Union Transfer & Storage Co.

24 DECISIONS OF NATIONAL LABOR RELATIONS BOARD on employee rights under the Act. Accordingly, I shall not recommend the usual "broad" cease-and-desist order. Upon the basis of the foregoing findings of fact and upon the entire record in the case, the Trial Examine?makes the following: CONCLUSIONS OF LAW 1. By discriminating in regard to the hire and tenure of employment of Thomas DeSantis, thereby encouraging membership in a labor organization, the Company has engaged in unfair labor practices within the meaning of Section 8(a)(3) and (1) of the Act. 2. The aforesaid unfair labor practices are unfair labor practices affecting com- merce within the meaning of Section 2(6) and (7) of the Act. [Recommendations omitted from publication.] Union Transfer & Storage Company and General Drivers, Warehousemen and Helpers Local Union No . 968. Cases Nos. 23-CA-1000 and 23-RC-1511. November 7, 1961 DECISION AND ORDER On February 28, 1961, Trial Examiner John C. Fischer issued his Intermediate Report in the above-entitled proceeding, finding that-the 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 Intermediate Report attached hereto. The Trial Examiner further found that the challenged ballots of the alleged discriminatees were invalid. Thereafter, the General Counsel and the Charging Party filed exceptions to the Intermediate Report with supporting briefs. The Respondent filed a brief in support of the Intermediate Report. The Board' has reviewed the rulings made by the Trial Examiner at the hearing and finds no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Intermedi- ate Report, the exceptions and briefs, and the entire record in the case, and hereby adopts the Trial Examiner's findings, conclusions, and recommendations, with the single exception 2 noted below. [The Board dismissed the complaint.] 1 Pursuant to 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 Rodgers and Leedom]. 3 We do not adopt the Trial Examiner's finding that a Houston ordinance prohibited smoking in the Respondent 's warehouse INTERMEDIATE REPORT AND RECOMMENDED ORDER STATEMENT OF THE CASE Upon charges filed by General Drivers , Warehousemen and Helpers Local Union' No. 968 , herein called the Union , the General Counsel of the National Labor Re- lations Board, by the Regional Director for the Twenty -third Region, Houston, Texas, 134 NLRB No. 4. UNION TRANSFER & STORAGE COMPANY 25 issued his complaint , dated April 29, 1960, against Union Transfer & Storage Com- pany, herein called the Respondent. With respect to the unfair labor practices, the complaint alleges in substance that Respondent ( 1) terminated on or about March 4, 1960, the employment of Charles Odel Jones, Crabon Bush, Keffer Runnels, Charles G. Mills, Hubert Williams, Consteen Johnson, Ned Haywood, Jr., Booker T. Horton, Abe Stevens, Jr., and Richard Harden, and has failed and refused, and continues to fail and refuse, to reinstate said employees for the reason that they joined or assisted the Union or engaged in other concerted activities for the purposes of collective bargaining or other mutual aid or protection , and (2 ) since on or about March 2, 1960, and continuing to date, Respondent has interfered with, restrained, and co- erced, and is interfering with , restraining, and coercing , its employees in the exercise of rights guaranteed in'Section 7 of the Act, by the following acts and conduct: (a) interrogated employees concerning their membership in or affiliation with the Union, (b) threatened employees with loss of employment if they became unionized, (c) engaged in surveillance of union meetings attended by its employees, and (d) dis- charged Billy Joe Reed, a supervisor, on or about March 4, 1960, because of his prounion sympathies. In its timely filed answer, Respondent denied generally the unfair labor practice allegations and pleaded affirmative defenses. In accordance with a consent-election agreement, entered into by the Union and Respondent Company, an election was held on March 25, 1960, in Case No. 23-RC- 1511, where the 10 alleged discriminatorily discharged employees (8(a)(3)'s) voted challenged ballots. As a result of not counting these challenged ballots, the Union lost the election. Out of 34 votes case, 10 voted for the Union and 13 against it, and 1 was void. Thus for further decision is the question whether these 10 individuals were in fact terminated 'in violation of Section 8(a)(3). If it is found that these individuals were so terminated, their ballots shall be opened and counted and a revised tally of ballots shall be served upon the parties by the Regional Director. Pursuant to due notice, a hearing was held before the duly designated Trial Ex- aminer between the dates May 24 to 28, 1960, at Houston, Texas. All parties were represented at the hearing and afforded full opportunity to be heard, to examine and cross-examine witnesses, to introduce relevant evidence , to present oral argument at the close of the hearing, and thereafter to file briefs as well as proposed findings of fact and conclusions of law. All parties filed comprehensive briefs which have been carefully considered. Motions by Respondent Company to reopen the hearing for purposes of taking additional testimony and evidence were received , considered, and rejected by the Trial Examiner. Upon the entire record in the case, and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Respondent is, and has been at all times material hereto, a corporation duly organized under and existing by virtue of the laws of the State of Texas, having its principal office and place of business at 2202 Nance Street in Houston, Texas, where it is engaged in a public warehousing operation. Respondent, during the year 1959, a representative period, performed services of a value in excess of $50,000 for customers located outside the State of Texas for the handling of warehousing of goods and materials which were transported to the State of Texas from points out- side the State of Texas. Respondent is, and has been at all times material hereto, engaged in commerce within the meaning of Section 2(6) and (7) of the Act. H. THE LABOR ORGANIZATION INVOLVED General Drivers, Warehousemen and Helpers Local Union No. 968, hereinafter referred to as the Union, is, and has been at all times material herein, a labor organi- zation within the meaning of Section 2(5) of the Act. IH. _THE UNFAIR LABOR PRACTICES The Repondent Company operates a public warehouse in Houston, Texas. It receives income from its customers from the performances of three distinct services. The first is from charges for unloading the customers' merchandise from freight cars or trucks and moving merchandise into and out of the warehouse to a loading dock when requested by the customer. This source is referred to as "handling income." The second type of income is that called storage which is a charge levied per case or by weight for the length of time such item is retained in storage. The third source of income is received from draying or trucking merchandise which has been handled and stored with the Company from its warehouse to consignees in the local area or to 26 DECISIONS OF NATIONAL LABOR RELATIONS BOARD rail or motor carrier terminals for transshipment. The owner of-Respondent Com- pany, Fisher G. Dorsey, has been engaged in this type of business for some 50 years. He was the founder and owner of several similar or ancillary enterprises. By reason of age and illness and for other business reasons and at doctor's orders he had divested himself of two companies by closing them down, i e., Blue Bonnet Freight and Federal Rigging Companies, had sold his Patrick Transfer and Storage Co., and for the year immediately preceding this case, had been negotiating for the sale of his two remaining operations Patrick, Shipside Co. and Respondent Company because of economic difficulties. Respondent counsel, Saccomanno, in his exhaustive brief to the Trial Examiner, correctly illustrates Dorsey's situation as shown in the case record: One of his enterprises, Patrick Transfer and Storage, had been sold. Two others, Blue Bonnet Freight Forwarding and Federal Rigging, have been closed down. He had been negotiating for the sale of-the two remaining operations, Patrick Shipside and the present Respondent, Union Transfer, in a package, but has until now been frustrated by the poor financial record of Union Transfer. The other of his two remaining enterprises Patrick Shipside, was unionized by the Long- shoremen ten years ago. During that period there has been a Patrick no strike, no grievance and no National Labor Relations Board complaint. The Long- shoremen think sufficiently well of Mr. Dorsey to assent to his service on their Welfare Committee. Of substantial importance to the entire financial problem of Union Transfer were the losses involved in the drayage operations. These operations were pe- ripheral to the business, which is primarily warehousing. Until a few months before the matters giving rise to the Complaint, the drayage had been contracted out to a man named Robinson, who at the same time was also general manager of the warehouse business. Robinson had quit and had gone into competition with Union Transfer, taking a number of valued accounts. Union found itself compelled either to find a new contractor in a hurry or undertake the drayage itself. The latter course was chosen provisionally. However, the drayage did not prove profitable, dissatisfaction with it was repeatedly expressed, and at- tempts were made to secure a new contractor and eliminate this entire aspect of Union Transfer's operations. In the meantime, however, negotiations had been going on with one Robert L. Harper relating to the sale of both Union Transfer and Patrick Shipside to Mr. Harper or tb a syndicate of which he was a part. These began in November of 1959. Until these negotiations were concluded, Mr. Dorsey was reluctant to enter into any commitments, such as a new drayage contract, which would limit the freedom of action of the prospective purchaser and perhaps render the purchase less attractive. However, on February 29 Mr. Dorsey received word that this transaction could not be completed. It was clear from the circum- stances that the financial statement was a major factor in the failure of the sale and that drastic reorganization was called for to improve the company's position. The drayage losses were a significant part of the bad financial picture, and there resulted a decision to take immediate action to eliminate them or to at least reduce them. The only available step in this direction was to secure a-contractor able to perform the services more economically and efficiently than could Union Transfer. Thus the step previously discussed was taken. Discharges incidental to the contracting out of the drayage operations account for five of the ten employees named in Paragraph VII of the Complaint. This, Respondent asserts to be a bona fide exercise of the rights of management taken for valid economic reasons and unmotivated by anti-union bias or unlawful purpose. Three of the remaining five men named in Paragraph VII, Respondent asserts, were discharged by reason of lack of work, a valid economic motive, and not by reason of bias or unlawful purpose. The remaining two, Consteen Johnson and Ned Haywood, were discharged for valid disciplinary reasons. They had violated a no-smoking rule of which they were admittedly aware, and their discharge was proposed to Mr. Dorsey by a supervisory employee who did not at the time know of the movement for unionization and who was not shown to have any interest in it one way or the other This too Respondent asserts to be a valid exercise of the rights of management without proper motivation. The evidence which shows the financial picture which is so vital to the inter- pretation of the facts of this case is as follows, and is shown by Respondent's Exhibits 5, 6, 7, 8, 9, 10 and 13. In the calendar year of 1958 Respondent showed an income of $306,421 77, total expenses of $293,739.96 for a net profit of $12,681.81. (Exhibit R-7 ) In 1959 income dropped to $246,975.48 and a net LOSS of $65,697.78. (Exhibit R-7.) The continuing need for corrective I UNION TRANSFER & STORAGE COMPANY 27 economic measures is illustrated by Exhibits R-8, R-9 and 9-10 which show that in January 1959„the Company had a net loss of $5,033.80, in February it had a net loss of $1,179.93 and in March a loss of $3,373.09 or a combined loss of $9,586.82 for the first quarter of 1960. The projected loss for the entire year would be a loss of $38,357.28. The deterioration of the company is illustrated by Exhibit R-5 which is an analysis of the drayage tonnage for 1958, 1959 and January and February of 1960. This exhibit shows that in 1958 the Respondent received an average of 213/4 0 per hundredweight for draying an average of 2,750,000 pounds per month and that the total for the year was 33,163,835 pounds. In 1959 this had dropped drastically to a monthly average of about 1,910,000 pounds and that the rate dropped from an average of 213/40 to 203/40. For 1960 the monthly average had dropped to less than, 1,500,000 pounds per month. From 1958 the monthly average of 2,750,000 pounds had dropped by about 45% to less than 1,500,000 pounds. Exhibit R-6 which is an analysis of the revenue handling earned by Respond- ent for October, November, and December, 1959, and January, February, March, and April, 1960 illustrates further the decline of the Respondent's business. It shows that in this seven month period Respondent received into its warehouse 13,128,534 pounds of rice and received an average of $0.105 per hundred- weight for handling it in and prepayment for moving it out. During the same period Respondent received 21,108,422 pounds of other merchandise for which it received an average of $0.128 per hundredweight. This difference of $0.023 per hundredweight is what Mr. Dorsey meant when he said the rice was a lower income account. (R. 724.) During these months the inbound movement was as follows: [Amounts in pounds] Month Rice Other mer- chandise Total October 1959-------------------------------------------- 2, 2.58, 140 3,216,345 5,474,495 November 1959- ---------------------------------------- 2,162,661 3,593,084 5,755,745 December 1959------------------------------------------ 2,288,907 2,702,736 5,591,643 January 1960 -------------------------------------------- 379, 176 2,742,718 3,121,894 February 1960-------- ------------------------------- 3,168,462 3,347,188 6,515,650 March 1960--------------------------------------------- 1,686.258 2,477,558 4,163, 816 April 1960----------------------------------------------- 584,930 3,028,793 3,613,723 Thus the tonnage for February was more than 3,000,000 pounds greater than January and March was approximately 2,400,000 pounds less than Feb- ruary while April was almost 3,000,000 pounds less than February and about 500,000 pounds less than March. Mr. Dorsey testified that the reason for the heavy movement of rice in Febru- ary was due to the "Cuban situation" (R. 720) and that is shown on Exhibit R-6 in the increase from 379,176 pounds of rice in January to 3,168,462 in February which decreased to 1,686,258 pounds in March and to 584,930 pounds in April 1960 There are two additional pieces of background material necessary at this point. One relates to the original unionization effort and the other deals with alleged union animus on the part of owner Dorsey. Charles Odel Jones, one of the five truckdrivers discharged at the time of the contracting out of the drayage incident, testified that nearly a year before the events leading to this complaint, all of the employees met with Foreman Brooks and asked him to discuss improving condi- tions of employees with Dorsey. At that time Jones discussed possible unioniza- tion with Teamster Union Organizer Ted Garcia, but being unable to get enough of the employees to sign union cards, the organizational efforts were abandoned. Jones testified that Dorsey called him into the office, told him he was a bad influence, that his services were no longer needed, and that he, Dorsey, "didn't want no union in his Company; he wasn't going to have no union there, and he would close up first, before he let a union come in" and thereupon fired Jones Dorsey denied that this conversation ever took place. These events having antedated the 6-month statutory period of the alleged unfair labor practices in this case renders it unneces- sary to resolve this credibility conflict. Suffice it to say that if Jones had been fired on Thursday, he was rehired and put back on the job the following Monday. The other incident concerns a statement allegedly made by Dorsey in the presence of dischargee Billy Joe Reed in which Reed testified that on one occasion at lunch with one A. D. Boone that Dorsey, when asked by Boone if he thought the Ccmpany 28 DECISIONS OF NATIONAL LABOR RELATIONS BOARD would ever go union, replied that he felt that the men would not want a union and that if the Union did try to move into Union Transfer, that he would contract out his drayage, put the drivers out of work, clamp down, and clean house. Boone, a witness for Respondent, and not connected with the Company, denied any such luncheon meeting and denied that Dorsey said that if the Union ever did try to move in, he would contract out the drayage and more or less clean house . Dorsey denied making any such statement in the presence of Reed and Boone. The Trial Examiner finds this denial supported by the disinterested witness , Boone. Advent of the Union The union organization effort became reactivated when Consteen Johnson and a group of the employees met at Swan's Ice House on February 29 to again discuss possibilities of unionizing. A meeting was scheduled after work on the evening of March 2 at 6:30. Johnson stated that he had telephoned Teamsters Local 968 on March 1 and set up this meeting with Organizer Nick Howard at Teamsters headquarters. Eighteen of the drivers and warehouse employees were present. Before leaving for the meeting at the union hall, Johnson invited Office Manager Reed to attend the meeting., When Reed finished his work that evening, he in turn invited Warehouse Superintendent Kensinger to accompany him to the meeting. Each one of the participants gave somewhat different versions of the incident. The Trial Examiner finds, however, that Johnson invited Reed to attend the meeting, that Reed accepted and, in turn invited Kensinger to accompany him to the meeting. They drove over to the meeting in Kensinger's car where they stayed 10 or 12 min- utes and "were treated as guests." Johnson's accepted testimony at the time of their entrance into the meeting was as follows: Well, Nick Howard was explaining to us the benefits of the Union and Mr. Kensinger and Mr. Bill Reed walked in. And he [Howard] stopped talking. And so, he asked me would it be all right-no, he asked me who was those guys, and I introduced him to Mr. Kensinger and to Mr. Bill Reed, and told him what position they held. And he asked me if I thought it was all right to continue. I told him I thought it would be because Mr. Reed was in favor of the Union. . . Well, I told him just normally, I said, "I think Mr. Reed is in favor of the Union and you can continue with the conversation." . . . Well he told us that signing a union card, Nick Howard told us signing a union card did not make us a union member, and we could sign the cards with our own free will if we wanted to. And he gave us some cards to sign, and said sign them, and in signing those cards, some of the guys had trouble knowing what position they held with the Company, putting it down on their cards, and Mr. Kensinger helped one of the guys, which is Clarence Norman, fill out his card, told him what to put on there, such as, warehouseman. And Mr. Bill Reed was telling him some things to tell the guys, which positions they didn't hold, not to tell them to put certain things on there they didn't hold. Then, after that, they gave us a union badge and told us they thought it would be okay for us to wear the badges on the job. At the conclusion of this meeting, Kensinger drove Reed back to the warehouse so Reed could get his truck and then Kensinger drove to the home of Company Comptroller John Moyer. After discussing what occurred at the meeting Kensinger decided to let Dorsey know what was going on and Kensinger related the events to Dorsey, asking "what he thought he should do." He quoted Dorsey as saying "forget about it." (Dorsey was ill with the flu and had not been to his office that day.) Branscome Learns of Union Meeting Branscome, assistant to owner Dorsey, testified that he first learned of the con- templated union meeting: As I was leaving the building that same incident [evening], of course, the warehouse was already closed, so I could not go through the warehouse as we usually do. I had to go out the front door and go around the building. And outside is where I met Tommy Walker and he told me about this anticipated meeting that evening, and that he had been invited or else it had been men- tioned to him by Johnson, and that Johnson had asked him if he was going to come with them or stay behind, or something to that effect. Branscome stated that he did not contact Dorsey in any way that evening-rather that his first conversation with Dorsey, relative to the information he had received concerning the meeting, was the following morning after Dorsey got to the office UNION TRANSFER & STORAGE COMPANY 29 between 9:30 and 10 o'clock, and after he had arranged a conference with a trucking contractor named Sicola with the plan of contracting out Respondent's trucking op- eration to Sicola. The Trial Examiner finds this to be the facts. As previously indicated by the figures set forth in Respondent's exhibits, the drayage operation was shown to be a costly mistake-what with a decline in weekly average of freight hauled of 182,000 pounds, and a corresponding reduction in income down from 213/4 cents to 203/4 cents per hundredweight. This situation would have been obvious to everyone involved in the business, from the owner down through the veriest employee. Its effect on management would be to cause officials to cast about for a method of eliminating fiscal losses , and the effect on, employee personnel would be to undermine their morale. Suffice it to say, upon learning on February 29 that Harper was unable to buy Union Transfer and Patrick Shipside as a package deal, Dorsey told Branscome,. "Let's do something-There is no use putting off any longer. Let's get something- going." At this time there was no union activity of any kind in the picture. Dorsey had been prodding Harper to give him an answer as to whether or not Harper's syndicate would buy both businesses because Dorsey had some moves in mind himself, and could not make any changes in operations until he got an answer one way or another from Harper. These negotiations had run from the last part of November until February 29. The record is bare of any activity the next day, Tuesday, March 1, and Dorsey was at home ill on Wednesday, March 2. However, the first thing Branscome did on Thursday, March 3, between 9 and 9:30 a.m., was to call Sicola to come over and discuss taking over their drayage business. Sicola and Branscome had known each other for some 10 years. In fact, in the preceding November, Sicola at Branscome's request, had made certain drayage deliveries fox Union Transfer. Sicola credibly testified in this connection that on March 3; Well, Mr. Branscome called me and asked me if I was interested in a big hauling deal, and I said I was if the price was right. And he said, "How soon can you come up here and talk to me?" I said, "any time." He said, "How about coming right away?" So I told him I could be there in the next 20 or 30 minutes. So I went to his office and we had a discussion about it. . We had an open discussion about rates and how much tonnage was involved and how many trucks it would take for the tonnage and how many man-hours and the rates. Sicola stated that the contract was consummated in the presence of Branscome, Dorsey, and himself on March 3, but he was not certain whether it was signed that day or the next, on March 4. When he went back to Union Transfer, he stated that he agreed to give it a trial for 30 days: This contract was dated February 29, but he stated that he signed it either 2 or 3 days after February 29. He noticed the wrong date on it but did not pay any attention to it. He was given a copy of the contract and thought Dorsey's signature was on it. He started working under the contract on the following Monday. The contract reads as follows: CONTRACT AGREEMENT This agreement is between Fisher G. Dorsey Interests and Sicola Bros. Hauling. It is agreed that Sicola Bros. Hauling will handle all drayage of freight for Union Transfer'& Storage Company on a rate of .14 cwt. All motor equip- ment of Union Transfer & Storage Company to be leased to Sicola Bros. Haul- ing at rate of $25 00 per day based on a six (6) day week and at the end of thirty (30) days Sicola Bros. Hauling has option to enter negotiations on pur- chase arrangement for the equipment. This equipment is being turned over to Sicola Bros. Hauling in good operating condition. All equipment maintenance, property damage, liability, and cargo insurance , and operating expenses to be handled by Sicola Bros. Hauling who will also furnish all labor necessary for the operation of this equipment . This contract to be effective for one year be- ginning March 7, 1960. February 29, 1960. -------------SE--Y -,--------- FISHER G. DOR FISHER G. DORSEY INTERESTS. ------------------------- CHARLES SICOLA, SICOLA BROS. HAULING. Branscome's testimony is similar to that of Sicola except that he stated positively that the contract was signed on Thursday, February 3, during a conference between 30 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 10 and 12 a.m. in Dorsey's office. In his earlier conferences with Sicola , Branscome had indicated that there would be approximately 750,000 pounds per week to be hauled locally to consignees in Houston and to various carrier terminals . On Fri- day, March 4, Sicola talked to the truckdrivers and asked them if they would drive for him on a commission basis, but they all refused, preferring to work for wages. Sicola staffed the trucks with his own drivers and Respondent terminated its five drivers along with three warehousemen at the close of business. At the end of the first week or in the beginning of the second week Sicola com- plained vigorously that the tonnage was considerably below that which had been anticipated and during the second week of performance , he discussed being let off of his contract with Dorsey. Dorsey agreed that an error had been made in com- puting the average haul and told Sicola that if he could make a profit at 14 cents a hundred, he could go his way and Dorsey would go his. Sicola substantiated this as follows: Well, yes, he said that. But he wanted me to stay for a period of time until such a time as he could get somebody else. I said I couldn't stay if I continued to lose money, even if I had signed a contract, because I felt like the terms was misrepresented to me and I didn't want to take a loss on the misrepresentation . Well, he and Mr. Branscome both said they would see I did not take a loss and would probably come out with some gain. Dorsey released him from the contract at the conclusion of the second week, dis- regarded his gasoline bill and waived the $25 per day equipment rental. Sicola was thereby enabled to make a profit of $50 per week. The contract was then given to Caesar Gray. It was an oral agreement except that the equipment, consisting of two Chevrolets, one International, and a tractor-trailer truck, was sold to Gray who took the responsibility of carrying the insurance, up- keep, maintenance, and his own drivers' wages. Caesar Gray, who relieved Sicola on the hauling contract, was an honest and straightforward witness and undoubtedly able to handle economically a trucking op- eration such as Respondent's, but he was certainly not one who had a mind heavily laden with figures and dates. As previously indicated , he has an oral agreement under which he began operation in the middle of March-although in his testimony he confused February and March. The Trial Examiner accepted his testimony im- plicitly. Queried as to whether or not he was performing all of the local drayage service for Union Transfer, his answer was "I think I am, yes." He testified that he commenced providing his services: "I think it was around, somewhere around the second week, I believe first or second week, in March, I believe it was." He stated that he had a brother-in-law in the transfer business who suggested that Union Transfer drayage was going to be up for contract, and that he had a friend who called him and told him to go over and see Dorsey about the contract. (Incidentally, this friend was Robert L. Harper who had been negotiating up until the last week in February with Dorsey and whose negotiations fell through.) Gray's son is stationed at Union Transfer terminal and dispatches and supervises the trucks acquired on a purchase agreement from Union Transfer. H. J. Colson, who had been employed with Red Arrow Freight Lines as district salesman in Victoria, Texas, had his job abolished around February 10. Colson had been in all phases of the warehouse business for nearly 25 years. He put in his application in several places in Houston . In his search for reemployment he came to Union Transfer and spoke to Dorsey who told him around February 25 to report for work on Monday, March 1. He quoted Dorsey as saying: "I need a spare tire, I would like you to learn my operation in the warehouse, stay down there a while and come up in the office." Colson stated that Dorsey wanted him to learn every phase of Union Transfer's operation in the warehouse: Your job down there-[I] just want you to go down there and see what I got in the warehouse, see if anything is'going on that is wrong, you know what is wrong and what is right. If the men are loafing down there or anything, you know what is supposed to go on in a warehouse. . . . You go on in and introduce yourself to the superintendent, the shipping clerk, receiving clerk, tell them who you are, that you are working for me. They might want to know what you are doing around the warehouse. Colson followed these instructions and worked for 30 days in the warehouse before he was brought upstairs and immediately took Kensinger 's place as superintendent when Kensinger left the Company. The conclusion is inescapable that owner Dorsey, who made all the decisions and issued the orders on everything of importance concerning his business affairs, did not undertake nor engage in a scheme to thwart the unionization of his em- UNION TRANSFER & STORAGE COMPANY 31 ployees-constituting himself and his official personnel a cabal for that purpose. The Trial Examiner who heard the testimony, observed the witnesses demeanors, read the record, and considered the arguments and contentions of counsel in their comprehensive briefs, finds that the only motivation in- Dorsey's entire conduct was to extricate himself from his uneconomical drayage dilemma . There was no union animus involved in his successful effort to divest himself from a losing drayage op- eration which he erroneously undertook when his nephew, Robinson, left him, taking many of the most profitable contracts. Dorsey had successfully worked for 10 years with two locals of International Longshoremen Association and was thought well enough by them to be a member of their welfare committee. Like some manage- ments, he doubtlessly felt that he could have gotten along better without them- that they just "messed things up," but he lived with them in "peaceful coexistence." The Trial Examiner is also of the opinion that from Dorsey 's long experience in labor relations he was too intelligent and unionwise to have made some of the anti- union statements attributed to him by certain of General Counsel's witnesses. (Cf. 8(a)(1) treatment hereinafter.) Some, in themselves, would have been implicit unfair labor practices-such as threats of reprisal, etc., upon rank-and-file manual laborers. If not a hard task master, Dorsey was at least an exacting one, a man of few words, a strict disciplinarian unsentimentally interested only in results . His order to Branscome to do something about disposing of the unprofitable drayage operation when informed of the inability of Harper's syndicate to purchase his two businesses demanded immediate action. Branscome took such immediate action, and Sicola was saddled with the responsibility without full knowledge of what he had under- taken. The Trial Examiner is convinced that even though Branscome had heard about employees meeting the previous evening to discuss unionizing, it played no part in his efforts to carry out Dorsey's order. Even if Dorsey had been well, it is im- probable that Branscome would have called Dorsey and injected this certainly un- pleasant thought in Dorsey's then frame of mind-and it is even more improbable that Branscome would have alerted Sicola to the fact that he, Sicola, might be con- fronted with a Teamsters organizational problem. Kensinger's conference with Moyer immediately after having injudiciously attended the union meeting and tele- phoning his sick boss at his home is illustrative of how he felt toward Dorsey. Dorsey's response to this information was typical of his character, "forget it!" (Dorsey had little confidence in Kensinger either.) There was also a time factor which renders the improbability if not the impossibility of Dorsey's concocting a plan to thwart the organizational activities of its drayage and warehouse employees. Management officials had no opportunity to get together and make a plot against the employees after Dorsey's arrival at work and before his conference with Sicola as is illustrated by a time sequence chart prepared in his brief by Respondent Counsel Saccomanno and attached hereto as an appendix . The suggestion that Sicola take over his trucks and drivers negatives such a plot. The last thing that Dorsey would want would be a fracas with the Union. The sole concern of Dorsey was to rid himself of an unprofitable operation It is understandable to the Trial Examiner that Dorsey, old and sick and desirous of getting his business affairs in order, would have followed the practices in this instance which evidently have characterized his entire successful business experience. This case does not fall within the line of cases wherein an employer may be ordered by the Board to reopen a farmed out department . Cf. Jay Foods, Inc., 29 NLRB 690. Therefore , the Trial Examiner will recommend that the counts in the complaint involving the alleged , discriminatory discharges of the five truck- drivers and three warehousemen , excluding Consteen Johnson and Ned Haywood, be dismissed. The cases of Johnson and Haywood are treated repeatedly hereinafter. The Allegation of Surveillance The allegation that Respondent engaged in unlawful surveillance of union meetings and activities rests on the attendance of Reed and Kensinger at the meeting at Teamsters headquarters on March 2. These circumstances are detailed hereinbefore. The invited attendance of a minor warehouse supervisory employee, Kensinger, and a minor office managerial employee , Reed, does not constitute an act of surveillance under the circumstances heretofore described , as the Board uses the term. Trial Examiner Funke in Rural Electric Company, Inc., 130 NLRB 799, succinctly stated the rule which is applicable in this case. The vice in surveillance lies in the intrusion by management into the organiza- tional activities of employees, the breach of their freedom to engage in con- certed activity, and the necessarily coercive effect of espionage upon the employees. 32 DECISIONS OF NATIONAL LABOR RELATIONS BOARD None of these untoward elements was present , and management was unaware of the meeting and attendance, and predicated no action thereon when they learned what had transpired . Accordingly, the Trial Examiner will recommend that the count in the complaint involving surveillance be dismissed. Discharge of Reed The allegation that Respondent discharged Billy Joe Reed, a supervisor, on or about March 4, 1960, because of his prounion sympathies is alleged as being violative of Section 7 of the Act as having interfered with, restrained, and coerced employees in the exercise of guaranteed rights. The facts of record show that Respondent sus- tained its defense that Reed was discharged because of inefficiency as is evidenced by the testimonies of office employee, Elvie Borens, Superintendent Branscome, and owner Dorsey. In Borens ' estimation he "didn't do any work" and "he spent a good bit of time in the coffee shop just talking and drinking coffee." Branscome had had heart-to-heart talks with Reed along the same lines. Dorsey testified that Reed did not fit into the job, and that by reason of mechanization of office procedures recommended by his professional mangagement counsel , Reed was not needed and was accordingly discharged. It is significant to the Trial Examiner that these discharges all came at a time when reorganization of Dorsey's entire business was being accomplished . Such re- organization predated the union activities , and was the only factor in the discharges alleged in the complaint. Also, there is no basis for finding that Supervisor Reed should be offered reinstatement with backpay as argued by General Counsel. Under the doctrine of N.L.R.B. v. Columbus Iron Works Company , 217 F. 2d 208 (C.A. 5), even if Reed, a supervisor , had been discharged whether or not discriminatorily, no violation of the Act would be involved . Even assuming, arguendo, that Dorsey had fired Reed for union activities and attending union meetings, Reed would not be en- titled to reinstatement. It is clear from the history of the Taft-Hartley legislation that Congress intended to restore to employers the right and power to insist upon the undivided loyalty of their supervisory personnel . The following observations of Senator Taft especially illuminating: The bill provides that foremen shall not be considered employees under the National Labor Relations Act. They may form unions if they please, or join unions, but they do not have the protection of the National Labor Relations Act. They are subject to idscharge for union activity, and they are generally restored to the basis which they enjoyed before the passage of the Wagner Act. It is felt very strongly by management that foremen are part of management; that it is impossible to manage a plant unless the foremen are wholly loyal to the management. The Alleged 8(a)(1)'s The complaint alleged that Respondent interfered with, restrained, and coerced its employees by interrogating employees concerning their membership in the Union, threatening employees with loss of membership, engaging in surveillance of union meetings, and discharging Supervisor Reed because of his prounion sympathies. The first of these interrogations to be treated deals with employees Blakes and Mills. Both testified that they were summoned to Dorsey 's office on March 11 when Mechanic Walker told them that Mr. Dorsey wanted to see them . They stated that after arrival in Dorsey's office, he asked , them how they felt about the Union and how other fellows felt about the Union . They stated that this meeting occurred around 9 : 30 a.m. They also testified that Dorsey told them that there would be no union at Union Transfer & Storage Company because before he would allow the warehouse to go union he would close up or turn operations over to another party. Dorsey's accepted testimony on this point is: They came to my office and I asked them what they wanted. They said Tommy Walker told them I wanted to see them . I corrected them I had not told Tommy any such thing and then right away they said , "We came to tell you we are on your side ; we don't want any union ." And I stayed quiet and [they] followed through on that , "We would like to have a little raise , though." Now, that was Mills talking. I said, "First of all , if you are entitled to a raise, I wouldn't give it to you because I would be accused of buying your votes." I said, "That is all out." Dorsey also similarly testified that he did not tell them that he would contract out the drayage nor turn the warehouse over to someone to operate . Blakes and UNION TRANSFER & STORAGE COMPANY 33 Mills also testified to another meeting in Dorsey's office on another occasion. Blakes said that the second meeting was some weeks after the meeting of March 11. Mills testified that the second meeting was before March 11. Dorsey testified that there was only one meeting and that it occurred about 1 week before the election which was March 25. The real crux of the conflicting testimonies of Blakes, Mills, and Dorsey resolves into one question: Were there two meetings in Dorsey's office or only one? Dorsey says there was only one. Blakes and Mills were confused as to the times of the meetings but both agreed on the interrogation and threats. Blakes stated that on the second meeting they went up there to boi row some money. He was positive in his testimony as to facts occurring on or about March 11 but equivocated and could not be pinned down nor remember questions propounded to him by Re- spondent Counsel Saccomanno just a week before this trial. He stated that they did not meet Branscome as they came up the stairs to Dorsey's office but did recall meeting Kensinger. The versions given by Blakes and Mills are conflicting and un- certain. Those given by Dorsey, Branscome, and Kensinger are certain. According- ly, the Trial Examiner rejects the testimonies of Blakes and Mills and finds that there was only one meeting, that being around March 11, and that their purpose in coming up to Dorsey's office was to borrow money and assure him of their support after the Union had filed its charges on March 8. The Trial Examiner concluded that they, like other employees, had previously importuned Dorsey for loans, but had gotten their stories mixed up on the occasion of this trial. Accordingly, the Trial Examiner will recommend that the complaint be dismissed on this count of interroga- tion and threats of reprisal. Discharge of Johnson and Haywood for Smoking Extensive testimony was heard and numerous exhibits of demonstrative evidence were admitted dealing with the discharges for violating Respondent's no-smoking rule. From the documentary evidence there are pictures showing no-smoking signs in the warehouse. It is a matter of common knowledge that smoking is not allowed in warehouses of the type of Respondent's in any city, and particularly not in Houston, where city ordinance specifically forbids such smoking and provides punishment for infraction of this law. Further it was brought out in the record that smoking was forbidden except in front of-the dock door entrance. All of the witnesses agreed on this fact, and when Johnson was once caught smoking by Dorsey in the warehouse, Dorsey told him that he ought to fire him, and admonished him never to do it again. Superintendent Branscome had reprimanded Johnson about smoking in the ware- house. Dorsey credibly testified that he. had caught Haywood smoking in the ware- house around the middle of February and Kensinger likewise testified that he had seen Haywood smoking on two prior occasions, prior to the first of March. Haywood denied this but the Trial Examiner resolved this credibility conflict in favor of Re- spondent's witnesses.' The reasons behind the more objective testimony of Respond- ent's witnesses was that they, with the exception of Dorsey, had less or nothing to gain by fabricating facts. Accordingly, the Trial Examiner thus resolved evidentiary conflicts against General Counsel's witnesses. _ The discharges of Johnson and Haywood were made by Colson. It will be recalled that Colson made application for employment on February 18, was interviewed by Dorsey on February 25, and went to work on March 1. His instructions from Dorsey, as heretofore recited, were to find out everything possible that was wrong with Dorsey's operation. The Trial Examiner came to the conclusion, after carefully ob- serving Colson and studying his testimony in light of all other testimony, that he carried out literally his instructions. Obviously Colson had no background of ex- perience in Dorsey's operations and it is apparent on the face of the record that he went about his job as an "eager beaver." His inspections drew the attention and concern not only of Reed, but also of Kensinger as to which one of them Colson might supplant. The Trial Examiner accepts Colson's testimony that he caught both Johnson and Haywood smoking in the warehouse from March 1 through 4 when they were discharged. He reported these facts to Dorsey and recommended their discharge and was told to fire them. Accordingly, the Trial Examiner finds that Johnson and Haywood were discharged for cause, and it will be recommended that this count in the complaint be dismissed. Based upon his observation of the demeanors of the testifying witnesses, their ob- jectivity and the manner in which they gave their testimonies , the Trial Examiner came to the conclusion that the witnesses for the Respondent were in the main reliable ; whereas the'witnesses for General Counsel equivocated, became confused , were tripped up on cross-examination, or made diffused assertions. 630849-62-vol. 134-4 34 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Layoff of Horton, Stevens, and Hardin Employees Horton, Stevens, and Hardin were laid off at the direction of Super- visor Kensinger. Kensinger discussed with Branscome on March 4 about laying off some of the employees stating: "I told him the workload was pretty well accom- plished and I could get back in line with the payroll again." He stated that he followed strict seniority in layoffs whenever possible, but that layoffs were matters within his sole discretion. The evidence of record supports Kensinger's reasons for laying these three men off at this time. Subsequent rehiring of other laborers is accounted for by the increased number of carloads of rice to be unloaded. The Trial Examiner implicitly accepts Kensinger's version and finds these layoffs not to have been discriminatorily motivated. The Union Button Incident Considerable testimony was given with reference to the charge that management interrogated employees on March 2 concerning the wearing of union buttons. These actions were primarily attributed to Dorsey and are advanced by General Counsel as being evidence of union animus which occasioned the discharges. This incident occurred in the forenoon following the union meeting of the previous evening. Undoubtedly several of the employees who had attended the union meeting openly wore their buttons. There is no doubt but that the wearing of these buttons came to the attention of supervisors, but the Trial Examiner finds that the wearing of the buttons played no role in the decision of management to change the operation and contract out the drayage as well as to curtail their personnel. In one incident Dorsey is charged with having approached Johnson, inspected the button and asked him if he did not know that the button was "hot." The Trial Examiner rejects Johnson's version of this event and finds that remarks made by Dorsey, if any, were not in the nature of threats of reprisal but rather would have been facetious. This incident is found to be no violation of the Act. Disposition of Challenged Ballots in Case No. 23-RC-1511 The Trial Examiner, having found that Johnson, Jones, Bush, Runnels, Williams, Haywood, Horton, Mills, Stevens, and Hardin were not discharged for their union activity, their challenged ballots need not be opened and counted nor a revised tally of ballots be served upon the parties. The ballots are invalid. Upon the basis of the foregoing findings of fact, and upon the record as a whole, it will be recommended that the complaint be dismissed in its entirety and, further, the Trial Examiner makes the following: CONCLUSIONS OF LAW 1. Union Transfer & Storage Company is engaged in and, during all times material, was engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. General Drivers, Warehousemen and Helpers Local Union No. 968 is a labor organization within the meaning of Section 2(5) of the Act. 3. The allegations of the complaint that Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (1) and (3) of the Act has not been sustained by a preponderance of the substantial evidence. [Recommendations omitted from publication.] Pine State Creamery Company, Inc. and James Marshall Hilliard and Howell L. Jones. Cases Nos. 11-CA-1710-2 and 11-CA-1730. November 7, 1961 DECISION AND ORDER On July 12, 1961, Trial Examiner James A. Shaw issued his Inter- mediate Report in the above-entitled proceeding, finding that the Re- spondent had engaged in and is engaging in certain unfair labor 134 NLRB No. 3.