em- ployees and disregard the rights and obligations of its employees and of itself under those agreements. The Company_ believes and has been advised that the conti acts for their term constitute legal and binding obligations both on the part of the Company and on the part of the employees, and that its individual em- ployees have constitutional rights which they are entitled to have preserved and which the Company has no right to surrender. , * > * * * * * 5 Conclusions - The respondent contends that the individual contracts are valid and enforceable and preclude it from engaging in collective bargain- ing with the Union concerning the terms and conditions of employ- ment which are covered by such contracts 7 The issue thus presented is whether, by voluntarily entering into individual contracts of employment prior to the designation of a col- lective -bargaining agent, the employees are disabled during the term of such contracts from bargaining through representatives of their subsequent choosing with respect to teims and conditions of employ- ment covered by the individual contracts Correlatively, the question is whether the respondent, undei the, circumstances, is relieved of the duty to bargain collectively We must resolve the issue against the respondent, and we find its defense to be without merit. The Act expressly recognizes that the iefusal of employers to accept the procedure of collective bargaining in our Dacision and ,Direction of Election (see footnote.3, supra) we overruled a sinulai contention of the respondent to the effect that the individual contracts with the emploiee's constituted a bar to an election 96 DECISIONS OF NATIONAL LABOR RELATIONS BOARD leads to industrial strife and unrest by perpetuating the inequality of bargaining power between employers and their employees "who do not possess full freedom of association or actual liberty of con- tract " Aimed at removing that disparity of bargaining power and its consequent evils, the Act expressly declares that the public policy is to encourage the practice and procedure of collective bargaining and imposes upon employers the duty to bargain exclusively with the duly designated representatives of their employees The duty is necessarily paramount to the freedom of contract which the employer may have enjoyed prior to the enactment of the statute or before the collective agent has been chosen Until such representative is desig- nated, the employer may, of course, deal individually with his em- ployees concerning any aspect of the employment relationship so long as he does not exact terms repugnant to the Act 8 and does not offer the contracts for the purpose of infringing rights under the Act 9 The employee is not, however, presumed thereby to have sur- rendered his right to collective bargaining during the period of his individual agreement The right and its correlative duty aie merely in abeyance pending the choice of a collective agent 10 When once a majoiity of the employees have exercised their right to choose a representative for concerted bargaining in an appropriate unit, the employer's statutory obligation to deal exclusively with such repre- sentative as to all terms and conditions of employment is immediate and unconditional and its performance nnay not be deferred or quali- fied by reason of any individual bargain which he may have made with his employees 11 Nor may the employer, contrary to the Board's determination, limit the bargaining unit to the non-contracting em-_, ployees and thereby arrogate to himself a power lodged exclusively in the Board Any attempt by the employer to cuitail the collective agent's power or to compel individual bargaining under the contracts constitutes an obstruction to the rights guaranteed by the Act To -hold otherwise would be to violate the clear intendment of the Act and to discourage self-organization and collective bargaining Thus, the respondent, by insisting that those who signed contracts wish to bargain on an individual basis and by refusing to deal with the Union with respect to terms and conditions covered by the individ- 8 National Licorice Co v National Labor Relations Board, 309 U S 350 National Labor Relations Board v Superior Tanning Co , 117 F ( 2d) 881 (C C' A 7), cert den 313 U S 559 11 Even where an employee voluntarily signs an individual contract of employment, agreeing to bargain individually , the individual contract, to that extent , is vold and un- enfoiceable See National Labor Relations Board v Stone, 125 F (2d) 752 (C C A 7) ; Mattei of Killefei Manufacturing Corporation and Steel Workers Organizing Committee, 22 N L R B 484 11 In Home Building & Lean Assn v Bladadell, 290 U S 398, 435, the Court said, existing laws [are] read into contracts in order to fix obligations as between the p'irtles ' J. I CASE COMPANY 97 ual contracts, has failed to bargain collectively within the meaning of the Act - Moreover, the iespondent has utilized the conti acts to interfere with and impede its employees in the exercise of their right to select repre- sentatives for collective bargaining and to baigain through such iepiesentatives by urging its employees, by means of the letters of December 17, 1941, and March 19, 1942, to bargain individually on the basis of the contracts father than through a collective agent The letteis clearly weie intended to advise the employees that continued suppoit of the Union as collective bargaining agent would be of no avail, as the respondent nn ould i efuse to deal with such agent The iespondent's purpose in so encularizuig its employees was thus to compel them to adhere to the individual contracts and to abandon their collective efforts and rights during the term of the contracts. We find that the respondent on March 7, 1942, and at all times there- after, has refused to bargain collectively with the Union as the exclu- sive representative of the employees in an appropriate unit and has thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act We find also that, by urging, its employees to bargain individually on the basis of the contracts, the respondent has interfered with, iestrained, and coerced its employees in the exercise of the rights guaranteed by Section 7 of the Act Iv THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE We find that the activities of the respondent set forth in Section, II, above, occurring -in `connection with the operations of the ie- spondent described in Section I, above, have a close, intimate, and substantial relation to ti ade, traffic, and commerce among the several States and tend to lead to labor disputes buldennng and obstiucting commerce and the free flow of commerce TII1 REllrnl We-have found that the iespoiident has interfered with, iestiained, and coerced its employees in the exercise of the iiglits guaranteed in Section 7 of the Act We shall, therefore, order the respondent to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. We have found that the respondent has failed to bargain with the Union Consequently, we shall order it upon request to bargain col- lectively with the Union with respect to iates of pay, wages, hours of employment, and other terms and conditions of employment 472514-42-von 42-7 1 98 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Since we have found that the iespondent has utilized the individual contracts as a means of thwaiting the rights of its employees under the Act, and since we consider such contiacts to constitute an obstacle to the full exercise of the iight to collective bargaining, we find it necessary, in order to effectuate the policies of the Act, to oidei the respondent to refrain from enforcing the contracts We shall con- sequently dnect the respondent to give 'to each employee who, has signed such contract written notice stating ( 1) that the conti acts will not in any manner be enforced or attempted to be enfoiced , (2) that the employees are not requiied oi expected by virtue of such contiacts to deal with the respondent individually ; and (3) that such discon- tinuance of the contiacts is without piejudice to the asseition of any legal rights the employees may have acquued undei such coati acts. We shall further oidei the iespondent to post notices to the same effect in appropriate places in its Rock Island plant Upon the basis of the above findings of fact and upon tlie-entue iecord in the case, the Boaid makes the following CONCLUSIONS OF LAN% 1. International Union, United Automobile, Anciaft & Agiicultutat Implement Woikeis of America, C . I 0, is a labor of ganizatiou within the meaning of Section 2 (5) of the Act 2 All production and maintenance employees, including Chailes R_ (Whitey) Clausen, Johnny Waters, Olivei Gordon, Walter Coghill, Frank De Freeze, and Hank De Vooght , and excluding office and cleiical employees and Paul Eastland , Russel Johnson , Loyd Cousin,_ and other supervisory employees , and pattein makeis and pattern makers' apprentices , constitute a unit appropiiate for the puiposes of collective baigaining, within the meaning of Section 9 (b) of the Act 3 Since Febiuaiy 13, 1942, and at all times theieaftei , Inteina- tional Union, United Automobile , Au ci aft & Agi icultui al Implement Woikers of America, C I O, has been the exclusive iepiesentative of all such employees for the puiposes of collective bargaining, within the meaning of Section 9 (a) of the Act. 4 By refusing to bargain collectively with Inteinational Union, United Automobile, Aircraft & Agricultui al Implement Woi ket s of America, C I 0, as the exclusive repiesentative of its employees within an appiopriate unit, the respondent has engaged in and is engaging in unfair labor practices , within the meaning of Section 8 (5) of the Act. 5 By intei fei ing , with, rests aiming , and coercing its employees in the exercise of the rights guaranteed ,in Section 7 of the Act, the J I CASE COMPANY 99 respondent has engaged in and is engaging in u nfai• labor practices, within the meaning of Section 8 (1) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting ;commerce within the meaning of Section 2 (6) and (7) of the Act ORDER Upon the basis of the above findings of fact and conclusions of law, and pursuant to Section 10 (c) of the National Labor Relations Act, the National Laboi Relations Boaid hereby oiderrs that the respond- ent, J I Case Company, Rock Island, Illinois, its officers, agents, successors, and assigns, shall 1 Cease and desist from (a) Giving effect to the individual conti•icts of employment or any modification, continuation extension, or ienewal thereof, or entering into any similar form of contract with its employees foi any period subsequent to the date of this Decision; (b) Refusing to baigain collectively with International Union, United Automobile, Anciaft & Agiicultuial Implement Workers of America, C I 0, as exclusive iepiesentative of, all production and maintenance employees at its Rock Island, Illinois, plant, including Chailes R (Whitey) Clausen, Johnny Wateis, Oliver Gordon, Walter Coghill, Fiank De Freeze, and Hank De Vooght, and exclud- ing office and clerical employees and Paul Eastland, Russel Johnson, Loyd Cousin, and othei supervisoiy employees, and pattein makers and pattein makeis' appientices, in respect to rates of pay, wages, Iioui is of employment, and other terms and conditions of employment; - (c) In any inannei inteifeiing with, iestiaining, or coercing its employees in the exercise of then iight to self-organization, to form, join, of assist laboi organizations, to bargain collectively thiough i epiesentatives of their own choosing, and to engage in concerted activities for the purposes of collective bargaining or other mutual aid and piotection as guaranteed nn Section 7 of the Act 2 Take the following affirmative action which the Boaid finds w ill effectuate the policies of the Act: (a) Give sepaiate wi tten notice to each of its employees who signed an individual contract of einploynient or any modification, continuation, extension, or renewal thereof, or any similar form of contract for any peiiod subsequent to the date of this Decision, that such contract will not in any manner be enforced or attempted to be enfoi ced, that the employee is not required of expected by virtue of such contract to deal with the respondent individually, and that such discontinuance of the contiact is without prejudice to the assertion of any legal rights the employee may have acquired under such conti act; 100, DECISIONS OF NATIONAL LABOR RELATIONS BOARD (b) Upon request, bargain collectively with International Union, United Automobile, Aircraft & Agricultural Implement Workers of America, C I. 0., as the exclusive representative of all its production and maintenance employees, including Charles R. (Whitey) Clausen, Johnny Waters, Oliver Gordon, Walter Coghill, Frank De Freeze, and Hank De Vooght, and excluding office and-clerical employees and Paul Eastland, Russel Johnson, Loyd: Cousin, and ` other super- visory employees, and pattern makers and pattein makers' appren- tices, in respect to rates of pay, wages, hours of employment, and other terms and conditions of employment;- (c) Post immediately in conspicuous places throughout its Rock Island, Ilmois, plant and maintain for a period of at least sixty (60) consecutive days from the date of posting, notices stating (1) that the respondent will not engage in the conduct from which it is ordered to cease and desist in paragraphs 1 (a), (b), and (c) hereof, and (2) that the respondent will take the affirmative action set forth in paragraphs 2 (a) and (b) hereof; (d) Notify the Regional Director for the Thirteenth Region in writing within ten (10) days from the date of this Order what steps the respondent has taken to comply herewith MR GERARD D REILLY concurring : I concur in finding that the refusal of the respondent to bargain with the Union certified pursuant to Section 9 (c) as the collective bargain- ing agent for all the employees within the appropriate unit on matters covered by the individual contracts amounted to a violation of Sec- tion 8 (5) of the Act. The position of the Company is that since-these individual con- tracts have fixed certain provisions with respect to wages, hours, and working conditions of employment foi a teim of 1 year, the employees are disabled during the term of these contiacts from bargaining through a collective agent for changes in these matteis In other words, we are urged to hold that inasmuch as the individual agree- ments contained no provisions which contravened the provisions of this Act or any other statute, the employees in question were bound by these conditions until the expiration date and were not relieved front their obligations by the designation of a statutoiy collective bargaining agent. The question thus posed is a difficult one It i a'ses a problem of a possible conflict between the law of contracts and i ights arising under the National Labor Relations At In my opinion, this record does xiot require the Board to pass upon it J. I. CASE COMPANY 101 The case is before us on a stipulation of agreed facts These indi- vidual contracts were incorporated by reference in the stipulation and the Board should consider their legal effect. It seems to me clear from examining these instruments that, despite the fact that on their face they purport to be in effect for a fixed peiiod, they aie lacking in the elements of mutuality- necessary for contracts of employment enforceable ' for a definite ter nI. 2 These contracts affoid the em= ployees no greater security of tenure than they would enjoy under an employment relationship terminable at will Hence, it follows that an employee himself at any time could negotiate for a change in wages, hours, and working conditions specified in these instruments. There- fore, tinder the provisions of the National Labor Relations Act, an em- ployee could designate a collective bargaining agent to conduct these negotiations and the employer would be obligated to bargain with him That-is what happened in this case, but the employer did not fulfill his obligation. I think it is sufficient to rest our judgment upon this ground without passing upon the abstract question of law raised by the respondent. 12 Thus, while exacting a promise from the employee to work for a period of 1 year, the employer agrees only to furnish employment "as steadily as busin"ss and trade conditions permit" (Clause 2 of the Company agreement ) Moreover, the employer reserves the tight unilaterally to effect material changes in manufactuting methods and to determine the rate of pay for any "new job", which might result in consequence of ucb changes (Clause 3 of the Company agreement )