Dearborn Oil and Gas Corp.

DEARBORN OIL AND GAS CORPORATION, ETC. 645 and their votes will be pooled with those in voting group (2).10 If a majority of the employees in the pooled group select the UAW, the Regional Director is instructed to issue a certification of representa tives to the UAW for the pooled group which the Board, in such cir cumstances, finds to be an appropriate unit for the purposes of col- lective bargaining. [The Board dismissed the petition filed in Case No. 13-RC-6604.1, [Text of Direction of Elections omitted from publication.] 10 If the votes are pooled , they are to be tallied in the following manner : The votes for the Pattern Makers shall be counted as valid votes but neither for nor against the UAW ; all other other votes are to be accorded their face value , whether for the UAW or for no union. Dearborn Oil and Gas Corporation , George C. Schoonmaker and James W. McCummings, Partners, doing business as Diamond Operating Service, and George C. Schoonmaker, Trustee, do- ing business as North Stewart Waterflood 1 and Local 7-482, Oil, Chemical and Atomic Workers International Union, AFL-CIO. Case No. 35-CA-766. December 9, 1959 DECISION AND ORDER On April 3,1959, Trial Examiner Reeves R. Hilton issued his Inter- mediate Report in the above-entitled proceeding, finding that the Respondents had engaged in and were engaging in certain unfair labor practices and recommending that they cease and desist therefrom and take certain affirmative action, as set forth in the copy of the Inter- mediate Report attached hereto. Thereafter, the Respondents filed exceptions to the Intermediate Report and supporting briefs. Pursuant to the provisions of Section 3(b) of the Act, the Board has delegated its powers in connection with this case to a three-member panel [Chairman Leedom and Members Bean and Jenkins]. The Board has reviewed the rulings made by the Trial Examiner at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Inter- mediate Report, the exceptions, the briefs, and the entire record in, the case,2 and hereby adopts the Trial Examiner's findings, conclu- sions, and recommendations with the modifications and corrections below. We find, as did the Trial Examiner, that Diamond violated Section 8(a) (1) and (3) of the Act. We do not agree with the Trial Exam- 1 Herein referred to as Dearborn , Diamond, and North Stewart , respectively. ' The request of Dearborn for oral argument is denied because the record , including the exceptions and briefs, adequately presents the issues and the positions of the parties. .125 NLRB No. 71. 535828-60-vol. 125-42 646 DECISIONS OF NATIONAL LABOR RELATIONS BOARD iner, however, that Dearborn and North Stewart were responsible, together with Diamond, for such violations. It was the Trial Examiner's view that Dearborn, Diamond, and North Stewart must be considered as a single employer for the pur- poses of the Act, even though there was no common ownership of any of these companies. This single-employer finding is predicated on the following factors : a. The common control exercised by Schoonmaker over all three companies Schoonmaker is a banker in Evansville, Indiana, with considerable experience in the exploitation of oil leases. At the times here relevant, he was president of Dearborn,-' and one of its three directors 4 He was one of three trustees of North Stewart,' and he was one of the two partners who constituted Diamond, the other partner being McCummings. While the Trial Examiner found that Schoonmaker was the "dominating and key figure" in all three Respondents, the only evidence as to his participation in the management of Dearborn was that he was consulted about the purchase of leases for, and the drill- ing of wells by, Dearborn and was familiar with its day-to-day opera- tions. General labor relations and other policies applicable to all its subsidiaries, including Dearborn, were formulated by Holly.' The day-to-day handling of labor relations was entrusted to others than Schoonmaker 7 The extent of Schoonmaker's actual participation in the management of North Stewart is not shown by the record. As to Diamond, the record shows only that McCummings, Schoonmaker's partner, was in charge of operations. b. Integration o l Respondents' operations Diamond was established in 1954 to perform drilling services on a contract basis. In 1:955, Diamond undertook to supply a roustabout and construction service to developers of oil properties, principally Dearborn and North Stewart. This service was rendered on a cost- plus-10-percent basis. Between 1955 and 1958, all 3 of Diamond's foremen and 3 of its approximately 20 employees were involved in temporary or permanent transfers between Diamond and Dearborn. Diamond's supervisors directed Dearborn's employees to an extent 3 Dearborn was engaged in leasing and developing oil properties in several States, in- cluding Indiana. • The other two directors were officers of Dearborn's parent company, Holly Corporation. This was the name for a group of leases, which constituted the corpus of the trust managed by Schoonmaker and the other trustees. 0 See footnote 4, supra. Holly also controlled all capital expenditures by Dearborn in excess of $250. ' Hiring and discharge of employees working in the Evansville area was handled by McCummings, who was vice president of Dearborn , as well as Schoonmaker's partner in Diamond. DEARBORN OIL AND GAS CORPORATION , ETC. 647 not specified in the record. All three Respondents used the same bookkeeper and the same office. We do not agree with the Trial Examiner that the foregoing facts demonstrate that all three Respondents were subject to "common control" by Schoonmaker , or that he was, as the Trial Examiner found, "the dominating figure in these closely -knit, allied ventures." For one thing, the record does not show that Schoonmaker had the controlling voice in the operation of North Stewart, but only that he ,was one of the three cotrustees who shared equally in such control. Nor does it show , apart from the fact that North Stewart had a cost-plus arrangement with Diamond, that there was any integration between the operations of North Stewart and Diamond or Dearborn. As to the crucial area of labor relations ,8 there is no basis in the record for finding that Schoonmaker directed the labor relations policies of Dearborn or North Stewart. Moreover, even if we found common control here, we would still not find that such common control plus the degree of integration set forth above sufficed, without more, to establish that Diamond and either, or both, of the other Respondents constituted a single employer, so as to justify holding them responsible for Diamond 's unfair labor practices. Generally speaking, in those unfair labor practice cases in which the Board and the courts have held that a legal entity may be held for the acts of another, because both constituted a single employer, it appeared that both were not only subject to common control, but also that a controlling ownership interest in both companies was held by the same individual or group of individuals .' We believe that it is proper to require that both elements-common ownership and common control-coexist before we assess joint responsibility. Any other rule would introduce into the administration of the Act an ele- ment of guilt by "association" based upon the fortuitous circumstance of two respondents having common officers or agents. As we under- stand the position of our dissenting colleague, it is that where the same individual is president, general manager, or director of labor rela- tions of two separate legal entities , and engages in unfair labor prac- tices while acting in his capacity as an officer of one of such entities, the other entity should be held responsible for such unfair labor prac- tices, even though its proprietors or stockholders had not directly or indirectly authorized or ratified such unfair labor practices. We can 8 Centralized control of labor relations is a factor frequently stressed by the Board In finding common control of separate legal entities . See, e.g., Thomas Morelli, at at., d/b/a Morelli Brothers, et at., 123 NLRB 635 ; 9.cousti Engineering of Alabama, Inc., 114 NLRB 1415, 1416; National Electronic Manufacturing Corporation, et at., 113 NLRB 620. 9See, for example: N.L.R.B. v. Somerset Classics, Inc., et at., 193 F. 2d 613 (C.A. 2), enfg. 90 NLRB 1676; and N.L.R.B. v. Federal Engineering Company, Inc ., 153 F. 2d 233 ( C.A. 6), enfg. as mod. 60 NLRB 592. 648 DECISIONS OF NATIONAL LABOR RELATIONS BOARD find no clear authority for such a view in the decisions of the Board."" Indeed, insofar as this view would impute liability to a principal Dearborn or North Stewart-for the acts of an agent-Schoon- maker-though not acting within the scope of his employment for such principal, but solely in the exercise of his authority as partner in. Diamond to deal with the employees of Diamond, we believe that such view contravenes the intent of Congress in enacting Section 2(13) of the present Act-that a principal be held responsible for the unfair labor practices of his agent only in accord with the com- mon-law rules of agency." Accordingly, we find no warrant for taxing Dearborn or North Stewart with responsibility for Diamond's violations of the Act. We shall, therefore, dismiss the complaint as to them. ORDER Upon the entire record in the case, and pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board orders that George C. Schoonmaker and James W. McCummings, partners, doing business as Diamond Operating Serv- ice, Evansville, Indiana, their agents, successors, and assigns, shall: 1. Cease and desist from : (a) Discouraging membership in, and activities on behalf of, Local 7-482, Oil, Chemical and Atomic Workers International Union, AFL-CIO, or any other labor organization, by discharging employees or by discriminating in any other manner in regard to their hire or 1o In none of the cases cited In the dissent as finding joint liability , absent common ownership, does it clearly appear that the Board relied on common con- trol alone. In Editorial "El I+mparcial," the Trial Examiner's finding, which was adopted by the Board, was that one of the Respondents was a "corporate affiliate" of the other, and the record shows common ownership of both corporations . In Dayton Coal and Iron Corp. the Respondents were not found to be a single employer, but were held jointly responsible for the unfair labor practices solely because of their joint active participation, and collaboration , therein. This was also true In Long Lake Lumber Co . In National Shoes, Inc., the Intermediate Report strongly suggests-if, indeed , it does not find-that there was common ownership of both respondent corporations. It is true , as pointed out in the dissent , that in representation cases the Board has sometimes found that the em- ployees of two separate legal entities constitute a single appropriate unit, the two entities being viewed for this purpose as a "single employer" even though they have no common ownership , but only common management . However, contrary to the dissent , it is not clear to use that the mere fact that the same union represents the employees of A and B in a single unit requires us to inpute liability to A for any improper conduct by B in Its dealings with the union , even though A expressly disavows or disassociates itself from such misconduct . Whether A would be responsible despite such disavowal would neces- sarily be determined by the statutory rules governing vicarious liability , particularly Sec- tion 2 ( 13), referred to in the text infra . Moreover, it should be noted that , in treating unit issues in representation cases, the Board is concerned with the degree of integration of operations and of community of interest among the employees sought to be represented, and that the fact that all such employees are subject to the same management aids to establish such integration and community of interest . It is a far different matter, how- ever, to view common management as conclusive on the question of liability of one legal entity for the unfair labor practices of another. 11 See Sunset Line and Twine Company, 79 NLRB 1487, 1509. DEARBORN OIL AND GAS CORPORATION, ETC. 649 tenure of employment, or any term or condition of employment, ex- ^cept as authorized in Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. (b) Interrogating their employees in a manner constituting inter- ference, restraint, or coercion in violation of Section 8 (a) (1) of the Act, concerning membership in the above-mentioned or any other labor organization. (c) In any other manner, interfering with, restraining, or coercing employees in the exercise of their right to self-organization, to form labor organizations, to join or assist Local 7-482, Oil, Chemical and Atomic Workers International Union, AFL-CIO, or any other labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the pur- pose of collective bargaining or other mutual aid or protection, or to refrain from any and all such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized by Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act : (a) Resume construction and roustabout operations and offer to the employees listed in Appendix A of the Intermediate Report im- mediate and full reinstatement to their former or substantially equiva- lent positions without prejudice to their seniority or other rights and privileges, and make them whole for any loss of pay suffered by them in the manner set forth in the section of the Intermediate Report entitled "The Remedy." (b) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social- security payment records, timecards, personnel records and reports, and all other records necessary to analyze and determine the amount of backpay due, and the rights of the employees under the terms of this Order. (c) Post at their place of business in Evansville, Indiana, copies of the notice attached hereto marked "Appendix." 12 Copies of the said notice, to be furnished by the Regional Director for the Ninth Region, shall, after being duly signed by them or their authorized representative, be posted by them immediately upon receipt thereof and maintained by them for 60 consecutive days thereafter in con- spicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by them to in- Is In the event that this Order is enforced by a decree of a United States Court of Ap- peals, there shall be substituted for the words "Pursuant to a Decision and Order" the words "Pursuant to a Decree of the United States Court of Appeals, Enforcing an Order." 650 DECISIONS OF NATIONAL LABOR RELATIONS BOARD sure that said notices are not altered, defaced, or covered by other material. (d) Notify the Regional Director for the Ninth Region, in writing, within 10 days from the date of this Order, what steps have been taken to comply therewith. IT IS FURTHER ORDERED that the complaint herein be, and it hereby is, dismissed insofar as it alleges violation of Section 8(a) (1) and (3) of the Act by Dearborn and North Stewart. MEMBER JENKINS, dissenting in part: I do no agree with the majority's reversal of the Trial Examiner's finding that all three Respondents-Diamond, Dearborn, and North Stewart-must be considered as a single employer for the purposes of the Act and hence equally responsible for the 8 (a) (1) and (3) violations found in this case. The Trial Examiner has predicated this finding upon substantial evidence in the record and his credibility resolutions which show that all the Respondents were under the com- mon control and direction of one individual, Schoonmaker, in their business operations as well as their labor relations; that, by virtue of his position as president and manager of Dearborn, partner in Dia- mond, and cotrustee of North Stewart, Schoonmaker was the domi- nating and key figure in these closely knit, allied ventures; and that he conducted the operations of the three Respondents in a unified manner as a single enterprise. My colleagues' principal bases for disagreeing with the Trial Ex- aminer's finding of common control are that the record does not show that North Stewart's operations were controlled by Schoonmaker, that its operations were integrated with those of Diamond or Dear- born, or that its labor relations policies were directed by Schoonmaker. However, not only do I agree with the Trial Examiner's finding which I believe is amply supported by the evidence, but also North Stewart and Diamond apparently concur in and accept it as meritorious be- cause neither of them has filed exceptions thereto. Nevertheless, the majority's most serious quarrel does not appear to be with the Trial Examiner's conclusions regarding the common control exercised by Schoonmaker over the three Respondents, but with his view that the Respondents must therefore be considered a single employer, although they were not commonly owned. I am completely in agreement with the Trial Examiner that while common ownership may be a factor in reaching a single employer and joint responsibility finding, albeit a significant one, it is by no means a sine qua non. The majority by requiring common ownership as well as common control before it will make such a finding has now adopted a new test which does not accord with precedent. It also may have added a new element which is, at best, undesirable. DEARBORN OIL AND GAS CORPORATION, ETC. 651 Insofar as precedent is concerned the factor of common ownership was not present in all unfair labor practice cases in which the Board and the courts have made a single-employer and joint-responsibility finding.13 Furthermore, as I read those unfair labor practice cases where common control and common ownership were present, the latter was only an additional consideration supporting the ultimate conclu- sion and there was no indication that it was given equal weight with common control.14 Indeed, in some cases the element of common ownership was not even mentioned in support of the single-employer finding, although it apparently was present." Nor is there any refer- ence in any of the cases on this subject to a requirement that both factors "coexist" as a condition to imposition of joint liability. Moreover, there have been a host of representation cases where the Board has held separate legal entities to constitute a single employer and found appropriate a single unit of the employees of the com- panies involved because of common control of business operations and labor policies, notwithstanding the absence of common owner- ship.16 While they concede that this is so, my colleagues are appar- 13 See, for example, Dayton Coal and Iron Corp., et al., 101 NLRB 672, enfd . 208 F. 2d 394 (C.A. 6). Contrary to the statement of the majority in footnote 10, supra, the re- spondents in this case were found to be a single employer . 101 NLRB at 688. See, also, Long Lake Lumber Company, et al., 34 NLRB 700, enfd. 138 F. 2d 363 , 364 (C.A. 9). In my opinion, the language of the Board in this case requires the conclusion that the re- spondents were found to constitute a single employer , unless the substance of what the Board said is to be completely disregarded in favor of its failure to use the actual words "single employer." Thus, in finding joint responsibility, the Board discussed in detail the facts demonstrating common control of the business operations and labor relations of the respondents. No mention was made of the absence of evidence of common ownership as in any way detracting from the finding. 14 See N.L.R.B. v. Concrete Haulers, Inc., and Wamix, Inc., 212 F. 2d 477, 479 (C.A. 5) ; N.L.R.B. v. Condenser Corporation of America , 128 F. 2d 67, 71; National Garment Com- pany, et al., 69 NLRB 1208, enfd. 166 F. 2d 233, 238 (C.A. 8), cert. denied 334 U.S. 845. 15 See, for example , Editorial "El Impartial," Inc., 123 NLRB 1585. I disagree with the majority's interpretation of this case as set forth in footnote 10, supra. The Trial Examiner merely alluded to the fact that one of the respondents was the corporate affiliate of the other in his recitation of the facts of the case. Nowhere in his legal conclusion that the respondents constituted a single employer does he refer to corporate affiliation in the sense of common ownership as support for his finding . On the contrary, he bases his find- ing upon common control of the business operations and labor relations policies and con- duct of the operations of the two respondents in an integrated manner as a single enterprise. It is this finding that the Board adopted. I think that the point which I am making here-that very little or no weight was attached by the Board or the Trial Ex- aminer to the element of possible common ownership-is graphically emphasized by the fact that the majority is constrained to go to the record to sustain its contention that common ownership was present in this case. See, also , National Shoes, Inc., et at., 103 NLRB 438, 441, enfd. 208 F. 2d 688, 691 (C.A. 2). Here again, no reference was made by the Trial Examiner or the Board to the presence of common ownership in the legal con- clusion and finding that the two companies involved in that case constituted a single em- ployer and were jointly responsible for the unfair labor practices. 10 See, for example , Macy's San Francisco, and Seligman & Latz, Inc. , 120 NLRB 69; Chemical Express, 117 NLRB 29; Stainless Welded Products, Inc., 116 NLRB 791 ; Hazel- Atlas Glass Co. and Clarksburg Paper Company, 115 NLRB 40; Sunnyland Packing Com- pany and Sunnyland Poultry Company, 113 NLRB 162; Miami Paper Board Mills, Inc., and Simco Waste Paper, Inc., 109 NLRB 167; Inter- Ocean Steamship Co. (Tomlinson Fleet ), 107 NLRB 330; Basic Management, Inc., and John W. Galbreath Co., 104 NLRB 1038; Franklin Simon of Company, Inc. and Rays -Newport, Inc., 94 NLRB 576; Lloyd A. Fry Roofing Company and Volney Felt Mills, Inc., 92 NLRB 1170; Smith Rice Mill, Inc. and DeWitt Bonded Warehouse Company, 83 NLRB 380; Clarksburg Paper Company, 80 NLRB 1304. 652 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ently questioning the pertinency of these cases because they are now suggesting that the standards applicable to single-employer findings for unit purposes in representation proceedings are somehow different from those applicable in unfair labor practice proceedings. I am constrained to say that they are thereby subscribing to a wholly un- tenable position. Thus, it is inconceivable to me that having held that two or more companies constituted a single employer for unit purposes, if the Board should thereafter be presented with a complaint against these companies alleging a refusal to bargain in the appropriate unit, the Board could or would find an 8 (a) (5) violation, but not hold the companies jointly responsible as a single employer. The Board has consistently held for many years in representation cases where joint petitioning unions are involved that if the unions are successful in the election which is directed, they will be certified jointly and the employer can then insist that they in fact bargain jointly for the employees as a single unit.17 In my opinion, if this language means anything, it means that the employer would not violate Section 8 (a) (5) if he refused to bargain with only one of the jointly certified unions and the unions would violate Section 8(b) (3) if they refused to bargain jointly with the employer. Parity of reasoning demands the same results where joint employers are involved. It is equally inconceivable that if, after certification of the union, the parties to the representation proceeding should enter into a con- tract containing an illegal union-security provision and a complaint was issued against these companies, the Board could not or would not find them jointly liable for the 8(a) (1), (2), and (3) violations. In other words, I believe, in disagreement with my colleagues, that it is difficult to imagine cases which are more relevant to the instant problem than representation cases where the Board has made single- employer findings for unit purposes. At certain points in its opinion the majority indulges in a jousting exhibition with "straw men" which it has created as manifesting its understanding of my position and which it, of course, is able to blithely destroy. Rather than compound the confusion thus engen- dered by setting forth what my position is not, I prefer to restate what it is. In my view, the identical criteria are applicable to single- employer findings in unfair labor practice cases and in representation cases involving unit determinations. Where the same individual or group controls the business operations and labor relations policies of two or more companies and conducts the operations as one enter- prise, the companies constitute a single employer for the purpose of the Act. What is the significance of such a finding? According to 11 See, for example, Gordon B. Irvine, 124 NLRB 217, and cases cited therein. DEARBORN OIL AND GAS CORPORATION, ETC. 653' my concept of the legal relationship thus established, there is- virtually by definition-only a single inseparable and indivisible entity. While that status continues to exist, it is impossible to speak in terms of the individual or group engaging in unfair labor practices. while acting on behalf of one company but not the others or of one company disavowing the improper conduct of the others. Accord- ingly, the companies must be held jointly responsible for any unfair labor practices engaged in by the individual or group. Having set forth in some detail why I do not believe that precedent in any way supports the new test adopted by the majority, I turn now to what I have heretofore mentioned may possibly be a new element which is being added. Before doing so, I should note that whenever I have used the term "common ownership" in this opinion I have been referring to the accepted Board and court legal definition, to wit, the interests of stockholders in a corporation or partners in a partnership. While the majority opinion at most places uses the term "common ownership," at one point it also refers to a quite different concept, i.e., the requirement of "a controlling ownership interest." [Em- phasis supplied.] The majority may thus now be holding that sepa- rate legal entities will not be responsible under the Act as a single employer unless the same individual or group of individuals has a controlling stock interest in the companies or a controlling interest in the partnership, depending upon which types of legal entities are involved. If this be so, I submit that the majority is introducing a new standard which opens up a Pandora's box of problems. I suggest just a few possible difficulties. For example, what is a controlling stock ownership interest in a corporation? Ina company whose stock is privately held or publicly held to a limited extent, an individual or group might need 51 percent of the stock to possess a controlling ownership interest. On the other hand, it is a well-known fact that an individual or group possessing a much smaller percentage of the stock (as little as 10 percent) in a company whose securities are widely held by the public can have effective controlling ownership. Indeed, in such a company it is most unusual that one individual or group has as much as 51 percent of the capital stock. When the Board is faced with an issue such as is involved in the instant case, are my colleagues proposing to investi- gate each of the companies concerned to determine the percentage of stock interest necessary for a finding of controlling ownership in- terest or are they going to apply an arbitrary requirement of a 51- percent stock interest regardless of the amount of stock in public hands? Suppose, as another example, A, B, and C are equal partners in a business. A is in complete charge of its operations and all labor relations matters. B and C are father and son. Who has the con- trolling ownership interest? Assuming the Board would find B and 654 DECISIONS OF NATIONAL LABOR RELATIONS BOARD C had such interest, would the parties be permitted to show that B and C were always in disagreement and would this fact affect the determination? Finally, I believe the majority's statement that any rule other than the one it now espouses would introduce an element of "guilt by 'asso- ciation"' is utterly without foundation. Even in the test adopted by the majority, it is solely the element of common control in the day-to- day operations of the companies which prevents such a result. It has often been held that the mere fact that two companies have common stock ownership and interlocking directorates does not make them a single employer for the purposes of the Act, if they are engaged in completely unrelated operations and are without common manage- ment.l$ . If the criterion were only common ownership or controlling ownership interest, then it truly would be a "guilt by `association"' rule because a finding of joint responsibility would be based solely upon the fact that two or more entities happened to have the same stockholders. Accordingly, if my colleagues' purpose is to avoid bringing into play an element of "guilt by 'association,"' the require- ment for a single-employer finding of common ownership or control- ling ownership interest is superfluous so long as common control is likewise a prerequisite. For all the reasons I have indicated above, I agree with the Trial Examiner that the critical and essential factor for a determination that two or more separate entities constitute a single employer has been-and should continue to be-treatment of the entities as a single enterprise by virtue of common control and direction of business oper- ations and labor relations policies. 's See, for example, Park Plaza Amusement Company, 124 NLRB 428 ; Clark Concrete Construction Corporation, 116 NLRB 321; The Woodstock Manufacturing Co., Inc., 116 NLRB 389; American Furniture Company, Inc ., of El Paso, 116 NLRB 1496 ; Central Dairy Products Co„ Stefen's Branch, 114 NLRB 1189; Orkin "The Rat Man," Inc., 112 NLRB 762; Lisowitz, Inc., et at., d/b/a Lisowitz Enterprises, 108 NLRB 1479 ; N.L.R.B. v. Brown and Root Inc., et al., 203 F. 2d 139 (C.A. 8 ) reversing on this point 99 NLRB 1031. APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, we hereby notify our employees that : WE WILL NOT discharge or otherwise discriminate against any employee for the purpose of discouraging membership in Local 7-482, Oil, Chemical and Atomic Workers International Union, AFL-CIO, or any other labor organization. WE WILL NOT interrogate our employees concerning their mem- bership, affiliation, or sympathy with the above or any other union. DEARBORN OIL AND GAS CORPORATION, ETC. 655 WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of their right to self- organization, to form, join, or assist any labor organization, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the pur- pose of collective bargaining or other mutual aid or protection, and to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employ- ment, as authorized in Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. WE WILL offer to the following employees immediate and full reinstatement to their former or substantially equivalent positions without prejudice to their seniority or other rights and privileges enjoyed, and make them whole for any loss of pay suffered as a result of the discrimination against them : Leonard Trofford Morris Wright Robert Gus Ropp Roland DuVall Donald Furman Glenn French Ronald Houchings Frank Rainey Charles Pickerel Gene Smith Dorris Wright All our employees are free to become, remain, or to refrain from becoming or remaining, members in good standing in the above- named Union or any other labor organization, except to the extent that this right may be affected by an agreement in conformity with Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. GEORGE C. SCHOONMAKER AND JAMES W. MCCUMMINGS, PARTNERS D/B/A DIAMOND OPERATING SERVICE, Employer. Dated--- ------------- By------------------------------------- (Representative ) (Title) This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material. INTERMEDIATE REPORT STATEMENT OF THE CASE Upon charges, as amended, filed by Local 7-482, Oil, Chemical and Atomic Workers International Union , AFL-CIO, herein called the Union , the General Counsel of the National Labor Relations Board, through the Regional Director for the Ninth Region (Cincinnati, Ohio), issued a complaint dated December 31, 1957, against Dearborn Oil and Gas Corporation, George C. Schoonmaker and James W. McCummings, Partners, doing business as Diamond Operating Service , and George C. Schoonmaker, Trustee, doing business as North Stewart Waterflood , herein 656 DECISIONS OF NATIONAL LABOR RELATIONS BOARD referred to as Dearborn , Diamond, and North Stewart, respectively, and collec- tively as the Respondents , alleging that the Respondents and each of them have engaged in and are engaging in unfair labor practices in violation of Section 8 (a) (1) and (3 ) of the Act. In their separate answers the Respondents deny the commission of any unfair labor practices . The issues are discussed below. Pursuant to notice, a hearing was held before the Trial Examiner at Evansville, Indiana, on January 21 and 22 and February 25, 1958, and on the last date the hearing was continued sine die in order that the General Counsel might initiate proceedings for the enforcement of certain subpenas issued by him . Following these proceedings the hearing was resumed on December 2, 1958 , and concluded Decem- ber 5. All parties were represented at the hearing and were afforded full oppor- tunity to be heard, to introduce relevant evidence , to present oral argument, and to file briefs . On January 12, 1959, the General Counsel and counsel for the Respondents filed briefs which 1 have fully considered. Upon the entire record and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENTS The complaint, as amended at the hearing, sets forth the business of each Respondent and alleges that the Respondents, together with other concerns whose names are unknown, constitute a single integrated enterprise. The Respondents deny they are operated as an integrated enterprise and Diamond and North Stewart deny they are engaged in commerce within the meaning of the Act. Dearborn, at the hearing, admitted it was engaged in commerce as defined in the Act. Dearborn, a Delaware corporation, has its principal office in New York City, is licensed to do business in Indiana, maintains an office in Evansville, and is engaged in the business of producing and selling petroleum and natural gas. During the calendar year 1956, it sold products valued in excess of $600,000 to concerns within the State, which concerns in turn shipped goods valued in excess of $50,000 directly across State lines. Diamond, a partnership, maintains its office in Evansville, Indiana, and provides roustabout services, diamond coring, and pumping for other concerns in the Evansville area. During 1956, Diamond rendered services to companies in Indiana in excess of $64,000, of which about $39,000 was for Dearborn, and performed services for concerns outside the State valued in excess of $61,000.1 North Stewart is a trust, located in Evansville, engaged in the production of petroleum and natural gas, and during 1956 the trustee sold and shipped all its oil, valued in excess of $56,000 directly to Ohio Oil Company pipeline? I find each of the Respondents is engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of the Act. III. THE UNFAIR LABOR PRACTICES The principal issues are (1) Whether the Respondents were and are operating as an integrated enterprise and (2) whether the Respondents collectively or individually engaged in unfair labor practices as alleged in the complaint. A. The operations of the Respondents and their business relationships with each other Dearborn was, and is, a wholly owned subsidiary of Holly Corporation which maintains offices in New York City. Holly, through divisions or wholly owned subsidiaries , is engaged in various industrial activities and controls interests in oil and gas properties in many States and in Canada and Mexico. Charles Chiusano, vice president of Holly in charge of its labor policy, was vice president of Dearborn. 'Exhibit A of the motion to quash subpoenas duces tecum served upon the partners. The accuracy of the data was not challenged. Counsel for Diamond also moved to dismiss the complaint on jurisdictional grounds because during 1957, the services rendered within the State amounted to about $44,000 ($17,000 for Dearborn) and out-of-State services were valued at approximately $49,000. The motion was denied. 2 This Information appears in the motion tb quash a subpoena duces 'teoum served upon George C. Schoonmaker. The data was obtained from the records of North Stewart and the accuracy thereof was not questioned at the hearing. DEARBORN OIL AND GAS CORPORATION, ETC. 657 George C. Schoonmaker was president of Dearborn and the board of directors consisted of Chiusano, Schoonmaker, and Sherwin Harris, president of Holly. Officers of Dearborn could be removed by action of a majority of the board of directors. Chiusano further stated that Schoonmaker held about 550 shares out of 4,000,000 shares of Holly stock , was local manager of Dearborn, directly responsible to him, and McCummings was employed as petroleum engineer. Chiu- sano stated that Anton Fisher, who died October 23, 1957, was treasurer of Dear- born and vice president and treasurer of Holly in charge of the oil division including Dearborn. A few months before Fisher 's death, Chiusano took over the respon- sibility for the oil division and immediately came to Evansville, in the summer of 1957, to visit the property. Chiusano's visit lasted about 3 days and that was his only trip to Evansville in 1957. He did not know how often Fisher had been to Evansville in 1957. Chiusano assumed Schoonmaker and McCummings were responsible for the hiring and firing of employees , at least he had no knowledge of anyone else having such authority . According to Chiusano, Dearborn employed about 30 persons: 2 clericals, 3 foremen or leadmen , and the remainder as pumpers to operate and maintain machinery in its oil-producing operations . He stated that all records were kept in New York City, although payrolls were prepared in Evans- ville, and all capital expenditures in excess of $250 had to be submitted to him for approval. Schoonmaker said he was president of Dearborn from about 1953 or 1954 until around June 1, 1958, and that McCummings was a vice president during some unspecified period. Dearborn maintained its Evansville office in the same office where Schoonmaker conducted his other business interests . He stated he was elected president because Dearborn needed "a respectable front" in order to borrow money necessary to carry on its operations . Schoonmaker related that he was consulted in respect to the purchase of leases and the drilling of wells and while "they respected my judgment as an oil man ," his decisions on such matters were not necessarily final. He had nothing to do with the hiring and firing of employees , that phase of opera- tions being handled by McCummings . During the period January 1956 to June 1958, Schoonmaker stated that Harris, Chiusano , and Fisher made numerous trips to Evansville, maybe once a month, to look over the property and get acquainted with what was going on and where money was being spent. In its Indiana operations Dearborn held a number of leases known as Union East Waterflood where it produced oil by injecting water into the ground which created an artificial pressure thereby stimulating the flow of oil. During the early part of 1958, Dearborn sold Union East to Harold A. Ball, as appears below, which apparently resulted in Schoonmaker being asked to resign as president. During August 1954, Schoonmaker and McCummings formed the Diamond part- nership and purchased four diamond core heads and barrels and other equipment necessary to core oil sands. Schoonmaker said he provided the capital and McCummings conducted the operations . He explained that coring is a method of extracting oil pays or prospective oil pays in which the head , with small diamonds set in it to cut through hard rock formation , is rotated into the ground for the purpose of obtaining some substance or formation which can be analyzed to deter- mine whether a well should be drilled. In its early operations Diamond's functions ended when it was determined to make a well and actual construction thereof was performed by a contractor. Around September 1955, Diamond , in addition to its coring operations , commenced furnishing roustabout services 3 and the construction and operation of waterflood plants. These services were furnished on a cost -plus-l0- percent basis . Schoonmaker said the partnership was formed for the purpose of rendering services at costs equal to, or less than, other firms and that Diamond per- formed services for Dearborn and North Stewart, while he was president and trustee, respectively, and for other concerns in Indiana , Kentucky, and Illinois. About May 1957, Diamond went out of the roustabout and construction business but continued its coring operations . Schoonmaker said he has no intention of going back into the construction business. North Stewart, as Schoonmaker testified, is a group of leases on oil-producing property located near Union East . North Stewart is owned under a recorded trust agreement for the benefit of Schoonmaker, T. J. Morton, Jr., and Mike Ryan. There are other parties who have interests in the leases but they are not named in the trust agreement. Roustabouts are men usually experienced in oilfield work and are engaged in laying pipelines, repair and construction work, and various jobs essential to the production of oil. 658 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Schoonmaker is also trustee, under similar trusts, covering properties known as Stewart Waterflood, Pellville Waterflood, and Hackett Waterflood, and is coowner of Glenville Waterflood. As appears above, Schoonmaker conducted all his business interests from his office, except that at some unstated date Diamond changed its business address to McCummings' office, located in the same building. E. W. Pfeffer stated he was accountant and office manager for Schoonmaker and maintained books and records for North Stewart, Diamond, and his numerous other interests. However, Pfeffer performed no accounting sevices for Dearborn, but he did perform clerical functions such as the preparation and distribution of pay- checks and the classification of vendors' invocies. Payrolls were made up on the basis of timesheets sent in by the field employees, most of whom were paid a monthly rate. All records of Dearborn were kept in New York City, including canceled paychecks, and only a "skeleton" set of records was maintained in Evansville so that Schoonmaker might have a working knowledge of the operations and the costs in- volved. He also stated that McCummings was employed by Dearborn as a petroleum engineer and was in charge of field operations. Each of Dearborn's leases or group of leases was operated by an individual who was in control of operations and was responsible to McCummings. Chiusano testified that neither Holly nor Dearborn has, or had, any interest in Diamond, other than, he supposed, using it as a contractor or for furnishing roust- about services, the same as it used independent contractors throughout its opera- tions. He further stated that Dearborn did not have the organization to do con- struction or roustabout work and that it was cheaper to have this work performed by outside contractors. According to Chiusano, Diamond was engaged as an independ- ent contractor and upon completion of its services submitted an invoice which was paid by Dearborn. He also stated that Schoonmaker exercised no control over Dear- born's policy and neither Dearborn nor Schoonmaker, as president, had any authority in respect to the hiring, firing, or terms of employment of Diamond's em- ployees, nor exercise any control over the manner in which it performed services for Dearborn. Again, neither Holly nor Dearborn had any interest in, or control over, Schoonmaker's various other business concerns or ventures. McCummings, who was experienced in oilfield operations, stated that certain roustabout work had to be done on the various leases and as the roustabouts per- formed varied jobs on the respective leases, which resulted in their receiving numer- ous paychecks, he and Schoonmaker decided to expand Diamond's operations to the construction field and the furnishing of roustabout services. McCummings solicited business of this type from concerns and Diamond supplied such services to Dearborn, Schoonmaker's interests, Bristol Petroleum, Diabolo Petroleum Com- pany, Henry Gwaltney, and others. Dearborn also engaged other independent con- tractors at the same time it was using Diamond's services. McCummings said Diamond ceased its construction and roustabout business in May 1957, and since then has been renting out its diamond coring equipment. According to a seniority list, which McCummings stated omitted 2 and possibly more names, Diamond hired 20 employees (including the 2 omissions) in the period September 15, 1955, to March 27, 1957, 4 of whom were hired in March 1957. Diamond now employs a few pumpers, but no roustabouts. McCummings has no intention of resuming construction work. The Sale of Dearborn's Oil Interests Schoonmaker testified that he was requested by Dearborn to sell its oil leases in Indiana. In this connection he contacted a Mr. Davis at Tulsa and New York as well as Murphy Oil Company, a local concern, but he was unable to effectuate a sale. Schoonmaker advised Morton, his cotrustee, that while he, Schoonmaker, could not purchase the leases he was very much interested in having Harold A. Ball, an as- sociate of Morton, buy them. The approximate dates of these events were not stated. However, Ball purchased Dearborn's leases sometime in the first 3 months of 1958. Ball, as stated by Schoonmaker, was not an oil man, knew nothing of the oil business, and bought the property as an investment, "only . on the condition and assumption that I would continue to look after it for him." Thereafter, Schoon- maker conducted the business for Ball and used his own office for that purpose as well as Ball's business address. Pfeffer said the services he performed for Ball were similar to those he rendered for Dearborn, except for accounting information. Employment History and Status of Dearborn and Diamond Employees Chiusano denied there was any interchange of employees between Dearborn and Diamond. DEARBORN OIL AND GAS CORPORATION, ETC. 659 Pfeffer could not recall any specific instances of transfers among Respondents, although this action may have occurred. Pfeffer obtained his information concern- ing employees from McCummings and at times this information went directly to the payroll clerk without passing his desk. McCummings testified all roustabouts employed by Diamond were on a temporary basis and occasionally he attempted to obtain permanent or better jobs for individuals of proven ability with other concerns including Dearborn, North Stewart, and Schoon- maker's oil production ventures. Counsel stipulated that Marion C. Eakins, Edwin B. Bratcher, and Callahan Whitt were supervisory employees of Diamond at all times material herein. Bratcher was employed continuously by Diamond as assistant production superin- tendent from the fall of 1955, or January 1956, to September 30, 1957, when he was terminated. About 2 weeks prior to his termination Schoonmaker informed him Diamond was disbanding at which time Bratcher asked him for a job with Dearborn. Schoonmaker said he could probably get him a job and upon his termination Bratcher went to work for Dearborn, with the same title, without any loss of time. Bratcher continued in Dearborn's employ until about January 1, 1958, when he returned to Diamond as production superintendent, and was so employed at the time of the hearing. McCummings informed Bratcher that he was going back with Diamond and he lost 1 or 2 days between jobs since he had to move from Princeton, Indiana, to Owensboro, Kentucky. Eakins was employed by Schoonmaker as construction foreman at Pellville Water- flood from 1954 to September 1955, when he went to work for Diamond as con- struction superintendent and was so employed until terminated on October 1, 1957. Eakins, like Bratcher, was given 2 weeks' notice by Schoonmaker and asked for a job with Dearborn. About a week later McCummings stated he would work for Dearborn and he was employed, in the same capacity, without any lapse of time. Eakins remained with Dearborn until about May 31, 1958. On June 1, 1958, he was employed by Ball, as relief pumper, at Union East and was so employed when he testified at the hearing. Whitt was employed by Diamond as production superintendent from about November 1, 1955, to May 1, 1957. On the latter date he was employed by Dear- born, in the same capacity, and worked until May 31, 1958. He then went with Ball, as a pumper, at Union East and was still employed at the time of the hearing. George B. Boyles testified he was employed by Dearborn from about May 15 to November 20, 1955. At the time of his termination he was told that if he wanted to work as a roustabout to report to Eakins, which he did. Boyles was hired by Dia- mond around November 21, 1955, was made roustabout gangpusher about 2 months later, and worked until May 15, 1957. The next day he went to work for Dearborn as a pumper and worked until May 1958, when he was terminated. John B. Shawhan was employed by Diamond about November 15, 1955, as a truckdriver and in the course of his employment injured his back (he did not give the date of his injury) so that he could no longer drive. Because of his condition, Shawhan, in the latter part of 1956, told Bratcher, who was running Union East, that if Bratcher was ever transferred he would like to have his job. Bratcher said he would keep him in mind and in the latter part of December 1956 he informed Shawhan he had the job. Shawhan quit his job with Diamond about December 31, 1956, and went to work for Dearborn at Union East on January 1, 1957, as a pumper. His employment with Dearborn was terminated on January 14, 1958. Shawhan was hired by Eakins and under his suprevision while working for Diamond and received order from Whitt and Bratcher during his employment with Dearborn. Fred C. Blaize was employed by Diamond in March or April 1956 as a roust- about, sometime later became relief truckdriver, and when Shawhan quit, he was made truckdriver. Around May 10, 1957, Eakins advised all the employees of Diamond they were being laid off but he told Blaize he was being transferred to Dearborn and to report for work the next morning. Blaize reported the following morning to Eakins at Union East, continued as truckdriver, and was paid by Dia- mond until about October or November 1957. Thereafter he was paid by Dear- born, as driver, util he was terminated in the latter part of January 1958. Blaize stated he performed truckdriving duties for both Diamond and Dearborn and while employed by Diamond he worked under Eakins, Bratcher, and Whitt. B. Organizational activities; acts of interference, restraint, and coercion; the lay- off of employees Thomas T. Corbin, Jr., president of the Union, stated that about April or May 1957, the employees approached him and requested the Union to act as their bar- gaining agent. After receiving signed authorization and application-for-membership 660 DECISIONS OF NATIONAL LABOR RELATIONS BOARD cards, Corbin addressed a letter to Diamond, dated May 4, stating the Union repre- sented a majority of its employees and requesting recognition as their bargaining representative and for the purpose of negotiating an agreement. By letter dated May 10, Schoonmaker advised the Union he did not know whether it represented a majority of the employees and, therefore, could not grant recognition as requested. Boyles, the gangpusher, testified he learned of organizational activities in April 1957, at which time he signed a union card while working at Union East. 'Three other employees, Shawhan, Dorris Wright, and Ronnie Houchins, were present when he signed the card. About May 3, Boyles reported for work at Eakins' home and Eakins told him, "The office got wind of the union, and if they heard any more about it they would fire all the men and hire Corebel [a contractor] for con- tract labor." Boyles related Eakins' remark to Frank Rainey, Wilford Nobles, and right on their way to work that morning and when they reached Union East he repeated the remark to Shawhan, Blaize, and Gus Ropp. Later the same morning Eakins told Boyles, at North Stewart "he would like to get the boys together as a group and try to talk them out of the notion of joining the union, or we'd all be -_fired." On May 8, Eakins gave Boyles layoff notices to be delivered to approximately five employees and on Friday, May 11, similar notices were given to Boyles for three more employees. On the latter date Eakins told Boyles, Nobles, and Wright to re- port to him the following Monday, May 14, and they did report to Eakins at his home. Eakins stated he was going to the office that day and thy would neither work nor be laid off "until the deal was settled." He further said he would advise Boyles .of the outcome that afternoon, which he did by leaving a note in Boyles' car stating that Boyles and Wright would work the next morning but there was no need of Nobles reporting. On May 15, Eakins advised Boyles that construction work was .being abandoned and authorized Boyles to inform the remaining employees that they were being laid off and to look for other jobs. About 2 or 3 months after the May layoffs, Boyles or Shawhan asked Eakins if the employees had been laid off because of the Union and he said, no, the layoff was caused by Diamond's inability -to pay union wages and insurance. Robert J. DuVall was hired by Eakins about January 11, 1956, as a roustabout. Around May 3, 1957, DuVall and Eugene Smith signed union cards which they dated back to sometime in April because they wanted their cards to correspond in point of time with those signed by other employees. About May 8, Eakins asked DuVall if he knew anything about the Union and he stated he did not, other than he had heard a Diamond employee, T. L. Harl, and a Mr. Dnyett, whom he described .as "company realtor," discuss the subject at the plant. A day or so later Eakins told DuVall he heard they were going to have ia union or an election and he hoped "the boys didn't do it because if they do they're going to be laid off, and hire .contract labor. We're going to disband Diamond Operating Service." About May 13, while working at Livermore East Waterflood, Bratcher inquired if DuVall had :anything to do with starting the Union and he replied he did not. Bratcher then stated he had DuVall, Smith, and Glenn French "worked in," when the conversation was interrupted by a telephone call for Bratcher. The next day DuVall and others were working at Pellville and about 11:30 Bratcher told them "this is it." DuVall inquired why they were being terminated !and Bratcher said he thought he had them "worked in" but Eakins must have done a lot of talking at the office. He then told -them to finish the job and go home, which they did. Ropp was hired by Eakins about January 2 and worked until May 8, 1957. Ropp heard of organizational activities in the early part of April and signed a union card about April 12. In the latter part of April or early May Eakins told Ropp, Donald Furman, and Ralph Riley, at Union East, that "if we wanted to keep a crew on the job it would be advisable to drop the Union." Later, around May 5, Eakins warned Ropp and Rainey, at Stewart Waterflood, "If we went ahead with the union that we would be fired and hire contract labor." On May 8, Boyles informed Ropp .and five other members of the crew that Eakins had stated they were 'all fired. Wright was hired about July 1956, signed a union card around April 10, and was laid off May 10, 1957. According to Wright the crew normally reported for work at Eakins' home where Eakins would give Boyles the work assignments for that day. Wright was advised of his termination by Boyles. About 2 or 3 weeks after his termination Wright apparently asked Bratcher for is job and Bratcher stated if they had treated Eakins differently they would still be working. Furman was employed from March 19 to May 8, 1957, primarily as helper on ,the truck. He signed a union card about April 10. Some 2 or 3 weeks later Eakins approached Furman, Ropp, and Riley at Union East and inquired if they had ;heard anything about the Union. Riley said he could not tell him, whereupon DEARBORN OIL AND GAS CORPORATION, ETC. 661 Eakins asked if Riley or anyone else had signed up and Riley gave the same reply. Eakins remarked if the men signed cards they would be laid off and contractors would be hired. About 3 or 4 days after his layoff Furman went to Eakins' home to turn in his time and Eakins told him if the men had not signed union cards they would still be working. Houchins worked for Diamond from about June to October 1956, when he was laid off and was reemployed from around April 1 to May 8, 1957. He signed a union card in the latter part of April. About 1 month after his last layoff Eakins, while fishing with Houchins, commented "the boys had messed up with what they had been doing." Raney worked as helper on the truck and as roustabout from about May 1956 to May 13, 1957. He signed a union card about May 10. A week or two before his layoff Eakins came to North Stewart, where Rainey, Ropp, and Furman were working, and, after asking about the Union, told them to forget it, that the em- ployees would be laid off and contractors would be hired. Rainey stated that shortly before his layoff he was left at Stewart one evening so Eakins came over to drive him home. On their way home Eakins asked if Rainey had signed, or would sign, a union card and he answered that he did not know. Eakins then remarked that he was afraid "the boys • messed up on account of this union," that Diamond was getting ready to disband and contractors would be hired. Again, shortly before May 13, Eakins told Rainey the employees were going to be laid off because of the Union. Blaize, as set forth above, was laid off by Diamond about May 10, and then went to work for Dearborn where he remained until January 1958. He signed a card about April or May. Shortly before the layoff of May 10, Blaize and Eakins were driving to North Stewart when Eakins asked him if he knew anything about the Union and he replied he did not. On May 10, Eakins came to Blaize's home to inform him of his job with Dearborn and to report for work the following morning. On this occasion Blaize stated he had lied when Eakins had inquired about the Union and he wanted to advise Eakins that while he knew when and who started the Union, he would not give this information to Eakins or anyone else. Eakins said that was his privilege and he did not have to tell him. Rainey stated that Eakins told him the roustabouts were laid off because they were not performing enough work for the costs involved. Blaize also stated that about May 14 he asked Bratcher why the men were being laid off and he replied it was because of the Union. Shawhan, as appears above, quit his job with Diamond around December 31, 1956, immediately went to work for Dearborn, and was terminated January 14, 1958. He signed a card about April 10. Shawhan was aware that employees were laid off around May 8, and,a few days later while working at Union East he asked Eakins if the men had been laid off by reason of union activities. Eakins replied the em- ployees were laid off because of slack work and that contractors were going to take over. Shawhan commented it looked funny to him to lay off employees and then hire contract labor and Eakins said he did not know. Around July 1, Eakins re- marked to Shawhan and Boyles that the men were not laid off for union activities but because Diamond could not afford to pay union wage scale. The Respondents' Case Eakins was questioned in detail on the statements concerning organizational activities or the Union attributed to him by witnesses for the General Counsel and he categorically denied making any such statements or remarks. He explained that at times he asked Boyles if he (Boyles) thought it would be helpful to call a meeting of the employees and speak to them about loafing on the job. Eakins did not think Boyles answered his inquiries and there is no indication that any such meeting or gathering was held. Eakins recalled the occasion when Furman came to Eakins' home with his timesheet and in the course of their conversation he told Furman the boys would probably be working if they had not loafed on the job. Eakins also remembered driving Rainey home from the job one afternoon and in answer to Rainey's question as to why they were going to be laid off he stated none of the employees bade been giving a days' work and some were turning in overtime. Eakins said that he had approximately 13 or 14 employees in May 1957, all of whom were terminated between May 8 and 15, 1957. The terminations were effectuated by Eakins, who instructed Boyles to notify the employees they were being laid off. Bratcher denied he ever told Blaize that the men were being laid off because of the Union. In substance Bratcher admitted he told Wright on one occasion that "if you hadn't treated Aikens [Eakins] the way you had, and loafed on him, you 535828-60-vol. 125=43 662 DECISIONS OF NATIONAL LABOR RELATIONS BOARD would probably have a job." He denied that he asked DuVall if he had anything to do with starting the Union. French was employed by Diamond about June 26, 1956, and terminated around May I 1 or 14 , 1957. He signed a union card about 1 week prior to his termination. French denied he ever heard Boyles make any statement to the effect that the Company had heard of organizational activities and if the employees attempted to organize they would be fired and contract labor would be hired. He also denied having any conversations with Eakins regarding the Union or that any supervisor or official ever threatened him with discharge if he joined or became active on behalf of the Union. The Cessation of Construction Work As !already stated, Diamond was in the construction business from September 1955 to May 1957. Schoonmaker testified that around November 1, 1956, he called McCummings to his office, outlined Diamond's situation, and then instructed him to get out of the construction business "as quickly as he could." McCummings said they could not leave projects then in progress, principally Dearborn work, but upon completion of these jobs construction work would be terminated . Schoon- maker agreed with him believing the jobs could be finished within 90 days. Schoon- maker decided to get out of the construction business because of complaints of high costs from customers, financial burdens, such as the failure of Diabolo Petro- leum Company to pay $10,000 for work performed ,4 and the fact that we. would never make any money. According to Schoonmaker "one of the principal factors" in deciding to abandon construction work was a complaint he had from Gwaltney, the same day he talked with McCummings. Gwaltney, who had an interest in Dear- born, told Schoonmaker he did not like to be critical , "but you are wasting money outrageously." Schoonmaker asked why he had not mentioned this to him and Gwaltney replied he thought Schoonmaker knew what he was doing , "But your costs are sky high; and I am coming up and making a complaint about it." Gwaltney also stated Diamond had a lot of men in the field who were not working. Schoonmaker related that Chiusano and Harrison complained , at unstated times, about not making money, wasting money, and "They particularly objected to the fact that McCummings and I were making money on the side." When questioned by his own counsel as to whether Chiusano urged him to remain in the construction business , Schoonmaker answered: Well, he told me I was stealing from the company , which, of course, wasn't the truth, but at least that's what he accused me of doing. Schoonmaker further testified that at some unspecified date his cotrustees, Morton and Ryan , brought up the subject of reducing the costs at North Stewart. As a result of these complaints Schoonmaker decided to abandon construction work. Schoonmaker explained that the inability to complete the jobs within 90 days was due to bad weather , rather than inaccurate estimates. McCummings stated that at undisclosed times Schoonmaker received complaints regarding Diamond's costs from officials of Dearborn and Holly, Morton, Ryan, and Gwaltney and, as a result thereof, he and Schoonmaker discussed the situation in early November 1956, at which time they decided to go out of the construction business. At that time McCummings believed the pending projects could be com- pleted by the first of the year. McCummings further testified that officials of Dearborn and Holly strenuously objected to Diamond's excessive labor costs on the numerous trips he made to New York City and on the numerous visits they made to Evansville . Again, McCummings failed to give the approximate dates of these complaints and neglected to state what, if anything, he said to the officials or Schoonmaker, or whether he took any action at all concerning the complaints. Gwaltney stated he was primarily an oil well drilling contractor and also operated gas and oil wells. He conducted his business through two companies , Henry Gwalt- ney Drilling Company and Henry Gwaltney Producing Company. At the time of the initial development of Union East, Gwaltney owned 25 percent of the working interest but due to lack of capital to waterflood the property he transferred his interest to Dearborn for a one-eighth net profits interest and also received one-sixty- fourth overriding royalty interest until such time as the property paid out. Gwaltney was familiar with Diamond's operations , knew Eakins , and at times was drilling in the same area where Diamond employees were working . Gwaltney visited these jobs three or four times a week, his visits varying from an hour to a day, and he * The parent company of Diabolo, a Canadian company , went into bankruptcy. Accord ing to McCummings , Diamond performed services for Diabolo until the spring of 1957. DEARBORN OIL AND GAS CORPORATION, ETC. 663 had an opportunity to observe whether or not the employees were working. In this connection Gwaltney said he spent practically the entire afternoon of April 3, 1956, with his crew at Union East and he saw 6 or 8 Diamond employees, approxi- mately 800 yards away, who performed no work at all for 4 hours, except to put wood on a fire. On cross-examination he said no supervisor was present, that he did not know what the men were supposed to be doing, and he did not speak to them. Thereafter, apparently until early 1957, Gwaltney saw Diamond employees loafing in similar fashion about six or eight times. Gwaltney stated there were other oc- casions when the men were not working "-as I think men should work" and cited an instance when Diamond had more men than necessary to operate the truck. This occurred at Stewart where four or five men were loading pipe. In early November 1956, Gwaltney went to Schoonmaker's office and complained he did not like the way things were going in the field, that costs were too high and men were loafing on the job. He also told Schoonmaker: For your own good, get out ,there nand do something about the situation. You're president of Dearborn, you're a partner in Diamond, Diamond is overcharging Dearborn, you're overcharging as trustee, and as trustee you should know the obligations of a trustee. Schoonmaker was unaware of the situation for Gwaltney quoted him as saying "he didn't know previous to that" time, but "he would clean it up." Gwaltney warned Schoonmaker he was going to bring the matter to the attention of Holly and Schoon- maker promised something would be done. In the latter part of January or early February 1957, Gwaltney again talked to Schoonmaker who stated he was getting out of the construction business as quickly as possible. Gwaltney further stated that in April 1956, following the April 3 loafing incident, and during the summer and fall he spoke to McCummings regarding excessive time and costs on the various projects. McCummings said he had to get the work done and he would try to get better efficiency. According to Gwaltney, Diamond's construction work "started tapering off" around April or May 1957. Since May 1957, he has been doing 50 percent of the work formerly performed by Diamond for Dearborn and the remain- ing work has been handled by Corbel. Gwaltney has had about six men performing this type of work while Corbel has employed from three to five employees. Pfeffer testified that as a result of Gwaltney's criticism of Schoonmaker's opera- tions at Union East, he at once checked the records of Diamond's construction work for the period September 1955 to September 1956. Pfeffer could not approximate the time required to make the check, other than it was less than a month, and upon completion of his study he immediately reported to Schoonmaker. The study disclosed that Diamond was not making any money on cost-plus-10 percent,5 that accounts were slow, construction work required an increase in capital of about $10,000 to $20,000, and the "lifting cost" per barrel of oil from Union East and North Stewart was higher during this period than when other labor was used. Pfeffer expressed the opinion that the construction business was of no value to Schoonmaker and he should get out of this field. Following this report, Pfeffer was present when Schoonmaker gave the substance of this report to McCummings, at which time he announced he was going out of the construction business. It was Pfeffer's under- standing that this was to be done immediately. Diamond terminated all construction work in late 1957, and at the time of the hearing had no construction employees. Pfeffer stated that one-third of the Diabolo account of $10,000 was for diamond coring and pumping services and the remainder for construction labor. The entire sum was charged off on Diamond's tax return for the year 1957. Pfeffer said Diamond made a small profit in 1956 and 1957, and estimated that with the elimina- tion of construction work profits should be higher for 1958. Chiusano merely stated he was not satisfied with the type of work Diamond was performing for Dearborn. Chiusano was asked if he knew Gwaltney and he replied about ,all he knew of Gwaltney was that he was a contractor and "has leases along with Dearborn" in some venture. Eakins said that in late 1956, McCummings informed him labor costs were too high and if he did not get it straightened out McCummings would have to do some- thing. The following March Schoonmaker told him of receiving complaints on costs and unless something was done "we were just going to have to go out of business; that we just couldn't continue in that manner." . c Schoonmaker said that 7 percent, such as taxes and insurance, was a direct cost against the payroll. 664 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Bratcher testified that in January or February, Schoonmaker showed him figures on construction costs and remarked something had to be done. Subsequently, about March or April, Schoonmaker told him operation costs had not been cut and that he was going to disband Diamond. The Evidence in Respect to Diamond's Labor Costs Diamond contends that the excessive labor costs, which prompted it to cease con- struction operations, were attributable primarily to loafing by the employees and poor supervision. Eakins said that from the middle of 1956 until Diamond went out of the construc- tion business he talked to the employees about loafing and padding timesheets to get overtime. He knew the men were loafing because his job assignments were always made on the basis of a day's work and when the job was not finished in that time he attributed it to loafing. Eakins further stated that when he drove up to the job he would find the men loafing but upon his arrival they would jump up and commence working. Eakins was not certain when he first reported any loafing to McCummings other than "I expect as early September 1956." Concerning the pad- ding of timecards, Eakins said each employee kept his own time and turned it in to him every 2 weeks for approval. He then submitted the card to McCummings. Eakin said there were times when he disapproved the cards for he knew the men could not have worked that number of hours. Eakins failed to state when the padding occurred or the names or number of men involved in this practice. In this respect he first reported the padding or discrepancies to McCummings in the latter part of 1956, and in the last few months of construction operations McCummings rode him about overtime and excessive costs. Whitt stated that in January 1957, Schoonmaker called the three supervisors to his office and informed them that costs were too high and "we had to cut expenses." Schoonmaker made no mention of anyone having complained about labor costs. In March 1957, Schoonmaker said costs had not been reduced sufficiently and "he was going to abandon Diamond Operating." Whitt said at times he had observed Eakins' employees loafing and when he, Whitt, drove up to the job they would start working. He could not give any dates as to when or in what period the loafing oc- curred, other than he first spoke to Eakins about it in the latter part of 1956. Bratcher said that prior to January 1957, he saw the employees loafing on many occasions, practically every morning when they reported for work, and he spoke to McCummings and Eakins about the subject around January 1, 1957. French testified his first day of employment (about June 26, 1956) he worked at B & B Waterflood with DuVall, Smith, and two or three other employees. Eakins was not present that day and DuVall told them what to do. French stated the men were on the job 8 hours and worked but 5 minutes in the morning and 5 minutes in the afternoon. The rest of the time they loafed. He also stated that when Eakins was around they worked and when he left they did hardly anything. Through- out his employment, about 11 months, French guessed the crew worked but I full day a month although they were paid for 8 hours per day. On cross-examination French said that on the first day of his employment the crew spent about 5 minutes building a form in which to pour concrete, that they then telephoned for ready mixed concrete and when the truck delivered the concrete that afternoon they poured and smoothed it up. Gay Marcum, pumper at B & B Waterflood, said that about July or August 1956, he saw DuVall, French, Petrie, Smith, and Rowan pouring a concrete floor and leave the job, to sit in the shade, after getting only part of it poured. When they returned they could not level off the concrete so they spent the next day or so pouring more concrete and leveling it off. Eakins was not at the job. Marcum stated Diamond men worked all over the B & B area and when Eakins was not around they would sit in the toolhouse "as long as they could" and several days they never left the toolhouse. Marcum made no attempt to fix the approximate date of these occurrences and the toolhouse was located about a mile from the pump. One morning in the fall of 1956, Marcum heard Eakins tell DuVall, Smith, and another employee to repair a pump jack at a certain well. Eakins then left and about 10 o'clock he heard DuVall say they would go to the well after lurch, which they did. The next day they repaired the jack. Marcum said he and another man could have made the repairs in a couple of hours. Lyman Harris, drilling superintendent for Gwaltney, testified that one time, apparently at the Shawhan lease, he saw two Diamond employees rustling wood and four standing by a fire. Harris did not know how long the men stood by the fire because he "was only there a few minutes." DEARBORN OIL AND GAS CORPORATION, ETC. 665 . Boyles, the gangpusher, testified that the only time the men did not work was when they did not have tools or proper supervision or direction. Ropp said the men loafed from half an hour to an hour perhaps once a week. On these occasions the foreman, Eakins, was not present and the men did not work because of lack of direction or work assignment. Ropp was never criticized by Eakins for loafing. Wright denied there was "a terrific amount of loafing" or that the men would sit around for an hour doing nothing. He stated on occasions when the crew reported for work they had to wait for the foreman to give them instructions as to what to do. On rebuttal, DuVall testified French first joined the crew about July 1, 1956, and on that day DuVall, French, and Smith tore down an old pump building and stacked the metal and lumber. He denied taking any breaks that day, except 30 minutes for lunch. DuVall stated that in August 1956, he was with a crew of six or seven men at B & B Waterflood to pour an outside concrete floor, measuring 24' x 22'. T. H. Hari told DuVall that the concrete would be delivered around noon and to have forms straightened and everything ready, which they did. During the luncheon period the first truck arrived and the crew poured and spread the concrete. About 10 minutes later the second truck arrived. Prior to its arrival Hari sent four of the crew to other jobs so DuVall told Hari this left him shorthanded and asked if they could pour the floor in sections but Hari said to pour it all at once. After dumping the second load DuVall and the two remaining men immediately went to work spreading but they were unable to finish the job before the concrete set up on them. DuVall denied they took any work breaks during the pouring and spreading. DuVall recalled repairing a pump jack at B & B and another one at Livermore. On the B & B job the crew had to turn the jack around, disassemble it, and run a pump or rod line about 700 yards. Apparently, it took about 3 days to complete the job. He denied there was any loafing on the job. DuVall said that shortly after French's employment the crew worked 8 hours a day, 6 days a week. He denied there was any such practice as work breaks, and stated the crew went from job to job on the various leases, some of which were as much as 6 miles apart. DuVall admitted that when it rained hard they would go to the shed but he denied he or the crew ever spent an entire day in a shed or toolhouse. Other Incidents Affecting Labor Costs Marcum said that in December 1956, he saw DuVall leave his place of work, in Eakins' absence, and go on two rabbit "hunting expeditions," which lasted 2 or 3 hours. Likewise, Harris stated that on two occasions in the winter of 1956, he saw Eakins, DuVall, Blaize, and other men go rabbit hunting. DuVall said he went hunting on his own time early the morning of the first day of the rabbit season in December 1956, and reported for work at 7 o'clock, the usual time. On another occasion Eakins came to the job, while the men were working, and asked DuVall to go bird hunting with him. Both Eakins and DuVall had guns in their cars and they went hunting for about an hour and a quarter. Marcum accompanied them. DuVall did not hunt on any other occasions. Eakins said he never gave DuVall permission to go hunting on company time. Wright testified that one day he and Houchins helped Eakins when he was moving to another house. He also stated he hauled pipe to Eakins' home and built a basketball goal for him. The latter job was performed after working hours. Eakins was asked by Diamond counsel if Wright and other members of the crew "spent days of work" helping him to move, cleaning up his yard, and hauling pipe and lumber to his house and he answered in the affirmative. He said this work was performed on Diamond's time and charged to Dearborn. Eakins admitted Wright built a basketball goal for him but it was on company time and charged to Dearborn. Eakins gave no approximate dates covering these services. However, he stated that about March or April 1957, he was called to Schoonmaker's office who complained about the way things were going and apparently Schoonmaker mentioned that he was aware of the above activities. Eakins offered to pay for the services but Schoonmaker refused to accept any payment. He also conferred with Schoonmaker concerning these services the day before he testified at the hearing. Schoonmaker related that one time Eakins told him- he had taken some material off the lease and said that he should have maybe made arrangements with somebody for it, but he was sorry, but he didn't think it was important. Schoonmaker did not know the extent of the work at that time. He also stated that during the hearing Eakins offered to pay for the material and he told him to forget it. McCummings was unaware of these activities on the part of Eakins. 666 DECISIONS OF NATIONAL LABOR RELATIONS BOARD McCummings admitted he had Diamond employees build a fence for him at his home. He did not pay for the labor and did not know to whom these costs were charged. C. The discharge of Ralph Riley The complaint alleges that Riley was unlawfully discharged on or about May 14, 1957. Riley did not appear as a witness at the hearing although the General Counsel made diligent efforts to locate him. Shawhan testified that Riley was employed as a pumper at Union East and North Stewart and signed a union card about April 10. About May 10, Shawhan was present when Whitt told Riley that Schoonmaker did not know Riley had been pumping at two leases and commencing May 16, he would work exclusively at North Stewart. There was also some discussion about work orders coming from too many bosses, referring to Eakins , and Shawhan taking over as pumper at Union East. Riley was discharged about May 14, 1957, and subsequently told Shawhan he had been fired, as related by Whitt, for allowing a tank to run over and not cleaning up for 2 or 3 days after the overflow. This incident occurred in January 1957. At or about that time Riley told Shawhan that McCummings wanted to fire him but Whitt interceded for him and he was kept on the job. Whitt said Riley had quite a few tank overflows and did not properly service the wells. Whitt spoke to him at different times about his work but he did not improve and he was discharged about May 14 because of inefficiency. Gwaltney stated Riley did not keep his tanks clean and many times when he went to service the wells he could not find Riley. Gwaltney complained about Riley to McCummings in the summer of 1956, in early 1957, and about March or April 1957. McCummings knew Riley was not doing a good job, he was not turning in accurate gauges, failed to keep the tanks and wells clean, and did not stay on the job. He also received complaints from Gwaltney, as stated above. McCummings told Whitt on two occasions that unless Riley improve he would have to dismiss him and when he failed to straighten out he was discharged. The General Counsel failed to establish this allegation of his complaint by a fair preponderance of the evidence. I therefore find that Riley was not unlawfully discharged. Concluding Findings The first question to be resolved is whether the Respondents may be considered as a single employer for the purposes of the Act. It is undisputed that all times material Schoonmaker was president and manager of Dearborn, a copartner of Diamond, and cotrustee of North Stewart. Of course, it is clear that the Respond- ents were separate entities and were not under common ownership. However, in my opinion, the evidence conclusively shows that all the Respondents were under the common control and direction of Schoonmaker in their business operations as well as their labor relations. Schoonmaker claimed he was only a figurehead in Dearborn, was elected president merely for loan purposes, and, in substance, that Chiusano or Fisher actually conducted the business of Dearborn. Later, Schoonmaker admitted his association with Dearborn was not exclusively of a financial nature but as an experienced oil operator for the purposes of consultation with Dearborn officials in matters pertaining to lease purchases and well drilling. Further, as president and manager he was the sole representative of Dearborn in Indiana and conducted its business from his office in Evansville. Chiusano, manager of Holly's labor policy, initially testified, that Schoonmaker as manager was directly responsible to him, that he, Chiusano, had to personally give prior approval for capital expenditures in excess of $250, and that Schoonmaker had no control whatever over Dearborn's labor policy. Later, on cross-examina- tion, Chiusano acknowledged that it was Fisher who was in charge of Dearborn's operations and it was not a few months before his death (October 23, 1957) that Chiusano was given authority or supervision over Dearborn's activities. Upon assuming those duties Chiusano immediately came to Evansville, in the summer of 1957, for about 3 days and that was his only visit throughout the year 1957. More- over, he had no knowledge of any trips by Fisher to Evansville during 1957, nor did he mention any visits at anytime by Schoonmaker or McCummings to New York City, or any telephone conversations he might have had with them. Again, although supposedly in charge of Dearborn's labor relations, Chiusano was not even certain who was responsible for the hiring of employees, for when questioned on that subject, he responded, "I would assume that it occurs between Mr. Mc- Cummings and Mr. Schoonmaker ." Chiusano's testimony not only fails to support the contentions that he alone was responsible for the affairs of Dearborn and that DEARBORN OIL AND GAS CORPORATION, ETC. 667 Schoonmaker exercised little, if any, authority, but on the contrary plainly proves that it was Schoonmaker, not Chiusano, who was in complete control of Dearborn's operations. By his own admissions Chiusano did not come into the picture until the summer of 1957, long after Dearborn allegedly severed its business relations with Diamond. Despite this state of affairs, Chiusano related in cavalier fashion that neither Dearborn nor its president had any interest in or control over Diamond's business or labor relations, and Diamond was simply performing work for Dearborn as an independent contractor. It seems clear from the record, and I got the same impression when he was testifying, that Chiusano was doing nothing more than giving ,a bird's-eye view of the whole situation and that he had no actual knowledge of the matters involved. But irrespective of whether his broad, general assertions and his negative-type testimony were based upon suppositions or undisclosed sources of information, it is unmistakably plain that he did not assume his duties in regard to Dearborn until the summer of 1957, and made only a single visit to Evansville that year. Since he was not even questioned in regard to trips in 1956 and 1958, it is reasonable to infer that none occurred. Consequently, his testimony in these respects completely contradicts the testimony of Schoonmaker and McCummings that Chiusano and other officials made numerous trips to Evansville in the period January 1956 to June 1958. No explanation was offered as to how Chiusano could have effectively conducted Dearborn's business under these circumstances, espe- cially during the critical period from about November 1, 1956, to May 1957. I, therefore, find that Schoonmaker was in full and complete control of Dearborn's operations in that interval. Here Diamond in furnishing coring, construction, and roustabout services to Dearborn and North Stewart was engaging in -an integral part of their producing operations. By virtue of his positions as president and manager, partner and cotrustee, Schoonmaker was the dominating and key figure in these closely knit, allied ventures. Gwaltney was fully aware of the unsatisfactory situation brought about by Schoonmaker directing the business of all three concerns and openly questioned the propriety of his acting in these conflicting capacities at their meeting around November 1, 1956. Indeed, Schoonmaker himself, from the very outset, was cognizant of the legal, and perhaps ethical, obligations created by the arrange- ments under which he conducted the operations of Dearborn, Diamond, and North Stewart in a unified manner. The fact that Schoonmaker had placed himself in an untenable position is substantiated by the following examination of Schoonmaker by his own counsel: Q. In a certain sense you were dealing with yourself. Is that right? A. Because I was dealing with myself as an individual, and trusteeship with Dearborn of which I was president, and under the trusteeships I knew that I must be careful. That's the reason that [Diamond partnership memoranda] was drawn up in that sense. The reliance upon the partnership memoranda to justify the position in which he found himself is no excuse at all, for that memoranda, dated June 15 and August 12, 1954, which he characterized 'as informal agreements with McCummings, merely fix charges for coring by Diamond and provide for payment of a few expense items. Manifestly, the memoranda has, or had, no bearing relationship to the fact that Schoonmaker conducted the operations of the Respondents as a single enterprise. In addition to the foregoing the evidence reveals that for at least part of the time all the Respondents had a common office and, in varying degrees, utilized the services of Pfeffer for their office and administrative work. Finally, as detailed above, there were many instances of the transfer of employees, including supervisors, back and forth among the Respondents. Under settled principles, two or more entities enjoying a separate existence may nevertheless be regarded as one employer for the purposes of the Act if they are under common ownership and control and their labor policies are subject to common direction. (N.L.R.B. v. Stowe Spinning Company, et al., 336 U.S. 226, 227; N.L.R.B. v. Federal Engineering Company, Inc., 153 F. 2d 233, 234 (C.A. 6); N.L.R.B. v. National Garment Company, 166 F. 2d 233, 238 (C.A. 8), cert. denied, 334 U.S. 845; N.L.R.B. v. Somerset Classics, Inc., et al., 193 F. 2d 613, 615 (C.A. 2); N.L.R.B. V. New Madrid Manufacturing Company, et al, d/b/a Jones Manufacturing Com- pany, 215 F. 2d 908, 913-914 (C.A. 8); N.L.R.B. v. A. E. Nettleton Co., et al., 241 F. 2d 130, 131-132 (C.A. 2).) Admittedly, all three Respondents are not commonly owned. However, while ownership is an important fact in determining whether two or more entities are engaging in an integrated business, naked ownership, and nothing more, is by no means decisive of the issue. (H. S. Sackett, Jr. d/b/a Woods Products Company, 668 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 100 NLRB 115; The Woodstock Manufacturing Co., Inc., 116 NLRB 389.) Of far greater importance than ownership is the element of common control and direction over the companies' business operations and labor policies. In considering whether two separate corporations might be considered as an integrated enterprise the Third Circuit Court of Appeals in an early case, N.L.R.B. v. Condenser Corporation of America (128 F. 2d 67), plainly set forth the essentials necessary to establish integra- tion, as follows: (p. 71) It simply rests on the premise that where in fact the production and distribution. of merchandise is one enterprise, that enterprise, as a whole, is responsible for compliance with the Labor Relations Act regardless of the corporate arrange- ments of the parties among themselves. What is important for our purposes is. the degree of control over the labor relations in issue exercised by the company charged as a respondent. Press Co., Inc., v. N.L.R.B., 1940, 73 App. D.C. 103, 118 F. 2d 937. Regardless of what Cornell says concerning its connection. with Condenser's employees it appears that "together, respondents act as employers of those employees . N.L.R.B. v. Pennsylvania Greyhound' Lines, Inc., 1938, 303 U.S. 261, 263 . . . . [Emphasis supplied.] The rationale of the Condenser case has been adopted in: N.L.R.B. v. Hearst Publi- cations Inc., 322 U.S. 111, 129; N.L.R.B. v. Long Lake Lumber Company, et al., 138 F. 2d 363, 364 (C.A. 9); N.L.R.B. v. Don Juan, Inc., 178 F. 2d 625, 627-628 (C.A. 2); N.L.R.B. v. Charles R. Krimm Lumber Company, et al., 203 F. 2d 194, 196. (C.A. 2); N.L.R.B. v. Concrete Haulers Inc., et al., 212 F. 2d 477, 479 (C.A. 5); and J. G. Roy and Sons Company v. N.L.R.B., 251 F. 2d 771, 774 (C.A. 1). See also, Butler Brothers v. N.L.R.B., 134 F. 2d 981, 983-984 (C.A. 7). In view of the foregoing authorities and on the facts as found above, I further find and conclude that all Respondents must be considered as a single employer for the purposes of the Act. During April or May 1957, the employees engaged in organizational activities and signed union authorization cards, most of them being signed or dated April 10. While thus attempting to unionize, Eakins, around May 3, warned Boyles that "the office got wind of the union and if they heard any more about it they would fire all the men and hire Corebel for contract labor." Boyles repeated Eakins' threats to at least six of the employees the same morning. Later that day, at North Stewart, Eakins told Boyles he would like to assemble the employees and "try to talk them out of the notion of joining the union, or we'd all be fired." In early May, Eakins also questioned Ropp, Furman, and Riley, at Union East, concerning organizational activities and inquired if they had signed union cards. When he received no informa- tion Eakins cautioned the group "it would be advisable to drop the union" if they wanted to maintain their jobs. Again, around the first of May at North Stewart, Eakins asked Rainey, Ropp and Furman about the Union and advised them to forget it, that they would be laid off and contractors would be engaged. The Union by letter dated May 4 requested recognition, which was refused by Schoonmaker by letter dated May 10. On May 8, Eakins instructed Boyles to deliver layoff notices to about five- employees. On that date Boyles, according to Ropp, informed Ropp and five other members of the crew, including Furman and Houchins, that they were being discharged. About that time Eakins queried DuVall if he knew anything regarding the Union and he said he did not, other than hear Harl and Dnyett discuss the subject. A day or so later Eakins remarked to DuVall that he had heard the men were going to have a union or an election and hoped "the boys didn't do it" for they would be laid off and contract labor hired. About May 13, Bratcher asked DuVall if he had anything to do with starting the Union and he answered he did not. Bratcher concluded the conversation by stating he had DuVall, Smith, and' French "worked in" as far as their jobs were concerned. The next day Bratcher discharged DuVall and when he asked the reason for this action Bratcher replied Eakins must have done a lot talking at the office. Rainey was discharged about May 13, and shortly prior thereto Eakins declared the employees had "messed up on account of the Union," that Diamond was disbanding and outside contractors would be hired. Around the same time he further warned Rainey the employees were going to be laid off because of the Union. Shortly before May 10, Eakins ques- tioned Blaize regarding the Union but he refused to give any information. On May 10, Eakins came to Blaize's home on business and Blaize volunteered that while he knew the leader of the union movement and when it started, he would not give this information to Eakins or anyone else. Eakins said that was his privilege. Bratcher, about May 14, in answer to Blaize's inquiry as to the reason for the layoffs, DEARBORN OIL AND GAS CORPORATION, ETC. 669 stated they were brought about by union activities. Around May 8, Shawhan put the same question to Eakins and he replied the layoffs were due to slack work and contractors taking over operations. When Shawhan commented this looked funny, Eakins remarked he did not know. Eakins and Bratcher denied uttering any of the foregoing statements or question- ing the employees concerning their union membership or activities. Eakins ex- plained he spoke to Boyles about calling a meeting of the men to discuss loafing but no such meeting was ever held. French denied Eakins or any supervisor ever men- tioned the Union to him or that Boyles repeated to him any threatening statements made by Eakins.° It is conceded that Eakins had approximately 13 employees during May, all of whom were discharged between May 8 and 15,. practically all of them being notified of this action by Boyles. The Respondents deny the employees were discriminatorily discharged. Affirma- tively, Diamond contends high labor costs, due to loafing and poor supervision, forced it to abandon the construction phase of its business which resulted in the dismissal of the construction employees. As detailed above, Schoonmaker decided to get out of the construction field on November 1, 1956. His decision was bottomed primarily on a complaint by Gwaltney, that very day, about Diamond's excessive costs, as well as similar com- plaints from Dearborn officials, in the course of which Chiusano accused him of stealing, and his cotrustees. However, he neglected to say when his fellow officials and trustees brought these matters to his attention. It is obvious from the testimony of Gwaltney and Schoonmaker that the question of high costs was initially raised by Gwaltney around November 1, and the discussion, as related by Gwaltney, ended with Schoonmaker saying "he would clean it up." It strikes me that Schoonmaker was not unduly alarmed by Gwaltney's visit and at no time did he indicate to Gwaltney that he was going out of. the construction business. In fact Gwaltney did not learn Schoonmaker was getting out of this business until January or Febru- ary. It occurs to me that if Schoonmaker had considered Gwaltney's complaint so serious that he forthwith decided to cease construction work, he would have made known his intentions to Gwaltney during this meeting, or at least prior to January or February, and without waiting for Gwaltney to approach him a second time. In my opinion Gwaltney's testimony lends no support whatever to Schoonmaker's claim that it was his complaint that prompted such hasty action. Nor does Schoon- maker receive any support from Chiusano, for the best he could come up with was the broad assertion that he was not satisfied with the type of work Diamond was performing. Strangely enough, while Schoonmaker emphatically testified Chiusano accused him of stealing from Dearborn, Chiusano was not even examined in respect to any such statement. Neither of the cotrustees appeared as witnesses at the hearing. McCummings sought to assist Schoonmaker by stating that Dearborn and Holly officials as well as other persons had complained to Schoonmaker and at the meeting of November 1, he and Schoonmaker decided to get out of the con- struction business. McCummings also added that officials of Dearborn and Holly had strenuously complained to him along the same lines on his numerous trips to New York City. Apart from the general and hearsay character of his assertions, plus the absence of any dates, his testimony, like that of Schoonmaker, is contra- dicted by Chiusano. It is plain that McCummings was not disturbed by Gwaltney's complaint in April 1956 in regard to loafing for he simply told Gwaltney he would try for better efficiency. Pfeffer's testimony completely refutes the contention that Schoonmaker and Mc- Cummings decided to terminate construction work around November 1. Thus, he stated that following Gwaltney's complaint he made a study of construction costs for the period September 1955 to September 1956, and upon completion of the study he reported to Schoonmaker that costs were too high, that Diamond was not making any money on its existing charges and suggested dropping this type of work. After submission of his report Pfeffer testified he was present when Schoonmaker informed McCummings of the contents thereof, at which time he announced he was going out of construction business. Pfeffer refused to state approximately how much time he spent on the study, other than it was less than a month. Similarly, he had no recollection of the approximate date of his discussion with Schoonmaker or the meeting between Schoonmaker and McCummings. But irrespective of Pfeffer's poor memory as to time and dates, it is undisputed his study did require some time, and since Schoonmaker did not reach a decision until subsequent to the 0 Boyles did not testify he related these statements to French. 670 DECISIONS OF NATIONAL LABOR RELATIONS BOARD receipt of his report, Pfeffer's testimony squarely contradicts that of Schoonmaker and McCummings that the decision was made on November 1. Again, Eakins and Bratcher repudiated Schoonmaker and McCummings on this point. Eakins testified that in late 1956, McCummings expressed the opinion that costs were high and something should be done, and in March Schoonmaker informed him that unless something was done about costs he could not continue in business. In like fashion, Schoonmaker first spoke to Bratcher regarding the reduction of costs in January or February and later, about March or April, Schoonmaker said costs had not been reduced so he was going to give up construction work. Likewise, the Respondents' evidence pertaining to loafing is in broad general terms, except perhaps for Gwaltney who observed the men standing around on six or eight occasions and the two instances cited by French and Marcum. The latter acts were satisfactorily explained by DuVall. I agree there was some loafing on the part of the employees but certainly not to the extent pretended by the Respondents. In any event Schoonmaker and his counsel freely concede the loafing was due to poor supervision. Along the same line, it is undisputed that one time Eakins and DuVall spent about an hour hunting when they were supposed to be working, and Eakins also used the crew to help him move, haul pipe, and build a basketball goal for him, all of which was charged to Dearborn. Eakins sought to create the impression he offered to pay these costs in April 1957, but it is obvious from his jumbled account of this offer, as well as Schoonmaker's version, that no such offer was made until the day before he testified. McCummings, too, had the crew build a fence for him but he could not remember to whom the costs were charged. Counsel for the Respondents has ballooned these acts so that they now become rabbit hunting expe- ditions and days spent by the crew rendering personal services for Eakins. As might be expected, counsel offers no suggestion as to just what position the employees should have taken when instructed by Eakins and McCummings to perform services for them. It is ridiculous to believe the men should have refused to obey these orders, so in carrying out their instructions they did nothing more than might be normally expected of them. Counsel further argues that the Respondents should not be required to reinstate "a group of loafers to be supervised by an inefficient foreman who uses his crew for his own personal use." These arguments have already been answered for Schoonmaker testified, as quoted by counsel earlier in his brief, "I'm not blaming this [loafing] on any of the employees" and Eakins the inefficient and dishonest foreman continued in Diamond's employ until October 1, 1957, when he was transferred, in the same capacity, to Dearborn. There he remained until May 31, 1958, and the following day he was transferred to Ball and he was so employed at the time of the hearing. I was, and am, persuaded by the consistent and plausible testimony of the wit- nesses for the General Counsel who testified in a frank manner regarding interroga- tions of their union membership and activities and threats and warnings directed to them by Eakins and Bratcher that they cease their union activities otherwise they would be discharged. Accordingly, I accept and credit their testimony. Opposing this evidence is a mass of testimony which, as discussed above, is so replete with inconsistencies, contradictions, vagaries, and incongruities that it proves Tittle, if anything, insofar as the issues here are. concerned. On the evidence I find that Schoonmaker and McCummings did not decide to go out of business around No- vember 1. On the contrary I find, on the basis of the testimony of Gwaltney, Eakins, Bratcher, and Whitt that it was not until March or April that Schoonmaker indicated any concern with labor costs and even then he merely declared to Eakins that unless something was done he could not continue in business. This negates the idea that Schoonmaker reached any firm decision to go out of business prior to the com- mencement of organizational activities. I am convinced that the discharges, occur- ring shortly after the threats and warnings issued to the employees and the Union's request for recognition, were motivated by a desire to prevent organization and that Schoonmaker and McCummings used high labor costs 7 as a pretext to accomplish that purpose. In brief, Diamond contends it ceased construction operations for economic reasons and, irrespective of motive. an employer has an absolute right to go per- manently out of business. I have already found the cessation of construction work IT fail to see how the inability of Diabolo to pay its account affected the dismissals for Diamond was performing services for it until the spring of 1957 and charged off the loss for the taxable year of 1957. Equally without substance is the bare reference to a con- struction project which was estimated at approximately $30,000 but cost twice as much to build. DEARBORN OIL AND GAS CORPORATION, ETC. 671 was a pretext to prevent organization and the question of an employer's right to completely discontinue business is not presented for the work formerly performed by Diamond for Dearborn, North Stewart, and Schoonmaker's other concerns was simply subcontracted to Gwaltney and Corebel. It has been long established that the Act does not attempt to regulate the employer's control of his business in the employment or discharge of employees, "so long as he does not attempt thereby to interfere with the right of self-organization of the employees or to intimidate or coerce them." (Appalachian Electric Power Company v. N.L.R.B., 93 F. 2d 985, 989 (C.A. 4).) As a corollary to this proposition an employer may suspend his operations or change his business methods so long as the change in operations is not motivated by the illegal intention to avoid his obligations under the Act. (N.L.R.B. v. Adkins Transfer Company, Inc., 226 F. 2d 324, 327-328 (C.A. 6); N.L.R.B. V. The Houston Chronicle Publishing Company, 211 F. 2d 848, 851-854 (C.A. 5); N.L.R.B. v. Deena Products Company, 195 F. 2d 330, 334-335 (C.A. 7), cert. denied 344 U.S. 827; Butler Bros., supra; Celanese Corporation of America, 95 NLRB 664, 670-671; T. A. Treadway, et al., d/b/a Diaper Jean Manufacturing Company, 109 NLRB 1045, 1048, enfd. per curiam, 222 F. 2d 719 (C.A. 5); The R. C. Mahon Company, 118 NLRB 1537, 1542; Industrial Fabricating Inc., et al., 119 NLRB 162, 168-170; Bermuda Knitwear Corporation, 120 NLRB 332.) From all the evidence I have no difficulty in finding that the subcontracting of construction work by Diamond following the discharge of its employees was prompted by anti- union considerations and was strictly in accordance with the predictions, threats, and warnings by Eakins and Bratcher that unless the men forthwith quit their organizational activities they would be discharged and outside contractors would be engaged to perform construction and roustabout services. I therefore find and conclude that the Respondents by interrogating, warning, and threatening the employees and by discharging them under the above circum- stances thereby engaged in unfair labor practices prohibited by Section 8(a) (1) and (3) of the Act.8 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondents set forth in section III, above, occurring in connection with the operations of the Respondents, described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow thereof. V. THE REMEDY Having found that the Respondents constitute a single employer for the purposes herein, I shall recommend that the Respondents jointly and severally cease and desist from the unfair labor practices found and take certain affirmative action in order to effectuate the policies of the Act. Having found that the Respondents have engaged in interrogation of employees concerning the Union and have interfered with, restrained, and coerced the employees in derogation of their rights secured by Section 7 of the Act, I shall recommend that they cease and desist therefrom. Having found that the Respondents discriminatorily discharged the employees listed in Appendix A attached hereto, and have since failed to reinstate them, I shall recommend that the Respondents be ordered to offer them immediate and full rein- statement to their former or substantially equivalent positions without prejudice to their seniority and other rights and privileges, and make them whole for any loss each may have suffered because of the discrimination against him by payment of a sum of money equal to the amount he normally would have earned as wages from the date of discrimination to the date of the offer of reinstatement, less his net earnings during said period, with backpay computed on a quarterly basis in the manner established by the Board in F. IF. Woolworth Company, 90 NLRB 289. The Respondents shall upon request make available to the Board or its agents payroll and other records to facilitate the checking of the amount of backpay. Having found that the Respondent Diamond shut down its construction and roustabout operations sometime following the discriminatory discharges in May 8In making these findings I do not rely upon any postdiecharge statements. Further, I do not attach any importance to the fact that some of the employees may have back- dated their union cards since union majority as of a certain date is not an Issue and in view of the illegal mass discharge it is immaterial when, or whether, the discriminatees signed union cards, 672 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 1957, I shall recommend, in accordance with Board policy as expressed in the Mahon case, supra, that the Respondent Diamond be ordered to resume such opera- tions and to offer reinstatement to the dischargees in the manner described above. The fact that the Respondent Diamond in committing the unfair labor practices may have created a problem for itself and the Respondents by entering into agreements or arrangements with Gwaltney and Corebel for the performance of this work, which was formerly performed by the dischargees for the Respondents and Schoon- maker's other concerns, is no reason for not recommending issuance of the customary reinstatement and backpay order. This policy was affirmed in Drennon Food Prod- ucts Co., 122 NLRB 1353. In view of the nature of the unfair labor practices committed, the commission of similar and other unfair labor practices reasonably may be anticipated. I shall therefore recommend that the Respondents be ordered to cease and desist from in any manner infringing upon rights guaranteed to the employees by Section 2 of the Act. The General Counsel points out that Ball as successor to Dearborn is liable for the unfair labor practices. It appears that Ball is a successor to Dearborn and as such may be responsible for remedying the unfair labor practices found herein. Of course, the recommended order includes successors. Since Ball is not a Re- spondent nor a party to the proceedings I will not recommend any specific action be taken by him. Upon the basis of the foregoing findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. The Respondents, and each of them, are engaged in commerce within the mean- ing of Section 2(6) and (7) of the Act and constitute a single employer for the purposes of the Act. 2. The Union is a labor organization as defined in Section 2(5) of the Act. 3. By discriminatorily discharging the employees listed in Appendix A the Re- spondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8 ( a) (3) and (1) of the Act. 4. By interfering with, restraining, and coercing their employees in the exercise of the rights guaranteed in Section 7 of the Act, the Respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8(a)(1) of the Act. 5. The aforesaid unfair labor practices are unfair labor practices affecting com- merce within the meaning of Section 2(6) and (7) of the Act. 6. By discharging Ralph Riley the Respondents have not engaged in unfair labor practices in violation of Section 8(a)(3) and (1) of the Act. [Recommendations omitted from publication.] APPENDIX A Leonard Trofford Charles Pickerel Frank Rainey Robert Gus Ropp Morris Wright Gene Smith Donald Furman Roland DuVall Dorris Wright Ronald Houchings Glenn French Knoxville News-Sentinel Company, Inc. and Mailers Local Union #83, International Typographical Union , AFL-CIO. Case No. A0-1. December 10, 1959 ADVISORY OPINION A petition has been filed by Mailers Local Union # 83, International Typographical Union, AFL-CIO, herein called Local #83, I.T.U., pursuant to Section 102.98 of the Board's Rules and Regulations, 125 NLRB No. 84.