Mission Manufacturing Co.

MISSION MANUFACTURING COMPANY 275 3. By discrimination in regard to hire and tenure of employment of employees, thereby discouraging membership in a labor organization, the Respondent has en- gaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(3) of the Act. 4. Thereby and by interfering with , restraining, and coercing its employees in the exercise of the rights guaranteed by Section 7 of the Act, as above found, the Respondent has engaged in and is 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 within the meaning of Section 2(6) and (7) of the Act. [Recommendations omitted from publication.] Mission Manufacturing Company and Lodge 12 of District 37, International Association of Machinists , AFL-CIO Mission Manufacturing Company and Lodge 2007 of District 37, International Association of Machinists, AFL-CIO. Cases Nos. 23-CA-939 (formerly 39-CA-939) and 23-CA-940 (formerly 39-CA-910). July 25, 1960 DECISION AND ORDER On March 22, 1960, Trial Examiner Ramey Donovan issued his Intermediate Report in the above-entitled consolidated proceeding, finding that the Respondent had engaged in certain unfair labor prac- tices. The Trial Examiner also found that the Respondent had not engaged in certain other unfair labor practices and recommended that the complaint be dismissed with respect to such allegations. These findings, conclusions, and recommendations are more fully set forth in the copy of the Intermediate Report attached hereto. Thereafter, the General Counsel and the Respondent filed exceptions to the Inter- mediate Report and briefs in support thereof. Exceptions to the Intermediate Report were also filed by the Charging Parties. Pursuant to the provisions of Section 3 (b) of the National Labor Relations Act, the Board has delegated its powers in connection with these cases to a 'three-member panel [Chairman Leedom and Members Rodgers and Jenkins]. 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 en- tire record in these cases, including the Intermediate Report and the exceptions and briefs, and hereby adopts the findings,' conclusions, 1 We do not adopt, or find it necessary to pass upon, the Trial Examiner's statement, at footnote 21 of the Intermediate Report, regarding what occurred during the recent national steel negotiations. 128 NLRB No. 18. 276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and recommendations a of the Trial Examiner, except as modified herein.3 ORDER Upon the entire record in these cases and pursuant to Section 10 (c) ,of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that Mission Manufacturing Company, Houston, Texas, its officers, agents, successors, and assigns, shall: 1. In the event that its employees designate Lodge 12 of District 37, International Association of Machinists, AFL-CIO, Lodge 2007 of District 37, International Association of Machinists, AFL-CIO, or any other representative for purposes of collective bargaining within the meaning of Section 9(a) of the Act, cease and desist from exclud- ing such bargaining representative from participation in grievance handling. 2. Take the following affirmative action, which the Board finds will ,effectuate the purposes of the Act : (a) Post at its plant in Houston, Texas, copies of the notice attached hereto and marked "Appendix." a Copies of such notice, to be fur- nished by the Regional Director for the Twenty-third Region, shall, after being duly signed by its authorized representative, be posted by the Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, includ- ing all places where notices to its employees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that such notices are not altered, defaced, or covered by any other material. (b) Notify the Regional Director for the Twenty-third Region, in writing, within 10 days from the date of this Order, what steps the Respondent has taken to comply herewith. a The Trial Examiner found that the Respondent violated Section 8(a)(1) and (5) of the Act by expressly excluding the Unions from participation in the grievance procedure. He concluded , however, that since the Unions were no longer the recognized bargaining agents, a recommendation of an order to bargain would be inappropriate . Thus, he -reasoned , "a recommendation that the Company be ordered to inform its employees that the Company will not refuse to and will bargain in good faith with the Union and will not exclude the Union from participation in grievance handling would be confusing, at least to the employees, and would serve no useful purpose toward effectuating the pur- poses of the Act " Chairman Leedom and Member Jenkins do not agree with this conclusion . They agree that a remedial order, which would require the Respondent to accord recognition to the Unions in praesenti, would be inappropriate . However, they believe that a remedial order which would insure that the violation found here will not be committed in futuro should issue. Accordingly , Chairman Leedom and Member Jenkins, in order to remedy the viola- tions found , and to insure that the policies of the Act are effectuated , order the Respondent not to exclude from grievance handling the Charging Unions or any other representative which may hereafter be designated to represent a majority of the employees in a unit appropriate for bargaining. Member Rodgers agrees with the Trial Examiner 's reasoning and would, in the circum- stances of this case , and for the reasons indicated by the Examiner, adopt the Trial Examiner's recommendation dispensing with a remedial order. 3 The Respondent's request for oral argument is hereby denied, as the record , including the briefs and exceptions , adequately reflects the issues and the positions of the parties. * 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." MISSION MANUFACTURING COMPANY APPENDIX NOTICE TO ALL EMPLOYEES 277 Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that : WE WILL NOT, in the event that our employees designate Lodge 12 of District 37, International Association of Machinists, AFL- CIO, Lodge 2007 of District 37, International Association of Machinists, AFL-CIO, or any other representative for purposes of collective bargaining within the meaning of Section 9(a) of the Act, exclude such bargaining representative from participa- tion in grievance handling. All our employees are free to become, to remain, or to refrain from becoming or remaining, members of the above-named labor organiza- tions or any other labor organizations. MISSION MANUFACTURING COMPANY, Employer. Dated---------------- By------------------------------------- (Representative) (Title) This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material. INTERMEDIATE REPORT STATEMENT OF THE CASE Upon a duly issued consolidated complaint and answers of the Respondent, Mission Manufacturing Company, a hearing was held in Houston, Texas, on January 26, 27, and 28, 1960, before the duly designated Trial Examiner. The complaint alleges that Lodge 12 and Lodge 2007 of District 37, International Association of Machinists, AFL-CIO, respectively, herein called Lodge 12 and Lodge 2007, have been at all relevant times the respective collective-bargaining agents of two separate appropriate bargaining units of Respondent's employees; that since July 23, 1959, Respondent has failed and refused to bargain collectively in good faith by, on July 23, 1959, uni- laterally effecting changes in wages, hours, and working conditions; by instituting a new grievance procedure which eliminated Lodge 12 and Lodge 2007 from partici- pation therein; by, on August 18, 1959, conditioning the return of striking employees on their applying as new employees and filing new application forms; by, on Sep- tember 11, 1959, terminating the employment of striking employees; by, on October 5, 13, and 20, 1959, refusing to reinstate or reemploy striking employees upon their unconditional offer to return to work; by, on October 7, 1959, and thereafter refusing to recognize Lodge 12 and Lodge 2007 as the collective-bargaining agents of its employees, all in violation of Section 8(a) (1) and (5) of the Act; that the afore- mentioned refusal to reinstate or to reemploy employees on October 5, 13, and 20, 1959, and the conduct on August 18 and September 11, 1959, were violative of Section 8(a) (1) and (3) of the Act. In its amended answer Respondent denied the commission of unfair labor practices as alleged in the complaint and alleged that by September 11, 1959, all employees who had not returned to work had been permanently replaced and had no further right of reinstatement or reemployment; denied that former employees who applied for reemployment on October 5, 1959, made an unconditional offer to return to work or that the strike had been abandoned on that date; alleged that the strike was 577684--61-vol. 128-19 278 DECISIONS OF NATIONAL LABOR RELATIONS BOARD in breach of the contract between Respondent and Lodges 12 and 2007; denied that up to October 7, 1959, it had failed to recognize or bargain with Lodges 12 and 2007; admitted that on October 7, 1959, it refused to recognize Lodges 12 and 2007 because neither union represented a majority of Respondent's employees in appro- priate bargaining units; alleged that on enumerated dates named employees were reinstated in positions of like status and pay to those occupied by said employees prior to the strike; alleged that three named employees were terminated because of unprotected or unlawful strike or picket line activities; alleged that on enumerated dates named employees were offered reinstatement of like status, pay, and seniority to those held prior to the strike but refused or failed to accept such reemployment; alleged that named employees never offered to return to work, unconditionally or otherwise, and have no right to reemployment or reinstatement; alleged that during the strike Respondent, for economic reasons, had reduced its complement of employees. All parties were represented, were afforded full opportunity to be heard, to examine and cross-examine witnesses, to introduce evidence, to argue orally upon the record, and to file briefs. Based on the entire record in the case, and from observation of the witnesses, the Trial Examiner makes the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Mission Manufacturing Company is a corporation organized under and existing by virtue of the laws of the State of Texas, having its principal office and place of business in the city of Houston , Texas, where it is engaged in the manufacture of oilfield equipment and related products . During the most recent 12-month period, Respondent purchased raw materials and equipment , principally metals, of a value in excess of $50,000, that were shipped directly to Respondent's plant from points outside Texas . During the same period, Respondent sold products valued in excess of $50,000, that were shipped from its plant directly to points outside Texas. It is found that Respondent is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. If. THE LABOR ORGANIZATIONS INVOLVED Lodge 12 and Lodge 2007, both of District Council 37, International Association of Machinists, AFL-CIO, are labor organizations within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The bargaining and the terminations; the factual picture thereof On January 23, 1946, Lodge 12 was certified by the National Labor Relations Board, herein called the Board , as the collective -bargaining representative of the following unit of Respondent's employees : all production and maintenance em- ployees, including warehousemen , but excluding shop clerks , office clerical employees, guards, maids , porters, laborers , and supervisory employees.' Pursuant to the parties ' agreement for an election and their agreement regarding the composition of the bargaining unit, the Board conducted an election and certified Lodge 2007 , on September 4, 1958, as the collective -bargaining representative for a unit of "employees classified as laborers , shot blast operator and sand blast oper- ator, excluding maids, employees classified as, or performing the duties of office porter, and all other employees." During the period from 1946 to the termination of the 1958 contract in July 1959, Respondent and Lodge 12 had lived under a series of contracts . Their relationship was such that neither strikes nor unfair labor practice charges arose during this period. Pursuant to a 60-day notice provision of the 1958 contract , A. T. Adams, business representative for District 37, International Association of Machinists, on May 12, 1959, by letter, informed Respondent that Lodges 12 and 2007, respectively, were thereby notifying Respondent of their desire to terminate their contracts? 1 64 NLRB 1289 The Board's Decision and Direction of Election, which resulted in the certification, reveals that the Company and the Union were in agreement with respect to the composition of the bargaining unit 2 The Lodge 12 unit comprised over 300 employees whereas the Lodge 2007 unit appears to have been less than 25 employees Adams represented both Lodges and in the sub- MISSION MANUFACTURING COMPANY 279 Negotiations on the terms of a new contract were held between Respondent and Lodge 12 on June 2, 3, 10, 16, 19, 22, 24, 25, and 27; July 2, 3, 8, 9, 11, and 14; and August 4, 5, 6, 11, and 18; all dates in 1959. The meetings between Respondent and the Lodge 2007 representatives took place on June 2, 5, 16, and 23; July 10 and 16; and August 4, 5, 6, 11, and 18. The August meetings were, in fact, joint meetings with both Lodges in attendance. The complaint does not allege that Respondent failed to bargain in good faith prior to July 20 or 23, 1959, when Respondent put into effect certain changes relating to wages, hours, conditions of employment, and grievance procedure. Although the record does not contain evidence describing the early meetings between the parties, we are aware of the situation as it existed in July. Bartley had suggested to Adams on July 3 that the existing contract be extended an additional week beyond its July 12 expiration date. Adams, on July 8, declined to accept the suggestion. According to Adams, when the parties began their July 9 meeting they had reached a tentative agreement on article I (recognition clause), article VI (training program), article VII (seniority), article IX (shift assignment), article XII (grievance and arbitration procedure, article XIII (discharges or other discipline), article XVI (court service), article XVII (bulletin board), article XX (management rights), article XXI (union security), and schedule C (apparently a form to be signed by employees to authorize the Company to check off their union dues) .3 The parties by the close of the July 9 meeting were in tentative agreement on all portions of the contract except article II (relating to hours and scheduling of work), article III (holidays-the Union wanted an additional paid holiday), article XIX (shift differential), article XXIII (termination clause), and wages. On wages the Union wanted an 8-percent increase and the Respondent offered 6 percent. The Company's original proposal on the termination clause was for a 3-year contract. This was changed to a proposal for a 2-year contract with wage reopening after 1 year, provided that if either party reopened the contract on wages the other party could reopen other provisions of the contract. Adams had stated that it was his opinion that the union membership would not accept this proposal but would go along with a 2-year contract with reopening at the end of 1 year limited to wages and pensions. By the close of the meeting the Company had proposed an option of a 1-year contract or its 2-year contract proposal as aforedescribed. It is not contended that the Union accepted this proposal or either of the options or that this proposal was submitted to the membership or voted upon by the membership. The Trial Examiner finds that the above proposal was not accepted by the Union and that at the inception of the meeting between the parties on the next day, July 10, the Company handed Adams a letter whereby it withdrew its offer of a 1-year contract but otherwise did not alter its position, including the proposal for a 2-year contract The July 10 meeting was participated in by the Respondent, Adams, and the Lodge 2007 committee. The issues in dispute were substantially the same as those in the July 9 meeting with Lodge 12. sequent negotiations with Respondent he was the principal union negotiator. He was assisted by a Lodge 12 employee committee and by a Lodge 2007 employee committee C. 0. Bartley, vice president of Respondent, was its principal negotiator, assisted by various management personnel. The contracts which the Lodges had with the Respondent were identical with the exception of wages and some items that were not applicable to Lodge 2007. In the negotiations discussed herein substantially identical negotiations took place between Respondent and the two Lodges, with the Lodge 12 negotiations serving as the bellwether. i The reference to various numbered articles pertains to the articles in the existing contract which apparently served as the basic document in the negotiations, i e , the parties would agree on retaining certain provisions of the old contract or propose addi- tions, deletions, or changes thereto. It is appropriate to observe that the Trial Examiner found both Adams and Bartley to be credible and reliable witnesses generally and, on the whole, their testimony is not in conflict. In the same connection the Trial Examiner noted no indication in the record that the negotiations between the parties were carried on in any but it cordial manner. There was no name calling or histrionics and while both sides bargained hard for their respective positions, the bargaining appears to have been on a high level The foregoing observations of course in no way preclude close scrutiny of the conduct of the parties or preclude a finding of failure to bargain in good faith if the evidence warrants such a conclusion. 280 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Adams contacted the Federal Mediation and Conciliation Service and asked that a meeting be arranged for July 11, a Saturday. The meeting between the parties was arranged and held on that date with a Federal mediator participating. The various articles of the contract were reviewed by the parties and then the mediator met separately with the parties. The iespective positions were the same at the close of the meeting as they had been at its inception. Bartley had been informed by Adams that the two Lodges were holding member- ship meetings with regard to the contract proposals on Sunday, July 12, and asked if Bartley wished to be advised of the result. Bartley replied that he would like to be so advised or that you can call me if you want to.4 The meetings were held as scheduled, the Company's contract proposals were voted upon, rejected, and the Lodges voted to strike the next day, after midnight. The pickets were placed at midnight or shortly thereafter on the morning of July 13. Adams telephoned Bartley and advised him of the foregoing. Bartley said "O.K." or something to that effect.5 Adams also advised the Federal Mediation Service of the union action and stated that the Union was available to meet with the Company. A meeting scheduled by the mediator was held on July 14 between the Company and the Lodge 12 representatives. The parties did not narrow the areas in dispute between them and accord was not reached on any such issues. The evidence in fact is clear that the parties were further apart at the end of the meeting than was the case at its inception. Thus, the Company reinstituted proposals regarding main- tenance and warehouse people that it had dropped on July 9 and 11; this was also true with respect to the evaluation of certain job classifications. The Union like- wise reinstituted proposals regarding hours of work that it had dropped or modified on July 9; it reinstituted its position regarding promotions, transfers, and shift assignments. The parties were also in disagreement with respect to the term of the contract and wages. Substantially the same situation developed on July 16 when the Company met with Lodge 2007. At the end of the July 14 and 16 meet- ings, aforedescribed, neither the Company nor the Union requested further meetings and no arrangements were made for additional meetings. On July 23, 1959, Bartley wrote two letters, one to Adams and Lodge 12 and the other to Adams and Lodge 2007. With respect to material features the letters were the same. The following extracts from the letter to Lodge 12 are typical: This is to notify you that our plant is open for business and is operating. Any or all employees may return to their jobs if they wish. Effective immediately the Company is putting into effect the following pro- visions with respect to Lodge 12, in accordance with negotiations prior to, and subsequent to, your strike, and in accordance with the Company's final posi- tion of July 14. The changes from the 1958 contract are designated below. All provisions not mentioned will remain the same as in the 1958 contract. Article 17-Hours of Service and Overtime Section 1-35% of warehouse and maintenance Department to work a normal work week of five (5) non-consecutive days. . Section 2-Rewording for clarification previously agreed upon. No change in content. . . . Article III-Holidays Article VII-Seniority * * * * * * * Article VIII-Promotion and Transfer * * * * * * * Article IX-Shift Assignment Article X11-Grievance and Arbitration Procedure Changes in times allowed at the various steps in the grievance procedure to allow more time for processing a grievance. Changes in the procedure for handling a grievance by the Company These changes are as agreed upon July 8 and will be put into effect at this time except the union repre- sentative will not participate. Grievances will be handled strictly between the man and the Company. 4 In the order stated the versions are those of Bartley and Adams. The Trial Examiner does not view the difference as significant 5 There were five employees who did not go on strike on July 13 ; one was in the Lodge 2007 unit and four in the Lodge 12 unit. MISSION MANUFACTURING COMPANY 281 Article XIII-Discharges and Other Discipline Minor changes agreed upon between the Union and the Company on July 2... . Article XIV-Company Benefits Rewording in Section 1(a) to state that "pension benefit and group life and hospitalization benefits, as negotiated, will continue in effect for the duration of this agreement." Article XVI-Court Service * * * * * * * Article XXI-Union Security Does not apply * * * * * * * Article XXIII-Termination Clause Does not apply Exhibit "A"-Schedule of Wages Change rates of various job classifications as presented to the Union June 27. . . . General wage increase of 6%. Exhibit "C"-Authorization for Dedication of Union Dues Does not apply Copy to: All Mission Employees [signature etc.] 6 Bartley testified that, although he was not sure, he believed that the provisions referred to in the July 23 letter were put into effect on Monday, July 20, in accord- ance with the Company's normal policy of implementing changes on Monday. Upon receipt of the two letters, aforedescribed, the Union filed unfair labor practice charges against the Company on July 24, 1959.7 Other than the filing of charges with the reference therein, "Further bad faith is shown by the Company's extensive unilateral changes in wages, hours, and working conditions on July 23, 1959," the Union thereafter in meetings or conversations with the Company did not mention the fact of the Company's action in putting into effect the various provi- sions referred to in the July 23 letter or refer to the Company's announced exclusion of the Union from the grievance procedure as described in the same letter or seek to bargain on these matters. 6In the course of negotiations for the prior contract in 1958, the Company, on June 30, 1958, had written to the Union as follows : The Company and the Union have been unable to agree on a new contract. Both sides have taken final positions We, therefore, consider an impasse to exist. Effec- tive Monday, July 7, 1958, the Company will put the proposed contract into effect, as per the Company's final position, except for union dues deduction and the grievance and arbitration procedure contract provisions will be placed into effect when a con- tract is signed between the Company and your Union The Company in a notice to the employees during the above 1958 period of "impasse" stated : "The grievance procedure, as outlined in the old contract, will be used except that all discussions and processing of a grievance that any individual has will be between the Company and the individual man . . " 7The original charge alleged violations of Section 8(a)(1) and (5) of the Act in the following respects: (1) By withdrawing proposals regarding wages and overtime before the Union could accept or reject the proposals; (2) by withdrawing its proposal on July 10, 1959, with respect to a termination clause before the contract containing such clause could be submitted to the union membership for approval "and this refusal of the Company to honor its proposals directly caused the unfair labor practice strike which began on July 13"; (3) "Further bad faith is shown by the Company's extensive uni- lateral changes in wages, hours, and working conditions on July 23, 1959" , (4) by the above acts and by other acts and conduct the Company restrained and coerced its em- ployees in the exercise of rights guaranteed by Section 7. A first amended charge, filed August 21, 1959, repeated verbatim the above allegations plus an allegation of sur- veillance of the picketing by the installation of a microphone on July 13. A second amended charge, dated October 8, 1959, incorporated the allegation of its predecessors plus an allegation relating to the termination of employees The foregoing observation is also applicable to a third amended charge, filed October 29, 1959, although the latter specified that the section of the Act allegedly violated was: 8(a) (1), (3), and (5) and not merely Section 8(a) (1) and (5) as had the preceding charges. 282 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On August 2, 1959 , Sunday, the Company advertised in the newspaper for em- ployees. Interviews of applicants were held on August 3 and successful applicants began reporting for work on August 4.8 s The table follows : Date Number in bargaining unit Number returning employees Number re- placements at work Total jobs filled Total vacant jobs August- 3 362 5 0 5 357 4 362 5 2 7 355 5 362 5 17 22 340 g 362 6 35 41 321 7 ------------------------------ 319 6 59 65 254 10------------------------------ 319 6 93 99 220 11------------------------------ 319 6 96 102 217 12------------------------------- 319 6 127 133 186 13------------------------------- 319 6 131 137 182 14_______________________________ 319 7 130 137 182 17_______________________________ 319 14 131 145 174 18------------------------------- 319 19 131 150 169 19------------------------------- 319 21 137 158 161 20------------------------------- 319 24 141 165 154 21------------------------------- 319 34 139 173 146 24------------------------------- 319 73 141 214 105 25------------------------------- 325 85 142 227 98 26------------------------------ 325 102 141 245 82 27------------------------------ 325 119 140 259 66 23------------------------------- 325 124 139 263 62 31------------------------------- 325 130 143 273 52 September- 1------------------------------- 325 130 142 272 53 2-------------------------------- 325 130 150 2S0 45 3________________________________ 325 135 173 308 17 4- ------------------------------ 325 135 191 326 C{) 7------------------------------ 325 135 191 326 (') 8________________________________ 325 135 191 326 C) 9________________________________ 325 135 191 326 (`) 10------------------------------- 325 135 191 326 (') 11------------------------------- 325 135 187 322 3 14------------------------------- 325 135 186 321 4 15------------------------------- 325 135 185 320 5 16------------------------------- 325 135 183 318 7 17------------------------------- 325 135 183 318 7 18------------------------------- 325 135 183 318 7 21------------------------------- 325 135 183 318 7 22------------------------------- 325 135 183 318 7 23------------------------------- 325 135 183 318 7 24------------------------------- 325 135 183 318 7 25_______________________________ 325 135 182 317 8 23------------------------------- 325 135 182 317 8 29_______________________________ 325 135 182 317 8 30------------------------------- 325 137 184 321 4 October- 1-------------------------------- 325 137 183 320 5 2-------------------------------- 325 137 181 318 7 5-------------------------------- 325 137 181 318 7 *One over complement. MISSION MANUFACTURING COMPANY 283 Between the last meetings of the parties on July 14 and 16 and the intervening events aforedescribed, i.e. the July 23 letter, the unfair labor practice charge of July 24, and the advertisement for and hiring of replacements, August 2 to 4, neither party had sought a meeting or had communicated with the other regarding renewed negotiations. A meeting, arranged by the mediator, was next held on August 4. The parties engaged in a general discussion of the issues but neither altered its position. At a meeting on August 5 with the mediator the parties went over the contract and the issues that were in dispute. No agreement was reached and the positions of the parties were unchanged on the disputed issues. Adams, at the hearing, was asked: Q. All right, now, there you say you reviewed your positions. Was your position the same on August 5 or substantially the same as it was on July 14? A. It was substantially the same, I would say. It was Adams' testimony that the mediator told the parties that after talking to each side it was his opinion that if they could come up with something on hours of work, duration of the contract, and schedule A (wages), they would have an agree- ment.9 At the August 6 meeting, according to Adams, the Union said that it was flexible as to the disputed issues and the Company said that it was ready to discuss them. No agreement was reached and the positions of the parties remained the same although the Company agreed to pay one-half the cost of the employees' hospitalization and surgical benefit plan for the month of August. Adams received by mail a notice from the Company, addressed "To All Striking Employees," dated August 7, 1959. A note appended on the notice received by Adams stated: "A copy of this has been mailed to all striking employees, [signed] C. O. Bartley." The notice advised the employees that the Company intended to operate as well as it could during the strike and that it had been able to maintain good production; it was stated that the strike had already cost the average striker over $400. "On Monday, August 3, 1959 we began hiring new employees on a permanent basis to fill the jobs of employees who are on strike. If you are replaced by a new employee before termination of the strike, or before you offer to return to work, you will no longer have a job at Mission." io On August 7 the Company, after a survey of sales forecasts, finished goods inventories, raw material inventories, and general business conditions reduced its complement of employees from 362 to 319. This decision was made by Ralston B. Bayer, production superintendent, who testified at the hearing concerning his deter- mination.il According to Bayer he customarily made ,a manpower reevaluation 8 to 12 times each year; he testified to a reduction in complement in 1958 and stated that the 1959 decision was reached in the same manner. The Union was not in- formed of reduction in complement until 4 days later, on August 11. The next meeting that was held was arranged by the mediator for August 11. At this meeting Adams asked Bartley if the Company would agree to the same contract that had been presented at the union meetings on July 12. Bartley said "No" but that the Company would agree. to the contract that it had proposed on July 14, plus some side agreement for settling the strike. The parties then dis- cussed the number of persons hired during the strike and the number of openings then existing. Bartley told Adams that the number of people required (apparently this was a reference to the complement ) had been reduced by about 30 and that there were approximately 210 job openings for the strikers . According to the testi- mony of Bartley , which is credited, Adams asked what the Company position would be regarding persons hired during the strike if the Union accepted the Company's contract position of July 14. Bartley replied that the people referred to had been 9 Bartley testified that the mediator asked both parties, when they left the meeting, to consider what he thought would be three major items so that we could thoroughly discuss them at the meeting he had scheduled for the following day It is the Trial Examiner's opinion , first, that the segment of the meeting referred to is not a pivotal point in the case and, secondly, that the implications of Bartley's version is substantially the same as Adams' version and, thirdly, the mediator 's view, while entitled to respect , was an opinion and not necessarily correct and may have been a mediatory technique and, in any event, is not dispositive of the issues in this case "The notice went on : "At present, most of you who wish to return to work will find jobs available . However, we believe that it is only fair that you should know that more replacements are being hired each day, and as time goes on, the number of jobs available to striking employees will steadily decrease." "Bayer stated that a reevaluation on August 25 raised the complement figure to 325 "to be on the safe side." Bayer's testimony was not controverted. 284 DECISIONS OF NATIONAL LABOR RELATIONS BOARD hired in good faith and the Company could not displace them. The positions of the parties did not change at this meeting except that later, in the course of the meeting, the Company stated that any contract it would sign with Lodge 2007 would have to have a September 4, 1959, termination date. When Adams expressed sur- prise, the Company explained that since the certification was dated September 4, 1958, and all the jobs m the Lodge 2007 unit had been filled during the strike the Company did not believe that the Union now represented a majority in the unit; the Company therefore felt that it could not sign a contract beyond September 4.12 Other than as hereinabove described the Union expressed no position on the various issues and the parties' positions remained unchanged with the exception of the September 4 contract date regarding Lodge 2007. The parties met again on August 18. Adams said that the union representatives would recommend the following settlement to the membership; a 2-year contract as proposed by the Company to Lodge 12 on July 14 and to Lodge 2007 on July 16, providing that the Company would agree to put all the strikers back to work. The Company replied that it would not agree to displace those hired during the strike.13 The Union asked for a reply in writing which the Company agreed to give. Adams then asked the Company if it had a proposal for settling the strike, reminding the Company that the Company had previously stated that it would agree to its (the Company's) July 14 proposal if there was a side agreement on settling the strike. The Company replied in the affirmative and handed the Union a typewritten docu- ment, captioned, "Strike Settlement Agreement." It was recited therein that the agreement was between the Company and the named Lodges of the Union; that concurrently with the execution of the agreement the parties had executed "a labor contract, effective . . . terminating on ________________'; that in order to expedite and simplify the return to work of striking employees each striking employee who desires to return to work . must make an individual application to return to work in the form attached hereto. If a striking em- ployee does not make an individual application to return to work by ________________, it is conclusively presumed that he has resigned from the employment of the Company. If any employees fail to submit such applica- tions by 5:00 p.m. on ________________, they will not be considered for rein- statement until striking employees who submitted applications on or before such date have returned to work. * To the extent that he has not been permanently replaced by Company, a striking employee, who has made application to return to work . will be returned to work on the basis of his group seniority if physically and otherwise qualified to perform the work. . . There will be no displacement or "bump- ing" of employees presently work . . . by striking employees. . Striking employees who have been permanently replaced by 'Company during the term of the strike shall lose all seniority rights and shall no longer be considered employees of the Company. * * * * * * * No grievances arising out of or resulting from the return to work of striking employees may be filed until at least fifteen, (15) days have elapsed from the date of this Agreement. After such period has elapsed, any such grievance must be filed within the time limits prescribed in Article XII, Section 2 of the labor contract. The above-written proposal of the Company as submitted to the Union on August 18 also contained a paragraph whereby the Union would agree to withdraw its unfair labor practice charges. There is no evidence that this item was discussed by the parties and the Trial Examiner finds that it was not. During a recess of the August 18 meeting the Company took back its written proposal, physically deleted therefrom the proposal for withdrawal of charges, and returned the document to the Union. The Company also changed the caption from "Strike Settlement Agree- ment" to "Strike Settlement Proposals" although the term "Agreement" remained in the body of the document. 12 Dncontroverted evidence establishes that on August 10 the complement of the Lodge 2007 unit was 20; that by that date there was 1 returned striker and 20 replacements The personnel director, Hoyler, testified that an extra man had been hired by mistake. 13 On August 18 the Lodge 2007 unit complement was filled as previously described. In the Lodge 12 unit, there were 19 returned strikers, 131 replacements, and 109' vacant lobs. MISSION MANUFACTURING COMPANY 285 Adams testified that he did not see the application form although the Company pro- posal referred to such an attached document that was to be executed by strikers who desired to return to work. As previously noted, Adams impressed the Trial Examiner as a credible witness and he credits his testimony on this point since it is possible that the form was either not attached or became detached in the course of passing the papers, of which there were only two copies. Adams did not testify that this aspect (of applications), which was in the body of the Company proposal, was not discussed and the Trial Examiner credits Bartley, also a credible witness, that the Company pointed out that the purpose of the application requirement was to enable the Company to know which persons desired to return to work since "We had no way of assuming that everybody would come back." Bartley identified Respondent's Exhibit No. 6 as the form about which the Company had been talking. The form is captioned: "Form-Personnel 81359." There are then four lines for name, address, city, telephone number, respectively, and underneath there appears the sentence, "I hereby make an unconditional offer to return to work at Mission Manufacturing Company" and a line for "signature." When asked whether he had presented this form to the Union on August 18, Bartley testified, "I thought I did, sir. I was under the impression that I did " In any event, the Trial Examiner finds that the above form was the one referred to by the Company on August 18 although not seen by Adams. By a letter of August 18 the Company gave its reply in writing to the union settle- ment proposal as requested at the August 18 meeting. In the letter the Company reiterated its position that it would not displace the replacements in order to take back all the strikers. The letter then referred to the previous day's discussion about the system to be used in taking back strikers pursuant to a settlement. The letter set forth six situations that might arise and stated that if different situations arose they would be handled in accordance with the "seniority system." 14 After August 18 neither party requested a meeting and none were held until October, as described below. On September 11, 1959, the Company mailed letters to all employees who were then on strike. The letters stated: This is to notify you that your former job with Mission Manufacturing Com- pany has been filled by a permanent replacement, and that your employment with Mission Manufacturing Company has been terminated.15 There were in fact three vacant jobs on September 11. The total complement was 325; there were 135 returned strikers; 187 replacements; a total of 322 jobs filled. On September 10 there had been no vacancies, in fact, the Company was one over its complement. There were four vacancies on Monday, September 14; five on September 15; seven from September 16 to 24, inclusive; eight from September 25 to 29, inclusive; four on September 30; five on October 2; seven from October 2 to 5, inclusive. Personnel Director Hoyler, when questioned at the hearing with respect to the three vacancies on September 11, testified that when he sent out the termination letters to all strikers he was unaware that all jobs had not been filled; he explained that during the week of September 7 there had been no vacancies, including Thursday, September 10; Hoyler stated that between September 10 and 11, there had been four terminations and he was unaware of that fact at the time the letters were sent, having received no requisitions for employees in his depart- ment on September 11. The Trial Examiner credits the foregoing uncontroverted testimony of Hoyler which, of course, does not obviate the fact that the jobs of three strikers were not filled on September 11 At a union meeting on October 4, it was voted to terminate the strike at 9:30 a in., October 5, and to return to the plant in order to get back the strikers' jobs. The members instructed Adams to make an unconditional application on behalf of all 14 The situations set forth by the Company in its letter were : 1. If a man's job is open when he offers to return or when the Union makes such an offer on his behalf, he goes back to his old job ; 2 If his job is filled and there are other openings in his group for which he is qualified, he goes to the other opening in the group; 3. If no openings in his group but openings in another group in which he had previously established seniority, he goes to the opening; 4 If no openings in any group in which he had seniority but openings in other groups, he will get the opening if qualified; 5 If no openings in any group in which he is qualified but openings in Group I (helper), he gets the opening; 6. If no opening, he has been permanently replaced 1G This paragraph was common to all the letters which otherwise varied according to the individual with respect to such matters as money due under the pension plan, vacations, etc. 286 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the strikers for jobs with the Company; they also instructed Adams to write to the Company notifying it of the action taken at the meeting. The pickets were removed at approximately 9:30 a in., October 5, and Adams met with Bartley at the plant at approximately the same time. Adams gave Bartley a letter which stated that "the striking employers of Lodge 12 and 2007-voted to call off the strike-effective at 9.30 a.m., October 5, 1959, and to unconditionally return to work immediately." After reading the letter Bartley said, "Where do we go from here." Adams said, "All the striking employees are here at the plant; they are making an unconditional offer to return to work and are now ready to go to work." Bartley replied that he did not have any job openings and all the strikers had been replaced; he said the men could make out applications and they would be considered at such time as the Company needed additional employees. On the same day Adams reported the foregoing to the union members and it was voted to restore the pickets at 2 a.m., October 6 This was done.is Also at the October S union meeting, aforedescribed, individual letters signed by individual strikers were sent to the Company. The letters referred to the termination of the strike as of October 5 and stated: "This is to officially notify you that I am ready, willing, and able to resume my former position with your company immediately. Please notify me when and where to report to work." All the indi- vidual letters were sent to the Company with a covering letter from Adams, on October 5, stating that the applications were to be considered as a request and as agreement to return to work unconditionally and were continuing applications for reemployment. Additional applications were sent on October 13 and 20. The Company, by letter of October 7 to Adams, acknowledged receipt of the October 5 communications, above-mentioned, and advised the Union that the Com- pany no longer recognized Lodge 12 or 2007 as the collective-bargaining agents for any of its employees, since neither represents a majority of the Company's employ- ees in appropriate units. The Company also referred to its September 11 letters notifying strikers that they had been permanently replaced It was also stated that that the Company would be glad to consider any former employees who had been replaced in the same manner as any other new applicants. About October 7, 1959, Production Superintendent Bayer and Personnel Director Hoyler telephoned seven strikers, Wesneski, Wagner, Wells, Koenning, Mayers, Novosad, and Niblett. Bayer testified that the Company needed operators in certain classification groups (Hoyler testified that there were seven openings) and they selected the men on the basis of past performance, attitude, attendance, and, in general, on their personnel record. With minor variations, Bayer's conversation with Niblett was typical. Bayer asked Niblett if he wanted to return to work. Niblett said he did and Bayer explained that there was an opening in the group classification in which Niblett had formerly worked. Six of the seven employees thus contacted sent telegrams to the Company saying that they accepted the offer of employment, but thereafter they did not report for work. The reason for the failure to report was, apparently, as some of the men told Bayer, the presence of the picket line.17 Also in evidence are a series of letters, dated October 16, 1959, and later, from the Company to individual strikers.ls Those strikers, who had returned to work prior to September 11, received their old seniority, vacation, and insurance benefits. They were restored to their former jobs, if unfilled, and received either their former wage rate plus the 6-percent increase or the wage rate called for by the particular job. Returning strikers were required to take no physical examination nor were they subjected to any employment interview; they had executed a form, Respondent's Exhibit No. 6, indicating a willingness to return to work. The Company's proposal for settling the strike envisaged reinstatement of strikers to former positions unless the strikers had been permanently replaced. "The picket signs originally had stated, "On strike, International Association of Machinists" and "Mission Manufacturing Company on strike, International Association of Machinists" The October 6 signs read, "Company discharged IAM members and refused to rehire us IAM Lodges 12 and 2007." 17 Wagner returned later, about December. >e One type of letter stated : "We have received your letter dated October 19, 1959 [this date varied] If you will call at our personnel office, we will accept and consider your application for employment with respect to any jobs which may be available and for which you may be qualified." The other type, all dated in December 1959, stated "You are hereby notified to report for work at Mission Manufacturing Company on or before December 19, 1959 [this dated varied]. Please come directly to the personnel office when you report." The majority of the addressees did not report to the Company. MISSION MANUFACTURING COMPANY 287 B. Conclusionary findings 1. The collective bargaining Preliminarily, the Trial Examiner is not persuaded by Respondent's contention that the Lodge 2007 bargaining unit was inappropriate. This unit, like the Lodge 12 unit, was certified by the Board and the Respondent had agreed with the Union on the appropriateness of the unit. It was essentially a residual unit of plant laborers who had not been included in the original Lodge 12 production and maintenance unit. The appropriateness of such units has been upheld by the Board. E. P. Jacobs Sr., at at., d/b/a Jacobs Manufacturing Company, 99 NLRB 482; The Wilson H. Lee Company, 97 NLRB 1023; Houston Lighting & Power Company, 100 NLRB 76; Miller Manufacturing Company, 110 NLRB 909; Yale and Towne Manufacturing Company, 112 NLRB 1268. The unrepresented timekeepers, tool clerks, production control clerks, and storekeepers are distinguished from the hourly paid employees in both of the certified units by the fact that they are salaried employees. Although the employees in the Lodge 2007 unit are Negroes, this is apparently due to the fact that the Respondent, who does the hiring, has not hired any white men for the jobs covered by the Lodge 2007 unit. Lodge 12 has both white and Negro members and the applicable union constitution and rules do not refer to color as one of the criteria for membership in the instant Union. Respondent was per- mitted to litigate the appropriateness of the unit since there was some implication that Respondent would demonstrate that race or color was the basis for the estab- lishment and retention of the Lodge 2007 unit. The evidence has not borne out any such contention or intimation. The rule that the appropriateness of unit may not be relitigated in a complaint proceeding, in the absence of newly discovered evidence or evidence not in the employer's possession at the time of the representation case proceeding, would in itself be sufficient basis for rejecting Respondent' s position.19 Equally unconvincing, in our opinion, is the position, raised for the first time in Respondent's answer to the complaint and never raised in the course of bargaining with the Union, that the July 13 strike was illegal and in violation of the no-strike clause of the contract. The effective date of the contract was July 13, 1958, and it was for a term of 1 year. In our opinion, the contract expired midnight, July 12, 1959, a Sunday. The fact that changes in working conditions and related matters at Respondent's plant were placed in effect customarily on a Monday, at the com- mencement of the 7 a.m. shift, does not alter this fact. The plant, moreover, was not in full operation on Sunday, July 12. A few employees, scheduled to start work at 11 p.m on July 12, may have failed to report. At most these persons might have been subjected to disciplinary action or discharge, a course of action that Respondent did not adopt. In any event the Union' s decision to strike and the strike itself officially commenced at midnight or shortly thereafter on July 13. After some 17 bargaining sessions, the parties by the end of the meetings on July 9 and 10, 1959, had reached tentative agreement on many contract provisions. They were unable to agree on certain other provisions, described above. Some indication that the bargaining had reached a general bedrock area was the fact that a Federal mediator was called in by the Union for the July 11 meeting. The respective positions remained unaltered by the end of that session. The Union decided to put the company proposals to a vote of the union members at a meeting called for the purpose. This too was some indication that the negotiations had reached the stage where the wheat had been separated from the chaff and that a substantial degree of firmness in positions had been reached. Adams, the union representative, had previously informed Bartley, the company representative, that he did not believe that the members would accept the company position on the term of the contract but the company position remained firm. The Union remained firm. Both parties were aware of the likelihood or the possibility that, with the expiration of the old contract in a day or two, July 12, the Union would strike, particularly in view of the union rejection of the company proposal of a 1-week extension of the contract. Firmness of position in the face of the foregoing is indicative of deter- mination on both sides. Nor was there any change when Adams telephoned Bartley and informed him that the Union, on July 12, had voted to reject the company proposals and to strike. In effect, the telephone call gave the Company a last chance to change its position and to avert the strike but the effort was unsuccessful. Both parties had now demonstrated the firmness of their respective Positions, the Union by its members' willingness to be deprived of wages for an indefinite period unless is National Carbon Company, a Division of Union Carbide t Carbon Corporation (Edge- water Works), 110 NLRB 2184; The Baker and Ta4Jior Co, 109 NLRB 245. 288 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Company agreed to its position, the Company by its willingness to incur the ,economic disruption of a strike unless the Union acquiesced in its position. The strike commenced on July 13. Actuality as distinguished from contemplation de- scended upon both parties and presented a further test for their resoluteness. They met on July 14 and 16. Not only was their divergence confirmed but each side, in fact, stiffened its position and reinstituted demands previously compromised or dropped. They were further apart at the end of the meetings than at the inception. Neither party requested further meetings nor were arrangements made for additional meetings. It is the opinion of the Trial Examiner and he finds that the Respondent had bargained in good faith and had made a bona fide but unsuccessful attempt to reach agreement with the Union. The bargaining had reached a point where it could reasonably be concluded that the parties were unyielding in their respective positions. Under such circumstances Respondent could place in effect, as it did, provisions that had been proposed to and discussed with the Union in the course of the bargaining sessions and that the Union had either agreed to or rejected2e The doctrine that a strike breaks an impasse has been enunciated by the Board and the courts. However, we believe that the rationale of this principle is to be understood. It is well stated in N.L.R.B. v. Reed & Prince Manufacturing Com- pany, 118 F. 2d 874, 885 (C.A. 1). The court declared that an impasse is broken by a strike for what seemed a rigidity of bargaining positions before strike action, afterward might very well have become a model of flexible compromise. "If in the presence of a strike an employer could avoid the obligation to bargain by declaring further efforts to be useless, the Act would largely fail of its purposes." In the instant case,-as we have seen, the Respondent bargained with the Union after the issues between them had firmed and had been brought into clear focus and prior to instituting the various changes of July 20. The meetings of July 14 and 16 confirmed the rigidity of the respective positions of July 9 and 10. Subse- quent meetings on August 4, 5, 6, and 11 emphasized that the positions of July 9 and 10 and the positions on the above occasions in August were as far apart as ever 21 It is reasonable to attribute the change in the Union's position on August 18 to a change in circumstances, particularly the fact that the Company had hired 93 replacements and had some returned strikers and was apparently having no difficulty in recruiting a steadily increasing number of replacements. By that time, also, the union members had been on strike over a month. In any event, we are not persuaded that even subsequent agreement would indicate or necessarily estab- lish that there had been no prior impasse. Human affairs, particularly industrial relations with its many imponderables, in a sense , never reached a true "impasse" if by the term we mean a dead end with no possibility of change or escape. There 20 N L R B v. Crompton-Highland Mills, Ire, 337 U S 217, 225-226, where the em- ployer granted the employees a substantially larger wage increase than previously offered to the Union, without consulting the Union or affording it a chance to negotiate The court observed • "We do not here have a unilateral grant of an increase in pay made by an employer after the same proposal has been made by the employer in the course of collective bargaining but has been left unaccepted or even rejected in those negotiations. Such a grant might well carry no disparagement of the collective bargaining proceedings Instead of being regarded as an unfair labor practice it might be welcomed by the bargaining representative, without prejudice to the rest of the negotiations" A' L R B v Andrew Jergens Co , 175 F 2d 130 136 (C A 9), cert denied 338 U S 827 • Exposition Cotton Mills Company, 76 NLRB 1289; W. W Cross and Company, Tnc . 77 NLRB 1162, 1166. Cf. NL R.R v Sands Manufacturinq Co., 306 US 332, 343-344, wherein the Court stated • "When the representatives of the 2 parties separated on August 21 no further negotiations were pending, each had rejected the other's proposals and there were no arrangements for a further meeting On the following day the factory was closed There is no suggestion that there was a refusal to bargain on August 21 There could be. therefore, no duty on either side to enter into further negotiations for collective bargaining in the absence of a request therefor by the employees No such request was made prior to September 4 " 21The fact that the Company at the August 6 meeting agreed to pay one-half the cost of the employees' hospitalization and surgical benefit plans does not alter this conclusion It is evident that this matter was little more than a housekeeping type detail (although certainly important to the employees) and was not an issue in the bargaining No doubt during the recent national steel strike, while the parties were bargaining and arguing about wage increases, inflation, excess profits, and foreign competition, some arrangement was made about the medical insurance plans of the employees but it was scarcely evi- dence that the parties were close to agreement in their bargaining. MISSION MANUFACTURING COMPANY 289 is always hope, always a possibility of agreement, but this does not mean that a stage of reasonably regarded "impasse," for lack of a better term, has not been reached in a particular set of circumstances, of which the instant case, in our opin- ion, is an example. As is apparent from a reading of our rather detailed description of the bargaining sessions in the preceding section of this report, one feature that the Company placed in effect on July 20, as set forth in its July 23 letter, was not previously discussed with the Union. This was the exclusion of the Union from the grievance procedure. The Respondent explains its aforementioned position on the ground that it was an interim procedure tailored to a situation where no union representatives, stew- ards, or committeemen were working because of the strike. This explanation is not without a measure of plausibility not only because of the absence of the union representative who would normally handle grievances but also because it is likely that the newly hired replacements and the returned strikers, both of whom had crossed the union picket line and were, in the eyes of the Union, "strikebreakers," did not expect that a union committeeman would cross the picket line for the sole purpose of representing a "strikebreaker" in a grievance proceeding. There is also room to doubt that the Union was ready or eager, at this stage, to represent "strike- breakers" in their grievances and thus contribute to their well-being and stability as replacements or to contribute thereby to the functioning of the Company's employee relations program. Notwithstanding the foregoing considerations, we are of the opinion that at the time the Company expressly excluded the Union from participation in the grievance procedure the Union was the statutory representative of the employees and as such could not be excluded from grievance participation 22 If the union representatives did not choose to cross the picket line in order to participate in grievance proceedings on behalf of "strikebreakers" or if they could not be present for scheduled grievance meetings on reasonable notice or if employee grievants were unable to contact them, the Company might have been in a position, after having afforded the Union an opportunity to participate, to proceed with the individual employee. In the posture presented, however, we conclude and find that by excluding the Union from participation in the grievance procedure the Respondent acted contrary to the man- date of the statute and thereby violated Section 8(a)(1) and (5) of the Act. Ordinarily, an employer's action in excluding the collective-bargaining agent from participating in such matters as wages, hours, and working conditions, would indi- cate either a pronounced hostility to the principles of the Act and of collective bargaining or a profound ignorance of the law or both. From the evidence in this case we are not persuaded that either of these categories is applicable to this Respondent. In the letter of July 23 describing the institution of the wage increase and other conditions, the Company stated that the provisions "with respect to Lodge 12" were being put into effect "in accordance with negotiations prior to, and subsequent to, your strike, and in accordance with the Company's final position of July 14. . All provisions not mentioned will remain the same as in the 1958 contract." It is evident that the foregoing referred to Lodge 12, the bargaining representative, and its role is acknowledged as is the basic contract, that of 1958, which was a contract with the Union. The changes in the grievance procedure, described under article XII, the contract grievance article, were referred to as changes agreed upon on July 8, a reference to negotiations with the Union, except that the grievances would be handled between the Company and the individual without the participation of the Union. All those concerned, the Company, the Union, and the employees, were aware that in the 1958 contract negotiations when there was failure to agree on terms of a new contract, characterized by the Company at the time as an im- 22 In his brief the General Counsel has underscored the second proviso of Section 9(a), thus indicating, apparently, its applicability. Conceivably, it could be urged, we believe, that the second proviso is applicable with reference to the rituat'on delineated in the first proviso, i.e , where there is a contract or agreement in effect However since in our view of the section an individual employee has a right to present a guevance to an employer even absent a contract or agreement, the bargaining representative has the corresponding right to be present Further, Section 9(a) itself, apart from the nrevi"s, makes it clear that the bargaining representative is the exclusive representative of the employees of the employer with respect to rates of pay, wages, hours, or other conditions of employment and as such is not excludable from a grievance procedure dealing with these very matters. Bethlehem Steel Company, etc, 89 NLRB 341. 290 DECISIONS OF NATIONAL LABOR RELATIONS BOARD passe,23 the Company decided to put into effect certain conditions including a griev- ance procedure excluding the Union. They also knew that when agreement on a contract was reached there was no exclusion of the Union from its rightful role in grievance and otherwise. These facts do not mean that the Company's exclusion of the Union in 1958 was legally correct nor does it alter our conclusion regarding similar action in 1959. However, it does indicate that the Company's action was of an interim nature and not intended nor understood to mean that the Company was not continuing to bargain with the Union or that the Company expected to rcgotiate a contract wherein the Union would be excluded from the grievance procedure or in any way not accorded its statutory status. The Company in the numerous bargaining sessions had never proposed or intimated that the Union should be excluded from grievance participation and we are not persuaded that it had any intent to do otherwise than make an interim exclusion during the strike. It is our opinion that the Union and the employees understood this for the reasons already stated and for reasons to be stated hereinafter in discussing the alleged conversion of the strike.24 The Trial Examiner is of the opinion and finds that the conditions placed in effect by the employer on July 20 and described in the July 23 letter did not convert the economic strike into an unfair labor practice strike, nor prolong the strike, nor was the employer's action a bargaining issue between the parties.25 A review of the issues and the matters raised and discussed by the Union subsequent to July 20 and 23 demonstrates that the Company's action was not even adverted to, much less becoming an issue that caused the Union to continue the strike or prevented the consummation of a contract. It is our opinion that this situation is most reasonably explained by the fact that the Union was aware that the Company continued and intended to continue to bargain with the Union and that the exclusion from the grievance procedure was an interim stage during the strike. The filing of a charge on July 24 is evidence of one thing, i.e., that the Union considered the Company's action to be illegal. It is reasonable to conclude, however, that if the company action as announced on July 23 was the matter or one of the matters that prevented the parties from reaching agreement and from calling off the strike, it would have been mentioned at least once in the course of bargaining. The evidence shows what the issues were that separated the parties in July and it also shows what the issues were that separated the parties in August and thereafter. The July 23 con- duct of the Company was not a factor. J. H. Rutter-Rex Manufacturing Company, Inc., 115 NLRB 388, a case cited by the General Counsel, is, in our opinion, clearly distinguishable on its facts.26 23 Whether it was or was not an impasse we are in no position to determine nor is it necessary that we do so. u Additional evidence that the Company intended to accord the Union its statutory status is afforded by the Company's strike settlement proposal to the Union on August 18. This was at a time when the Company's bargaining position was strong and when the Union was ready to capitulate (except for the demand that all strikers be reinstated). Certainly any intent to supplant the Union could be expected to come to the fore under these circumstances . However, the settlement proposal contemplated and stated expressly that the agreement was between the Company and the Union and that they were enter- ing into a labor contract Also, in the Company's letter of August 19 regarding reinstate- ment of strikers the Company explained that if a striker's job was open when lie offered to return to work or when the Union made such an offer on his behalf be would be re- stored to his old job. This is illustrative of the fact that except for its interim position on grievances, the Company recognized and accorded the Union its statutory rights. Moreover, the July 14 proposals of the Company which became the ultimate basis of negotiation between the parties and which each was willing to accept in August, did not exclude the Union from the grievance procedure. 1-5 Since we have found that only the exclusion of the Union from the grievance pro- cedure was illegal, it is apparent that only this aspect is relevant to the conversion issue However, we do not believe that the wage increase or the other conditions pro- longed or converted the strike in any event. 20 In that case, without deciding, the Board felt that it was "arguable" that the em- ployer had refused to bargain prior to the strike when the strike commenced, the Board found that "the evidence of the Respondent's rejection of the very principle of collective bargaining [was] clear." He refused "to recognize or meet with the Union." There was a plethora of antiunion activity by the eniploier and he improved working conditions without having bargained with the union The failure to recognize or meet with the union obviously prolonged and converted, the strike "even assuming its economic origin" to an unfair labor practice strike If all this was not clear enough, there was -idence that strikers solicited by the employer to return stated plainly that they would MISSION MANUFACTURING COMPANY 291 On August 7 when the Company made the decision to reduce its overall comple- ment of employees to 319, the decision had no immediate effect. The strike was in full swing and there were 254 vacancies in the working force. At the first meeting with the Union after the aforementioned decision, the Company on August 11 in- formed the Union of its decision. The parties in general discussed this area, including the number of vacancies and the number of persons hired. The Union did not ask that the decision be rescinded, altered, or modified and there is no evidence that thereafter the Union sought to discuss the matter or that the Company refused to do so. Neither the charges nor the complaint allege the aforedescribed action of the Company to constitute a violation of the Act. It is not found that the Company violated Section 8(a)(1) and (5) of the Act in the foregoing respect and we are of the opinion that any violation of Section 8(a)(5) in this respect would be at most a technical one.27 2. The strikers accused of misconduct With respect to employees Athey, Asberry, and Windham, whom the Company accused of misconduct during the strike, it is the Trial Examiner's opinion that this aspect of the case has been disposed of by the conclusion that the strike was at all times an economic strike. If the strike had been converted into an unfair labor practice strike, the right of reinstatement upon application would have been subject to defeasance only in those instances where the individual employees had been guilty of such misconduct during the strike as would disqualify them from rein- statement.28 More explicitly, Athey's alleged misconduct occurred on October 9, 1959, according to Respondent's witnesses. This date was subsequent to the replacement and termination of the strikers, including Athey, in the early part of September 1959. The alleged misconduct of Windham and Asberry occurred on July 24 and August 4, 1959, respectively. While it is true that Respondent in its amended answer states that Athey, Asberry, and Windham were discharged and hence had no right to rein- statement, the Trial Examiner is of the opinion that such an allegation is no more conclusive than any other averment and is subject to evidentiary proof. The evi- dence on this score is that on August 7, 1959, Asberry and Windham received letters suspending them pending completion of an investigation concerning their alleged misconduct. There is no evidence that they ever received any notice of discharge because of misconduct or that the Company had taken such action. Athey received no letter of any type regarding misconduct although he, as well as Asberry and Windham and all the other strikers, evidently received letters of September 11 notifying them that their jobs had been filled and that they were terminated Personnel Director Hoyler testified that no letter, similar to the ones sent to Asberry and Windham, was sent to Athey because his alleged misconduct occurred after he and other strikers had been replaced and terminated in September. Hoyler testified that Asberry and Windham were suspended, as the letters to them stated; he said they were not discharged and adhered to his statement even after the averment in Respondent's amended answer, aforementioned, was called to his attention. Hoyler also testified that Asberry and Windham were terminated in September with the other strikers whose jobs had been filled.29 Even if Respondent's amended answer, which was signed not by an officer of Respondent but by its attorney, is regarded as an admission against interest (it is doubtful that it was so regarded or was such when made), it has evidentiary value but is not per se conclusive. As indicated, we are persuaded that the testimony of Hoyler, who was in charge of personnel matters and personnel records, was more accurate and more convincing than an averment in the amended answer lacking other support in the record. continue the strike because of the specific reason that the employer would not recognize and consummate a contract with the union. Neither the Union nor the strikers in the instant case so much as intimated that they were continuing the strike because of the interim grievance procedure. 21 In Kerrigan Iron Works, Inc., 108 NLRB 933, the employer failed to discuss with the union the transfer of employees from the old to the new plant. The Board concluded that this was no more than a technical violation requiring no remedial action becau,,r the transfers were not discriminatory and both before and after the incident the employer otherwise bargained in good faith. 28 The reduction of employee complement would, of course, have affected the total number of jobs available 29 The Trial Examiner does not find that there has been proof that the suspension of two men while on strike, pending an investigation of alleged misconduct, is in itself discriminatory. 292 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 3. The reinstatement of striking employees It having been found that the strike was economic in its inception and continued as an economic strike, the employer was within its Tights to replace the strikers.30 The jobs of all strikers were filled by permanent replacements on September 4, 1959. This condition continued to September 10. The fact that, on September 11 when Respondent advised the strikers that they had been replaced and were therefore terminated, there were three vacancies unknown to company officials, who prepared and signed the letters, does not alter the legal situation. The respective positions of the Company and the strikers was determined by the fact of full replacement on September 4 and thereafter the Company's obligation to strikers was the same as to any applicants for new employment.31 The Trial Examiner is unable to agree with the General Counsel that there is legal significance in the Company's position during the strike and at the time it proposed a settlement that strikers who desired to return should fill out slips with their names, addresses, and telephone numbers and sign under a line which stated, "I hereby make an unconditional offer to return to work at Mission Manufacturing Company." In the case cited by the General Counsel, Jack Robinson, d/b/a Robinson Freight Lines, 114 NLRB 1093, and similar cases, the employer was not contending that the economic strikers had been permanently replaced and the Board expressly found that the employer considered and treated the striker-applicants as new employees without any of their former rights. This is not the instant case as the evidence, heretofore set forth, will show. Prior to permanent replacement Respondent did not treat returning strikers as new employees and we find an absence of discrimination in the requirement 32 We find equally insignificant, in the context of the instant case, the fact that at one meeting where strike settlement and the consummation of a contract were under discussion, the Respondent proposed that as a part of the settlement the Union should withdraw its charges. This proposal was withdrawn by the Respondent at the same meeting, sua sponte, before the Union even commented upon the proposal. The Trial Examiner also finds that the Respondent's evidence that the reduction in employee complement was due to, economic considerations was substantially uncontroverted and the conclusion that the reduction was so motivated follows and is hereby made. 4. The Union's alleged loss of majority status As we have seen , the complement of the Lodge 2007 unit on August 10, 1959, was 20. On that date the Company had 1 returned striker and 20 replacements hired during the strike. The Company, therefore, on August 11, advised the Union that it did not believe that the Union represented a majority of the employees in the unit. Although willing to enter into a contract with Lodge 2007 if agreement was reached, it was the Company's position that any contract with Lodge 2007 should not extend beyond September 4, 1958, the end of Lodge 2007's certification year. On October 7, 1959, the Company notified the Union that it no longer recognized either Lodge 12 or Lodge 2007 as collective-bargaining agents for its employees since neither represented a majority of the employees in the respective bargaining units. The aforementioned conduct, in our opinion, was not violative of the Act and it is so found. This is not the situation posed by a challenge to the Union's majority status during the certification year.33 The term of a contract is a bargainable matter and the Trial Examiner finds that the Respondent acted in good faith and not in a context of unfair labor practices. It therefore could legally take the position on August 11 that any contract with Lodge 2007 would not extend beyond the certifica- tion year since, by reason of the total replacement of the strikers in that unit, Respondent legitimately doubted the Union's majority status and believed that such 3O N L R B v Mackay Radio & Telegraph Co., 304 U.S. 333. 31 Bartlett-Collins Company, 110 NLRB 395, 397; Kansas Milling Company v N.L R B., 185 F. 2d 413, 420 (CA 10). 33 Prior to the strike and at all relevant times, the Company had not permitted "bump- ing " As explained without contradiction at the hearing, this meant that if a man with 5 years' seniority was on the second shift and a 2-year man was on the first shift the former could not "bump" the latter and secure the first shift. In the event of an open- ing, however, the greater seniority would prevail. Respondent followed the same policy during the strike. 33 Ray Brooks v. N.L.R.B., 348 U.S. 96. MISSION MANUFACTURING COMPANY 293 status had ceased.34 We are also of the opinion and find that on October 7 Respond- ent had a legitimate basis for doubting the majority status of both Lodge 12 and 2007. By October 5 Respondent's overall complement was 325; there were 137 returned strikers; 181 permanent replacements; and 7 vacancies. These figures when broken down show a complement of 20 in the Lodge 2007 unit, with 1 re- turned striker, 19 replacements, and no vacancies. The balance is found in the Lodge 12 unit. In reaching the above conclusion we make no finding whether or not the Union, the two Lodges, represented a majority of the employees in the appropriate units. The "answer to the question whether Respondent violated Section 8(a) (5) . . . de- pends, not on whether there was sufficient evidence to rebut the presumption of the Union's continuing majority status or to demonstrate that the Union in fact did not represent the majority . but upon whether the employer in good faith believed that the Union no longer represented the majority of the employers." 35 In the instant case it appears reasonable to conclude and it is found from a con- sideration of the totality of the circumstances and facts in this particular case that the Respondent in good faith believed that either all or a subsantial number of the 181 newly hired replacements were not union adherents, particularly in view of the absence of any evidence or claim on the Union's part that the opposite was true. Also, it could reasonably be assumed, whether correctly or not, that at least some of the returned strikers had abandoned the Union. Moreover, even if all the 137 returned strikers remained union members, they constituted less than a majority. The situation in the Lodge 2007 unit is a particularly clear basis for a reasonable doubt as aforedescribed, since there were 19 replacements and 1 returned striker in a complement of 20. IV. THE REMEDY It has been found that Respondent, while substantially all the employees were engaged in an economic strike, and while it was recognizing and bargaining with the Union in good faith, declared that it would handle grievances on a company and individual employee basis, excluding the Union therefrom. This type of griev- ance procedure, in actuality, related to individuals who had crossed the picket line and who were at work. The matter never became an issue in the bargaining between the Company and the Union or a factor in the strike. All the circumstances and the context in which the Company's action occurred have convinced the Trial Examiner, as explained heretofore in this report, that the action was of an interim nature and the evidence supplies ample warrant for the conclusion that the Company intended and demonstrated and the Union understood that if the parties could reach agree- ment on the economic issues that were the sole points of disagreement, the Union would have its full statutory status. The Trial Examiner has found that the Com- pany's position on interim grievances was legally wrong in view of the Union's statutory status. However, we are unable to discern any sound or useful purpose that would be served by recommending remedial action at this time in the context of the situation between the parties as we have found it to be. The Union is no longer the recognized bargaining agent and a recommendation of an order to bargain is not appropriate. We are of the opinion that a recommenda- tion that the Company be ordered to inform its employees that the Company will not refuse to and will bargain in good faith with the Union and will not exclude the Union from participation in grievance handling would be confusing, at least to the employees, and would serve no useful purpose toward effectuating the pur- poses of the Act. At such time as the instant Union or any union represents a majority of the employees in an appropriate unit, we are inclined to believe that the findings in this report regarding the role of the bargaining agent in grievance handling will have a salutary effect. In the event they do not have such an effect and, assuming as the Trial Examiner does, at least at this point, that his findings are legally correct, and another similar situation is posed by this Company in the course of its dealings with a bargaining agent, an adverse finding with potentially wide implications would appear to be appropriate. The Trial Examiner, therefore, recommends no remedial action in this case. 14 The Hinde d Dauch Paper Company, 104 NLRB 847; Vulcan Steel Tani; Corporation, 106 NLRB 1278, 1280. 35 Celanese Corporation of America, 95 NLRB 664, 671, 673-674 ; National Carbon Division, Union Carbide d Carbon Corporation, at al., 105 NLRB 441; Old Line Life Insurance Company of America, 96 NLRB 499; Stoner Rubber Company, Inc., 123 NLRB 1440. 577684-61-vol. 128-20 294 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Upon the basis of the foregoing findings, and upon the entire record, the Trial Examiner makes the following: CONCLUSIONS OF LAW 1. Mission Manufacturing Company is an employer within the meaning of Section 2(2) of the Act and is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Lodge 12 and Lodge 2007 of District 37, International Association of Ma- chinists, AFL-CIO, are labor organizations within the meaning of Section 2(5) of the Act. 3. Respondent has refused to bargain collectively by excluding the aforementioned labor organizations from the grievance procedure when they were the statutory representatives of the employees and has thereby violated Section 8(a)(1) and (5) of the Act. 4 Respondent has not otherwise refused to bargain collectively in violation of Section 8(a)(5) of the Act. 5. Respondent has not discriminated against employees in violation of Section 8 (a) (3) of the Act. [Recommendations omitted from publication.] ,Falstaff Brewing Corporation and Oscar Gerak Brewers and Maltsters Local Union No. 6, affiliated with Inter- national Brotherhood of Teamsters , Chauffeurs, Warehouse- men and Helpers of America and Oscar Gerak. Cases Nos. 14-CA-0174 and 14-CB-789. July 25, 1960 DECISION AND ORDER On February 11, 1960, Trial Examiner Thomas A. Ricci issued his Intermediate 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 there- from and take certain affirmative action, as set forth in the copy of the Intermediate Report attached hereto. Thereafter, the Respond- ents filed exceptions to the Intermediate Report and briefs in support thereof.' Pursuant to the provisions of Section 3 (b) of the National Labor Relations Act, the Board has delegated its powers in connection with these cases to a three-member panel [Chairman Leedom and Members Rodgers 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 and briefs, and the entire record in the cases, and hereby adopts the Trial Examiner's findings, conclusions, and recommendations, except as modified herein.2 I Inasmuch as the record, exceptions, and briefs adequately present the issues and posi- tions of the parties, the Respondent's requests for oral argument are denied. 2At one point in his Intermediate Report, the Trial Examiner states "[A]s in all proceedings charging unlawful discrimination under the statute, the question is whether 128 NLRB No. 39.