Bon Hennings Logging Co.

BON HENNINGS LOGGING CO. 97 Bon Hennings Logging Co., a Corporation and Clayton Knowles and Brotherhood of Teamsters, Warehousemen & Auto Truck Drivers, Local No. 684, International Brotherhood of Team- sters, Chauffeurs, Warehousemen & Helpers of America. Case No. 20-CA-1736. July 12, 1961 DECISION AND ORDER On May 11, 1960, Trial Examiner Martin S. Bennett 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 Interme- diate Report attached hereto. Thereafter, Respondent Bon Hennings Logging Co. filed exceptions to the Intermediate Report and support- ing brief. Pursuant to the provisions of Section 3(b) of the Act, the Board has delegated its powers in connection with this case to a three- member panel [Members Rodgers, Leedom, and Fanning]. 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 entire record in this case, including the Intermediate Report and the excep- tions and brief, and hereby adopts the findings, conclusions, and rec- ommendations of the Trial Examiner, with the following modifications : 1. We find, in accord with the Trial Examiner, that as Respondent Bon Hennings Logging Co., a corporation, hereafter referred to as the Respondent Employer, furnished services in excess of $50,000 to Roddis-Craft, Incorporated, a firm which meets the Board's direct jurisdictional standards, the operations of the corporate Respondent meet the Board's indirect jurisdictional standards.' We therefore find that it will effectuate the policies of the Act to assert jurisdiction herein. We further find that the above facts, which establish that the Board's indirect outflow standards have been met, also establish the existence of the necessary legal jurisdiction under Section 2(7) of the Act. 2. The Trial Examiner found that the Respondent Employer, Bon Hennings Logging Co., and Respondent Knowles, the Respondent Employer's foreman and agent, engaged in certain unfair labor prac- tices, as set forth in the Intermediate Report, including the discrimi- natory discharge of the Respondent Employer's truckdrivers. The Trial Examiner also found that under a lease arrangement purporting 1 Siemons Mailing Service, 122 NLRB 81. 132 NLRB No. 7. 98 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to establish Respondent Knowles as an independent proprietor of the trucking operations of the Respondent Employer, the trucking opera- tions had in fact been continued by Respondent Knowles as the agent of the Respondent Employer. We adopt these findings, which are amply supported by the record. The Trial Examiner recommended that the cease-and-desist pro- visions of the Order be directed against both Respondents. The Trial Examiner recommended that the Respondent Employer be or- dered to reinstate the discriminatorily discharged employees, and that both Respondents be made jointly and severally responsible for the payment of backpay. Because Respondent Knowles , as an agent of the Respondent Em- ployer, was an active participant in the Section 8 (a) (1) violations found, and in the discriminatory discharges, we shall direct the cease- and-desist provisions of the Order against both Knowles and the Re- spondent Employer.2 However, in the circumstances of this case, we do not believe that it will effectuate the policies of the Act to make Knowles personally responsible for the payment of backpay, as he was at all times in the employ and under the control of the Respondent Employer. As there has been no bona fide lease or transfer of assets to Knowles, assets available for the payment of backpay will be un- affected by the absence of responsibility by Knowles. Accordingly, we shall not direct the backpay provisions of the Order against Knowles. The Trial Examiner further found that certain alleged offers of employment as truckdrivers for Knowles, made to the discriminatees by Respondent Knowles while Knowles was purporting to operate the Employer's trucks, had no effect on the rights of the discriminatees to be reinstated by the Respondent Employer and receive backpay. The Respondent Employer contends that as the discriminatees refused Knowles' offers of employment, such refusals should bar reinstatement and toll the rights of discriminatees to backpay from the date of the refusals. There are, to begin with, a number of issues as to whether any of the alleged offers were unconditional offers of actual employment, and to whether any of the dischargees refused such offers. However, we find it unnecessary to resolve these factual issues, as we find, for the reasons set forth below, that the alleged offers do not affect the rein- statement and backpay rights of the discriminatees. The discriminatees were, at all times following their discharges, legally entitled to reinstatement, by the Respondent Employer, to the same positions they held,at the time of their discriminatory dis- charges, without prejudice to their seniority and other rights and 2 See Sections 2(2) and 10 (c) of the Act; The L.B. Hosiery Co., Incorporated and Lee Maisel, doing business as Myerstown Hosiery Mills , 88 NLRB 1000, enfd. 187 F. 2d 335 (C.A. 3). BON HENNINGS LOGGING CO. 99 privileges.' Only their refusal of full reinstatement to such positions could terminate their rights to be reinstated by the Respondent Em- ployer. The alleged offers by Knowles, although made at a time when Knowles was actually an agent of the Respondent Employer, were not offers of reemployment with the Respondent Employer in connection with which any of their former rights would have been restored. ,These offers were therefore not offers of reinstatement, and they did not affect the employees' rights to be reinstated by the Respondent Employer 4 - The Respondent Employer further argues that even if the alleged job offers do not constitute offers of reinstatement, they must neverthe- less bar or toll backpay because they were, at least, offers of interim employment which the discharged employees had a duty to accept. The issue thus presented- is the applicability of the Phelps Dodge s doctrine, which is that "a clearly unjustifiable refusal to accept new employment" by discriminatorily discharged employees provides ground for the tolling or abatement of-backpay otherwise due them. We find that the doctrine is not here applicable. - Here, the offers were not offers made by a neutral-employer, of employment with the neutral employer.' The offers were made by an agent of the culpable employer posing as a new employer. As noted, the offers were not offers of rein- :statement. It would not effectuate the policies of the Act to require these employees to cooperate with their culpable employer by accept- ing from it, either directly or through its agent, less than the full rein- statement which is their due. We therefore find that any failure by the employees herein to accept the alleged offers of employment was not "a clearly unjustifiable refusal to accept new employment" and cannot, therefore, affect the Respondent Employer's responsibility for backpay.e 3. The Respondent Employer further contends that the discrimi- natees are ineligible for backpay because of their participation in pick- eting. The dischargees, it is true, had a duty to seek suitable new employment following their discharges. However, the record is in- complete as to what efforts they'made to seek such employment during the period in question. Under the circumstances we shall defer deter- mination of this unresolved backpay question to the compliance stage 'of this proceeding, at which time the Respondents will be afforded an opportunity to adduce evidence concerning the efforts, or lack of efforts, of the discriminatees to seek suitable new employment? 8 See Hugh Major, d/b/a Hugh Major Truck Service, 129 NLRB 322. 4 Cf. Nlectro -Mechanical Products Company, 126 NLRB 637, 647-648. 5 Phelps Dodge Corp v. N L R B., 313 U.S 177. e Cf. N L.R.B. v. Armour & Co, 154 P. 2d-570, at 577 ( C.A. 10 ) ; Nlectro-Mechanical Products Company, supra, footnote 4. 7 Ra-Rich Manufacturing Corporation, 120 NLRB 503, at 505, enfd 276 P. 2d 451 (C.A. 2). 614913-62-vol. 132-8 100 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ORDER Upon the entire record in this proceeding, and pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that : 1. Respondent Bon Hennings Logging Co., Arcata, California, its officers, agents, successors, assigns, and Respondent Clayton Knowles, an individual, shall cease and desist from : (a) Discouraging membership in Brotherhood of Teamsters, Ware- housemen & Auto Truck Drivers, Local No. 684, International Broth- erhood of Teamsters, Chauffeurs, Warehousemen. & Helpers of Amer- ica, or in any other labor organization of employees of Bon Hennings Logging Co., by discriminating in regard to hire or tenure of em- ployment, or any term or condition thereof, except to the extent per- mitted under Section 8 (a) (3) of the Act. (b) In any manner interfering with, restraining, or coercing em- ployees in the exercise of their right to self-organization, to form, join, or assist any labor organization, to join or assist Brotherhood of Teamsters, Warehousemen & Auto Truck Drivers, Local No. 684, In- ternational Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, to bargain collectively through representatives of their own choosing, to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, and to refrain from any or all such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment, as authorized in Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. 2. Respondent Bon Hennings Logging Co., its officers, agents, suc- cessors, and assigns, shall take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Offer to Samuel P. Guthrie, Merle W. Birch, Benjamin F. Cur- tis, Everett Overholser, William Evans, Paul La Berge, Aloyious M. Vanderhoef, Roger Severson, Henry Smith, and Lester Blakeley immediate and full reinstatement to their former or substantially equivalent positions, without prejudice to seniority or other rights and privileges, and make them whole for any loss of pay they may have suffered by reason of the discrimination against them, in the manner and method set forth in the section of the Intermediate Report entitled "The Remedy." (b) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social se- curity payment records, timecards, personnel records and reports, and all other records necessary to determine the amounts of backpay due under the terms of this Order. BON HENNINGS LOGGING CO. ' 101 (c) Post at its plant at Arcata, California, copies of the notice at- tached hereto marked "Appendix." 8 Copies of said notice, to be *furnished by the Regional Director for the Twentieth Region, shall, after being duly signed by Respondents' representatives, be posted by Respondent Bon Hennings Logging Co. immediately upon receipt thereof, and be maintained for a period of 60 consecutive days there- after, in conspicuous places, including all places where notices to em- ployees are customarily posted. Reasonable steps shall be taken to insure that said notices are, not altered, defaced, or covered by any other material. (d) Notify the Regional Director for the Twentieth Region, in writing, within 10 days from the date of this Order, what steps the Respondents have taken to comply herewith. 8In the event that this Order is enforced by a decree of a United States Court of Appeals, there shall be substituted for the words "Pursuant to a Decision and Order" the words "Pursuant to a Decree of the United States Court of Appeals , Enforcing an Order." APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, and-in order to effectuate the policies of the National Labor Relations Act, we hereby notify our employees that: WE WILL NOT discourage membership in, or activity in behalf of, Brotherhood of Teamsters, Warehousemen & Auto Truck Drivers, Local No. 684, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, or any other labor organization of our employees, by discriminating in any manner in regard to hire or tenure of employment, except to the extent permitted under Section 8(a) (3) of the Act. Bon Hennings Logging Co. WILL, offer Samuel P. Guthrie, Merle W. Birch, Benjamin F. Curtis, Everett •Overholser, William Evans, Paul La Berge, Aloyious M. Vanderhoef, Roger Severson, Henry Smith, and Lester Blakeley immediate and full reinstate- ment to their former or substantially equivalent positions with Bon Hennings Logging Co., without prejudice to seniority or other rights and privileges. Bon Hennings Logging Co. WILL make whole the above-named employees for any loss of pay suffered as a result of its discrimina- tion against them. WE WILL NOT in any manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organization, .to form, join, or assist any labor organization, to join or assist Brotherhood of Teamsters, Warehousemen & Auto Truck Drivers, Local No. 684, International Brotherhood of Teamsters, Chauf- 102 DECISIONS OF NATIONAL LABOR RELATIONS BOARD fours, Warehousemen & Helpers of America, to bargain collec- tively through representatives of their own choosing, to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, and to refrain from any or all such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment, as authorized in Section 8 (a) (3) of the National Labor Relations Act. All employees of Bon Hennings Logging Co. are free to become or remain, or refrain from becoming or remaining, members of the above-named or any other labor organization. BON HENNINGS LOGGING CO., Employer. Dated---------------- By------------------------------------- (Representative ) (Title) Dated---------------- ---------------------------------------- CLAYTON KNOWLES This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material. INTERMEDIATE REPORT AND RECOMMENDED ORDER STATEMENT OF THE CASE This hearing was held at Eureka, California, on February 2, 3, and 4, 1960, with all parties represented. Briefs have been submitted by the General Counsel and Hennings Logging. The complaint alleges that Respondent Bon Hennings Logging Co., herein called Hennings Logging, and Respondent Clayton Knowles had engaged in unfair labor practices within the meaning of Section 8(a)(1) and ( 3) of the Act. More specifically, it is alleged that on and after November 2, 1959, Respondents had threatened employees with reprisals for engaging in activities in behalf of Brotherhood of Teamsters , Warehousemen & Auto Truck Drivers, Local No. 684, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, herein called the Union , and that on November 3 and 4, 1959, Respondents had discharged 10 named employees because of their activities on behalf of the Union.' The answer of Hennings Logging disputed the jurisdiction of the Board , admitted the termination of the 10 named persons on or about November 3, 1959, and de- nied the commission of any unfair labor practices . It affirmatively alleged that they were terminated on or about November 3, because Hennings Logging had abandoned the trucking portion of its logging business for nondiscriminatory reasons and had turned it over to Respondent Knowles effective that date . The answer of Respondent Knowles denied the commission of any unfair labor practices. Upon the entire record in the case, and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENTS Bon Hennings Logging Co. is a California corporation which is engaged in logging operations at Arcata, California. During the year 1959, Hennings Logging, under contract with Roddis-Craft, Incorporated, of Arcata, California, a wholly owned 'Their names are Samuel P. Guthrie , Merle W. Birch , Benjamin F. Curtis, Everett Overholser, William Evans, Paul La Berge , Aloyious M. Vanderhoef, Roger Severson, Henry Smith , and Lester Blakeley. BON HENNINGS LOGGING CO. 103 subsidiary of Roddis Plywood of Marshfield, Wisconsin, cut logs valued at $324,000. These logs were cut on property Roddis-Craft owned or on which it had cutting rights. Roddis-Craft, in turn, shipped plywood valued in excess of $3,500,000 from Arcata to points outside the State of California. Respondent stresses the fact that only a small portion of the timber so logged by Hennings Logging was delivered directly to Roddis-Craft viz, logs valued at approxi- mately $31,600. The record discloses that the remainder of the timber, slightly under $300,000 in value, was delivered by Hennings Logging to various concerns in the area pursuant to the direction of Roddis-Craft, it having been sold by Roddis-Craft to those concerns. It is to be noted, however, that the only direct business relation- ship is between Hennings Logging and Roddis-Craft, with the latter making pay- ments in the amount of $324,000 directly to Hennings Logging covering all of the contracted timber. In view of the dollar amounts involved in the direct relationship between Hen- nings Logging and Roddis-Craft, I am of the belief that the operations of Hennings Logging fall within the jurisdictional formula established by the Board as a prerequi- site to the assertion of jurisdiction over the operations of an employer who furnishes services valued in excess of $50,000 to an employer who meets the Board's juris- dictional standards. Siemons Mailing Service, 122 NLRB 81. See also Northwest Protective Service, Inc., 124 NLRB 840, and Batjac Enterprises, Inc., et al., 126 NLRB 1281. I find that the operations of Respondent Bon Hennings Logging Co. affect commerce? II. THE LABOR ORGANIZATION INVOLVED Brotherhood of Teamsters, Warehousemen & Auto Truck Drivers, Local No. 684, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, is a labor organization admitting to membership the employees of Re- spondents. III. THE UNFAIR LABOR PRACTICES , A. The issues The 10 complainants herein were truckdrivers for Respondent Hennings Logging. The latter is a contract logger with a shop in Arcata, California, whose employees are divided into three categories: (1) shop employees, (2) loggers, and (3) truck- drivers. Almost all of the previously unorganized truckdrivers attended a meeting under the auspices of the Union and signed applications for membership on Novem- ber 1; all were terminated 2 days later on November 3, 1959, by Respondent Hen- nings Logging? The issue is whether the 10 men were discharged on November 3, 1959, because of their union activities, actual and suspected, or whether, as Respondent Hennings Logging states in its answer, Bon Hennings, the owner of all the stock in Hennings Logging "because of marital and financial difficulties . had, substantially prior thereto, arranged to get out of the trucking business and to turn over to Clayton Knowles the trucking portion of Hennings' business . . . the transaction was con- summated effective November 3, 1959 . . the employment of all truck drivers of logging trucks by Hennings was terminated on that date because of the turnover of the log trucking business to Knowles. .. The latter, since February 1959, had been truck boss or foreman for Hennings Logging and was in charge of the truckers. It is the theory of the General Counsel that the transfer of the trucking portion of the business by Hennings to Knowles was not a bona fide transaction but rather a pretext or device so as to keep the Union out of the plant; that Hennings still controls the integrated business including the trucking operations; and, in essence, that the only change is in the method of Knowles' payment or remuneration by Hen- nings. Also at issue is whether certain statements by Hennings and Knowles to em- ployees constitute unlawful interrogation and threats of reprisals within the meaning of Section 8(a)(1) of the Act. 2 In view of the findings made hereinafter concerning the relationship between Hennings Logging and Knowles, it is deemed unnecessary at this point to treat with the operations of Knowles. 8 One of the men, Curtis, was a fleet mechanic In the shop and in emergencies filled In as a truckdriver Another, Birch, did not attend the meeting, and signed a card sub- sequent to his termination. As will appear, his case is on a par with those of the others. 104 DECISIONS OF NATIONAL LABOR RELATIONS BOARD B. Sequence of events 1. Introduction ; union organization Having been requested by a coworker to explore the benefits of union organiza- tion, complainant A. M. Vanderhoef contacted the Union and arranged an initial meeting of truckdrivers for Sunday , November 1, 1959. Almost all of the drivers of Hennings Logging attended , discussed the benefits of union organization, and proceeded to sign cards. On the following morning, November 2, between 8 and 9 a.m., Hennings admittedly heard a report from Shop Foreman Morley or from another employee that the employees were interested in union organization. That afternoon Hennings stopped at the mill of one K. DeRossett with whom he does business . According to Hennings , DeRossett asked what was wrong with the truckdrivers because "they're going to join the union." DeRossett also proceeded to repeat an alleged comment by driver Vanderhoef that morning to the effect that the men were joining the Union so as to eliminate another truckdriver for Hennings Logging, one Seckman , who was doing too much work. This report allegedly in- censed Hennings who left the scene and returned to his own premises . I deem it im- material whether Vanderhoef , who in essence denied the statement attributed to him, actually made it. I find, however, that Hennings believed Vanderhoef had made the statement and proceeded on that assumption. Between 4 and 6:30 p .m. that day, November 2, Hennings discussed the Union with four or five employees including truckdrivers La Berge, Vanderhoef , and two or three others who are not identified . La Berge, as he testified , punched out that afternoon at approximately 4:30 p .m. and was asked by Hennings if he was one of the men who had been present at the union hall on Sunday night, November 1; La Berge admitted that he had attended . Hennings questioned him about the ad- vantages of joining a union and then stated "there will never be a union man on my job." Significantly , La Berge was not involved in the Seckman incident .4 Earlier that day, according to the uncontroverted testimony of Vanderhoef, Shop Foreman Red Morley, a supervisory employee, accused Vanderhoef of being the instigator of the union movement in the shop ; this, of course, was substantially cor- rect. Late in the afternoon Vanderhoef struck up a conversation with Hennings and asked who was spreading the story that he, Vanderhoef, was the instigator of the union movement. Hennings replied, "I will not have any [profanity deleted] on this job . that is union." Hennings then changed the subject and , significant- ly, discussed with Vanderhoef the hour at which Vanderhoef would start work on the following morning, but made no reference to the abandonment of the trucking portion of his operation or the imminent discharge of Vanderhoef.5 Early that evening, Truck Foreman Clayton Knowles returned from a hunting trip which had commenced on October 22 or 23. He and Hennings are in substantial agreement that Hennings , in a telephone conversation that evening, directed Knowles to install some hot water heaters at a woods location on the following day. Accord- ing to Hennings , he stated to Knowles that a lease of the trucks to Knowles as an entrepreneur should be ready ; Knowles' testimony was in substantial agreement as to the trip to the woods and the lease. The testimony of both Knowles and Hennings is silent as to any reference to the Union on this occasion , but there is an interesting item of evidence concerning a 4 Hennings admitted asking La Berge whether he was joining the Union and the reason therefor ; La Berge replied that he deemed it a necessary act Hennings asked La Berge if he was joining to procure Seckman's discharge , which La Berge denied , and Hennings allegedly stated that he was not opposed to unions , but that if anyone felt he could procure Seckman's discharge through unionization he would see "this outfit in hell first, and let the [profanity deleted] go broke . . . . " I credit the testimony of La Berge, a clear and meticulous witness who was manifestly less excitable than Hennings ; moreover, Hennings substantially admitted La Berge 's version of the incident except for the refer- ence to Seckman 5 Hennings' version was that Vanderhoef asked about his, Vanderhoef 's, purported leadership in the unionization movement; that he pleaded ignorance on the subject ; and that he, Hennings , then brought up the statement attributed by DeRossett to Vanderhoef relative to the elimination of Seckman Vanderhoef replied that this was not the reason for unionization and reiterated his belief in the Union Here, as well , I credit Vander- hoef's version of the incident, bearing in mind that Hennings spoke in a similar vein to La Berge who was not involved in The Seckman Incident I deem it significant that Hennings then had knowledge of the union activities , although he disclaimed this to Vanderhoef. BON HENNINGS LOGGING CO. 105 telephone call received by Knowles at or about this hour. Donald Pote, the only truckdriver who worked for Knowles at that time, visited Knowles at his home on November 2 between 6 and 7 p.m .6 While Pole was present, Knowles received a telephone call, turned to Pote, and stated, as Pote uncontrovertedly testified, and I so find, that the men were "going union and I will fire the whole bunch of them." Pole further testified that Knowles referred to a lease of Hennings' equipment on this occasion with a 30-day option to return the equipment. 2. Lease of the trucks and trailers to Knowles A lease agreement between Respondents Hennings Logging and Knowles was exe- cuted and sworn to by them on November 3, 1959, effective the following day. The record discloses that it allegedly came into the picture under the following circum- stances. Donald Falk, an attorney in the area who has represented Hennings for 4 or 5 years in general legal matters but not in this proceeding, prepared the lease, pursuant to Hennings' instructions. Hennings testified that he picked up the lease at Falk's office on the afternoon of November 3 and had dinner with Knowles that evening, November 3, at which time they went over the lease and agreed to its terms. Ac- cording to Knowles, they signed the document between 5 and 6 p in. and it was then notarized, as it discloses, by Kenneth Pease who is also vice president and book- keeper for Hennings Logging. Knowles, as Knowles Trucking Company, has since operated these trucks and trailer combinations which total 13 or 14 in number. The complainants herein, as Hennings Logging's answer admits, were discharged by Hennings Logging on or about November 3, allegedly as a result of this transaction between Respondents entered into for a nondiscriminatory reason, viz, Hennings Logging's abandon- ment of its trucking operations, which is explored hereinafter. Hennings Logging has not had any truckdrivers on its payroll since that date. The lease provides as follows: Whereas Hennings contemplates a change in management and retirement of the President of the Corporation [Hennings] and whereas it is the policy of Hennings to departmentalize the operation of the Corporation so that the wife of the present President Bon Hennings, to wit: Martha Hennings will be more able to conduct the operations of the Corporation; and Whereas Knowles desires to lease all of the trucks and trucking equipment from the Corporation and to be responsible to the Corporation for the operation of the same, NOW THEREFORE, it is mutually covenanted and agreed between the parties as follows: 1. Effective November 4, 1959 Hennings does hereby lease, let and demise unto Knowles all of those certain trucks as shown and identified on Exhibit "A" attached hereto, along with all of the equipment appurtenant to said trucks, including the trailers, enumerated on Exhibit "A" attached hereto? 2. The term of this Lease shall be for one year from the date hereof to wit:- to and including the 3rd day of November, 1960. 3. Knowles shall be responsible for the hiring and firing of all truck drivers for said trucks and shall be responsible to hold Hennings free and harmless from any liability arising out of the operation of said trucks during the period of this Lease. 4. As a consideration for the operation of said trucks and trailers, Knowles agrees to pay Hennings the sum of fourty-[sic] three and one-half cents ($.431/z) per mile for the use of said trucks providing that said trucks are used in a unit as a truck and trailer, and that said trailer shall not be operated ex- cept in combine with the said trucks. 5. Hennings shall be responsible for all repair, maintenance, and for minor breakdowns, in the event any of said units suffers a major breakdown, then in such event, Knowles may return said equipment to Hennings , and in the event 9 Hennings Logging owned all the trucks, nominally at least, at this time except for one which was owned by Knowles and leased to Hennings Logging together with a driver, Pote, who was paid by Knowles. Pote originally placed this visit on November 3 but it is elsewhere apparent, both from Pote's later testimony as well as from the sequence of events, that November 2 was the date on which he visited Knowles 7 Thls appendix was not introduced in evidence. 106 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Hennings does not desire to correct said major breakdown, then this Lease shall terminate and end as to that particular vehicle. 6. As this Lease is being entered into at the commencement of the Winter Logging Season , and with the unpredictable weather of Humboldt County, it is understood and agreed that Knowles shall have the right to cancel this lease upon fifteen ( 15) days notice to Hennings in the event he is unable to operate due to inclement weather conditions, and that for the initial period of this Lease of thirty (30) days Hennings agrees to carry Workman's [sic] Compen- sation on the drivers, or until such time, whichever is greater, that Knowles is able to secure his own compensation for said employees , and that Knowles shall have the use of the diesel fuel permit of Hennings during a like period of time. 7. This Lease is not assignable without the prior written consent of Hen- nings and any attempt of assignments shall render this Lease null and void and inoperative. 8. Knowles agrees that the operation of said motor vehicles that they will act without violation of any City, State, County or Federal Law or Ordinance or Rural Regulation , and shall hold Hennings free and liable from the same. 9. In the event that Hennings deems that the operation of Knowles has be- come unsatisfactory, then in such event Hennings may terminate this agree- ment by giving to Knowles fifteen (15) days written notice of termination of this Lease. 10. In the event that Knowles is unable to meet the initial payroll taxes and payroll for his commencing operations under the terms of this Lease, then in such event Hennings agrees to advance to said employees the prevailing rates of pay that are in effect in the area and will pay for the account of Knowles any payroll taxes or other pay that may be due to said employees. [Emphasis supplied.] Although the lease is actually silent as to how Knowles might use the trucks and trailers, it is clear that Knowles has since engaged in the pickup and delivery of logs for Hennings Logging and apparently for that concern alone. Knowles is re- imbursed by Hennings Logging for transportation of these logs at a predetermined rate, not specified herein, which varies according to the nature and distance of the haul. As appears in the lease, Knowles pays Hennings Logging for the use of the equip- ment at a rate of $0.435 per mile. The net result is that checks are exchanged between Respondents at unspecified intervals, reflecting payment for the use of the trucks by Knowles to Hennings and on the other hand payment from Hennings to Knowles for the hauling of logs. The first check from Hennings to Knowles Trucking Com- pany, it may be noted, is in the amount of $4,000 and is dated November 23. Sub- sequent checks are in odd amounts and are dated December 9 and 22, 1959, and January 7, 1960. The testimony of Hennings discloses that the November 23 check actually amounted to an advance from Hennings to Knowles in order to supply Knowles with funds against which to draw his first payroll, as anticipated in clause 10 of the lease, quoted above. The first check from Knowles Trucking Company to Hennings for the lease of the trucks and trailers is dated December 9 and is in the amount of $11,855. This was a personal check from Knowles, whereas subse- quent checks, dated December 22 and 31, were checks by Knowles Trucking Com- pany to Hennings. It is also to be noted that these trucks and trailers were purchased by Hennings in March 1959, that delivery was made between April and July 1959, and that Hennings Logging is paying for them under 2-year purchase contracts. Presumably title thereto remains in the vendor, consistent with the customary conditional sales contract. C. Evidence of antiunion motivation As heretofore set forth, Hennings questioned employee Paul La Berge on the afternoon of November 2, 1959, concerning his attendance at the union meeting on the previous evening and, on discovering that La Berge had attended, told him that "there will never be a union man on my job." Around the same time, as detailed above, Hennings also informed employee Vanderhoef that he would not have any person "on the job . . . that is union " Truckdriver Everett Overholser testified, and I find, that he was on the company premises on November 2 at which time Hennings approached and asked about the men "going union." Overholser admitted that some of the men had "signed up last night." Hennings queried him concerning his views on unionization and stated that BON HENNINGS ' LOGGING CO.' 107 "when the union moved in on his job, his job was through, or something to that effect." 8 On November 3, Overholser was given his terminal paycheck by Knowles who stated that "he was going to discharge all of the drivers over this union deal and then hire some other guys back later." It is conceded that Knowles was a supervisor in the employ of Hennings Logging up to the time that Hennings Logging and Knowles negotiated the lease. In view of the evidence set forth below, the record warrants the conclusion that Knowles was an agent and supervisory employee of Hennings thereafter as well .9 The record contains a number of statements by Foreman and subsequent Entre- preneur Knowles which are undenied. As noted, Pole, the only previous employee of Knowles, testified that Knowles announced on November 3 that the men were "going union" and that he would discharge the entire crew. ' Complainant Vanderhoef uncontiovertedly testified, and I find, that Knowles came to Vanderhoef's home after work on November 3 and informed him that he would not be working on the following day because "We are going out of business." Vanderhoef responded that Hennings was doing this "because the boys wanted to go union out there" and Knowles admitted, "Yes, that, among other things." Complainant Merle Birch went to the shop to pick up his paychecks on the after- noon of November 4. He saw Knowles and asked if rumors that the shutdown had resulted from "some of the fellows . talking union" were true. Knowles replied that this was "partly the reason." Birch who had not attended the November 1 union meeting then volunteered the information that a previous experience with a union had left him dissatisfied and that if unionization was the cause of the shutdown he, Birch, was willing to "go back to work non-union." He asked Knowles when opera- tions would be resumed and the latter stated that it might be the first of the following week. Indeed, Knowles telephoned Birch on Sunday night, November 8, and in- structed him to report for work on November 9. On Thursday morning. November 5, a large number if not all of the terminated truckdrivers went to the plant to pick up their paychecks. Each received two checks from Vice President and Bookkeeper Kenneth Pease: a semimonthly paycheck cover- ing the last half of October, normally payable on November 10, and another covering work to date in November. During the course of the conversation, Pease was asked if Hennings Logging was going out of business because of the union activities of the employees. Pease replied, "That, among other reasons" and added that the men should have known better than to attempt this.'° After the termination of the truckdrivers, Knowles experienced difficulty in re- cruiting a new crew. On the afternoon of November 5 or 6, Knowles was at Hen- nings' residence and, as Knowles put it, Hennings told him that he "had better start getting . . . some men and go to work." Knowles telephoned complainant Roger Severson whose work record had been highly regarded by Hennings, and invited Severson to make an appearance at Hennings' residence. After Severson's arrival, Hennings stated, as Severson testified, that he had asked him over "to find out how you feel about this union business." Severson replied that s Hennings claimed that this talk took place on November 4 and that it related only to whether Overholser would work as a truckdriver for Knowles. Overholser impressed me as an honest witness who told the truth and his testimony is consistent with considerable testimony elsewhere attributing similar statements to Hennings. It may further be noted that Kennings' testimony, on its face, places him in the position of recruiting personnel for Knowles a day after an alleged bona fide transaction, as a result of which Hennings had abandoned the trucking portion of his business. g This testimony was based in part on Overholser's affidavit which Overholser testified was correct, although at the time of his testimony he did not recall the reference to the Union. See Anderson v Souza, 38 Cal 2d 825 Knowles did not specifically deny this testimony and testified only that he learned of the Union on the morning of November 3 from employee Goodman ; the latter did not testify but was placed on the scene by Overholser. In this respect, it is noted that employee Henry Smith testified and I find that he heard Knowles state to Goodman on November 3 that he had learned "you fellows are going union." 10 This finding is based upon the testimony of several of those present and the quotation is from the testimony of Severson who, here as elsewhere, impressed me as an intelligent and honest witness ; Pease did not testify. While Respondent denied that Pease was a supervisor, the record discloses that he ran the office ; that he was an officer, viz, vice president of the concern : and, more particularly, that he was one of three directors of Hennings Logging. I find, therefore, that his statements are attributable to Hennings Logging. 108 DECISIONS OF NATIONAL LABOR RELATIONS BOARD he felt the same as the other men. Hennings stated that he hated to lose him as a driver because he had done excellent work but then, growing excited, announced that "Mere will be no . union men on my payroll. . . I will go broke; I will go bankrupt; I will go plumb out of business." Knowles stated that he had to hire some truckdrivers and left the premises; Hennings repeated that he disliked losing Severson and the latter replied that he would not turn his back on the other drivers.il The Union commenced picketing operations at the premises of Hennings Logging on the morning of November 6 and the complainants participated to an undisclosed extent. Benjamin Curtis, a fleet mechanic at Hennings Logging who on occasion filled in as a truckdriver, testified that he attended a meeting with Hennings, Knowles, and Shop Foreman Morley on November 5; the topic of the Union was brought up and at that time or shortly thereafter, at Hennings' request, Curtis agreed to drive a truck. Curtis drove a truck on November 6, passing through the picket line and there- after, as he testified, told Hennings that he did not wish to cross the picket line. Shortly thereafter, Hennings discharged Curtis, stating that it was because of "The choosing of sides against him, with the union." 12 D. Respondents' defenses A consideration of the evidence readily discloses that the record is replete with inconsistencies, largely major, in Respondents' position herein. It will be recalled that the answer of Knowles was a general denial and that the answer of Hennings Logging stated that the complainants were terminated "because of [Hennings'] marital and financial difficulties" as a result of which Hennings Logging "substantially prior thereto [November 3, 1959] arranged to get out of the trucking business and to turn over to Clayton Knowles the trucking portion of Hennings' business; that the transaction was consummated effective November 3, 1959, and that the employment of all truck drivers of logging trucks by Hennings was terminated on that date." (1) It is a general practice in industry where an employer contemplates the termi- nation of an employee whose work has been satisfactory to give the employee advance notice of some sort so as to cushion the financial blow and also to afford the employee an opportunity to obtain other employment. This would particularly be so where the reduction in force was not a sudden and unanticipated one, but rather had been under consideration for a period of time. ' In the present case, both Hennings Logging and Knowles strove to portray their move as one long considered. Hennings claimed that he had discussed the proposed lease with Knowles from October 1 on "practically every day" and that the arrange- ment had been made on October 15, but "not the physical terms of it." Knowles claimed that the topic had been raised between them as early as September. Also to be noted is the fact that these employees were normally paid on the 25th of the month, this representing work performed during the first half of the calendar month, and again on the 10th of the following month for the second half of the previous month. In the present dispute, they were discharged on November 3 without any notice and paid off several days later in full. The question immediately presents itself why there had been no mention of this to the employees. This is particularly significant because apparently most of the drivers, if not all, were regarded highly by Respondents and indeed, both Respondents, as noted, later strove to persuade some of these drivers to go to work for Knowles subsequent to their termination on Novem- ber 3 by Hennings Logging. Nevertheless, they were terminated abruptly by Hennings Logging on November 3 in the middle of a pay period with no notice and were paid off in full 2 days later. Clearly this was an act inconsistent with any effort to retain competent employees by notifying them that although there would be a change in the operation of the business, provision would be made for their employment under the new regime. Stated otherwise, in a bona fide transaction, a transfer of competent employees would n This finding is based on the testimony of Severson which I credit here as elsewhere. I deem it immaterial whether the incident occurred on November 6, as he testified, or on November 5, as Hennings and Knowles claimed. Hennings testified only that Severson was invited over on this occasion ; that both Knowles and Hennings asked him to go to work for Knowles ; and that Severson refused "on account of the union " Knowles testified that be asked Severson to go to work for him and that Severson refused because he intended "to strike together with the boys . . . on this union deal " >a Hennings testified that on November 9 or 10, Shop Foreman Morley, in the presence of Curtis, stated to Hennings that Curtis wanted to know if his services were desired and Hennings allegedly replied that they were not Hennings construed this as an appli- cation for shopwork. This manifestly does not contravert Curtis' testimony which, in any event, I credit herein. BON HENNINGS LOGGING CO. 1109 be desirable , would be anticipated , and,would be . announced: Here there was only abrupt action characterized primarily by great haste. (2) Other evidence demonstrates that the decision by Hennings to execute the lease was indeed a precipitate one. Roger Severson , who was regarded highly by both Hennings and Knowles, left work early on Friday, October 30, because of illness and visited a physician. Hennings telephoned Severson at noon on Sunday, Novem- ber 1 , to ascertain if he would be able to report for work on Monday, November 2. Severson proposed that he take a few days off for reasons of health , and Hennings responded, "Take all the time you want until you get to feeling like you can come back to work. And then you come back." It is clear that as of November 1, Hen- nings' interest was only in arranging the return of a valued employee to work and he was silent as to any imminent discharge or change in the business. Severson did not work on Monday or Tuesday but did visit the office on Tuesday afternoon, November 3 , and informed Vice President Pease that he could return to work the following day. Peace expressed pleasure over his improved health and told Severson that this would be "all right"; however, Severson was not called in to work on Wednesday which was a rainy day. It is thus apparent that as of the after- noon of November 3, Vice President and Director Pease, who notarized the lease agreement on the evening of November 3, if his attestation is accepted at face value, was ostensibly ignorant of Severson's pending termination. Hennings' conduct in this regard flies directly in the face of a claim that the lease and the termination of the drivers had long been under consideration . Moreover, Hennings did not even mention the lease to DeRossett on November 3, an appropriate time for such a disclosure were the move-so imminent. Still another example of haste in the execution of the lease is the- fact that on the evening of November 2, Hennings told Knowles to construct some showers on No- vember 3 at a Hennings Logging woods installation, obviously a job more consistent with Knowles' employment by Hennings Logging rather than with his new status as a trucking entrepreneur. (3) As noted, Hennings Logging's answer claimed that the lease resulted from the marital and financial difficulties of Hennings which caused him to abandon the trucking portion of the business . And considerable testimony was adduced concern- ing the divorce and a promised payment by Hennings of $10,000 due to his wife on October 20, 1959, pursuant to a settlement agreement entered into at the time of the divorce in March 1959. Respondents contend that because of this financial pressure Hennings sought to divest himself of the trucking portion of his business . But the record discloses nothing that lends any support to this claim , either in logic or in operative facts. It is true that Hennings was not able to come up with the promised sum. In lieu thereof, Hennings' attorney, Falk, prepared a note dated October 20, wherein the payments were prorated over an 11 -month period commencing with a $2,000 in- stallment on that date . But it is clear from the testimony of Mrs. Hennings, which I credit, that she did not initially accept this proposal ; indeed, she gave it much con- sideration for some weeks until sometime between the middle and end of November, at which time she accepted it and Hennings brought her the note and the overdue first installment. Just how the lease transaction of November 3 served to cope with this financial problem, I am at a loss to comprehend and no logical explanation is proffered. (4) An inspection of the lease and a consideration of the testimony discloses that what actually was under consideration in the October 1959 offer to Mrs . Hennings was a purported departmentalization of the business into three operating divisions, shop, woods, and trucking , each under its own head, although it appears that the shop and the trucking operations actually had been under separate heads, namely, Morley and Knowles. Taking the lease at face value, however, it appears that the departmentalization was being undertaken because Hennings was endeavoring to persuade his wife to take over the business. This would have been in lieu of a cash settlement totaling $71 ,000, of which the above-mentioned sum of $10,000 was due on October 20. The thought was that with a reliable head over each department Mrs. Hennings would be in a better position to operate the business The minutes of a special meeting of the board of directors of Hennings Logging on October 15, 1959, state as follows in part: The meeting was called to order by the President, discussion was held concern- ing the turning over of the Directorship to Martha Hennings, or her appointees, as it appeared that Bon Hennings was not going to be able to meet his financial commitments to his ex-wife, Martha, and that he was in process of turning over his stock in the corporation to her. 110 DECISIONS OF NATIONAL LABOR- RELATIONS BOARD Hennings stated that he expected that Martha would be the sole stockholder by the first of 1960 unless she would relent in her pressure on him for money payments. Discussion was held concerning the various possibilities of liquidation or dis- solution. Hennings stated that he would prefer to permit Martha to continue operations providing problems of management could be met. Discussion was held concerning departmentalization of the corporation. Significantly there is not a word in the minutes about the lease to Knowles and the reference to departmentalization, it is clear and I find, is a reference to having a competent head over each of the three divisions so that Mrs. Hennings could operate the business in the absence of her former husband. Mrs. Hennings, however, de- clined this offer after considering it for 3 or 4 weeks. She specifically recalled that she had the matter under consideration at the time she read in the press of the picket line established by the Union; as noted, this picket line was established on Novem- ber 6, after the termination of the complainants . Mrs. Hennings' rejection of the- proposal to take over the business was coupled with her acceptance of the installment payment proposal during the latter half of the month of November, as described above. (5) Although, according to Hennings, the deal with Knowles had been discussed since October 1, the minutes of the special board of directors' meetings held on October 15 are silent on this topic. Surely, if this were a current and seriously con- sidered proposal, mention would have been made thereof. (6) A strong indication that there was no meeting of the minds on the lease of the trucks, assuming prior discussions between Knowles and Hennings, is the fact, as testified by Knowles, that when he signed the lease on November 3, he discovered for the first time that a change had been made in certain language regarding the diesel fuel permit. It is clear that Hennings made the change or that it was made under his direction. Knowles, although discovering the change for the first time, proceeded to sign the lease containing a clause which provided that Knowles would have the use of Hennings' diesel fuel permit for the first 30 days of the contract ; the record does not disclose the original text thereof. (7) The basic thrust of Respondents' position herein is that the lease to Knowles resulted from the "marital and financial difficulties" of Hennings. As demonstrated, a temporary solution of the pending -financial settlement to Mrs. Hennings was not agreed upon until late in November, well after the discharge of the complainants herein. What I deem to be of crucial significance here are the actual financial details of the transaction between Hennings and Knowles . Knowles agreed to lease the trucks and trailers and pay Hennings $0.435 per mile. Although the lease is silent on this topic, there is testimony that Knowles was to haul Hennings ' logs and was to be reimbursed at certain specified rates. Bearing in mind that this transaction was allegedly entered into in an effort to alleviate Hennings' straitened finances, one is immediately struck by the fact that no funds passed from Knowles to Hennings as part of the transaction. In fact, as Hennings conceded, "I can't say that it would help me too much financially except for the fact that I was more interested in getting away from the whole operation." In sum, no funds passed and I find no evidence in support of Respondents' contention herein. This is not to say that Hennings' divorce did not place him in a financial bind. But it is to say that the only issue here is whether this problem played a part in the lease and a preponderance of the evidence warrants the conclusion that it did not. (8) In fact, there is direct evidence that the lease transaction, at least at the out- set, imposed a financial burden upon Hennings. The latter agreed to carry workmen's compensation for Knowles' drivers for the first 30 days or longer until Knowles pro- cured such coverage, and further agreed that Knowles would have the use of Hen- nings' diesel fuel permit for the same period . This of course demonstrates the haste behind the execution of the lease and refutes the existence of any period of long planning behind it. Indeed in paragraph 10 the lease provides as follows: In the event that Knowles is unable to meet the initial payroll taxes and pay- roll for his commencing operations under the terms of this Lease, then in such event Hennings agrees to advance to said employees the prevailing rates of pay that are in effect in the area and will pay for the account of Knowles any pay- roll taxes or other pay that may be due to said employees. It would seem that Hennings proceeded to do precisely what the quoted section envisaged, because on November 23, 1959, he advanced $4,000 to Knowles to cover his first payroll . As is readily apparent, rather than this being a situation where BON HENNINGS LOGGING CO. 111 Hennings made a lease to relieve himself of a financial burden, this is rather indica- tive of a lease where, initially at least, an additional financial burden was incurred by Hennings. (9) During-the hearing, the Seckman incident was advanced as a cause for the discharge of the drivers. Obviously, this could not be the case because, even on the posture most favorable to Respondents, only one of, the drivers was involved and yet Respondent Hennings Logging discharged all of them. (10) One troublesome aspect of the case is found in the testimony by Donald Falk, the general attorney for Hennings Logging, which was offered by Respondent Hennings Logging in support of its position herein . Falk testified that in the week following the October 15 board of directors ' meeting, Hennings called him and stated that he had been discussing with Knowles and Shop Foreman Morley the question of their assuming the trucking and shop portions of the business respectively. Around October 25 or 26, Hennings asked him several times to prepare a lease to Knowles and he, Falk, dictated one at that time, although he did not know when it was actually transcribed. Falk and Hennings chanced to meet out of town on November 3; Falk told him on this occasion that he could pick up the lease at his office ; and Henning did so later that afternoon. I deem it noteworthy that the lease refers to an appendix A which lists the trucks and equipment included in the transaction , but Falk never saw it and he did not know how many trucks were involved in the lease, despite the fact that the entire trans- action involved equipment valued between $330,000 and $340,000, all of which was being paid for by Hennings on an installment contract. The parties, it was under- stood, were to prepare appendix A and attach it to the lease. However, although Falk has seen the lease 'several times since November 3, there was no such attach- ment thereto. It would seem to follow that there was a specific omission of a vital portion of the lease, viz, the basic subject matter, on November 3, the date of its purported execution. I am of the belief that Falk was in error on his dates and this is entirely under- standable, for he was actively engaged in Hennings' behalf in a divorce action with a large and controversial property settlement. There were financial problems therein and careful negotiations on the part of Mrs. Hennings which , it is true, caused finan- cial problems for Hennings, as noted in the. minutes of the board of directors' meet- ing of October 15 and in the testimony of Falk. Hennings, and Mrs. Hennings. The most that can be said for Respondents ' position herein is that although Hennings and Knowles might have previously discussed the possibility of the lease in a general way, a plethora of evidence demonstrates that the ultimate decision to execute a lease was a hasty one. I believe that. Hennings encountered Falk on November 3, discussed his situation with him, and arranged to have the lease, on its face a simple one, prepared and ready that evening. I find that Falk was in error as to the date he received specific instructions from Hennings concerning the preparation of the lease. . I find in view of the foregoing that an overwhelming preponderance of the evi- dence does not support Respondents' contention herein. E. Control of the trucking operations A consideration of the evidence readily discloses, as the General Counsel con- tends, that Respondent Hennings Logging remains in actual control of the trucking operations and that the lease is an illusory one. ( 1) All of the equipment still remains garaged on Hennings Logging premises and is serviced by Hennings Logging precisely as it had been in the past. (2) Knowles invested no capital in the operation and in fact was advanced $4,000 by Hennings to meet the initial -expenses and payroll, despite Hennings' testimony that his cash balance was "in the red" at the time. (3) As set forth above, Hennings instructed Fleet Mechanic Curtis on November 6 to drive a truck and Curtis did so. This demonstrates that Hennings was still giving orders to truckdrivers. (4) Hennings testified that Curtis drove for Knowles after the latter took over and, significantly, Curtis remained on the Hennings Logging payroll at the time. Hennings testified rather unimpressively that Knowles was to reimburse him for this but that he, Hennings, did not know if this had been done and that he had not checked into the matter. (5) Shop Foreman Morley drove these trucks on an unspecified occasion or occasions after Knowles took over, and Hennings conceded that so far as he knew Morley remained on his payroll during this period. Even Knowles conceded that for the first few days of the operation Hennings Logging carried his men on its payroll. 112 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (6) As set forth above, on November 5 or 6, after Hennings had leased out the trucks, he nevertheless attempted at length to recruit driver Severson to drive a truck for Knowles. (7) The very terms of the lease provide that Hennings Logging,can terminate the lease on 15 days' notice to Knowles, with the only condition being that Hennings unilaterally decide "that the, operation of Knowles has become unsatisfactory." Stated otherwise, Hennings Logging may reclaim its equipment on 2 weeks' notice, although, as demonstrated, this would amount to no physical change because the equipment is both maintained and garaged by Hennings Logging on its own premises and Knowles has no financial investment therein. (8) Hennings conceded that under the new arrangement he still informs Knowles where logging operations are taking place and where to deliver the logs. On occa- sions, Knowles will ask him to instruct drivers where to go and Hennings will do so. (9) As noted, the lease did not contain any appendix with a list of equipment and did not even specify that Knowles was to haul for Hennings Logging. In fact, it did not contain any data as to what Knowles was to be paid by Hennings Logging for transporting the logs. In sum, I believe and conclude that Knowles continued after November 3, 1959, to operate as the truckdriver foreman for Hennings Logging and further that he remained an agent of Hennings Logging. The timing of the lease, its illusory nature and the subservient position of Knowles to Hennings thereafter so reveal. The only change made was in the manner of Knowles' compensation. Instead of receiving a monthly salary, he paid Hennings so much a mile for rental of the trucks and, in turn, received offsetting checks for hauling the timber. They exchanged checks pursuant to an agreed-upon formula and the difference in the respective checks was Knowles' pay as the supervisory employee of Hennings Logging. Hennings has not disposed of any capital assets and, in essence, conducts his operations on an integrated basis, as in the past. See Clyde Taylor Company, 127 NLRB 103. F. Conclusions I have previously found that Respondents' defenses lack merit or substance in that the lease was an illusory one. The record convinces me that Hennings Logging was given or attempting to give Knowles the nominal position of an independent con- tractor and that Hennings intended to and did retain control of this portion of the business. The record also warrants the conclusion that Knowles was perforce not unaware of this scheme and aided Hennings in accomplishing the move. That the objective of Respondent Hennings Logging in undertaking this transaction was discriminatory and for the purpose of eliminating the influence of the Union among these employees and, presumably, a subsequent union demand for recogni- tion is readily disclosed. As detailed above, on November 2, prior to the execution of the lease, Hennings questioned La Berge concerning the union meeting on November 1 and stated that there would never be a union man on his job; he spoke similarly to Overholser and told the latter that "when the Union moved in on his job, his job was through." Knowles told Overholser on November 3 that he was discharging the drivers over the "Union deal" and would rehire them later. This, too, is evidence that Knowles remained the agent of Hennings thereafter. Knowles also told his own employee, Pote, that he would discharge the crew for "going union," 13 and announced to Vanderhoef that they were going out of business partly because the men wanted'a union. Knowles spoke in a similar vein to complainant Birch on November 4, and sig- nificantly demonstrated interest in rehiring Shim when Birch evinced antiunion sym- pathy Even Vice President and Director Pease, in paying off the men on November 5, disclosed to a group that one of the reasons for abandoning the truck- ing operation was the union activity of these employees. On November 5 or 6 when Hennings tried to persuade Severson to work for Knowles, he told Severson that there would be no "union men" on his payroll and that he would go through bankruptcy and go out of business first. Finally Curtis who had driven a' truck through the picket line on Hennings' instructions and thereafter declined to cross the line was terminated because he had chosen sides "against him, with the Union." I find, as alleged in the complaint, tnat on or about November 3 Respondent Hen- nings Logging and Respondent Knowles did discharge the 10 complainants because 13 This statement is relied on only as evidence of Knowles' motive herein. BON HENNINGS LOGGING CO. 113 they had engaged in union activities, thereby discriminating with respect to their hire and tenure of employment within the meaning of Section 8(a)(3) of the Act, and that by said conduct Respondents have interfered with, restrained, and coerced employees in the exercise of the rights guaranteed by Section 7 of the Act, within the meaning of Section 8(a)(1) thereof . See Brown-Dunkin Company, Inc., 125 NLRB 1379. 1 further find, as alleged in the complaint, that on or about November 2 and 6, Hennings questioned employees concerning their union activity and threatened them with economic reprisal for engaging in same, announced that he would not employ union members, and threatened to close down operations because of such union activities. 1 also find, as alleged, that on or about November 3 and 4, Trucking Foreman Knowles informed employees that they were being discharged because of their union activities or sympathies and that they would be replaced by other em- ployees. 1 find that by such statements Respondents Hennings Logging and Knowles have further interfered with , restrained, and coerced employees in the exercise of the rights guaranteed by Section 7 of the Act, within the meaning of Section 8(a) (.1) thereof. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondents set forth in section III, above, occurring in connec- tion with the operations set forth in section 1, above, have a close , intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow thereof. V. THE REMEDY Having found that Respondents have engaged in unfair labor practices, I shall recommend that they cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Considerable testimony was adduced relative to job offers made to some com- plainants by Respondent Knowles. I deem it unnecessary to pass on whether they were unqualified offers, because it is clear and I find that they were predicated upon the spurious lease to Knowles. Stated otherwise, I have found that Respondent Hennings Logging discriminatorily discharged the complainants and Board policy requires that they receive an offer from that concern which is and was their em- ployer. Entertainment or recognition of the offers from Knowles would be tanta- mount to a finding that the Hennings Logging lease to Knowles was bona fide and that is precisely contrary to the findings heretofore made. Hence, an offer of rein- statement by Hennings Logging and appropriate reimbursement by Respondents will be recommended. See Bonnie Lass Knitting Mills, Inc., 126 NLRB 1396. It has been found that Respondents have discriminated with respect to the hire and tenure of employment of Samuel P. Guthrie, Merle W. Birch, Benjamin F. Curtis, Everett Overholser, William Evans, Paul La Berge, Aloyious M. Vanderhoef, Roger Severson, Henry Smith, and Lester Blakeley. I shall, therefore, recommend that Respondent Bon Hennings Logging Co. offer them immediate and full rein- statement to their former positions without prejudice to seniority or other rights and privileges. See The Chase National Bank of the City of New York, San Juan, Puerto Rico, Branch, 65 NLRB 827. I shall further recommend that Respond- ents make the above-named employees whole for any loss of pay suffered by reason of the discrimination against them. Said loss of pay, based upon earnings which each normally would have earned from the date of the discrimination to the date of the offer of reinstatement, less net earnings, shall be computed in the manner established by the Board in F. W. Woolworth Company, 90 NLRB 289. See N.L.R B. v. Seven-Up Bottling Company of Miami, Inc., 344 U.S. 344. In view of the nature of the unfair labor practices found, it is believed that the imposition of a broad cease-and-desist order should be recommended. On the basis of the foregoing findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. Brotherhood of Teamsters, Warehousemen & Auto Truck Drivers, Local No. 684, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, is a labor organization within the meaning of Section 2(5) of the Act. 2. Bon Hemmings Logging Co. is an employer within the meaning of Section 2(2) of the Act. 3. By discriminating in regard to the hire and tenure of employment of Samuel P. Guthrie, Merle W. Birch, Benjamin F. Curtis, Everett Overholser, William Evans, 114 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Paul La -Berge, Aloyious M. Vanderhoef, Roger Severson, Henry Smith, and Lester Blakeley, thereby discouraging membership in a labor organization , Respondents have engaged in unfair labor practices within the meaning of Section 8(a) (3) of the Act. 4. By interfering with, restraining, and coercing employees in the exercise of the rights guaranteed by Section 7 of the Act, Respondents have engaged in unfair labor practices within the meaning of Section 8(a) (l) of the Act. 5. The aforesaid unfair labor . practices are unfair labor practices affecting com- merce within the meaning of Section 2(6) and ( 7) of the Act. [Recommendations omitted from publication.] Air Control Products, Inc. of Tampa and Air Control Products, Inc. of St. Petersburg and Teamsters, Chauffeurs, Helpers Local Union #79, affiliated with the International Brother- hood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Petitioner. Cases Nos. 1$-RC-1156 and 12-RC-1157. July 12, 1961 DECISION AND DIRECTION OF ELECTIONS Upon petitions duly filed under Section 9(c) of the National Labor -Relations Act, a consolidated hearing was held before Joseph V. Moran, hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed.' 'On February 27, 1061 , the Employers were served with notice of hearing in these cases to be held on March 8, 1901 , and on March 1 were served %xith an order rescheduling hearing to Dlaich 9. On march 2, the Regional Office of the Board received a letter from the Employers' attorney, dated March 1, requesting adjournment of the hearing on the ground that he would be at a trial in the County Circuit Court on the scheduled date. -The Employers did not serve a copy of this letter on the Petitioner nor submit to the Regional Office the copies required by the Board's Rules and Regulations , Series 8, as -amended, Section 102 65 ( a). On March 2, the hearing officer was told by the Employers' -attorney, in a telephone conversation , that lie would adiise the Regional Office before the close of business on March 7 whether or not he had completed the trial and could go to hearing on March 9 , and would make an appointment for representatives of the Board and the Petitioner to examine certain records of the Employers which had been subpenaed. There was no coin iuunication from the attorney on March 7 , but, at 4 :30 p.m on March 8, the day before the scheduled hearing, his secretary called the Regional Office to ask for an adjournment, and was told by the hearing officer that the request had come -too late. On the morning of March 9 , the Regional Office received a telegram from the attorney asking for an adjournment. A few minutes before the scheduled start of the :hearing, the hearing officer told the attorney, in a telephone conversation , that adjourn- ment was dewed because of the failure to carry out the agieement with the Regional Office to communicate on March 7 and to arrange for examin a tion of the subpellacd records The hearing proceeded as scheduled while the Employers ' attorney was absent, the manager' of both corporations were present tluoughout the hearing , but both refused to enter an appearance and, when called by the Petitioner to testify , refused to answer questions on the ground they had been advised by their attorney to refuse - Thereafter, the Employers filed a motion for a rehearing on the ground they had been improperly denied an adjournment . As the Employers had adequate notice of the hearing, did not -comply with the Board's Rules and Regulations concerning the filing and service of written motions, did not comply with their own undertaking to give adequate notice to the Regional Office of their continuing need for an adjournment and to arrange for examina- tion of record,; , and had both managers present throughout the hearing , we hereby affirm the hearing officer's refusal to adjourn the hearing , and, accordingly , deny the Employers' -motion for a rehearing. Pennington Bros, Inc, 124 NLRB 933. 132 NLRB No. 8.