Pan Atlantic Steamship Co.

868 DECISIONS OF NATIONAL LABOR RELATIONS BOARD earned as wages from the date of the discrimination against him to the date of the offer of reinstatement, less his net earnings during such period , in accordance with the formula set forth in F. W. Woolworth Company, 90 NLRB 289: Ernest M. McGee, James W. Pittman, Henry J. Pulka, William W. Shirley, Gerald E. Wil- liams, John Alvin Williams, David George Wingate, Leo A. Wingate, R. J. Andrews Jr., Etna Beck, Jimmy Beck, J. A. Booth, Pope C. Branson, Jr., Edward J. Brown, Jakie L. Cooner, H. A. Floyd, William H. Freeman , Lawrence E. Holmes, H. M. Martin, Benny G. Mercer, E. C. Mobley, David A . Nelson, J. R. Newsome, David R. Rich, Tenley Sweat , R. E. Taylor, Donald E . Watson, Henry T. Watson, W. C. Watson, Bevis V. White, Freddie A. Wilder, H. H. Williams, and J. D. Piver. Because of the variety of the unfair labor practices engaged in by the Respondent, the Trial Examiner senses an attitude of general opposition to the purposes of the Act in general, and hence the Trial Examiner deems it necessary to order that the Respondent cease and desist from in any manner infringing upon the rights guaran- teed in Section 7 of the Act. CONCLUSIONS OF LAW 1. Seafarers International Union of North America , Atlantic and Gulf Districts, AFL-CIO ( Harbor Inland Workers Division ), is a labor organization within the meaning of Section 2(5) of the Act. 2. By discharging the employees named above in "The Remedy ," thereby dis- criminating in regard to their hire and tenure of employment and discouraging union activities among its employees , the Respondent has engaged in and is engag- ing in unfair labor practices within the meaning of Section 8 (a)(3) and ( 1) of the Act. 3. By interfering with , restraining, and coercing its employees in the exercise of the rights guaranteed to them in Section 7 of the Act, the 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 did not commit unfair labor practices with regard to the following employees : Allen W. Guest, David W. Lyle, Mikell L. McCarthy, David A. Watson, Frank L. Wingate, Clyde R. Snow, James B. Smith, and Woodrow Sheely. [Recommendations omitted from publication.] Pan Atlantic Steamship Company and Felix Hernandez Velez International Longshoremen's Association Local 1575, ILA- DCPPR, ILA-Ind., and International Longshoremen's Associa- tion, Local 1855, ILA-DCPPR, ILA-Ind., and International Longshoremen's Association, District Council of Ports of Puerto Rico, ILA-Ind. and Felix Hernandez Velez. Cases Nos. 24-CA-1122 and 24-CB-307. August 10, 1961 DECISION AND ORDER On July 27, 1960, Trial Examiner A. Norman Somers issued his Intermediate Report in the above-entitled proceeding, finding that the Respondent Unions and the Respondent, Pan Atlantic Steamship Company, had each of them engaged in certain unfair labor practices and recommending that they cease and desist therefrom and take certain affirmative action, as set forth more fully in the Intermediate Report attached hereto. He further found that the Respondents had 132 NLRB No. 58. PAN ATLANTIC STEAMSHIP COMPANY 869 not engaged in other alleged unfair labor practices.' Thereafter the General Counsel filed exceptions to the Intermediate Report and a supporting brief. 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 brief, and the entire record in the case, and hereby adopts the findings, conclusions, and recommen- dations of the Trial Examiner with the following additions and modifications : The General Counsel excepts to the Trial Examiner's failure to find that the Respondent Company violated Section 8(a) (3) and (1) of the Act and the Respondent Unions violated Section 8(b) (2) and 8(b) (1) (A) of the Act, by the failure to hire or refer for hire Felix Hernandez Velez. We find no merit in this exception. In the summer of 1958, the Respondent Company commenced oper- ations of a specialized trailership service in Puerto Rico, centered on the ports of San Juan and Ponce. This service required a specialized type of stevedoring for which prospective workers had to undergo it period of training. To acquire trained personnel, the Respondent Company entered into a prehiring contract with the International Longshoremen's Association, and hiring hall arrangements with Locals 1575 and 1855 of the ILA. These hiring hall arrangements established an exclusive referral system for stevedores and warehousemen under which preference was given to members of the two locals. They were clearly unlawful? In due course, rosters of permanent union person- nel competent to perform the specialized shipside operations was established. At the Respondent Company's warehouse operations in San Juan (until June 15; 1959) and at Ponce, the hiring hall worked as follows : The warehouse superintendent informed the office of the president of the respective locals as to the personnel requirements for the following day. A slip of paper indicating the number required would be handed to an ILA member present in the office and familiar with prospective crew members, who would go out in the hall and pick from the waiting men as many as were needed. A list was then made up and sent to the Respondent Company. On the following day a 1 However, the Trial Examiner, through oversight, failed to recommend dismissal of that portion of the complaint. 2 The Trial Examiner found correctly that by maintaining and enforcing these agree- ments the Respondents violated Section 8 ( a) (3), (2), and ( 1) and Section 8(b) (2) and 8(b) (1) (A ) of the Act, respectively. No exceptionv were filed to these findings and we hereby adopt them. However, in view of the decision of the United States Supreme Court in Local 357, International Brotherhood of Teamsters , Chauffeurs, Warehousemen and Helpers of America (Los Angeles-Seattle Motor Express ) v. N.L.R B.. 365 U S. 667, we do not adopt the Trial Examiner 's rationale insofar as it is based on our holding in Mountain Pacific Chapter of the Associated General Contractors, Inc., et at, 119 NLRB 883 Rather we rely on our rationale in National Maritime Union of America, et al., 78 NLRB 971, enfd. 175 F. 2d 686 ( C.A. 2), cert. denied 338 U .S. 954. 870 DECISIONS OF NATIONAL LABOR RELATIONS BOARD shapeup would take place. If riot all of the persons on the list ap- peared, substitutes were picked by a trusted ILA member- from other applicants appearing on a standby basis. The Charging Party, Velez, was one of those trusted ILA members, and frequently performed the functions of selecting personnel for the list and picking replacements if not all on the list appeared. In most cases, members in good stand- ing in the respective locals were selected for employment. The system, however, was not rigid. Sometimes nonunion men also got jobs. One day in March 1959, after receiving a,request from the Respond- ent Company for a warehouse crew, President Ortiz of Local 1575 in San Juan, designated a man other than Velez to pick out men to work on the following day. Velez, who was in the union hall, was not selected. He, nevertheless, appeared for the shapeup on the following morning. Again, another man conducted the shapeup. Three of the previously selected workers did not show up. Three others were selected in their place, one a union member and two nonunion men. Velez was not among them. He went to Respondent's warehouse superintendent to complain and was told that the Company had nothing to do with the selection of personnel. An official of the Re- spondent Company testified that had Velez been referred, it can be assumed that he would have been given a job. The General Counsel's argument with respect to the alleged dis- crimination against Velez is as follows : Where as here, a company has granted a union virtually unlimited and unfettered control over the hiring and referral of personnel, and where the union, regardless of motive, fails to refer an applicant, and where it is further shown, that if referred, such applicant would have been employed by the com- pany, a violation of Section 8(a) (3) and 8(b) (2) is established. In other words, such nonreferral is an implementation of an unlawful hiring agreement, and as such is violative of the Act, regardless whether there was, in fact, discrimination in favor of union members, and even if, as here, nonunion men were referred although union men in good standing were seeking referral. Although the General Counsel did not so state explicitly, his theory compels the conclusion that where a number of job applicants in a shapeup seek referral for one available job, and the union in a non- discriminatory manner refers one man, the others are thereby ipso facto discriminated against in violation of the Act. The failure to refer any applicant for employment on the part of the union operating an unlawful hiring hall would thus be a per se violation of Section 8(b) (2) and 8(b) (1) (A), and correlative action of the Employer a violation of 8(a) (3) and (1). We do not believe that the purposes of the Act require the adoption of the General Counsel's theory. It fails to make the distinction between the existence of a hiring hall agreement and its operation. PAN ATLANTIC STEAMSHIP COMPANY 871 It is well established that both the union and the employer violate the statute if they commit discriminatory acts against specific employ- ees or applicants for employment in the operation of a hiring hall agreement or arrangement which in itself is lawful. Vice versa, it seems to us that a hiring hall agreement, unlawful on its face, may exist, or unlawful hiring arrangements, giving preference to union members, may be maintained, while nevertheless in individual cases applicants for employment are referred in a nondiscriminatory man- ner without recourse to such unlawful agreements or arrangements. Surely, if a union, notwithstanding the existence of an unlawful agreement or arrangement, refers all applicants in a nondiscrimina- tory manner, we would not find the operation of the hiring hall as distinguished from the agreement or arrangement, to be violative of the Act. The same would appear to apply where specific, albeit not all, referrals are nondiscriminatory. In such event, the mere existence of an unlawful hiring hall agreement or arrangement affects the free- dom of employees to engage in union activities or to refrain from engaging therein. However, we believe it sufficient to remedy the coercive effect of such agreement or arrangement to order the parties thereto to cease and desist from giving effect to or enforcing them. We see no valid reason to order reinstatement or backpay for employ- ees or job applicants whose failure to be referred is not related to any agreement or arrangement or whose employment opportunities have not been adversely affected by actual discrimination on the part of the union or the employer. To grant reinstatement or backpay to an unlimited number of job applicants because one of them was referred to the one available job in a nondiscriminatory manner would be in the nature of a penalty rather than a remedial action. The record shows that on the day Velez failed to get a referral from the' Union and employment from the Company the referral system was operated in a nondiscriminatory manner. Velez, himself an active participant in the operation of the hiring hall and a member of the Union'of long standing, had no more claim to the one available job than any other applicant. He had not been requested by name by the Respondent Company,3 there is nothing to indicate that he was persona non grata with the Union, nor is there any other evidence showing that his nonreferral was caused by anything more than nonavailability of a Sufficient number of jobs for all applicants present at the shapeup. Under these circumstances, we do not consider him a victim of the operation of the unlawful hiring hall agreement. In accordance with 3The Radio Officer's Union of the Commercial Telegraphers Union , AFL (A. H. Bull Steamship Company ) v. N L R .B., 347 U.S. 17; International Hod Carriers' Building and Common Laborers' Union of America, Local No . 83, AFL-CIO and Thurman Hughes, its Business Agent ( Consolidated Construction Company, Inc ), 124 NLRB 1131, at 1132 ; Local 401, Boilermakers (Roberts & ' Company), 126 NLRB '832 ; Los Angeles-Seattle Motor, Empress, Incorporated, 121 NLRB 1629 at 1630, enfd. 275 F. 2d 646 (C.A.D.C.), cert. granted 363 U.S. 837. - ' 872 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the recommendations of the Trial Examiner, we shall therefore -dis- miss the complaint with respect to Velez. TIlE REMEDY The General Counsel also excepts to the failure of the Trial Exam- iner to recommend that the Respondents reimburse to the employees all dues and other moneys exacted from them during the existence of the illegal hiring and referral agreements and arrangements. With- out adopting the Trial Examiner's rationale as to the nonapplication of the Brown-Olds 4 doctrine because of the circumstances of this case, we shall not grant this remedy for the reasons stated in the decision of the United States Supreme Court in N.L.R.B. v. Local 60, United Brotherhood of Carpenters and Joiners of America, AFL-CIO, et at., 365 U.S. 651. ORDER Upon the entire record in the case, and pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that : A. Respondent Company, Pan Atlantic Steamship Company, its officers, agents, successors, and assigns, shall : 1. Cease and desist from : (a) Performing, maintaining, continuing, giving effect to, or en- forcing, any agreement or understanding, oral or written, with Inter- national Longshoremen's Association Local 1575, ILA-DCPPR, ILA-IND., International Longshoremen's Association Local 1855, ILA-DCPPR, ILA-IND., and International Longshoremen's As- sociation, District Council of Ports of Puerto Rico, ILA-IND., or with any other labor organization, which requires membership in, clearance, or referral from, or approval of, the above or any other labor organization as a condition for employment or work, or which accords preference in employment to members of. the above, except as authorized by Section 8 (a) (3) of the Act, as modified by the Labor- Management Reporting and Disclosure Act of 1959. (b) Recognizing the above-named labor organizations or any of them as representative of its employees for the purpose of dealing with Respondent Company concerning grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of employment, unless and until the said labor organizations shall have demonstrated their exclusive majority representative status pursuant to a Board-conducted election among the Respondent Company employees. (c) Entering into, renewing, or giving effect to any contract or understanding with said Unions affecting its employees until and & J. S. Brown-E. F. Olds Plumbing h Heating Corporation, 115 NLRB 594. PAN ATLANTIC STEAMSHIP, COMPANY 873 unless they shall have demonstrated their majority status, in the man- ner stated above. (d) In any like or related manner interfering with, restraining, or coercing any employees in the exercise of the rights guaranteed in Section 7 of the Act, except to the extent that such rights may be affected by an agreement requiring membership in a labor organiza- tion as a condition of employment, as authorized by the proviso of Section 8 (a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Withdraw and withhold all recognition from the above-named labor organizations as the representative of its employees for the purpose of dealing with it concerning wages, hours, and other terms and conditions of employment, unless and until said organizations have demonstrated their exclusive majority status pursuant to a Board- conducted election. (b) Post at the Respondent Company's piers, copies of the notice attached hereto marked "Appendix A." s Copies of said notice, to be furnished by the regional Director for the Twenty-fourth Region, shall, after being duly signed by the Respondent Company's repre- sentatives, be posted by it immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent Company and its representatives to insure that said notices are not altered, defaced, or covered by any other material. (c) Post at the same places and under the same conditions as set forth in (b) above, as soon as they are forwarded by the Regional Director, copies of the Respondent Unions' notice herein marked "Appendix B." 6 (d) Furnish to the Regional Director signed copies of the notice marked "Appendix A" for posting by Respondent Unions, as herein- after directed. (e) Notify the Regional Director for the Twenty-fourth Region, in writing, within 10 days from the date of this Order, what steps the said Respondent Company has taken to comply herewith. B. Respondent Union, International Longshoremen's Association Local 1575, ILA-DCPPR, ILA-IND., International Longshoremen's Association Local 1855, ILA-DCPPR, ILA-IND., and International Longshoremen's Association, District Council of Ports of Puerto Rico, 5In 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." See footnote 5, supra. 874 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ILA-IND., their officers, representatives, agents, successors, and as- signs, shall: 1. Cease and desist from : (a) Maintaining, performing, continuing, giving effect to, or enforc- ing any arrangement, agreement, or understanding, oral or written, with Pan Atlantic Steamship Company, which requires membership in Respondent Unions as a condition of referral, or which accords preference in employment to members of Respondent Unions, except as authorized by Section 8 (a) (3) of the Act, as amended by the Labor- Management Reporting and Disclosure Act of 1959. (b) In any like or related manner restraining or coercing any em- ployees of, or applicants for employment at, Pan Atlantic Steamship Company in the exercise of their rights as guaranteed by Section 7 of the Act, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment, as authorized in Section 8(a) (3) of the Act, as modi- fied by the Labor-Management Reporting and Disclosure Act of 1959. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Post at the offices and meeting halls of Respondent Unions, copies of the notice attached hereto marked "Appendix B." Copies of said notice, to be furnished by the Regional Director for the Twenty- fourth Region, shall, after being duly signed by the representatives of Respondent Unions, be posted immediately upon receipt thereof, and be maintained by the Respondents for 60 consecutive days thereafter, in conspicuous places, including all places where notices to members are customarily posted. Reasonable steps shall be taken by the Re- spondent Unions to insure that said notice shall not be altered, defaced, or covered by any other material. (b) Mail to the Regional Director for the Twenty-fourth Region copies of the notice attached hereto marked "Appendix B" for posting by Pan Atlantic Steamship Company. (c) Post at the same places and under the same conditions as set forth in (b) above, as soon as they are forwarded by the Regional Director, copies of the Respondent Company's notice marked "Appen- dix A." (d) Notify the Regional Director for the Twenty-fourth Region, in writing, within 10 days from the date of this Order, what steps they have taken to comply herewith. IT IS FURTHER ORDERED that the complaint be, and it hereby is, dis- missed insofar as it alleges that the Respondents discriminated against Felix Hernandez Velez in violation of Section 8(a) (3) and (1) and section 8(b) (2) and (1) (A) of the Act, respectively. PAN ATLANTIC STEAMSHIP COMPANY 875 MEMBERS FANNING and BROWN took no part in the consideration of the above Decision and Order. APPENDIX A 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, as amended, we hereby notify you that : WE WILL NOT maintain and enforce any agreement, understand- ing, or practice whereby membership in, clearance or referral from, or approval of, International Longshoremen's Association Local 1575, ILA-DCPPR, ILA-Ind.; International Longshore- men's Association Local 1855, ILA-DCPPR, ILA-Ind.; and International Longshoremen's Association, District Council of Ports of Puerto Rico, ILA-Ind., is required as a condition of em- ployment, or which requires that preference in employment be given to members of the Union, except as authorized in Section 8(a) (3) of the Act, as modified by the Labor-Management Re- porting and Disclosure Act of 1959. WE WILL NOT in any like or related manner interfere with, re- strain, or coerce employees or applicants for employment in the exercise of the rights guaranteed in Section 7 of the Act, except to the extent that such rights may be affected by an agreement re- quiring membership in a labor organization as a condition of employment, as authorized in Section 8 (a) (3) of the Act, as modi- fied by the Labor-Management Reporting and Disclosure Act of 1959. WE WILL NOT recognize the above-named labor organizations and we hereby withdraw and will withhold all recognition from the above-named labor organizations as the representatives of our employees for the purpose of dealing with us concerning wages, hours, and other terms and conditions of employment, and we will not enter into, renew, or give effect to any contract or understand- ing with said unions affecting our employees, unless and until said labor organizations shall have demonstrated their exclusive majority status pursuant to a Board-conducted election. PAN ATLANTIC STEAMSHIP COMPANY, Employer. Dated---------------- By------------------------------------- (Representative ) (Title) This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material. 876 DECISIONS OF NATIONAL LABOR RELATIONS BOARD APPENDIX B NOTICE TO ALL MEMBERS OF INTERNATIONAL LONGSHOREMEN'S Associ- ATION LOCAL 1575, ILA-DCPPR, ILA-IND .; INTERNATIONAL LONG- SHOREMEN'S ASSOCIATION LOCAL 1855, ILA-DCPPR, ILA-IND.; AND INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, DISTRICT COUN- CIL OF PORTS OF PUERTO Rico, ILA-IND. Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify you that : WE WILL NOT maintain and enforce any agreement, understand- ing, or practice with Pan Atlantic Steamship Company whereby membership in, clearance from, or approval of, our Unions is required as a condition of employment, or which requires that preference in employment be given to members of our Unions, except as authorized in Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. WE WILL NOT in any like or related manner restrain or coerce employees or applicants for employment in the exercise of the rights guaranteed in Section 7 of the Act, except to the extent that such rights may be affected by an agreement requiring member- ship in a labor organization as a condition of employment, as authorized in Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. INTERNATIONAL LONGSHOREMEN'S ASSOCIATION LOCAL 1575, ILA-DCPPR, ILA-IND.; IN- TERNATIONAL LONGSHOREMEN'S ASSOCIATION LOCAL 1855, ILA-DCPPR, ILA-IND.; AND INTERNATIONAL LONGSHOREMEN'S ASSOCI- ATION, DISTRICT COUNCIL OF PORTS OF PUERTO Rico, ILA-IND., Labor Organization. Dated---------------- By------------------------------------- (Representative ) (Title) This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material. INTERMEDIATE REPORT AND RECOMMENDED ORDER STATEMENT OF THE CASE This consolidated proceeding, with all parties represented , was heard in Santurce, Puerto Rico, from February 23 to March 4, 1960, inclusive . The issues were the alleged violations by the Respondent Employer of Section 8(a)(1), (2 ), and (3), and by Respondent Unions of Section 8(b)(2) and 8 (b)(1)(A) of the Act. The parties waived oral argument (except for discussions , passim, of certain legal points as they arose during the hearing ). After initially electing not to file briefs, they have since, in compliance with the direction of A. Norman Somers, the duly designated Trial Examiner, filed statements of their positions concerning what issues remain PAN ATLANTIC STEAMSHIP COMPANY 877 in-tlie , wake of the Supreme Court's supervening decision • rendered April 25, 1960, in Local Lodge No. 1424, International Association of Machinists, AFL-CIO; et al. v. N.L.R.B., 362, U.S. 411, (the so-called "Bryan Manufacturing Company" case). Upon'the entire record, and from my observation of the witnesses, I hereby make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE EMPLOYER The Respondent Employer, Pan Atlantic Steamship Company, herein sometimes referred to as the Company or Pan Atlantic, is a Delaware corporation which op- erates a "trailership" service between ports in continental United States and the ports of San Juan and Ponce in Puerto Rico, deriving an annual revenue therefrom in ex- cess of $100,000. Jurisdiction is undisputed. If. THE LABOR ORGANIZATIONS INVOLVED Respondent Unions, Locals 1575 and 1855 of International Longshoremen's Asso- ciation, Ind., and the District Council of the Ports of Puerto Rico of the same Inter- national, are labor organizations within the meaning of the Act. Local 1575 rep- resents the employees in San Juan and Local 1855 those in Ponce. The Council negotiates with employers in Puerto Rico on behalf of both locals. Except where there is a specific need to distinguish them, they will be collectively referred to as the ILA or the Union. III.' THE UNFAIR LABOR PRACTICES A. Introduction: The matters disposed of by the Supreme Court's supervening decision Much of this case has been washed out by the Supreme Court's decision in the Local Lodge No. 1424, International Association of Machinists, AFL-CIO, case. The General Counsel's attack was trained largely on the recognition which the Company granted to the Unions and the contract made with it on July 16, 1958. This was more than 6 months before March 16, 1959, when the original charges were served, and thus prosecution for the transaction of July 1958 is barred by passage of time. However, as in the Local Lodge No. 1424 case, the General Counsel claimed that although the original transaction was out of legal reach, the continued maintenance of the relationship it created was not. He attacked as a violation of the Act the Company's continued recognition of the Union because of the claimed prematurity of the original one in that the force employed when recognition was first given was not representative in size and character of the unit involved; he assailed the union-shop and checkoff provisions of the contract, because, although unoffending on their face, the contract itself was made with a union lack- ing, by reason of the same prematurity of the original recognition, valid status as exclusive collective-bargaining representative of the employees in the unit covered; and finally, he challenged the exclusive referral arrangement made by the Company with the Union on the ground that even if it were free of other defects (which are a separate basis for attacking the arrangement, to engage our attention later) the Union, also because of the prematurity the original recognition, lacked the requisite capacity to enter into any kind of exclusive referral arrangement. It happened that in late August 1958, more than a month after recognition was first accorded, and still within the time-barred period preceding the charges, the Board conducted a consent election among the employees in the now fully estab- lished unit, and the Union polled all of the valid, unchallenged votes cast, on the strength of which the Board issued its certification to the Union. Dutifully invok- ing ;time-honored dogma, the General Counsel contended that all the votes cast in the privacy of a Board-provided booth, like all the perfumes of Arabia, could not wipe away the stain of the prematurity of the original recognition, until and unless expiated by completely undoing the existing structure. All that is now behind us. Superveningly, on April 25, 1960, the Supreme Court, in the Local Lodge No. 1424 case, held that the passage of time which shelters from prosecution the origin of the relationship shields also its continuance, when the sole basis for impugning the continuance is the alleged vulnerability of the origin. This takes out of legal reach and we must treat as valid the Union's status as exclu- sive collective-bargaining representative of the employees in the unit in question, the contract and the union-shop and checkoff clauses within it, and, indeed, the referral arrangement insofar as it was claimed that the Union lacked capacity to enter into an otherwise unoffending one. In compliance with my direction that the parties state their legal positions in the light of the decisions in the Local Lodge No. 878 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 1424 case, the General Counsel has amended his complaint by striking the allega- tions which attack the parties' present relationship on the basis of the alleged il- legality of its origin. This leaves us with the residual claim of the General Counsel that the exclusive referral arrangement is illegal in that it lacks the requisite safeguards against dis- crimination as prescribed by controlling Board doctrine and that the Charging Party was discriminated against under it. We turn to these matters now. B. The referral arrangement 1. Its prelude To get started in business at the waterfront in Puerto Rico, Respondent Company had to muster a working force with the help of a union which had access to a labor market to which the Company was a stranger. How it came to be ILA is itself a background item of some interest. Trailership service, in which the Employer is engaged, differs from standard freighter service in that the cargo, instead of being loaded directly on or unloaded directly from the hold of the vessel, is first placed into a "trailer," or container, which is in turn loaded into the hold, and conversely, unloaded from the hold before the cargo is removed. It is a mechanized operation, requiring specially trained personnel for many of its features, particularly in the, shipside operation of loading or unloading, as distinguished from the warehouse op- eration of storing. In March 1958, about 3 to 4 months before the Company here embarked upon the trailership service in Puerto Rico, Waterman Steamship Cor- poration, its then parent, tried to institute the service on the island. Waterman brought to San Juan from continental United States of America, a fully loaded trailership, the SS Beinville. That ship was laid up at port for nearly 4 weeks while Waterman's officials tried to muster a crew for its unloading through UTM, another union on the island waterfront, with which Waterman had dealings in re- spect to other operations. The ship,returned to the States with the cargo unloaded. Henry .Wells, then per- sonnel officer of Waterman and later occupying that position for the Company, testified this was because Waterman balked at UTM's insistence upon selecting the personnel without giving Waterman a voice in that process, for which Waterman held out because of the specialized character of trailership stevedoring. Eusebio G. Moreno, president of the ILA District Council in Puerto Rico, intimated that Water- man's misadventure of March was really due to the dissatisfaction which he and his minions, then on the outside looking in, had been able to instill in the UTM mem- bership with the contract being negotiated by the latter with Waterman. At any rate,,in June 1958, when Respondent Company's filial tie to Waterman was severed and it became an independent concern, the same men who had negotiated on behalf of Waterman with UTM in March were now negotiating for Respondent Company with ILA. By way of insight with the mores of filling personnel needs at the water- front, it is noted that, according to Moreno's testimony, it had been originally con- templated that the negotiations would be with UTM and ILA, for an arrangement whereby UTM would supply the personnel one half of the time and ILA the other. UTM lost interest and the negotiations were carried on entirely with ILA. In return for the assurance given by Moreno that Respondent Company need have no fear of running with ILA into the kind of snag that Waterman ran into with UTM, Respondent Company made some whopping concessions in respect to wage rates and other conditions, and ILA, in turn, made substantial concessions to the Company regarding a voice in the selection of personnel. 2. Its characteristics As is typical of waterfront operations, the personnel needs of the Company, both at San Juan and Ponce, vary from day to day, the force reaching its peak, at each port, with the day of the week in which the vessel arrives (usually on Tuesdays at San Juan and Wednesdays at Ponce) and its nadir on the day farthest removed from ship's arrival, when only a skeleton crew of about half a dozen people work at the respective warehouses. The size of a shipside, or stevedoring, crew to work at actual loading or unloading, is fixed by the contract (which is one of the concessions achieved by the Union). The number for each vessel is 49, consisting of 2.gangs of 21 each, 6 checkers, and a waterboy. At the warehouse, the peak size, leached on day of ship's arrival, is about 50 in San Juan and 20 in Ponce. The day's force is mustered each morning through the customary waterfront shapeup, where the men report at the dock and those to work are determined from the appearance of their names on a list. The.Union's role in preparation of the list PAN ATLANTIC STEAMSH'IP' COMPANY 879 and in the modifications of it is the basis for the attack here on the referral system. At each port, there is a list and shapeup for the shipside, or stevedoring, crew, and a separate one for that of the warehouse. In respect to the shipside crew at each port, the Union deferred to the Company's need for a specialized permanent per- sonnel from the day that the first vessel arrived and operations began. This was on Tuesday, August 5, 1958, at San Juan and August 6 at Ponce. Before these respective dates, the Company had been training some people whom it had acquired on its own in the handling of trailer trucks and cranes and other special features of shipside operations in a trailer-ship service. For the remainder it turned to the Union, and the men referred by it furnished the pool from which the shipside work force was mustered and selected. By the time of the ship's arrival in the respective ports on August 5 and 6, 1958, there was a complete list of 49 men for the shipside crew at each port. These were made up of persons whom the Company itself preliminarily acquired and trained and of those whom the Union supplied and the Company tested and trained. Whether the Company's contribution to the list was as high as 50 percent, which it claimed at the hearing , is, as I view it, no longer material. The persons on each list were tried and tested for competency and the lists became fixed well before the 6 months preceding the charges, so that the list as thus used is beyond attack because of the Union's role in its original preparation, even though member- ship in the Union was from the start a prerequisite to being on it. The procedure for the shapeup at shipside operations is for the stevedoring super- intendent at each port, on the day before the ship's arrival , to send notification of that fact to the president of the appropriate local-Guillermo Ortiz, of Local 1575 at San Juan , and Ramon Mejias, of Local 1855 , at Ponce. Even though the number of persons needed for that eventuality is already predetermined by the contract, the notification ceremonially includes a statement of the next day's needs by category of position and the number in each. And even though the persons to do the work have already been determined by the list, the president of the local refers the persons on it for the next day's work and the following morning sends to the Company a fresh list of names duplicating the already preestablished one. The next morning , the names on the list are read off at the company pier. Those present are put to work. When one on the list does not show up , his replacement is selected from the ranks of persons reporting at the pier in a standby capacity. These replacements are normally from the ranks of the Union unless the demand outruns the supply, in which case a nonmember may be selected . The company officials indicated that replacements, whether for the day or permanent ones to replace such on the list as have dropped out, are made after "consulting" the president of the local. But it is clear from the pretrial statements of these witnesses and their admissions on probing that the consultation consists of the local president's naming who the replacement shall be. As to the warehouse at each port , the referral system was altogether discontinued at San Juan on June 15, 1959, and the General Counsel does not quarrel with the Company's hiring practice there from that date on. The system for filling personnel needs at the San Juan warehouse, until June 15, 1959, and at that in Ponce to date is relatively the same, with minor variances. At San Juan, the warehouse superin- tendent would inform Local 1575's president, Guillermo Ortiz, or his secretary, of the needs for the day following. Ortiz would note on a slip of paper the number of men needed in each classification . He would hand this over to an ILA member present, whom he knew to have worked for the Company before and to be familiar with the persons comprising its crew. The latter would be instructed to go outside the hall, where those waiting to be referred were gathered, and to select from their ranks as many persons as were indicated on the paper. In fulfullment of this instruc- tion, the desienee would then go outside and indicate his selection by picking up from among the many being waved in his face the ILA membership cards of the persons picked. (Sometimes a social security card would do instead, but that was only in the infrequent instance where the supply of ILA members ran out, usually because of a surging demand created by the fact that some other company was also expecting a vessel the next day.) The cards would be turned over to Ortiz, who would make up a list of names from them. The next morning, Ortiz would send the list and the cards to the Company. The names on the list would be read off either by the warehouse superintendent or by one Juan Martinez Encarnacion. (The latter, known as "Juancho," is a rank-and- file worker in the warehouse, who somehow, either by mutual choice or his own wheedling, established himself as a liaison between Union and Company. Since he is a sort of fixture at the warehouse, being among the handful who work even on the days when the force is at its lowest , the Company would , on occasions, instead of telephoning in its next day's requirements , send him to inform Ortiz , in which case Ortiz would designate him as the person to make the day's selection .) At the next morning's shapeup, attended by Ortiz or his representative , the names of the persons 880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to work that day were read off from the list. When a person on the list did not show up, his replacement would be picked from among those reporting in a standby capacity. The persons on the list who responded and the replacements for those who dia not would make up the day's payroll. In the choice of replacements, it was customary to give preference to one with an ILA card, but not invariably so. This variance is exemplified by Felix Hernandex Velez, the Charging Party, whose non- selection on a given day in March 1959 is the basis of an 8(a)(3) allegation in the complaint. He reported on a standby basis, and of the three vacancies which arose that morning, he, although a member of the Union in good standing, was not selected for any, while two were filled by persons not in good standing. All of this, as previ- ously stated, ended in San Juan on June 15, 1959, when the Company made up a permanent list of the personnel for each day of the week in the warehouse, and those on the list report for work directly to the Company without prior referral by the Union. The selection of personnel for the warehouse at Ponce, as stated, is essentially similar to that which had prevailed until June 15, 1959, at San Juan, except that Ramon Mejias, president of the Local in Ponce, when informed by the Company of its next day's needs, does his own selecting or designates his son David to do it. These persons comprise the next day's crew and Mejias informs the company pay- master of these names after ,they have begun the day's work. C. Its legal consequences The legality of the referral system is controlled by the standards laid down by the Board in the Mountain Pacific case.' For convenience of reference we note them now. The referral agreement must expressly provide for a nondiscriminatory re- ferral, without regard to union membership, and for retention by the employer of the right to reject any person referred. Also, the employer must post the terms of the referral system, including the two safeguards above described. The admitted failure to post the terms of the referral arrangement would in itself be sufficient to invalidate it at all branches of the Company's operations. As it oper- ated in the warehouse at Ponce at all times and at the one in San Juan until June 15, 1959, it did not meet the prescribed standards, since there was no express provision for nondiscriminatory referral of personnel or for preservation of the right of rejec- tion by the Company, and, apart from that, members of the Union were in fact gen- erally given preference in the matter of referral. As to the shipside operations, the permanent referral list as used since before 6 months preceding the charges would, as I see it, pass muster. However, the replacements on those lists are still named by the Union and in a manner not in conformity with Mountain Pacific standard. Accord- ingly, it is found that by operation of the referral system for the shipside personnel at both ports, the warehouse personnel for Ponce, and the warehouse personnel at San Juan until June 15, 1959, the Company discriminatorily encouraged membership in the Union in violation of Section 8(a)(3) and interfered with, restrained, and coerced its employees in the exercise of their statutory rights in violation of Section 8(a) (1) of the Act, and the Union caused such discrimination in violation of Section 8(b) (2) of the Act, and restrained and coerced employees in the exercise of their rights in violation of Section 8 (b) (1) (A) of the Act. By the same conduct of the Company rendered "assistance" to the Union in violation of Section 8(a) (2) of the Act. 2. The alleged discrimination against Felix Hernandez Velez Felix Hernandez Velez was a member of the Union in good standing for many years, having joined it during his employment with one of the other waterfront com- panies at San Juan under contract with the Union. He was first referred for work at the San Juan warehouse of the Company in late 1958 or early 1959, during the existence of the referral system at that place, and he continued to be so referred 1 or 2 days a week. Indeed, under the previously described practice of Oritz, presi- dent of Local 1575, to designate an ILA member to select the persons for the next morning's shapeup at the Company warehouse in San Juan, Ortiz sometimes desig- nated Hernandez Velez for that purpose. But not always. One day in March 1959, after receiving the usual call from the Company concerning its next day's needs, Ortiz happened to designate another person to make the selection. As was normally the case, the number of ILA members present exceeded the number of jobs, and this time Hernandez Velez was among ' Mountain Pacific Chapter of the Associated General Contractors, Inc.; et al., 119 NLRB 883, remanded 270 F. 2d 425 (C.A. 9), Supplemental Decision and Order, 127 NLRB 1393. PAN ATLANTIC STEAMSHIP COMPANY 881 those not selected for the next morning's call. Hernandez nevertheless reported at the shapeup the following morning in the hope of being selected as a replacement for an absentee. Three such vacancies arose, but he filled none of them. Two of these were filled, oddly enough, by persons not in good standing with the Union, in contrast with Hernandez, who was. Hernandez sought out John Funke, the district superin- tendent for the Company, and the latter told him the Company had no part in the selection of the warehouse personnel? Hernandez then went to the Board's Regional Office, where he filed the original charge of March 13, 1959, which opened the Pandora's box for the Respondents. It has been difficult to follow the theory of the case presented on behalf of Hernandez. The sole basis on which the General Counsel rests his claim that Hernandez was discriminated against is that he failed of referral under a system which did not satisfy the requisite conditions of validity under the Mountain Pacific doctrine. The General Counsel makes no claim that the failure was due to his not being in good standing with the Union, which indeed he was; nor does he claim that it is related in any way to the exercise by Hernandez of any of the rights guaranteed in Section 7 of the Act. Also, there is no showing that Hernandez would normally have worked on the day or days in question but for his failure to be referred by the Union. The General Counsel rests his position upon the broadest ground conceivable, which is that failure to place on a job after failure of referral for work under an invalid referral system is by that token alone discrimination in violation of Section 8(a)(3). The basic fallacy in the General Counsel's position is the complete disregard of the element of causation as a necessary condition to liability. The invalidating feature of the referral system is that under it members of the ILA are preferred over nonmembers. That indeed is the basis on which the General Counsel attacks the system, his allegation in paragraph XI of the complaint being that it gives "preference in selection and referral of individuals for employment by the Re- spondent Company to members of the [Union]." [Emphasis supplied.] The Gen- eral Counsel does not and cannot claim that Hernandez' failure to work on the day in question was the result of that kind of illegal preference. Hernandez was a mem- ber not of the class which was victimized but of the one which was specially favored by it. What happened is that he failed to place not because of the special preference thus illegally enjoyed by the group of which he was a part but in spite of it, for on the day in question two of the vacancies he tried to fill were given to persons not in good standing with the ILA. What the case comes down to is that on the day in question the potential for discrimination in favor of members as against nonmembers, inhering in the system and which is the basis for its in- validity, did not materialize. On that day there was no unlawful discrimination in favor of Hernandez, a member of the Union, over others who were not mem- bers, and that being so it is claimed there was unlawful discrimination against him. This would seem to me to be standing the jurisprudence of liability on its head. This is not to say that one who is a member of the Union normally favored by an invalid referral system cannot be a victim of discrimination under it, or that to support a finding of discrimination the Union must itself have had a discriminatory reason for refusing to make the referral. In that connection, the General Counsel has cited cases in which it has been held that regardless of whether the Union had a discriminatory motive in not referring a person for work, and whether the latter belonged to the Union or not, it would still be discriminatory on the part of an employer to refuse to put a person to work solely because of such lack of clearance. That, indeed is the basic doctrine of the Radio Officers case,3 and I have applied it in a case in which the Board sustained the finding of discrimination.4 However, there and in every instance in which the doctrine urged by the General Counsel has been applied, it affirmatively appeared that the employer would have taken on the employee in question but for the refusal of clearance by the Union. This estab- lishes the indispensable causal link between the nonreferral and the failure to place. Thus, in Radio Officers, the employer offered and the employee accepted a position 2 Hernandez' testimony, as interpreted from the original Spanish. was to the effect that Funke' told him it is not the Company's but the Union's "fault" that he was not hired. However, it is clear from the sense of the record that Funke was merely talking in terms of whether the Company had any role in the selection The Radio Officers' Union of the Commercial Telegraphers Union, AFL (A. H Bull Steamship Company) v. N L R B , 347 U S. 17. * International Hod Carriers', Building and Common Laborers Union of America, Local No. 83, AFL-CIO ( Consolidated Construction Company, Inc ), 124 NLRB 1131 ( case of Walter Pennington). ` 882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD on its ship from which the union had the employee removed because he had accepted a job without prior clearance from it (347 U.S. 17, at 30-31). In the International Hod Carriers case, supra, the employer specifically asked the union for clearance for the employee in question and failed to employ him only because of the union's refusal to grant it. In E d B Brewing Company, Inc., 122 NLRB 354,5 the em- ployer discharged the employee in compliance with a specific demand by the union because he had been hired without following the established hiring hall procedure. More recently, in Local 401, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO; et al., (M. A. Roberts d Company), 126 NLRB 832, the Board found the union refused to clear [the two employees involved] for employment on the [desired] job when clearance was re- quested by the [employer] and "for this reason [the employer] refused to transfer [them] and was compelled to hire a number of employees referred by [the union]." [Emphasis supplied.] And, most currently, in the decision rendered by the Board on June 21, 1960, on the remand in the Mountain Pacific case (supra, footnote 1), the Board found the "job applicant Lewis' failure to obtain work was due to the Local's refusal to refer him initially, because he was not a member, and, later, be- cause he had also filed with the Board, and refused to withdraw charges against the Unions." The Board in the Mountain Pacific case further stated that the denial of employ- ment there violated the Act "on an entirely separate and independent ground, i.e., because it constituted implementation of a hiring clause which . was illegal." The Board so stated in a context of the failure of a person to be placed, who was not a member of the union, and who was thus part of a group inherently discrimi- nated against as a class by virtue of the invalid referral system. The failure to refer a person in the unfavored class carries out the very feature of the system which invalidates it and is thus an implementation of it. The same cannot be said here, where the person who failed to place was a member of the group enjoying the special favor which is at the base of the system's invalidity. The fact that in spite of it, he failed of selection at the same time that two persons in the normally unfavored class nevertheless succeeded is hardly an implementation of the system. It was a deimplementation which, if not to be praised, is not to be branded as a violation either.6 It follows that the General Counsel has failed to establish that the Company, in not putting Felix Hernandez Velez to work in March 1959, discriminated against him in violation of Section 8(a) (3), or that the Union caused or attempted to cause the Company to discriminate against him in violation of Section 8(b) (2) of the Act. IV. THE REMEDY It has been found that Respondents conducted an exclusive referral practice which did not satisfy the requirements of Mountain Pacific and hence that the Company overstepped the limitations of Section 8(a)(1) and (3) and the Union those of 8(b)(2) and 8(b)(1)(A) of the Act. It has been found also that such practice constitutes inherent assistance and support of a union within the meaning of Sec- tion 8(a) (2). It will be recommended that the Respondent cease and desist from institutine or maintaining any exclusive referral system other than in conformity with requirements of the Mountain Pacific doctrine. As to the affirmative measures to effectuate the policies of the Act. For reasons more fully spelled out in the discussion of the dues reimbursement remedy, the impact of these practices upon the employees' freedom of choice in this case is somewhat speculative. It would therefore seem doubtful whether the normal re- quirement that the Company suspend further recognition of the Union pending a 6 Set aside on other grounds • N L R R. v. E & B Brewing Company, Inc., et al, 276 F. 2d 594 (C A. 6), cert denied 366 II S 908. 6 It appears that some time after he filed his charge, Hernandez was referred again for work at the San Juan warehouse, and finally on June 15, 1959, when the Company abandoned the referral system there and set up a permanent roster of warehouse per- sonnel for each day of the week, it put Hernandez on the list for one such day. That does not demonstrate to me that he would normally have worked the day In question in March but for the failure to be referred. We do not know whom Hernandez was com- peting against in June as against the day in question in March If anything, his losing out in the competition for selection in March to two persons who were outside the favored group of which he was a part, would indicate that he could hardly have won out in an evenhanded competition in March if there had been no referral system, since he would then not even have had the initial advantage which he enjoyed under it. PAN ATLANTIC STEAMSHIP COMPANY 883 new election,7 would produce a result materially different from the one held in August 1958, when the Union polled all of the valid votes cast. However, the find- ing that the Company assisted the Union in violation of Section 8(a)(2) would seem to make the suspension of recognition requirement mandatory, upon me at least,8 and I shall accordingly include such a recommendation here. As to dues reimbursement pursuant to the Brown-Olds doctrine,9 the fact that the memberships here preexisted the employees' employment with the Company and that there is no affirmative evidence that any employee was coerced into joining or adhering to the Union by reason of the referral system, would not, for that reason alone, bar the application of that remedy here. Certain reviewing courts, reversing the Board on that score, have disallowed the remedy in the absence of an affirmative showing that the employees ordered to be reimbursed were coerced into joining or remaining in the union involved.10 On the other hand, the Board, the Seventh Circuit agreeing," applies the presumption initiated in the Local 357 (Los Angeles- Seattle) case, supra, footnote 10, that an exclusive referral system, which lacks ade- quate safeguards against favoring members over nonmembers of the union, coerces employees into not merely joining but also remaining in the union, with the result that the dues or other moneys paid into it are in the nature of an illegal exaction, which should be reimbursed as an incident for laying the groundwork for freedom of choice, within the classic doctrine enunciated in the Virginia Electric Power case.12 Hence, if there were no evidence in the record concerning the matter either way, under the presumption above mentioned, the finding would have to be that the invalid referral arrangement did coerce the employees into becoming and remaining members of the Union, and this would call for a dues reimbursement remedy. Until the conflict is resolved by the Supreme Court, as it would seem destined soon to be from its granting of certiorari in some of the cases reflecting the conflict (supra, footnotes 10 and 11), the presumption applied by the Board is binding upon me and is the one to be applied here.13 The presumption is one of fact, and applies in the absence of an affirmative show- ing, as put by the Seventh Circuit in the Local 60, Carpenters case, supra, footnote 11, that "even without the unlawful discrimination, the Company's employees would have maintained their membership in [the union]." (273 F. 2d 699 at 703.) The record would seem to contain such a showing here. It must be remembered, first, that independently of the existence of a referral system, all employees who have worked for Respondent at least 30 days,are under obligation to be members of the Union under the union-shop provision of the contract, which is here beyond attack under the doctrine of the Local Lodge No. 1424 case, previously discussed. Quite apart from this, the working force, except for a minority whom the Company acquired on its own and who joined the Union pursuant to their obligation under the union-shop provision, is composed of people who for many years before the Respond- ent Company's appearance in Puerto Rico in 1958, belonged and have continued to belong to ILA as an incident of their employment at other waterfront companies 7 Bowman Transportation, Inc., 112 NLRB 387; 113 NLRB 786; enfd. as modified 355 U.S. 453. 8 See Progressive Kitchen Equipment Co., Inc., 123 NLRB 992, footnote 2. 9J. S Brown-E F. Olds Plumbing & Heating Corporation, 115 NLRB 594. '()Local 357, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Los Angeles-Seattle Motor Empress) v. N L.R B., 275 F. 2d 646 (C.A D C.), modifying 121 NLRB 1629, cert. granted June 27, 1960 (46 LRRM 203) [reversed 365 U S 667] ; Morrison-Knudsen Company, Inc. v. N.L R.B , 275 F. 2d 914, 918 (C.A. 2), cert. denied 366 U S: 909; Building Material Teamsters, Local 282, etc. (Crawford Clothes, Inc.) v. N.L.R.B , 275 F. 2d 909, 912 (CA. 2) ; N.L R B. v American Dredging Company, 276 F. 2d 286, 288 (CA. 3), cert. denied 366 U.S. 908; N.L R B. v. United States Steel Corp., 278 F. 2d 896 (CA. 3) ; Lakeland Bus Lines, Inc. v. N L R.B., 278 F. 2d 888 (C A 3) ; N L.R.B. v. Local Union No 85, Sheet Metal Workers' Inter- national Association (Mahon Construction Co ), 274 F. 2d 344 (C.A. 5) ; N L R B v. Millwrights Local 2232, District Council of Houston and Vicinity, etc (Farnsworth & Chambers), 277 F. 2d 217 (C.A. 5) ; Morrison-Knudsen Company, Inc. v. N L R B., 276 F. 2d 63 (CA. 9). n N.L.R.B. v. Local 60, United Brotherhood of Carpenters and Joiners of America, AFL-CIO, et al. (Mechanics Handling Systems), 273 F. 2d 699, 703 (CA 7), cert granted June 27, 1960 (46 LRRM 203) [reversed 365 U.S. 651]. 12 Virginia Electric and Power Company v. N.L.R.B., 319 U.S. 533, affg. 132 F. 2d 390 (-C A. 4), which enforced 44 NLRB 404 13 Cf Novak Logging Company, 119 NLRB 1573. 614913-62-vol. 13 2-5 7 884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD which are under contract with ILA. These include establishments such as San Juan Mercantile Corporation, Puerto Rican Dry Dock Company, etc. The workweek of these persons is normally made up of the aggregate of the 1 or 2 days' work they receive at each company. The inducement to remain with ILA thus continues apart from their employment at any single company. For example, Felix Hernandez Velez, the Charging Party, supplements his I day's work a week at Respondent Company with work at Puerto Rican Dry Dock Corporation, and (until he was dropped there for personal reasons) with San Juan Mercantile Corporation as well. Illustrating how employment with Respondent Company is not a factor in the employees' adherence to ILA was the array of witnesses produced by the General Counsel, who testified concerning the operation of the referral system at the ware- house in San Juan until its discontinuance on June 15, 1959.14 Their membership, like that of Hernandez Velez, long preceded the advent of Respondent Company. Through referral by ILA they worked first for other companies and then, with the appearance of Respondent Company, for it as well. Most telling, and exemplifying how the prospect of work at Respondent Company is not a causative factor in reten- tion of membership at ILA, is that these persons were not, as was Hernandez Velez (supra, footnote 6), placed on the permanent roster of personnel which Respondent Company established on June 15, 1959, when it abandoned the referral system at the warehouse in San Juan. Although they have not worked for Respondent Com- pany since then, they have retained their membership in ILA for the access which it affords them to employment with other waterfront companies under contract with ILA. Indeed, since the company for which an employee works is the variable and the union through which he is referred is the constant, some of these people, if the testimony of Felipe Falcon Robles is typical, conceive of themselves as working for their union, and will cite a given place as an "ILA pier" or a "UTM pier," depending upon the union involved. It would seem to me to be the fair conclusion that the presumption that the invalid referral system here involved coerced the employees into acquiring or retaining mem- bership in the Union is overcome by the elements in the record completely insulating it as a cause for either: their membership (with the exception of the few who joined pursuant to the valid union-shop clause) preceded even the existence of Respondent Company and their retention of membership is in connection with employment or the prospect of employment with other waterfront companies under contract with Respondent Union. These are not before us, nor do we know anything of the nature of their arrangement with ILA. Additionally, the question of the coercive effect of the referral system is in any event academic beyond the 30th day of any person's employment with Respondent Company. For after this he is legally obliged to join the ILA under a union-shop provision which, as already noted, is here beyond attack. A case in point is the roster of permanent employees at the San Juan ware- house since June 15, 1959. Even with the referral system abandoned, they must still be members by virtue of the union-shop requirement. Assuming that the pre- sumption of coercion has not otherwise been overcome, we would have to suppose that these employees, but for the referral system, would have availed themselves of the 30 days' grace by terminating their many years of membership in the Union when their employment began, only to resume it at the end of a month. So to sup- pose would be to seriously jar the presumption of rationality- which attends the administrative process. I accordingly conclude that the record overcomes the initial presumption that the referral system coerced the employees into acquiring or retaining their membership in the Union and affirmatively establishes that the invalid referral system did not coerce or even cause any of the employees to become or remain members of it. Since the payment of dues is therefore causally unrelated to the existence of the invalid referral system, a reimbursement requirement would operate not remedially, as the Act requires, but punitively, as the Act for'bids.15 A dues reimbursement remedy will therefore not be recommended in this case. Upon the foregoing findings of fact, and upon the entire record, I hereby make the following: CONCLUSIONS OF LAW 1. By maintaining an exclusive referral system which lacked the requisite safe- guards against discriminatorily favoring members of Respondent Unions as against nonmembers, Respondent Company encouraged membership in the Respondent 14 These were Felipe Falcon Robles, Humbert Aponte Martinez, Reinaldo Aponte, and Luis Osorlo ' 1s Republic Steel Corporation v. N.L R B., 311 U.S 7. UNITED INSURANCE COMPANY 885 Unions by discrimination in respect to hire and tenure of employees, thereby engaging in an unfair labor practice within the meaning of Section 8 ( a) (3) of the Act; thereby it assisted and supported Repondent Unions, thus engaging in an unfair labor practice within the meaning of Section 8(a) (2) of the Act; and thereby it interfered with, restrained , and coerced its employees in the exercise of their rights under Section 7, and thus engaged in an unfair labor practice within the meaning of Section 8(a)(1) of the Act; and the Respondent Unions thereby caused such discrimination , thus engaging in an unfair labor practice within the meaning of Section 8(b) (2) of the Act, and restrained and coerced employees in the exercise of their rights under the Act, thus engaging in an unfair labor practice within the meaning of Section 8(b) (1) (A) of the Act. 2. Said unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. 3. The Respondent Company did not discriminate against Felix Hernandez Velez in violation of Section 8(a)(3) or ( 1), and the Respondent Unions did not cause or attempt to cause Respondent Company so to discriminate against him , in viola- tion of Section 8(b) (2) or 8 (b) (1) (A) of the Act. [Recommendations omitted from publication.] United Insurance Company and Insurance Workers Inter- national Union, AFL-CIO. Case No. 4-CA-1576. August 10, 1961 DECISION AND ORDER On March 24, 1961, Trial Examiner Sydney S. Asher, Jr., issued his Second Supplemental Intermediate Report in the above-entitled pro- ceeding, 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 Second Supplemental Intermediate Report attached hereto. There- after, the Respondent and the Charging Party filed exceptions to the Second Supplemental Intermediate Report and supporting briefs. The Board' has reviewed the rulings made by the Trial Examiner at the hearing and supplemental hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Second Supplemental Intermediate Report, the exceptions and briefs, and the entire record in the case 2 and hereby adopts the Trial Examiner's findings, conclusions, and recommendations. ORDER Upon the entire record in the 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 , United Insurance Company, Chicago, Illinois, its officers, agents, successors, and assigns, shall : 1 Pursuant to the provisions of Section 3(b) of the Act , the Board has delegated its powers in connection with this case to a three -member panel [Members Rodgers, Leedom, and Fanning]. 2 The Respondent's request for oral argument is denied, as the record , and the excep- tions and briefs , adequately present the issues and the positions of the parties. 132 NLRB No. 70.