Erie Resistor Corp.

ERIE RESISTOR CORPORATION 621 CONCLUSIONS OF LAW 1. The Respondent is engaged in commerce within the -meaning of Section 2(6) and (7) of the Act. • 2. International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Help- ers of America, Local 657, is -a labor organization within the meaning of Section 2(5) of the Act. 3. By threatening its employees with reprisals because of their union activities and by making statements designed to give the impression that Respondent had their union activities under surveillance, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting com- merce within the meaning of Section 2 (6) and (7) of the Act. 5. The Respondent has not violated Section 8 (a)(3) of the Act, or Section 8(a)(1) except as specifically found above. [Recommendations omitted from publication.] Erie Resistor Corporation and International Union of Electrical, Radio and Machine Workers, Local 613, AFL-CIO. Case No. 6-CA-1790. July 31, 1961 DECISION AND ORDER On October 18, 1960, Trial Examiner Reeves R. Hilton issued his Intermediate Report in the above-entitled proceeding, finding that Respondent had not engaged in 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 and the Charging Party, International Union of Electrical, Radio and Machine Work- ers, Local 613, AFL-CIO, herein called the Union, filed exceptions to the Intermediate Report, together with supporting briefs. Re- spondent filed a brief in support of the Intermediate Report. On May 4, 1961, the Board heard oral argument in Washington, D.C., in which all parties appeared and participated. 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 Inter- mediate Report, the exceptions and briefs, the oral argument, and the entire record in the case, and finds merit in the exceptions of the -General Counsel and the Charging Party. Accordingly, the Board adopts the findings of the Trial Examiner only to the extent they are consistent with the decision herein. The essential facts of the case are not in dispute. The Union, which had been certified in 1951 as representative of Respondent's production and maintenance employees, called a strike on March 31, 1959. The strike was concededly economic in its inception, the parties Having been unable to come to terms on a new agreement. 'All em- 132 NLRB No. 51. 622 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ployees working in the bargaining unit, numbering, approximately 478, joined the strike. New applications for employment were received by Respondent within a week or two after the strike began. However, during April, Respondent operated the plant as best it could with 140 clerical and other nonunit employees performing production jobs. Production reached about 15 to 30 percent of normal. Several customers can- celed their orders with Respondent. On May 3, Respondent decided to seek replacements to run the plant, and so informed all members of the Union by letter. Strikers were told they would have their jobs only until replaced. The first replacements were hired the week of May 11. After being accepted for employment, these replacements were told by Respondent they would not lose their jobs as a result of the strike. Similar assurances were given by Respondent's division managers in meetings with re- placements inside the plant. During this period the parties continued negotiations for a new agreement. In a bargaining session held May 11, Respondent in- formed the Union that it was promising replacements they would not be laid off as a result of the settlement of the strike, and advised it that in order to implement this promise, it would have to accord the replacements some form of superseniority. Respondent offered to negotiate the details of a superseniority scheme for the replacements. The Union replied that superseniority was discriminatory and illegal, and refused to consider it. Five bargaining sessions were held between May 11 and 28, during which Respondent proposed several alternative forms of supersenior- ity. The Union, however, remained adamant in its opposition to super- seniority, contending that all strikers would have to be reinstated and the replacements terminated. Because of certain picket-line incidents which had occurred on April 2 and May 7, Respondent proposed to delete the union-security clause which had been contained in the prior contract, suggesting that, because of the Union's harassment of re- placements, employees should no longer be required to join the Union. By May 25, 33 replacements were working, plus 4 former strikers.' On May 27, Respondent decided that enough replacements had been hired so that its proposed superseniority plan should be made more definite. A plan calling for 20 years' additional seniority for employ- ees in the unit who worked during the strike was devised by Respond- ent's director of industrial relations, Gordon Ferrell. This plan was to apply only in the event of future layoffs, and the 20 years thereby accorded replacements and ex-strikers could not be used for purposes 'The 140 clerical and other nonunit employees continued to work at unit jobs through- out the strike, supplementing the replacements and returned strikers. ERIE RESISTOR CORPORATION 623 of vacations, bumping, and other employee benefits based on years of service with the Employer.2 On May 28, Respondent informed the Union that it had settled on the 20-year superseniority plan. However, this plan was not publi- cized by Respondent until June 10, and was claimed to be "confiden- tial" until then. At a union meeting held May 29, the strikers unanimously resolved to continue striking "until management stops its unfair labor practice by making us agree to giving superseniority to the scabs." That week- end, May 30 and 31, the Union publicized Respondent's 20-year super- seniority plan over the local television station. As the strike progressed, the Respondent continued to receive applications from prospective replacements.' Over 300 applications were received which were not processed-according to one company official, because he did not want to "break" the Union. Industrial Relations Director Ferrell testified that the Company "purposely proceeded slowly in its replacement program so as to preserve, if possible, a continuity of employment." During the week beginning June 4, agreement was reached on sev- eral seniority provisions which had hitherto been in dispute. Super- seniority, however, remained in issue, and on June 10, Respondent wrote a letter to all employees and members of the Union, making public for the first time its superseniority plan. On June 11, the Union offered to give up its union-security agreement if the Company would abandon superseniority. No agreement was reached, however, and the Union stated it would continue striking until Respondent yielded on superseniority. By June 14, 81 replacements had accepted employment, plus 23 returning strikers. On June 15, Respondent posted on the Company bulletin board its 20-year superseniority plan. In the week following June 15, 21 more replacements accepted employment, plus 64 addi- tional strikers-a total of 102 replacements and 87 former strikers. On June 24, the Union decided it had to settle the strike, and offered to withdraw the picket line and submit the superseniority issue to the Board. The parties at that time drew up a tentative agreement with respect to the remaining economic issues. Although the Respondent informed the Union on the evening of June 24 that it was not able s According to Ferrell, the figure of 20 years was developed from a projection of what Respondent's work force would be following the strike, on the basis of expected orders. Apparently, Respondent was concerned with the impact of future layoffs on the replace- ments. At the time of the strike, in addition to the 478 employees in the bargaining unit, there were about 450 other employees on layoff As of March 31, the beginning of the strike, a male employee needed 7 years ' seniority to avoid layoff ; a female employee needed 9 years 8 Throughout this period , the city of Erie was classified by the U.S. Department of Labor as an "F" area , the designation indicative of the greatest relative labor surplus (at least 12 percent unemployed). 624 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to accept the terms of the tentative agreement, the strike nonetheless came to an end on June 25. The next day Respondent gave the Union a list of 129 employees whose jobs had been filled by replacements. Thereafter, strikers who had not been replaced were recalled by Respondent in the order of seniority, with several exceptions for critical jobs. By July 5 there were 358 employees working in the bargaining unit. Respondent's work force increased to a maximum of 442 by September 20, 1959, then, for economic reasons, decreased gradually to 240 by May 1, 1960. It is conceded that a large number of employees laid off be- tween September 1959 and May 1960 were recalled strikers whose seniority became insufficient solely because of the operation of Re- spondent's superseniority plan. On July 17, 1959, the parties executed a strike settlement agree- ment wherein they agreed to settle Respondent's "replacement and job assurance" policy through the Board and the Federal courts. The existing plan was to "remain in effect pending final disposition." Also on this date the parties executed a new contract, including among other things a maintenance of membership provision. The principal issue in this case is the legality of Respondent's superseniority plan. The complaint alleges, and the General Counsel and Charging Party contend, that Respondent's insistence on, and institution of, its 20-year superseniority plan for returning strikers and strike replacements was in violation of Section 8(a) (1), (3), and (5) of the Act. The Trial Examiner` dismissed the complaint. Finding that the Board's past decisions on superseniority had considered motivation as the controlling factor in determining the legality, of strike super- seniority, the Trial Examiner held the evidence inadequate to support a finding that Respondent had adopted its superseniority plan to dis- criminate against the Union. He therefore found no violation of the Act. We do not agree with the Trial Examiner's interpretation of the Board's past 'decisions regarding superseniority.• The Board has never found the grant of superseniority to returning strikers or strike replacements lawful. As early as 1940, the Board indicated that an employer could not, in addition to replacing strikers, deprive strikers of their seniority for not reporting to work during a strike.4 Simi- larly, in General Electric Company 5 the Board found unlawful an employer's tolling of strikers' seniority during their strike, while not tolling the seniority of nonstrikers. The Board observed that relative seniority is one of the factors upon which individual em- & Paper, Calmenson & Company, 26 NLRB 553, 557. See also Precision Castings Com- pany, Inc., 48 NLRB 870. 6 80 NLRB 510. ERIE RESISTOR CORPORATION 625 ployees' tenure of employment depends, and stated that "except to the extent that a striker may be replaced during an economic strike, his employment relationship cannot otherwise be severed or impaired because of his strike activity ." 6 The Board has considered the legality of superseniority in four cases since General Electric. In Potlatch Forests, Iotic.,7 an employer during an economic strike proposed that replacements be given spe- cial protection when the strike was over. Thereafter, it accorded superseniority to all those who had worked during the strike, placing them above those who had remained on strike. Several strikers re- instated after the strike were laid off in conformity with this plan. The Board adopted the Trial Examiner's finding that the employer's superseniority policy was discriminatory and in violation of Section 8 (a) (3) of the Act. The Ninth Circuit, in an opinion discussed here- inafter, denied enforcement of the Board's order.8 In the three superseniority cases which followed Potlatch,, inde- pendent evidence of the employers' discriminatory intent appared in the record. In the California Date Growers d.ssociation s and Ballas Egg Products 11 cases, the respondents had committed other unfair labor practices while granting superseniority. In Mathieson Chemical Corporation," the employer promulgated its superseniority policy after the strike ended, thereby making it plain that its sole intention was to favor nonstrikers over strikers. In each of these cases the Board found violations of the Act without relying on its Potlatch decision, but in each case the Board disclaimed any inten- tion of passing upon the rationale of the Potlatch case that super- seniority, however motivated, was an illegal discrimination against strikers. The Board's unfair labor practice findings were in all three cases sustained by the courts on appeal.12 The decision of the Ninth Circuit in Potlatch, supra, thus stands as the only decision, Board or court, finding lawful an employer's use of superseniority.13 In so finding, the Ninth Circuit, though recognizing that the grant of superseniority during a strike was a form of dis- crimination which tended to discourage union activities, concluded nonetheless that it was a legitimate corollary of an employer's right under the Mackay Radio decision 14 to secure permanent replacements. "Id. at 513. 7 87 NLRB 1193. 8 N L R B. v Potlatch Forests, Inc., 189 F. 2d 82. 9118 NLRB 246, enfd 259 F. 2d 587 (C.A. 9) 10125 NLRB 342, enfd. 283 F. 2d 871 (C.A. 6). 11114 NLRB 486, enfd 232 F. 2d 158 (C.A. 4), affd. 352 U S 1020. 17 Supra. >a Cf. N.L.R B. v. Lewin-Mathes Company, Division of Cerro De Pasco Corp , 285 F 2d 329 (C.A. 7 ), petition for modification denied January 19, 1961 , in which the Seventh circuit indicated that an employer's use of superseniority during an economic strike would be lawful, even though the Board's decision in that case had not passed on that issue, nor had the complaint alleged superseniority as a separate unfair labor practice. 14 N.L R B. v Mackay Rodeo h Telegraph Go, 1304 U.S. 333. 626 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In Mackay, the Supreme Court held that an employer could lawfully hire replacements during an economic strike in order to continue his business, and need not, at the strike's end, discharge these replacements in order to reinstate returning strikers. We respectfully disagree with the Ninth Circuit's aforementioned view with respect to Mackay and superseniority. 15 In our opinion, superseniority is a form of discrimi- nation extending far beyond the employer's right of replacement sanc- tioned by Mackay, and is, moreover, in direct conflict with the express provisions of the Act prohibiting discrimination. Perhaps most obvious is the distinction that permanent replace- ment affects only those who are, in actuality, replaced, while super- seniority for replacements affects the employment tenure of all strikers, whether or not replaced. It is one thing to say that a striker is subject to replacement, and therefore loss of his job at the strike's end; quite another to say that, in addition to the threat of replacement, and re- gardle.-q of :i pp T yerrs siicce i i n P^nrinb lnlacement for 119i i dividual striker, all strikers will at best return to their jobs with infe- ricr seniority, thus incurring a detriment to their job security forever. ^'learly, this is a discrimination in addition to the threat of replace- ment, and not merely a lesser form of discrimination encompassed by it Mackay permits an employer to take certain action in order to cars; on his business during an economic strike. It is obvious that, in some instances, an employer may more readily secure replacements if he can offer them superseniority. But we also believe that Mackay contem- plated a situation whereby, at the strike's end, strikers who were not replaced could return to their jobs with no impairment of their tenure because they chose to go on strike. It is expressly provided in the Act, and not here disputed, that strikers retain their employee status during a strike.1e Mackay itself holds that, as "employees," strikers may not be discriminated against in the manner of, and the terms of, their reinstatement.'' Yet, giving 20 years or any other special senior- ity to strike replacements necessarily deprives unreplaced strikers of an important aspect of their prestrike status, for seniority is by its nature relative : giving to one necessarily takes away from another. In essence, therefore, an award of superseniority to strike replacements renders one important requirement of Mackay-nondiscriminatory and complete reinstatement of unreplaced strikers- an actual impossibility. 15 A number of law review notes have commented critically on the Ninth Circuit's Potlatch decision . See, e.g. , 27 U. Chi. L. Rev. 368 (1960 ) ; 6 Duke B, J. 143 (1957) ; 42 Va. L. Rev. 836 (1956) ; 30 Texas L. Rev. 776 (1952) ; 6 Rutgers L. Rev. 470 (1952) 9 wash. & Lee L. Rev. 115 ( 1952 ) ; 4 Stan. L. Rev. 151 (1951). 10 Section 2(3) includes in the definition of employee "any individual whose work has 11 ceased as a consequence of, or in connection with, any current labor dispute. .. . 11 Supra, at p. 345. See also Jack C. Robinson, d/b/a Robinson Freight Lines, 114 NLRB 1093, 1096, enfd. 251 F. 2d 639, 642 ( C.A. 6) ; Indiana Desk Company, 56 NLRB 76, 78-79, enfd. as modified 149 F. 2d 987 (C.A. 7). ERIE RESISTOR CORPORATION - 627 Further, permitting an employer to grant superseniority to all who work during a strike greatly enlarges the definition of "replacement" as envisaged by Mackay. Under the Supreme Court's Mackay decision, an employer during an economic strike is permitted to secure new em- ployees, or employees outside the bargaining unit, to work permanently, at unit jobs. But superseniority-is normally offered not only to new ,employees-if to them at all_18-but to the bargaining unit employees themselves, if they abandon the strike, or choose not to join it. Natu- rally, superseniority must be offered to the strikers on an individual basis, since extra seniority for all is real seniority for none. From this point of view, an offer of superseniority is not merely at attempt to secure new "replacements," but more accurately an offer of benefit•to individual strikers to abandon the strike and return to work. In other contexts, the Board and"courts have held such an offer of bene- fit to individual strikers to be • an independent violation -of Sdction 8(a) (1) 19 i_ The discrimination effected by superseniority lasts iridefiriitely. Thos Respondent in the present case contends that it was- concerned with assuring replacements and nonstrikers of "permanence." Yet, by this, the employer admits it meant not just the right to the job of a replaced striker at the strike's end, but much more, the job plus a 20-year seniority cushion available in the event of future economic declines and layoffs 20 We do not think the "permanence" envisaged by the Supreme Court in Mackay encompassed this "concern" of the em- ployer, despite the contrary opinion of the Ninth Circuit in Potlatch,. Whether a replacement can have the job of a striker is one question, settled in Mackay; 21 but the effect of future economic declines and layoffs is a separate question, affecting not only replacements, but all employees alike. We are confident the Supreme Court in Mackay did not intend to permit preferred treatment of nonstrikers and replace- ments long after the strike was over. Is In some cases, as in Mat hieson ,Cliemical Corporation, supra, superseniority was offered only to returning strikers. In none of the cases heretofore considered by the Board has supersemority been offered only to new employees. 19 See, e.g, Marlboro Electronic Parts Corp., 127 NLRB 122, 132; Trinity Valley Iron and Steel Company, a Division of C. C. Griffin Manufacturing Company, Inc., 127 NLRB 417, 424, enfd . 290 F. 2d 47 (C.A. 5). See also N.L.R.B . v. I. Spiewak & Sons, 179 F. 2d 695, 0961-697 ( C.A. 3). ' Director of Industrial Relations Ferrell testified that "We knew because of the number of people on layoff and in light of the business which we had estimated, projected, that this was going to require some sort of seniority, additional seniority, which would give these people that job assurance which we felt we had the right to offer them , as permanent replacements. Otherwise, they wouldn't be permanent." 21 Respondent contents, inter alia, that it had to offer superseniority merely to assure replacements of jobs at the strike 's end, since the Union was taking the bargaining position that all replacements must be discharged at the strike's end . Respondent's argument is'a non sequitur, for superseniority has no bearing whatever on whether the employer abides by its right under Mackay to retain replacements at the strike 's end, or, on the other hand, accedes to the Union's legitimate bargaining request, understandably common to all strik ing unions, that the strikers should be recalled to their jobs. . 614913-62-vol. 132-41 1 628 DECISIONS OF NATIONAL LABOR RELATIONS BOARD There are two other aspects of superseniority which distinguish it from the mere right of replacement granted in Mackay, and which por-, tend ill for the collective-bargaining process-and the right to strike, both protected by Sections 7 and 13 of the Act. First, whereas the threat of replacement by outsiders may solidify the strikers in their collective efforts, superseniority effectively divides the strikers against themselves. All employees formerly on layoff, and younger strikers with low seniority, immediately see their chance -of a lifetime to gain at one stroke the security which only long years of employment could theretofore give them; employees longer in the employer's service sense the threat, and are impelled to return to work to protect their seniority. This combination of threat and promise, inherent in grants of seniority not based on actual service, could ap- pear close to irresistible, and places strong pressure on the strikers, their mutual interest overwhelmed by, fear and desire, to abandon the strike. The present case illustrates the point. At the inception of the strike, all 478 employees in the bargaining unit honored the picket line or joined in strike activities. As the strike progressed, Respondent se; cured a gradually increasing number of new employees as replace- ments, but few strikers returned to work until Respondent's offer of superseniority was publicly announced. During the weekend of May 30 and 31, the Union publicized, Respondent's 20-year superseniority policy over the local television station 22 On June 10, the plan was announced by Respondent in a letter to all employees and union mem- bers; on June 15, Respondent posted it on the company bulletin board. During the week ending June 7, the total number of strikers who aban- doned the strike rose from 5 to 8. By June 14, the total had jumped to 23, and in the week ending June 21, it jumped over 200 percent to 87. The number increased to 125 during the week commencing June 22 23 At this point, the Union found it impossible to continue the strike; and decided it had to settle. The strike ended June 25. The second point is that superseniority renders future bargaining difficult, if not impossible, for the authorized collective-bargaining representative. Unlike the right of replacement granted under Mackay, which ceases to be an issue once the employer decides to re- tain all replacements at the strike's end, superseniority is a continual irritant to the employees and to the Union. Employees are henceforth set apart into two groups : those who stayed with the Union to the end and lost their seniority, and those who,returned before the end of . 22 Prior to this, the superseniority plan was considered "confidential' by Respondent; and had merely been discussed between the parties in bargaining. On May 27, Respondent told the Union it had settled on the 20 -year plan. $ In addition,, 57 new employees had been hired as replacements, and 70 employees formerly, on layoff had returned . Thus the number of strikers induced 'to abandon the strike greatly exceeded the number of new, employees hired as replacements, and was also greater than the number of laid-off employees induced to return to work. ERIE RESISTOR CORPORATION 629 .the strike and thereby gained extra seniority. This difference is re- emphasized with each subsequent layoff, for those who supported the union most faithfully are likely to be the first laid off. 'It is doubtful whether the Union can ever again succeed in calling, or even threat- ening, a strike, for those with 20 years' superseniority will be fearful that this time replacements may, perhaps, be granted 40 years' super- seniority. Those who were lucky enough not to be replaced during the first strike will prefer to remain at work, and regain the seniority so abruptly lost during the first strike. The effective reward of non- strikers and punishment of strikers inherent in superseniority stands as an ever-present reminder of the dangers connected with striking, and with union activities in general. In the present case, at the end of the strike, the Union received ap- proximately 190 withdrawal cards from former members. In the course of economic layoffs which followed, approximately 132 strikers who had not been replaced, and who had been recalled, were among the first to lose their jobs solely as a result of the superseniority plan. It is hard to conceive of continued effective collective bargaining under these circumstances. In view of the immediate consequences to employees' tenure which follow from a grant of superseniority, we do not believe that specific evidence of Respondent's discriminatory motivation is required to establish the alleged violations of the Act. In the Radio Officers' case,24 the Supreme Court pointed out that in some situations "specific evidence of intent to encourage or discourage is not an indispensable element of proof of violation of § 8(a) (3)." This is merely a corollary of the common-law rule that a person is held to intend the foreseeable consequences of his conduct, and the result is, in the words of the Supreme Court, that "proof of certain types of dis- crimination satisfies the intent requirement." 25 One of the situations specifically considered by the Supreme Court in Radio Officers' (Gaynor) involved disparate wage treatment of em- ployees solely on the basis of their union membership'and status. The Supreme Court upheld the Second Circuit's finding that this form of discrimination was "inherently conducive to increased union member-' ship," and, since the consequences were so plainly foreseeable, no further proof of "intent" was necessary. r 24 The Radio Officers' Union of the Commercial Telegraphers Union, AFL (A. H. Bull -Steamship Company ) v. N.L.R.B., 347 U.S. 17. 25 Id. at pp. 44-45. ' See also the Supreme Court's decision in Republic Aviation Corporation v. N.L.R.B, 324 U.S. 793, 795, where the Supreme Court upheld the Board 's 8(a) (1 ) and (3) findings with respect to the discharges of three stewards wearing union buttons, even though the discharges "were found not to be motivated by opposition to the particular union or we deduce, to unionism ." And see N.L R.B. v. Beth E. Richards; d/b/a Freightliner Equip- ment Company, 265 F. 2d 855, 860 (C.A. 3), where the court, in, discussing an'employer's criteria for layoffs, reiterated the rationale of Radio Ofllcers', supra, and observed : "It is 'possible that the criterion adopted , though alone reasonable enough; may have the fore. 630 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In our opinion, the present case is in every essential respect like Gaynor, supra. The right to strike is a privilege guaranteed to em- ployees by statute, and Respondent's superseniority policy-on its face discriminatory against those who continued to strike-clearly dis- couraged strike activities and union membership of employees. Such was the inevitable result of a preference granted for all time to those who did not join the Union's strike activities. Where discrimination is so patent, and its consequences so inescapable and demonstrable, we do not think the General Counsel need prove that Respondent subjec- tively "intended" such a result." Nor do we believe that Respondent's claim of "necessity" can be a defense to the type of conduct here found unlawful. Surely every employer faced with a strike, or any other form of union activity, will be first concerned with the well-being of his business. There is, more- over, no doubt that a strike may increase the intensity of this concern, for the primary purpose of most strikes is to apply economic pressure to strengthen the union's bargaining demands 29 But we do not believe that the effectiveness of a strike, or the difficulty an employer may have in securing replacements,29 can sanction the pervasive form of preferred treatment here utilized by the Employer 30 To excuse such conduct would greatly diminish, if not destroy, the right to strike guaranteed by the Act, and would run directly counter to the guaran- tees of Section 8(a) (1) and (3) that employees shall not be discrimi- nated against for engaging in protected concerted activities. We find, in conclusion, that Respondent's grant of superseniority during the course of the Union's strike was in violation of Section seeable result of affecting union activity , in which case the employer commits an unfair labor practice." 27 The Supreme Court's recent decision in Local 357, International Brotherhood of Team- sters, Chauffeurs, IVarehousemen and Helpers of America v. N.L.R.B. ( Los Angeles-Seattle Motor Express), 365 U.S. 067, does not in our opinion require a different conclusion, but rather supports the conclusion here reached. In Local 357 the Supreme Court reiterated its earlier position In Radio Officers' that "some conduct may by Its very nature contain the implications of the required intent; the natural foreseeable consequences of certain action may warrant the inference. . 21 ( Id at p. 675.) The Court in Local 3.,7 refused to infer discrimination from an exclusive hiring agreement which expressly provided that there should be no such discrimination. se See, e g., American Brake Shoe Company, Ramapo A jax Division, 116 NLRB 820, 831, enforcement denied 244 F. 2d 489 (C.A. 7). ao In view of our finding herein that necessity is not a defense to the type of conduct engaged in by Respondent, we do not pass upon Respondent's contention that, in the cir- cumstances of this case, it was in fact necessary to offer superseniority in order to procure strike replacements. Also In view of our decision herein , we do not pass upon the question of whether the Respondent had an express discriminatory intent in instituting its superseniorily plan. See California Date Growers Assn . and Ballas Egg Products , supra , footnotes 9 and 10. 801n other contexts , the Board and courts have held that an employer's economic con- cern does not justify conduct otherwise violative of the Act. See, e g., N L.R.B . v. Hudson Motor Car Company , 128 F. 2d 528, 532-533 (C.A. 6) and N.L.R.B. v. Gluek Brewing Com- pany dnd Bach Transfer and Storage Company, 144 F. 2d 847, 853-854 ( C A. 8), cited with apparent approval in Cusano, d/b/a American Shuffleboard Co. v. N .L.R.B., 190 F. 2d 898, 903 footnote 7 (C.A. 3). See also Star Publishing Co, 4 NLRB 498, 503 enfd 97 F. 2d 465, 470 (C;A. 9); Allis-Chalmers Manufacturing Company v. N.L.R.B., 162 F. 2d -435, 440 (C.A. 7). I ERIE RESISTOR CORPORATION 631; 8(a) (1) and (3) of the Act, and that Respondent's subsequent layoff of a large number of recalled strikers pursuant to such plan was likewise violative of these sections 31 As we have found, above, that superseniority was an unlawful form of discrimination, we find, in accordance with the Supreme Court's decision in Borg-Warner '31 that Respondent's continued insistence on this or a similar proposal, as a condition of negotiating an agreement with the Union, constituted a violation of Section 8 (a) (5), as alleged in the complaint.33 Having found that Respondent unlawfully insisted on, and adopted, its superseniority plan during the course of the Union's strike, we find the evidence supports the General Counsel's and the Charging Party's position that Respondent's unfair labor practices prolonged the strike, thereby converting it to an unfair labor practice strike. The-strike-at its.ineeption was economic in nature, with five con- tractual issues outstanding. However, on May 11, Respondent,intro- duced the subject of superseniority into the discussions, stating that it could sign no contract without some form of superseniority. Super- seniority soon became the dominant issue in the settlement of the strike. At informal "side-bar" conferences held May 14 and 15, the parties discussed the remaining issues aside from superseniority, and agreement seemed imminent. Union negotiator Collella went so far as to tell Respondent that "if they dropped the superseniority issue, we had a complete agreement." However, Respondent at the meeting on May 18 reiterated its position that superseniority was "something that management people want and we must have." The Union would not agree to superseniority, and the parties recessed for several days. When Respondent settled on the 20-year plan on May 28, the Union, si We do not agree with Respondent 's contention that the Union in its strike settlement agreement of July 17 waived - all rights for these employees . The settlement agreement provided , inter alia : "The Company 's replacement and job assurance policy to be resolved by the NLRB and the Federal Courts and to remain in effect pending final disposition." It is clear that this agreement was intended merely as an interim settlement pending legal determination of the employees ' rights In any event , we would not in our discretion honor a private settlement which purported' to deny to employees the rights guaranteed them by the Act. Cf Wooster Division of Borg-Warner Corporation, 121 NLRB 1492, 1495. 3= N L R B. v. Wooster Division of Borg-Warner Corporation, 356 U S. 342 . Cf. Mathis- son, supra (114 NLRB at p. 488). as The complaint also alleges that Respondent refused to bargain by engaging in dilatory tactics and shifting positions , by giving the Union insufficient time to consider proposals, and by failing to give the Union requested information as to the names of replaced strikers. With respect to the former allegations , we find the evidence insufficient to establish that Respondent's "change of positions" and "one-day offers" were anything other than bona fide strategic maneuvers on the part of Respondent , and we . find nothing unlawful in Respondent's tactics. See, a g., R J. Oil h Refining Co., Inc., 108 NLRB 641, 643; Solar Aircraft Company, 109 NLRB 130, 133. With respect to Respondent's failure to supply the Union with the names of the replaced strikers, the record indicates that on June 26 Respondent did furnish the Union with the requested information As Respondent has already supplied this information , and as we have found that Respondent unlawfully refused to bargain on other grounds , we do not believe any useful purpose would be served by predicating a finding of a refusal to bargain on this additional ground . See The Jacobs Manufacturing Co., 94 NLRB 1214, 1226, enfd. 196 F. 2d 680 ( C.A. 2). '632 DECISIONS OF NATIONAL LABOR RELATIONS BOARD held a meeting on May 29, and unanimously resolved to continue striking "until management stops its unfair labor practice by making us agree to giving superseniority to the scabs." Similar statements were made by union negotiators on June 11 and 23. At one point, Union Representative Copeland asked, "If we are willing to tear up the entire contract and give it back to you and start from scratch, would you then be willing to move off the superseniority ?" Respond- ent refused. It is well settled that an economic strike is converted to an unfair labor practice strike when an employer's unfair labor practices operate to aggravate, or prolong, the strike.34 In the present case, it is clear that by May 29, the date of the Union's resolution to continue striking over superseniority, Respondent's superseniority policy had served to aggravate and prolong the strike, despite a narrowing of the parties' disagreement on other issues. We find, therefore, that the Union's strike,' economic in its inception, was on May 29 converted to an unfair labor practice strike by the Respondent's unfair labor practices, found above. It follows that all strikers not replaced as of that date were, under, established law, entitled to reinstatement as of the date of their uncondiional abandonment of the strike." We find this date to have been June 25, 1959, when the Union notified the Respondent by tele- gram that the strike was terminated, and that the strikers were "ready, willing and able" to return to work.36 As Respondent failed on June 25 to fulfill its obligation to reinstate the unfair labor practice strikers, we find that it thereby committed an additional violation of Section 8 (a) (1) and (3) of the Act, as alleged in the complaint. THE REMEDY Having found that the Respondent has violated the Act, we shall order that it cease and desist therefrom, and take certain affirmative action in order to effectuate the policies of the Act. As we have found Respondent's 20-year superseniority policy to " Kohler Co, 128 NLRB 1062 ; Combined Metal Mfg. Corp., 123 NLRB 895, 897; J. H. Rutter-Rem Manufacturing Company, Inc., 115 NLRB 388 , 390, enfd . 245 F. 2d 594 (C.A. 5). 85 See, e g., N.L.R.B. v. Peoheur Lozenge Co., Inc., 209 F. 2d 393, 404-405 (C.A. 2), cert. denied 347 U. S. 953. 8e we find no merit in Respondent's contention that the Union 's offer of June 25 was conditional . Although the Union did state that the striking employees "desire[d] reinstatement in line with their seniority as per the agreement reached with your repre- sentatives," there was some question at the time as to the exact terms of the strike settle- ment. Respondent answered the Union's telegram the same day with Its own telegram, "welcoming" the Union 's decision to "terminate" the strike. Respondent made clear Its understanding that the agreement referred to in the Union 's wire was simply that Respond- ent would furnish a list of strikers who had been replaced , and would ,call back to work those eligible for jobs. A return telegram from the Union did not dispute this interpreta- tion. Thus, both parties treated the Union 's telegram as an unconditional offer to return to work, and the strikers who were recalled did so return. Moreover, Respondent in a note handed to the Union on June 26 stated : "The Company received notice of your ter- mination of the strike at 3 :30 p.m., June 25th , and considers that hour as the end of the strike." (General Counsel's Exhibit No. 11.) ERIE RESISTOR CORPORATION 633 have been discriminatory and in violation of the Act, we shall order the Respondent to forthwith rescind said policy, and to restore all strikers who sought reinstatement on June 25, 1959, to the seniority they would have enjoyed absent the discriminatory policy. We have also found that the strike, which began as an economic strike on March 31, 1959, was converted into an unfair labor practice strike on May 29, 1959, and that Respondent's refusal to reemploy the strikers on June 25, 1959, when they unconditionally applied for rein- statement, was discriminatory and violative of Section 8 (a) (1) and (3) of the Act. We shall therefore order the Respondent, insofar as it has not already done so, to offer to those employees who went on strike on March 31, 1959, and who were not replaced prior to May 29, 1959, immediate and full reinstatement to their former or substantially equivalent positions, dismissing, if necessary, any employees hired since May 29, 1959, to replace them .17 If, after such dismissal, there are not enough positions remaining for all these employees, the avail- able positions shall be distributed among them, without discrimination because of their union membership, activity, or participation in the strike, following such system of seniority or other nondiscriminatory practice as heretofore has been applied in the conduct of Respondent's business. Those strikers for whom no employment is immediately available after such distribution shall be placed upon a preferential hiring list, and they shall thereafter, in accordance with such list, be offered reinstatement as positions become available, and before other persons are hired for such work. Reinstatement, as provided herein, shall be without prejudice to the employees' seniority or other rights and privileges. We shall also order the Respondent to reimburse these employees for any loss of pay they may have suffered by reason of the Respondent's discrimination against them, by payment to each of them of a sum of money equal to the amount which he normally would have earned as wages during the periods (a) from June 25; 1959, the date of the Re- spondent's refusal to reinstate them upon their unconditional appli- cation, to the date of the Intermediate Report herein, and (b) from the date of this Decision and Order to the date of the Respondent's offer of reinstatement,"' or placement on a preferential hiring list in the manner hereinabove described, less his net earnings during said periods. Such loss of pay shall be computed on the basis of separate calendar quarters, in accordance with the policy enunciated in the Woolworth case." 17 See N.L.R.B. v. Peeheur Lozenge Co ., supra, and cases cited therein. The exact names of the discriminatees , as to whose identity there appears to be no dispute , shall be left to the compliance stage of the proceeding. ° When, as here , the Board, contrary to the Trial Examiner, orders reinstatement of employees, backpay is abated from the date of the Intermediate Report to the date of the Board's Decision and Order. 'IF. W. Woolworth Company, 90 NLRB 289. 634 DECISIONS OF NATIONAL LABOR RELATIONS BOARD We have further found that- Respondent discriminated against certain strikers who were recalled, by laying them off solely as a result of the operation of the Respondent's 20-year superseniority plan. We shall order that Respondent offer reinstatement to all such strikers who would not otherwise have been laid off, on the basis of their restored seniority, dismissing if necessary employees hired since May 29 who were retained solely because of the operation of the 20-year super- seniority plan. We shall also order that Respondent make whole all discriminatorily laid-off strikers for any loss of pay they may have suffered as the result of Respondent's superseniority policy. The amount of backpay thus due shall be computed in accordance with the Board's normal backpay policies, as set forth above. ORDER Upon the entire record in this case, and pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Erie Resistor Corporation, Erie, Pennsylvania, its officers, agents, successors, and assigns, shall : 1. Cease and desist from : (a) Maintaining or giving effect to its 20-year superseniority policy, or to any other seniority or layoff policy which discriminates against any of its employees with regard to the order in which they are to be selected for layoff, or with regard to any other aspect of their employ- ment relationship, on the basis of whether they had or had not engaged in strike or concerted activities, or whether they had or had not worked during a strike. (b) Discouraging membership in International Union of Electrical, Radio and Machine Workers, Local 613,' AFL-CIO, or in any other labor organization of its employees, by refusing them reinstatement upon their unconditional abandonment of their unfair labor practice strike, or by laying them off solely as a result of the operation of a discriminatory superseniority policy, 'or otherwise discriminating against them in regard to their hire or tenure of employment or any term or condition of employment, except as authorized in Section 8(a) (3) of the Act, as amended. (c) Refusing to bargain collectively with the aforementioned labor organization as exclusive bargaining representative of employees in the appropriate unit, by insisting that the Union agree to a discrimi- natory strike superseniority plan. The appropriate bargaining unit is: All production and mainte- nance employees at Respondent's Erie, Pennsylvania, plants, excluding clerical employees, office employees, engineering department em- ployees, accounting department employees, sales department employ- ERIE RESISTOR CORPORATION 635 ees, personnel department employees, time-study employees, expe- ditors, laboratory employees, nurses, quality control inspectors, time- keeping employees, executives, guards, professional employees, and supervisors as defined in the Act. - (d) In any like or related manner interfering with, restraining, or coercing employees in the exercise of rights guaranteed in Section 7 of the Act. 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act: (a) Upon request, bargain collectively with International Union of Electrical, Radio and Machine Workers, Local 613, AFL-CIO, as the exclusive representative of all employees in the aforementioned appro- priate unit. (b) Rescind its 20-year superseniority policy, and restore all strikers who sought reinstatement on June 25, 1959, to the seniority they would have enjoyed absent the 20-year superseniority policy. (c) Insofar as it has not already done so, offer the employees who went on strike on March 31, 1959, and who were not replaced prior to May 29, 1959, immediate and full reinstatement to their former or substantially equivalent positions, without prejudice to their seniority or other rights and privileges, or place them on a preferential hiring list, in the manner set forth in the section entitled "The Remedy," and make them whole for any loss of pay they may have suffered by reason of Respondent's discrimination against them, in the manner set forth in the section of this Decision entitled "The Remedy:" (d) Offer reinstatement to all recalled strikers who were laid off solely as the result of the operation of Respondent's 20-year super- seniority plan, and who would not otherwise have been laid off, and make all discriminatorily laid-off strikers whole for any loss of pay they may have suffered as the result of Respondent's superseniority policy, in the manner set forth in the section of this Decision entitled "The Remedy." (e) 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 analyze the seniority and reinstatement rights of employees and former employees and the amounts of backpay due under the terms of this Order. (f) Post at its plants in Erie, Pennsylvania, copies of the notice attached hereto marked "Appendix." 40 Copies of said notice, to be furnished by the Regional Director for the Sixth Region, shall, after being duly signed by the Respondent, be posted by it immediately upon 4° In the event that this Order is enforced by a decree of a United States Court of Appeals , there shall be substituted for the words "Pursuant to a Decision and Order" the words "Pursuant to a Decree of the United States Court of Appeals , Enforcing an Order." 636 DECISIONS OF NATIONAL LABOR RELATIONS BOARD receipt thereof, and maintained by it for 60 consecutive days there- after, in conspicuous places, including all places where notices to em- ployees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that said notices are not altered, defaced, or covered by any other material. (g) Notify the Regional Director for the Sixth Region, in writing, within 10 days from the date of this Order, what steps the Respondent has taken to comply herewith. IT IS FURTHER ORDERED that the complaint be, and it hereby is, dis- missed insofar as it alleges separate Section 8(a) (5) violations of the Act-not found herein. 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 maintain or give effect to our 20-year super- seniority policy, or to any other seniority or layoff policy which discriminates against any of our employees with regard to the order in which they are to be selected for layoff, or with regard to any other aspect of their employment relationship, on the basis of whether they had or had not engaged in strike or concerted activi- ties, or whether they had or had not worked during a strike. WE WILL NOT discourage membership in International Union of Electrical, Radio and Machine Workers, Local 613, AFL-CIO, or in any other labor organization of our employees, by refusing them reinstatement upon their unconditional abandonment of their unfair labor practice strike, or by laying them off solely as a result of the operation of a discriminatory superseniority policy, or otherwise discriminating against them in regard to their hire or tenure of employment or any term or condition of employment, except as authorized in Section 8(a) (3) of the Act, as amended. WE WILL NOT refuse to bargain collectively with International Union of Electrical, Radio and Machine Workers, Local 613, AFL-CIO, as exclusive bargaining representative of employees in the appropriate unit, by insisting that the Union agree to a discriminatory strike superseniority plan. Upon request, we will bargain collectively with the aforesaid Union. WE WILL rescind our 20-year superseniority policy, and restore all strikers who sought reinstatement on June 25, 1959, to the seniority they would have enjoyed absent the 20-year super- seniority policy. WE WILL, insofar as we have not already done so, offer the em- ERIE RESISTOR CORPORATION 637; ployees who went on strike on March 31, 1959, and who were not replaced prior,to May 29, 1959, immediate and full reinstatement to their former or substantially equivalent positions, dismissing, if necessary, any employees hired since May-29, 1959, to replace them. If, after such dismissal, there are not enough positions remaining for all these employees, the available positions shall be distributed among them, without discrimination because of their union membership, activity, or participation in the strike, follow ing such system of seniority or other nondiscriminatory practice as heretofore has been applied in the conduct of our business. Those strikers for whom no employment is immediately available after such distribution shall be placed upon a preferential hiring list, and they shall thereafter, in accordance with such list, be offered reinstatement as positions become available, and before other persons are hired for such work. Reinstatement, as pro- vided herein, shall be without prejudice to the employees' seniority or other rights and privileges. WE WILL make our employees whole for any loss of pay they may have suffered as a result of our discriminatory refusal to re- hire them on June 25,1959. WE WILL offer reinstatement to all recalled strikers who were laid off solely as a result of the operation of our 20-year super- seniority plan, and who would not otherwise have been laid off, on the basis of their restored seniority, dismissing if necessary employees hired since May 29 who were retained solely because of the operation of the 20-year superseniority plan. WE WILL make whole all discriminatorily laid-off strikers for any loss of pay they may have suffered as the result of our super- seniority policy. ERIE RESISTOR CORPORATION, Employer. Dated---------------- By------------------------------------- (Representative ) (Title) This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material. INTERMEDIATE REPORT STATEMENT OF THE CASE Upon a charge, as amended, filed by the International Union of Electrical, Radio and Machine Workers, Local 613, AFL-CIO , herein called the Union , the General Counsel of the National Labor Relations Board, through the Regional Director for the Sixth Region ( Pittsburgh, Pennsylvania ), issued a complaint dated April 7, 1960, alleging that the Respondent or the Company has engaged in and is engaging in unfair labor practices in violation of Section 8(a) (1), (3 ), and (5 ) of the Labor Management Relations Act, as amended . In its answer, the Respondent admits certain allegations of the complaint , but denies the commission of any unfair labor practices. Pursuant to notice a hearing was held on May 23, 24, 25, and 26, 1960, at Erie, Pennsylvania, before the duly designated Trial Examiner. All parties were 638 DECISIONS OF NATIONAL LABOR RELATIONS BOARD present and represented by counsel and were afforded opportunity to adduce evi- dence, to examine and cross-examine witnesses, to present oral argument, and to file briefs. On July 25 all counsel filed briefs which I have fully considered., Upon the entire record and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE COMPANY'S BUSINESS Counsel stipulated that the Company is a corporation organized and existing under the laws of the Commonwealth of Pennsylvania and maintains its principal office at Erie, Pennsylvania. The Company also has associated or subsidiary com- panies which operate other plants in Pennsylvania, Ohio, Mississippi, California, and Canada. The present case involves only the plant at Erie, Pennsylvania. At this plant, during times material herein, the Company was engaged in the manu- facture and sales of electronic components, electro-mechanical assemblies, and custom-molded plastics. During the 12-month period preceding the issuance of the complaint the Company shipped products valued in excess of $50,000 to places outside the State of Pennsylvania. For the purposes of this proceeding the Com- pany agrees that it is engaged in commerce within the meaning of the Act. I so find. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The issue - The principal issue is whether the granting of superseniority, under the circum- stances herein, to replacements of strikers and to strikers and/or other employees who returned to work during the strike constitutes a violation of Section 8(a)(1), (3), and (5) of the Act. B. The Company's operations at the Erie plant; labor relations history Counsel stipulated that from about 1943 until 1951, the production and main- tenance employees were represented by United Electrical, Radio and Machine Workers of America, CIO (UE), but since the latter date, and following proceed- ings before the Board, the employees in that category have been represented by the Union. The Company has had successive collective-bargaining agreements cov- ering these employees with the UE and the Union, the last agreement with the Union running from April 1, 1957, through March 31, 1959. The agreement con- tained a union-security clause and a provision for the checkoff of union dues. There is no dispute concerning the appropriateness of the unit alleged in the com- plaint, namely, all production and maintenance employees, with the usual statutory exclusions and other classifications of employees. I find the unit to be appropriate for the purposes of collective bargaining. I further find, on the basis of the record herein, that the Union represented a majority of the employees in the unit at all times material herein. The parties stipulated as follows concerning the operations at the Erie plant: The Company maintained and operated three divisions at the plant: (1) the electronics division, which manufactured electronic components, located in the north and south plants, (2) the electronic-mechanical division, which produced electro-mechanical assemblies, located in the east plant, and (3) the plastics division, which produced custom-molded plastics, situated in the west plant. As of March 31, 1959, the Company employed a total of 636 employees in its electronics division, 345 of whom were employed in the bargaining unit; in the electro-mechanical division approximately 13 of the 51 employees were in the bar- gaining unit, while in the plastics division some 120 out of about 200 employees were in the bargaining unit. In addition, the Company had about 450 employees in the unit on layoff status, approximately 400 of whom had no reasonable ex- pectation of being recalled. The parties further stipulated that as of March 31, 1959, under the terms of the union agreement, a male employee needed about 7 years' seniority to hold one of the jobs available, while a female employee required about 9 years' seniority. 1 Appended to the General Counsel's brief, as attachment A, Is a motion to correct spe- cified errors in the transcript. The corrections being appropriate and there being no objec- tion thereto, I grant the motion. Attachment A Is received In evidence as Trial Examiner's Exhibit No. 1. ERIE RESISTOR CORPORATION 639 ' As appears below, the Union went on strike at midnight, March 31, 1959, which continued until June 25, 1959, when it was terminated. The parties also stipulated that the electro-mechanical division, or the east plant, never reopened after the strike and the building is now used by another company. The plastics division, or west plant, operated until December 28, 1959, when all operations were discontinued. The Company no longer manufactures custom- molded plasitcs, but to the extent that such business is still conducted, such opera- tions have been consolidated in a plant operated by a subsidiary company in Ohio. The closing of these divisions and the removal of the plastics operation are not alleged as unfair labor practices and are not issues in the case. C. The negotiations between the Union and the Company; the strike By letter dated January 26, 1959, Edward F. Bordonaro, president of the Union, notified the Company of the Union's desire to enter into negotiations for a new agreement. On January 30, Gordon D. Ferrell, director of industrial relations, acknowledged the above letter and advised the Union of the Company's intention to change or terminate the agreement upon its expiration date of March 31, 1959. The parties stipulated that between February 10 and March 31, negotiating com- mittees of the Union and the Company, headed by Bordonaro and Ferrell, respec- tively, held 22 meetings during which they discussed proposals and counterproposals and while they reached agreement on many terms they were unable to conclude a final agreement. As of the latter date the parties had failed to agree upon the Union's demands for a general wage increase, limitation upon the Company's right to subcontract work, freezing seniority for quality control inspectors, vacations, and the payment of group insurance. Having failed to reach an agreement, the Union went on strike upon the expira- tion of its existing agreement, midnight March 31. The General Counsel concedes the strike was an economic one, but that on and after May 11, it was prolonged by the Company's unfair labor practices which converted the same to an unfair labor practice strike. 1. The events during the strike Raymond Bertone, administrative specialist under Ferrell, and Lewis J. Shioleno, general manager of the electronics division, both of whom were members of the negotiating committee, testified concerning the Company's operations during the strike. Plainly, all the employees in the bargaining unit responded to the strike call, for Bertone and Shioleno stated that during the first month of the strike the Com- pany attempted to continue operations by using clerks, engineers, and other em- ployees who were outside the bargaining unit. Shioleno related the Company had a number of orders on hand for electronic components and due to domestic and foreign competition decided it was necessary to operate the electronics division plants. Similarly, George Schau, general manager of the plastics division, testified that plastic products were manufactured to customer specification so it was essential to try to maintain production in this department. During April, Shioleno stated production in electronics was about 30 percent of prestrike levels, whice Schau said production in plastics was only 15 to 20 percent of normal production. As pro- duction was inadequate to meet customer demands, Shioleno stated that around the end of April the Company decided to obtain replacements for the striking employees. On May 3, the Company sent a letter to each of the striking employees stating that commencing May 7, the Company was going to obtain replacements and the striker would retain his job until such time as he was replaced, but not thereafter. The local newspaper carried a news article on May 4, quoting from the letter and saying that strikers who failed to report for work by May 7 faced loss of their jobs. According to a job summary of employees working on production during the strike, produced by Bertone and prepared from personnel and payroll records, the Company for the workweek commencing May 4 had 140 employees working on pro- duction and maintenance jobs, all of whom were clerks or other workers outside the bargaining unit.2 As of that date no replacements had been hired nor had any of the strikers returned to work. 2 The initial column of the summary, Respondent's Exhibit No. 12, is captioned "Week Ending," and under this column appears 5-4-59, and successive weeks to 6-22-59. Bertone testified the heading is erroneous and should read "Week Beginning " May 4, 1959. He further stated that employment figures in other columns cover the entire workweek for the stated period. 640 DECISIONS OF NATIONAL LABOR RELATIONS BOARD . 'On May 6, Bordonaro addressed a letter to striking employees who had crossed the picket line warning them of penalties that could be imposed by the Union for .working in a struck plant or acting as strikebreakers. Meantime, between April 8 and May 6, the Union and the Company held eight bargaining sessions. On May 7 and 8, the plant closed down because of mass picketing. As a result thereof the Company discharged five employees for alleged violence in connection with the picketing. The discharges became an issue in the bargaining negotiations, as well as the basis for unfair labor practice charges, but the matter was finally resolved by the parties. According to the records produced by Bertone, the Company, for the week com- mencing May 11, hired 1 new employee as a permanent replacement, 23 employees on layoff status reported for work as replacements, and I striker returned to work. On May 11, Ferrell advised the Union at a meeting of the bargaining committee that the Company had given assurance to persons hired on returning to work during the strike they would not be laid off upon settlement of the strike, and in order to effectuate its assurances to these persons, the Company had to give them some kind of superseniority, otherwise their jobs would not be permanent. The Union took the position that superseniority was discriminatory and illegal and wanted no part of any such plan. The Company proceeded with its hiring program and as of the week beginning May 25 it had 8 newly hired employees, 39 employees who had been on layoff status, and 5 returning strikers. Ferrell, Bertone, and Shioleno testified the replacements, at the time they were hired and thereafter, -were given assurance they would not be laid off or discharged when the strike was settled. As the Company was not securing many replacements under its program, the officials, around May 25, decided upon a plan under which 20 years' seniority, for the purpose of layoff and recall, would be added to the service of anyone returning to work during the strike. Ferrell stated the plan was reduced to writing on May 27 and entitled "Replacement Policy and Procedure." In brief, the plan detailed pro- cedures for reemployment of striking employees, laid-off employees, and new hires and added 20 years' seniority to the regular seniority of all such persons for layoff and recall. On May 28, Ferrell stated the plan was explained to the Union, although he was not certain whether the Union was presented with a written copy thereof. Bordonaro said the Company outlined the plan and gave the Union a written proposal of super- seniority in general terms. The Union asked for a list of the names of striking em- ployees who had been replaced but the Company refused to furnish this information on the basis of the Board's decision in Oklahoma Rendering Company (75 NLRB 1112). While the Company did not publicize the plan, nor inform the production workers thereof, the Union about May 30 publicized the plan in a television broadcast. According to the stipulation of the parties, 12 meetings were held between May 11 and June 5. At each of these meetings, as well as subsequent meetings, Bordonaro stated the subject of superseniority was discussed, with the Company taking the po- sition that it must have some form of superseniority and the Union opposing any such provision or plan. On June 10, the president of the Company sent a letter to all the employees who were working or on layoff status as of March 31 in which he reviewed acts of violence on the picket line and stated that the Company was instituting a 20-year seniority policy for persons returning to work during the strike. On June 14, the Company placed a prominent advertisement in the newspaper en- titled "A Report to the Community on the Erie Resistor Strike." In the course of this lengthy report the Company stated it had assured employees returning to work during the strike that they would not be fired or penalized by the Union and that their jobs would not end with the settlement of the strike. The Company also stated that the "Union now asks that the Company withdraw any measure of additional job security for the employees." The ad concluded with the Company saying that for the reasons stated it could not agree to continuation of the union-shop clause, but offered the Union a maintenance -of-membership provision. On June 15, the Company posted copies of its replacement policy and procedure of May 27 on the plant bulletin boards, with a supplement that the policy was in effect, unless the Union agreed to a substitute plan providing for 20 years' seniority. After the notice was posted the employees were informed that the policy was in effect. ' The Company continued its replacement program and as of the workweek com- mencing June 22, it had a total of 57 newly hired employees, 70 laid-off employees, ERIE RESISTOR CORPORATION - - 641 and 125 returning strikers, plus the 140 clerical and other employees. In addition thereto the Company hired' 58 temporary employees whose employment was to terminate upon settlement of the strike. At the meeting of June 24 the Union, as stated by Bordonaro and Angelo Colella, international representative, submitted a proposal that the strike be terminated on the basis that (1) the "replacement problem" be resolved by the Board or final dis- position by the Federal courts, (2) the Company to furnish the Union with necessary data on job openings and replacements, (3) strikers who have been replaced to be considered as laid-off employees, (4) a moratorium be declared on the granting of additional seniority to anyone returning to work while the proposal was being considered, (5) provision for the resolution of the discharges, and (6) the Union agreed to a maintenance-of-membership provision. Colella said that Ferrell agreed to give an answer by June 26. He further stated that following the meeting the Union withdrew the picket line at the plant and publicized its action in the news- papers and on the radio and television stations. On June 25, the Union sent a telegram to the Company stating it had terminated the strike as of 5:30 p.m., June 24, and that all striking employees desired rein- statement in line with their seniority as per the agreement reached with the Company. The same day the Company replied by telegram advising the Union that the only agreement reached was that the Company would furnish a list of strikers who had been replaced and a list of discontinued jobs. The Company also stated it would call back strikers still eligible for jobs in an orderly fashion as promptly as business warranted. The Union answered this telegram with another telegram, sent the same day, wherein it requested an early meeting to resolve the one issue between the parties and urged that all the conditions, wages, and hours agreed to would remain in effect. On June 26, the Company submitted its written reply rejecting the Union's pro- posed settlement agreement. The Company also presented the Union with a list of strikers who had been replaced, the list being subject to correction. Later, on July 6, the Company gave the Union a corrected list of strikers who had been replaced. Thereafter, between July 7 and 17, the bargaining committees met on three or four occasions and on the latter date the parties executed a new basic contract and a strike settlement agreement. The basic contract contains a mantenance-of-membership clause while the strike settlement provides the Company's replacement and job assurance policy is to be resolved by the Board and the Federal courts and is to remain in effect pending final disposition. 2. The hiring of replacements; the reinstatement of striking employees After the Company's announcement that it was going to resume operations and start hiring replacements, as expressed in the above-mentioned letter of May 3, Ferrell instructed Bertone to set up procedures for hiring replacements. As the program was given wide publicity the personnel office received many inquiries con- cerning employment, in fact the Company received some job applications shortly after the strike started, and applicants were instructed to come to the office where they filled out the standard job application form and were interviewed by Bertone or his associates. The Company did not lower its hiring standards and still required female applicants to be high school graduates, while male applicants had to have some kind of work experience. Bertone stated that when applicants were accepted as permanent employees they were told they would not be laid off or discharged by reason of the settlement of the strike. Bertone knew of the 20-year seniority policy on May 27, and followed the procedure outlined in that statement of policy. As already stated, the Company, for the workweek of June 22, had hired as permanent replacements 57 new employees, 70 employees who had been in layoff status, and 125 returning strikers. In addition the Company between June 8 and 22 hired 58 temporary employees, college students, all of whom were discharged about 1 week after the strike was called off. On June 26, as stated above, Bertone fur- nished the Union with a list of replaced strikers, which list was later corrected. Bertone said that when the strike terminated the Company had about 300 applica- tions for employment which were not considered or processed. Ferrell confirmed statements contained in an affidavit given to a Board agent to the effect that the Company had 300 applications on hand and, if it so desired, the Company could have broken the strike and replaced all the striking employees. Continuing, he stated that since there were some 10,000 unemployed persons in the labor area, there would have been no difficulty in finding sufficient employees, but the Company proceeded slowly in its replacement program in order to preserve, if possible, a continuity of employment. Colella also testified, and his testimony was not contra- 642 DECISIONS OF NATIONAL LABOR RELATIONS BOARD dicted, that at the bargaining session on June 5, Shioleno declared the Company had 300 applications and that the Company was ready to replace the strikers but he stopped the plan because he did not want to break the Union. On one occasion, June 17, the Company placed an advertisement in the newspaper for female employees. The ad stated women were wanted "for steady work," gave the general job qualifications, and stated that applicants should call the office for interview. The General Counsel also produced four official publications by the U.S. Depart- ment of Labor entitled "Area Labor Market Trends," which were received in evi- dence. These publications disclose that before and throughout the strike the city of Erie was classified as an "F" chronic surplus area, that is, job seekers were sub- stantially in excess of job openings. Bertone testified that following the termination of the strike the Company recalled the striking employees who had not been replaced and whose jobs had not been eliminated. The strikers were recalled in the order of their seniority, except for the first 2 weeks when the Company reinstated certain experienced workers it needed for specialized products. Bertone confirmed the fact that all persons who came to work during the strike, excluding the temporary workers and clerical and other workers, were given 20 years' seniority for layoff and recall. He added that super- seniority could not be used for the purpose of job "bumping." Bertone produced a summary of company records showing the total number of employees in the bargaining unit, on a weekly basis, following the settlement of the strike. For the workweek commencing June 29, the Company had 358 employees, which number gradually increased so that by the week of September 21 there were 442 employees in the unit. Thereafter, the number steadily decreased and for the week of April 25, 1960, there were but 240 employees in the unit. Ferrell admitted that the application of the superseniority policy resulted in the layoff of many em- ployees, the reinstated strikers, who otherwise would have been retained. The General Counsel does not contend the reduction-in-force was discriminatory, but that the Company's utilization of superseniority in selecting employees for layoff was discriminatory and violative of the Act. 3. The withdrawals from the Union Shioleno testified that on June 30 he called a meeting of the employees to inform them the Union had agreed to a maintenance -of-membership clause and it was up to them whether they wished to become or remain members of the Union, or refrain from becoming or remaining union members . In this connection Shioleno exhibited and explained three cards to the employees; one card, of pink color, was a form of resignation from the Union and revocation of the union dues' checkoff ; a white card, which was an application for membership in the Union; and a green card, an authorization for checkoff of union dues. Shioleno advised the employees the cards would be available at the foreman's desk. Bordonaro testified the Union received about 173 pink or withdrawal cards between July 1 and 17, and some 17 similar cards subsequent thereto . I mention the foregoing as part of the chronology of the case. Under the circumstances I find nothing unlawful in the Company 's actions. D. The applicable decisions The General Counsel contends that the Company's adoption of the 20-year senior- ity, under the circumstances found above, was, and is, unlawful on the theory that (1) such action was illegal per se, and (2) the policy was motivated by unlawful considerations. The Company asserts there is no authority to support the per se theory and that the evidence shows that the policy was announced and adopted for legitimate economic reasons. There is no dispute that the Company had the right to replace permanently the strikers since the strike was an economic one. Speaking of this right the Supreme Court, in N.L.R.B. V. Mackay Radio & Telegraph Co., (304 U.S. 333, 345-346), plainly stated: an employer, guilty of no act denounced by the statute, has [not] lost the right to protect and continue his business by supplying places left vacant by strikers. And he is not bound to discharge those hired to fill the places of strikers, upon the election of the latter to resume their employment , in order to create places for them. The assurance by [the employer] to those who accepted employment during the strike that if they so desired their places might be,permanent was not an unfair labor practice nor was it such to reinstate only so many of the strikers as there were vacant places to be filled. ERIE RESISTOR CORPORATION 643 Here the controversy centers on the announcement and adoption of the 20-year seniority policy granted to striking employees, laid-off employees, and new hires who crossed the picket line. The Board and the courts, in several cases, have passed upon the legality of a policy which accords a form of supersemority to non- strikers or strike replacements as against strikers. The issue was first presented in Potlatch Forests, Inc., 87 NLRB 1193 (1949). There the Union called an economic strike on August 7, 1947, after an impasse in negotiations, which resulted in a shutdown of the Respondent's operations. A few weeks later strikers began crossing the picket line, new employees were hired as replacements, and by October 10 the Respondent had some 1,750 employees out of a normal complement of 2,600 workers. The parties met on several occasions between October 7 and 10, and one of the subjects discussed related to procedures to be followed in getting the strikers back to work and how replacements and returned strikers were to be protected in the jobs they were holding at the termination of the strike. On October 12, the parties reached a strike settlement agreement which included a provision that all former employees would return to work without dis- crimination on October 13, and no later than October 22, in order to protect their job rights. Shortly after the execution of this agreement, company officials deter- mined upon and drafted a "Return-to-Work Policy," which they claimed was to provide a guide for uniform interpretation and application of the strike settlement agreement. The pertinent portion of the policy provided for the division of em- ployees, for purposes of determining seniority upon a reduction in force, into two classes, one composed of those who had crossed the Union's picket line during the strike; the other made up of employees who remained out on strike during its entire course. This form of superseniority was later referred to by the Respondent as "strike seniority." The "Return-to-Work Policy" was drafted without consulting the Union and after it was drafted it neither submitted it to any union official, nor was it printed or otherwise generally publicized among the employees. In fact employees became aware of "strike seniority" only when they as individuals inquired about their own seniority status. Although officials of the Union did not see a copy of the policy until June 1949, the Union was aware that the Respondent was maintaining a policy of preferential treatment to employees who had worked during the strike. The Respondents' principal defense was that the Union agreed to "strike seniority" as part of the settlement agreement. This defense was rejected and the Board held that a seniority policy which classified employees on the basis of whether they had or had not worked during a strike, to the detriment of the latter group, was discrimi- natory and violative of Section 8(a)(1) and (3) of the Act. In denying enforcement of the Board's order, N.L.R.B. v. Potlatch Forests, Inc. (189 F. 2d 82, 86 (C.A. 9)), the court held that the evidence was insufficient to establish that the true purpose motivating the, Respondent's adoption of the "strike seniority" policy was a desire to penalize those members of the Union who had most persistently asserted the Union's demands. The court stressed the fact that the Com- pany had advocated "strike seniority" before the strike was settled and adopted that policy at the time of the settlement of the dispute. The court concluded that "the `discrimination' between replacements and strikers is not an unfair labor practice despite a tendency to discourage union activities, because the benefit conferred upon the replacements is a benefit reasonably appropriate for the employer to confer in attempting `to protect and continue his business by supplying places left vacant by the strikers'." The court further stated that the record did not disclose that the Respondent in fact had assured the replacements that "their places might be per- manent," but that such assurance need not be proved. The issue next arose in Mathieson Chemical Corporation and/or Olin Mathieson Chemical Corporation, 114 NLRB 486 (1955). Following the termination of a strike, and after all the strikers had been put back to work, the Respondent, for the first time, decided to separate its employees into two seniority groups for layoff purposes, depending on whether or not they had returned to work before the end of the strike. The Respondent did not contend that, as an economic measure to get employees to work during the strike, it had promised them superseniority. There is no indication the Respondent hired or attempted to hire replacements . In an ensuing economic layoff the Respondent in effect dismissed the complainants because they remained on strike, while retaining an equal number of other employees with less seniority because they returned to work. It was stipulated the complainants would not have been laid off except for the superseniority policy. In finding a violation of the Act, the Board held that "the Respondent's change of seniority policy and its consequent dismissal of the complainants were in fact motivated not by any legitimate economic interest of its own, but by a desire to punish the complainants for exer- cising the right guaranteed in Section 7 to engage in concerted activities, and a wish 614913-62-vol. 132-42 644 DECISIONS OF -NATIONAL LABOR RELATIONS BOARD to reward the other employees for abandoning or not participating in the strike." The Board was of the unanimous opinion that the Potlatch decision was distinguish- able on its facts. The Court of Appeals for the Fourth Circuit fully sustained the Board's findings and conclusions in Olin Matlueson Chemical Corporation v. N.L.R.B., 232 F. 2d 158. (Affirmed without opinion, 352 U.S. 1020.) The court also pointed out that the case differed factually from the Potlatch case in that the "strike seniority" in Potlatch was advocated before the strike was settled and adopted at the time of the settlement thereof. Moreover, there was an absence of unlawful motivation on the part of Potlatch. However, the court disagreed with a portion of the Potlatch opinion wherein the Ninth Circuit held that assurance to replacements that their jobs would be permanent need not be proved. On this point the Fourth Circuit stated: With a strike in progress, the primary concern of the employer is to keep his plant in operation. It is then proper for an employer, who might be unable to procure replacements save upon a promise of permanent tenure, to promise such tenure to the replacements. The question was determined the third time in California Date Growers Associa- tion, 118 NLRB 246 (1957). Here the Respondent instituted a seniority policy under which seniority of striking employees was reduced below that of nonstrikers and replacements. Although the Respondent claimed this action was necessary for eco- nomic reasons, the superseniority policy was not announced until the Respondent published its hiring list, more than 3 months after the strike ended. The timing of this action, the Board said, distinguished the case from the Potlatch case, and the Board reaffirmed its views as expressed in the Olin Mathieson decision. Continuing, the Board found that the Respondent in adopting the superseniority policy, at a time when it was engaging in other unfair labor practices, was motivated by a desire to discriminate against the striking employees rather than for economic reasons. The Board further found that while the Respondent may have generally told the replace- ments they would be "maintained" after the strike, the replacements were not in- formed of any new seniority policy until publication of the hiring list. Moreover, one of the Respondent's officials admitted that no mention was made of loss of seniority to strikers who were offered reinstatement after the strike because the Re- spondent did not want to "agitate the situation." The Board concluded by stating that while the Respondent had the right permanently to replace the strikers, "This is not to say, however, that the Respondent after the strike was over could go further than that and reduce the seniority of returning strikers, who had not been replaced, to punish them because they engaged in protected concerted activity." In these cir- cumstances the Respondent violated Section 8 (a) (1) and (3) of the Act. The Board's order was enforced by the Ninth Circuit Court of Appeals in N L.R.B. v. California Date Growers Association, 259 F. 2d 587. The court stated that the decisions in the Mackay Radio and Potlatch cases indicate the Respondent's adoption of the seniority policy did not constitute, per se, an unfair labor practice and that such action in particular situations may be perfectly permissible within the Act. Nevertheless, "the motive of the employer in carrying out these actions becomes the controlling factor," citing the Olin Mathieson decision. The court pointed out that the facts make the instant case clearly distinguishable from the Potlatch case, in that in Potlatch "the employer made its position as to `superseniority' and protection of employment tenure for nonstrikers, clear and open before the termination of the strike," whereas in the instant case the employees were not informed of the change of seniority "until long after the settlement of the strike." The court held there was substantial evidence to support the Board's finding that the Respondent's adoption of the superseniority policy was motivated by a desire to punish the strikers. The most recent decision dealing with this issue is Ballas Egg Products, Inc., 125 NLRB 342. In this case the union, in the summer of 1957, engaged in a campaign to organize the respondent's employees. During this drive the Respondent inter- rogated its employees concerning their union activities, threatened to shut down the plant if the employees selected the union as their bargaining agent, encouraged the formation of a labor organization of its own choosing, and transferred an employee because of activities on behalf of the union. In a complaint proceeding the Board found that this conduct interfered with the rights guaranteed the employees under the Act in violation of Section 8(a)(1) thereof. (121 NLRB 873.) On July 3, 1957, the union called a strike. Some 83 employees joined the strike while about 75 remained at work. On July 5, the respondent assembled the non- strikers in the plant and informed them that they would be given preference in reten- tion in future layoffs over new hires and strikers who might later return to work. While the respondent believed this policy would keep the plant in operation, it made no mention of this belief to the nonstrikers when the policy was announced. - ERIE RESISTOR CORPORATION 645 The strike terminated July 19 without any replacements beng hired or sought during the period of the strike . With the end of the dispute the strikers requested reinstatement. Due to the seasonal decline in business , the respondent had only 14 job openings, so it reinstated 14 strikers and placed the remaining strikers on a preferential hiring list . The strikers were not informed of the new superseniority policy. With the start of the busy season,' around January 1958, the respondent recalled 19 additional former strikers. In July the respondent found it necessary to lay off 12 employees and in August it laid off 2 more employees . In line with its new seniority policy the respondent selected 14 strikers for layoff . This was the first time that the strikers were aware of this policy. The parties stipulated that if the Respondent's former seniority policy had been utilized in this layoff , 11 of the 14 former strikers would have retained their jobs. The Board found that the respondent's motivation in adoptng , maintaining, and utilizing its superseniority policy was impelled by antiunion considerations rather than any economic interest of its own, and the case is controlled by the Board and court decisions in California Date Growers and Olin Mathieson. The Board noted that, as in the California Date Growers case, the respondent 's discriminatory motive was evidenced by unfair labor practices which occurred immediately prior to the announcement of its superseniority policy. And, as in the Olin Mathieson case, the illegality of the respondent 's motivation stems from the fact that it neither hired nor sought replacements during the strike and there is no probative record evidence that the adoption and announcement was necessary to entice strikers to remain at work. Accordingly, the superseniority violated Section 8(a)(1) and (3) of Act. The Board stated it was unnecessary to, and did not, pass upon the Trial Examiner's further finding that the respondent's conduct was unlawful under the Board's holding in the Potlatch case (which finding is cited at length in the General Counsel's brief), because the facts are different from those in the Potlatch case. Analysis and Concluding Findings I have no difficulty in concluding that the alleged violation may not be sustained on the per se theory . Granting, as argued by the General Counsel , that the Potlatch case was decided on that basis and that it has not been specifically overruled , subse- quent decisions by the Board distinguish Potlatch and make it clear that motive is the controlling factor in determining the legality of an employer's institution of a superseniority policy or plan? The remaining issue, therefore, is whether the evidence supports the General Counsel's alternate theory that illegal motivation prompted the Company 's announce- ment and establishment of the 20-year seniority policy. As detailed above, the Company made no effort to hire replacements during the first month of the strike but attempted to maintain operations at the plant with em- ployees outside the bargaining unit . As this force was unable to meet production demands the Company, on May 3, wrote the strikers that it was going to obtain replacements commencing May 7 . The Union countered with a letter to some of the strikers warning them of penalties that could be imposed against strikebreakers. While Bordonaro asserted the letter was sent to strikers who had crossed the picket line, no strikers had returned to work as of that date. The Company was unable to secure any replacements on May 7, in fact the plant was closed down on May 7 and 8 because of mass picketing. On May 11 , Ferrell advised the Union that the Company had assured employees hired or returning to work during the strike that their jobs would be permanent and the Company had to give them some type of superseniority . The Union summarily rejected any such plan . The Company proceeded with its hiring program and advised replacements their jobs would be permanent. Since the Company was not securing a sufficient number of replacements, its officials on May 25 decided upon the 20-year superseniority policy and notified the Union of the policy on May 28. Although the Company did not publicize the policy the Union did so in a television broadcast . Bordonaro also admitted the subject of superseniority was discussed at some 12 bargaining sessions between May 11 and June 5, as well as meetings subsequent thereto. On June 10, the Company sent a letter to all employees who were working or on layoff status as of March 31, informing them of the 20-year seniority policy. On June 14, the Company placed an ad in the newspaper that replacements would not lose their jobs upon settlement of the strike. On June 15, the Company posted copies of its replacement policy and procedure 3 See also, Twenty-second Annual Report of the NLRB, pp. 71-72. 646 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and informed the employees the policy was in effect. Thereafter the Company con- tinued to hire replacements. On June 25, the Union notified the Company it had terminated the strike. On July 17, the parties executed a new basic contract and a strike settlement agree- ment, the latter providing that the legality of the superseniority policy shall be determined by the Board and the courts. In my opinion the facts in this case, tested with the, criteria set forth in the applicable decisions, are wholly inadequate to support a finding that the Company adopted the superseniority policy for proscribed purposes. Here the Company has a record of contractual relationships with the Union and its predecessor for many years and the present controversy is bottomed exclusively on the superseniority policy. Unlike the facts found in the Olin Mathieson, California Date Growers, and Ballas Egg cases, the Company announced and adopted its superseniority policy during the course of the strike, not subsequent to the settlement thereof. Again, unlike the circumstances present in California Date Growers and Ballas Egg, there is no contention, much less evidence, that the Company was engaging in, or had engaged in, any other unfair labor practices at or about the time it announced and adopted the superseniority policy. The facts also differ from those in Olin Mathieson and Ballas Egg, in that the Company sought and hired replacements during the strike, whereas the employers in those cases neither hired nor sought replacements during the strike. Thus, in the instant case there is a complete absence of the factors which the Board has relied upon as evidence of illegal employer motivation in the announcement and adoption of a superseniority policy. Nor do I find any other factors upon which a finding of illegal motivation might be predicated. The General Counsel concedes that an employer may "induce" prospective re- placements to work during an economic strike by the granting of additional seniority, if this is necessary to secure their services for the continuation of his business. In this case, he argues that the Company has failed to prove it was necessary to grant superseniority in order to obtain replacements. While the General Counsel has carefully screened the record for evidence to support his necessity argument, he relies principally upon the fact that the Company had 300 unprocessed job applications when the strike ended, certain statements by Ferrell and Shioleno and the failure of the Company to communicate its superseniority policy to prospective replacements before they were hired. It is true the Company did have 300 unprocessed applications at the termination of the strike. I am also satisfied that at the bargaining session of June 5, Shioleno declared in the course of a heated argument, that the Company could have replaced the strikers but he prevented it because he did not want to break the Union. Like- wise, Ferrell admitted the strike could have been broken, but the Company "pro= ceeded slowly in its replacement program so as to preserve, if possible, a continuity of employment." There is no doubt that the question of whether it was necessary to grant superseniority in order to obtain permanent replacements is an element to be considered in determining the employer's motive for his action. Actually, the only evidence tending to support the General Counsel's position is the fact that the Com- pany had 300 job applications , which he characterizes as "the crushing blow to Re- spondent's case." At first glance this fact might appear impressive , but when con- sidered in the context of the Company's course of action it loses its importance and is wholly insufficient to warrant a finding of unlawful motivation on the part of the Company. Further, the Company's employment records refute the idea that it was able to secure replacements without some form of superseniority. A summary of these records shows the following hirings, exclusive of temporary replacements: Week commencing: Laid-olp Permanent employees replacements permanent Returning new employees replacements strikers May 11, 1959 ---------- 1 23 1 May 18, 1959 ---------- 1 32 4 May 25, 1959 ---------- 8 39 5 June 1, 1959 ---------- 18 39 8 June 8, 1959__________ 34 47 23 June 15, 1959 ---------- 43 59 87 June 22, 1959 ---------- 57 70 125 Thus, in my opinion, the employment records fully sustain the Company's position that the replacement program was ineffective until the Company announced its superseniority policy for replacements. ERIE RESISTOR CORPORATION 647 Nor do I see how the statements of Shioleno and Ferrell warrant the conclusion or inference that the adoption of the superseniority policy was prompted by antiunion considerations . On the contrary, these expressions make it clear that the policy was promulgated for economic reasons, not for illegal or discriminatory purposes. The General Counsel asserts that the Company made no effort to communicate its superseniority policy to prospective replacements or unemployed workers and that the assurance was given to replacements after they were hired , not while they were still prospective replacements , which shows there was no need to grant superseniority. The manner in which the policy was announced and publicized by the Company, as well as the Union, is set forth above, and I believe it is reasonable to infer that the public and persons interested in employment were aware of the policy. The General Counsel's attempt to draw some distinction between hired replacements and prospec- tive replacements is a fine one and without substance . The undisputed evidence shows that when replacements were hired they were assured their jobs would not cease with the termination of the current strike, and such assurance is sufficient under the applicable decisions. At the same time, the General Counsel contends that the Com- pany's communication of its superseniority directly to the Union , the laid-off em- ployees, and the strikers proves that the Company was seeking to induce the strikers to abandon the strike ; therefore, its motive "must have been to punish employees who continued to exercise their rights under the Act." Certainly the Company had the right to propose a superseniority plan to the Union as a subject for bargaining, albeit the subject was a hard and difficult one from the Union 's standpoint. As might be expected, the parties were unable to reach agreement on superseniority , although it was discussed at practically every bargaining session held subsequent to May 11. Insofar as presenting the plan directly to the strikers and laid-off employees the Com- pany did nothing more than send a letter to the strikers , on May 3, stating it in- tended to hire replacements and later, following an impasse in the negotiations, the Company, on June 10, addressed a letter to the strikers and the laid-off employees ad- vising them of the 20-year seniority policy. Since there was nothing unlawful in the Company's course of conduct, I find it may not serve as a basis for inferring that the Company established the policy to punish the strikers, as urged by the General Counsel. The General Counsel advances other points and arguments , such as the Company's insistence upon and unilateral adoption of the superseniority policy, as additional violations of Section 8(a)(5). He admits these so-called violations stem from the basic issue and are not essential to a finding that the superseniority policy is violative of the Act under the Potlatch case. While I have considered these points and argu- ments, I do not deem it necessary to discuss them. ,In summary, the issue here calls for the balancing of somewhat conflicting rights of the employees to engage in an economic strike and that of the employer to main- tain and operate his business. Thus, the Supreme Court recognized in Mackay that the employer's legitimate interest in continuing operation of his plant was a right to be balanced against the broad statutory protection granted economic strikers. In other words, an employer is not required to underwrite an economic strike by shutting down while it is in progress and reinstating the strikers after it is over, but is entitled to keep his plant running if he can and find men to do the work of the strikers. If he could him-men only for the duration of the strike, subject to displacement on the return of the strikers, he obviously would have little or no chance of hiring anyone. Accord- ingly, the balance between the employee's risk of losing his job by striking and the employer's risk of losing his business through an inevitable shutdown has been struck in favor of the employer. As I view it, the Ninth Circuit in Potlatch extended the principle of Mackay and held that replacements could be given superseniority, pro- vided there was no discriminatory motivation, but merely an intent to operate the business involved. Subsequent decisions of the Board and the courts-Olin Mathie- son, California Date Growers, and Ballas Egg-hold that the motive of the employer is the controlling factor in determining whether the policy or plan was for leeitimate economic reasons or to punish or retaliate against the strikers for their participation in protected union activities. From the evidence and findings herein I am convinced, and find, that the 20-year seniority policy of the Company was announced and adopted for legitimate economic reasons. In view of this finding, it follows that the strike which was economic in its inception was not thereafter converted into an unfair labor practice strike and the subsequent layoff of strikers, who would have been retained except for the utilization of the super- seniority policy, was not discriminatory. Upon the basis of the foregoing findings of fact and upon the entire record, I make the following: 648 DECISIONS OF NATIONAL LABOR,RELATIONS BOARD CONCLUSIONS OF LAW 1. The operations of the Respondent occur in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. The Respondent has not engaged in unfair labor practices as alleged in the complaint within the meaning of- Section 8(a) (1), (3 ), and (5 ) of the Act. [Recommendations omitted from publication.] Hoisting & Portable Engineers Local Union #701, International Union of Operating Engineers, AFL-CIO and Cascade Em- ployers Association, Inc. and Corvallis Sand & Gravel Co., Eugene Sand & Gravel Co., and Wildish Sand & Gravel Co., Parties to the Contracts. Cases Nos. 36-CB-235 and 36-CB- 235-2. July 31, 1961 DECISION AND ORDER On September 8, 1960, Trial Examiner William E. Spencer issued his Intermediate Report in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the copy of the Inter- mediate Report attached hereto. Thereafter, the Respondent filed exceptions to the Intermediate Report and a supporting brief and the Charging Party filed 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 [Chairman McCulloch and Members Fanning and Brown]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Interme- diate Report, the exceptions and briefs, and the entire record in this case,1 and hereby adopts the findings, conclusions, and recommenda- tions of the Trial Examiner only insofar as they are consistent with the following decision and order .2 1 We find no merit in the Respondent's contention that the Trial Examiner held that Respondent was bound by the determination made in the earlier case, Cascade Employers Association, Inc., 127 NLRB 488, and that it was not given a de novo consideration of whether the Cascade Employers Association constituted an appropriate multiemployer unit. We have in any case given the issue de novo consideration . The Respondent moved for leave to amend its answer to the complaint and to reopen the record on the issue of appropriate unit. As the issue was fully litigated at the hearing, we agree with the Trial Examiner that the Respondent's position as to the unit in its answer is not controlling. We therefore grant the Respondent 's motion to amend and find it unnecessary to remand the case in view of our disposition of the matter herein. 2 The request by Respondent for oral argument is hereby denied because, in our opinion, the record and the briefs adequately present the issues and the positions of the parties. 132 NLRB No. 44.