Continental Bus System, Inc.

384 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Upon the basis of the foregoing findings of fact , and the entire record. in the case, I makethe following: CONCLUSIONS OF LAW 1. Bakery Sales Drivers Union, Local No. 344, is a labor organization within -the meaning of Section 2(5) of the Act. 2. All drivers, order fillers , and shipping and receiving room clerks of Laabs, Inc., at it Milwaukee, Wisconsin, warehouse and stores, excluding office and clerical -employees, watchmen, guards, professional employees, supervisors as defined in the Act, and all other employees , constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 3. Bakery Sales Drivers Union, Local No. 344, has been at all times since June 12, 1959, and now is the exclusive representative of all employees in the aforesaid appropriate unit for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. By failing and refusing at all times since June 15, 1959, to bargain with Bakery 'Sales Drivers Union , Local No. 344, as the exclusive bargaining repre- sentative of employees in the appropriate unit, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section &(a) (5) of the Act. 5. By discriminating in regard to the hire and tenure of employment of its employ- ees Ronald W. LaPorte, Jr., and Jack M. Sanfelippo to discourage membership in a labor organization, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(3) of the Act. 6. Derivatively by the aforesaid unfair labor practices , and independently by interrogating its employees Ronald F. LaPorte, Jr., Jack M. Sanfelippo, and Balaz Meekesh concerning their affiliations with a labor organization , by offering induce ments to LaPorte and Sanfelippo in the form of increased wages and other benefits if they would withdraw from the Union , and by assisting Balaz Meekesh in prepar- ing a letter of withdrawal from the Union, the Respondent has been and is now interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section- 7 of the Act, and has thereby engaged in and is engaging in unfair labor practices within the meaning of Section &(a) (1) of the Act. 7. The aforesaid unfair labor practices are unfair labor practices affecting com- merce within the meaning of Section 2(6) and (7) of the Act. [Recommendations omitted from publication.] Continental Bus System , Inc. and Division 1142, Amalgamated Association of Street, Electric Railway & Motor Coach Em- ployees of America, AFL-CIO. Case No. 16-CA-1184. August 1, 1960 DECISION AND ORDER On November 20, 1959, Trial Examiner John H. Eadie issued his Intermediate Report in the above-entitled proceeding, finding that the Respondent had not engaged in and was not engaging in any of the unfair labor practices alleged in the complaint and recommending that the complaint be dismissed in its entirety, as set forth in the copy of the Intermediate Report attached hereto. Thereafter the General Counsel filed exceptions to the Intermediate Report and a supporting brief, and the Respondent filed limited exceptions and a brief in support of the Intermediate Report. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, the Board has delegated its powers in connection with this case to a three-member panel [Members Rodgers, Jenkins, and Fanning]. 128 NLRB No. 47. CONTINENTAL BUS SYSTEM, INC. 385 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 Intermedi- ate Report, the exceptions and briefs, and the entire record in the case, and hereby adopts the Trial Examiner's findings, conclusions, and recommendations. [The Board dismissed the complaint.] INTERMEDIATE REPORT STATEMENT OF THE CASE Upon charges duly filed by Division 1142, Amalgamated Association of Street, Electric Railway & Motor Coach Employees of America, AFL-CIO, herein called the Union, the General Counsel of the National Labor Relations Board, by the Regional Director for the Sixteenth Region, issued a complaint dated February 20, 1959, against Continental Bus System, Inc., herein called the Respondent, alleging that the Respondent had engaged in unfair labor practices within the meaning of Sections 8(a)(1) and (5) and 2(6) and (7) of the National Labor Relations Act, as amended, herein called the Act. On March 9, 1959, the Respondent filed an answer, in which it admitted the jurisdictional allegations of the complaint but denied the commission of any unfair labor practice. Pursuant to notice, a hearing was held at Dallas, Texas, before the duly desig- nated Trial Examiner on various dates starting April 14 and ending June 9, 1959. At the opening of the hearing, the General Counsel moved to amend the complaint. The motion was granted. The General Counsel, the Respondent, and the Union filed briefs with the Trial Examiner after the conclusion of the hearing. Upon the entire record in the case, and from his observation of the witnesses, the Trial Examiner makes the following: FINDINGS OF FACT I THE BUSINESS OF THE RESPONDENT The Respondent is a Tennessee corporation, having its principal office and place of business in Dallas, Texas, where it is engaged in the operation of an intercity busline During the course and conduct of its business, during the period of 12 months prior to the date of the complaint herein, the Respondent has received a gross revenue in excess of $500,000, of which more than $50,000 represents revenue re- ceived from interstate passenger fares. The complaint alleges, the answer admits, and the Trial Examiner finds that the Respondent is engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED Division 1142, Amalgamated Association of Street , Electric Railway & Motor Coach Employees of America , AFL-CIO, is a labor organization which admits to membership employees of the Respondent. III THE ALLEGED UNFAIR LABOR PRACTICES A. Background For many years the Union has been the bargaining representative of the Respond- ent's drivers, terminal employees, and maintenance employees. The Union has never been certified by the Board as the bargaining agent of the drivers; but the Respondent has recognized it as such since about 1937. On March 27, 1946, the Board certified the Union as the bargaining representative of the Respondent's terminal employees at its Fort Worth, Texas, establishment. However, since the certification the Respondent has recognized and bargained with the Union as the agent of all of its terminal employees. The Board also certified the Union as the collective-bargaining representative of all of Respondent's maintenance em- ployees by its decision dated August 9, 1949. 386 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Before 1958 the Respondent and the Union had a history of successful bargain- ing negotiations, entering into separate contracts for each of the three classes of employees mentioned above. The Union had never struck the Respondent's properties. The three contracts between the Respondent and the Union were due to expire at midnight on May 15, 1958. The parties were unable to negotiate new contracts at meetings held starting on April 28, 1958, and ending on May 15, 1958. The next meeting was not held until June 30, 1958. When agreement on contracts was not reached at this meeting, the Union called a strike starting at 12:01 a.m. on July 2, 1958. The employees were still on strike at the time of the hearing herein. It is undisputed that the strike was economic in its inception. However, the General Counsel contends that on July 26, 1958,1 the strike was converted into an unfair labor practice strike. B. The alleged refusal to bargain 2 There is no issue in the case as to the three units alleged to be appropriate in the complaint. The Respondent's answer admits this allegation. It also admits that the Union represented a majority of the employees in each of said units at all times prior to October 17, 1958.3 The first bargaining conference between the parties was held on April 28, 1958. At this meeting the Union presented written proposals, which among other changes in the existing contracts called for general wage increases and a "disability and retirement plan." At another meeting held on April 30, 1958, Thomas Samuel Reece, vice president and general manager of Respondent, proposed that the exist- ing contracts be extended for a period of 1 year without change. In substance, he told the Union's representatives that it was futile to discuss any of the Union's proposals such as "vacation allowances, paid sick leave, or time and a half pay for holidays," which involved increased cost to the Respondent, in view of its poor financial condition. In this connection the Union was advised that during 1957 the Respondent "in operating revenues before taxes had approximately a little more than $13,000. Of the $13,000, $9,000 represented the sale of buses, which meant that less than $5,000 operating revenue was the year end results" 4 and that the Respondent had "approximately a $50,000 greater loss" for the first 3 months of 1958 as compared with the same 3 months of 1957. Ted Morrow, a Federal conciliator, was present at the meetings held on May 14 and 15, 1958. The positions of the parties were the same, and it does not appear that any counterproposals were made. The fact that the contracts were due to ex- pire at midnight on May 15 was discussed. Reece proposed that the contracts be extended for a period of 60 days. The Union rejected this proposal and would agree only to "a day to day extension." The next bargaining conference was held on June 30, 1958. The Union stated at this meeting that it would consider putting into the base rates the amounts which were being paid under the cost-of-living clause [in the old contracts], which at that time was twelve cents an hour for hourly employees and six mills a mile for operators, let that become a part of an over-all twenty cents an hour and eight and a half mill increase, which had been in our original proposals which, in effect, would mean that the only cost to the company at that time would have been eight cents an hour for the hourly employees, maintenance and terminal, and a quarter of a cent a mile for the operators above what they were paying at that time. Then resetting the base for the cost-of-living as of the June 1958 i The complaint was amended as above. The complaint originally alleged the date as August 27, 1958. 2 The facts related herein in this connection are undisputed, except where noted. The Trial Examiner has considered the entire record, bat has set forth only those facts which be believes to be relevant and material to the issues involved 3 The above date apparently refers to the time that the Respondent began to resume operations and to replace the strikers * The General Counsel points out in his brief that the above net figure "appears to be inaccurate in the light of Respondent's own stipulation that the actual net figure was around $200,000" The Respondent stipulated to this figure "for Continental Bus System as a whole." The record shows that the division of Respondent known as "Continental Rocky Mountain Lines" is also a part of the Respondent's operation, and that said divi- sion is not involved in-the proceeding herein Reece testified that the figure of $200,000 represented "a consolidated return" which included Rocky Mountain Lines. CONTINENTAL BUS SYSTEM, INC. 387 index, putting into the contract, in writing, the disability and retirement plan which was already in effect, this fifty dollars per month,5 and setting a third week's vacation after some period of time which we were willing to come to an agreement on. The Respondent refused this offer . It offered the Union a counterproposal, in the form of a letter to the Union, which provided for increases of 1 mill per mile to operators and of 10 cents per hour to maintenance and terminal employees, 5 cents of which was not to become effective until May 17, 1959. The proposal also in- creased the allowances to operators for tire changes, meals, and rooms and increased the "semi-monthly guarantee to $82.50." Reece requested that the Re- spondent's proposal be made known to the employees; and stated that "there would be less and less to offer as time went along" if a strike occurred. The Union rejected the Respondent's offer. As stated above, the strike commenced at 12:01 a.m. on July 2, 1958. On July 26, 1958, Reece sent a letter to the Union. Copies of the letter were sent to all employees, together with copies of the Respondent's proposal of June 30. The letter reads as follows: At 4:30 P.M. June 30, 1958, which was our LAST meeting BEFORE and SINCE the strike was called by you, a written proposal from the Company was handed to you individually. Our proposal was given after long and serious consideration of the Com- pany's position financially and otherwise. I advised you then and during negotiations that we could reach that point of improvements to our employees' wages only if no strike was called. I further advised that the damages from a strike would cause less and less to be available for everyone. Mr. Connally telephoned me the evening of June 30, 1958, advising that the executive committee decided that the proposition made would not be offered to the membership for their vote. I therefore understood then and I understand now that the offer was rejected. The purpose of this letter is to advise you that since I have not withdrawn the offer made I must, for the clarification of all, advise you the following: (a) The Company offer of June 30, 1958 will remain tendered to you and the membership through July 31, 1958 with one exception, i.e. the effective date of the contract and the effective date of the rates will begin the date of contract execution and ratification. (b) Further negotiations or proposals after August 1, 1958 on the part of the Company will necessarily be controlled by conditions as they exist at that time. Under date of August 14, 1958, the Union sent a letter to Conciliator Morrow, complaining about alleged inimical conduct of "Management personnel of Conti- nental Bus System, Inc. and men whom we believe to be agents of the Company," and suggesting that another bargaining meeting be arranged . On August 18, 1958, Reece sent a letter to Morrow, in which he referred to the above letter of the 5 The above disability and retirement "arrangement" was put into effect after the bar- gaining negotiations between the Respondent and the Union during 1956, pursuant to an oral understanding between Reece and John W. Connally, a member of the executive board of the International Union. Concerning his talk with Connally at the time, Reece testified credibly and without contradiction, I told Mr. Connally . . . that I would see if we couldn 't give them $50 a month . . . but on a voluntary basis , not having to do with a contract , not having to do with the union or an agreement ; that I would put in such an arrangement where em- ployees who for age couldn't work, had to quit work or for employees who became totally disabled, regardless of their age, that we would put them immediately on a $50 basis and that we would carry that situation on as long as the company was able to do it, that once we established that arrangement in contrast to the emer- gency deals which we would carry on too, that we knew we would never cut off a person who had been put on that unless the company went out of business But not knowing what the ultimate cost might be, I would take it on the basis of doing it as long as it could be done There was no-it was specifically understood there would be no contract or no agreement, that it wasn 't an agreement , it was just a discussion between he and I as an aftermath of the discussions that already had been concluded We had concluded our discussions on the basis that we had not instituted any retirement or disability program. 388 DECISIONS OF.NATIONAL LABOR RELATIONS BOARD Union and suggested a meeting "where all of Continental's employees are invited, where the Executive Committee, the Conciliation Service and the Company are represented," stating that the Respondent would arrange for a place for such meeting and provide transportation "for all employee members." Copies of Reece's letter were sent to all employees. As a result of the above, a meeting between the parties was held on August 27, 1958, at Morrow's office. The Respondent's suggestion for a meeting with the employees included was discussed. The Union would not agree to such a meeting. It again offered its oral proposal which had been submitted at the meeting held on June 30. The Respondent rejected the offer and submitted a written proposal for the Union's consideration. The letter accompanying the proposal reads as follows: After fifty seven (57) days of strike against the Company on the part of Local 1142, its members, officers and as directed by the International, the Company finds it necessary to adjust its wage pattern because of the losses created by the strike We incurred losses from January through June of this year, which I explained to you during our negotiations, and now we must add to those losses the cost of the strike. During negotiations and in the presence of the Conciliator, I stated that if a strike was called by you, the Company would have less and less to offer according to the length of the strike, because at that time we had incurred heavy losses during 1958. Adding the burden of a strike could only make the position of the Company worse from the standpoint of money with which to ineet its obligations, including wages. I hand you herewith our proposal of this date, August 27. This offer shall remain good through September 14, 1958. The Respondent's proposal offered basic wage rates which were lower than those set forth in its proposal of June 30,6 and eliminated checkoff of union dues, arbitra- tion, and the cost-of-living clauses contained in the old contracts 7 The Union rejected the Respondent's proposal in a letter to Reece dated September 10, 1958.8 The parties met again on September 16, 1958, in the office of Federal Conciliator Walter White The Union made an oral proposal which reduced its proposal of June 30 by a half mill per mile for operators and by 1 cent per hour for terminal and maintenance employees.9 The Respondent rejected the offer. Reece then proposed that the employees be permitted to vote "by U S mail ballot with the ballots to be returned to the Federal Mediator's office" on a proposal which he would submit. The Union's representatives stated that the proposal should be submitted to them first Hunter then told Reece that "some months prior . the membership voted that no future offers . . would be taken by U.S. mail, and that any offer that was made by management would be brought before meetings of the membership, and that they would vote on them by ballot in these meetings." Under date of September 26, 1958, Reece sent a letter to all employees in which he referred to the meeting of September 16 and to his suggestion to permit the em- ployees to vote by mail on the Respondent's proposal. Copies were sent to the Union and to Conciliator White. The letter concludes in part as follows: However, I further advised Mr. Hunter that since he would not use the secret ballot system and would not put to vote my proposal without it meeting his approval first, I would therefore tender to Local 1142 a final proposition and, not knowing what he would do regarding any type of vote to be taken, that I intended to furnish each member a copy of the proposal in order that they would have all of the details involved, whether they had an opportunity to vote or not. I further advised Mr. Hunter that, in any event, the Company intends to resume service at an early date. 8 The proposal provided foi the "base rates of last contract" with increases of 5 cents per hour in September 1959 and September 1960 for maintenance and terminal ein- ployees As for operators, it provided for 0 070 cents per mile in September 1958, 0 0715 in September 1939, and 0 0725 in September 1960 The 0 0725 rate was the rate offered for the operators in the proposal of June 30, and the 0 070 rate was 11/ mills below the rate paid at the start of the strike 7 The three above benefits had been in all contracts for a number of years 8 The Respondent answered the above letter by letter dated September 10, 1958, with copies thereof sent to the employees. Charles W. Hunter, secretary-treasurer and business agent of the Union, testified credibly to the above. CONTINENTAL BUS SYSTEM, INC. 389 Reece sent a letter to the Union dated October 10, 1958 Copies were sent to Conciliators White and Morrow and to all employees. The letter refers to Reece's letter of September 26, 1958, and states that the Respondent was preparing a "FINAL offer." The letter concludes as follows: This offer will be delivered to you Monday morning, October 13, 1958 and will expire at 5:00 p.m., Thursday, October 16, 1958. In the event you see fit to afford the membership a secret ballot by U.S. mail, this time limit will be extended, upon request. Knowing that you have Committeemen throughout the System, it is felt that if you have any inclination to vote this offer by the membership, regardless of the manner used, it can be accomplished through instructions to your Com- mitteemen by telephone to proceed immediately In each place, the members will have copies of the offer in time to represent themselves as to the merits of accepting this offer and return to work or by their rejection. On October 13, 1958, Reece called Olvin E. Elsik, president of the Union, and arranged to meet him in front of the Respondent's terminal. Elsik and Hunter met Reece at about 9 a in ; and Reece gave them the Respondent's proposal.iO Elsik and Hunter told Reece that they would arrange for meetings of the Union's members so that they could consider the Respondent's proposal, and that they "would try to set up these meetings in such a manner as to wind them up" in time to meet the deadline specified in Reece's letter of October 10. The Respondent's proposal restored arbitration and the cost-of-living clauses in all three contracts. However, the cost-of-living proposed provision was to begin with "the October, 1958 Index," which automatically wiped out the amounts paid under the clauses in the expired contracts. Taking into consideration the lost cost- of-living benefits, the Respondent's proposal meant a decrease in wage rates from the rates paid as of the start of the strike; but it represented an increase over the rates contained in the Respondent's proposal of August 27. The Union held meetings for its entire membership. The employee members rejected the Respondent's proposal. However, the Union was unable to count the ballots before the Respondent's deadline expired, because it was enjoined from doing so by court order." It notified the Respondent at a later date as to the results of the vote It did not request an extension of the Respondent's deadline On October 17, 1958, Reece sent a letter to all employees. He stated that the Respondent was "resuming operations with such employees as may choose to 1° The Respondent sent copies of the proposal to all employees The covering letter, dated October 13, 1958, reads as follows As indicated to you in my letter of September 26, I have this date delivered to the officers of Local 1142 the FINAL Company offer We feel that regardless of the handling given by the Union, by you, or both, it will be a turning point for all employees of Continental Bus System and that you should therefore remember the following On May 17, all contracts expired You worked from May 16 through July 1 without a contract, and, as you can best testify, nothing was changed or disturbed On July 2, you left your work and your pay On July 2, both your work and your pay were available and waiting for you We regret exceedingly the hardships and misfortunes that you and your families have experienced during the strike We regret the loss of business to our competition and the years of hard work by all of us that it represented We regret the long period ahead to be consumed in climbing the hard way to get back to our position of July 1, 1958 We do not accept any blame or responsibility for what has happened, the Company did not leave you i Our experience of the past four months has shown us that, while all of you made the strike possible, only a few are responsible for its continuance We feel that every man has responsibilities and we know of none greater than man's responsibility to his family, to -himself and his obligations I enclose your personal copy of our FINAL offer to the Union for you to use as you see fit The evidence shows that a number of the letters were mauled to employees on October 12 UThe evidence shows that the Respondent was not involved in the above matter Reece was subpenaed as a witness 577684-61-vol 128-26 390 DECISIONS OF NATIONAL LABOR RELATIONS BOARD return to work"; that "The wage scale, classifications and allowance set out in my letter of October 13, 1958 to the Union will prevail. Seniority will be preserved"; and that the employees could "consider this letter as our request and instruction" to report for work on October 20, 1958. In a news release, issued by the Respondent on October 17, 1958, and distributed to "City Officials of all on-line cities all media and wire services," it is stated, "We intend to remain in business, and those of our employees who do not return to work will necessarily be replaced. Those who return will be fully protected as to seniority." i2 Meetings between the parties were held on October 30 and November 11, 1958, in the office of the Federal Mediation and Conciliation Service. The Respondent arranged for 'a reporter to make transcripts of these meetings. At the meeting on October 30 the Respondent charged that the Union had not withdrawn from any of its demands made in its original written proposal which was submitted on April 28, 1958. The Union disputed this, stating that it had made oral proposals.is When asked, Reece stated that since the Respondent had resumed operations, employees were being paid the rates specified in the Respondent's last proposal. The Union proposed orally that it would "recommend to the membership a settle- ment if all of the conditions existing in the contract at the time that the strike started would be restored"; that the "basic wage would continue through May 15, 1959"; that the employees receive wage increases on May 16, 1959; and that the vacation and retirement provisions in its original proposals be included. Reece rejected .the offer, pointing out the financial inability of the Respondent to meet "the cost involved" and the fact that new employees had been hired. He stated that the Respondent's final offer of October 13, 1958, was still open to the Union "with the conditions to be reckoned with . . . and that is as to the employees who have returned and the employees who have been hired, and that is a question that has got to be handled through counsel, because it has many ramifications; but those people have got to be taken care of." The positions of the parties did not change at the meeting held on November 11, 1958. The Union demanded that "a prerequisite of settling this strike would be on a number 1 basis that all employees be restored to their former position" according to their seniority. Reece replied that the employees who had been hired since resumption of operations must be retained on the job. The parties held an "off the record" meeting on November 18, 1958. Another meeting was held on November 25. The Union made two proposals at this meet- ing, one oral and the other in writing. In each proposal the Union reduced its wage demands slightly. The written proposal also provided, "All other provisions of all three contracts to remain the same with the exception of the . . . time pro- gression elements as set forth in the Company's letters of October 13, 1958, which shall be applicable." Reece rejected both proposals and stated that he would pre- pare another proposal of the Respondent to be submitted at a later meeting. The final meeting between the parties was held on December 3, 1958. The Re- spondent submitted a written proposal which contained the same rates of pay as those specified in the Respondent's proposal of October 13, 1958. It offered to establish an "incentive pay plan" whereby employees "will receive additional pay above their base rates if the Company receives improvements to revenues above its operating expenses." It eliminated "cashing of checks" and "check-off union dues" in all three contracts, and "Article X, Section 8, in the Terminal contract." 14 The proposal also provided for the recall of strikers and their seniority, with different provisions for each of the three classes of employees. In each instance, however, the striking employees who were to be recalled "on the date of contract execution" would retain their seniority; but those strikers not recalled at that time would have seniority after the replacements hired since July 2, 1958. By letter dated December 20, 1958, the Union rejected the Respondent's proposal. In addition to the above facts concerning the negotiations, the General Counsel presented evidence which he contends establishes "two separate instances of indi- vidual bargaining" in violation of Section 8(a)(5) of the Act. One such instance sa The above release and another issued at about the same time give the Respondent's version of the negotiations and events leading to its decision to resume operations. 13 As related above, at the meeting held on Tune 30, 1958, the Union stated that it would "consider" changing its original wage demands. The Union made the same offer on August 27, 1958. 14 The above section concerns "seniority districts " The section also was eliminated in the Respondent's proposal of October 13, 1958 It was discussed between the parties at subsequent meetings, at which Reece explained that the reason for the change was the anticipated building of a new terminal. CONTINENTAL BUS SYSTEM, INC. 391 involved two supervisory employees of the Respondent, namely L. R. Peek and Bennie Rhodes, division superintendent and foreman of Respondent, respectively. Striker Otis Cannon had a conversation with Peek and Rhodes on about November 15, 1958, in a restaurant near the Respondent's terminal in Wichita Falls. Concern- ing the conversation Cannon was questioned and testified as follows: Q. All right, now, tell us of the circumstances, did you go in and seat your- self, or what took place, just relate the circumstances as best you can. A. Well, I sat down at the counter on a stool and had my coffee, and as I got up to leave I saw them sitting over in a booth. Q. What happened then? A. They spoke to me, and we had a friendly conversation, and they asked me to sit down, and Mr. Peek asked me when I was coming back to work. Q. You sat down at their invitation? A. Yes, sir. Q. Tell us what the conversation was. A. And Mr. Peek asked me when I was coming back to work and I told him under the condition things were in now I couldn't come back to work. Q. Did you explain in this conversation what you meant by that? * * * * * * * A. I told him I didn't feel like l could come back to work and go up and down the road and face the friends I have known for 20 years and have them call me names. * * * * * * * Mr. Peek told me I could come back to work if I would come down in a group to Dallas and settle with Mr. Reece, and go back to work, but that Mr. Reece was not going to settle with the union, and I told Mr. Peek I couldn't understand what was holding the settlement up, if it was a dispute between the company and the union I thought it a shame that all of us hundreds of people were being held out of work, that I thought somebody could shake hands and get things settled and get back to work and start building a bus line. Q. Pardon me, are you through? A. At that point Mr. Rhodes spoke up and said, "Mr. Cannon is right," and Mr. Peek said the only way we could settle would be to go in a group to Mr. Reece and Mr. Reece was not going to settle with the union. Peek denied the remarks attributed to him by Cannon. Peek testified to the following: Well, when he walked up he started talking about burning up a roast out at his house a day or two before and he had been batching, so he said, and he was talking about having to repaint his kitchen, and then he got around to the point of saying, "Mr. Peek, when are you going to let us go back to work," and I told him, "Now, you have Mr. Reece's letter," and he said, "I was late re- ceiving my letter due to the fact my wife was gone and had the car and I didn't get to come to town for two or three days and as a result I didn't receive my letter at the proper time," and I said, "Well, what the letter said still applies." * * * * * * * Mr. Cannon was talking about he wanted to go to work and I told him, I said, "Well, Cannon, all you have got to do is report and you can go to work," and he said, "Well, I don't want to report by myself." He said, "I don't want to be the only one to go down there," and I told him at that time, "You can go by yourself or go in a group and report for work." Mr. Cannon was talking about the new men the company had employed and he said, "If the company would get rid of the new men and make the old men the original offer that was offered back the first of July when the strike occurred," that he felt like all of the men would accept it and they would go to work, and I told him Mr. Reece was not going to make an offer on that basis. * * * * * * * On the basis of the original offer of July the 1st and firing the new employees that were put to work. Rhodes testified substantially the same as Peek in this connection. He testified that when Cannon said he did not want to go to work "by himself," Peek replied, "Well, if you want to come to Dallas and go to work you can, or you can come in a bunch and go if you want to." During cross-examination Rhodes testified that 392 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Peek told Cannon that he could see "Mr. Welch or Mr. Brown" if he wanted to go to Dallas and apply for work. Peek impressed me as a reliable and credible witness, and I credit his version of the above conversation. There are no important conflicts between his testimony and that of Rhodes. In my opinion, Cannon's testimony to the effect that Reece would not "settle" with the Union was merely his conclusion of Peek's remarks. The second instance claimed by the General Counsel to be individual bargaining involves Bartram Wayne, a striker and former business agent of the Union, and Sidney Rudd. A dispute exists as to whether or not Rudd is a supervisory employee within the meaning of the Act. Rudd worked for the Respondent as a bus operator for about 14 years and until about September 1946. From that time until October of 1958 he operated his own bus company in Fort Worth. During the early part of October 1958, he applied to the Respondent for a job as a bus operator. On October 18 Rhodes notified him that a job was open for him as a "supervisor" on the Respondent's "training program." Rudd started work on October 20, 1958. Concerning his work, Rudd testified that he taught "drivers how to drive the bus, handle tickets and baggage"; he worked as a "driver instructor or supervisor, whatever you want to call it"; at times he drove buses and "helped with the baggage and express"; he "painted a couple of restrooms, laid a little linoleum, fixed some swinging doors"; and he had "no connection with hiring" of employees. Rudd and Wayne were friends for about 22 years, and their wives were "very close friends." At times they visited one another in their homes. It is undisputed that during the strike and until October 18 Rudd had a number of conversations with Wayne during which he urged Wayne to return to work for the Respondent. It is also undisputed that they had conversations on October 18 and 22 Wayne testified that on October 18 Rudd came to his home; Rudd said "as of this day I am an employee of Continental Bus Company, supervisory capacity temporarily. . . . How about you coming back over and going to work"; when he said he was "not interested," Rudd replied "0 K., if you are that hard-headed I will let you alone", and Rudd said that "management had the upper hand" and the Union would lose "in the long run." Concerning the conversation on October 22, Wayne testified that he and his wife were invited to Rudd's home; that Rudd said, You just as well make up your mind now you have lost the strike and you haven't got a chance to win it. . . I don't think you could go back over there right now and get your own seniority yourself. . . I will tell you what you can do, you have been business agent of this local and some of the boys respect your opinion and have got a little confidence in you . . you can go out here and call up 14 or 15 of them and go back over there with them . . . you would probably get your seniority back and possibly a super- visor's job later on; that he told Rudd that he was "not interested"; and that Rudd told him that he had hired a mechanic by the name of Rhoden that day Wayne further testified that the following took place at the end of the conversation. I was getting ready to leave and Sidney asked me and says, "Well, are you going back over there with me in the morning," and I said, "No, Sidney, I am not going " He said, "I will give you a hundred dollars to go over there with me in the morning," and I said, "No, I am not going," and he said, "I will give you two hundred," said, "Three hundred-" he spoke to my wife, and told her to go back to the highboy and get his purse, and he said, "I will give you three hundred dollars." I said, "No" He said, "How much will it take to get you over there," and I said, "You and Continental both haven't got enough money to get me to go back." He said, "I am going to get on the telephone and hire me a 40-year old bus driver." Rudd admitted that on October 18 he had urged Wayne to return to work, as he had done on previous occasions. He testified that he did not go to see Wayne pursuant to instructions or suggestions from anyone connected with the Respondent, but because "I always considered Bert Wayne a friend of mine . . and I thought he had made a mistake and I thought I was helping him " He denied the statements attributed to him by Wayne in connection with the offer of money He admitted that he offered money to Wayne, but in explanation testified as follows: CONTINENTAL BUS SYSTEM, INC. 393 Bert Wayne on several occasions, at least five or six different occasions, had told me and discussed with me in asking him or trying to get him to come back to work for the company, long before I went to work for the company myself, that he was going down to Bert & Steve's and get a job driving a cab, and he was telling me some of the money the boys was making, and I happened to know they didn't make that kind of money because I had used employees from there recently in my own company that had worked down there and they used to tell me what kind of salary they made, and I just hated to see Bert Wayne go down there and drive a taxicab for a living, not that that is dishonorable or anything, but for some reason I hated to see him do it, and I told him "Bert, I hate to see you go down there and drive a cab," and I said, "If you need a hundred or two or three all you have to do is ask for it and I will let you have it." That isn't the first time I had offered him money. During cross-examination Rudd was questioned and testified as follows: Q. In any of these conversations you had with Mr. Wayne did you ever mention the fact that you would like for him to talk to anybody else about having that particular driver return and work for the company? A. Not any particular driver. I told him on several occasions prior to the time I went to work for the company I thought he ought to get a bunch of them and go to work. Q. Let's be specific as to October of '58. Did you in either of these conver- sations in October of '58 repeat that to Mr. Wayne that you thought he ought to get a bunch of these employees and get them to come back to work? A. I don't remember specifically on those last two conversations. I wouldn't deny saying it. I just don't remember it on that particular occasion, but I will admit I asked him several times, "Why don't you get a bunch of those boys and come back to work where you belong." Q. It could have been repeated in October '58? A. Yes. From their demeanor as witnesses, both Wayne and Rudd impressed me favor- ably. Rudd was not evasive, and the explanations that he offered appear plaus- ible, especially in view of the admitted longstanding friendship between him and Wayne. Accordingly, from the above testimony, standing alone, I am unable to determine who is telling the truth in this connection. The Respondent was not responsible for Rudd's remarks on October 18, since he was not in its employ as of that date. Further, in my opinion the General Counsel failed to prove that Rudd was a supervisory employee within the meaning of the Act, unless Wayne's testimony is credited. This I am unable to do for the above reason. Rudd did not deny specifically that he told Wayne that he had hired a mechanic; but he did testify to the effect that he did not have anything to do with "hiring," on which point he was cross-examined. During cross-examination Rudd admitted that "last week" 15 he had a conversa- tion with striker Ray Haggard, but denied that during that conversation he had asked Haggard to return to work or had told him that he would lose his seniority unless he returned to work. He testified that at about the time he was reemployed by the Respondent, or shortly before, he had talked to Haggard about his seniority. For impeachment purposes only the General Counsel called Haggard as a witness. Haggard testified that he had two conversations with Rudd, one about "two or three weeks" after Rudd had returned to work, and the other on May 29. As to the first conversation, Haggard testified as follows: Well, he called me and said he was looking over the seniority roster and found my name on there. He wanted to know why I wouldn't come back to work. He said, "You know you are going to lose your seniority; you know you are fighting a losing battle. You can't win." And he went on to say, after I refused to come back, he said, "How much would it take to get you to come back?" I said, "Mr. Rudd, how much money does Continental have?" He said, "I don't know." I said, "Well, they don't have enough." One word brought on another one, but we talked about forty minutes about going back to work. I don't recall the exact words. I didn't think it was important at the time or I would have gone and carried it on further than I did, but it got kinda next to me and I blew my top too quickly, I think. "Rudd gave the above testimony on June 4, 1959 394 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Haggard testified that during the conversation on May 29 Rudd asked him why he did not return to work and told him that he would lose his seniority unless he did. Called in surrebuttal, Rudd testified that he and Haggard had been "pretty close friends for some twenty or twenty-five years." He denied the remarks attributed to him by Haggard. I do not credit the above testimony of Haggard. Rudd was present at the hearing during Wayne's testimony and knew that he probably would be called as a witness. He appeared to me to be an intelligent person; and I do not believe that he would have engaged in a conversation on May 29, such as that related by Haggard. Fur- ther, insofar as the Respondent was concerned, Haggard could not have retained his seniority by returning to work at that time, since the conversation took place long after the Respondent had resumed operations. In fact, the record reveals that this point of seniority was one of the main issues blocking settlement between the Union and the Respondent. I find that the General Counsel has failed to prove that the Respondent refused to bargain in violation of Section 8(a) (5) of the Act. In brief, the General Counsel contends that the record shows that the Respondent did not want to reach an agree- ment with the Union, and that the Respondent did not bargain in good faith. Contrary to the General Counsel's contention, I believe that the record discloses that at all times the Respondent made reasonable efforts to reach an agreement with the Union. At the start of the negotiations the Respondent proposed a renewal of the old contracts. Reece explained that the Respondent was financially unable to meet the Union's demands and that there would be "less and less" to offer in case the Respondent's financial condition was further damaged by reason of a strike. However, faced with a strike on June 30, 1958, the Respondent did offer slight increases in the wage scales. This fact indicates that the Respondent was anxious to reach agreement, at least as of that time. At the start of the strike there was an impasse on wages. Although each side had withdrawn slightly from its original position, the parties were still far apart. On August 27, in accordance with its warning, the Respondent submitted a proposal which offered less insofar as wage rates were concerned than the proposal of June 30 offered, and which eliminated arbitration, checkoff, and cost of living. On October 13 the Respondent submitted a proposal which restored arbitration and cost of living and which increased the wage rates as set forth in its proposal of August 27. This again does not sound like a company which does not want to reach an agreement.ie The failure to agree to put in writing the pension and disability arrangement or plan which was in effect ordinarily would constitute a refusal to bargain. However, the record shows that this plan was not part of a contract, oral or otherwise, between the Union and the Respondent. When it was inaugurated, Reece explained that he could not make it part of the contract because the Respondent did not know the cost involved or if it could afford to continue with it. Certainly, at the times in- volved herein, the Respondent was less able to obtain an answer to these questions, in view of the short time that the plan had been in effect and of the Respondent's financial condition. In any event, for the latter reason and since the plan unques- tionably involved a major money item, I do not believe that the Respondent's refusal to reduce the plan to writing showed any bad faith or refusal to bargain on its part. Contrary to the assertion in General Counsel's brief, the record does not show that the Respondent refused to discuss this subject. Withdrawal of benefits, such as checkoff and arbitration, indicates bargaining in bad faith. However, this is not conclusive. The withdrawal of the cost-of-living clause on August 27 is understandable in view of the unquestioned damage to Re- spondent's financial condition because of the strike; and is no different than the Respondent's reduction of the proposed wage rates. Insofar as arbitration and checkoff are concerned, I believe the General Counsel would be correct in his contention, provided that the parties were not so far apart at the start on wages and at the end on the question of the seniority of the strikers. Under the circumstances, I believe that the proposed withdrawal of these benefits might be classed as bargaining strategy. The Respondent's restoration of arbitration at a later date indicates that such was the case. The General Counsel contends that the Respondent engaged in "individual bar- gaining" and "bargaining by edict." The record discloses that the Respondent at 16 As related above, the rates set forth in the proposal of October 13 meant a decrease from the wages paid as of the start of the strike, because of the new cost-of-living clause. CONTINENTAL BUS SYSTEM, INC. 395 times requested the Union to poll by ballot its members . 17 However, the Respondent did not condition its proposals on the Union's acceptance of the request. The Respondent sent letters and copies of its proposals to the employees and issued news releases. I do not believe that such correspondence or news releases suggest individ- ual bargaining or bargaining by edict. They merely make a report on ,the history of the negotiations. The Respondent's proposal of October 13 was not conditioned on the Union's acceptance of a poll of its members. The Respondent set a time limit on acceptance of the proposal . This also is understandable in view of the fact that the Respondent intended and did resume operations shortly after the expiration date. However, the Respondent's letter of October 10, 1958, stated that the limit would be extended, "upon request," provided that the Union afforded its membership "a secret ballot by U S. mail." As related above, the Union did not request an extension of the time limit. Under all of the circumstances I do not believe that the above consti- tutes bargaining by edict. C. Alleged surveillance During July 1958, the Respondent retained the services of C & I Protection, Inc., herein called C & 1, to furnish "janitor service .. . patrol service , guard service .. . various types of escort service and generally any and all types of protective services that might be required under the conditions . . at the time." Andrew L. Smith testified without contradiction that "through stock" he is con- nected with Smith Detective Agency, C & I, Truth Verification , Inc., herein called Truth, and other protective organizations and corporations ; that he appoints the presidents of these companies ; that Shelly H. Baker is president of C & 1; that Lee R. Keener is president of Truth; that he determines the policies of "most all" of the companies ; that one such policy was not to investigate matters generally as between union and management; that when threats of violence were received against personnel of any of his companies or against personnel or property of any protected company, Truth was called upon to investigate to the fullest extent possible; that when he received a subpena to appear as a witness in the instant proceeding, he had conversations with Baker and Keener; and that from them he learned that because of a threat received by Baker, Truth had conducted an investigation which had in- cluded the "bugging" of rooms occupied by John Connally, general executive board member of the Union , at the Travis Hotel in Dallas.18 The "bugging" device referred to in the record is a small broadcasting device. Its transmission can be picked up by any standard shortwave receiver . At the hearing it was stipulated that between August 16 and October 22, 1958, Truth had placed bugging devices "in one or more rooms at the Hotel Travis." Karl Rebstock, a detective of the Dallas Police Department , testified without con- tradiction that on or about August 21, 1958, he was employed by Keener to perform some work ; that he was told to report for work in a certain room in the Travis Hotel; that when he reported he was met by an employee of Truth who told him that he was "to follow" an official of the Union who occupied an adjoining room; that one man in the room "took a pair of earphones out of a gray flat box" and stated that he was going "to attempt to listen through the wall"; that the following morning he reported to the same room in the hotel where he met Keener; that he The record shows that the Respondent stated its belief during the negotiations that the Union was using it as a lever in its negotiations with other bus companies and did not wish to reach agreement In its answer the Respondent alleges as follows On the contrary, the Union prior to July 1, 1958, and at all times subsequent to August 27, 1958 until on or about the 30th day of October , 1958 failed and refused to bargain in good faith with the Respondent In this connection Respondent shows that the Union did not desire to secure contracts with the company covering the affected employees (and therefore did not attempt to secure such contracts or to bargain in good faith in connection with the securing of such contracts ) until such time as satisfactory contracts could be secured by certain labor organizations with another bus company known as American Buslines, Inc and still another bus opera- tion known as the western Division of Transcontinental Bus System. ' As to the scope of the investigation and the reason for it, Smith testified, I think Mr. Reece's office was bugged at some time or other we had conversations bugged all over town . We were following witnesses every place we were trying to do one thing , is to find out who in the told one of my executives that they were going to run over his child and his wife with an automobile , when that is one of the best ways the Maffia has to put fear into anyone who is going to protect an industrial plant. Now, that is a real threat to me and it was probably a real threat to Mr. Baker. 396 DECISIONS OF NATIONAL LABOR RELATIONS BOARD saw a "tape recorder" in the room at the time; that Keener instructed him to follow the union official in the next room; that he followed the man until about 11 a.m.; that Keener then instructed him to call "the airlines at Love Field . . . to see if this man had a reservation to a certain city in Texas"; that later he met Keener at Truth's office; and that Keener had the tape recorder at the office.is Connally testified, in substance, that he participated in negotiations between the Union and the Respondent; that during that period of time he stayed at the Travis Hotel in Dallas; that on October 20, 1958, he found a bugging device in the bed- springs in his room; that thereafter he found in each of the three or four rooms he had previously occupied a slit on the underside of the ticking of the bedsprings, similar to the one in the bedsprings in the room where he discovered the device; and that during his stay at the Travis he had numerous conversations with members and officials of the Union. Reece testified that on about three occasions, all within a short space of time and starting in September, Keener came to his office in order to get him to identify voices on some recordings; that in each instance he identified only the voices of Connally, Elsik, and Hunter (all officials of the Union; and that Keener men- tioned Baker when making his first request for identification of voices. In this connection Reece was questioned and testified as follows: Q. Did you listen to the records-to the recordings? A. No, sir, I listened to parts of the recordings that he turned over for me. Q. Well, can you recall what was said on these recordings? A. No, sir. Q. Were you paying any attention as to what was being said? A Not particularly because he had the areas that he wanted me to listen to marked and he played that section and many times it had to be repeated because it was so goofed up and almost impossible to hear, or inaudible, I should say, that it was very difficult to discern or determine anything. Q. Did Mr. Keener tell you how these recordings were obtained? A. No, sir. Q. Did you make any inquiry as to how they were obtained? A. No, sir. As a matter of fact, I resented at that time and have since the necessity for his asking me to listen. It was in connection with his business and for that reason and that only did I lend my services to try to identify specific voices for him. Q. Did Mr. Keener at this time ask you why he wanted you to identify- A. Sir? Q. Did Mr. Keener ask you why- A. No, sir, he didn't ask me, he may have told me. Q. Did he tell you? A. I told him I didn't want to know what his purpose was beyond the fact that he said for their own needs they needed identification of certain voices. Q. He didn't state that because of these so-called threats to Mr. Baker? A. No, sir. The record discloses that C & I billed the Respondent monthly for "guard service" for the months from July through October 1958, inclusive. In addition, C & I sub- mitted separate bills for "services rendered" on October 1 and November 1, 1958, in the amounts of $3,732.05 and $2,255. Reece testified that these two bills also were for "guard service and the attendant things that was involved... . They were for guard service and the patrol service, and so on. . Concerning the need for and the amount of guard and patrol service, Reece testified: I don't know how many they had, but you must remember that the need of these guards were two or three fold; number one, for continuous guard service and the protection of property and the general activity, and then the need for reinforcements or additional dependent upon the amount of activity that was developed because of the strike. * * * * * * * Well, here, we had concentrations of cars and men, three, four, five, six cars, carloads of striking employees that would congregate for reasons best known to them, but in the area of the shop or the gates or around the entrance 19 The record reveals that on Aueiist 20, 1958, Connally and Keener were registered in adjoining rooms at the Hotel Travis. CONTINENTAL BUS SYSTEM, INC. 397 to the place, and it was the arrangement for the guard service to keep these conditions under surveillance and call for as many people as they might need in order to have record and knowledge of what was happening and to take care of the situation, whatever it might turn into. I think the patrol service ran parallel to the need for increasing or diminish- ing the amount of guards or the amount of additional protection that was required. As a matter of fact, the patrol service was stepped up considerably after we went into business with respect to following buses in and out up to the corner, and so forth, to be in the area or the vicinity all the time. In order for the protection-originally when the strike started, in order to protect the property and after all there was several million dollars worth of property involved, and in order to protect the people that were still on the property, which we have a general office with many people there serving other companies, the arrangement was set up for an orderly protective service, gen- erally speaking for any and all eventualities. Now, that was in an orderly fashion, we can say, until such time as for some reason that I couldn't explain there would be concentrations of employees at a given time around these gates, and so forth, generally speaking in the night. After that, when we had finally determined as late as early October that we were going to have to go back into business with or without the union, then the activity stepped up again because in that time we began the hiring of re- placements, and following that period then was the institution of service when it stepped up very briskly, and in connection with that it was certainly the company's intention to go as far as they could go and leave no stones unturned with respect to keeping as much order as possible and in the event of violence and trouble or wrecks or anything else that occurred as a result of the picket that we would be as close to it as we could from the standpoint of trying to have the proper knowledge of the people that were involved in order to carry through the proper prosecution for such acts of violence, and, naturally, that was around-the-clock proposition, and naturally these people were the ones that were equipped to handle it and the matter was left in their hands at their discretion to use many or as few as the circumstances required. It is for that reason I can't tell you on a given night how many patrols were called, how many guards were called, what type of activity took place at a particular time. I can only say to you that there was a great deal of that extended over a long period of time but more particularly during the period of training and after service was begun. The General Counsel urges in his brief that an inference should be drawn from the above evidence to the effect that Truth was acting as the Respondent's agent for the purpose of engaging in surveillance of the Union's activities. In support of his contention the General Counsel relies mainly on two facts, that the two bills for "services rendered" were not itemized and that Reece listened to the recordings when they were brought to his office by Keener. The fact that Truth engaged in surveillance of Connally, by bugging his rooms at the Travis Hotel at various times and by having him shadowed, is undisputed. How- ever, the record affirmatively shows, as pointed out in the Respondent's brief, that because of a threat received by Baker, president of C & I, Truth caused an investiga- tion to be made, including surveillance of Connally's activities; that the only pay- ments made by the Respondent were to C & I; that the first Reece knew of the bugging was when Keener requested his assistance in the identification of voices on parts of certain recordings; and that the Respondent neither authorized nor had anything to do with the bugging. This affirmative evidence is presented by exhibits and through the uncontradicted testimony of Reece and Smith. The question re- mains for the Trial Examiner as to whether or not such affirmative evidence should be disregarded and Reece and Smith discredited. From their demeanor as witnesses, Reece and Smith both impressed me favorably. Smith's testimony stands uncontradicted, as does Reece's in this connection. While Smith was verbose, he was forthright and not evasive or contradictory in his testi- mony. There are no conflicts between his testimony and that of Reece. Under the circumstances, while the evidence as a whole raises suspicions, I do not believe that the inference urged by the General Counsel is justified. For the above reasons I credit the above testimony of Reece and Smith and find that the Respondent did not engage in the alleged surveillance. [Recommendations omitted from publication.]