Craig-Botetourt Electric Cooperative

CRAIG-BOTETOURT ELECTRIC COOPERATIVE 355 to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection , or to refrain from any and all such activities. NACHMAN CORPORATION, Employer. Dated ------------------- By------------------------------------------- (Representative ) (Title) NoTE.-We will notify any of the above-named employees presently serving in the Armed Forces of the United States of their right to full reinstatement upon ap- plication in accordance with the Selective Service Act after discharge from the Armed Forces. This notice must remain posted for 60 consecutive days from the date of posting, and must not be altered , defaced, or covered by any other material. Employees may communicate directly with the Board 's Regional Office, Midland Building, 176 West Adams Street , Chicago, Illinois, Telephone No. Central 6-9660, if they have any question concerning this notice or compliance with its provisions. Craig-Botetourt Electric Cooperative and International Brother- hood of Electrical Workers, AFL-CIO. Case No. 5-CA-0330. September 3, 1963 DECISION AND ORDER On May 8, 1963, Trial Examiner John H. Eadie issued his Inter- mediate Report in the above-entitled proceeding, 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 attached Intermedi- ate Report. Thereafter, the Respondent filed exceptions to the Inter- mediate Report, and a supporting brief. Pursuant to the provisions of Section 3(b) of the Act, the Board has delegated its powers in connection with this case to a three-member panel [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 In- termediate Report and the entire record in the case, including the exceptions and brief, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner with the following modifications : The complaint alleged, and the Trial Examiner found, that the Re- spondent violated Section 8 (a) (3) and (1) of the Act by (1) the dis- criminatory layoff on June 19, 1962, of its "line" crew, and (2) the discriminatory layoff on December 7, 1962, of employee Donald Cald- well. We agree with the Trial Examiner that these layoffs were for discriminatory reasons and that by this conduct the Respondent violated Section 8 (a) (3) and (1) of the Act. 144 NLRB No. 33. 727-083-64--vol . 144-24 356 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 1. The layoff of the "line" crew on June 19: As described more fully in the Intermediate Report, the Respondent, which is engaged in the generation and distribution of electricity, employs approximately 23 persons. It maintains two crews : a "right-of-way" crew, which cuts and clears brush, and a "line" crew, which services the electric lines. On May 3,1962,1 shortly after the Union's petition was filed,2 Bowman, Respondent's manager, discharged employee Wallace, a lineman, indi- cating his displeasure at the employees' organizing a union behind his back. On June 1 Bowman demoted employee Donald Caldwell, an active union adherent, and told several employees that Caldwell would have kept his job if it had not been for his union activity. On June 19, the day following the Board-directed election,' Bowman laid off the entire line crew, consisting of Lipes, working foreman, Carper, Tripp, R. Caldwell, C. S. Elmore, and Craft. At that time, Bowman stated that the reason for the layoff was that he could not afford to have line- men cutting brush and that the work was slack. The line crew em- ployees then notified Quinn, the Union's international representative, of the layoff; whereupon Quinn called Bowman and informed him that in view of the recent election, and the immediacy of the bargaining negotiations, it was a "rather inopportune time" for the layoff, and he requested Bowman to put the men back to work. The entire line crew was returned to work on June 21, and again assigned to cutting brush. On June 26 the Union was certified as exclusive bargaining representative of the Respondent's production and maintenance em- ployees. As described more fully in the Intermediate Report, nego- tiations between the Respondent and the Union began on approxi- mately August 17 and concluded on December 11; no agreement was reached, however. On December 7, the Respondent laid off Donald Caldwell, the Union's shop steward and the sole employee negotiator, and as described below, on December 8 Elmore, the Respondent's office manager, suggested to another employee that Caldwell had been laid, off because of his union activity. We are persuaded, in the circumstances, that the Respondent's lay- off of its line crew on June 19 was not, as urged by the Respondent, dictated by economic considerations, but rather was for union reasons in violation of Section 8(a) (3) and (1) of the Act. We note at the outset that the Board-directed election, which the Union won, was held on June 18, and that on the following day and without any warn- ing the Respondent laid off its entire line crew. The Respondent con- tends, however, that the layoff of the line crew was based on economic considerations, and that the timing in connection with the election was purely coincidental. Thus, the Respondent argues that as of April 1962, its construction program had been completed; that the 1 Unless otherwise indicated , all dates refer to 1962. 2 The Union's representation petition was filed on April 10, 1962. 3 The election results showed that 14 ballots were cast for the Union, and none against. CRAIG-BOTETOURT ELECTRIC COOPERATIVE 357 right-of-way was also in good condition; that maintenance and op- erating costs were running in excess of the approved budgeted ac- count; and that "due to the decreased amount of system improvement work," the line crew, and perhaps to some extent the right-of-way crew, was overstaffed. The record, however, does not support this defense. We note initially, as did the Trial Examiner, that the Re- spondent's testimony in connection with its economic defense was in- consistent. Thus, the Respondent's economic explanation for the lay- off, namely, that its "right-of-way" was in good condition and the "line" crew was "overstaffed," indicated that there would be a pro- longed layoff. However, the Respondent also testified that the line crew was not given 2 week's notice or pay instead of notice because the layoff was only temporary. Nor does the evidence adduced support the Respondent's assertion that there was an economic basis for a layoff of the entire line crew. On the contrary, the record establishes that the Respondent's operations have shown a steady growth in profits over the years. Thus the Respondent's newsletter for March-April 1962 stated that "the year 1961 was the best year financially in the history of Craig-Botetourt." " We also note from the Craig-Botetourt Coop News for January-February 1962 that during the 5-year period 1956 to 1961, the Respondent's revenues increased from about $192,000 to $280,000, and its line mileage from 745.8 to 786.9. The Coop News con- chided that "these statistics show healthy progress between the years 1956 and 1961." In this connection, we deem it particularly significant that on this occasion the Respondent laid off its entire line crew of six employees, whereas for at least 11 years prior to this proceeding, the Respondent had no occasion to lay off its entire line crew. Finally, we believe that the fact that only 2 days after the layoff the Respondent reinstated the line crew after a telephone request from the union rep- resentative refutes the Respondent's economic defense. In our opinion if, as the Respondent claims, the layoffs were for valid and compelling economic reasons, Respondent would not have reinstated these em- ployees upon the bare request of the union representative, and further without at least seeking to convince the Union of the merit of its as- serted valid and compelling economic reasons, or unless some change in economic conditions occurred, which has not been shown here. Although the reasons given by the Respondent for the layoff of its line crew are not entitled to credence, the record does establish a credible explanation in Respondent's union animus. In finding that the Respondent had manifested union animus, we rely on Bowman's statement to an employee in connection with Wallace's discharge indi- cating his displeasure at the employees' organizing a union behind his back; Bowman's further statement in connection with the demo- 'This conclusion was affirmed by the admission of Bowman, the Respondent's manager, at the hearing. 358 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tion of Caldwell that Caldwell would have kept his job if it had not been for his union activity; and Elmore's statement to an employee suggesting that Caldwell was laid off because of his union activity 5 We further find that the Respondent' s union animus is also evidenced by its conduct in laying off employee Caldwell, which conduct we have found below was for discriminatory reasons, in violation of Section 8(a) (3), and the Respondent's conduct, more fully described in the Intermediate Report, which the Trial Examiner found, and we agree, constituted an unlawful refusal to bargain with the Union in violation of Section 8 (a) (5) of the Act. Accordingly, in view of Respondent' s union animus, the timing of the layoff, and the lack of support for Respondent's defense based on asserted economic necessity, we find that the layoff of the line crew was discriminatory, in violation of Section 8(a) (3) and (1) of the Act. 2. The layoff of Donald Caldwwell on December 7: Donald Caldwell was hired by the Respondent on November 4, 1957, as foreman of the right-of-way crew. In April 1960 he was promoted to the job of staking engineer. As noted above, on June 1, 1962, Caldwell, an active union adherent, was demoted and returned to his old job of right-of-way foreman, and at the time Bowman told several em- ployees that Caldwell could have retained his engineering job if he had not joined the Union. Collective-bargaining negotiations be- tween the Respondent and the Union commenced on August 17, and on August 20 the Union notified Respondent that Caldwell had been selected to represent the employees in bargaining negotiations and had been appointed shop steward. On November 23 Respondent ad- vised Caldwell by mail that "a reduction in force is being made," and that he was "scheduled to be laid off December 7." On December 8 employee Craft met Troy Elmore, the Respondent's office manager, who during a discussion of Caldwell's layoff said that "one of the big ones is gone," and otherwise suggested that Caldwell had been laid off because of his union activity. The final negotiating session occurred on December 11. 5 While the Respondent's statements in connection with the discharge of Wallace and the demotion of Caldwell occurred more than 6 months before the filing of the charge herein, Chairman McCulloch and Member Brown note that the Respondent did not object to the Trial Examiner relying on such evidence for the purpose of evaluating its conduct within the 6-month period preceding the filing of the charges Moreover , since the reason for the Respondent's layoff of the line crew was, as already noted, not credible , leaving the real reasons for such layoff at least partially unexplained by events occurring within the 6-month period, they believe that the consideration of such background evidence for the purpose of explaining the reason for the discharges is warranted here. Paramount Cap Manufacturing Company, 119 NLRB 785, 787 ( Members Rodgers and Leedom dis- senting). Member Leedom concurs in the finding that the Respondent laid off the line crew for discriminatory reasons because, in his view, evidence of Respondent's union animus within the 6.month period in connection with the layoff of Caldwell establishes that such animus continued to exist throughout the relevant period and , therefore, that the layoff of the line crew was for discriminatory reasons. See Dan River Malls, Incorpo- rated, 125 NLRB 1006. CRAIG-BOTETOURT ELECTRIC COOPERATIVE 359 Like the Trial Examiner, we are convinced that Caldwell's layoff was motivated by antiunion considerations. We base this conclusion on Respondent's union animus; the fact that Caldwell was union steward, and the sole employee negotiator; the fact that, as described more fully in the Intermediate Report, his layoff occurred at a critical point during the course of bargaining negotiations; and the Respondent's statement intimating that Caldwell was laid off because of his union activity. Moreover, the Respondent's contention that Caldwell was laid off for reasons of "economy" does not withstand scrutiny. In this connection, Bowman, the Respondent's manager, testified that pursuant to a letter from the board of directors he laid off two employees in July 1962 for reasons of "economy"; that Cald- well's layoff had been under consideration for some time but was de- ferred pending completion of contract negotiations; that following the July layoff, a further reduction in personnel was necessary; that in December there was only a "small operating margin" ; and that Caldwell, having the least seniority in the crew, was laid off in the "reduction of forces." We find such generalized testimony unper- suasive, particularly in the absence of specific evidence indicating that Caldwell's layoff was necessitated by economic reasons and in view of the evidence, discussed above, that the Respondent's business had been expanding at the time of the layoff. We accordingly find on a preponderance of the evidence that the layoff of Caldwell was occasioned by reason of his union activities and hence violated Section 8(a) (3) and (1) of the Act. 3. We also find, in agreement with the Trial Examiner, and for the reasons stated by him,' that on and after August 17 the Respond- ent failed to bargain in good faith with the Union, in violation of Section 8(a) (5) and (1). ORDER The Board adopts as its Order the Recommended Order of the Trial Examiner with the following modifications :' (1) The phrase "except to the extent that such rights may be affected by an agreement requiring membership in a labor organiza- tion as a condition of employment as authorized in Section 8(a) (3) of the Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959, shall be deleted from paragraph 1(c) thereof. (2) The phrase "except to the extent that such rights may be af- fected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8(a) (3) of the 6 Member Leedom, however, does not rely on Respondent's announcement of its plans to reduce its work force and if necessary contract out the work. a The Commonwealth of Virginia has a right-to-work law. 360 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959," shall be deleted from the third paragraph of the Appendix. (3) The phrase "except to the extent that this right may be af- fected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8(a) (3) of the Act," shall be deleted from the last paragraph of the Appendix. INTERMEDIATE REPORT STATEMENT OF THE CASE Upon charges filed on December 14, 1962, and January 16, 1963, the General Counsel of the National Labor Relations Board issued a complaint dated January 23, 1963, against Craig-Botetourt Electric Cooperative , herein called the Respondent, alleging that the Respondent had engaged in unfair labor practices affecting com- merce within the meaning of Section 8(a) (1), (3), and (5 ) and Section 2(6) and (7) of the National Labor Relations Act, as amended , herein called the Act. The Re- spondent filed an answer on or about February 4, 1963, in which it admitted the jurisdictional allegations of the complaint but denied the commission of any unfair labor practices. A hearing was held before Trial Examiner John H. Eadie at Roanoke, Virginia, from March 19 to 21 , 1963, inclusive. At the close of the General Counsel's case the Respondent moved to dismiss those allegations of the complaint which allege a violation of Section 8(a)(5) of the Act . Ruling was reserved . The Respondent renewed its motion to dismiss at the close of the whole case . Ruling again was reserved. The motion to dismiss is disposed of as hereinafter indicated. The General Counsel and the Respondent presented oral argument on the record at the close of the case. Both from the entire record in the case and from his observation of the witnesses, the Trial Examiner makes the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The Respondent is a Virginia corporation , with its principal place of business at New Castle, Virginia, where it is engaged in the generation and distribution of electricity. During a representative period of 12 months , the Respondent, in the course and conduct of its business operations, derived gross revenues in excess of $250,000 and purchased goods and materials of substantial value from points and places outside the Commonwealth of Virginia. The complaint alleges, the Respondent's answer admits, and the Trial Examiner finds that the Respondent is engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED International Brotherhood of Electrical Workers, AFL-CIO, herein called the Union, is a labor organization which admits to membership employees of the Respondent. III. THE UNFAIR LABOR PRACTICES A. Background Harry Bowman and Troy Elmore are the Respondent's manager and office man- ager, respectively. During 1962, the Respondent employed approximately 23 persons, including Bowman and Elmore. Of this number approximately 16 were production and maintenance employees . The Respondent had about 800 miles of line, of which about 200 miles were in wooded sections . It had a line crew and a right-of-way crew, each of which had a working foreman .' The right-of-way crew cut and cleared brush. When there was no linework , the line crew also cut brush . A line- man is paid approximately $2.30 per hour . An employee in the right-of-way crew 1 The parties agree and the evidence shows that these foremen were not supervisory employees within the meaning of the Act. CRAIG-BOTETOURT ELECTRIC COOPERATIVE 361 receives about $1.50 per hour. For about 11 years prior to the times mentioned herein, no employees had been laid off. A petition was filed by the Union in Case No. 5-RC-3792 on April 10, 1962. On May 3, 1962, the parties entered into an agreement for a consent election. An election was conducted by the Board on June 18, 1962. The result was 14 ballots cast for the Union and none against. The Board certified the Union as the bargain- ing representative of the employees in an appropriate unit on June 26, 1962. The first meeting between negotiators of the Union and the Respondent was held on or about August 17, 1962. B. The layoff on June 19, 1962, and events prior thereto Robert Wallace, Jr., was hired by the Respondent on September 1, 1960. On May 3, 1962, he and employee Osbourne Damewood, a line maintenance serviceman, were called to Bowman's office. Bowman asked Damewood about Wallace's work. Damewood replied that Wallace "wasn't climbing too much." When asked by Bowman, Wallace admitted that he had not climbed a pole for 1 or 2 months. Bow- man then asked them to read and sign a statement,2 telling them that it was for the "records" of Charles Quinn, an international representative of the Union. After Wallace and Damewood signed the statement, Bowman told Wallace that he was discharged. He stated that since the employees "had gone behind his back and organized a union" he had "to cut down on manpower and expenses to a minimum." Bowman also said that he had to protect his job, as he was getting too old to start looking for another one; that he did not like to discharge anyone; and that since his lawyer had told him that "from now on out he'll have to be a regular son of a he guessed that he would "have to act like one." After Wallace left, Bowman told Damewood that he would get him another helper. On November 4, 1957, Donald M. Caldwell was hired by the Respondent as the foreman of the right-of-way crew at the rate of $1.50 per hour. During April 1960, Caldwell was promoted to the job of staking engineer. About December 1, 1960, he received a raise of 11 cents per hour. At the time Bowman told him that he deserved the raise and was glad that he could give it to him. On June 1, 1962, Bowman told Caldwell that he had "so much work" that he had to hire a "professional man"; that for this reason he had hired John Max Hancock to take over Caldwell's job; and that since they were "exercising seniority," he (Caldwell) could go back to his old job as right-of-way foreman. When Caldwell asked him if his work had been satisfactory, Bowman replied that he did not want to discuss it. Caldwell replaced Robert Hancock 3 as right-of-way foreman. Hancock returned to his old job as truckdriver, replacing Arnold Helems. Charles Elmore, although having greater seniority than Helems, elected to return to his old job as groundman on the line crew in order that Helems could get back as a laborer on the right-of-way crew. At the time Bowman told Hancock, Helems, and Elmore that he had to have a "professional man" to help him since the Respondent had "so much work to do"; that since he did not know "what kind of pay scale the union would have," there would not be any cutback in wages "for the time being"; and that Caldwell could have kept the engineering job if he had not joined the Union.4 2 The statement contained the following: Robert Morris Wallace Junior was employed September first nineteen sixty as a power distribution line serviceman Such training and work to include the installa- tion of transformers, service meters, to repair overhead lines, and other duties per- taining to power lines with specific duties and line of work. Climbing tools and equipment were purchased by Wallace. Following his employment periodic reports from 0 0. Damewood were received by the management All the reports were un- satisfactory. They stated Wallace was making no progress on climbing, training, and slow process on other lines. On several occasions Wallace was in the manager's office and at this time he was warned that further future employment was dependent on his learning to climb. During the approximate last 4 months Wallace had not used his climbers. s The record discloses that Hancock had more seniority than Caldwell The above statements of Bowman stand uncontradicted in the record Although it appears that the Respondent did not contend in the representation matter that Caldwell should be excluded from the appropriate unit, Bowman testified to the effect that Caldwell was a trainee for the job as staking engineer or as assistant to him, such job to be supervisory or part of management. 362 DECISIONS OF NATIONAL LABOR RELATIONS BOARD As stated above the election was held on June 18, 1962 . Deal Lipes was foreman of the line crew. The crew included Norman Carper, Charles Elmore, Frank Craft, John Tripp, and Russell Caldwell. At the start of work on June 19, Bowman laid off the entire crew. Concerning the conversation with Bowman at the time, Lipes testified credibly and without contradiction as follows: The first thing he said when he stepped up to us was, "I think too much of you fellows to fire you," and he says, "but I've got to lay you off, there's nothing to do. I can't have linemen cutting brush. We've lost several thousand dollars on you all cutting brush. The work is slack and there's not anything to do." I asked him what if he had a major breakdown, did he expect us to be around, and he said no, he didn't expect us to be around. And I said to the crew that we'd just as well go, and he said yes, you 're free to go, you can leave the county, you can leave the State, you can leave the United States. The employees called Quinn and told him that they had been laid off. Quinn advised them to report to work the following morning. On June 20 the employees went to the Respondent's office and asked Bowman if there was any work for them. He replied that he had "nothing" for them to do, and asked them who had told them to report for work. Lipes replied that Quinn had told them to report. The employees again called Quinn and informed him that they had been sent home. He advised them to report for work the following morning. Quinn then called Bowman. He asked Bowman, "Just what is the problem down there ?" Bowman replied, "Well, we've been doing brush cutting and tree trimming work with the crews and we are just going to discontinue doing it." Quinn told Bowman that it was "a rather inopportune time" for the layoff since the election had just been held; and that in his opinion the layoff was an unfair labor practice and would impair the atmosphere for the negotiations . When Bowman asked Quinn what he wanted him to do, the latter urged him to "put those men back to work." Bowman agreed to return the crew to work the following morning. Bowman called Lipes about 4 p.m. on June 20 and told him that the line crew should report for work on June 21 as he had "some right of way that was in bad shape and needed to be widened." The employees returned to work on June 21 and were assigned to cutting brush , the same work they were performing before the layoff. The Respondent contends that the line crew was laid off on June 19 for economic reasons. In this connection, Bowman testified to the effect that: as of April 1962, the construction program had been completed; "the right of way was also in good condition"; "particularly in May . . our costs on maintenance and operations, which items include the right-of-way work, were running in excess of the approved budgeted account"; and "due to the decreased amount of system improvement work" the line crew and "perhaps to some extent" the right-of-way crew were "overstaffed." He testified that this situation was discussed by the Respondent's board of directors with Therman Britt, the Respondent's attorney at the time, who advised "not to lay off any- one until after the vote was taken"; and that the line crew was laid off immediately after the election "because it had been recognized as being necessary and was delayed at our attorney's advice." The above testimony of Bowman indicates that the Respondent contemplated an indefinite or prolonged layoff of the line crew. This conclusion agrees with Bowman's statement to the employees when he laid them off on June 19. However, when asked why the employees did not receive the customary "two weeks notice or pay in place of notice," 5 Bowman testified "because they definitely understood at the time that it was temporary and they would not be laid off for a prolonged period." From all of the above I am convinced and find that the Respondent on June 19, 1962, laid off Deal A. Lipes, Norman Carper, John R. Tripp, Russell Caldwell, C. S. Elmore, and Frank Craft because of their membership in and activities on behalf of the Union, thereby violating Section 8(a) (3) and (1) of the Act. C. The layoff of Donald M. Caldwell Caldwell's demotion on June 1, 1962, from staking engineer to foreman of the right-of-way crew has been related and found above. By letter dated August 20, 1962, the Union notified George V. Gardner, the Respondent's attorney, to the effect that the employees had elected Caldwell to represent them during the bargaining 6 As will be found hereinafter, Donald Caldwell received such notice when he was laid off on December 7, 1962. CRAIG-BOTETOURT ELECTRIC COOPERATIVE 363 negotiations. Also by letter dated August 20, 1962, the Union notified Bowman that Caldwell had been appointed as the Union's shop steward. On November 23, 1962, while Caldwell was on vacation, he received through the mail a notice from the Respondent, stating that "a reduction in forces is being made" and that he was scheduled to be laid off on December 7. From that time until his last day of work on December 7, no one representing management spoke to Caldwell about his layoffs On December 8, 1962, employee Marvin Craft met Troy Elmore at the Esso Servicenter in New Castle. Elmore invited Craft into his automobile, stating that he wanted to talk to him.7 Concerning the conversation, Craft testified credibly and without contradiction as follows: ... We started out and he said he'd had a Lions Club meeting the night before ... He said some member had got on him about the way he was treating employees, the way they had been treated out there, and he said it hurt him, it hurt his feelings pretty bad, and he went on to tell me, he said he'd kept out of this union business, he wasn't saying too much about it. He said he'd helped out on two occasions, helped in negotiations . . He said he wasn't going to get into it because he would just get into trouble if he got out of line. He went on to tell me, he said he guessed I knew we were getting rid of Donald Caldwell and said yeah, I'd heard that . . . one of the big ones is gone, that's what he said . . . Next I said, well, Troy if that's what you think maybe you're right. And he starts out and says, well, let's put it this way. "If there's an apple orchard out there and a hornet's nest in it and a bunch of men is going to work around there, some of the men throw rocks at that nest and get them stirred up you won't work there, will you?" and I said I guessed not. He said that's the same principle as our Coop. It's just like a big hornet's nest, and the men's got it stirred up and if you throw rocks, you just put it between the lines and you can figure it out. P. W. Stoutamire, president of the Respondent's board of directors, testified that the Board discussed the layoffs in 1962, including that of Caldwell; that the layoffs were decided upon for reasons of "economy"; and that in this connection he wrote a letter, dated July 12, 1962, to Bowman.8 Bowman testified in substance that: as a result of Stoutamire's letter he laid off two employees "within the next few days"; 9 Donald Caldwell's layoff had been considered "sometime previously" but action thereon had been deferred in the hope "that contract negotiations would be completed and it could be done following the contract"; (following the July layoffs) "we felt that we still had to make a further cut in operating personnel"; "at the close of December we had a small operating margin . . . . Compared to the amount of business we were doing, it was just about a break even proposition"; Donald Caldwell was laid off "on the reduction of forces" and not discharged; and Caldwell had the least seniority in the crew. As in the case of the line crew, the Respondent's economic defense is not credited. The evidence shows that there was a steady growth over the years in the Respondent's plant and business. For example, for the year 1956 its revenue from "energy bills" was $192,277.20 with 745.8 miles of line, and for 1961 its revenue was $280,021.69 6 Glenn McKinnon, an international representative of the Union, testified credibly that when the Union learned of Caldwell's impending termination, it proposed during a meet- ing with the Respondent that Caldwell "be kept on the payroll at least until the negotiating sessions were concluded" ; and the Respondent rejected the proposal. 7 The record indicates that both Craft and Elmore were members of the Lions Club The letter reads as follows: I have reviewed the Operating Report and Financial Statement for June, 1962. It is noted that under maintenace $3,948 00 was expended, which is $1,544.00 in excess of the approved budget. Also, that operating expenses for the year to date total $3,354 00 more than the approved budget. You are requested to take steps at once to correct this situation and report on progress at the July Board meeting. At the June meeting, you reported that because of the small amount of line construction which could be scheduled, principally due to prior completion of major system improvements, the line crew would have to work on brush cutting or have working hours reduced. Please report on the amount of time the line crew is on brush cutting and the wage rate for crew members when on that type of work. O The evidence discloses that Russell Caldwell was laid off on July 13 and that Arnold Helems was discharged on the same date. 364 DECISIONS OF NATIONAL LABOR RELATIONS BOARD with 786.9 miles of line. Bowman himself testified that 1961 was the best year financially in the history of the Respondent.'° Accordingly, and in view of the statements of Bowman and Elmore to employees, I find that by laying off Donald Caldwell on December 7, 1962, the Respondent violated Section 8(a)(3) and (1) of the Act. D. The refusal to bargain As stated above, the first bargaining session between the Respondent and the Union was held on August 17, 1962. The final meeting was held on or about December 11. Gardner was the Respondent's chief spokesman at the meetings. At the start of the negotiations the Union submitted a proposed contract. The Respond- ent agreed to a number of the Union's proposals, which for the most part involved little or no "cost" to the Respondent. A meeting was held on November 7, at which all the employees in the bargaining unit were present. Bowman, Elmore, and Stoutamire represented the Respondent at the meeting; Gardner was absent. The employees had been invited to attend by the Respondent. The Respondent informed McKinnon "in advance" of the meeting of its intention to invite the employees, and McKinnon did not object. Elmore informed the Union's representatives that the Respondent was considering a new group accident and health policy, with increased benefits and costs,ll and that he did not know if the Respondent would or could pay the increased costs. McKinnon stated that if the Respondent decided against paying the increased costs, then the Union wanted to have it arranged so that the employees could pay for it "individually " Another meeting was held on November 8 in Gardner's office. At this meeting McKinnon raised the question as to why the Respondent had invited all the em- ployees to attend the meeting held on November 7. Gardner informed him that "it was in order for [the employees] to get adequate information concerning negotia- tions " 12 When the subject of wages arose, Gardner stated that the Respondent did not have "anything to offer ... in the way of a raise." McKinnon told Gardner that "when all the other items had been agreed upon excluding wages," then they could "go back over the contract" and eliminate some of the "cost items" and "apply some of it on some increase in wages." At a meeting of the Respondent's board of directors held on November 24, 1962, it was decided to take out the new group accident and health policy with "the total cost of the increase" to be paid by the Respondent, and that such insurance was "to be in lieu of any general wage increase." The Board "suggested" to Bowman that he "discuss this insurance in fringe benefits with the employees," noting "that it would take a wage increase considerably larger than the cost of the insurance to give the employee equivalent insurance purchasing power because of his payroll tax deductions." 13 By a memorandum dated December 5, 1962, Bowman notified all employees that the new group accident and health insurance was to become effective January 1, 1963. He explained the increased benefits and stated, "The Board is placing this fine insurance in the hands of each employee in lieu of a wage increase January 1 believing the insurance more beneficial than any small adjustment that could possibly be made." The final meeting between the Respondent and the Union was held on Decem- ber 11. The Respondent rejected the Union's proposed subcontracting clause. Gardner stated that the Respondent was going to continue to reduce its labor force "In its newsletter for March and April 1962, the Respondent informed its members, "The year 1961 was the best year financially in the history of Craig-Botetourt " 11 The record discloses that the Respondent prior to the above time had a group insurance policy covering the employees without cost to them, and indicates that the Union had withdrawn its original insurance proposal and had stated that it was satisfied with the "existing" insurance plan The Respondent's board of directors met on October 27, 1962, in order to "pass on converting the group hospitalization insurance to a new plan in view of the major increase going into effect January 1 on the present plan " Action was de- ferred by the Board with "the thought that action should be delayed until the next meet- ing and that perhaps by that time contract negotiations would be completed." 1= McKinnon's testimony indicates that be questioned the Respondent in this connection because he "originally misunderstood Mister Gardner or someone" to have said that the Respondent wanted the employees "to get accurate information " 11 There is no evidence in the case that Bowman informed either the employees or the Union of the Board's action Donald Caldwell testified without contradiction that after the meeting of November 7 "we never heard another thing about the insurance." CRAIG-BOTETOURT ELECTRIC COOPERATIVE 365 "and, if necessary, to contract out the work." He gave the Union the Respondent's "final offer," which was "oral" and did not provide for any increase in wages. It was rejected by the Union. The complaint alleges that the Respondent negotiated with the Union in bad faith "by, among other acts, inviting all members of the collective bargaining unit to attend contract negotiation sessions , unilaterally granting and announcing to members of the collective-bargaining unit an increase in medical and hospital insurance benefits, and discharging a representative of the union who participated in collective-bargaining negotiations." Since it has been found above that the Respondent gave McKinnon, the Union's chief negotiator, advance notice of its intention to invite all employees to the meeting of November 7, and that he did not object, I do not agree with the General Counsel's contentions in this respect. Otherwise, I believe that the evidence, aside from the statements of Bowman and Elmore to employees, clearly shows that the Respondent, although it complied with the purely formal requirements of collective bargaining by meeting with the Union and discussing contract proposals, was attempt- ing to undermine the certified bargaining representative and was not bargaining in good faith. The Respondent laid off Caldwell, the leading adherent of the Union and one of its negotiators. About the same time as Caldwell's layoff, the Respond- ent unilaterally granted increased insurance benefits. Standing alone, this was a technical violation of Section 8(a) (5) of the Act. But the Respondent made a point of informing the employees that such insurance was "in lieu of a wage increase January 1 believing the insurance more beneficial than any small adjustment that could possibly be made." This conduct occurred less than a month after Gardner told McKinnon that the Respondent had nothing to offer in the way of a wage increase. McKinnon made it clear to Gardner at the time that "some increase in wages" was one of the main issues and stated that the Union was willing to bargain on the issue later by eliminating some of the "cost items" upon which tentative agreement had been or could be reached, such as insurance.14 This statement by McKinnon indicated that it was possible for the parties to reach agreement on a contract. Instead of exploring the possibility, the Respondent not only engaged in the conduct discussed above, but also at the final meeting on December 11 informed the Union that it planned to continue to lay off employees and if necessary to contract out the work. With Caldwell's layoff on December 7 in mind, I conclude that the Respondent's action was calculated to make it impossible for the Union to reach agreement and indicates that the Respondent had no intention of entering into a contract. Accordingly, I find that on and after August 17, 1962, the Respondent refused to bargain collectively in good faith with the Union in violation of Section 8(a)(5) and (1) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in section III, above, occurring in con- nection with Respondent's operation described in section I, above, have a close, intimate, and substantial relationship to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that the Respondent has engaged in certain unfair labor practices, it will be recommended that it cease and desist therefrom and that it take certain affirmative action designed to effectuate the policies of the Act. Having found that the Repsondent has refused to bargain with the Union in violation of Section 8(a) (5) and (1) of the Act, I will recommend that the Respondent be ordered to bargain with the Union upon request as the exclusive representative of all its employees in the appropriate unit concerning rates of pay, wages, hours, and other terms and conditions of employment, and if an understanding is reached, embody such under- standing in a signed agreement. It has been found that the Respondent on June 19 and 20, 1962, laid off Deal A. Lipes, Norman Carper, John R. Tripp, Russell Caldwell, C. S. Elmore, and Frank Craft, and on December 7, 1962, laid off Donald M. Caldwell. Accordingly, it will 14It is true that the Respondent at the meeting of November 7 informed the Union's representatives that it was considering new insurance. However, no agreement on the issue was reached by the parties at the time and it was not discussed thereafter. 366 DECISIONS OF NATIONAL LABOR RELATIONS BOARD be recommended that the Respondent offer Donald M. Caldwell immediate and full re- instatement to his former or substantially equivalent position without prejudice to his seniority or other rights or privileges, and make him and the employees named above whole for any loss of pay suffered by reason of the discrimination by payment to each of them of a sum of money equal to that which he would have earned as wages from the date of the discrimination to the date of reinstatement, less his net earnings during such period in accordance with the formula prescribed in F. W. Woolworth Company, 90 NLRB 289, together with interest on such sum, such interest to be computed in ac- cordance with the formula prescribed by the Board in Isis Plumbing & Heating Co., 138 NLRB 716. Upon the basis of the foregoing 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 the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, the Respondent has engaged in unfair labor practices within the meaning of Section 8 (a) (1) of the Act. 4. By discriminating with respect to the hire and tenure of employment of its em- ployees, thereby discouraging membership in the Union, the Respondent has engaged in unfair labor practices within the meanng of Section 8 (a) (3) of the Act. 5. All production and maintenance employees employed by the Respondent, in- cluding working foremen , but excluding office clerical employees , watchmen, guards, and supervisory employees as defined in the Act, constitute an appropriate unit within the meaning of Section 9 (b) of the Act. 6. The Union has been at all times on and after June 18, 1962, the exclusive representative of all employees in the aforesaid appropriate unit for the purposes of collective bargaining within the meaning of Section 9(a) of the Act. 7 By refusing at all times on and after about August 17, 1962, to bargain collec- tively with the Union as the exclusive representative of its employees in the afore- stated appropriate unit, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a) (5) of the Act. 8. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law and upon the entire record in the case , I recommend that Craig-Botetourt Electric Coopera- tive, New Castle, Virginia, its officers, agents, successors, and assigns, shall be ordered to: 1. Cease and desist from: (a) Discouraging membership in International Brotherhood of Electrical Workers, AFL-CIO, or any other labor organization of its employees , by discriminatorily lay- ing off or failing and refusing to reinstate any of its employees or by discriminating in any other manner in regard to their hire and tenure of employment or any term or condition of employment. (b) Refusing to bargain collectively with respect to rates of pay, wages , hours of employment , and other terms and conditions of employment with the above-named labor organization as the exclusive representative of its employees in the appropriate unit found above. (c) In any other manner interfering with , restraining, or coercing its employees in the exercise of the right to self-organization, to form labor organizations, to join or assist the above-named labor organization 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, or to refrain from any or all such activities , except to the extent that such rights 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 I find will effectuate the policies of the Act: (a) Upon request bargain collectively with the above -named labor organization as the exclusive representative of the employees in the above-described appropriate unit CRAIG-BOTETOURT ELECTRIC COOPERATIVE 367 with respect to rates of pay, wages, hours of work, and other terms and conditions of employment, and embody in a signed agreement any understanding reached. (b) Offer Donald M. Caldwell immediate and full reinstatement to his former or substantially equivalent position without prejudice to his seniority or other rights or privileges, and make him and Deal A. Lipes, Norman Carper John R. Tripp, Russell Caldwell, C. S. Elmore, and Frank Craft whole in the manner set forth in the section of the Intermediate Report entitled "The Remedy." (c) Preserve and, upon request, make available to the National Labor Relations Board or its agents for examination and copying all records necessary for the deter- mination of the amount of backpay due under these recommendations. (d) Post at its plant in New Castle, Virginia, copies of the attached notice marked "Appendix." 15 Copies of said notice, to be furnished by the Regional Director for the Fifth Region, shall, after being duly signed by the Respondent or its authorized representative, be posted by Respondent immediately upon receipt thereof and main- tained by it for a period of 60 days thereafter in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken to insure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for the Fifth Region, in writing, within 20 days from the date of the receipt of this Intermediate Report, what steps it has taken to comply herewith.16 151n the event that this Recommended Order be adopted by the Board, the words "A Decision and Order" shall be substituted for the words "The Recommended Order of a Trial Examiner" in the notice. In the further event that the Board's Order be enforced by a decree of a United States Court of Appeals, the words "A Decree of the United States Court of Appeals, Enforcing an Order" shall be substituted for the words "A Decision and Order." 16 In the event that this Recommended Order be adopted by the Board, this provision shall be modified to read: "Notify said Regional Director, in writing, within 10 days from the date of this Order, what steps the Respondent has taken to comply herewith." APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Rela- tions Act, as amended, we hereby notify our employees that: WE WILL NOT discourage membership in International Brotherhood of Elec- trical Workers, AFL-CIO, or any other labor organization of our employees by discriminating in regard to their hire or tenure of employment, or any term or condition of employment. WE WILL, upon request, bargain collectively with the above-named labor organization as the exclusive bargaining representative of all employees in the appropriate unit with respect to rates of pay, wages, hours of employment, and other conditions of employment, and if an understanding is reached, embody such understanding in a signed agreement. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of their right to self-organization, to form labor or- ganizations, to join or assist International Brotherhood of Electrical Workers, AFL-CIO, or any other labor organization, to bargain collectively through representatives of their own choosing, to engage in concerted activities for the purposes of collective bargaining or mutual aid or protection, or to refrain from any or all such activities, except to the extent that such rights 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. WE WILL offer to Donald M. Caldwell immediate and full reinstatement to his former or substantially equivalent position, without prejudice to his seniority or other rights and privileges, and make him and the following employees whole for any loss of pay suffered as a result of the discrimination against them: Deal A. Lipes John R. Tripp C. S. Elmore Norman Carper Russell Caldwell Frank Craft All our employees are free to become, remain, or refrain from becoming or re- maining, members of any labor organization except to the extent that this right may 368 DECISIONS OF NATIONAL LABOR RELATIONS BOARD be affected by an agreement requiring membership in a labor organization as a con- dition of employment as authorized in Section 8(a) (3) of the Act. CRAIG-BOTETOURT ELECTRIC COOPERATIVE, Employer. Dated---- --------------- By------------------------------------------- (Representative ) (Title) NOTE: We will notify the above -named employees if presently serving in the Armed Forces of the United States of their right to full reinstatement upon applica- tion in accordance with the Selective Service Act and the Universal Military Training and Service Act of 1948 , as amended, after discharge from the Armed Forces. This notice must remain posted for 60 consecutive days from the date of posting, and must not be altered , defaced, or covered by any other material. Employees may communicate directly with the Board's Regional Office, Sixth Floor, 707 North Calvert Street, Baltimore, Maryland, Telephone No. 752-8460, Extension 2100, if they have any question concerning this notice or compliance with - its provisions. Aerojet-General Corporation and United Missile and Aerospace Technicians, Petitioner. Case No. 20-RC-5?44. September 3, 1963 DECISION ON REVIEW AND ORDER On January 9, 1963, the Regional Director for the Twentieth Re- gion issued a Decision and Direction of Election in the above-entitled proceeding. Thereafter, the International Association of Machinists, AFL-CIO, and its Local Lodge 946, herein called the Intervenors or IAM, filed with the Board, in accordance with Section 102.67 of the Board's Rules and Regulations, Series 8, as amended, a timely request for review on the ground, inter alia, that a substantial question of law or policy was presented here as to whether an election in this case should be barred because of the Government's intervention in collective-bargaining negotiations between the Employer and IAM, the recognized bargaining agent.' The Board, by telegraphic order dated January 30, 1963, granted the request for review and stayed the election. The Board has considered the entire record 2 in this case and makes the following findings : The Employer is a prime contractor of the U.S. Air Force for the development and production of missiles and rockets. IAM was first certified by the Board in a production and maintenance unit at the Employer's original plant in Pasadena in 1944. Since that time the unit has been enlarged pursuant to agreement by the parties or on 3 As an additional ground for review IAM contended that Petitioner was not a labor organization within the meaning of the Act, because it allegedly is merely a "paper corpora- tion" and lacks the indicia of a labor organization sound in certain sections of the Labor- Management Reporting and Disclosure Act of 1959 . For the reasons noted in Alto Plastic Manufacturing Corporation, 136 NLRB 850, 854 ; and Hamilton Brothers Inc., 133 NLRB 868, 872, we agree with the Regional Director that these contentions lack merit. 2 We deny the Petitioner's request for oral argument because, in our opinion , the record and briefs adequately set forth the positions of the parties. 144 NLRB No. 42.