Local 425, United Association of Journeymen, Etc.

LOCAL 425, UNITED ASSOCIATION OF JOURNEYMEN, ETC. 1161 Columbia Records, a Division of Columbia Broadcasting Sys- tem, Inc. and International Union of Electrical , Radio and Machine Workers of America, AFL-CIO, Petitioner. Case No. 2-RC-10059. December 23, 1959 DECISION AND ORDER Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, a hearing was held before Peter C. Benedict, hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed. While the issues raised at the hearing in this proceeding were be- fore the Board for consideration, the Intervenor,' alleging forgery and fraud, requested an investigation of the adequacy of the showing of interest submitted in support of the instant petition and an oppor- tunity to prove its allegations by newly discovered evidence. In view of the nature of the allegations, the Board found it advisable to con- duct a further administrative investigation for the purpose of deter- mining whether or not the Petitioner's showing of interest may have been tainted. On the basis of such additional investigation, we are administra- tively satisfied that the Petitioner's showing of interest is inadequate. Accordingly, we shall dismiss the petition 2 [The Board dismissed the petition.] 'Local 237, United Electrical , Radio and Machine Workers of America, Ind. 2 Globe Iron Foundry, 112 NLRB 1200. 125 NLRB No. 114. Local 425, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO and Joseph A. Scalise and Lummus Corporation, Party to the Contract. Case No. 4-CB-384. De- cember 28, 1959 DECISION AND ORDER On August 10, 1959, Trial Examiner Thomas A. Ricci issued his Intermediate Report in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the copy of the Intermediate Report attached hereto. The Trial Examiner recom- mended dismissal as to certain other unfair labor practices alleged in the complaint. Thereafter, the Respondent filed exceptions to the Intermediate Report and a supporting brief. 125 NLRB No. 107. 1162 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 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 Fanning]. The Board has reviewed the rulings of the Trial Examiner made at the 'hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Interme- diate Report, the exceptions and brief, and the entire record in the case, and hereby adopts the findings, conclusions, and recommenda- tions of the Trial Examiner, with the following additions : We find, as did the Trial Examiner, that the Respondent violated Section 8(b) (1) (A) and (2) of the Act by: (1) Causing Lummus Corporation to discriminatorily refuse to hire Scalise, a journeyman pipefitter; and (2) maintaining and enforcing, pursuant to contract, an exclusive hiring arrangement which did not conform with the standards established by the Board in the Mountain Pacific case.' The Trial Examiner recommended that the Respondent be ordered to cease and desist its unfair labor practices and be required to reimburse all employees from whom moneys had been exacted by Respondent during the time the illegal provisions were in effect, in accordance with the Board's Brown-Olds 2 remedy. The Respondent concedes that it violated Section 8(b) (1) (A) and (2) of the Act. However, Respondent contends that application of the Brown-Olds remedy here would be punitive, inequitable, and would not effectuate the purposes of the Act. In, support of this con- tention, the Respondent made the following offers of proof at the hearing : (1) Evidence that because of Respondent's limited financial resources, enforcement of the reimbursement order against it would jeopardize its existence and deprive its members of vested rights to certain benefits. (2) A proffer of testimony by Lummus' employees who were members of Respondent 3 that they paid dues to the Respond- ent voluntarily and not because of any coercion inherent in the unlawful hiring clause. (3) Evidence that all Lummus employees who were mem- bers of Respondent. had joined the Respondent several years before they were hired by Lummus. The foregoing offers were rejected by the Trial Examiner and Respondent excepts to these rulings. As to (1), we find, like the Trial Examiner, that proof respect- ing Respondent's financial inability to comply with a reimburse- ' Mountain Pacific Chapter of the Associated General Contractors, Inc., 119 NLRB 883. 2 J. S. Brown-E. F. Olds Plumbing & Heating Corporation, 115 NLRB 594. a The offer of proof asserts that of the 10 '8 Lummus employees engaged as p'ipefltters, 68 were members of the Respondent and the rest were members of sister locals. LOCAL 425, UNITED ASSOCIATION OF JOURNEYMEN, ETC. 1163 ment order should be reserved for consideration by the Board in the compliance stage of the proceeding. As to (2), we conclude that the Trial Examiner properly rejected this offer of proof. The Board has considered numerous cases in- volving contracts containing exclusive hiring clauses and has held that the existence of such a contract, without the safeguards enun- ciated in the Mountain Pacific case, inevitably coerces employees to become or remain union members and to make payments to the union.4 We do not believe that testimony by union members as to their motives for joining or remaining members of the Union is, in a context such as this, sufficiently persuasive to warrant a differ- ent result here. As to (3), the Respondent's contention is, in effect, that the ex- clusive hiring provisions did not coerce payment of membership clues to Local 425 because (a) all pipefitters hired by Lumnnis who paid dues to Local 425 had already joined it long before they were hired and therefore could not have been coerced to join by such provisions, and (b) once they were hired by Lummus, the lawful ma=intenance-of-membership clause in the contract applied to them and they were thus lawfully required to remain members of Local 425. Accordingly, Respondent asserts that here, unlike the Salts7nan case, supra, it cannot be said that the illegal hiring provisions "in- evitably coerced" any Llm mus employee who was paying dues to Local 425 to become or remain a member of Local 425. The maintenance-of-membership clause, although legal when stand- ing alone, cannot be considered in a vacuum. The other clauses in the contract delegated to the Respondent exclusive control over Luinmus' labor supply. The inevitable effect of such a delegation, without the safeguards prescribed in the Mountain Pacific case, was to deter any member of the Respondent interested in obtaining employment with Lummus from relinquishing his membership in the Respondent. Ac- cordingly, even if we concede that the Respondent's offer of proof establishes that all members of the Respondent on the Lummus job joined it for reasons unrelated to the hiring provisions of the contract, we would still not be precluded from finding, as we do here, that such members were coerced by the illegal clause to retain their membership in the Respondent at least while seeking employment with Lummus, and before the maintenance-of-membership clause applied to them.' To that extent, at least, we find that the offer of proof is insufficient, even assuming the truth of the facts alleged therein, to demonstrate 4 Nassau & Suffolk Contractors' Association, Inc., 123 NLRB 1393 . See also Saltsman Construction Company, 123 NLRB 1176 ; Argo Steel Construction Company , 122 i\'LRB 1077; Funeral Directors o f Greater St. Louis, Inc., 125 NLRB 241. e Cf. Argo Steel Construction Company, 122 NLRB 1077 , where the Board found that the inclusion of a maintenance-of-membership provision in a contract containing an ex- clusive hiring clause did not preclude a finding that such hiring clause created unlawful closed-shop conditions. 1164 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the inappropriateness of the Brown-Olds remedy here. Accordingly, we affirm the Trial Examiner's rejection of such offer. Finally, we believe that a mere cease and desist order will have little impact in an industry where illegal hiring practices are wide- spread. The reimbursement remedy more properly effectuates the purposes of the Act because it provides not only a deterrent to future violations but an incentive to future compliance. The courts have generally upheld the Board's remedial orders, including orders for reimbursement of dues, "unless there is a showing that the order is a patent attempt to achieve ends not designed to fairly effectuate the purpose of the Act." 6 There appear to be no unusual circumstance here which would warrant waiving the usual reimbursement order. ORDER Upon the entire record in this case, and pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Local 425, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO, its officers, agents, successors, and assigns, shall: 1. Cease and desist from : (a) Causing or attempting to cause Lummus Corporation, or any other employer within its territorial jurisdiction over whom the Board would assert jurisdiction, to discriminate against employees in violation of Section 8(a) (3) of the Act: (b) Performing, maintaining, or otherwise giving effect to any agreement or arrangement requiring referral clearance by the Re- spondent as a condition of employment with Lummus Corporation, or any other employer within its territorial jurisdiction over whom the Board would assert jurisdiction. (c) Operating an exclusive hiring hall except under the standards specified in the Mountain Pacific case.? (d) In any like or related manner restraining or coercing the employees of Lummus Corporation, or any other employer within its territorial jurisdiction over whom the Board would assert jurisdiction, in the right to engage in or refrain from engaging in any or all of the activities guaranteed by Section 7 of the Act, except to the extent that such right may be affected by an agreement requiring member- ship in a labor organization executed in conformity with Section 8 (a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. e Virginia Electric & Power Co., 319 U.S. 533, 540; Bryan Manufacturing Company, 264 F. 2d 575, cert. granted 360 U.S. 916; N.L.R.B. v. Broderick Wood Products Com- pany, et al., 261 F. 2d 648, 559. 7 119 NLRB 883. LOCAL 425, UNITED ASSOCIATION OF JOURNEYMEN, ETC. 1165 2. Take the following affirmative- action which the Board finds will effectuate the policies of the Act. (a) Notify Lummus Corporation and Joseph A. Scalise, in writing, that it has no objection to Scalise's employment. (b) Reimburse all employees for moneys illegally exacted from them in the manner and to the extent set forth in the section of the Intermediate Report entitled "The Remedy." (c) Post at its offices and meeting halls, including all places where notices to members or prospective members are customarily posted, copies of the notice attached hereto marked "Appendix." 8 Copies of said notice, to be furnished by the Regional Director for the Fourth Region, shall, after being duly signed by Respondent Union's repre- sentative, be posted immediately upon receipt thereof and maintained by the Respondent Union for 60 consecutive days thereafter. Rea- sonable steps shall be taken by the Respondent Union to insure that said notice is not altered, defaced, or covered by any other material. (d) Mail to the Regional Director for the Fourth Region copies of the notice attached hereto marked "Appendix" for posting by Lummus Corporation, if willing, for 60 days at projects within the jurisdictional area of the Respondent Union, in all places where no- tices are customarily posted. Copies of said notice, to be furnished by the Regional Director, shall, after being signed by the Respondent's representative, be forthwith returned to the Regional Director for such posting. (e) Notify the Regional Director for the Fourth Region, in writing, within 10 days from the date of this Order, what steps it has taken to comply herewith. IT IS FURTHER ORDERED that the complaint, insofar as it alleges any unfair labor practices by the Respondent Union in causing one of the members of the Hazleton Association of Plumbing Contractors, Inc., to refuse employment to Scalise and in maintaining or giving effect to any contract with the Association in violation of Section 8(b) (1) (A) and (2) of the Act, be, and it hereby is, dismissed. 8 In the event that this Order is enforced by a decree of a United States Court of Appeals, there shall be substituted for the words "Pursuant to a Decision and Order" the words "Pursuant to a Decree of the United States Court of Appeals , Enforcing an Order." APPENDIX NOTICE TO ALL MEMBERS OF LOCAL 425, UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF THE PLUMBING AND PIPEFITTING INDUSTRY OF THE UNITED STATES AND CANADA, AFL-CIO, AND TO ALL EMPLOYEES OF AND APPLICANTS FOR EMPLOYMENT WITH LUMMUS CORPORATION 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 you that : 1166 DECISIONS OF NATIONAL LABOR RELATIONS BOARD WE WILL NOT perform, maintain, or otherwise give affect to the provisions of any agreement with Lummus Corporation, or with any other employer over whom the National Labor Rela- tions Board would assert jurisdiction, which unlawfully condi- tions the hire of applicants for employment upon referral or clearance by any labor organizations. WE WILL NOT cause or attempt to cause the above-named em- ployer, or any other employer over whom the National Labor Relations Board would assert jurisdiction, to discriminate against employees or applicants for employment in violation of Section 8(a) (3) of the Act. WE WILL NOT operate an exclusive hiring hall except under the standards specified in the Mountain Pacific case. WVE WILL NOT in any like or related manner restrain or coerce employees in the exercise of the rights guaranteed them in Section 7 of the Act, except in the manner permitted by Section 8(a) (3) of the Act, as modified by the Labor-Management Re- porting and Disclosure Act of 1959. WE WILL reimburse the employees of Lummus Corporation for all dues and fees they were illegally required to pay to our Union as a result of the unlawful hiring provisions in our agreement with the aforementioned Company. LOCAL 425, UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF THE PLUMBING AND PIPEFITTING IN- DUSTRY OF THE UNITED STATES AND CANADA, AFL-CIO, Labor Organization. Dated---------------- By------------------------------------- (Representative ) ( Title) This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material. INTERMEDIATE REPORT AND RECOMMENDED ORDER STATEMENT OF THE CASE Upon a charge filed by Joseph A. Scalise the General Counsel issued a complaint on October 8, 1958, against Local 425, United Association of Journeymen and Ap- prentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO, herein called the Respondent. Because Scalise had also filed a charge (Case No. 4-CA-1578) against Lummus Corporation, which operated in con- tractual relationship with Respondent Local 425, the complaint presented a con- solidation of the two cases, following an order of consolidation issued by the Regional Director . The case against Lummus Company was severed by order of the Regional Director on April 13, 1959, and thereafter the Respondent Local 425 filed timely answer to the complaint . As framed by the pleadings the main issue of the case as it now stands is whether the Respondent violated Section 8 (b) (1) (A) and 8(b) (2) of the statute. A hearing on the complaint was held on June 3, 1959, at Hazleton, Pennsylvania , before the duly designated Trail Examiner ., All parties were afforded LOCAL 425, UNITED ASSOCIATION OF JOURNEYMEN, ETC. 1167 full opportunity to examine and cross-examine witnesses, to introduce evidence, to present oral argument, and thereafter to file briefs. A brief was received from the Respondent. Upon the entire record in the case, and from my observation of the witnesses, I make the following: FINDINGS OF FACT I. JURISDICTION The complaint in this case rests upon a single charge filed by Scalise on June 11, 1957, in which he accuses Respondent Local 425 of having caused Lummus Corpora- tion to deny him employment during the immediately preceding month. Lummus' involvement in this proceeding stemmed from a project which it undertook and per- formed in the city of Hazleton, Pennsylvania, during the spring and summer months of 1957. The complaint further alleges that Lummus' then current contract with United Association of Journeymen and Apprentices of the Plumbing and Pipe-fitting Industry of the United States and Canada, AFL-CIO, the parent of the Respondent Local, contained unlawful hiring provisions. Lummus Corporation, duly organized under the laws of the State of Delaware and having its principal office and its place of business in New York City, New York, is engaged in industrial construction and engineering. Lummus performs construction and engineering services in States other than New York amounting in value to more than $100,000 annually. I find that Lummus Corporation is engaged in commerce within the meaning of the Act and that it will effectuate the policies of the Act to assert jurisdiction in this proceeding. The Board exercises its jurisdiction over a labor organization respondent in a case of this type, depending upon whether or not the employer involved is engaged in interstate business operations affecting commerce within the meaning of the Act, and further, upon whether or not the volume or nature of such business meets the Board's established minimum standards.' Clearly, therefore, in view of the nature and volume of the Lummus operations, both the legal and discretionary standards requirements for assertion of jurisdiction over the Union Respondent in this case are satisfied in so far as the case presents issues arising from the activities carried on between the Respondent and Lummus Company. The complaint expands beyond the subject matters contained in the single charge. It alleges that in 1958 the Respondent unlawfully caused Scalise to be denied em- ployment by one Potence, a plumbing contractor and member of the Hazleton As- sociation of Plumbing Contractors, Inc. It also alleges that an agreement in effect in 1958 between the Respondent and the Hazleton Association contains unlawful pro- visions and therefore evidences further unfair labor practices by the Respondent. There is no allegation, contention, or evidence anywhere in the record respecting tht nature or extent of the business operations of any of the employer members of the Hazleton Association. No witnesses were called to testify on the merits of the complaint allegations; the record consists only of the pleadings and a stipulation of facts with pertinent exhibits. As stated, the charge makes no reference to the As- sociation or to any of its members, and none of the record documents mentions any commerce data concerning them. No issue was raised by the Respondent, either at the hearing or in its brief, on the question of whether there is a legal basis for the Board to exercise its jurisdiction over the affairs between the Respondent and the Association members, much less whether the operations of those members satisfy the minium jurisdictional standards established by Board rule. It could be inferred, from contentions made at the hear- ing, that both the General Counsel and the Respondent have assumed there is in fact ample basis for assertion of jurisdiction over this aspect of the Respondent's activities. The only issue litigated at the hearing concerned the appropriate remedy. Counsel for Local 425 stipulated that the Respondent had made Scalise whole for what loss of earnings he had suffered because of the denial of employment with Potence, of the Hazleton Association. In his brief, however, he says that an issue respecting the legality of the two agreements-one between the parent International Union and Lummus, and the other between Local 425 and the Hazleton Associa- tion-still remains to be decided. But even a contention concerning the legality of the Hazleton Association contract presupposes adequate jurisdictional basis for the Board to decide the question. 1 Moving Picture Projectionists Local 150 , I.A.T.S.E. (Southside Theatres, Inc., et al.), 109 NLRB 259. 1168 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The parties' apparent agreement as to the adequacy of a jurisdictional basis apart, however, the Board has held ". . . in each case which comes before it this Board considers the issue of jurisdiction as though exceptions thereon have, in fact, been filed by the opposing interests." 2 In a comparable situation (Merritt-Chapman & Scott Corporation, 118 NLRB 380, 386) involving respondent international and local unions which had caused a named respondent employer to discriminate against employees unlawfully, the com- plaint was amended to add further specific unlawful acts by the same union respond- ents in causing the discharge of employees by other employers first mentioned during the proceedings in the complaint amendments. There the Board said: "Even assum- ing that the General Counsel's bill of particulars may properly be regarded as amend- ing the complaint so as to allege that the Union's caused discrimination by em- ployers or employer associations other than the Company, we find merit in the Unions' jurisdictional argument. Thus, we note that the record developed at the hearing was devoid of evidence that the unnamed employers, or the employer as- sociations mentioned for the first time in the General Counsel's bill of particulars, were engaged in commerce. . We are therefore constrained to find that the allegations are not properly before us for determination." The fact that a respondent union may have carried on an unlawful practice with a large interstate company does not mean that the Board therefore may, or will, exercise its jurisdiction over all aspects of such a union's activities , including its relations with very small or purely local intrastate employers. It is for this reason that Board restraining orders issued against unions in this type of case expressly provide that the union may not thereafter enter upon unlawful contracts with "any other employer," excluding, however, from the ambit of the injunction "any em- ployer over whom the Board will not assert jurisdiction." 3 The General Counsel advanced no theory whereby the threshold requirement for commerce data respecting the Association could be dispensed with. Lummus Com- pany never joined the Hazleton Association; it never signed or adopted the As- sociation contract with Local 425. Indeed, there is nothing to indicate that when it went to Hazleton, Pennsylvania, and carried on the work which it had contracted to perform there, it approached or had anything to do with any of the members of the Association. As stated in the fact stipulation of the parties, Lummus abided by, maintained and gave effect to the hiring procedures of the Hazleton [Association] agreements. " 4 If it is a theory of the General Counsel that be- cause Lummus chose to deal with Local 425 in precisely the same manner as the Hazleton contractors had long done pursuant to written agreement, its, Lummus', conduct served to put the local contractors in interstate commerce as bargaining as- sociates of Lummus, I find it an unpersuasive argument. No more could it be held that the Board can take jurisdiction, under this statute, over any local business, merely because one union operates a single hiring hall where all employers are treated alike, and one of them alone is engaged in interstate commerce.5 Absent any evidentiary basis for an essential jurisdictional finding that the Hazle- ton Association or any of its members are engaged in commerce within the meaning of the Act, I shall recommend that the complaint be dismissed to the extent that it alleges any unfair labor practice by the Respondent in causing one of the Association members to refuse employment to Scalise and in maintaining or giving effect to any contract with that Association. 2 Southwest Mississippi Electric Power Association , 110 NLRB 1884. 3 See, Sterling Furniture Company, 105 NLRB 653. 4 Paragraph 11 of the complaint alleges that Lummus ". . . did . . . adopt and agree to abide by the [Association ] agreement . . . .' This phrase is ambiguous ; it could well mean that Lummus agreed simply to follow local practice. In any event, decision here must be based only on the statements appearing in the stipulation of fact. 5 The converse situation was presented in the Plumbing Contractors Association of Baltimore, Maryland, Inc., 93 NLRB 1081 , in which the Board asserted jurisdiction over an association but refused to do so respecting an employer [ McCann] who was not a member. ". . . the basic requirement for inclusion in a multlemployer unit , and hence for basing jurisdiction upon the totality of the operations of all the employers in the unit, is `participation in joint bargaining as a group.' It is not sufficient that an em- ployer customarily adopts the terms of the agreement negotiated by the multiemployer group , or agrees in advance to be bound thereby. As McCann has not participated in group bargaining through the association, we must base our jurisdictional findings as to McCann on McCann's individual operations , rather than on the operations of the associa- tion. Accordingly, we shall dismiss the petition as to McCann." LOCAL 425, UNITED ASSOCIATION OF JOURNEYMEN, ETC. 1169 IL THE LABOR ORGANIZATION INVOLVED Local 425, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES During the period alleged in the complaint-starting on December 12, 1956, and continuing thereafter-Lummus maintained and gave effect to an agreement with the United Association of Journeymen and Apprentices of the Plumbing and Pipe- fitting Industry of the United States and Canada, AFL-CIO, here called the Inter- national. Lummus signed the agreement as an employer member of National Constructors Association. The General Counsel put into evidence a contract between these signatories executed on March 1, 1956, which expressly provided for a 1-year term, with automatic annual renewal thereafter in the absence of notice to terminate. He also placed into evidence a second such contract, similar to the first in all per- tinent provisions, executed on June 1, 1957, and to continue in effect until June 17, 1958. The critical period of the complaint, and the time when the specific refusal to refer Scalise for work occurred, came after expiration of the first year period of the 1956 contract and before execution of the June 1957 agreement. In view of the provision for automatic renewal in the 1956 agreement, the statement in the stipula- tion of facts reading ". . . Lummus . . . had during the period alleged in the com- plaint, maintained and given effect to an agreement with United Association . .. and the absence of any indication that notice to forestall renewal of the 1956 contract was given by either party, I find that the first contract continued in effect throughout the months of March, April, and May, 1957, by automatic renewal pursuant to its provisions. A reading of the Lummus contract with the International shows clearly that by its terms it was intended as an instrument tying in the activities of the locals of the International throughout the country, with the arrangements made by the Interna- tional. It expressly provided for participation by the local unions in implementing the hiring practices and defining the working conditions laid out in broad strokes in the national contract, wherever one of the signatory companies might undertake a project. Thus the contract says that the International Union "has in its membership in local unions throughout the United States . . . competent, skilled and qualified journeymen and apprentices. . .." It also states that the employer "recognizes the union as the sole and exclusive bargaining representative for all journeymen and apprentices." The critical article of the contract, so far as the essential allegations of this com- plaint are concerned, is article 5: "Hiring of Men." It provides as follows: In hiring the men the employer shall be the sole judge of the number of men required, and the initial requests for the furnishing of journeymen and appren- tices shall be made to the Local Union within whose jurisdiction the work is being performed. . The employer shall have the right to determine the competency and qualifi- cations of the men referred by the Local Union having jurisdiction and the right to hire and discharge accordingly. . The Union agrees to furnish at all times to the Employer duly qualified journeymen and apprentices in sufficient number as may be necessary to properly execute work contracted for by the Employer in the manner and under the conditions specified in this agreement. If the Local Union in the territory or territories where the Employer holds a contract fails to supply sufficient competent and capable journeymen and ap- prentices, as described herein, the Employer may request the United Association to furnish such additional employees as it may require. If upon request the Local Union or the United Association is unable to supply journeymen with special skills, the Employer may secure such journeymen from out-of-town labor markets areas. .. . Scalise requested George Spearko, business manager of the Respondent Local, for a job referral on May 12, 1957. Because Scalise was not a member in good standing of the Local for reasons other than nonpayment of dues, Spearko refused the request. On about May 13, 1957, Scalise applied for work at Lummus Company in Hazleton, Pennsylvania, and was refused. He was told that he would need a job referral from Spearko. On about the same day, Scalise again requested a job referral from Spearko who again refused it. 1170 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Conclusions I find that the contract in question established an exclusive hiring system whereby Lummus was obligated to employ only such journeymen and apprentices as Local 425 or the International itself referred for employment. I reach this conclusion from consideration of the interrelated language of the several subsections concerned with the hiring of men. They start by saying that the employer "shall" make "initial requests" for employees directly to the local. The clear meaning of this phrasing is that the employer is not free to hire in the first instance from any source whatever, and only took to the local or "request" employees from that source, if it so chooses, as but one of many sources among others. Whatever doubt may appear in the language of this first subsection from the fact that the word "only" does not appear,6 is fully dispelled and clarified in the immediately subsequent ones. After obligating the local to furnish journeymen whenever requested to do so, the contract goes on to provide that the employer "may" request employees directly from the International "if" the local fails to refer employees. And finally the last resort left available to the employer appears in the final subsection, which says that the employer "may" secure employees elsewhere "if" both the local and the International are unable to supply the employees needed. This is clearly permissive language which would have no coherent meaning if the employer were free in the first instance to hire, without contractual restraint, from any source of its choice. It is only intelligible if the first phrase-requiring the employer to make his initial request to the Union-is taken at its face value as meaning that the employer has no choice at the very start but to look to the Union for his initial employment. But this is precisely what the Board has called an "exclusive referral contract." 7 The Respondent makes no contention to the con- trary. Rather, arguing only that whatever illegality may appear in the contract the remedy for unfair labor practices found ought not conform with the Board's recent remedial policy, its counsel stated on the record: "I am not defending against this complaint. I lost this case before I ever started." In Mountain Pacific Chapter of the Associated General Contractors, Inc., 119 NLRB 883, the Board held that an exclusive hiring hall agreement was lawful only if it specifically provided three safeguards: (1) Selection of employees shall be on a nondiscriminatory basis and shall not be based upon, or in any way affected by, union membership, bylaws, rules, regulations, constitutional provisions, or any other aspect or obligation of union membership, policies, or requirements; (2) the employer retains the right to reject any job applicant referred by the Union; and (3) the parties post in appropriate places all provisions relating to the hiring arrangement including these three safeguards. As the contract in effect in 1957, written by the International but by its terms providing for execution by Local 425 in Hazleton, Pennsylvania, and in fact maintained, implemented, and carried out by Local 425, did not expressly provide for the three safeguards set out above, it was unlawful. Accordingly, I find that by maintaining and carrying out its exclusive referral hiring system, the Re- spondent violated Section 8(b) (2) and (1) of the Act.8 In conformity with the exclusive referral system set out in the contract, Lummus refused to employ Scalise on May 13, 1957, in the absence of a job referral from Spearko, the business manager of Respondent Local. Spearko refused to refer Scalise. I find that by such refusal to refer Scalise on request, and by so causing, Lummus to deny him employment in violation of Section 8(a)(3) of the Act, the Respondent violated Section 8(b) (1) (A) and 8(b) (2) of the Act.9 See, Local 863, International Brotherhood of Boilermakers, Iron Ship Builders, Black- smiths, Forgers and Helpers of America, AFL-CIO, et at. (Anchor Welding and Manu- facturing Company, et al.), 123 NLRB 1877. 7Los Angeles-Seattle Motor Express, Incorporated, 121 NLRB 1629. As in the ease at bar, the contract considered in Los Angeles-Seattle also contained a lawful union-security clausb requiring union membership after the first 30 days of employment. 9 United Association of Journeymen and Apprentices, etc.. Local 231, AFL-CIO (J. S. Brown-E. F. Olds Plumbing d Heating Corporation), 115 NLRB 594. 9 Referring to the discharge of Scalise , counsel for the Respondent made the following statement on the record at the hearing : "You will note from the reading of the stipula- tion that on page 3 there appears on admission that on May 12 and, 13, 1957 , that the Local 425 refused the request of Scalise for a job on the Jerolemon plant which was being built by the Lummus Company in Hazleton because he was not a member in good stand- ing, and that the charging party was refused work by the Lummus Company because he had not received referral from Local 425. On the face of it accordingly we are con- ceding that we have committed a violation of 8(b) (2)." LOCAL 425, UNITED ASSOCIATION OF JOURNEYMEN, ETC. 1171 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in section III, above, occurring in con- nection with the operations of Lummus Corporation described in section 1, above, have a close, intimate, and substantial relation to trade, traffic and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that the Respondent has engaged in certain unfair labor practices, I shall recommend that it be ordered to cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Specifically, it has been found that the Respondent caused Lummus to deny employment to Scalise because he was refused referral by the Respondent. I shall recommend that Respondent notify Lummus Corporation, in writing, and serve a copy upon Scalise, that it has no objection to Scalise's employment. As the Respondent has already made Scalise whole for the loss of earnings occasioned by the discrimination in his employment caused by the Respondent, and as the Lummus project in Hazleton, Pennsylvania, has been completed, there is no occasion here for the usual make-whole and reinstatement remedial provisions. It has also been found that the contract in effect in 1957 was unlawful because it did not meet the Mountain Pacific case standards. I shall therefore recommend that the Respondent be ordered to cease and desist from performing, maintaining, or otherwise giving effect to any agreement or arrangement which provides for exclusive hiring arrangements without containing the Mountain Pacific standards. As employment with Lummus Company was, under the terms of the contract, conditioned upon approval by ,the Respondent Local, I shall also recommend, con- sistent with the Board's clearly and repeatedly enunciated policy, that the Respond- ent be ordered to reimburse all employees covered by that contract who worked for Lummus at the Hazleton, Pennsylvania, project for all initiation fees and dues paid by them to the Respondent.'° The record shows that earliest employment under the contract in question at the Lummus project occurred in May 1957, within the 6-month period prior to the filing and the service of the charge. Accordingly, the reimbursement liability of the Respondent shall cover the entire period of the duration of that project, and shall be limited, with respect to each employee involved, to the time he spent at work there. Counsel for the Respondent argued at the hearing that the Brown-Olds disgorge- ment remedy is not warranted as effectuating the policies of the Act, that it is inequitable, and that it ought not be applied in the circumstances of this case. In support of these contentions he made an offer of proof, primarily in the form of testimony of members of the Respondent and financial statements, to establish that: (1) Union members were not coerced by the unlawful contract but instead paid dues and other fees to the Local voluntarily; (2) the Respondent is financially unable to comply with the reimbursement remedy and would be rendered defunct thereby; (3) the union members would lose vested property rights in consequence of the repayment of union dues; and (4) the consequent extinction of the Local would deprive employees of the right to retain a bargaining agent of their choice, a privilege accorded by the statute. I rejected this offer of proof." I rejected it because the Board has held, in reaffirming the Brown-Olds remedy as a matter of policy, that an unlawful exclusive hiring contract inevitably coerces employees, and because matters pertaining to a Respondent's financial inability to comply with a Board order or hardship upon a Respondent properly are to be considered by the Board in the compliance stage of the proceeding." Upon the basis of the foregoing findings of fact, and upon the entire record in the case, I make the following: 10 United Association of Journeymen and Apprentices of Plumbing and Pipefitting Industry of the United States and Canada, Local 331, AFL-CIO (J. S. Brown-E. F. Olds), supra. n With permission of the Trial Examiner the offer of proof was submitted In written form after the close of the hearing and has been marked as Respondent's Rejected Exhibit No. 1. "Local 138, International Union of Operating Engineers, AFL-CIO, etc., 123 NLRB 1393 : "In our opinion, the existence of an unlawful contract is sufficient in and of itself to establish the element of coercion in the payment of monies by employees pursuant to the requirements of such a contract." See also J. W. Saltzman, 123 NLRB 117(1. 1172 DECISIONS OF NATIONAL LABOR RELATIONS BOARD CONCLUSIONS OF LAW 1. Lummus Corporation is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Respondent is a labor organization within the meaning of Section 2(5) of the Act. 3. By causing Lummus Corporation to discriminate with respect to the hire and tenure of employment of employees in violation of Section 8(a)(3) of the Act, and by maintaining, performing, and giving effect to a contractual arrangement and practice requiring referral clearance by Respondent as a condition of employ- ment with Lummus Corporation, Respondent has engaged in unfair labor practices within the meaning of Section 8(b)(2) of the Act. 4. By restraining and coercing employees in the exercise of the rights guaranteed by Section 7 of the Act the Respondent has engaged in unfair labor practices within the meaning of Section 8(b)(l)^(A) of the Act. 5. The aforesaid unfair labor practices are unfair labor practices within the meaning of Section 2(6) and (7) of the Act. [Recommendations omitted from publication.] H. W. Woody, Jr., and Local 46, International Association of Heat and Frost Insulators and Asbestos Workers [C. H. Moyers]. Case No. AO-2. December 28, 1959 DISMISSAL OF PETITION FOR ADVISORY OPINION A petition has been filed by H. W. Woody, Jr., as business agent of Local 46, International Association of Heat and Frost Insulators and Asbestos Workers (herein called Local 46), and by said Local 46, praying for an advisory opinion by the Board as to whether it would assert jurisdiction over a case pending before the First Circuit Court for Knox County, Tennessee. It appears from said petition that : 1. There is now pending before the First Circuit Court for Knox County, Tennessee, a suit for damages in the sum of $50,000 brought by C. H. Moyers, as Plaintiff, against said Woody, said Local 46, and International Association of Heat and Frost Insulators and As- bestos Workers (herein called International), as joint defendants. 2. The gist of said State court action is that the defendants therein caused Moyers to be wrongfully discharged from his employment on February 25, 1956, and that since that date said defendants have "rendered the plaintiff [Moyers] unable to follow his trade" with "would-be employers." 3. The petition herein fails to mention the name of any employer involved in said State court suit, and it is also fails to allege the gen- eral nature of the business involved in the State court proceeding or the commerce data relating to the operations of such business. 4. A response has been received from said Moyers alleging, inter alia, that Petitioners are being sued in the State court for the tort of "intervening and interfering, and in a conspiracy so to do, in Moyers' 125 NLRB No. 130.