Marathon-Clark Cooperative Dairy Association

882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Marathon-Clark Cooperative Dairy Association and General Chauffeurs, Teamsters, Warehousemen and Helpers Local Union No. 446, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Case No. 18-CA-1283. June 26, 1962 DECISION AND ORDER On February 1, 1962, Trial Examiner Eugene E. Dixon 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. Thereafter, the General Counsel filed exceptions to the Intermediate Report and a supporting brief, and the Respondent filed a request for oral argument.' 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 Brown]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Inter- mediate Report, the exceptions and brief, and the entire record in the case, and finds merit in certain of the General Counsel's exceptions. Accordingly, the Board adopts the findings of the Trial Examiner only insofar as they are consistent with the following : We do not agree with the Trial Examiner that Respondent's course of conduct during negotiations was lawful because it was dominated by an intent purely economic to avoid entering into a contract with the Union except on terms it felt were necessary to avoid eventual eco- nomic collapse. The issue here is not whether Respondent's actions were reasonable in light of its economic situation, but whether Re- spondent in fact fulfilled its bargaining obligations under the Act. We conclude, contrary to the Trial Examiner, that it did not meet those obligations, for it is evident to us that Respondent's whole course of conduct during the period under consideration was dictated by a desire to rid itself of the Union, not to explore in good faith the pos- sibilities of reaching an agreement embracing economic terms satis- factory to both parties. Its conduct was, therefore, violative of the Act. 1 As the record, including the exceptions and brief , adequately sets forth the issues and the positions of the parties , the request is hereby denied. 137 NLRB No. 91. MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 883 Respondent's board of directors is composed of six members and a chairman who, at the time of the 1961 "negotiations" under considera- tion, was George Mathews. Mathews also acted as Respondent's chief negotiator. The credited testimony demonstrates that Mathews pos- sessed a strong antipathy toward the Union. On one occasion in 1959 Mathews stated that the employees would be better off if they got rid of the Union. Again in August 1960 he stated that Respondent would have to get rid of the Union. In the light of developments discussed below, we find significant, too, the statements made at several meet- ings of Respondent's board in the spring of 1961 that Respondent would prolong the negotiations which are the subject of this proceed- ing until the employees went out on strike and would then get some one else to come in and take over the cheesemaking. Negotiations started on March 24, 1961, after the parties had previ- ously exchanged written demands in which the Union sought certain increases in benefits and the Respondent sought what amounted to an across-the-board reduction in benefits. At the meeting, Mathews out- lined in detail Respondent's financial plight and stated that changes, probably including the contracting out of the cheesemaking opera- tions, were necessary. Discussion of the parties' demands proved fruitless. Meetings were also held on April 21, May 12, and June 5 and 9. The strike commenced on June 17, 1961. At all meetings, Re- spondent's economic and operational problems were discussed and the possibility of contracting out was raised. As for the possibility of a strike, Mathews was the first to raise it at the April 21 meeting or ap- proximately some 6 weeks before the Union threatened, or the em- ployees took any action with respect to, a strike? As for the various economic demands, the record shows that at the meetings the Union progressively retreated from its original position until on June 9 it agreed to settle for the old contract. However, the Respondent took the position not only at the meetings listed above but also at meetings during the strike that it did not have sufficient information as to its, own economic position to make the Union a specific offer on a new contract. Respondent maintained this position even up to the time of the hearing in this proceeding. Indeed, a suggestion at the April 21 meeting by two of Respondent's directors that the old contract might serve as a basis of agreement was categorically rejected by Mathews, and at the June 5 meeting Mathews stated he was withdrawing all out- standing proposals. Furthermore, though consistently presenting Re- spondent's adverse financial position as an important factor standing in the way of agreement with the Union, Mathews, on May 12, after 2 The only possible basis for Mathews' statement that the Union was going on strike was the fact the Union had filed, as required by State and Federal laws , certain notices that a labor dispute existed . However, notices had also been filed in past years when no strike in fact occurred 884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD having asked the Union for its comments, "point blank" rejected a Union suggestion that a consultant be hired to make operations more efficient, stating the Company needed no outsiders to tell it how to run its business. The consequence was that no agreement was reached and on June 7 the Union notified the company of strike action, the walkout occurring, as noted, on June 17. However, late in April or May, while negotiations were going on, Mathews began discussions with Donald and Melvin Nelson concern- ing their taking over on a contract basis Respondent's cheesemaking operation when the employees went out on strike. Then, in May or early June the Nelsons, before any threat of a strike had been made, gave up their then means of livelihood-Donald Nelson resigning from his job as manager of a cheese factory and his father, Melvin, giving up his farming operation-and both moved to homes nearer the Respondent's plant. In consequence, on June 17, the day the strike began, the Nelsons and their wives were operating, as employees, the cheesemaking process in Respondent's plant. On July 1, an arrange- ment was placed in effect contracting the cheese operation to the Nelsons. As a result of the change, the Nelsons received in place of wages, a cent and a half per pound of cheese produced, hired their own employees, and took over day-to-day maintenance work affecting the cheese operation, and also engaged in certain milk hauling. They paid all their expenses out of their per pound contract price. Additional negotiating meetings were held between the Respondent and the Union during the strike on July 18 and August 21. However, nothing was accomplished. Similarly, on September 26, dealings through a conciliator proved fruitless. It is apparent from the foregoing that the Respondent did not at any time material seek in good faith to explore in the various nego- tiating sessions the possibility of reaching an agreement satisfactory to the parties involved. Rather, the whole course of Respondent's conduct reveals an intent to carry out Mathews' policy announced to Respondent's board of prolonging negotiations until the employees struck, and then contracting out the cheesemaking operation. Thus, as noted, the Respondent, on June 5, withdrew its original proposed changes in the contract and at all times took the position that it had insufficient economic information to make the Union any firm offers. Yet, despite its asserted lack of knowledge, Respondent rejected "point-blank" a union suggestion that an expert be called in to ration- alize the cheesemaking operation. Furthermore, while ostensibly en- gaged in negotiations with the Union, Respondent made firm arrange- ments 3 with the Nelsons to take over the cheesemaking operation. 8 We find without merit or record support the Respondent 's argument that the arrange- ment with the Nelsons was merely a precautionary one That the Nelsons would give up their present means of livelihood and move closer to Respondent 's plant on the mere possibility of employment based on the contingency of some, as yet, unannounced strike MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 885 Under the circumstances it is evident, and we find, that on and after March 24, 1961, the Respondent did not bargain in good faith but rather embarked upon a program, involving stalling tactics in bar- gaining and contracting out of the cheese process, designed to rid itself of the Union and the employees it represented. The fact that Respondent may have also had economic reasons for its course of conduct does not, as stated, excuse its failure to comply with the bargaining requirements of the Act. Accordingly, we conclude that the Respondent violated Section 8(a) (5) and (1) of the Act. In view of his finding that the Respondent had not unlawfully refused to bargain, the Trial Examiner concluded that the strike of the employees commencing June 17, 1961, was not an unfair labor practice strike. In view of our contrary determination set forth above, we disagree. The record shows that the employees struck because they had no contract and because of their dissatisfaction with the progress of the negotiations. As Respondent's unlawful refusal to bargain impeded successful negotiations and as it prevented even the possibility of the parties reaching agreement, such unlawful conduct was a causative factor in the walkout. Accordingly, we find that the employees were engaged in an unfair labor practice strike, and we further find that Respondent's refusal to reinstate them pursuant to their unconditional demands for reinstatement, dated July 19, 1961, violated Section 8(a) (3) and (1) of the Act. The Trial Examiner concluded that the Respondent did not on June 17, 1961, unlawfully discharge employees Loughead and Under- wood or otherwise discriminate against them as alleged in the com- plaint. The record shows that the two employees came to the plant early the morning of June 17, that they were told by a union repre- sentative to go in to see what was happening, and that they found that the Nelsons and their wives were performing the cheese processing. While Loughead and Underwood were in the plant, Plant Manager Burke talked to them and his conversation is susceptible to the con- struction, urged by the General Counsel, that he laid off Loughead and Underwood. However, the record also shows that the union repre- sentative, to whom the two employees spoke, was present in order to lead a strike of the employees and to provide picket signs. Moreover, in view of the union representative's conversations with Loughead and Underwood, it cannot here be determined whether they entered the plant for the purpose of going to work or merely to obtain infor- mation for the Union. Consequently, we find, upon the record before us, that the evidence does not preponderate in support of a finding that Loughead and Underwood were unlawfully discharged on June 17. However, the record does show that the two employees joined with is incredible. Consequently, we disagree with the Trial Examiner that the changeover to cheesemaking by the Nelsons was to occur only if the employees happened to go out on a strike. 886 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Union in its strike effort when they talked to the union representa- tive on the morning of June 17 and that they made no request for re- instatement between that date and July 19 when they joined with the strikers in requesting unconditional reinstatement. Consequently, we find that Loughead and Underwood were unfair labor practice strikers entitled to reinstatement pursuant to their requests dated July 19, 1961. THE REAiEDY As we have found that the Respondent engaged in certain unfair labor practices, we shall order it to cease, and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Having found that the Respondent has refused to bargain in good faith with the Union as the exclusive representative of the employees in the appropriate unit, we shall order the Respondent upon request to bargain in good faith with the Union, and, if agreement is reached, to embody such agreement in a signed contract. We have also found that Respondent contracted out its cheesemak- ing operation without bargaining in good faith with the Union and for the purpose, at least in part, of ridding itself of the Union and the employees it represents. Further, we have found that the Re- spondent unlawfully refused to reinstate its striking employees upon their unconditional application for reinstatement. It is evident, how- ever, that if the status quo existing prior to such unlawful conduct is to be reestablished and if such unfair labor practices are to be reme- died fully that the Employer must be required to discontinue any ar- rangement involving contracting out of his cheesemaking operation and to reestablish such operation as it existed on June 16, 1961, to the extent necessary to accommodate the reinstatement of employees who accept Respondent's offer of reinstatement. We shall so order. Fur- ther, we shall order that the Respondent, if it has not already done so, offer the unfair labor practice strikers, who made unconditional re- quests for reinstatement, full reinstatement to their former or sub- stantially equivalent positions, dismissing, if necessary, employees hired to replace the strikers. If, after the dismissal of the replace- ment employees, there are not enough positions available for all of the workers entitled to reinstatement, available positions shall be dis- tributed among them, without discrimination because of their union membership, activity, or participation in the strike, on the basis of a seniority system, or any other nondiscriminatory practice with respect to work assignments previously followed by the Respondent in the conduct of its business. The employees for whom no work may be immediately available, after such distribution, shall be placed on a preferential hiring list, with priorities determined on the basis of the MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 887 seniority system or other nondiscriminatory system previously fol- lowed by the Respondent in the conduct of its business. They shall be offered reinstatement thereafter in accordance with such a list as posi- tions become available and before other persons are hired for work. Reinstatement, as ordered herein, shall be effectuated without preju- dice to the seniority of the employees or any of their other rights and privileges. We shall also order the Respondent to reimburse all the employees entitled to reinstatement for any loss of pay they may have suffered by reason of the Respondent's discrimination with respect to them, by payment to each of them of a sum of money equal to the amount that they would normally have earned as wages during the period between the time Respondent received the unconditional ap- plications for reinstatement and the date of Respondent's offer to re- instate the employees or to place them on a preferential hiring list in the manner described above, less net earnings during that period. Such pay loss shall be computed in the manner set forth in F. W. Woolworth Company, 90 NLRB 289. The Respondent's conduct in the commission of the unfair labor practices found herein gives us cause to believe that the Respondent may commit other violations of the Act in the future. We shall, there- fore, issue a broad cease-and-desist order forbidding the Respondent from infringing in any other manner upon the rights of its employees as guaranteed by the Act, in addition to those rights found to have been violated herein 4 ORDER Upon the entire record in this case, and pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Marathon-Clark Cooperative Dairy Association, Abbotsford, Wisconsin, its officers, agents, successors, and assigns, shall : 1. Cease and desist from : (a) Refusing to bargain collectively with General Chauffeurs, Teamsters, Warehousemen and Helpers Local Union No. 446, Inter- national Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, as the exclusive representative of all Respond- ent's intake employees, cheesemakers, helpers, and warehousemen at its Abbotsford, Wisconsin, dairy plant, excluding office clerical em- ployees, professional employees, and supervisors as defined in the Act. (b) Discouraging membership in the above-named Union, or any other labor organization, by refusing to reinstate any of its employees who are unfair labor practices strikers upon their unconditional re- quests for reinstatement, or by discriminating in any other manner in regard to their hire or tenure of employment or other terms and ' Federal Dairy Company, Inc., 130 NLRB 1158. Cf. Caroline M. Layton White, d/b/a Layton Oil Company, 128 NLRB 252, 261. 888 DECISIONS OF NATIONAL LABOR RELATIONS BOARD conditions of employment, except to the extent permitted by Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. (c) In any other manner interfering with, restraining, or coercing its employees in the exercise of their right to self-organization, to form labor organizations, to join or assist General Chauffeurs, Teamsters, Warehousemen and Helpers Local Union No. 446, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and 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 or all such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment, as authorized in Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Terminate any arrangement for contracting out its cheese- making operation and reestablish such operation as it existed on June 16, 1961, to the extent necessary to accommodate the reinstate- ment of employees who accept Respondent's offer of reinstatement. (b) Upon request, bargain collectively with the above-named Union as the exclusive representative of all the employees in the appropriate unit with respect to rates of pay, wages, hours of employment, or other terms and conditions of employment, and embody any understanding reached in a signed agreement. (c) Offer to the employees who were on strike on July 19, 1961, reinstatement to their former or substantially equivalent positions, without prejudice to their seniority or other rights and privileges, and make them whole for any loss of pay they may have suffered in the manner set forth in the section of this Decision and Order entitled "The Remedy." (d) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social se- curity payment records, timecards, personnel records and reports, and all other records necessary to analyze the amounts of backpay due and the rights of employment under the terms of this Decision and Order. (e) Post at its plant at Abbotsford, Wisconsin, copies of the notice attached hereto marked "Appendix." I Copies of said notice, to be furnished by the Regional Director for the Eighteenth Region, shall, 5 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." MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 889 after being duly signed by the Respondent's authorized representa- tive, be posted by the Respondent immediately upon receipt thereof, and be maintained by it 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 the Re- spondent to insure that said notices are not altered, defaced, or covered by any other material. (f) 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. IT IS FURTHER ORDERED that the complaint, insofar as it alleges viola- tions of the Act not found herein, be, and it hereby is, dismissed. APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that : WE WILL, upon request, baragain collectively in good faith with General Chauffeurs, Teamsters, Warehousemen and Helpers Local Union No. 446, International Brotherhood of Teamsters, Chauf- feurs, Warehouseman and Helpers of America, as the exclusive representative of all our employees in the following appropriate unit with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment, and, if an agreement is reached, embody such agreement in a signed contract. The ap- propriate unit is : All intake employees, cheesemakers, helpers, and warehouse- men employed at our Abbotsford, Wisconsin, dairy plant, ex- cluding office clerical employees, professional employees, and supervisors as defined in the Act. WE WILL NOT discourage membership in General Chauffeurs, Teamsters, Warehousemen and Helpers Local Union No. 446, In- ternational Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, or any other labor organization, by re- fusing to reinstate any of our employees who are unfair labor prac- tices strikers upon their unconditional requests for reinstatement or by discriminating in any other manner in regard to their hire or tenure of employment or other terms and condition of employ- ment, except to the extent permitted under Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Dis- closure Act of 1959. 890 DECISIONS OF NATIONAL LABOR RELATIONS BOARD WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organiza- tion, to form labor organizations, to join or assist General Chauf- feurs, Teamsters, Warehousemen and Helpers Local Union No. 446, International Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, or any other labor organiza- tion, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the pur- pose of collective bargaining or other mutual aid or protection as guaranteed in Section 7 of the Act, or to refrain from any or all such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organi- zation as a condition of employment, as authorized in Section 8(a) (3) of the Act, as modified by the Labor-Management Re- porting and Disclosure Act of 1959. WE WILL offer all our employees who were on strike on July 19, 1961, immediate and full reinstatement to their former or sub- stantially equivalent positions. WE WILL terminate any arrangement made for contracting out our cheesemaking operation and reestablish such operation as it existed on June 16, 1961, to the extent necessary to accommodate the reinstatement of employees who accept our offer of reinstate- ment. WE WILL make our striking employees who for any loss of pay each of them may have suffered as a result of our discriminatory refusal to reinstate them on or after their unconditional requests for reinstatement dated July 19, 1961. All our employees are free to become or remain, or to refrain from becoming or remaining, members of General Chauffeurs, Teamsters, Warehousemen and Helpers Local Union No. 446, International Broth- erhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, or any other labor organization, except to the extent that this right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8(a) (3) of the Act, as modified by the Labor-Management Re- porting and Disclosure Act of 1959. MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION, 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. Employees may communicate directly with the Board's Regional MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 891 Office, 316 Federal Building, 110 South Fourth Street, Minneapolis 1, Minnesota, Telephone Number, 339-0112, Extension 2601, if they have any question concerning this notice or compliance with its provisions. INTERMEDIATE REPORT AND RECOMMENDED ORDER STATEMENT OF THE CASE This proceeding, brought under Section 10(b) of the National Labor Relations Act, as amended (61 Stat. 136), herein called the Act, was heard before Trial Examiner Eugene E. Dixon at Abbotsford, Wisconsin, between October 3 and 6, 1961. The complaint, issued August 22, 1961, by the General Counsel of the National Labor Relations Board (herein called the General Counsel and the Labor Board) on behalf of the Regional Director for Eighteenth Region (Minneapolis, Minnesota), based upon charges duly filed and served by General Chauffeurs, Teamsters, Warehousemen and Helpers Local Union No. 446, International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America, herein called the Union or the Charg- ing Party, alleged that Marathon-Clark Cooperative Dairy Association, herein called the Respondent, the Company, or the Co-op, had engaged in and was engaging in conduct violating Section 8(a) (1), (3), and (5) of the Act. Specifically the Respondent is charged with: (1) From on or about March 24, 1961, failing and refusing to bargain collectively with the Union as the exclusive bargaining representative of its employees in an appropriate unit by (a) entering into negotiations with a "fixed and determined intent not to arrive at a collective- bargaining agreement, with the intention of causing its employees to engage in a strike, thereby enabling Respondent to replace them with nonunion employ- ees .. ," (b) on or about June 5, 1961, withdrawing from consideration previous proposals made to the Union and threatening the Union with subcontracting its cheese making operation, (c) suggesting to its employees that Respondent was ready to negotiate individually with its employees in derogation of the collective-bargaining rights of the Union, and (d) on or about June 17, 1961, unilaterally contracting out its cheesemaking operation without notification, consultation, or bargaining with the Union; (2) on or about June 17, 1961, discharging its employees Lyle E. Under- wood and William B. Loughead because of their membership in, support of, and activities on behalf of the Union; (3) failing and refusing since on or about July 24, 1961, to reinstate its striking employees upon their unconditional applications to return to work; and (4) engaging in various specifically described other acts of inter- ference, restraint, and coercion impinging upon rights of its employees guaranteed in Section 7 of the Act. In its duly filed answer Respondent, besides denying the Board's jurisdiction in this matter, also denied the commission of my unfair labor practices. All parties were represented at the hearing and were afforded full opportunity to participate, to examine and cross-examine witnesses, to present oral argument, and to file briefs. A brief has been received from the General Counsel. Upon the entire record, and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENT Respondent is, and has been at all times material herein, a corporation organized and existing under the laws of the State of Wisconsin, having its principal place of business at Abbottsford, Wisconsin, where it is engaged in the manufacture and sale of cheese and related dairy products. In the course and conduct of its business dur- ing its fiscal year ending December 31, 1960, Respondent caused to be manufac- tured, sold, and distributed products valued in excess of $964,000 of which products valued in excess of $500,000 were sold and shipped to the Wisconsin Cheese Pro- ducers Association. Wisconsin Cheese Producers Association is a corporation having its principal place of business at Plymouth, Wisconsin. During the calendar year 1960 the Wisconsin Cheese Producers Association sold approximately $4,000,000 worth of cheese about 90 percent of which was sold to sources outside the State of Wisconsin. Notwithstanding that the cheese Respondent sells to the Wisconsin Cheese Pro- ducers Association is sold f.o.b. Abbotsford and not withstanding that there is no specific indication that any of Respondent's cheese is actually included in the cheese 892 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that the Association sells outside the State of Wisconsin , I find Respondent to be engaged in commerce within the meaning of Section 2 (6) and (7) of the Act. Siemons Mailing Service, 122 NLRB 81. U. THE LABOR ORGANIZATION INVOLVED General Chauffeurs, Teamsters, Warehousemen and Helpers Local Union No. 446, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Help- ers of America, is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES From 1950 to April 30, 1961,1 when their last collective-bargaining contract expired, the Respondent and the Union had maintained a collective-bargaining rela- tionship in which the Union represented all the "intake employees, cheesemakers, helpers, and warehousemen employed at Respondent's Abbotsford, Wisconsin, plant." 2 On February 23, pursuant to the contract then in force, the Union requested that the contract be reopened for negotiation. On March 7 Respondent (by the presi- dent of its board of directors, George Mathews) 3 replied by letter that its board would meet on March 13 at which time the Union could appear and submit in writing "the desires of the employees" and at which time the Co-op would indicate in writing "the minimum terms which must be met before the employer can consider continuing or signing any new contract...." On March 10 the Union wrote to say that it could not meet on March 13. In this letter it enclosed a brief statement of its demands. The most important of these were requests for six paid holidays (where there had been none), an increase in vacations, and a reduction of the workweek from 48 to 40 hours with no reduction in the take-home pay or in the alternative a 15-cent increase. On March 20 Mathews sent the Union Respondent's "minimum terms" proposal and suggested March 24 as a possible meeting date. The most important of Respond- ent's proposals (all of which offered less than the employees were then receiving) were a decrease in both vacations and sick leave and a commitment by the Union to keep the cost of handling and manufacturing 100 pounds of milk no higher than 53.89 cents or to accept a cut in wages to achieve such a figure. On March 24, the first of eight negotiating meetings took place. As appears from the testimony of Raymond Yessa, the Union's president and business agent and its chief spokesman in the negotiations,4 in this meeting Mathews gave `a detailed description of [the Co-op's] financial problems. ' He also stated "that there was going to have to be some changes made" and indicated that they would prob- ably involve contracting out the cheesemaking. Thereafter both sides' proposals were discussed but no agreement was reached. On March 28 the Union, as was its practice, filed with the State Board and the Federal Mediation and Conciliation Service a 30-day notice of the existence of a dispute as required by Section 8(d) of the Act. On April 12 the Union also filed a similar 10-day notice to the same agencies, this time pursuant to section 111.11 of the Wisconsin statutes .5 The next bargaining session took place on April 21. Mathews opened the re- marks with a reiteration of his contentions that a change in operations would have to be made and commented "that the Union was going on strike." He again pointed out that the Co-op "wasn't making any money" and again stated that "the Co-op 'All dates herein are in 1961 unless otherwise indicated. 2It is admitted and I find that these employees, excluding office clerical, professional, and supervisory employees as defined in the Act, at all times material herein constituted an appropriate unit for collective bargaining within the meaning of Section 9(b) of the Act. 3 The board of directors is composed of seven members, all of whom are patrons of the Co-op (i e , sell their milk to it). They are elected annually by the members of the Co-op, all of whom are also its patrons. At all times material Mathews was the board president, Ralph Woik, its vice president, Fred C. Timm, its secretary-treasurer. The other four members were Ernest Bergman, Arnold Baake, Morris Mantos, and Ben Riehle. What was said at this as well as the other meetings is all based essentially on Yessa's testimony (much of it undenied) except where otherwise noted. 5 Mathews admitted that in all prior negotiations they received the same kind of notice from the Wisconsin Board. Section 111.11(2) provides for a 10-day notice to the State Board of intention to strike in connection with the "Initial processing . . . of . . . any . dairy product...." which notice is immediately brought to the attention of the employer Involved. MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 893 was contemplating contracting the cheese out to an independent contractor." In this connection Mathews made mention "of other plants that had this system of contracting out their cheesemaking operation and what wonderful results they got and how much profit they made." There was some inconclusive discussion of both sides' proposals. Then board members Bergman and Riehle made the suggestion that they thought that a settlement could be made on the basis of "last year's contract." Mathews retorted that if any commitment was to be made it would be made by him or the entire board. The union negotiators were then asked to step out which they did for about 45 minutes. When they returned they were informed that the board "would like time to consider the welfare-of the Co-op" and asked the Union to do the same. May 12 was the next meeting. The full board was present as it or a majority thereof had been at the previous meetings .6 Again, the matter of contracting the cheesemaking came up and Respondent's operation was discussed "pro and con." The Company asked the Union if it had any suggestion to make as a solution to its problem. Yessa replied that he thought that the operation of the plant was the Company's responsibility, "but as long as they asked (he) had a suggestion that maybe they should do the same thing as another Co-op had done, hire somebody as a consultant to make their operation more efficient." Mathews replied "point blank" that the Co-op would take care of its own operation-that it needed no "outsiders in it." In this meeting, Bergman asked what the Union was seeking. Yessa replied that the Union was asking for 15 cents an hour. It is clear from the undenied and credited testimony of several of Respondent's witnesses that from the very beginning the Union was offered the chance to take over the operation of the plant on a contract basis of a cent and a half a pound. Timm, Mathews, and Baake so testified. But, as Baake explained, there was not much discussion on the matter because the Union was not interested. Prior to the next meeting which took place on June 5, the Union asked the State Board for conciliation assistance which thereafter was furnished. Also prior to that meeting (specifically on May 1), the employees took a strike vote. At the June 5 meeting the matter of changing the operation and contracting the cheese- making again came up. Mathews, who on this occasion headed a three-man nego- tiating committee for Respondent, said that whoever took it over was going to do the milk hauling 7 also and would operate with a smaller crew. Yessa told Mathews "that he had the right, under the contract, if he wished to change his operation, that [the union] would not stop him from doing anything like that." Finally, Yessa (who was the only one representing the employees on that occasion) was asked by the conciliator to step out to permit the latter to talk to the Company alone. When he was called back in about 45 minutes, Yessa was asked what the Union's "current offer was." Yessa replied that they "would take last year's contract and six paid holidays." Mathews again brought up the matter of changing the operation presumably by contracting the work. Yessa charged that Mathews' posi- tion was inconsistent with the Company's March 20 written proposal that the Union guarantee not to exceed a set cost for processing a hundredweight of milk. Mathews then stated that he was withdrawing any outstanding proposals. He further com- mented that he had someone who was going to take over on a per pound basis who would do the cheesemaking and the milk hauling.8 He pointed out that this would also eliminate the manager and the office girl and would result in a saving of $32,000 a year. When Yessa was about to leave the meeting, Mathews came over and shook his hand saying, "There's no hard feelings, and we'll give our employees good references." The following day Yessa met with the employees 9 and as a result on June 7 the following letter was sent to each of the board members by Yessa: This is to notify you of the action taken by your Employee's [sic]. They have decided that if they have no contract signed, "No work." In plain and simple words there will be a strike. In some of the subsequent meetings the Respondent was represented by a committee composed of Mathews, Timm, and Baake. T While the patrons pay some of the cost of transporting their milk to the plant, vari- ous amounts of subsidies are paid to them by Respondent for the cost of hauling due to the differences of the distances they are located from the plant. In 1960 the total pay- ments under this subsidy policy amounted to $22,000. BAs will appear later, this was Melvin Nelson and his son, Donald. The circumstances of the Nelson's connection with Respondent will be treated below. P There were seven employees in the unit which was augmented at rush periods by three or four part-time employees. The usual rush period, which is known as the "flush," occurs in the late spring and early summer. 894 DECISIONS OF NATIONAL LABOR RELATIONS BOARD I regret sending you this notice, but you leave us no alternative . In fact we would not have to give you this notice. I believe your Employee's [ sic] are giving you a great deal more consideration than you are giving them. This is what you call loyalty. I remain, In addition to the above letter, on June 8 Yessa called board member Bergman and told him there would be a strike the following day due to the employees' disgust with the way the negotiations were going. Bergman thereupon sought out Union Steward Lawrence Jacobi and asked if the employees could delay the pending strike for one more day to permit the board of directors to meet again on the matter. Jacobi assented thereto and as a result another meeting was arranged between the board and the Union for June 9. Six members of the Board attended the meeting. The Union offered to settle for the old contract terms. After a 30-minute caucus by the company officials the Union was informed that the Company could not or did not want to make a decision with- out the full board and asked that a strike be held in abeyance for a week until the full board could meet the following Friday, June 16. Assured that this request was not made "for stalling purposes," the Union agreed. On the night of June 16 the board met and voted 4 to 3 to reject the Union's offer to accept the old contract. As had been promised, Burke, Respondent's man- ager, called Yessa to inform him of the result telling him at the suggestion of one of the board members that the vote had been unanimous. In a few minutes Yessa called back to see if he had correctly heard the decision. Finding that he had, he told Burke to tell the board that Respondent would "have to suffer the consequences." The next day picketing began at the plant. This picketing continued from that date to July 20, when in connection with the striking employees' unconditional demand for reinstatement to their "former or substantially equivalent employment" it was ter- minated. By July 25, however, not having been taken back to work, the picketing was resumed. Before going into the circumstances surrounding that picketing and its significance, we turn to the balance of the evidence on the refusal-to-bargain allegation. On July 18, while the picketing was in progress, at the Union's request the parties met again ii with the conciliator present. The latter met with both sides separately and then they all met together. The conciliator stated that the Company "still didn't know how they were going to operate their plant, it would depend on the volume and price and so on.. . The Company confirmed this stating (according to Mathews' testimony) that Respondent needed more facts before it could come up with a proposal. Another meeting took place on August 21. Again the financial situation of the Respondent came up A "general discussion of the pros and cons" took place. Then Yessa asked if the Respondent could make an offer. The Company offered $1.15 an hour.ii When asked if this included .the terms of the old contract the Company indicated that it did not No discussion took place. At the Union's suggestion that Respondent put the employees back to work and continue to negotiate, the company committee indicated that it would have to have a board meeting and would call a special meeting. Thereafter, another negotiating session took place on September 26. At this time the parties did not meet together but acted through the conciliator. Nothing was accomplished. The Arrangement With the Nelsons Melvin Nelson is a cheesemaker by trade who, prior to June 1, 1961, was living on and operating a leased farm at Stetsonville in the general vicinity of Abbotsford, Wisconsin. His son, Donald Nelson, is also a cheesemaker and immediately prior to June 10 was employed as manager of a cheese factory at Fremont, Wisconsin, about a hundred miles from Abbotsford. The Nelsons owned two trucks valued about $12,000 with which they were hauling milk under State franchises as of the above dates to Respondent's plant for Respondent's patrons. Sometime around the latter part of April or the first part of May, Respondent's board president, Mathews, talked to the senior Nelson about purchasing his milk routes and about the possibility of Nelson taking over the cheesemaking for Respond- ent in the event of a strike. Mathews asked if the plant could be run on a per pound 10 The Respondent was represented by its three-man labor committee and its attorney. For the Union, in addition to Yessa all the striking employees appeared n Up to the time of the picketing the Respondent complied with the terms of the old contract which included hourly rates from $1 70 to $1 80 plus the bookkeeper's weekly salary of $63 50 The latter apparently was mutually considered to be in the unit al- though technically not covered by its description MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 895 basis. Nelson said that it could and that it ought to be possible to do it for a cent and a half a pound. Two or three weeks after this conversation Nelson appeared before the board of directors and gave his expert opinion on how Respondent's oper- ation could be improved. At this time Nelson was asked if he would be willing to take over presumably on a contract basis as the board was "going to try to let it out that way if things worked out." Nelson indicated that he would be willing to take over. Thereafter, Nelson got in touch with his son Donald at Fremont about the situation at Abbotsford. As a result, sometime in the latter part of May Donald gave his employer, Wilbert Drews, notice of his resignation to be effective June 15. In explaining his action Donald told Drews that he might have a chance to go to work for Respondent, that because of "conditions they had at that time they were going on strike and they'd have to shut the doors," and in such event he and his father were going to take over the cheesemaking function and simultaneously protect their invest- ment in their two milk routes. Actually, Donald left Drews' employment on June 10, having called Drews on June 9 about an emergency requiring his premature leaving. ,On the night of June 16, after the Board had voted to reject the Union's offer to continue working under the old contract, the Nelsons were called to the board and asked if they would take over in case of a strike. They indicated that they would. The next morning, when Respondent's Manager Burke arrived and saw the union offi- cials outside with picket signs, he called the Nelsons and asked them to come to work as soon as they could. This they did, bringing with them their wives to help. From this time to July 1 the two Nelson men were paid $1.50 per hour and their wives $1.15 per hour.12 Apparently all other help, truckdrivers, the part-time bookkeeper, and the manager were also paid by the Co-op until July 1. After that date the Nelsons began operating on a payment of a cent and a half a pound for cheese produced and assumed the cost of all help except that of the part-time bookkeeper, the plant manager, and the whey truckdriver. As of the time of the hearing the Nelsons had two full-time employees to whom they were paying $330 a month each and a part- time employee whose rate was $10 a day. They were also operating four trucks on the milk routes, two of which were owned by Respondent. To about the middle of September the Respondent paid a 10-cent subsidy to the Nelsons for the milk hauling. Thereafter the subsidy was discontinued and the Nelsons received, in addition to their basic 11/z cents a pound, only what the patrons themselves paid for the milk hauling. In addition to producing the cheese and hauling the milk, the Nelsons also per- form the day-to-day maintenance work-all out of their contract price of 11/2 cents per pound. If any special maintenance work is required, the Co-op pays for it.13 Since the first week in September, Respondent has been without the services of a man- ager, Burke having voluntarily resigned at that time. To show Mathews' antiunion animus and intent to eliminate the Union as the bargaining agent of the employees, the General Counsel adduced evidence as follows: 1. A former employee, LeRoy Fritche, testified that about 3 years prior to the hearing in a social conversation with Mathews at the Airport Bar the latter said he thought the employees would be better off to drop out of the Teamsters and have their own organization. As to this conversation Mathews testified that he told Fritche that he "had no right to advise them what unit to belong to but as far as the Co-op was concerned [he] thought it would be more desirable if [Respondent] could talk to them as a unit of their own rather than have to talk to a business representative from Wausau, or elsewhere." Previously in his testimony, Mathews had denied having suggested to some of the employees "at times in the past . that they get rid of the Teamsters and form their own organization to bargain." I credit Fritche here. 2. Lyle Underwood, one of the union employees, testified that sometime after the signing of the 1959 contract in a social conversation with Mathews at the Farmer's Home Tavern, the latter said, "Why don't you guys get rid of that union and form a little union of your own, you'd be much better off." Except for the above general denial by Mathews this stands undenied in the record. I credit Underwood. 3. Board member Bergman testified on direct examination that after an arbitration hearing involving the Union at Wausau, Wisconsin, in August 1960, Mathews (in front of the courthouse after leaving the hearing) made the statement to him and two other board members, Baake and Timm, that they would "have to quit doing 12 The striking employees had been paid in the area of $1 70 to $1.80 per hour. 13 Before the strike the maintenance work was done by Lyle Underwood whose rate was $1 80 per hour. At that time any special maintenance work was handled by outside contractors 896 DECISIONS OF NATIONAL LABOR RELATIONS BOARD business with these hoodlums" and would "have to try to get rid of the Union." On cross-examination he testified that Mathews said, "We can't have these guys running our business, its just a bunch of hoodlums." He also testified that he could not say if the remarks on this occasion were in a serious or "kidding" vein and added that he imagined that rather than serious "it was just an off-the-cuff discussion." This also took place just after the 1960 contract had been signed. Mathews denied making such statements. I credit Bergman. 4. Bergman further testified that he heard Mathews on three or four occasions in board meetings in 1961 say he was going to get rid of the Union. He mentioned it at practically every meeting saying, "If the union would walk out on strike, then Nelson would take over." In this connection he further stated (in the June 9 meet- ing) that if they prolonged this bargaining the Union would finally walk out, that if the employees did not strike and Nelson took over Respondent would get in trouble legally. He also testified that Mathews had pointed out that the way they would "prolong the negotiations and stall until the employees did go on strike" was "by not accepting the old contract." 5. Board member Ralph Woik testified that he never heard Mathews say "in so many words" that he wanted to get rid of the Union but that on at least two oc- casions in 1961 board meetings he indicated the same thing by explaining that "by prolonging the negotiations to the point where the union would go on strike and then we would have somebody else taking over the making of cheese." In his testimony Mathews denied telling the board members they "could get rid of the union" by contracting out the cheesemaking or that the way they could get the employees to strike was to stall on negotiations. According to Mathews what he did say was that he "thought it would be desirable to have this on a contract per-pound basis, that [Respondent] couldn't do anything about it with anyone else as long as the Union was in here but it wouldn't be desirable to renew the contract in the form as it was at that time. [Respondent] couldn't renew the old contract and remain in business." He also told the board "that unless [the employees] went out [Respond- ent] couldn't hire anybody else." To the extent that there are any differences between Mathews and the two other board members here I credit the latter. In his testimony Mathews reviewed the financial circumstances and background of Respondent's operation without contradiction as follows: The Co-op "was always in financial difficulty and never seemed to get out of it and no one ever seemed to be able to do anything about it." As long as Mathews had been on the board (41/2 years) and even before that Respondent had never paid any dividends on its $245,000 worth of capital stock. Nor had it paid any interest or been able to retire any preferred stock. Even stock that is involved in the admin- istration of an estate cannot be retired. With these things in mind Mathews, who besides farming had experience in business, decided to make a thorough study of Respondent's operation. On the basis of this study he became "firmly convinced that drastic changes had to be taken in the reorganization of the business and the con- duct thereof." He found that the plant was operating inefficiently and that no changes were being made to keep up with the times. At one time Respondent had 300 patrons and a 33-million pound volume of production. At the time of the hear- ing their patrons numbered about 140 and their volume was down to about 24,500,- 000 pounds. As a result the unit cost of operation has been constantly rising. While they depreciate their equipment on their books they have no depreciation reserves. In addition to this jeopardy in which they stand regarding the replacement of equip- ment, much of their equipment is obsolete. After they got the 10-day strike notice of April 13 he spent most of his time on this matter. In case of a strike there were two things Respondent could do. They could have other dairy plants process their milk or they could find somebody to op- erate the plant while the strike was in progress. Mathews' investigation revealed that other plants were operating successfully on a per-pound or commission basis. In these plants the cost of hauling came within the contract price. He found that Respondent's cost-of-hauling milk was excessive and that Respondent's overhead was too high. It was his opinion that Respondent would have to adopt the same method of operation to compete with the commission- operated plants. He cited one unnamed example of another cheese factory operating in the same area as Respondent showing $31,000 less operating costs than Respondent yet operating on a volume of some 31/z million pounds less than Respondent while at the same time the hauling process or cost was included in these figures. His object as a member of the board of directors was to put Respondent's operation on a sound financial basis. While the overall operating statement for 1960 showed a $2,500 profit this was not made from cheesemaking but from trucking cheese to Marshfield, refunds from other cooperatives, and the sale of surplus equipment. A $901.89 MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 897 profit for the first 6 months of 1961 was also derived from similar sources and not from cheesemaking. Contentions and Conclusions as to the 8(a) (5) In his brief the General Counsel states that "what, in fact, happened here is that the Respondent had limited itself to complying with only the outward manifestations of collective bargaining. In contrast with these outward manifestations, the record reflects with remarkable clarity that Respondent entered negotiations with a fixed and determined intent never to reach a collective-bargaining agreement. Among the indicia leading to this conclusion are Respondent's evasive and dilatory tactics, its shifting position on wages, its continual insistence on its own terms and its refusal to submit reasonable counterproposals. Above all else, Respondent violated the good faith test when it handed the Union a fait accompli on the subcontract arrangement with the Nelsons." In support of his contention the General Counsel points to the "long harbored resentment against the Union" by Mathews as exemplified by Respondent's unsuc- cessful arbitration proceeding with the Union in 1960; the several occasions from the time negotiations began that Mathews "informed his Board of Directors of his intent to oust the Union, or at least expressed himself in favor of the idea." The way to do this, according to Mathews, was to stall on negotiations until the em- ployees became disgusted and walked out. Besides placating some board members' misgivings about the fate of the employees by saying they would have first choice to work for whatever the contractor would be willing to pay them, Mathews indulged in "threats" and "bait" to win approval of his objective. The "threat" was to stop selling his milk to Respondent. The "bait" was a saving of a $22,000 milk hauling subsidy plus the expense of an office girl. The General Counsel further attacks Respondent's defense that the subcontract arrangement with Nelson was undertaken and consummated as a result of the Union's threat to strike. In this connection the General Counsel points to some vagueness and inconsistency in the evidence as to when the Nelsons were first contacted about taking over the cheesemaking. On this basis the General Counsel contends that "this evidence strongly supports the conclusion that Respondent was busy making the arrangement with Nelson before it had any inkling of a possible strike and even be- fore it received the April 13 letter from the State Conciliator." The General Coun- sel also contends that the "evidence also strongly supports the General Counsel's position that the arrangement with Nelson was made permanent from the outset." In this connection the General Counsel points to the move to Abbotsford on or about June 1 by the senior Nelson and the junior Nelson's leaving his job on June 9 at Fremont, Wisconsin, and his moving to Abbotsford He also points to the fact that Nelson's son-in-law also quit his job to come to work for Nelson at Abbotsford. He further points to the younger Nelson's comment to one of the patrons on June 10 or 11 to the effect that his father was "going to start making) cheese at Marathon- Clark on June 16." While admitting that the Respondent "deluged the Union" with its financial plight, the General Counsel contends nevertheless "that Respondent never gave the Union an opportunity to bargain over any contemplated change in operations." This argu- ment the General Counsel illustrates with his comment that it was not until May 12 that Respondent ever ventured to ask the Union for any suggestions or comments. The General Counsel concludes that "it requires no great argument to prove that the Union was never given any opportunity to discuss, let alone bargain, on the change in operations." He further states that none of the problems in connection with making cheese for a cent and a half per pound "were ever explained to the Union." Although there is some merit in the General Counsel's position, I am unable to agree with him that the preponderance of the evidence in this record considered as a whole establishes a violation of Section 8(a)(5) of the Act. If the record shows with "remarkable clarity" a fixed intent on the part of Respondent (or its president) when it entered negotiations, that intent as I see it was purely economic and was to avoid entering into a contract with the Union except on the economic terms it or its president felt, rightly or wrongly, were necessary to avoid eventual economic col- lapse. One of the allegations of the complaint (and one of the main points in the Gen- eral Counsel's position) is that it was Respondent's purpose by stalling in the nego- tiations, to provoke the employees into striking. Yet, contrary to this purpose, on two occasions the Union was requested by Respondent's officials to postpone its an- nounced and imminent strike-which it did This is hardly consistent with a pur- pose to provoke a strike. Furthermore, if dilatory tactics were being engaged in by 649856--63-vol. 137-58 898 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Respondent to provoke a strike, it is difficult to understand why the same kind of conduct was engaged in after the strike occurred.14 The General Counsel refers to Respondent's "shifting position on wages" and makes much of the fact that in the June 5 meeting when the Union charged that Respondent's then insistence on contracting the cheesemaking was inconsistent with its initial written proposals, Respondent's president withdrew all previous proposals. The General Counsel's position would be more persuasive if it were not for the fact that regardless of Respondent's written proposals (all of which offered less in benefits than were granted under the contract then in force) the position it took in the very first meeting with the Union was that "the changes that would have to be made" would probably involve contracting out the cheesemaking. From that point on Respondent's position remained unchanged. Indeed, Union President Yessa testified about Respondent's insistence in this respect is as follows: "I mean it [the question of having the cheese made under the contract] always came in the picture. They were using it as a weapon against us, it could be made cheaper and [they could] operate the plant cheaper." The General Counsel also contends that Respondent's offer in the August 21 meet- ing of $1.15 per hour was substantially less than was being paid the Nelsons who had taken over the operations and was "a sham, a hoax and a travesty on the require- ment on good faith bargaining." There is nothing in the record to show that it was less than the Nelsons were then getting 15 While it is true that for about 2 weeks after the Nelsons took over, the father and son were ,being paid $1.50 per hour, it is also true that the two Nelson women were being paid $1.15 an hour. In any event, the circumstances in which the "offer" was made would seem to mitigate whatever semblance bad faith there may be in this particular instance 16 The major indicia however, of Respondent's bad faith, according to the General Counsel, occurred "when it handed the Union a fait accompli on the subcontract arrangement with the Nelsons." Again I disagree with the General Counsel's inter- pretation of the facts. In my opinion, the Union was not presented with a fait accompli when it was told that Respondent "had someone who was going to take over on a per pound basis." The employees were still working and continued to work for another week or more and were not replaced until they went on strike. And there is no indication that they would ever have been replaced had they not gone on strike. Indeed the inferences are just the contrary. So much for the General Counsel's main points . I turn now to his subsidiary con- tentions. I do this by way of my overall analysis of the situation as I see it. The record shows a declining trend in Respondent's operations 17 I am convinced of Mathews' sincerity of purpose in attempting to reverse this trend. This does not, of course, necessarily preclude the possibility that Mathews' real motive in part, at least, was to eliminate the Union. I have no doubt that much of the opposition that employers demonstrate toward unions is not the kind that originates in philosophic principle but is based solely on economic considerations . To determine just what the motive is, is always difficult. While there is evidence tending to show an anti- union bias by Mathews it is hardly overwhelming. A couple of isolated remarks in social conversations 2 or 3 years in the past and a more or less current (i.e , only 1 year old) comment which is characterized as not having been made seriously is what the General Counsel relies on in this connection. On this evidence, considered in the light of the record as a whole, I am reluctant to find that Mathews' position was based on opposition to the Union as such. But even if Mathews' real motive was to eliminate the Union, which I do not believe, I doubt that such a fact on this record would establish that Respondent, whose ultimate actions were those of a seven-man board of directors, violated the Act. 14 Both in the July 18 and August 21 meetings Respondent asked for more time to con- sider its bargaining position. As to this matter I will comment more fully below. 15 As of July 1 the Nelsons went on the cent and a half per pound basis 19 It will be recalled that the Union had been out on strike at this time for about 2 months and the Nelsons had taken over In this context, in a bargaining session the Union asked Respondent if it could make an offer It could and did. $1 15 an hour. In my opinion it was made and meant as a negative response to the Union and was so understood at the time 17 The following evidence was adduced from Respondent's annual reports: 1960 1959 1958 1957 1956 Number of patrons_______________________ 173 145 184 201 242 Operating cost per cwt. of milk handled, cents________________________________ 53 89 51.75 45 38 44 66 39 55 Labor and management cost per pound of cheese produced, cents_________________ 1 69 1.76 1 51 1 54 1.62 MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 899 It is this aspect of the case that both complicates and throws light on what oc- curred. As I see it, Mathews was determined to produce cheese by contract. But first he had to persuade a sufficient number of the board members to agree with him. Even though he may not have had the necessary support for this at the outset of the negotiations, apparently there was no objection at that time to his making this purpose clear to the Union , if for no other reason than as a matter of bargaining strategy. After all, the Union was asking for various increased benefits. As time lengthened and the bargaining continued it obviously became apparent that the union was completely on the defensive having made it clear that it had no intention whatever to enter into a contract arrangement itself and apparently having nothing to counter "the baleful ballad of Respondent's economic plight." At this point, recognizing the Union's weak bargaining position, a faction of the board, out of regard for the welfare of the employees or out of apprehension of a strike or of a change of the status quo, was willing to settle for the old contract. But Mathews, sensing success for his objective particularly with a strike vote having been taken on May 1, was fortified in his original position and undoubtedly ac- centuated his efforts to sway the entire board to his views. Since it was obvious that if Respondent made no concessions the employees would strike, Mathews made preparations accordingly. It is these preparations, including certain state- ments attributed to Mathews about them, that the General Counsel would rely on to show that Respondent's purpose was to provoke the strike and that this was to be accomplished by "stalling tactics" in the negotiations. I have already pointed to the inconsistency in this connection with the two occasions that the Union was asked to withhold strike action. Notwithstanding that Mathews may have described strategy to his fellow board members as "pro- longing the negotiations to the point where the Union would go on strike" and may have indicated that such a course of action would "get rid of the Union," I am unable to find bad faith here. There is nothing in the evidence, certainly before the strike began,18 to show any position by Respondent other than the one it took in the very first meeting-i.e., that its purpose was to have its cheese made on a contract basis. Having found that this purpose was a bona fide economic aim and was offered to the Union, I cannot find that by adhering to it until the employees went out in protest thereof the Respondent was guilty of a violation of Section 8(a) (5) of the Act.19 Nor is my conclusion changed by the knowledge and ex- pectation on the part of Respondent that this position on its part would result in a strike. In this light, the negotiations and arrangement with the Nelsons cast no adverse reflections on Respondent. There is one remaining matter to be commented upon. That involves the repeated claims by Respondent that it needed time to elicit more facts to enable it to know what position it could take regarding the negotiations. The General Counsel points to this as indicative of Respondent's stalling tactics engaged in to provoke the strike. But the perplexing thing about this is that Respondent continued to make the same claims after the strike occurred. I think the explanation involves a combination of things. I believe that in part, Respondent's pleas for more time (certainly before the strike occurred) stemmed from the need of both factions of the Board for more time to persuade the other to its way of thinking. To some extent also I believe that there was a genuine feeling on the part of some of the board members that they needed more information than they had. And last but not least, I cannot avoid the impression that some of Respondent's actions here stemmed from a mistaken idea of what the law required of it. Having found that Respondent did not refuse to bargain in violation of Section 8(a) (5) of the Act, it follows of course that when the employees went on strike because of the failure to get an agreement this strike was economic and was not an unfair labor practice strike.20 It also follows that Respondent did not discriminate against the employees in violation of Section 8(a) (3) of the Act when their demand for reinstatement was not complied with. I so find. 18 After the strike had been in progress over 2 months Respondent made its already ,commented-upon "offer" of $1 15 per hour In this connection the testimony of Bergman, one of the board members who would have accepted the old contract, is significant As already indicated, he testified that the way that Mathews told them they would "prolong the negotiations and stall until the employees did go on strike" was "by not accepting the [old] contract" 20 The General Counsel further contends that the strike in addition to having been caused by the alleged refusal to bargain, was also caused by the alleged discriminatory discharge of two employees Apart from the fact that no such allegation is contained in the com- plaint as will be seen below the evidence fails to support the General Counsel's contention. 900 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Alleged Discrimination Against Loughead and Underwood When the union officials, Yessa and Chamberlain , learned of Respondent's re- jection of the old contract on the night of June 16, they immediately got some picket signs and drove from Wausau to Abbotsford arriving about midnight. Because of the lateness of the hour they did not get in touch with the employees but they did put up the signs at the plant at that time. When they went to eat at 5 o'clock in the morning they took the signs down and did not (according to Yessa's testimony) again display them until sometime past 7 a.m. after two of the union employees (Underwood and Loughead) had gone into the plant and came out 2i About 5:30 Plant Manager Burke arrived at the plant. By this time the two union officials had returned. Burke said, "It looks like the boys won't be here today." According to Yessa, he did not give Burke "a definite answer" but told him to draw his own conclusion. About a half hour later the two Nelson men and their wives arrived and went into the plant. Shortly thereafter three other young men arrived who were part-time employees and did not belong to the Union. They also went into the plant. Next to arrive was Lyle Underwood, a union employee. According to his testimony, when he arrived Yessa and Chamberlain were standing in front of the factory. There were no picket signs out-nor did he see any any- where. The union officials informed him of the board's rejection of the old contract the night before and told him "there was somebody else in the plant working and to go in and see what the deal was." Inside the plant, according to Underwood's further testimony, he saw Burke and Nelson working on a separator. He said to them, "It looks like we don't work." Burke replied, "I guess that's right," and added that "they had decided to try it this way for a while." Underwood asked, "Can I pick up my personal belongings?" Burke said, "Yes, sure, go ahead." After getting his belongings Underwood went to the office. At this point William Loughead, another union employee, came into the office too.22 According to Underwood's testimony, in the office Burke told them, "I've been instructed to ask you to turn in your keys." Underwood said, "Here's mine. Does this mean that we're laid off?" Burke answered, "Not necessarily. You can go to work for yourself, if you want to." 23 When the General Counsel asked Loughead why he went on strike, Loughead answered, "Because I figured that they hadn't used us right by not trying to bargain with us." When asked if there was any other reason, Loughead knew of none. Considering the strike vote of May 1; the Union's letter of June 7 threatening a strike if an agreement was not reached; the two postponements of the strike; the statement by Yessa to the board on the night of June 16 that because of its rejection of the old contract it would "have to suffer the consequences"; Yessa's directions to Underwood "to go in and see what the deal was"; and Burke's remark to the two employees that they could go to work for themselves if they wanted to; I find that they were not discharged or discriminated against in violation of Section 8(a)(3) of the Act. Upon the above findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. The Respondent is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. The Respondent has not engaged in unfair labor practices as alleged in the complaint. RECOMMENDATION Having concluded that Respondent has not engaged in unfair labor practices as alleged herein, I recommend that the complaint be dismissed in its entirety. 21 There is some conflict as to whether the signs were on display earlier than this latter time. I see no need to resolve this conflict as the evidence is clear that if the signs were not officially posted at any of the times relevant herein, they were reposing in the back seat of Yessa's automobile which was parked directly in front of the plant and were clearly visible to anyone nearby. I so find. 22 Loughead had arrived at the plant some minutes after Underwood Like the latter, be testified that he saw Yessa and Chamberlain outside the plant but did not see any picket signs anywhere. 23Loughead's testimony was that Burke said, "Not necessarily, you can go out and bar- gain with the Board of Directors by yourselves, but not with the Union " This comment was denied by Burke. I credit Underwood