Kingsford Motor Car Co.

KINGSFORD MOTOR CAR COMPANY Balbino Santiago (social security No. 580-24-2949) 711 Year and quarter Gross back- pay Interim earnings Net backpay 1956-I1I----------------------------------------------------- $79.99 -------------- $79 99 IV------------------------------------------------------ 312 85 $42 57 270 28 1957-1-------------------------------------------------------- 385 88 100 45 285 43" II------------------------------------------------------- 94 34 17 99 76 35 III------------------------------------------------------ 382 87 139 12 243 75 IV----------------------------------------------------- 185 46 94 12 91 34 1958-1------------------------------------------------------ 209 85 64 27 145 58 II------------------------------------------------------- 173 92 125 43 70 78 Total net backpay----------------------------------- 1,263 50' CONCLUSION AND RECOMMENDATION Upon the foregoing findings, I find and conclude that the employees listed here- under are entitled to payment by Respondents of the sums listed opposite their names: Enrique Gallego------------------------------------------------ $851.56 Hermenegildo Luna--------------------------------------------- 1,344.78 Eusebio Mercado----------------------------------------------- 1,343.24 Rafael Renta--------------------------------------------------- 1,225.23 Pablo Retamar------------------------------------------------- 1,196.64 Balbino Santiago------------------------------------------------ 1, 263.50' Francisco Alcala------------------------------------------------ -------- Domingo Belmonte ---------------------------------------------- 95.24 Luis Felipe Dessus--- ------------------------------------------- 17.21 Manuel Jimenez------------------------------------------------ 49.02 Juan Oliveras --------------------------------------------------- 15.70, Eduardo Luis Renta----- ---------------------------------------- -------- Luis Guillermo Rios --------------------------------------------- 49.81 Rufino Rosaly-------------------------------------------------- 87.06 Alfredo Ruiz Puig---------------------------------------------- 83.95 Arsenio Salaman------------------------------------------------ 48.22 Enrique Soto--------------------------------------------------- 3.90, Jesus Vazquez------------ -------------------------------------- 19.58 Bernardo Velazquez--------------------------------------------- 7.79 Rafael Velez--------------------------------------------------- 218.28 Total---------------------------------------------------- 7,920.71 It is recommended that the Board adopt the foregoing findings and conclusions. E. S. Kingsford, doing business as Kingsford Motor Car Com- pany and Teamsters, Chauffeurs, Warehousemen & Helpers of America, Local No. 328, International Brotherhood of Team- sters, Chauffeurs, Warehousemen & Helpers of America. Cases Nos. 18-CA-1253 and 18-RC-4580. January 30, 1962 DECISION AND ORDER On October 16,1961, Trial Examiner Owsley Vose issued his Inter- mediate Report in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and 135 NLRB No. 76. 712 DECISIONS OF NATIONAL LABOR RELATIONS BOARD take certain affirmative action, as set forth in the Intermediate Report attached hereto. Thereafter, the Respondent filed exceptions to the Intermediate Report and a supporting brief. Pursuant to the provisions of Section 3 (b) of the National Labor Relations Act, the Board has delegated its powers in connection with this case to a three-member panel [Chairman McCulloch and Members Leedom and Fanning]. The Board has reviewed the rulings made by the Trial Examiner at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Inter- mediate Report, the exceptions and brief, and the entire record in this case, and hereby adopts the Trial Examiner's findings, conclusions, and recommendations.' DIRECTION In accordance with the recommendations of the Trial Examiner which it adopts; the Board hereby directs the Regional Director to count the ballots of Phillip L. Peterson, Evan Larson, Michael Ber- gagnini, Robert L. Valerio, and Joseph Selle; the individuals whose ballots were challenged in the election in Case No. 18-RC-4580, and thereafter to prepare and cause to be served on the parties a revised tally of ballots, and to take such further action as is appropriate in the circumstances. ORDER . The Board adopts the Recommended Order of the Trial Examiner with the following modifications : (1) that provision 2 read : "Take the following affirmative action which the Board finds will effectuate the policies of the Act." (2) That provision 2(e) read: "Notify the Regional Director for the Eighteenth Region, in writing, within 10 days from the date of this, Order, what steps the Respondent has taken to comply herewith." 2 1 The Respondent excepted to the Trial Examiner's recommended order that the Respond- ent reopen its body shop to provide substantially equivalent employment for the former body shop employees, because there is no provision in the Act which gives the Board authority to compel an employer to engage in any particular kind of business enterprise. Contrary to the Respondent' s contention , our mandate in the Act as expressed by the Supreme Court is that a remedy is an appropriate one "adapted to the situation which calls for redress" only if it remedies the discriminatory discharges . N L R.B. v Mackay Radio & Telegraph Co., 304 U.S. 333. It should be noted that the Trial Examiner's recommended order provides for the reopening of the Respondent 's body shop only if there are not equivalent positions available in his other operations . We do not believe that such a requirement is unfairly imposed in the event Respondent is unable to remedy the discriminatory discharges by reinstating the employees.to positions in his other opera tions But for the Respondent's violations of the Act, his employees would have remaineda in his employ S IIn the notice attached to the Intermediate Report marked "Appendix," the words "Decision and Order" are hereby substituted for the words "A Recommended Order of a Trial Examiner " In the event that this Order is enforced by a decree of a United States Court of Appeals, there shall be substituted for the words "Pursuant to a Decision and Order" the words "Pursuant to a Decree of the United States Court of Appeals, Enforcing an Order" KINGSFORD MOTOR CAR COMPANY 713 INTERMEDIATE REPORT AND RECOMMENDED ORDER AND REPORT ON CHALLENGED BALLOTS STATEMENT OF. THE CASE Upon a petition filed by Teamsters, Chauffeurs, Warehousemen & Helpers of America, Local No. 328, International Brotherhood of Teamsters, Chauffeurs, Ware- housemen & Helpers of America, herein called the Union, on January 10, 1961, requesting an investigation and certification of bargaining representatives for the shop and parts department employees employed by E. S. Kingsford, doing business as Kingsford Motor Car Company, herein called Respondent, Edward C. Knapp, the Regional Director for the Eighteenth Region, Minneapolis, Minnesota, on Janu- ary 16, 1961, scheduled a hearing on the matters raised by the petition for January 24, 1961. This proceeding is known as Case No. 18-RC-4580. After the hearing, the Board on March 21, 1961, issued its Decision and Direction of Election among the employees in an agreed appropriate unit. After the election had been scheduled by the Regional Director for April 5, 1961, the Union, on April 4, 1961, filed unfair labor practice charges with the Regional Director in Case No. 18-CA-1253. These charges, as amended on May 18, 1961, alleged that: (1) on or about January 21, 1961, Respondent closed his body shop, contracted out the work, and discharged employees Phillip Peterson, Joseph Tripp, and Evan Larson because of their membership in, support of, and activities on behalf of the Union; (2) between the dates of January 27 and February 11, 1961, inclusive, the Respondent laid off, discharged, or otherwise terminated the employ- ment of Michael Bergagnini, Joseph Selle, and Robert Valerio because of their membership in, support of, and activities on behalf of the Union; and (3) on various occasions since on or about February 6, 1961, Respondent and his general manager, Carl Minella, have interfered with, restrained, and coerced employees by threatening to close down and cease operations if the employees continued to support the Union. The election was held as scheduled on April 5, 1961. The tally of the ballots shows that 5 of the 14 ballots cast were challenged by the Company, which were sufficient in number to affect the outcome of the election. Thereafter, the Regional Director having reported that the challenged ballots were the ballots of Phillip L. Peterson, Evan Larson, Michael Bergagnini, Joseph Selle, and Robert Valerio, five of the six employees named in the charges filed in Case No. 18-CA-1253, the Board on May 25, 1961, directed that a hearing be held to resolve the issues raised by the challenged ballots. In its order of May 25, 1961, the Board specifically directed the Trial Ex- aminer conducting the hearing to "prepare and cause to be served upon the parties a report containing resolutions of- the credibility of witnesses, findings of fact, and recommendations to the Board as to the disposition of said issues." On May 31, 1961, the General Counsel, by the aforesaid Regional Director, issued his complaint, order consolidating cases, and notice of hearing, alleging in substance the matters contained in the Union's amended charge filed on May 18, 1961, and directing that the issues raised by the allegations of unfair labor practices and by the challenged ballots in the representation proceeding .be heard and determined together. On June 9, 1961, the Respondent filed his answer denying the commission of any unfair labor practices and setting forth certain affirmative defenses to the violations alleged. Thereafter, pursuant to-due notice, a hearing was held in the above-consolidated cases before Owsley Vose, the duly' designated Trial Examiner, at Iron Mountain, Michigan, on June 13 and 14, 1961. All parties appeared and were represented at the hearing and were afforded a full opportunity to be heard, to examine and cross- examine witnesses, and to present oral argument. Subsequent to the hearing both the General Counsel and Respondent filed briefs which have been fully considered.' 1 After the close of the hearing I requested of counsel for the General Counsel and counsel for Respondent a clarification of certain entries appearing on General Counsel's Exhibit No 10, and thereafter sent a notice of my request to counsel for the Charging Party. Pursuant to this request, clarification was received in the form of a letter from Respondent which counsel for the General Counsel has consented may be considered by me in lieu of a stipulation from the parties A copy of my request for clarification, a photostatic copy of Respondent's letter of clarification together with the covering letter -from Respondent's counsel , and counsel for the General Counsel's letter accepting Re- spondent's clarification are received in evidence as 'Trial Examiner's Exhibits Nos la, lb, Sc. and Id, respectively. `714 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Upon the entire record, and from my observation of the witnesses , I make the following: FINDINGS AND CONCLUSIONS 1. JURISDICTIONAL FINDINGS Respondent, an individual proprietor, owns and operates a Ford agency, and has sales and service facilities at Iron Mountain and Kingsford, Michigan. During 1960 Respondent sold new and used automobiles and parts and performed services for his customers in an amount valued in excess of $825,000, of which amount more than $50,000 worth is attributable to sales made and services rendered to customers situated outside of Michigan . I find, as Respondent admits, that he is engaged in com- merce within the meaning of the Act, and that it will effectuate the policies of the Act to assert jurisdiction herein. II. THE LABOR ORGANIZATION INVOLVED Teamsters, Chauffeurs, Warehousemen & Helpers of America, Local No. 328, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. Background; the organization of the Union; its efforts to obtain recognition Dissatisfaction with conditions at the Kingsford garage on December 24, 1960, led to a decision on the part of some of the men there to organize . Contact was made with a truckdriver, who put Kenneth Davis , the treasurer of the Union, in touch with Phillip L. Peterson and some of the other employees at the Kingsford garage? Davis scheduled a meeting of employees for December 30, 1960. Eleven of the fifteen nonsupervisory shop and parts department employees signed applications for membership in the Union on December 30. At the same time each signed a separate certificate stating that he is an employee of Respondent , that he maintains membership in the Union, and that he authorizes it to request recognition as his bargaining agent and to conduct bargaining negotiations in his behalf. On January 3, 1961 , Arnold Alsten, the secretary-treasurer of the Union , mailed the 14 signed certificates to Respondent with a covering letter which stated that "a majority of your employees within a bargaining unit consisting of shop employees have designated the Teamsters Union , Local 328, to represent them in collective bargaining negotiations for a working agreement." Included, among others, were the certificates of all the rank-and-file employees in the parts department and the body shop. In reply, Respondent on January 9, 1961 , wrote the Union as follows: .. we insist on an N.L.R.B. conducted election before recognizing any collective bargaining agency in negotiations for a working agreement in our shops." In re- sponse to Respondent's letter, the Union wrote back on January 10 that it had filed a petition for an election with the Board and requested that Respondent sign an agree- iient for the conduct of a consent election . Respondent declined to do so. B. The closing of the body shop; the discharge of Phillip L. Peterson, Joseph Tripp, and Evan Larson 1. The events of January 19 to 21 Peterson was a skilled body and fender man and acted as leadman in the body shop which was located in the basement of Respondent 's Kingsford garage. Tripp and Larson were apprentice bodymen who were learning the trade . According to Tripp's testimony, on Thursday, January 19, 1961 , Edwin E. Davey, Respondent's service manager, gathered the three men together and said, "Well, boys I have bad news for you. . . As of the 21st, the body shop will be discontinued." Peterson there- upon asked Davey "if it was because of us joining the Union." Davey replied that "he was in no position to answer that , he was an outcast." No explanation for the closing of the body shop was given , as Davey admitted . The testimony of Peterson and Larson fully corroborates that of Tripp concerning the date and the circum- stances of their being notified about the closing of the body shop. 2 For convenience, hereinafter I will refer to Respondent 's garage at Kingsford, Michi- gan, where Respondent maintained his main service facilities and his body shop, as the Kingsford garage. I will refer to Respondent 's establishment at Iron Mountain where he has his main office and showroom, and where some light service work is done, as the downtown garage. KINGSFORD MOTOR CAR COMPANY 715 The testimony of both Respondent and Davey concerning the timing of the deci- sion to close the body shop and the circumstances under which such decision was made and communicated to Davey is somewhat confused, vague, and at times incon- sistent. Respondent was unable to recall exactly when he made his determination to shut down the body shop. Nor was he able to remember when he conveyed his decision to Davey, except to say that he notified Davey of his decision not more than a day or two before the shutdown. Respondent also was unable to recollect whether he communicated his decision to close the body shop directly to Davey, or through Carl Minella, his general manager. Respondent did recall consulting his attorney in Milwaukee on January 19 for advice about closing down the body shop and otherwise reducing personnel. However, Respondent did not remember when he returned to Iron Mountain, whether it was the same day or the next. Davey testi- fied that he was in Respondent's office on the afternoon of January 21, that Respond- ent at that time informed him that he was closing the body shop as of that afternoon, that Respondent did not indicate to him any reason for his action, and that he returned to the Kingsford garage and notified the employees of the decision about 45 minutes later. In view of the mutually corroborative testimony of the three body shop employees concerning the circumstances of their being notified of the shutdown, the certainty with which they recalled that they had worked lih days after their noti- fication, and Respondent's failure to support Davey's version, 1 cannot accept Davey's testimony in this regard and find that the employees were notified of the shutdown as set forth in the testimony of Tripp, quoted above. The three men worked all day Friday, January 20, and Saturday morning, January 21. On Saturday morning Tripp noticed that the timecards for the three men for the following week had been placed in the rack beside the timeclock. When he called this fact to Davey's attention, Davey commented, "I put them there because 1 still have hopes that you'll be back working." Later that morning, Tripp and Peterson again put the question to Davey whether they were going to be working next week. Davey replied, "No, . I'm a stubborn man, I still have hopes." Peterson went to see Respondent in his office just before closing time on Saturday morning, January 21, and asked him whether he was going to be given his vacation -pay. Respondent replied that he would like to know how Peterson felt that he had earned it. When Peterson explained that Davey had promised him 1 week's paid vacation a year, and that he had had no vacation in the past year, Respondent replied that "he had discussed it with the men and would not pay." Respondent then turned the discussion to the Union. In the course of this discussion Respondent cited an instance of the Union wasting its funds by paying an excessive price when it purchased a tract of land in Escanaba. Respondent discontinued his body shop as of January 21, 1961. However, in a few instances he accepted orders for bodywork and contracted the work out to Jack's Body Shop, but Respondent billed the customer for the work. Respondent's records show ,a gross profit from the sale of body shop labor in the months of February and March 1961, after the closing of the body shop, in the amounts of $137 and $81, respectively. Prior to the closing of the shop, the men had not been given any inkling that such a move was being considered. Davey admitted that Respondent had never discussed -with him the closing of the shop.3 2. General Manager Minella's subsequent statement to Peterson A week or two after the closing of the body shop, Peterson went to the downtown garage to settle his account with Respondent. Carl Minella, Respondent's general manager, upon observing him there engaged him in a conversation, in the course of which he stated that "if the Union was to come in Mr. Kingsford would be unable -to continue in business and would be forced to sell both garages." Peterson replied that the men did not want Respondent to close down, "all they were asking was more fringe benefits . they did not want a huge increase or anything such as that, they were more than willing to meet him half way." Minella then informed Peterson that if the business were sold, he was thinking about starting a used carlot, and inquired whether Peterson was interested in becoming one of the partners in such a venture. 3. The Respondent's need for body and paint services Respondent, like other automobile dealers who engage in retailing of their own used cars, requires body and paint services from time to time to put used cars which 8 Davey testified that on one occasion, 2 to 4 months prior to the shutdown, he and Kingsford had had "a general discussion on how we could make it (the body shop operation ) better." 716 DECISIONS OF NATIONAL LABOR RELATIONS BOARD have been taken in trade into a salable condition . By his own admission , during the period beginning the latter part of January through May 1961 , Respondent con- tracted out bodywork on his own new and used cars and on customers ' cars sent over to him in the sum of $1 ,089.95 worth. Of this work, $868.45 worth went to Jack's Body Shop in Iron Mountain , and the remainder was sent to Phil's Body Shop in Aurora, Wisconsin. In addition, an analysis of the invoices of Jack's Body Shop, which was received in evidence by stipulation , shows that that shop worked on three other vehicles, insurance jobs, which were sent over by Respondent. These jobs are listed as follows: Miller Plumbing ------------------------------------------- $436.26 Carl Lemin ----------------------------------------------- 106.60 Kingsford-Minella ------------------------------------------ 488.12 Total ---------------------------------------------- 1,030.98 Thus, in a little over 4 months a total of $2,120.93 worth of bodywork available to Respondent was contracted out to outside body shops. 4. The workload in the body shop in January 1961 The volume of work in the body shop was very light in the period in January 1961, preceding the closing of the shop . Figures taken from Respondent 's payroll records show that after January 10, Peterson and Larson performed very little normal body- work either on customer or company cars. Tripp did almost no regular bodywork after January 6. The men filled in their time doing cleaning and repair work around the shop. Work generally slackens off in the body shop in the first part of the year. In past years, however, no layoffs had been made The decrease in the volume of work in January 1961 , was greater than in past years and was due in part to an unusual lack of snow in the Iron Mountain area . As a result Respondent failed to obtain the usual local accident repair work . Also, the lack of snow also kept tourists out of the area, which is a well-known winter resort , and as a result Respondent did not receive his usual tourist business. 5. Respondent's explanations for the closing of the body shop Respondent's principal explanation for closing the body shop is that the body shop had not been contributing its proper share to the gross earnings of the whole of its sale and service operations for several years, and that in view of his con- tinuing losses in the operation of the business, the difficult financial situation in which automobile dealers generally found themselves at that time, and the depressed eco- nomic conditions in the Iron Mountain area, he did not feel the continued operation of the body shop was economically warranted . Respondent also assigned other reasons for closing, including the asserted difficulties in properly supervising the body shop operations in its basement location , and pointed out that during 1960 leasing out the body shop was discussed with Jack Minella, a local body shop operator. Profit-and-loss figures furnished by Respondent for his operations as a whole show the following annual profits and (losses ), after yearend adjustments: 1955- ------------------------------------------------- $ 4,499.70 1956-------------------------------------------------- ( 3,598.99) 1957---- ---------------------------------------------- (14,742.50) 1958 -------------------------------------------------- (19,107.17) 1959-------------------------------------------------- (10 ,741.35) 1960-------------------------------------------------- ( 10,870.21) 1961 (through April)----------------------------------- 4(5,349.55) Counsel for the General Counsel introduced into evidence tabulations giving the gross profits (or losses ) of the various departments operated by Respondent covering the period beginning with January 1955 and running through March 1961. This tabulation was prepared from copies of reports submitted by the Respondent to the Ford Motor Company. These figures are broken down to show for each month ' Figures introduced into evidence by Respondent show also that he put additional capital into the business in the following sums, 1958------------------- -------------------------------------------- $15,000 1959----------- ---------------------------------------------------- 21,500 1960--------------------------------------------------------------- 3.000 KINGSFORD MOTOR CAR COMPANY 717 the Respondent's gross profit from the sale of vehicles, from the sale of parts and accessories, from the furnishing of body shop labor, and from Respondent's total sales of labor, i.e., from both the body shop and from Respondent's repair and service operations. By subtracting Respondent's gross profits from the sale of body shop labor from his gross profit from his total sales of labor, his gross profits from the sale of labor in his repair and service operations can be ascertained. These figures, while they do not present the complete picture of the Respondent's operations as a whole, do show that Respondent's substantial losses year after year were attributable to his vehicle sales, i.e., sales of new and used cars and trucks. Thus the figures as to Respondent's yearend adjustments in the value of vehicles on hand at the end of the year show that Respondent wrote down the value of these cars and trucks in the years 1955 to 1960 in an amount in excess of $38,000, which is a substantial portion of the losses suffered by the Respondent in these years. Respondent testified that "in 1960 every single vehicle we put on the road cost [him] $50.00 to put it out the door." Set out below are the total gross profits earned from the sale of body shop labor each year from 1955 to 1960, as shown by the tabulations above referred to, and the comparative figures showing the Respondent's gross profits resulting from the furnishing of labor for repair and service work. Bodand paint Repair and Gross profits- shop labor service labor 1955-------------------------------------- $1,023 $7,566 1956-------------------------------------- 2,837 5,919 1957-------------------------------------- 3,443 4,223 1958-------------------------------------- 3,906 8,987 1959-------------------------------------- 6,753 9,630 1960-------------------------------------- 5,379 9,221 From the foregoing figures it appears that Respondent's gross profits from the fur- nishing of body shop labor have been in a rising trend, increasing from $1,023 in 1955 to $5,379 in 1960.5 An additional gross profit accrues to Respondent from the operation of the body shop as the result of the furnishing of parts and accessories used in body shop operations. Respondent's gross profit from the sale of these items apparently is included in the parts and accessories total. However, this total is not broken down to show what portion is attributable to the operation of the body shop. To the extent that the necessary parts are available only through a franchised Ford dealer, even with the body shop closed, Respondent would benefit from the sale of these parts to outside body shops which were doing the body shop work formerly handled by Respondent. Respondent's gross profit from the sale of body shop labor compared very favorably with that earned in furnishing repair and service labor when the number of em- ployees engaged in the two departments is taken into consideration. As found below, Respondent's gross profits from the two departments afford an approximate measure of the net profitability of the two operations. Respondent had three em- ployees engaged in body shop operations throughout 1960. Respondent had at least 12 employees a month , upon an average, engaged in repair and service operations in 1960. This figure excludes the parts department employees . Respondent's gross profits from the sale of body shop labor in 1960 amounted to $5,379 as compared with $9,221 derived from labor in repair and service operations. Thus, with an employee complement four times as large as that of the body shop, Respondent in 1960 managed to gross less than twice as much from the sale of repair and service labor as it did from the sale of body shop labors In 1959, Respondent managed to achieve an even higher rate of return in the body shop, considering the number of employees engaged in each operation. Respondent had an average of between 11 and 12 employees engaged in repair and service opera- 5 Wliile Respondent's body shop labor gross profits went to an all-time high of $6,753 in 1959 and then dropped back down to $5,379 in 1960, this figure was considerably higher than the $3,906 figure which was the figure in 1958, and in this sense the long-term trend of Respondent's gross profits from the sale of body shop labor was upward 0It is possible that Edgar Loper, Respondent's used car reconditioner, and Edmund Morelli, who prepared new cars for delivery and acted as janitor also, should not be re- garded as being engaged in service operations, even though Respondent's reports to the Ford Motor Company include them in this category However, even if Loper and Morelli are eliminated as service employees, Respondent still achieved a substantially greater return, on a per-employee basis, from the sale of body shop labor than it did from its repair and service labor. 718 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tions in 1959, as compared with an average of less than 4 employees doing body and paint work .7 Yet Respondent's gross profits from the sale of the labor of the less than 4 men in the body shop amounted about 70 percent of his gross profits from, the sale of labor of the 11 or more men performing repair and service work, amount- ing to $6,753 for the body shop as compared with $9,630 for repair and service work. Even if Loper and Morelli are excluded from consideration on the theory that their labor is chargeable to other operations, Respondent grossed, upon a per employee basis, well over half again as much from the sale of body shop labor as from the sale of repair and service labor. In view of the considerable extent of the disproportion between Respondent's gross profits from his body shop operations and from his repair and service operations, upon a per-employee basis, it is not unreasonable to accept Respondent's comparative gross,profit figures for the sale of labor in the two departments as a rough guide to Respondent's net profit from the two operations. These gross-profit figures do not reflect the deduction of such overhead expenses as rent, taxes, insurance, interest, heat, light, telephone, and clerical expenses. However, in my opinion Respondent's overhead expenses for each employee engaged in body shop work would tend to be proportionate to his overhead expenses in running his repair and service operations, per employee performing such work, with the exception of rent and related items. While Respondent's overhead expenses for these items might tend to be higher for a body and paint shop than in repair and service operations, on a per-employee basis, because of the possibly larger space requirements of a body and paint shop, they would not be sufficiently higher, in view of the extent of the disproportion in favor of the body shop, to impair the use of Respondent's gross^profit figures as a basis for comparing the net profitability of the two operations. The gross profit figures above discussed indicate that the body shop was contrib- uting substantially more net profits to Respondent than was his repair and service department, upon a per-employee basis. While the total contribution of the body shop was less than that of the repair and service and the parts and accessories de- partments, Respondent's other two profitable departments, the body shop contribu- tion was nevertheless substantial, and pro tanto reduced Respondent's large losses in his vehicle sales operations. In light of these figures, and since one who is losing money in large sums in one phase of his operations does not normally abandon an- other phase which is substantially curtailing his overall losses, I cannot accept Re- spondent's testimony that he decided to close the body shop primarily because for several years the body shop had failed to make a satisfactory contribution to the whole of his service and sales operations. As noted above, Respondent suggests that the difficulties of adequately supervising his body shop operations because of its basement location and Service Manager Davey's primary responsibility to oversee the first-floor repair and service operations was a factor in his decision to close the body shop. The fact is, however, that this situation had existed since Jack Minella, Respondent's last full-time supervisor in the body shop, left in September 1958. Phillip Peterson commenced working in the body shop early in January 1959 and had acted as leadman there. It was during Peterson's first year in the body shop, 1959, that the gross profits of the shop reached an all-.time high. As noted above, the longterm upward trend of the gross profits of the body shop continued in 1960 despite a drop from the abnormally high figure reached in 1959. In view of the fact that Respondent had tolerated this situation for over 2 years without doing anything about it, and acted only after being informed that all his body shop employees had designated the Union as their bargaining agent, Respondent's suggestion that these asserted supervision difficulties were a contrib- uting factor in Respondent's decision to close the body shop is rejected. As noted above, Respondent stresses discussions with Jack Minella about his leasing out the body shop, apparently in an effort to show that the decision to close was not a spur-of-the-moment decision. The record shows that on one occasion in October and another in November 1960, Respondent discussed with Jack Minella the possibility of his leasing the body shop space. However, as a result of the many complications connected with such a venture, such as the questions of how to handle the billing and how to divide the parking space between them, no agreement was reached by the end of the year. After that, Minella heard about the Union and lost interest in the project. While these two discussions indicate that Respondent , before the advent of the Union, was desirous of improving the situation in regard to the While Respondent's reports to the Ford Motor Company indicate that it employed but three men in the body shop throughout 1959 , I find, in accordance with the testimony of Phillip Peterson , leadman in the body shop , that Respondent had four men in the body shop for 7 or 8 months of 1959. KINGSFORD MOTOR CAR COMPANY 7191 body shop, they do not show that Respondent contemplated abandoning the opera- tions altogether. There is a considerable difference between leasing of the body shop, and the outright discontinuance of body shop operations. Under a lease arrange- ment, ,the Respondent would have received some return for the use of the body shop, space in the basement of the Kingsford garage. With the elimination of body shop, Respondent not only suffered the loss of profits formerly derived from its operations, but at the same time continued to have to bear the burden of paying the overhead expenses on the idle body shop. C. The discharges in the parts department 1. The discharge of Michael Bergagnini on January 27 Bergagnini was hired in the parts department early in October 1960 to keep the- looseleaf books and catalogues up to date, and generally to help out in the depart- ment. At the time Bergagnini was hired he was told by Trudell, the supervisor in the department, that it would be good experience for him and that he would have some- thing to look forward to. Bergagnini's hiring brought the number of employees in- the parts department to four, including the supervisor. For the past 28 months Respondent had had only three employees altogether in the parts department. About January 24, 1961, Bergagnini observed Respondent's wrecker tow a pickup, truck belonging to Miller Plumbing & Heating Company to the back of Respondent's repair shop. The front end of the truck had been damaged in an accident. Later that day, Bergagnim saw Jack Minella, the proprietor of one of the local body shops, apparently making out an estimate as to the cost of doing the bodywork required. On the next day Jack Minella came and towed the Miller truck away. On the following day, January 26, Davey, the service manager, came up to Bergagnini at the window of the parts department, handed him an estimate covering the repairs to the Miller truck which had been prepared on an estimate form of Jack's Body Shop, and directed him to copy this estimate "word for word" on a Kingsford estimate form which he handed Bergagnini at the same time. Bergagnini replied "that it was body shop business and that [he] had no concern with the body shop especially since we didn't have a body shop any more." Davey thereupon, admonished Bergagnini as follows: "If you like working here, you'll do it." The next afternoon at 4:40 p m., Trudell called Bergagnini into his office and told him that General Manager Carl Minella "had called him up and told him to tell' [Bergagnini] not to come to work tomorrow." Trudell did not give Bergagnini any explanation for his termination. Trudell did say, however, that "he was sorry but there was nothing he could do about it." Bergagnini immediately called General" Manager Carl Minella on the telephone and asked him why he had been laid off. Minella replied that "there were too many men in the stock room" and hastily hung up the telephone. 2. The discharge of Robert L. Valerio on February 11, 1961 Valerio, after working in Respondent's parts department for 21/z years, quit in May 1959, because Respondent refused to give him a wage increase. In September 1960, Valerio was rehired in the parts department. He worked until February 11,_ 1961. About 5 minutes before closing time on that day Supervisor Trudell ap- proached him and said "he was sorry he had bad news for [him]. Mr. Minella had" told him he had to let [Valerio] go." Trudell then added that it would be a tempo- rary layoff until business picked up. About 10 days later Valerio went back and questioned Trudell about his chances of being called back to work. Trudell replied that "he didn't think they would be calling anybody back until this Union bit was settled." The union authorization certificates of both Bergagnini and Valerio were received by Respondent on January 6, 1961. 3. Respondent's explanation for the layoff of Bergagnini and Valero When questioned by counsel for the General Counsel as to his reasons for the layoffs in the parts department, Respondent testified that one of the reasons was the, necessity of bringing the number of employees in the parts department closer to the number required by the volume of business being done in the parts department. The two men in question were chosen, according to Respondent, because they had the least seniority in the department. As Respondent further testified, his attorney had previously discussed with him the advisability of making the layoffs on the basis- 720 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of seniority. Another reason, as Respondent in effect testified, was that he was facing union proposals which he felt that he could not meet.8 Respondent's records show that since the end of 1954, Respondent has regularly had four employees in the parts department, including Supervisor Trudell, with the exception of the 28-month period ending in September 1960, during which time Respondent had only three employees in the department. When Bergagnini was hired, this brought the size of the parts department staff back to the level which had existed in 1955, 1956, 1957, and the first few months of 1958. Respondent's gross profits from the parts department at the time Bergagnini was added to the staff about the first of October were averaging about $3,200 per month. At the time Bergagnini was laid off on January 27, Respondent had not yet had an opportunity to review its records for January. As Respondent testified, these records are not completed until the first part of the following month. Respondent's gross profits from the parts department for December 1961, the last month for which figures were available at the time of Bergagnini's layoff, were $3,672, one of the highest figures recorded by Respondent since 1954. Respondent's average monthly gross profits from his parts department for the last 3 months of 1960 were $3,233 per month, slightly higher than the average being achieved at the time Bergagnini was hired. When Valerio was laid off early in February 1961, Respondent had experienced just 1 low month in the parts department. In January 1961, Respondent's gross profit from the operation of the parts department was $2,259 as compared with the average in the preceding 3 months of $3,233 per month. However, Respondent had experienced wide fluctuations in the gross profits from the parts department in the past. Based on past experience, 1 month's drop was not decisive of a trend. In 6 different months during the 1955-1958 period during which Respondent had four employees in the parts department, Respondent's gross profits dropped to below $2,300; yet Respondent did not reduce his parts department staff during any of these months by even one man, let alone two. And it should be borne in mind that the low levels of gross profits from the parts department in January and February 1961, to some extent reflected the loss of profits arising out of the discon- tinuance of the body shop in January. Since ,the layoffs Respondent has had one of the female clerical employees come down to the parts department to do bookwork, change catalogues, make parts and price number changes, and add new material to the books. On each occasion on which she would visit the parts department she would spend about 2 hours. Customers and mechanics seeking to obtain parts from the parts department since the layoffs have had to wait in line longer to be waited on. Whereas, before the layoffs there would ordinarily be only one mechanic waiting in line at the mechanics' window for parts, thereafter two, or three at times, would be waiting in line. D. The discharge of Joseph Selle on February 10, 1961 1. The relevant facts Selle was hired by Respondent in March 1953 and worked steadily all during this period, with the exception of 2 months during which he worked part time. For the first 3i years of his employment Selle worked at the downtown garage washing and readying new cars for delivery, cleaning up used cars, and doing the janitorial work around the downtown garage and office. In the latter part of 1956, Selle was transferred to the Kingsford garage and Glen Beitel, another long-time employee of Respondent's, sent from the Kingsford garage to take over some of Selle's duties and to take on some additional ones, including oiling and greasing cars. Selle continued to spend a day or so a week at the Iron Mountain garage, cleaning up the office and the garage. After March 1959, Selle spent full time at the Kingsford garage. A new employee, Edmund Morelli, was hired at this time to take over the janitorial duties previously performed by Selle, to wash and prepare new cars for sale, and to assist Beitel in his lubrication and other light servicing operations. At the Kingsford garage Selle commenced working on the grease rack, greasing and changing oil in cars, installing mufflers and tailpipes and universal joints, and e Subsequently, Respondent acknowledged that he had received no union demands at this time These were not received until he received the Union's proposed contract which was mailed to him on March 20, 1961. However, as Respondent explained, he naturally assumed that the Union's wage proposals 'would be in excess of what he was paying the men. KINGSFORD MOTOR CAR COMPANY 721 adjusting the bands on automatic transmissions. When Selle first started working at the Kingsford garage he did 90 percent of the undercoating work on new cars. Toward the end of 1960, however, this work had dropped off considerably and Joe Tripp, one of the body shop employees, was taking care of all of it. Such shifting of employees from one duty to another was a common practice at Respndent's estab- lishment. In addition to these duties, Selle, in effect, served as a general utility man around the Kingsford garage, doing the necessary janitorial work, tending the fur- nace, driving Respondent's wrecker, and running around for parts. According to Service Manager Davey, Selle was a good worker who could be depended upon to do work in his field without requiring undue supervision. At 4:20 p.m. on February 10, 1961, Service Manager Davey summoned Selle to his service booth and told him, "I'm sorry but I have to let you go." Davey did not volunteer any explanation and Selle did not ask for one. Earlier that afternoon Respondent had instructed Davey that Selle "was through as of that afternoon." He did not give Davey any explanation for his action in regard to Selle. Respondent had not previously discussed with Davey terminating Selle. Selle was one of those employees whose bargaining authorization certifications was submitted to Respondent on January 3, 1961. Morelli, who subsequently took over the duties formerly performed by Selle at the downtown garage, was not among the employees whose certifications were furnished Respondent. 2. Respondent's contention regarding Selle's discharge Respondent asserts that Selle was not discharged but was merely laid off for lack of work. However, neither the testimony of Selle nor of Service Manager Davey, who notified Selle of his termination, supports this contention. According to Selle's credited testimony, Davey merely told him, "I'm sorry but I have to let you go." Davey's version of this conversation, that he had told Selle that "his services were through as of that evening," is not inconsistent with Selle's credited testimony. And it is undisputed that Selle was given no explanation for his termination. In the case of an able and experienced employee of 8 years' service, I find it unlikely that Respondent, or at least Serivce Manager Davey, would not have attempted to soften the blow by informing Selle, that he was being laid off only temporarily, if such was the case. Accordingly, I reject Respondent's contention that Selle was merely laid off. In support of his contention that a lack of work was responsible for Selle's ter- mination, Respondent testified that the undercoating work which Selle had been doing had dropped to almost nothing, that work was slow in the lubrication depart- ment, and that Selle was not qualified as an all-around mechanic. Respondent also points out that due to the low volume of work in the service department, it became necessary after Selle's layoff to reduce the hours of the mechanics from 44 to 40 per week, and to lay off one of the mechanics for 9 days. The figures as to the gross profits from Respondent's various operations which were introduced into evidence by the General Counsel establish that the volume of Respondent's repair and service work dropped substantially in January 1961, and to an even greater extent in February 1961. Respondent, however, could not have been aware of the latter drop when he had Selle terminated on February 10, 1961. After Selle's layoff, his janitorial duties were performed by William Pipp, a me- chanic and wheel alignment specialist. Other mechanics handled the lubrication, exhaust system, and universal joint work formerly done by Selle on the grease rack. Beitel came over from the downtown garage to take care of the undercoating work previously done by Selle. Loper, the used-car reconditioner, also did some of Selle's grease-rack work and, in addition, did the running for parts formerly done by Selle. As a consequence, as he credibly testified, he has not been able to spend as much time on used cars as he previouslyhad been doing. Respondent defended his retention of nonmember Morelli in preference to union member Selle on the grounds that Morelli was a better man and a more versatile workers Morelli, as found above, was the employee with 6 years less seniority than Selle, who took over Selle's old duties at the downtown garage when he was hired in 1959. Respondent did not give the basis for his conclusion that Morelli was the better worker. With regard to the comparative versatility of the two men, from 6 When first questioned about his retention of Morelli, Respondent was asked, "Could he (Selle) do all of the work that Morelli is doing now 9" Respondent's reply was, "I think he could but perhaps not to my satisfaction." 634449-62-vol 135-47 722 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the testimony as to the various specific kinds of duties Selle performed at both garages, it appears that he could perform a wider variety of more highly skilled op- erations than Morelli. Later on, when considering the Union 's specific wage de- mands, Respondent , in a listing of the employees and the Union's proposed rates for each, classified Morelli as a janitor, who would be entitled under the Union's requested wage scale to an hourly wage of $1 .94. At the same time Respondent allocated Selle to the $2.30 per hour bracket which is the greaser or apprentice- mechanic rate. Davey, who was Selle's immediate supervisor , regarded Selle as a good worker. Davey was not consulted by Respondent in connection with the discharge of Selle, although he apparently was in a better position than Respondent to appraise Selle's job qualifications since Davey regularly observed Selle at work at the Kingsford garage. Respondent, whose office was at the downtown garage , had no such op- portunity. E. Respondent's preelection conduct 1. Introductory statement On March 20 , 1961, while its representation petition was still pending before the Board, the Union mailed Respondent a copy of a proposed contract for his considera- tion. Appended to it was a proposed wage scale for the various categories of Re- spondent's employees which was considerably in excess of his wage scale at the time. In the letter accompanying the proposed contract, the Union, protesting Re- spondent's asserted discriminatory treatment of seven employees , urged the immedi- ate commencement of bargaining negotiations and suggested the possibility of strike action to secure recognition of the Union. As stated above, on March 21 , 1961, the Board issued its decision in the repre- sentation case directing that the Regional Director conduct an election among all Respondent's shop employees at its Kingsford and downtown garages, including the parts department employees . Pursuant thereto the Regional Director issued a notice of election to be held at the Kingsford garage on April 5, 1961. 2. General Manager Minella's statement to Beitel on April 1 On Saturday, April 1 , 4 days before the scheduled National Labor Relations Board election, Glen Beitel accompanied General Manager Carl Minella on a road test of his car. On this occasion Minella brought up the subject of the election . Minella first referred to the State election which was to be held the first part of the following week. Then, as Beitel credibly testified, the following conversation ensued: We talked about the politicians that were running and which were good ones and then he (Minella ) said, "There's another election coming up in a day or two after this state election," . . . and he says "I'm not telling you how to vote," but he said "If the Union wins we'll be all out of a job ," he says. .. . All I said was "Yeah." 3. Respondent's talk to the employees on April 4 Respondent scheduled a meeting of his employees for 7:30 p.m. on April 4, 1961, the evening before the election . The supervisors notified the employees of the meeting. All the employees attended with the exception of the clerical employees, one of the salesmen, and Loper, the used-car man. Respondent gave quite a lengthy talk on this occasion , the purpose of which, as Respondent admitted, was to convince his employees to vote against the Union in the election. Respondent opened his talk by referring to the financial losses which he had suffered in every year since 1955 . He mentioned his difficulties in raising money to meet the payroll and described at length how he had had to liquidate various assets and borrow from numerous sources in order to do so . Respondent then sought graphically to demonstrate the nature of his financial problems by referring to his "wash-out sheets," which he had with him . These are records kept by Respondent on which are recorded the gross profits or losses on the whole series of transactions involving first, the sale of a new car, and then all of the sales of used cars taken in trade not only on the sale of the original new car but also on the sale of the suc- cessive trade-ins.lo Respondent discussed in detail various series of specific trans- actions as shown by "wash-out" sheets, picked at random from his records of 1960 sales, pointing out the losses and profits , if any, involved. 10 It may take the sale of a series of four or more trade-ins before the "wash-out" occurs, i.e ., when Respondent finally sells a trade-in without having to accept a lesser valued used car as part payment. KINGSFORD MOTOR CAR COMPANY 723 Respondent asked the men why they had picked out the Teamsters Union and pointed to newspaper clippings relating to the doings of the Teamsters Union. Respondent went on to say that he had sold a parcel of land to a friend for $8,000 and that the Teamsters Union had paid $40,000 for an inferior piece of property. He added that the Union had squandered its funds buying tools with which to improve the property, buying twice as many as were necessary. Respondent pointed out that the source of the funds which were thus being wasted was their union dues, and the dues from other locals also. Respondent then mentioned that he had received a proposed contract from the Union together with a letter suggesting the possibility of a strike. Respondent dis- cussed various provisions of the contract. He criticized the successorship clause which he asserted would adversely affect his chances of selling the business. With regard to the Union's proposed wage scale, Respondent pointed out that if he paid the employees the union scale and granted the Union's pension proposal, he would have to raise wages 70 percent and double his charges to his customers, which his customers would not stand for. Respondent then stated that regardless of how the election turned out, he would "not sign a contract with the Union," that "before he'd sign ,a contract he would move to Arizona and sell real estate." At this point Respondent added that if he did sell the business to younger men, "they would probably not take up some of the older men that are now employed." 11 When Respondent asked whether there were any questions, Service Manager Davey, spoke up and said that "he thought a Union would be all right if it would be just a Union in the shop and then if there was any benefit to be made or to be shared then it would be shared with just the employees of the Union instead of having any of it go out to carry on or take care of a large Union." 4. General Manager Minella's second statement to Beitel on the morning of the election The election was scheduled to be held between 11 and 11:30 a.m. on April 5, 1961. Between 9 and 9 : 30 a.m. Minella approached Beitel a second time about the election. According to Beitel's credited and uncontradicted testimony, the following occurred: Well, first I noticed he (Minella) was pacing back and forth between his office and the wash rack and about twice or three times and on the third time he came to go down to the basement-way and he stopped at the basement-way doorway and he had motioned to me to come over , which I did, and he asked me, he said "I'm not telling you how to vote," he says , "but the old man-referring to Mr. Kingsford-is in a bad financial state," he says , "and we'll have to close down and be all out of a job, but I'm not telling you how to vote." I says, "O.K., Carl," and that's all I said to him. "The above findings based on the credited and mutually corroborative testimony of Glen Beitel and Alvin D. Peterson Respondent, when asked whether he had told the employees that he would not sign any contract with the Union, answered as follows: "I think probably I said I would not sign that contract . . . In the form in which it was presented." The testimony of the employees is to the effect that Respondent said that he would not sign a contract. Both Beitel and Alvin Peterson adhered to their testimony to this effect despite vigorous cross-examination. While Respondent denied having discussed "the business of this shop going out of business," he admitted that he had said, after stating that the Union's demands would have required him to double his charges to his customers, that the effect would be to "drive all his customers away and [be] might as well close his doors." With respect to the testimony about "going back to Arizona," Respondent testified as follows: I believe that I pointed out I might just as well have stayed in Arizona where I was running a 36,000 -acre ranch and 15 dudes rather successfully along with 600 head of White Face, which I had a damned sight sooner run than the 15 dudes, and it was in Arizona that I dabbled a little bit in real estate and I still have some real estate in Arizona. When asked why he had made the reference to going back to Arizona, Respondent replied, "Because I thought there might be a question in the minds of some of the employees as to what I might do " Thus the testimony of Respondent and the employees differs mainly in the matter of emphasis. Respondent in his testimony generally exhibited a very poor memory, even about important events. In my opinion the testimony of the two employees, which is quite detailed and precise, contains a more accurate presentation of the above portions of Respondent's talk to the employees. 724 DECISIONS OF NATIONAL LABOR RELATIONS BOARD F. Conclusions concerning the unfair labor practices 1. The sequence of events in broad outline On January 6, 1961 , Respondent received from the Union the notification that a majority of his employees had designated the Union to act as their collective- bargaining agent, together with a list of the employees which it represented. On the list were all of the nonsupervisory employees in the body shop and in the parts department. When Respondent declined to recognize the Union without an election, the Union filed a representation petition with the Board . On January 16, the Board's Regional Director scheduled a hearing in the representation case for January 24, 1961. On January 19, Respondent abruptly decided to discontinue his body shop operations, and the three union members in this department were discharged as of January 21. Union member Bergagnini , one of the parts department employees , was suddenly discharged on January 27 after a minor clash with Supervisor Davey on the preceding day over recopying an estimate for bodywork in the course of which he impliedly questioned Respondent's action in closing the body shop and discharging the three body shop employees. On February 10, Respondent abruptly laid off union member Selle, a service department employee of almost 8 years' standing, bypassing in the process nonmember Morelli, who had taken over Selle's old job at the downtown garage and who had been employed by Respondent less than 2 years. The day after Selle's discharge Respondent laid off Valerio, another employee in the parts department. Thus, within a 2-week period ending with Valerio's layoff on February 11, and at a time when Respondent was aware that a National Labor Relations Board election was in the offing, Respondent eliminated from his payroll 6 of the 11 employees whose certificates of union membership had been furnished him on January 6. A few days before the April election, and again less than 2 hours before the election, General Manager Minella threatened Glen Beitel that if "the Union wins, we'll be all out of a job." And the night before the election Respondent summoned the employees to the garage after working hours where he addressed them at length . In the course of his talk Respondent disparaged the Union, questioned the employees as to why they had selected the Teamsters Union, and warned that regardless of how the election turned out he would not sign a contract with the Union , and that before he would do so he would sell the business and move to Arizona and sell real estate. Viewing this sequence of discharges and layoffs in light of Respondent's opposition to the representation of his employees by the Union, which is epitomized in Respond- ent's announcement to the employees just before the election that he would sell the business before he would sign a contract with the Union , these discharges and lay- offs appear to be part of a common plan adopted by Respondent to avoid bargaining with the Union. In view of this fact , Respondent's explanations for the discharges and layoffs must be scrutinized with care. 2. The closing of the body shop As stated above, Respondent contends that the closing of the body shop was a routine business decision compelled by the comparatively poor showing made by that department. However, the figures as to Respondent's gross profits from the operation of the body shop as compared with Respondent's repair and service department-and these figures, as found above, afford a fair basis for comparing the relative profitability of the two departments-show that Respondent's gross profits derived from the sale of labor in these departments, were substantially higher, per man, in the body shop than in the repair and service department, which Respondent left intact at the time of the closing of the body shop. Futhermore, the gross profits of the body shop have been in an uptrend for the last 6 years, and although down in 1960 from the extra- ordinarily high figure reached in 1959, they nevertheless still were almost 40 percent higher in 1960 than in 1958, Respondent's next highest year In December 1960. the last full month before the shutdown , Respondent had a very high level of gross profits in the body shop, the December figure being $665 as compared with an average monthly gross profit in.1960 of $448. While business in the body shop dropped off abruptly in January 1961, Respond- ent's records show that for years he had experienced wide fluctuations in the volume of business and gross profits in the body shop. In earlier years when the gross profits of the body shop were considerably less than in 1960, Respondent did nothing about discontinuing operations. As Respondent himself testified, in making decisions of this kind, one cannot be blinded by the difficulties of the moment; one has to view "the overall picture over a period of years." KINGSFORD MOTOR CAR COMPANY 725 At the same time Respondent discontinued the body shop, he did nothing to reduce his payroll in the new and used-car sales department and in the clerical department. Yet, as found above, it was on the sale of new and used cars that Respondent was losing all his money. The body shop was one of three departments which was off- setting, in part, Respondent's heavy losses on the sale of new and used cars and trucks. Nevertheless, Respondent lopped off this one profitable department but did not reduce the payroll in the department which was primarily responsible for his losses year after year. Other circumstances cast doubt on Respondent's contention that the closing of the body shop was a routine business decision based upon economic considerations. Re- spondent failed to discuss his decision beforehand with Service Manager Davey, who was the supervisor over the body shop. When Respondent informed Davey of his decision to cease operations in the body shop, he did not mention the economic factor which was assertedly responsible for his decision. Consequently, when Davey, after notifying the men of Respondent's decision was asked if the organization of the Union had anything to do with their discharge, he said he did not know, that he was an "outcast" from the deliberations leading up to the shutdown. After the shutdown Respondent still needed the services formerly performed in the body shop, and thereafter had to send his new and used cars needing bodywork out to local body shops to have the work done. Respondent's customers continued to require the services of a body shop and Respondent referred them elsewhere to have the work done. Under all the circumstances, I cannot accept Respondent's contention that the decision to close the body shop was a routine business decision made after an appraisal of the relative profitability of his various departments. I conclude, upon the basis of Respondent's hostility to the Union, the speed with which he acted after being advised of the Union's request for recognition, his failure to substantiate his explanation for his action, and upon .all the circumstances of the case, that Respondent shut down the body shop and discharged the three body shop employees as part of his efforts to destroy the Union's majority status. By Respondent's action in this regard he has violated Section 8(a)(3) and (1) of the Act.12 In reaching this conclusion I have considered all of the cases cited by the parties. In all of the cases cited by Respondent in which the courts have disapproved Board findings of violations of Section 8(a) (3) and (1) of the Act based upon a change in, or discontinuance of certain operations, the courts have held that the change or discontinuance was made for economic reasons and not to avoid obligations under the National Labor Relations Act.13 This is true also of Fibreboard Paper Products Corporation, 130 NLRB 1558, which dealt primarily with the scope of an employer's duty to bargain collectively under Section 8(a)(5), a wholly different question. In this case, as hereinabove found, Respondent's claim of an economic basis for the closing of the body shop was refuted by his own records and other evidence shows that the discontinuance of the body shop was but one of a series of steps taken by Respondent to destroy the Union's majority status and defeat the Union in the elec- tion. In such situations, as the Board and the courts have held, changes or discon- tinuances of operations resulting in discrimination against employees violate Section 8(a) (3) and (1) of the Act. N.L.R.B. v. Cape County Milling Company, 140 F. 2d 543, 545-546 (C.A. 8); N.L.R.B. v. Brown-Dunkin Company, Inc., 287 F. 2d 17, 19-20 (C.A 10); Stewart Hog Ring Company, Inc., 131 NLRB 310; Unanue & Sons, Inc., 132 NLRB,522; Fine's Nearby Egg Corporation, ;132 NLRB 1585. 12 In view of my findings as to the extent of Respondent's gross profits from the opera- tion of the body shop, I do not credit Respondent's further testimony that he was in- fluenced in his decision to close the body shop by his awareness of the difficult financial situation in which automobile dealers generally found themselves at that time and the depressed economic conditions in the Iron Mountain area. While such matters might well have been factors in Respondent's decision had the body shop in fact not been contributing at least its share to Respondent's gross profits, they do not have the same significance where, as here, Respondent was operating the body shop on a steadily improving profitable basis 18 Mount Hope Finishing Company v . N L R.B., 211 F. 2d 365, 372 (C A. 4) ; N.L R.B. v. Houston Chronicle Publishing Company, 211 F. 2d 848, 853-855 (C A. 5) ; N L R B. v. Adkins Transfer Company, 226 F. 2d 324, 327-328 (C.A. 6) ; N.L R B. v J. M Lassing, et al , d/b/a Consumers Gasoline Stations, 284 F. 2d 781, 782-783 (C.A 6) ; N L R B. v. Atlanta Coca-Cola Bottling Company, Inc., 293 F. 2d 300 (C.A. 5) ; Jays Foods, Inc., an Illinois Corporation v. N.L.R B., 292 F. 2d 317 (C.A. 7). 726 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 3. The layoffs in the parts department As found above, the day after Bergagnini's argument with Davey over the copying of a bodywork estimate in the course of which he impliedly questioned Respondent's good faith in closing the body shop, Bergagnini was abruptly laid off. This was on January 27, 1961. Two weeks later Valero was also laid off. With the layoff of Valerio, Respondent accomplished a 50-percent reduction in the parts department staff, cutting it to an unprecedented level. Respondent contends that he was overstaffed in the parts department at the time of the layoffs and that they were necessary in order to bring the staff down to the level the current volume of business required. The latest complete figures as to Respondent's profit position in the parts department at the time of Bargagnim's layoff on January 27, 1961, were those covering December 1960. The December figure shows that the department was operating at a very high level that month. Comparing the figures as to Respondent's gross profits in the parts department for the last 3 months of 1960 with those for the preceding months, upon which Respondent presumably based his decision to increase the staff from three to four employees, it appears that Respondent was still operating at the same high level at the end of 1960 as existed several months before when Respondent added Bergagnini as the fourth man to the parts department staff. Although, as found above, January was a low month in the parts department, fluctuations in the volume of Respondent's parts department business were not unusual, and Respondent's gross profits in the depart- ment had on various occasions dropped to about the January 1961 levels without Respondent reducing the staff by even one man, let alone two. In view of the drastic nature of Respondent's cut in the parts department staff, Respondent's antipathy to the representation of his employees by the Union, his knowl- edge that both Bergagnini and Valerio were union members, the timing of their layoffs and the almost simultaneous layoff of Selle discussed below, and all the other circumstances of the case, I conclude that the layoffs in the parts department were of a piece with the closing of the body shop and were aimed at further impairing the Union's majority status at Respondent's garages. Accordingly, the layoffs of Bergagnini and Valerio were violative of Section 8 (a) (3) and (1) of the Act. 4 The discharge of Selle As found above, Selle was discharged on February 10 and Valerio was laid off from the parts department on February 11. This brought the number of union members terminated to a total of 6 out of 11 whose membership certifications had been received by Respondent on February 6. Selle's discharge, like the termination of all the other whose cases are here involved, was effected very abruptly upon orders from Respondent himself. Despite Selle's 8 years of loyal service and despite Respondent's subsequent claim that Selle was merely laid off for lack of work, this was not mentioned to him at the time of his termination and Selle was not given a word of explanation for the action Respond- ent had taken against him. Respondent decided upon Selle's discharge without consulting Service Manager Davey, who was Selle's immediate superior at the Kingsford garage, and who was therefore in a better position to appraise his job qualifications and to compare him with other employees. Davey admittedly regarded Seale as a good worker. Although Respondent professed to be guided by seniority in selecting parts de- partment employees for layoff, at the same time Selle was discharged nonmember Morelli, who had taken over Selle's old job at the downtown garage when he was hired 2 years earlier, was retained in Respondent's employ. As the record discloses, it was Respondent's practice to transfer employees from one duty to another, and from one garage to another when necessary. Respondent's claim that Morelli was a better worker is supported only by Re- spondent's own general testimony to this effect, and is unsupported by any clarifying details. As to Respondent's contention that Morelli was a more versatile man, the testimony as to the various specific tasks performed by each, in my opinion, rebuts this contention. Furthermore Respondent's subsequent classification of Morelli as a janitor compared with his classification of Selle as a greaser or an apprentice me- chanic, tends to refute his testimony that Morelli was a more versatile man. More- over, in appraising Respondent's explanation for his preferment of Morelli over Selle it is relevant to consider the fact that the figures as to the gross profits from the sale of labor in the body shop thoroughly refute Respondent's explanation for his dis- continuance of body shop operations. The impeachment of Respondent's explana- tion on the body shop phase of the case tends to cast doubt on Respondent's explana- tions on other phases of the case, as well, including the discharge of Selle. KINGSFORD MOTOR CAR COMPANY 727 Under all the circumstances of the case, including Respondent's disregard of Selle's seniority, Respondent's opposition to the employees' representation by the Union, and the timing of the various terminations, I conclude that had Respondent not been aware that Selle was a union member, he would have retained Selle in preference to nonmember Morelli who took over Selle's former duties at the down- town garage, and that the discharge of Selle was but another of the measures taken by Respondent in an effort to defeat the Union in the coming election. Accordingly Selle's discharge was violative of Section 8(a)(3) and (1) of the Act. 5. Respondent's interference, restraint, and coercion in violation of Section 8(a) (1) of the Act As found above, Respondent in his speech the evening before the election in effect accused the Union of wasting the dues which it received from its members, warned that regardless of how the election turned out he would not sign a contract with the Union, and that he would sell the business and move to Arizona before he would do so. Respondent also added that if he sold the business the new owners might not keep the older men on in their employ, thereby making explicit the threat to the men's jobs which was implicit in his threat to sell the business. Respondent's declaration that he would not sign a contract with the Union under any circumstances and his threat to sell the business before he would sign a contract with the Union, with which his declaration was coupled, unquestionably infringed the employees' freedom' of organization guaranteed in Section 7 of the Act and were therefore violative of Section 8(a)(1) of the Act. Respondent's further gratuitous warning to the effect that if he sold the business the older men might lose their jobs was likewise coercive and therefore also violative of Section 8(a)(1) of the Act-14 General Manager Minella's warnings on two occasions shortly before the election to employee Beitel that Respondent would have to "close down" and everyone would be out of a job in the event the Union won the election, in my opinion, had a co- ercive impact, and accordingly also constituted a violation of Section 8(a)(1) of the Act. Respondent contends that Minella's warnings merely constituted a prediction as to what was likely to occur under Respondent's existing difficult financial situation if the Union insisted upon higher labor costs. However, on the first occasion on which Minella warned Beitel, he did not even mention Respondent's financial diffi- culties. Hence, Respondent's contention is inapplicable to Minella's first threat to Beitel. As to the second occasion, on which Minella, after asserting "I'm not telling you how to vote" and referring to Respondent's "bad financial state," stated "and we'll have to close down and be all out of a job," in my opinion Minella's bare refer- ence to Respondent's "bad financial state" did not bring Minella's statement within the scope of Section 8(c) of the Act covering the "expressing of any views, argu- ments or opinion." Had Minella articulated the basis for his statement about closing down, as counsel does in making this contention, then perhaps Minella's statement might be regarded as an expression of "views, argument or opinion." However, absent such an explanation, and in view of the fact that the statement was made the morning after Respondent's speech to the employees in which he flatly stated that he would not sign a contract with the Union and hostilely warned that loss of employment would follow a union victory in the election, the reasonable implica- tion arising out of Minella's statement is that Respondent had in mind closing down if the Union won the election. So construed, Minella's second threat to Beitel also constituted interference, restraint, and coercion in violation of Section 8(a)(1) of the Act. IV. THE REMEDY Having found that Respondent has engaged in unfair labor practices, my recom- mended order will direct him to cease and desist from the unfair labor practices herein found, and to take certain affirmative action designed to effectuate the policies of the Act. My recommended order will also provide that Respondent offer Phillip L. Peterson, Joseph Tripp, and Evan Larson immediate and full reinstatement to their former or substantially equivalent positions without prejudice to their seniority and other is The fact that Respondent thus went out of his way to bring home to the men the adverse consequences of persisting in representation by the Union could not fail to impress upon them Respondent' s animus toward the Union In these circumstances, I must reject the suggestion that Respondent throughout his talk was merely expressing his opinion as to the economic consequences of attempting to operate under the scale of wages which he feared the Union would insist upon. 728 DECISIONS OF NATIONAL LABOR RELATIONS BOARD rights and privileges, resuming his body and paint-shop operations to the extent neces- sary to afford them such reinstatement, and that Respondent similarly reinstate Michael Bergagnini, Robert L. Valerio, and Joseph Selle to their former or substan- tially equivalent positions. My recommended order will further provide that each of the above-named, employees be made whole for any loss of pay he may have suf- fered by reason of Respondent's discrimination against him by payment to him of a sum of money equal to that which he would normally have earned as compensa- tion from the date of the discrimination to the date of the offer of reinstatement, less his net earnings during said period, and in the manner set out in F. W. Wool- worth Company, 90 NLRB 289. My recommended order will also direct that Respondent preserve and make available to the Board, upon request, all payroll and other records which have a bearing upon Respondent's reinstatement and backpay obligations under the terms of my recommended order. The unfair labor practices herein found are such as to indicate an attitude of opposition to the purposes of the Act generally, and accordingly, the commission of these and other unfair labor practices in the future^is reasonably to be anticipated from such past conduct. In these circumstances, the preventive purposes of the Act may be thwarted unless the remedy is coextensive with the threat. To effectuate the policies of the Act, therefore, it will be provided that Respondent cease and desist from infringing in any manner upon the statutory rights of its employees. CONCLUSIONS OF LAW 1. By discharging Phillip L. Peterson, Joseph Tripp, and Evan Larson on Janu- ary 21, 1961, by laying off Michael Bergagmni and Robert L. Valerio on January 27 and February 11, 1961, respectively, and by discharging Joseph Selle on February 10, 1961, E. S. Kingsford, doing business as Kingsford Motor Car Company, has dis- criminated in regard to their hire and tenure of employment, thereby discouraging membership in Teamsters, Chauffeurs, Warehousemen & Helpers of America, Local No. 328, International Brotherhood of Teamsters, Chauffeurs, Warehouse- men & Helpers of America, in violation of Section 8(a)(3) and (1) of the Act. 2. By stating that he would not under any circumstances sign a contract with the Union and by threatening to sell or close his business and that loss of employment would follow if the employees persisted in their union activities, E. S. Kingsford, doing business as Kingsford Motor Car Company, has interfered with, restrained, and coerced employees in the exercise of the rights guaranteed in Section 7 of the Act, in violation of Section 8(a) (1) of the Act. 3. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. REPORT ON CHALLENGED BALLOTS Phillip L. Peterson, Evan Larson, Michael Bergagnini, Joseph Selle, and Robert Valerio, the individuals whose ballots were challenged in the election conducted by the Regional Director on April 5, 1961, in Case No. 18-RC-4580, were or had been employed as shop or parts department employees at Respondent 's Kingsford, Michi- gan, garage, and hence were in the appropriate unit in which the Board directed an election in Case No. 18-RC-4580, and were therefore entitled to vote in the election if they retained their employee status as of the payroll period immediately preceding March 21, 1961, the payroll period designated by the Board in its decision and direction of election as governing the eligibility of employees to vote in the election. Having concluded that these five individuals had been discriminatorily discharged or laid off in violation of Section 8(a) (3) of the Act, I find that they retained their status as employees of Respondent by virtue of Section 2(3) of the Act, and were entitled to vote in the election. Accordingly, I recommend that the Board direct that the Regional Director for the Eighteenth Region shall, upon suitable notice to the parties, open and count the ballots of Phillip L . Peterson, Evan Larson, Michael Bergagnini, Robert L. Valerio, and Joseph Selle, and thereafter prepare and cause to be served upon the parties a revised tally of ballots, including therein the count of said challenged ballots. RECOMMENDED ORDER Upon the foregoing findings and conclusions and the entire record and pursuant to Section 10(c) of the Act, the Trial Examiner hereby orders that the Respondent, E. S. Kingsford , doing business as Kingsford Motor Car Company, his agents, suc- cessors, and assigns, shall: KINGSFORD MOTOR CAR COMPANY 729 1. Cease and desist from: (a) Discouraging membership in Teamsters , Chauffeurs, Warehousemen & Helpers of America, Local No. 328, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, or in any other labor organization of his em- ployees, by discharging, laying off, or in any other manner discriminating in regard to their hire or tenure of employment or any term or condition of employment. (b) Threatening employees that he will sell or close the business or take other retalitatory action against employees for having engaged in union activities. (c) Threatening employees that he will not sign a contract with the Union under any circumstances. (d) In any other manner interfering with , restraining, or coercing his employees in the exercise of the right to self-organization, to form labor organizations, to join or assist the above-named or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in any other concerted activities for the purpose of collective bargaining or other mutual aid or protection, or to refrain from any and all such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a con- dition of employment, as authorized by Section 8 (a) (3) of the Act. 2. Take the following affirmative action which I find will effectuate the policies of the Act: (a) Offer Phillip L. Peterson, Evan Larson, and Joseph Tripp immediate and full reinstatement to their former or substantially equivalent positions, without prejudice to their seniority or other rights and privileges, resuming his body and paint shop oper- ations to the extent necessary to afford them such reinstatement , and make the above- named employees whole for any loss of pay suffered by them in the manner set forth above in the section entitled "The Remedy." (b) Offer Michael Bergagnini, Robert L. Valerio, and Joseph Selle immediate and full reinstatement to their former or substantially equivalent positions, without prejudice to their seniority or other rights and privileges, and make each of them whole for any loss of pay he may have suffered as a result of his discharge or layoff, in the manner set forth above in the section entitled "The Remedy." (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, time- cards, personnel records and reports, and all other records which have a bearing upon Respondent's reinstatement and backpay obligations under this Recommended Order. (d) Post at his garages at Kingsford and Iron Mountain , Michigan, copies of the notice attached hereto marked "Appendix." Copies of said notice, to be furnished by the Regional Director for the Eighteenth Region, after being duly signed by an authorized representative of Respondent , shall be posted by Respondent immediately upon receipt thereof, and be maintained by him for a period of 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered , defaced, or covered by any other material. (e) Notify the Regional Director for the Eighteenth Region, in writing, within 20 days from the receipt of this Intermediate Report and Recommended Order, what steps he has taken to comply herewith. APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Recommended Order of a Trial Examiner of the National Labor Relations Board, and in order to effectuate the policies of the Labor Management Relations Act, we hereby notify our employees that: WE WILL NOT discourage membership in Teamsters, Chauffeurs, Warehouse- men & Helpers of America, Local No. 328, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, or any other labor organization of our employees, by discharging them or in any other manner discriminating against them in regard to their hire and tenure of employment or any term or condition of employment. WE WILL NOT threaten employees that we will sell or close the business or take other retaliatory action against them for engaging in union activities. WE WILL NOT threaten employees that we will not sign a contract with a union under any circumstances. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of the right to self-organization, to form labor organi- zations, to join or assist Teamsters, Chauffeurs, Warehousemen & Helpers of 730 DECISIONS OF NATIONAL LABOR RELATIONS BOARD America, Local No. 328, International Brotherhood of Teamsters , Chauffeurs, Warehousemen & Helpers of America, or any other labor organization, to bargain collectively through representatives of their own choosing , and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, as guaranteed in Section 7 of the Act, or to refrain from any and all such activities , except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment , as authorized in Section 8(a)(3) of the Act. WE WILL offer to Phillip L. Peterson, Evan Larson, Joseph Tripp, Michael Bergagnini, Robert L. Valerio, and Joseph Selle reinstatement to their former or substantially equivalent positions, without prejudice to their seniority or other rights and privileges , and we will make them whole for any loss of pay suffered as a result of their discharge or layoff. All our employees are free to become or remain or to refrain from becoming or remaining members of Teamsters , Chauffeurs, Warehousemen & Helpers of America, Local No. 328, International Brotherhood of Teamsters , Chauffeurs, Warehousemen & Helpers of America, or any other labor organization. E. S. KINGSFORD, DOING BUSINESS AS KINGSFORD MOTOR CAR 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. Reliance Steel Products Company and District 50, United Mine Workers of America and United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, AFL-CIO, Metal Trades Division, Local Union 372, Interested Party Reliance Steel Products Company and District 50, United Mine Workers of America, Petitioner. Cases Nos. 10-CA-4660 and 10-RC-4889. January 31, 1962 DECISION AND ORDER On August 10, 1961, Trial Examiner Robert E. Mullin issued his Intermediate Report in Case No. 10-CA-4660, finding that the Re- spondent 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 Intermediate Report attached hereto.' The Trial Examiner also found that the Respondent did not engage in certain unfair labor practices and 'The Respondent contends that the amended charges were solicited, or at least sug- gested , by a Board agent and that the Board cannot thus enlarge its own jurisdiction. In agreement with the Trial Examiner we find that the amended charges were merely proper particularizations of the violations alleged in the original charge and thus do not constitute an enlargement of the Board's "jurisdiction " Moreover, the Respondent made no allega- tion, and offered no evidence, of any specific impropriety by any Board agent , and there was thus no "good cause" shown for the production of the NLRB Manual or the testimony of the Board agent. Hickman v. Taylor, 329 U.S. 495, 505-512 , Goldman v United States, 316 U.S. 129, 132; N.L R B. v. Que8t-Shon Mark Brassiere Co., 185 F. 2d 285, 289, 290 ( C.A. 2), cert . denied, 342 U.S 812 This case is therefore clearly distinguish- able from N .L R B v. Capitol Fish Company, 294 F. 2d 868 ( CA. 5), reversing and remanding 126 NLRB 980. 135 NLRB No. 75.