V-O Milling Co.

In the Matter of V-O MILLING COMPANY and FLOUR, FEED AND CEREAL WORKERS FEDERAL UNION, LOCAL No. 21830, A. F. L. Case No. C-2124.-Decided August 19, 194 Jurisdiction :. feed and flour manufacturing industry. Unfair Labor Practices Collective Bargaining: majority not contested by employer-refusal to bargain concerning wages, regardless of previously established policy concerning wages, violative of Act ; union's other demands found not the real cause of the failure to reach an agreement; limited authority of employer's representative, and refusal to furnish a representative with the requisite authority, showed lack of good faith and made productive negotiations impossible Discrimination: request for reinstatement of unfair labor practice strikers and continuance of negotiations held to constitute a conditional request, and em- ployer's rejection thereof held not to constitute discrimination ;• charges dis- missed. Remedial Orders : employer ordered to cease and desist unfair labor practices; bargain collectively with union on request ; and offer reinstatement to unfair labor practice strikers on application, with back pay from 5 (lays thereafter. Unit Appropriate for Collective Bargaining : all employees in production, main- tenance, and drivers' departments,'including the truck drivers, but excluding supervisory employees with the right to hire and discharge, office and clerical employees, the garage mechanic and the garage mechanic's helper ; no con- % troversy as to. - Evidence : employer's conduct toward union prior to majority designation, although not, a refusal to bargain, held relevant in appraising subsequent negotiations. Mr. Charles M. Ryan, for the' Board. Stick cC Moerdyke, by Mr. John C. Stick, and Mr. Amos Friedman, of Los Angeles, Calif., for the respondent. Mr. Herman M. Johnson, of Bell, Calif., for the Union. Mr. Milton E.,Harris, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges filed by Flour, Feed and Cereal Workers Federal 'Union, Local No. ,21830, A. F. L., herein called the Union,, the Na- 1 The charges were filed by American Federation of Labor in behalf of the Union. 43 N. L. R. B., No. 59. 348 V-0 MILLING COMPANY 349 -tional Labor Relations Board, herein called the Board, by the Regional Director' for the Twenty-first Region (Los Angeles, California),' issued its complaint dated November 10, 1941, against V-O Milling Company, Los Angeles, California, herein called the respondent, alleging that the respondent had engaged in and was engaging in unfair labor prac- tices, affecting commerce within the meaning of Section 8' (1),'(3), and (5) and Section 2 (6) and (7) of the National Labor Relations Act, '49 Stat. 449, herein called the Act. Copies of the complaint, accompanied by notices of hearing, were duly served upon the respond- ent and the Union. With respect to the unfair labor practices, the -complaint as amended,2 alleged in substance that the .respondent. (1) on or about October 24, 1940, and at all times thereafter, refused to bargain col lectively in good faith with the Union a's the exclusive representative of all its employees within a specified appropriate unit ; and (2) on or about June 2, 1941, and from time to time thereafter, refused to rein- state 47 named employees who were then on strike as a result of the respondent's unfair labor practices, because of the union affiliation and activities of such employees ; and (3) that the respondent 'hereby interfered with, restrained, and coerced its employees in the'exercise of the rights guaranteed in Section 7 of the Act. On January 2, 1942, the respondent filed an answer to the complaint, as amended, denying that it had engaged in any of the, alleged unfair labor practices., Pursuant to notice, a hearing was held at Los Angeles, California, from January 12 to 15, 1942, before Gustaf B. Erickson, the Trial Examiner duly designated by the Chief Trial Examiner. The Board and the respondent were represented by counsel and the Union by a representative. All parties participated in the hearing and were af- forded full opportunity to be,heard, to examine and cross-examine witnesses, and to introduce evidence bearing upon the issues. At the close of the hearing, the Trial Examiner granted, without objection, the motion of counsel for the Board to conform the pleadings to the proof. The parties were then afforded an opportunity to argue orally before the Trial Examiner, but did not do so. Thereafter, pursuant to leave, the respondent filed a brief with the Trial Examiner. Dur- ing the hearing and in his Intermediate Report the Trial Examiner made various rulings on motions and on objections to the admission of evidence. The Board has reviewed the rulings of the Trial Ex- aminer and finds that no prejudicial errors were committed.- The rul- ings are hereby affirmed, On March 2, 1942, the Trial Examiner filed his Intermediate Report, copies of which were duly served on the respondent and the Union. 2 On December 29, 1941, the Board issued and served an amendment to the complaint. i 350 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Trial Examiner therein found that'the respondent had (1) re- fused to bargain collectively with the Union, and (2) on September 23, 1941, discouraged membership in the Union by refusing to reinstate 44 of the 47 employees named in the complaint. He recommended that the respondent cease and desist from refusing to bargain collec- tively.with the Union, discouraging membership in the Union,. and otherwise interfering with, -restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act. He fur- ther recommended that the respondent affirmatively bargain collec- tively'with the Union upon request and offer reinstatement and back pay to said 44 employees. On April 1, 1942, the respondent filed exceptions to the Intermediate' Report,and other parts of the record,3 and a brief in support thereof: No request was made for a hearing for the purpose of oral argument before the Board.4 - The Board has considered -the exceptions and brief and, insofar as the exceptions are inconsistent with the-findings, conclusions, and order hereinafter'set forth, finds them to be without merit. - Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The respondent, V-O Milling Company, is a California corporation with'its plant and office in Los Angeles, California, where it is engaged in the business of manufacturing feed and flour. During the fiscal year ending May 31, 1941, it purchased raw materials consisting of wheat, corn, barley, and other kinds of grains and protein concentrates in the amount of'145,683,387 pounds and of the value of,$2,215,173.78. Of that amount 21,852,508 pounds, of the value of $332,276.07, wei e purchased and obtained from sources outside the State of California, and 7,289,169 pounds, of the value of $110,758.69, were purchased through brokers who obtained such materials from outside the State of California. During ' the same period the respondent's' products amounted to 143,385,344 pounds, with a value of $2,580,297.44, of which approximately 2;867,707 pounds, of the value of $51,605.95, were shipped to purchasers outside the State of California. the meaning of the Act. The respondent concedes that its operations affect commerce,, within 3 The respondent therein moved to amend the Intermediate Report. The motion is hereby denied 4 The Intermediate Report advised the parties that they might request such oral argu- ment within 20 days. , V-0 MILLING 'COMPANY H. THE ORGANIZATION INVOLVED 351 Flour, Feed and Cereal Workers Federal Union, Local No. 21830, affiliated with the American Federation of Labor, is a labor organi- zation admitting to membership employees of the respondent. III. 'THE UNFAIR LABOR PRACTICES A. Background Early in 1940 the Union began organizing the respondent's em- ployees. On September 14, 1940, Herman M. Johnson , secretary and treasurer of the Union, sent a letter by registered mail to' the re- spondent ,5 stating that the Union represented a majority of the em- ployees in the plant and desired a meeting for the purposes ' of col- lective bargaining. Because of illness, Max Viault was -not at the plant when the postman attempted to deliver the letter , on September 16. The postman thereupon retained the letter , but left the usual notice. When no . reply ' was received to the notice, the postmaster mailed a' second notice to the respondent. However, the letter was never claimed , and was . subsequently , returned to' Johnson unopened. On or about September 27, 1940, the respondent was advised by the Board's Regional Office that the Union had filed charges against it, alleging a refusal to bargain. On or about September 30,1940, the respondent's board of directors met for the purpose ,of selecting "someone' to represent ' us to bargain or to meet with the employees ' representatives." John C. Stick, an attorney who had been retained by the respondent for many years, was chosen for the task .6 According• td Max Viault; Stick,was given "full authority to sign an agreement which he might , reach, with the Union, in accordance with our policy ;; which he was very familiar with," but was instructed that the respondent proposed to "continue to operate the way we had' always done." According to Stick, he frequently told the, Un ion's 'representatives that "the company had a, definite policy, which I [Stick] could not vary." On October 2, 1940; Johnson delivered to Stick a copy of a proposed contract , which the Union desired to enter into with the respondent. ' The letter was addressed : "Mr Max Viault • V-O Milling Co " Max Viault is an officer and director of the respondent, and testified that he and his brother Arthur are !'the only two responsible or, rather, owner'representatives,or execu- tives in the company we direct most of the operations ; in fact, we direct everything, so far as the company is concerned " According to Stick, the only other occasion on which he had represented the respondent with respect to labor relations was in August or September of 1937, when he accompanied Max Viault, to the Board's -Regional Office in connection «ith an investigation of, certain unfan labor practices previously charged against the respondent. , .352 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On October 7, Johnson telephoned Stick 'and asked if the contract ,was acceptable to the respondent. Stick replied that the Union must be certified before the respondent would commence negotiations. B. The refusal to bargain 1. The appropriate unit The complaint alleged that all the respondent 's" employees in the production , maintenance,- and drivers departments , exclusive of super- visory employees with the right to hire and discharge , and office and clerical employees , constitute 'a unit appropriate for the purposes of .collective bargaining: During the course of negotiations with the Union, as found below, 'the respondent raised h o question as to the propriety of the claimed unit. At the hearing the parties agreed that the truck , drivers should be included in the unit and that the garage mechanic and the garage mechanic's helper should be excluded from the unit. We find that all the respondent 's employees in the production,, maintenance , aiid drivers departments , including the truck drivers, but excluding supervisory employees with the right to hire and dis- charge, office and clerical employees, the garage mechanic ,. and the garage mechanic's helper, have at all times material herein constituted, and now constitute, a unit appropriate for the purposes of collective bargaining, and that said unit insures to employees of the respondent the full benefit of their right to self-organization and to collective bargaining and otherwise effectuates the policies of the Act. 2. Representation by the Union of a majority in the appropriate unit On October 14, 1940, the Union submitted to the respondent a large. number of signed application or membership cards, as proof of designation by the employees in the unit found above to be appro- priate. That proof established to the satisfaction of the respondent that the Union represented a majority of the employees . in said unit. Thereafter the respondent negotiated with the Union and at no'time raised a question as to the majority status of the Union. In its answer and at the hearing the respondent admitted'that the Union has repre- sented a majority of the employees in said -unit at all times since October 14, 1940: We find that at,all times material' herein the Union was the duly designated representative of a majority of the employees in the ap- propriate unit,,and that , by virtue of Section 9' (a) of the 'Act, the Union was and now is the exclusive representative of all the employees in said unit for the purposes of collective bargaining with the r V-0 MILLING COMPANY 353 respondent in respect to rates of pay, wages, hours of employment, and other conditions of employment. 3.• The refusal to bargain and the strike Pursuant to prior arrangement, a meeting was held in Stick's office 7 ,on October 16, 1940, at which the Union was represented by Sam P. Ming,8 Johnson, and others ; and the respondent was represented only by Stick. At the meeting the parties discussed the proposed contract which had been submitted to Stick on October 2, 1940. The,proposed ,contract included provisions that the respondent's employees become and remain members of the Union in good standing, and that the respondent give preference to members of the Union in filling vacant -ties; and it included a further provision for a specified wage scale. According to Stick, he called the attention of the Union's, representa- tives to the fact that the proposed contract called for a closed shop and preferential hiring, and told them hey was quite certain that the re- spondent would not agree to such provisions; Ming replied that the Union had such provisions in contracts with other mills in the vicinity; and he (Stick) countered by explaining the "company's policy,"-which, he stated, made the open shop mandatory. At the close of the meeting Stick said that he would take the Union's proposed contract and "`go over it with the company," and that he would have the respondent prepare a counterproposal, which the Union could study prior to the xiext meeting.9 On October 24, 1940; Stick mailed the respondent's counterproposal to Johnson. The counterproposal contained no provisions relative to the union shop or preferential hiring. With regard to wages, it was provided that the existing scale should be subject to change by the respondent at any time.l° A meeting was held in Stick's office on November 6, 1940, to consider the respondent's ' counterproposal as well as the Union's proposed contract. At this meeting the Union was represented by Johnson, Ming, and others, while the respondent was again represented only' Stick's office is located at a distance of about 5 miles from the plant., s Ming was then a vice president of the American Federation of Grain Processors, with which the Union was affiliated and which in turn was affiliated with the American Federa- tion of Labor 6 Stick further testified that at subsequent meetings with the Union lie said that he "would have to take the contract back to my client," that he "would be glad to talk [it] . . . over with my client," and that he "would see if the company itself was willing to -change its policy." io The latter;provision, sometimes referred to in the record as the "up and down" clause, reads as tollows • I The management however, reserves the right to raise or lower said scale, from time to time, as business conditions warrant, said right, however, shall not be exercised arbitrarily. According to Stick, Max Vlault told him that he (Viault) "believed that the Company should have the right to a flexibility on that point." 481039-42-vol. 43-23 a 354 DECISIONS OF NATIONAL LABOR RELATIONS BOARD by Stick. According to Stick, he again explained 4he respondent's policy in favor of an open shop and unrestricted hiring; the Union then explained its objection to the "up and down" clause; stating that no,definite standard was provided on which the Union could rely 11 and that there was no such clause in any of the Union's contracts with the'respondent's competitors; and he (Stick) then replied that the "up and down" clause probably could be adjusted "if we could work out and get by the question of the. closed shop and . . . the 'preferential hiring." - ' On November 12, 1940, Ming telephoned Stick and said that he pro- posed to send Stick some modifications of the Union's demands, in accordance with their November 6 discussion. On }the following day, Stick received, the proposed modifications. On November 14, John- son -telephoned Stick and arranged for a conference to be held, on November 15. On November 15, 1940, Johnson met Stick in the latter's office. In connection with the "up and down" clause,' Johnson told Stick that, with that clause in the contract, the Union' in effect would have no contract at all. According to Stick, he replied that the respondent insisted upon its 'sole right to determine wages* -and to maintain the "flexibility" of the "up and clown" clause. Stick further testified that Johnson then, asked him to have Max Viault attend one of the con- ferences; and that he (Stick) replied that he would ask Viault to do so and would give Johnson an answer within a few days. Johnson telephoned Stick on November 18, 1940, and inquired if Max Viault would agree to attend a conference. According to Stick, he replied that Viault "could see no reason for his-sitting into appear, personally [and that since] the company had authorized me [Stick] to represent the company, that he didn't see why he should sit on the conference." On November 20, 1940. Ming met Stick in the tatter's office. : Accord- ing to Stick, Ming proposed a moclificaf;ion of the closed or union shop which would exclude current employees who were not members of the Union. Stick rejected this modification as contrary to the respondent's policy. Ming then offered to lower certain of the proposed wage rates, but Stick replied that the respondent probably would not accept them. Stick added tliat^ Ming suggested that in. place of the "up and down" clause the contract provide for revision of wage rates at 90=day inter- vals. According to Ming, he stated that the Union wanted the revision to be,arrived at by mutual collective bargaining between the, parties. Ming-added that he requested Stick to have Max Viault fake part in 11 When during the healing herein, Johnson'was being examined by Stick, he testified that theie'was nothing in the respondent's proposal "guaianteerng" any wage increases and that they,were always "arbitrary with the company," to which Stick replied, "That is true " • I V-0 MILLING COMPANY 355 the bargaining conferences so that there would be someone present-. who "would be able to give us a definite `yes' or `no' answer and avoid all this delay," since Stick's role appeared to be no more than that of a "messenger boy." On November 27 1940, Stick read a prepared statement over the telephone'to Ming, to the effect that the-closed shop even in the modi- fied form would be contrary to the "announced principles" of the re- spondent, and was therefore unacceptable; and that, as to the, wage rates which the respondent had established from time to time, the respondent "proposes to continue to follow" the same practice, "so the company is not bound by, or hampered by any contract to pay wages inconsistent with the company's ability to pay." On December 17, 1940, the respondent put into effect a new wage scale, which raised the wages of all the employees in the appropriate unit as of December L' The increase was granted without negotiation with the Union,12 On December 19, 1940. in Stick's office, Johnson and Ming protested the wage revision as a unilateral act on the part of the respondent, and were told by Stick that it-was in accordance with the policy of the respondent.13 , The Union's representatives then protested the "up and down" clause which had been reincorporated into the new wage sched- ule sent to the Union 6 days earlier, but to no avail. Again Johnson asked Stick if "Max Viault couldn't be present at our meetings," since Stick himself never gave a "yes or no" answer but always stated that he had to go back to his "client." According to Stick, the parties agreed at the close of the meeting that, except for the closed or union shop and preferential hiring, the chief obstacle to an agreement was the wage provision. After further discussion of these points ,Ming said that the Union probably would have to try other methods, "per- haps trying the Labor Board or conciliation, or perhaps trying it the hard way." Ming telephoned Stick on December 24, 1940, and asked hint if the respondent had, any other proposal's to offer to the Union. Stick replied that there were none but that "he would continue trying to secure one." On December 27, Ming again asked Stick the same question and was given the same reply.' On January 13, 1941, Stick mailed to Johnson a set of new pro- posals, which not only made no concessions but on the other hand contained a partial retraction of the overtime provisions of the orig- inal counterproposal. In the covering letter Stick wrote in part that 12 On December 13 Stick had mailed Johnson a copy of the respondent's new wage schedule 13 The respondent for many years had revised its wage scales semiannually , as of June I and December 1. i 356 DECISIONS OF NTATIONAL LABOR RELATIONS BOARD Viault had "discovered several statements" in the respondent's original counterproposal which did not "conform to the practice at the plant," and that the new counterproposal should be substituted for the original one. Johnson and Stick had a conference on January 14, 1941, in Stick's office: The various proposals were generally discussed and Stick again told Johnson that the` counterproposal of January, 13 was made "to conform with the practice then existing at'the company." According tc Stick, Johnson offered a new wage scale, again lowering the wages theretofore demanded by the Union. On January 22, 1941, Johnson asked Stick if the respondent had any concessions to make on the subjects discussed on January 14. ,-`-tick answered that 'lie had talked, at considerable length with the "company"-and that its position was unchanged. On February 3, 1941, according to Stick,,he admitted to a represent- ative of the Board's Regional Office, in connection with a preliminary investigation of charges in the instant case, that he knew the Union was objecting strenuously to the respondent's practice of revising wages in what the Union stated was an "arbitrary manner and without bargaining with the Union about it," and expressed the opinion that the provision for unilateral wage revisions could "be eliminated alto- gether if that was the only thing in the road." Stick added that if the Union would "waive" its union shop and preferential- hiring demands the parties could "get together" on the Union's objection to the "up, and down" clause. On February 27,1941, Johnson gave Stick a copy of a contract which the Union was about to sign with one of the respondent's 'competitors, containing provisions similar to those in the Union's original proposal to the respondent. Stick said he would discuss the matter again with Max Viault. According to Johnson, Stick again told him that "on any contract that you would submit to me I would have to take the contract back to my client." A few -days later later Stick told Johnson that the respondent had nothing further to offer. The Union held a meeting on March 5,,1941, and, after a discussion of the negotiations, voted to give its executive board authority to call a strike if deemed necessary. 'On the following day, March 6, 1941, according to Johnson, he went to Stick's office and told him of the strike vote, adding that the Union had "tried every way possible to try to reach a settlement with the company but we never could get Mr. Viault to sit down and negotiate." Stick testified that he again told Johnson that if the,union shop and preferential hiring demands were eliminated by the Union, the "up and down" clause could be "cleared up." V-0 MILLING COMPANY 357 On or about March' 15, 1941, the respondent paid its employees a bonus in accordance with a profit-sharing plan theretofore in effect. The bonus was paid without negotiation with the Union, and was a unilateral act on the part of the respondent. A few days prior to April' 7, 1941, the Union sought the assistance of the Central Labor Council of Los Angeles, with which it was affili-, ated, in its attempt to ne2ot^ate with the respondent. ' J. W. Buzzell, secretary of the Council, telephoned the respondent's office on several cccasions and asked for Max,Viault, but was told by the operator that Viault was "not in." On April 7, the operator told Buzzell that Viault "didn't care" to see him, and that he had "better see Mr. Stick," who was identified as the respondent's "attorney." When Buzzell tele- phoned Stick's office and asked if an appointment could be arranged with Max Viault, he was advised that this could not be done. Buzzell thereupon wrote a letter toy the respondent, addressed specifically to "Mr. Max Viault, President," advising of the complaint of the Union and demanding a conference "for the purpose of opening negotiations looking forward to a contract" between the respondent and the Union. The letter was registered and mailed to the respondent in an envelope bearing the return address of the Central Labor Council, but was sub- sequently returned by the postman unopened and marked "Refused."- At about the same 'time efforts were made at the Union's request by a representative of the Conciliation. Service of the United States De- partment of Labor, and also by a representative of the mayor of Los Angeles, to secure the attendance of Max Viault at-a meeting with the Union. Johnson was informed by these men that Max Viault refused to talk with- them. The Union held a special meeting on April 11, 1941, at which the members employed by the respondent voted unanimously to strike the respondent's plant at noon on April-14. Johnson at once notified Stick of the action taken by the Union, and Stick immediately relayed this information to Max Viault. At noon on April 14, 1941, approximately 55 of the 70 employees in the appropriate unit went on strike, and a picket line was established. Johnson testified that the strike was caused by the respondent's insist- ence on the "up and down" clause and by the wage revisions it had unilaterally put into effect. Immediately after the employees left the plant, the respondent posted two 10 x 18-inch metal signs in' front of the plant stating : ALL EMPLOYEES - of this Company are invited. to return to their jobs immediately. 0 358 DECISIONS OF NATIONAL LABOR ' RELATIONS BOARD From that time until May 23, 1941 , the respondent hired applicants to fill the jobs of the strikers .14 On the latter date all jobs had been filled, and the signs were then taken down. On April 24, 1941, Johnson and other union representatives again met with Stick. Johnson asked Stick whether the respondent would sign a contract similar to contracts the Union had with other mills in the vicinity, if the Union would waive its demand for a union shop. Stick told Johnson to submit the contract and lie would be glad to study it, and that "if we could 'eliminate the closed shop and the hiring hall and 'agree on a wage scale, I [Stick] had no doubt at all we could get together." Johnson said that 'he would take the matter up with the employees who were riiembers of the Union, and would give Stick an answer "the first of the week." ' Thei_eafter, on April 28, Johnson advised Stick that the Union was not prepared to waive its demand for a union shop. Ina letter dated, June 13, 1941, Stick advised Johnson that "accord- ing to the policy of the Company" the respondent proposed to revise the wage scale, effective as of June 1. The revision as made without any 'negotiation with the Union. On September 13, 1941, Johnson held another meeting with Stick, -this time in the office of a representative of the Regional Office of the Board. The parties discussed substituting for the "up and clown" clause a clause for wage revisions based on mutual negotiations or on some governmental index of-the cost of living. Stick stated, according to his own testimony, that he "would be, glad" to consider these sug- gestions and discuss them with his "client," if only the Union would withdraw its demands for a union shop and preferential hiring. Stick added at the hearing that ever since the inception of negotiations in October 1940 he "always" told the Union's representatives that "so long as the union shop and the preferential hiring was in [the Union's proposed contract], that we couldn't go on with the conference." On December 31, 1941, Stick, in a letter to Johnson, stated that "the Company proposes to again adjust the wages by granting an increase to,its production employees of approximately 21/2 cents per hour pay- able January 3, 1942." The adjustment was made without negotiation with the Union. C. Concluding findings with respect to the refusal to bargain The issue presented by the foregoing facts is whether or not the respondent has refused to bargain collectively with the Union, within the meaning of the Act. The Act imposes on the respondent the obli- 0 u+Among the applicants were about a dozen employees who had previously participated in the strike V-O MILLING COMPANY 359' gation,to "negotiate in good faith" with the Union "with the view of reaching an agreement if possible," 15 and-to "enter into discussion with an open and fair mind, and a sincere purpose to find a basis of agreement. 1e In determining whether the respondent negotiated with the Union in good faith at the above-mentioned meetings, its, previous conduct toward the Union must be taken into account. In September 1940 the respondent had refused to accept a letter from the Union, requesting it collective bargaining meeting. Since the Union's majority as of that time has not been established, we do not find that the respondent thereby refused to bargain collectively. However, we do find that the respondent's refusal' of the letter is relevant in appraising its subse- quent conduct toward the Union. - One of the chief matters in dispute between the respondent and the Union from the inception of negotiations was the respondent's policy, embodied in part in the "up and down" ,' clause of its counterproposals and further exemplified by the unilateral wage revisions made during the negotiations, which purported to reserve to the respondent the right to revise wages unilaterally and without bargaining with the Union thereon. Section 9 (a) specifically states that,rates of pay and wages are'among the proper subjects of collective bargaining. The respond- ent in effect admits that it refused to bargain collectively with respect to the "up and down" clause and the wage revisions, but contends that such actions were, justified by its previously established pollCy.17 How- ever, the requirements of the Act cannot be subordinated to any private policy. While an employer is not required to yield to the demands of a union , here the respondent's insistence upon maintaining its absolute control of wages at all times was, in effect, a complete negation of the principle of collective bargaining. Aside from the disagreement of the parties on other points, the respondent clearly refused to authorize its representative even to consider any contractual provision which altered its wage policy or bound it for any definite period 'to maintain the exist- ing wage scale. The aim of collective bargaining, to achieve stability of industrial relations, cannot be attained when the ehployei' is willing to agree only to. the proposition that he shall be free to alter terms or conditions of employment at will and without regard to the exclusive representative of his employees. We find no merit in the respondent's p "National Labor Relations Board v Highland Park Manufacturing Company, 110' F (2d) 632 (C C A. 4), enf'g Matter of Highland Park Manufacriaing Co and Textile Workers Oigani_^tinq Committee, 12 N L R B 1238 "Globe Cotton Mills v National Labor Relations Board, 103 F ( 2d) 91 (C C A 5), mod'g and enf'g Mattei of Globe Cotton Mills and Textile Workers Organizing Committee, 6 N L 1: B 461 11 In its brief the respondent argues that "having established this as the business policy it is not a matter foi collective bargaining " 360 DECISIONS OF NATIONAL LABOR RELATIONS BOARD contention that its established policy justified it in refusing to bargain with respect to wages.18 'The respondent further contends that the Union's demands with respect to the union shop, preferential hiring, and the wage scale, con- stitute excuses for its own refusal to bargain in good faith concerning ;ts wage policy. Contrary to the assertion of the respondent'that the Union had maintained an adamant position throughout the negotia- tions on these issues, particularly the union shop issue, the record shows that the Union had indicated its willingness to modify its demands in some respects. We are convinced and find that the union-shop demand was not the cause of the failure to reach an agreement.1° If the re- spondent had undertaken ins good faith to explore the entire situation and had attempted to reach-an accord on other issues, particularly the subject of wages, it cannot be said that the negotiations would have resulted in an impasse over the union-shop issue.2° Moreover, the respondent's lack of good faith, and dilatory tactics, are further shown by the type of authority delegated to Stick as the respondent's bargaining representative and by the refusal of Max Viault to attend bargaining conferences as requested by, the Union. Throughout the negotiations Stick repeatedly asserted that he would have to' take up with the respondent any matter which in any way varied the respondent's current policies ; at the sametime, however, the respondent refused to authorize Stick to agree to any changes in those policies, and Max Viault, who had the requisite authority, refused to meet with the Union. By these tactics the respondent made any pro- ductive negotiations impossible ;and thereby revealed a "determined course of deliberate non-compliance" with the, Act.21,. 19 In Matter of Webster Manufacturing Company and American Federation of Labor, et al , 27 N. L It. B 1338. we said that an employer's refusal, in dealing with a union, to go beyond a statement of his policy which was subject to change at will, did not con- stitute the "effective, binding agreement to which the employees were entitled under the Act" Accord : Matter of Montgomery Ward & Company and Warehousemen's Union, Local No. 206, etc, 37 N. ,L It. B 100, where we said that "repeated rejection, of union 'proposals on the general ground that they were not consonant with company policy or practice" was an indication of the company's bad faith in its dealings with the union and fell short of the requirement (laid down by the Court in National Labor Relations Board v. Pilling of Son Co , 119 F (2d) 32 (C. C A 3) that the rejection must be justified to the union "on reason " In Matter of Westinghouse Electric and Manufacturing Company, et al and United Electrical, Radio and Machine Workers of America, et al, 22 N L It. B. 147, we said that a statement which "may be terminated at'the will, of the employer . . . fails, insofar as the employees are concerned, to stabilize their relations with the em- ployer, . . . will defeatrthe policy and purposes of the Act . . .,[and does] not satisfy the requirements of collective bargaining of Section 8 (5) of the Act " 10 Cf. Matter of Montgomery Ward & Co., Incorporated and United Mail Order, Ware- house and Retail Employees Union, Local 20 (C. I. O.), 39 N. L. R. B. 229 20 See National Labor Relations Board v. Remington Rand, Inc, 94 F. (2d) 862 (C. C. A. 2), cert. den, 304 U S. 576, mod'g and enf'g Matter of Remington Rand, Inc. and Remington Rand Joint Protective Board of District Council-Office Equipment Workers, 2 N. L It. B. 626. 21 Solvay Process Co. v. National Labor Relations Board, 117 F. (2d). 83 (C. C. A. 5), enf'g Matter of The Solvay Process Compaaiy, Baton Rouge, Louisiana and Oil Workers' International Union, Local No. 424, affiliated with the Committee for Industrial Organi- V-0 MILLING COMPANY 361 We find, as did the Trial Examiner, that the respondent, by its entire course of conduct in the negotiations, at all times since October 16, 1940, refused to bargain collectively with the Union, thereby inter- fering with, restraining, and coercing its employees in the exercise of the rights` guaranteed in Section 7 of 'the Act.22 We further find, as did the Trial Examiner, that the strike which commenced on April 14, 1941, was caused and prolonged by the respondent's unfair labor practices. 'D. 'The alleged discriminatory refusal to reinstate We have found above that on April 14, 1941, the respondent's unfair labor practices caused and thereafter prolonged a strike in which 55 of the, 70 employees in the appropriate unit participated; that,the respondent,'continued to operate the plant with the remaining em- ployees and persons- (including some 12 strikers) who thereafter ap- plied for work; and that the plant was fully restaffed by May 23, 1941, some 51/z weeks later.23 The, complaint alleged that on or about June 2, 1941, and from time to time thereafter, the Union requested the respondent to reinstate 47 named employees, who participated in the strike, but that the re- spondent refused to do so because of their union activities. The an- swer admitted that "upon several occasions the Union requested that the respondent . . . reinstate all the men who were then out on strike," but affirmatively alleged that the Union's requests were made upon the specific condition that the respondent execute a contract satisfactory to the Union. ration, 21 N L R B . 882; Great Southern Trucking Co. v. National Labor Relations Board, 127 F. (2d) 180 (C. C. A. 4)•, enf'g Matter of Great Southern Trucking Company, Charlotte Branch and International Brotherhood of Teamsters, Chauffeurs, Stablemen and Helpers 'of America, Local #71, 34 N L. it. B . 1068 ; National Labor Relations Board v. P. Lorillard Co., 62 S. Ct. 397, reversing and remanding 117 F. ( 2d) 921, with directions to enforce Matter of P. Lorillard Company, Middletown, Ohio and Pioneer To- bacco Workers' Local Industrial Union No. 55 , 16 N L It. B. 684. 11 National Labor Relations Board v. Pilling if Son Co., 119 F. ( 2d) 32 ( C. C. A: 3), enfg Matter of George P. Pilling if Son Co. and Dental, Surgical if Allied Workers Local Industrial Union, No . 119, affiliated with the C. I. 0.; 16 N: L. R B . 650; Singer Manufao- turfing Co v National Labor Relations Board, 119 F. (2d) 131 (C. C. A. 7), cert. den. 313 U S 595, mod 'g and enf'g Matter of Singer Manufacturing Company-and United Elec- trical, Radio and Machine Workers of America, Local No. 917, affiliated with , the Congress of Industrial Organizations, 24 N. L R . B. 444 ; Great Southern Trucking Company v. Na- tional Labor Relations Board, 127 F. (2d) 186 (C. C. A. 4), enf'g Matter of-Great Southern Trucking Company, Charlotte Branch and International Brotherhood of Teamsters, Chauf- feurs, Stablemen, and Helpers of Ames ica, Local # 71, 34 N. L. R B. 1068 ; National Labor Relations Board v Chicago Apparatus Co. 116 F. (2d) 753 (C C. A 7), enf'g Mat- ter of Chicago Apparatus Company and Federation of Architects, Engineers, Chemists and Technicians, Local 107, 12 N I, R B. 1002 ; National Labor Relations Board v Whittier Mills Co ., 111 F. (2d)• 474 W. C. A 5), enf'g Matter of Whittier Mills Company and Silver Lake Co. and Textile Workers Organizing Committee, 15 N. L. R B , 457 '23,The respondent' s records show without contradiction that the same number of em- ployees were working in the appropriate unit on June 1, 1941, as when the, strike com- menced on April 14, 1941 , and that more employees were working in a unit on August 1, 1941, and on January 1, 1942, the only other dates covered in the record. 362 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The evidence as.to when, if ever, the Union first made an uncon- ditional request for the reinstatement of the strikers is in dispute. Johnson testified that he asked Stick, "around the first part of June ... if the company would be willing to reinstate the men, and we would carry on negotiations"; that Stick replied that he would "talk to his client" about the matter; and that a few days later Stick told him that the respondent would "only take back a few men, and as jobs come open, they would take back the others." Johnson further testified that not more than a week later he had another meeting with Stick, at which time he asked Stick to "reconsider and take back- reinstate the "employees that were out on strike," and that Stick again answered that he "would take back some men, and as jobs opened up he would take back the other men." Johnson added that the reason for his request for reinstatement was that the strike had lasted 11/2 months, during 'which period the Union had to.contribute to the sup- port of some of the strikers, but that the Union had found itself unable to attain its objectives. 14 Johnson further testified' that'-he, ^met with Stick on September 23, again urged that the respondent sign a contract which would include a provision for a union shop, and at the same time again requested reinstatement of the strikers.' Johnson added that he did not make the 'requested reinstatement conditional on the signing' of a contract but asked 'merely that negotiations be "carried on"; and that Stick again said that only about a dozen of'the strikers could be reinstated at that time. Stick, who constantly refreshed his recollection from certain notes that he had previously made, denied Johnson's testimony that he (Johnson) had requested reinstatement dependent only on the carrying on of negotiations.. However, Stick testified that around April 24 Johnson asked him whether the respondent would reinstate .the strikers if the Union were willing to waive its union-shop demand, that he (Stick) replied that the respondent could take back some of the strik- ers, "probably 10 or 12 right then, and we could take the others back as fast as we could make arrangements," and that 4 days later Johnson advised him that the Union had decided not to waive its union-shop demand.25 , Stick further testified that on September 23 Johnson, with- 'out specifically yvaiving the demand for a union shop, again asked him how many men the respondent would take back, and that he (Stick) again replied that 'the respondent would take back "10 or 12 of them right away, and as soon as we could make the arrangements to put the others in their places, we would take back the rest of them." After the foregoing testimony, Johnson reiterated his previous testi- mony to the effect that his earliest`request'for the reinstatement' of the strikers which was "not contingent on any request that they [the re 24 As found above, the plant was fully restaffed by May 23, 1941. " Johnson corroborated this testimony.' V-0 MILLING COMPANY 363 spondent] sign a contract first" was "in the last part of. May ... or the early part of June," when he asked Stick if the respondent "would .be willing' to reinstate the men, and Nye would continue on to try, to reach an agreement with one another. while the men were working"; and that Stick replied that he could take only about 10 of the men back "because the positions were filled at the time." Stick then testi- fied that he had "no recollection" of such a request and that he "never understood" and did not "believe" the request was "made that way." We are satisfied from the foregoing testimony that the Union's appli- cation for reinstatement of the strikers was conditioned upon continued negotiations between the respondent and the Union. Accordingly, we find that the respondent did not discriminate against any of its striking employees with regard to their hire or tenure of employment to dis- courage membership in the Union. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE We find that 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, ha^,e 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 Having found that the respondent has engaged in and, is engaging in certain unfair labor practices, we shall order it to cease and desist therefrom and to take certain affirmative action which we find will effectuate the policies of the Act. We have found that the respondent refused to bargain collectively, with the Union as the exclusive representative of its employees in an appropriate unit. We shall order the respondent, upon request, to bargain collectively with the Union as such representative with respect to rates of pay, wages, hours of employment, and other conditions of employment, and, if an understanding is reached on any such matters, to embody said understanding in a signed contract. We have found that the respondent has not discriminated against any of its striking employees to discourage membership in the Union. Accordingly, we shall dismiss the allegations of the complaint to that effect. However, we have found that the respondent's unfair labor practices caused and prolonged the strike. Pursuant to our usual practice in such cases,'(' we shall order the respondent, in order to restore the status quo as it existed prior to the commencement' of the 26 Matter of Montqomery Ward t Company and Warehousemen's Union, Local No. 206, eto, 37 N. L. R . B. 100. 364 'DECISIONS OF NATIONAL LABOR RELATIONS BOARD strike, (1) to offer reinstatement to their former or substantially equivalent positions, without prejudice to their seniority and other rights and' privileges, to those employees who went on strike on April 14, 1941, or thereafter, and who-have applied -for and have not been offered reinstatement, and (2) upon application to offer reinstatement to their former or substantially equivalent positions, without prejudice to their seniority and other rights and privileges, to those employees who went on strike on'said date, or thereafter, and who have not pre- viously' applied for reinstatement ; dismissing if necessary all persons hired on or 'after April 14, 1941, the date of the commencement of the strike, and not in the_ respondent's employ on said date. If there is then not sufficient employment available for all employees, all avail-m able positions shall be distributed among them without discrimination against any employee because of his union affiliation or activities, following the system of seniority or other non-discrilninatory.practice heretofore applied in the conduct of the respondent's business. Those employees, if any, remaining after such distribution, for whom no em- ployment is immediately available, shall be placed upon a preferential list and thereafter offered employment in their former or substantially equivalent positions as such em,ploythent becomes available and before other persons are hired for such work, in the order determined among J hem by said system of seniority or other non-discriminatory practice. We shall further order the respondent to make whole those employees who went on strike on April 14, 1941, or thereafter; and who have ap- plied for reinstatement, for any loss, of pay they may have suffered by reason of the respondent's refusal, if any, to reinstate them as provided above within five (5) days of their respective applications, by payment to each of them of a sum of money equal to that which he would normally have earned as wages during the period from five (5)_ days after the date on which he applied for reinstatement to the date of the respondent's offer of reinstatement or placement on a pref- erential list, less his net, earnings, if any, during such period.27 We shall also order the respondent to make whole those employees who went on strike on.April 14, 1941, or thereafter, and_who have not pre- viously 'applied for reinstatement, for any loss of pay they may suffer by reason of the respondent's refusal, if any, to reinstate them as pro- vided above, by payment to each of them of a sum 'of money equal to aT By "net earnings " is meant earnings less expenses , such as for transportation, room, and board, incurred by an employee in connection with obtaining work and working else- where than for the respondent, which would not have been incurred but for the unlawful discrimination against him and the consequent necessity of his seeking employment else- where See Matter of Crossett Lumber Company and United Brotherhood of Carpenters and Joiners of America, Lumber and Sawmill Workers' Union, Local 25!10, 3 N L R B 440. Monies received for work performed upon Federal, State, county, municipal, or other work- reliet projects shall be considered as earnings See Republic Steel Coiporation v. N. L. R. ,8., 311 U. S. 7. V-0 MILLING- COMPANY 365 ,that which he'would normally have earned as wages during the period from five (5) days after the date on which he applies for reinstate- ment to the,date of the respondent's offer of reinstatement or place- ment on a preferential list, less his net earnings, if any, during such period.28 . Upon the basis of the foregoing findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. Flour, Feedand Cereal Workers Federal Union, Local No. 21830, affiliated with the American Federation of Labor, is a labor organiza- tion, within the meaning of Section 2 (5) of the Act. 2. All the respondent's employees in the production , maintenance, and drivers departments , including the truck drivers, but excluding supervisory employees with the right to hire and discharge, office and clerical employees , the garage mechanic, and the garage mechanic's helper, constitute a unit appropriate for the purposes of collective bargaining, within the meaning of Section 9 (b) of the Act. 3. Flour, Feed and Cereal Workers Federal Union, Local No. 21830; A. F. L., was at all times material herein and now is the exclusive representative of all the employees in such unit for the purposes 'of collective bargaining , within the meaning of Section 9 (a)' of the Act. 4. By refusing to bargain collectively with Flour, Feed and Cereal Workers Federal Union , Local No. 21830, A. F. L., as the exclusive representative of all the employees in such unit , the, respondent has engaged in and is engaging in unfair labor practices , within the mean- ing of Section 8 (5) of the Act. 5. By interfering with, restraining , and coercing its employees in the exercise*of the rights guaranteed in Section 7 of the Act, the re- spondent, has engaged , in and is engaging in unfair 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. 7. The respondent has not engaged in unfair labor practices within the meaning of Section 8 (3) 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'Labor Relations Board hereby orders that the respondent, " See footnote 26. 366 DECISIONS OF NATIONAL- LABOR RFILATIONS BOARD V-O;Milliiig Company, Los Angeles, California, its officers, agents, successors, and assigns,'shall: 1. Cease and desist from : (a) Refusing to bargain collectively with Flour, Feed and Cereal Workers Federal Union, Local No. 21830, A. F. L., as the exclusive representative of all its employees in the production, maintenance, and drivers departments, including the truck drivers, but excluding super- visory employees with the right to hire and discharge, office and clerical employees, the garage mechanic, and the garage mechanic's helper, with respect to rates of pay, wages, hours of work, and other condi- tions of employment; (b) Engaging in any like or related acts or conduct interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activity, for the purposes of collective bar- gaining or other mutual aid or protection, as guaranteed in Section 7 of the Act 2. Take the followino• affirmative action, which the Board finds will effectuate the policies of the Act : '(a) Upon request, bargain collectively with Flour, Feed and Cereal Workers Federal Union, Local No. 21830, A. F. L., as the exclusive representative of all its employees in the production, main- tenance, and drivers„ departments, including the truck drivers, but excluding supervisory employees with the right to hire and discharge, office and clerical employees, the garage mechanic, and the garage mechanic's helper, with respect to rates of pay, wages,,hours of work, and other conditions of employment, and if an understanding is reached on any such matters, embody said understanding in a signed contract; (b) Offer to those employees who went on strike on April 14, 1941, or thereafter, and who have applied for and have not been offered ,reinstatement, immediate and full, reinstatement to their former or substantially equivalent positions, without prejudice to their seniority, and other rights and privileges, in the manner provided in the remedy section above; and place those employees for whom employment is not immediately available upon a preferential list in the, manner set forth in said section, and thereafter, in said manner, offer them employment as it becomes available; (c) Upon application offer to those employees who went on strike on April 14, 1941, or thereafter, and who have not previously applied for reinstatement, immediate and full reinstatement to their former or substantially equivalent positions, without prejudice to their seniority and other rights and privileges, 'in the manner provided in the remedy 0 V-0 MILLING COMPANY 367 section above; and -place those employees for whom employment is not immediately available upon a preferential list in the manner set forth in' said section, and thereafter; in said manner, offer them employment as it becomes available; (d) Make whole ,the employees who went on 'strike on April 14, 1941, or thereafter, and who have applied for reinstatement, for any loss of pay they may have suffered by reason of the respondent's refusal, if any, to reinstate them within five (5) days of their'respective applications, as provided in the remedy section above, by payment to each of them of a sum of money equal to that which he would normally have earned as. wages during the period from five (5) days after the ,date on which-he applied for reinstatement to the date of the respond- ent's offer of reinstatement or placement upon a preferential list, 'less his net earnings, if any, during said period ; ' (e) Make whole the employees who went on strike on April 14, 1941, or thereafter; and who have not applied for reinstatement, for any loss of pay they may suffer by reason *of the respondent's refusal, if any, to reinstate them, as provided in the remedy section above by payment to each of them of a sum of money equal to that -vihich he would normally have earned as, wages during the period front five (5) days after the date on which he applies for reinstatement to the date of the respondent's offer of reinstatement or placement upon aprefer- ,eiitial list,, less-his net.,eariiings, if any, during said period,; (f) Post immediately iii. conspicuous places throughout its plant at Los Angeles,.California, and maintain for a period of at least (60) consecutive days 'from the date of.posting, notices to its employees",, stating: (1) that the respondent will not engage in the conduct from' which it is ordered to cease and desist in paragraph 1 (a) and (b) hereof; and (2) that it will take the affirmative action set forth in paragraph 2 (a), (b), (c), (d), and (e) hereof; - - (g) Notify, the Regional Director for the Twenty-first Region in' writing, within ten (10) days from the date of this Order, what steps the respondent has taken to comply herewith. AND IT IS FURTHER ORDERED that the complaint, insofar as it alleges' that the respondent engaged in unfair labor practices within the meaning of Section 8 (3) of the Act, be, and it hereby is, dismissed. MR. GERARD D. REILLY, concurring : I am of the opinion that -it is sufficient-to base the finding that the respondent unlawfully refused to bargain upon the respondent's method of carrying on negotiations with the Union. Since the com- plaint charges the respondent with a violation of Section 8 (5) of the Act it is, necessary to construe the words "to refuse to bargain col- lectively with the representatives of his employees." As is shown in 368 , DECISIONS OF NATIONAL LABOR RELATIONS BOARD 11 the decision of the majority, the respondent was represented through out the negotiations by Stick. While Max Viault, an executive and director of the respondent, asserted that, Stick was delegated full authority to sign any agreement he might reach with the Union, Stick repeatedly stated at the negotiating conferences, as' found by the majority, that he had no authority to vary the respondent's policies and that he would have to report back to the respondent before, he., could make any commitment on aiiy proposal. It is-clear, therefore, either that Stick did not have the necessary authority to negotiate an. agreement, or that he did, have such authority and-refused to exercise it. Faced with this situation the Union requested, that Max Viault participate' in the negotiations; Viault refused to meet «ith the Union. I am_ of the opinion that there is a "refusal to bargain collectively" within the meaning of the Act when an employer resorts to such tactics. It may be conceded that when an, employer is a corporation it is not necessary for the corporation's president, or even the general manager, to confer in person with the representatives of the employees. In other words, it.would not,be a violation of this subsection if the refusal to confer were accompanied by. a delegation of authority to a'subordinate official to conduct the•negotiations. But if the delegation of authority is not plenary, and the negotiations break down because of a controversy on a point outside the agent's limited scope of authority, it would seem to me that a refusal to bargain occurs if access to the higher corporation officials is then denied the repre- sentative. For the foregoing reasons'I concur in the-result reached by the majority.