Southland Cork Co.

906 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Employees may communicate directly with the Board's Regional Office, Fourth Floor, The 120 Building, 120 Delaware Avenue, Buffalo, New York, Telephone No. TL 6-1782, if they have any qeustion concerning this notice or compliance with its provisions. Southland Cork Company and Construction & General Laborers' Local Union No. 307, International Hod Carriers, Building & Common Laborers' Union of America , AFL-CIO. Case No. 5-CA-2416. April 17, 1964 DECISION AND ORDER On December 13, 1963, Trial Examiner Louis Libbin issued his De- cision in the above-entitled proceeding, finding that Respondent had engaged in and was engaging in certain unfair labor practices and recommeding that it cease and desist therefrom and take certain af- firmative action , as set forth in the attached Decision. He also found that Respondent had not engaged in certain other unfair labor prac- tices alleged in the complaint and recommended dismissal of these al- legations. Thereafter, the General Counsel, the Charging Party, and the Respondent filed exceptions to the Decision and supporting briefs. 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 Jenkins]. 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 entire record in the case, including the Decision, the exceptions, and briefs, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner with the following additions and modifications. 1. The Trial Examiner found, and we agree, that Respondent vio- lated Section 8 (a) (5) and (1) of the Act by failing to meet and confer with the Union in good faith at reasonable times and intervals during the period from September 1962 to April 1963; by refusing to make, and unduly delaying, any good-faith attempts to furnish the Union pertinent financial information; by insisting on recognizing the Union as the representative only of those unit employees who had been con- tinuously employed by, Respondent a - specified number of calendar days; and by refusing at all times on and after July 19, 1963, to meet and bargain with the Union because of the unresolved unfair labor practice charges in the instant case. 2. Contrary to the Trial Examiner, we find that by touring job ap- plicants through its plant on March 8,1963, Respondent violated Sec- tion 8 (a) (1) of the Act. 146 NLRB No. 119. SOUTHLAND CORK COMPANY 907 On September 7, 1962, following an election, the Board certified the Union as collective-bargaining representative of Respondent's produc- tion and maintenance employees. Thereafter, despite repeated efforts by the Union to arrange for prompt bargaining on terms of a collective- bargaining agreement, only two bargaining meetings were held, one on November 26, 1962, and the other on December 12, 1962, because of dilatory tactics by Respondent. At the second of these meetings, Respondent in substance pleaded financial inability to grant any wage increase, but simultaneously refused the Union permission to examine its books or to furnish a financial statement. After further unsuc- cessful efforts to arrange bargaining meetings, Raymond Murphy, the Union's attorney and negotiator, assembled the employees in the unit, in January 1963, told them that 5 months had already elapsed since the Union's certification with only two negotiating meetings having been held, said that the certification period was slipping away without enough meetings to get results, and asked for authority to call a strike if it became necessary. The employees unanimously voted to grant the strike authority requested. Despite all its efforts, it was not until the first week in March 1963 that the Union was able to arrange a third bargaining meeting; this was set for March 15, 1963. On March 7, 1963, after employees had left work for the day, Re- spondent posted "help wanted" signs on a telephone pole near the plant office, and in laundromats and drugstores in the neighborhood.' In response to these signs a large number of individuals appeared at the plant the next morning seeking employment. Many of them filled out job application forms in the plant in full view of employees at work. After filling out the forms, the applicants were openly escorted through the plant in small numbers by Superintendent Manges and Floorlady Parker who explained the nature of the work they would perform if hired. No applicant was hired on that day. On March 8, one of the employees telephoned Union Business Repre- sentative Radford, told him of the signs, interviewing, and tours, and said that the employees felt "they would be replaced." Radford called Attorney Murphy and relayed this information to him. Either that day or the following morning a Murphy told Radford to call a strike for Monday morning, March 113 Radford then proceeded to have picket signs made and told some of the employees "that Monday morn- 1 There is conflict in the evidence , not resolved by the Trial Examiner , as to whether this method of recruiting employees had been used in the past. 2 Radford's testimony seems to be that the strike instructions came to him on March 8 ; Murphy's testimony is that he gave the strike instruction on March 9 . The Trial Examiner has not resolved the conflict . In any event, the difference in the versions as to the time of Murphy's strike instruction is- not material. ' In section D 1 of his Decision , the Trial Examiner inadvertently refers to the date of the start of the strike as Monday , March 14, the correct date is Monday, March 11. 908 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ing we would put the signs up." According to his uncontradicted testimony, he gave employees the following reasons for the strike action : I told them it had been four and a half months and the company had offered us nothing and refused to meet with us and we felt it was unfair labor practice .... We felt from the signs [help wanted signs posted by the Respondent] that they were trying to replace them. On Monday morning, March 11, Radford appeared at the plant with the signs and told employees : ... the company had been failing to meet in good faith and has only met with us twice. If anybody asked them about the strike to tell him it was an unfair labor practice charge and point to the sign. Not to talk too much about it. The signs prepared by Radford and carried by pickets stated that the Union was "on strike against Southland Cork Co. unfair labor practices." The General Counsel contends that by touring job applicants through the plant on March 8, Respondent threatened employees that they would lose their jobs if they had the temerity to strike, thereby violating Section 8(a) (1) of the Act. The Trial Examiner rejected this contention. We do not agree with him. We accept as correct the Trial Examiner's statement that there was nothing unlawful per se about Respondent's conduct in seeking to protect its plant operations by having a ready supply of help available in the event of a strike. But it seems to us that Respondent far exceeded the reasonable neces- sities of its situation by the manner in which it advertised to existing employees the recruitment of potential employees. There was no need for the ostentatious flaunting of the large number of applicants for jobs by having them fill out job applications in the plant under the eyes of employees and then parading them through the plant in groups under the guidance of high supervisory officials. The work was un- skilled; no experience was necessary to operate the machines in use. Previously, Respondent had received applications for jobs in the office and not in the plant. Although department heads had sometimes shown job applicants through their departments, mass scale touring had never been used before. Under all the circumstances, including particularly the other unfair labor practices found, we believe and find, contrary to the Trial Examiner, that the described hiring proce- dure had an object beyond that of simple job recruitment; that a principal purpose was to intimidate employees, which it did, to create fear in their minds that if they struck they would be immediately and SOiJTHLAND - CORK COMPANY 909, permanently replaced 4 We further find that by such conduct Re- spondent violated Section 8 (a) (1) of the Act.' 3. The Trial Examiner found, and we agree, "that the immediate cause of the strike was Respondent's conduct in posting the `help- wanted' signs and in interviewing and touring applicants through the plant." As we have found that the touring of applicants through the plant was an unfair labor practice, we further find, contrary to the Trial Examiner, that- the strike was an unfair labor practice strike. Moreover, even were we to find that Respondent did not violate Section 8(a) (1) by its recruitment procedure, we would still find that the strike was an unfair labor practice strike. Although find-- ing that Respondent had unlawfully refused to bargain from Sep- tember 1962, the Trial Examiner nevertheless inferred that this unfair labor practice was not a cause of the strike which commenced on March 11, 1963. In making this inference, the Trial Examiner rea- soned that as Attorney Murphy had called the strike, his motivation was the Union's and the employees' motivation. Examining Murphy's, testimony on cross-examination on the first day of the hearing, the Trial Examiner concluded that Murphy's sole reason for calling the strike was his feeling that Respondent intended to discharge union members and hire new applicants at the first opportunity and his desire to act before Respondent built up to a position of strength where it could withstand a strike, and that Murphy's later references to Respondent's unfair labor practices were second thoughts advanced to support the allegations of the complaint 6 In drawing this in- ference, the Trial Examiner, in our opinion, improperly fragmented Murphy's' testimony and failed to give due weight to the testimony of Radford and the conduct of the employees on March 11, the first 4 The fact that Respondent's attorney and its president told Attorney Murphy that none- of the employees would be discharged in order to hire new applicants does not weaken this conclusion. Respondent never told this to employees although aware of employee disquiet; Murphy also said he did not believe Respondent 's witnesses ; and, finally , this testimony does not meet General Counsel's contention that by touring applicants through the plant, Respondent was impliedly threatening employees with loss of jobs if they had the temerity to strike. 5 See Ideal Baking Company of Tennessee, Inc., 143 NLRB 546; Associated Grocers of Port Arthur Inc., 134 NLRB 468, 473-474. Cf. Stork-line Corporation, 135 NLRB 1146, 1149. O In making his inference as to Murphy's motivation in calling the strike , the Trial Examiner was apparently much influenced by the fact that during the week before the strike, Respondent and the Union had agreed to schedule a bargaining meeting for March 15, and that about the same time arrangements were being made for a neutral person to ex- amine Respondent's financial records. The Trial Examiner seems to have inferred that as a result of these two steps, Murphy no longer thought in terms of Respondent 's unfair labor practices . There is no evidence to support the inference which the Trial Examiner draws from these two incidents. There is no evidence that as the result thereof Murphy's suspicions concerning Respondent's conduct , past and future, were allayed If they temporarily were, Respondent's conduct on March 7 and 8 was calculated to fan them into, being again. The Trial Examiner's own findings of unfair labor practices show how well founded any such suspicions would be. '910 DECISIONS OF NATIONAL LABOR RELATIONS BOARD day of the strike. Murphy testified, inter alia, that he told Radford to tell the employees that the strike was over Respondent's dilatory tactics in arranging bargaining meetings and its refusal to furnish financial data. Radford corroborated this account in part, for his uncontradicted testimony is that in turn he told employees in urging them to strike that "it had been four and a half months and the company had offered us nothing and refused to' meet with us and we felt it was an unfair labor practice." The picket signs prepared by Radford after his talk with Murphy and carried by the pickets on the first day of the strike authenticate this testimony for they bore the legend: "On strike against Southland Cork Co. unfair labor practices." Further, the employees were aware that they might have to strike because of Respondent's unfair labor practices, for as early as January 1963, Murphy had told them of Respondent's dilatoriness in arranging bargaining meetings and had requested and received strike authority for that reason. We believe that the evidence in its entirety, including all of Murphy's testimony, supports the inference that Respondent's unfair labor practices were, as contended by the General Counsel, a principal cause of the strike call and the walkout by employees. We so find. In any event, even assuming that Murphy did not have Respondent's unfair labor practices in mind when direct- ing Radford to call a strike, the evidence indicates unmistakably that Radford did tell the employees that the strike was being called because of Respondent's unfair labor, practices in delaying to meet with the Union. This creates a reasonable inference that the unfair labor practices were a motivating factor in the employees' decision to strike. Accordingly, on this additional ground, we find that the strike was an unfair labor practice strike.' As the strike was an unfair labor practice strike, the striking em- ployees were unfair labor practice strikers who, under established law, were entitled to reinstatement to their jobs upon their unconditional offer to return to work, regardless of whether or not they had been replaced .8 Accordingly, as it is undisputed that on May 2, 1963, all the strikers made such unconditional offers, we find that Respondent discriminated against them on that date in violation of Section 8 (a) (3) and (1) of the Act by failing and refusing to reinstate them. THE REMEDY As we have found that Respondent unlawfully refused to reinstate its striking employees upon their unconditional applications, we shall 7 We also think it quite clear on the basis of the Trial Examiner's own findings-for example, his finding that "during the period from September 1962 to April 1963, Respond- ent failed to discharge the obligation imposed upon it by Section 8 (a) (5) of the Act to meet and confer in good faith at reasonable times and intervals "-that the strike was prolonged by Respondent's unfair labor practices. 8 N.L.R.B. v. National Shirt Shops of Florida, Inc., 212 F. 2d 491, 494 (C.A. 5). SOUTHLAND CORK COMPANY 911 order Respondent to make whole all strikers for any loss of earnings they may have suffered by reason of the discrimination against them, by payment to each of a sum of money equal to that which he normally would have earned during the period from his unconditional request for reinstatement to the date when he was reinstated to his former job,9 less net earnings during that period. The amount of backpay and interest due shall be computed according to the Board policy set forth in F. W. Woolworth Company, 90 NLRB 289; and Isis Plumbing & Heating Co., 138 NLRB 716. Payroll and other records in posses- sion of the Respondent are to be made available to the Board, or its agents, to assist in such computation. Having found that Respondent independently violated Section 8 (a) (1) of the Act, we shall order Respondent to cease and desist from such conduct. As we are convinced that Respondent's unlawful con- duct goes to the very heart of the Act, and that'it may be anticipated from such conduct that Respondent may commit other violations of the Act in the future, we shall, unlike the Trial Examiner, issue a broad cease-and-desist order.lo Upon the basis of the foregoing and the entire record in this case, the National Labor Relations Board hereby makes the following: ADDITIONAL CONCLUSIONS OF LAW 11 7. By touring applicants for employment through the plant, Respondent threatened and coerced its employees in violation ,of Section 8 (a) (1) of the Act. 8. By refusing immediate reinstatement to the unfair labor practice strikers, upon their unconditional offer to return to work ,on May 2, 1963, Respondent discriminated in regard to their hire and tenure of employment, thereby discouraging membership in the above-named organization, in violation of Section 8(a) (3) and (1) of the Act. ORDER The Board adopts as its Order the Recommended Order of the Trial Examiner with the modifications and additions as noted below : 1. Substitute for the first paragraph therein the following : Upon the entire record in this case, and pursuant to Section 10(c) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board hereby orders that Respondent, its officers, agents, successors, and assigns, shall : 6 The Trial Examiner noted that Respondent had offered reinstatement to all striker, dur- ing the period from about May 20 to August 8, 1963, which was prior to the date of issu- ance of the Decision herein Accordingly , there is no"necessity for a reinstatement order. io N.L.R B. v. Entwistle Mfg. Co., 120 F. 2d 532, 536 (C.A. 4). u Paragraphs Nos. 7 and 8 are added to Trial Examiner's Conclusions of Law. 744-67065-vol. 146-59 912 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2. Delete paragraph 1(e), change paragraphs 2(b) and .2(c) to 2(d) and 2 (e), respectively, and add the following: 1. (e) Discouraging membership in, or adherence to, Construc- tion & General Laborers' Local Union No. 307, International Hod Carriers, Building & Common Laborers' Union of America, AFL-CIO, or any other labor organization of its employees, by discriminatorily failing or refusing upon their unconditional request to reinstate any of its employees who have engaged in a strike and are lawfully entitled to reinstatement, or by discrimi- nating against its employees in any other manner in regard to hire or tenure of employment or any term or condition of employment. 1.'(f) Touring applicants for employment through the plant in a manner constituting restraint or coercion in violation of Section 8(a) (1) of the Act, or 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 Union, or any other labor or- ganization, 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. 2. (b) Make whole in the manner set forth in the section of this Decision and Order entitled "The Remedy" all employees who were discriminatorily denied reinstatement on May 2, 1963. 2. (c) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records, and reports, and all other records necessary and appropriate to facilitate the checking of the amount of backpay due under the terms of this Decision and Order. 3. Add as the fifth indented, paragraph in the notice, the following : WE WILL NOT discourage membership in or adherence to Con- struction & General Laborers' Local Union No. 307, International Hod Carriers, Building & Common Laborers' Union of America, AFL-CIO, or any other labor organization of our employees, by discriminatorily failing or refusing to reinstate any of our employees or by discriminating in any other manner in regard to hire or tenure of employment or any term or condition of employment. 4. Add as the sixth indented paragraph in the notice the following : WE wiLL make whole all our employees who went on strike on or about March 11, 1963, and who were thereafter discrimi- natorily denied reinstatement. SOUTHLAND CORK COMPANY 913 5. In the paragraph immediately above the unit description in the notice substitute the word "other" for the words "like or related." TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE Upon charges filed on April 8 and June 10, 1963, by Construction & General Laborers' Local Union No. 307, International Hod Carriers, Building & Common Laborers' Union of America, AFL-CIO, herein called the Union, the General Counsel of the National Labor Relations Board, by the Regional Director for the Fifth Region (Baltimore, Maryland), issued his complaint, dated July 8, 1963, against Southland Cork Company, herein called the Respondent. With respect to the unfair labor prac- tices, the complaint, as amended at the hearing, alleges, in substance, that (1) by virtue of a Board election on August 29, 1962, and a Board certification on Septem- ber 7, 1962, the Union is and at all times has been the exclusive bargaining repre- sentative of all of Respondent's employees in a designated appropriate production and maintenance unit; (2) at all times since October 8, 1962, the Respondent has refused to bargain with the Union, upon request, in five specific respects; (3) on and after March 7, 1963, Respondent impliedly threatened employees with discharge because of their membership in and adherence to the Union; (4) a strike of Re- spondent's employees, which commenced on March 11, 1963, was caused and prolonged by Respondent's unfair labor practices; (5) Respondent failed and refused to reinstate the named strikers upon their unconditional request for reinstatement made on May 2, 1963; and (6) by the foregoing conduct Respondent engaged in unfair labor practices 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. In its duly filed answer, Respondent admits the appropriateness of the unit and the Union's exclusive representative status for said unit, as alleged in the complaint, but denies generally all unfair labor practice allegations. Pursuant to due notice, a hearing was held before Trial Examiner Louis Libbin at Norfolk, Virginia, on September 9 to 12, 1963, and at Washington, D.C., on Septem- ber 16, 1963. All parties were represented at the hearing, participated therein, and were afforded full opportunity to be heard, to examine and cross-examine witnesses, to introduce relevant evidence, to argue orally, and to file briefs. Respondent's motion to dismiss all allegations in the complaint, made at the close of the hearing and upon which I reserved ruling, is hereby granted in part and denied in part, in accordance with the findings and conclusions hereinafter made. On October 15, 1963, the General Counsel filed a brief, which I have fully considered. Upon the entire record in the case and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENT Southland Cork Company, a Virginia corporation, operates a plant in Norfolk, Virginia, where it is engaged in the manufacture of cork and rubber products. Dur- ing a representative 12-month period, Respondent sold and shipped products, valued in excess of $50,000, from its Norfolk, Virginia, plant directly to points located out- side the Commonwealth of Virginia; during the same period, Respondent received at its Norfolk, Virginia, plant goods and materials, valued in excess of $50,000, di- rectly from points located outside the Commonwealth of Virginia. Upon the above admitted facts, I find, as Respondent admits in its answer, that Respondent is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. If. THE LABOR ORGANIZATION INVOLVED The complaint alleges, the answer admits, the record shows, and I find, that Con- struction & General Laborers' Local Union No. 307, International Hod Carriers, Building & Common Laborers' Union of America, AFL-CIO, herein called the Union, is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. Introduction; the issues Respondent normally employs about,70 production employees. The Union won a Board election in a production and maintenance unit on August 29, 1962, and on 914 DECISIONS OF NATIONAL LABOR RELATIONS BOARD September 7, 1962, was formally certified by the Board as the exclusive representa- tive of all the employees in said unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employ- ment. Representatives of the Union and of the Respondent met eight times during the period following the Union's certification, and June 13, 1963, the date of the last meeting, without reaching agreement on a contract. On Thursday, March 7, 1963, Respondent posted on its premises signs calling for male and female help. Similar signs were also placed in the neighboring laundromats and drugstores. Male and female applicants appeared the next day and were shown through the plant by management representatives. On Monday, March 11, 1963, employees in the ap- propriate unit went out on strike. Thereafter, the plant continued to operate with strike replacements. By letter dated May 2, 1963, the Union, on behalf of all the striking employees, made an unconditional offer to return to work immediately. Within the next 3 or 4 months, the Respondent gradually reinstated all the strikers who desired to return to work, discharging replacements where necessary to make room for the strikers. The issues litigated in this proceeding are (1) whether the Respondent failed to bargain in good faith in violation of Section 8(a)(5) and (1) of the Act in the specific respects alleged in the complaint, as amended at the hearing; (2) whether Respondent's conduct on March 8, 1963, in connection with the posting of the help-wanted signs and in touring applicants through the plant constituted interference, restraint, and coercion of the employees in the exercise of their Section 7 rights and in violation of Section 8(a)(1) of the Act; (3) whether the strike was caused and prolonged by Respondent's unfair labor practices; and (4) whether Respondent's failure to reinstate all the strikers immediately upon their unconditional application constituted a violation of Section 8(a) (3) of the Act. B. The refusal to bargain The parties are in agreement as to the appropriateness of the unit for which, the complaint alleges, the Union was certified and as to the status of the Union at all times material herein as the exclusive collective-bargaining representative for all the employees in said unit since the Board election and the Union's certification. The complaint, as amended at the hearing, alleges, and the answer denies, that Respond- ent evidenced its bad-faith bargaining with the Union within the meaning of Section 8(a)(5) and (1) of the Act in the following five specific respects: (1) by engaging in dilatory tactics; (2) by refusing to furnish the Union, upon request, data relating to Respondent's claim of financial inability to give a wage increase; (3) by attempting to change the unit into a members-only unit; (4) by refusing to agree to an arbitra- tion clause while insisting on a no-strike clause; (5) by refusing to meet further with the Union until the charges filed in this proceeding have been resolved. I will now treat with these allegations seriatim. 1. Dilatory tactics i The General Counsel contends that Respondent engaged in dilatory tactics in getting negotiations underway and in thereafter arranging for meetings, particularly in the period prior to the strike which commenced on March 11, 1963. All meetings were held in Norfolk, Virginia. The Board election was held on August 29, 1962, and the Union was certified by the Board on September 7, 1962. The first thing the Union did was to write to Respondent, requesting the names of the unit employees, their classifications, and wage rates. This was furnished by Respondent on September 21. By letter dated September 25, addressed to the attention of H. Rives King, Respondent's president, Union Representative Radford stated that he was enclosing a copy of the Union's proposed agreement, consisting of 17 typed pages, and advised that the Union was ready to meet and negotiate "sat any time on a short notice so that we may con- summate an agreement at the earliest possible time." Receipt of this letter and the enclosure was acknowledged by President King by letter dated October 2, in which King requested two additional copies of the Union's proposed agreement for Respondent's board of directors. These additional copies were delivered to Respondent on October 4 and receipt acknowledged by letter from Plant Manager McGraine, dated October 8, 1962. By letter dated October 12, Radford reminded President King that he had not heard from King with respect to the Union's pro- 1 Unless otherwise indicated, the factual findings in this section are based on the credited testimony of witnesses for the General Counsel and correspondence between the parties, which are either admitted or undenied. SOUTHLAND CORK COMPANY 915 posed contract submitted on September 25, and requested the earliest possible date for a meeting "for purposes of collective bargaining ." This letter was acknowl- edged by Plant Manager McGraine by letter, dated October 16, in which McGraine requested a written answer to eight questions relative to the Union's proposals, including the "actual title of your union" and definitions of shop committee, bar- gaining committee, and union shop committee . Answers to all questions were furnished by Union Representative Radford by letter, dated October 18, in which Radford concluded with a plea for an early meeting "as considerable time has already elapsed and the employees are very anxious to get an agreement ." Receipt of this information was acknowledged by President King in his letter, dated Octo- ber 22. King pointed out that several departments were operating at about 60 percent capacity, resulting in numerous layoffs, that the welfare of management and em- ployees were affected with this "serious situation," that he felt that Respondent's "entire efforts should be devoted in attempting to alleviate our present position," and that for that reason Respondent could not agree to meet before Monday, November 26. Union Representative Radford replied by letter, dated October 29, in which he confirmed the contents of a telegram of the same date sent to Presi- dent King. The telegram quoted in the letter stated- In reference to your letter of 22 October 1962, we fail to see how good faith and collective bargaining could impede re-employment of any employees now laid off or to be laid off. The essence of good faith and collective bargaining is promptness in meeting for negotiations. Employees represented by us will not continue to work while our certification is caused to expire by delaying tactics. Respectfully requesting meeting on 5 November 1962; if not convenient, no later than any business day that week. Await reply. President King replied by letter, dated October 31, 1962, in which he expressed surprise at the contents of the Union's telegram, stated that "the next month is crucial in terms of management 's efforts in securing new business which will enable us to continue in operation," and reiterated that November 26 was the first date on which Respondent's representatives could meet with the Union. By reply letter dated November 6, Radford pointed out to King that "there have always been im- portant challenges to meet in every business day," that "if available time would be the guide, there would never be any collective bargaining"; and that in the past it has been assumed that a response of "busy right now" "really meant that we're not going to bargain in good faith." The letter concluded with an expressed inten- tion to make an exception in this instance in the interest of "good will and co- operation" on the Union's part, and further expressed a willingness to wait until November 26, 1962, for the first negotiating meeting. Representatives of Respondent and the Union finally met on November 26, 1962, and rapidly went over the items in the Union's proposed contract, with Respondent's representatives stating Respondent's position on each . Respondent's representatives then stated that they would prepare a counterproposal for discussion at a subsequent meeting. The second meeting was held on December 12, 1962, and lasted about 2 hours. The record does not show how the meeting date was arranged, other than that it was not done by correspondence. At this meeting, Respondent's representa- tive presented a draft of an agreement as a counterproposal , and its contents were discussed. Before adjourning, Raymond Murphy, attorney and negotiator for the Union, asked that a date be set for another meeting. George Gardner, attorney and chief negotiator for Respondent, consulted his appointment book, indicated that he had discussions scheduled with District 50 in the western part of the State, and stated that he could not set a date at that time. The next meeting was not held until April 15, 1963, despite efforts of the Union's representatives to obtain an earlier date. When Union Business Agent Radford telephoned President King in December, King stated that the Christmas and New Year's holidays were approaching and he saw no reason to have a meeting at that time. Radford continued his efforts to get a meeting date and made telephone calls to Respondent several times in January and February. On the occasions when he was able to speak to King, the latter stated that he would have to locate Attorney Gardner. On one occasion in January or February Mrs. Irwin, King's secretary, told Radford that she herself was unable to locate Gardner.2 2 The findings in this paragraph are based on the credited testimony of Radford King denied having received any telephone calls from any union representative during the period from December 12, 1962, to April 15, 1963. He admitted that not all meetings had been arranged by correspondence. I do not credit King's denials. Irwin merely denied receiv- ing any telephone calls from Radford in September and October 1962. 916 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Attorney Murphy made repeated efforts to contact Attorney Gardner to arrange another meeting date. During the week following the December 12 meeting, Murphy made a long-distance call to Roanoke, Virginia, where Gardner maintained an office, but the operator was unable to locate Gardner's number. Murphy then called Radford and was informed of Gardner's out-of-town telephone number as well as of King's position that there was no use in having a meeting before the holidays. In January, Murphy made three or four telephone calls to Gardner's office in Roanoke and on one occasion also to his house in Bluefield, Virginia. Each time, Murphy was advised that Gardner was in some other city. Murphy finally was able to talk to Gardner by telephone on January 21 and 24 but was unable to get a commitment for a meeting date. In early March, a meeting was finally scheduled for March 15. By letter dated March 4, Radford informed King of the place where reservations had been made for the meeting scheduled for March 15. This meeting was canceled by Gardner in a telephone call to Murphy on March 12 and confirmed by letter, in which Gardner referred to an agreement to submit Respondent's financial data to Tarrell and canceled the meeting to "await Mr. Tarrell's report." By letter dated March 18, 1963, Business Manager Radford advised President King that the Union would like to hear from him regarding a further meeting "for the purpose of negotiating a contract," adding that the Union was ready and willing to meet at any time, and pointing out that- Mr. Gardner felt that the meeting on March 15, 1963, would have been of little value, inasmuch as he could see no change in the Company's position. On the other hand, we feel that many changing circumstances might well give the Company, as well as the Union, additional grounds for believing that nego- tiations might be fruitful. King replied by letter dated March 21, agreeing to meet on April 8, 1963, "at a place and time appointed by you" (Radford). By letter dated April 3, Radford advised King of the place where reservations for the meeting had been made, and concluded with the statement that "we have scheduled the meeting time at 1 p.m. on your suggested date, April 8, 1963." The next day, April 4, Radford was informed on the telephone by either King or his secretary of the cancellation of the April 8 meeting date and of a willingness to meet on April 15 or 16, instead. Upon being informed by Radford of the cancellation of the April 8 meeting date, Murphy telephoned Gardner and King and was advised that they had not received enough notice about the time and place of the meeting. Murphy protested strongly, to no avail. By letter dated April 5, Radford informed King that the Union was agreeable to meeting on April 15 and advised of the time and place where reserva- tions for the meeting had been made. On April 8, the Union filed an unfair labor practice charge, the original charge in this proceeding alleging a violation of Section 8(a) (5) of the Act, by the dilatory tactics of Respondent in arranging and canceling meetings for a period of 7 months after its certification. Meetings were thereafter held on April 15, May 1, 2, and 22, and June 6 and 13. An additional meeting scheduled for June 26 was canceled by King, and a further request for a meeting, made by Radford on July 15, was refused by King in a letter, dated July 19, on the ground that "a meeting with you would serve no useful purpose until the charges filed with the National Labor Relations Board have been resolved." Respondent's Contentions and Concluding Findings At the oral argument, Respondent's counsel laid the blame for the failure to meet promptly with the Union after its certification on King's difficulty in obtaining a labor relations attorney in whom he had confidence and on King's business pre- occupation. As for the delay which occurred in arranging a further meeting after December 12, 1962, Gardner placed the blame on the Union, contending that the Company was waiting for the Union to ask Gardner for a meeting and that no such request was made. Gardner's contention that the contrary testimony of the witnesses for the General Counsel should not be credited has already been rejected by my prior findings. King testified that after the election he had to consult with the owners and fellow members of the board of directors, who lived in Miami, Florida. He ad- mitted that within 10 days to 2 weeks after the certification, he was authorized to obtain legal help and to represent Respondent with legal help in any negotiations with the Union. He further testified that thereafter he interviwed several labor relations consultants but was dissatisfied with them until he met with and acquired the services of Gardner in October 1962. He also testified that any additional delay in first meeting with the Union was caused by the necessity for devoting his time, and surveying the field, to determine how to increase business. SOUTHLAND CORK COMPANY 917 Because the Union was the newly certified representative of the employees, and there had been no prior collective-bargaining contract, the parties were of necessity faced with the task of negotiating an initial complete contract with all the details that such an undertaking would entail . Yet, during the-first 7 months after the Union's certification, only two bargaining sessions were held, each consuming a few hours during which little more was accomplished than a statement of each party's position with respect to the items contained in the other party's proposed agreement. How- ever, the above-recited facts clearly establish that Respondent alone was responsible for the delay and that even the meetings which were held during that period were achieved only through the perseverance of the Union 's representatives . King's fail- ure and refusal to agree to the first meeting date no earlier than 2 months after the Union's initial request may not be excused by his preoccupation with important busi- ness matters or to his failure to obtain suitable counsel more expeditiously. Nor may Attorney Gardner's failure to agree to an earlier meeting date after the meeting of December 12, 1962, be excused because of his preoccupation with his extensive law practice . It was incumbent upon Respondent to provide a representative who could conduct negotiations with the degree of diligence expected and required of it by the statute .3 Respondent's delaying tactics in connection with the scheduling of meetings during the first 7 months after the Union 's certification evidence a pur- pose to frustrate the collective-bargaining process and to avoid reaching an agreement. This is particularly apparent from the circumstances surrounding Respondent 's cancel- lation of the March 15 and April 8 meetings , as previously set forth. What has been said by the Board in two recent cases, applies with equal force to the facts in this case . Thus in Exchange Parts Company, 139 NLRB 710, the Board stated at 713-714: The Board has on a number of occasions emphasized that the duty to make expeditious and prompt arrangements to meet and confer is a positive legal duty which is an essential part of the obligation to bargain . There can be no doubt but that agreement is stifled at its source if opportunity is not accorded for discussion or is so delayed as to invite or prolong unrest or suspicion . There- fore, the exercise of a reasonable degree of diligence and promptitude in ar- ranging meetings for the purpose of eliminating obstacles to agreement is an obligation placed upon each party. The manner of the performance of this obligation by the negotiator is relevant in determining whether there has been a good-faith discharge of this positive legal duty imposed by statute . If a given negotiator becomes indisposed or is otherwise unable to discharge this respon- sibility because of other commitments , it is the duty of the party involved to designate a negotiator who can fully discharge this obligation . Passively wait- ing for the other party to make all requests for bargaining meetings , protracted delays in arranging for the meetings requested by the other party, and failure to advise as promised when another meeting could be arranged , are variations of negative conduct which has been held by the Board and courts to impede the bargaining process and otherwise frustrate negotiations so as to evidence a lack of regard for this aspect of the bargaining obligation. As indicated above, the record here reveals ample evidence of negative be- havior on the part of Respondents ' negotiator with respect to making arrange- ments for bargaining sessions . We cannot view this passive and uncooperative approach as indicating the exertion of every reasonable effort to meet and confer which was Respondents' legal duty. Indeed, in the circumstances , the conduct here involved not only displayed a singular disreeard for this positive legal duty but also inhibited the actual progress of negotiations by stifling the very op- portunity for discussion. Such a course of obstructionist behavior reflects a cast of mind lacking in good faith. And in Insulating Fabricators, Inc., Southern Division , supra, the Board quoted what it had stated in "M" System , Inc., Mobile Home Division , et al., 129 NLRB 527, 549 , as follows: The record here quite clearly supports a finding that the Respondent , in arrang- ing meetings with the Union failed to display the degree of diligence that proper performance of its bargaining obligations required . This is so whether or not the delays were inspired by a deliberate scheme to engage in dilatory tactics. One may sympathize with the problems of the Respondent's negotiator in fitting the negotiating meetings into the schedule of his busy law practice For of other business requirements], but this provides the Respondent with no legal excuse fur the consequent inordinately long delays tending to impair employee statutory 3 Insulating Fabricators, Inc, Southern Division, 144 NLRB 1325 918 DECISIONS OF NATIONAL LABOR RELATIONS BOARD rights. Labor relations are urgent matters too. If ... other activities made it impossible for ... [Respondent's negotiators] to devote adequate time to reasonably prompt and continuous negotiations, it was the Respondent's obliga- tion to furnish a representative who could. The duty to bargain in good faith includes the duty to be available for negotiations at reasonable times as the statute requires. That duty is not discharged by turning over the conduct of negotiations to one whose other activities make him not so available. I find that during the period from September 1962 to April 15, 1963, Respondent failed to discharge the obligation imposed upon it by Section 8(a)(5) of the Act to meet and confer in good faith at reasonable times and intervals. 2. Refusal to furnish financial information 4 At the first negotiating meeting held on November 26, 1962, where the Union's proposed contract was discussed, Attorney Gardner made it clear at the outset and during the course of the meeting that Respondent could not agree to any wage increase or to any items which would cost money, that Respondent was not making any money, and that Respondent could not grant any monetary benefits. Respondent's repre- sentatives refused to discuss the Union's proposals on wages, payments for holiday and overtime, vacations, and welfare payments because these were economic or money items. Gardner offered to prove that Respondent was in no position to agree to anything that would cost more money. Meyers, the Union's consulting conciliator and chief negotiator at this meeting, replied that the Union would have to arrange for an auditor or someone to go over Respondent's books. At the second meeting held on December 12, 1962, Attorney Murphy was the chief spokesman and negotiator for the Union. At this meeting the Respondent's counterproposed draft of agreement was discussed. On the issue of wages, Murphy stated that the Union had in mind a 27-cent across-the-board increase. At that point, Attorney Gardner, Respondent's chief spokesman and negotiator, called Murphy into a private room where he told Murphy that the Company had no money but would be willing to come to a "sweetheart agreement" on its own terms, and that if the Union were unwilling to agree to that they might as well strike. Murphy returned to the conference room where he conveyed this information to the other union representatives, who thereupon rejected Gardner's offer. In the ensuing discussions, Gardner indicated that Respondent was not a wealthy Company and did not have the money. Murphy explained that the Union was not trying to break up the Company, and pointed out that if Respondent was acting in good faith in claiming that it was financially unable to give a wage increase, it should permit the Union or someone else to examine the Company's books so that the Union would be in a position to consider dropping its wage demands either entirely or in part. Gardner refused to permit an examination of Respondent's books or to furnish any financial statement, asserting that Respondent was involved in a prod gram in which it was seeking capital investment.5 When Attorney Murphy finally spoke to Attorney Gardner by telephone on January 21 and 24, 1963, in his unsuccessful efforts to arrange another meeting date, as previously found, Murphy also asked Gardner for permission to have some- one look at Respondent's financial statement but received a "flat refusal" on the ground that Respondent was seeking investment capital at that time. On January 28, 1963, the Union filed with the Board's Regional Office an unfair labor practice charge, alleging that Respondent bargained in bad faith in violation of Section 8(a)(5) and (1) of the Act by its refusal to furnish financial data in support of its plea that it was financially unable to grant a wage increase. In an effort to settle this charge, the Regional Director, with the agreement of Respond- ent and the Union, arranged to have a neutral person, Elmer Tarrall, who was assistant superintendent of schools for Virginia Beach, Virginia, examine Respond- ent's books and financial statements and to report his findings to the Union. About March 1, the Regional Director telephoned Tarrall who thereupon agreed to act in this capacity. As a result of this arrangement, the Union, on March 18, filed Unless otherwise indicated, the factual findings in this section are based on credited testimony and exhibits which are either admitted or undenied G The findings in the two preceding paragraphs are based on the credited testimony of Union Representatives Radford, Meyers, and Murphy. I do not credit the contrary testi- mony of Respondent's Representatives King and McGraine that they and Gardner specifi- cally stated they were not pleading poverty in refusing to agree to a wage increase or to any other money item but merely indicated it was not justified or that it was not a sound business practice to grant a wage increase at that time. SOUTHLAND CORK COMPANY 919 a request for leave to withdraw its charge, and the request was granted by the Regional Director on April 1. Thereafter, Respondent's representatives always took the position that the Respondent was not pleading poverty but claimed that it would be an unsound or unwise business practice or economically unfeasible to agree to a wage increase or to any money items. Pursuant to an appointment with President King, Tarrall visited the plant in April, where he was, cordially received by King, to whom he spoke for over an hour, and was then given complete freedom to examine the Company's books with the assistance of an accountant from a reputable firm from Norfolk, Virginia. Tarrall examined an audited statement which had been certified by a certified public accountant and had served as the basis for an informational tax return to the Federal Government. The books showed a small profit of $1,000 or less for the preceding year. The accountant advised Tarrall that this report was not up to date and that a new statement would be available which would show a more favor- able profit. When Tarrall stated that he would wait and then return to see the additional data, the accountant expressed his willingness to see and talk to Tarrall at any time. On May 19, 1963, Tarrall sent identical letters to the Union and to the Re- spondent, advising that he was unable to arrive at a decision concerning their problem at that time and suggesting either a meeting between the parties or further study of Respondent's books with an up-to-date report of its financial status. At the last negotiating meeting held on June 13, Union Representative Meyers took issue with Gardner's statement that he had never pleaded inability to pay, and countered that Gardner did take that position at the first meeting of November 26, 1962, the only other meeting attended by Meyers. However, before the meeting ended, President King stated that he was willing to have a certified public accountant make an examination of Respondent's books and make his findings available to the Union.6 On June 20, Tarrall sent identical letters to the Union and to Respondent, remind- ing them of his prior suggestions and advising that he would contact all parties concerned by telephone to pursue further the issues involved. On July 25, Tarrall telephoned Business Manager Radford to inform him that he was going to contact King. Tarrall then telephoned King and asked if he could see and talk to him about the union matter which they had previously discussed. Tarrall intended to ask for permission to talk to the accountant again and to look at whatever addi- tional information was then available. However, the conversation ended when King replied that "the Labor Board had slapped an unfair labor practice charge against his company and he was not going to negotiate any more." Respondent's Contentions and Concluding Findings It is now well settled that where an employer claims financial inability to pay a requested wage increase, he fails to satisfy the statutory obligation to bargain in good faith when, upon request, he refuses or fails to make a good-faith attempt to furnish substantiating financial information? Respondent does not take issue with this legal principle but merely contends that the facts do not bring this case within the Truitt doctrine. Counsel for Respondent makes no claims which are at variance with my prior factual findings that at the meeting of December 12, 1962, and in telephone conversations on January 21 and 24, 1963, the Union requested and was denied permission to have Respondent's financial books examined. His position throughout and at the oral argument has been that Respondent never pleaded poverty, that it had the money to pay the requested wage increase but that it would be economically unsound to do so at that time, and that it nevertheless did later permit an impartial party to examine its books and also later offered to make its books available to any certified public accountant. However, as I have previously found, it was not until after the Union had filed the January unfair labor practice charges that Respondent's representatives began to state that they were not pleading poverty; prior to that time, they stated that Respond- ent was not making any profits and did not have the money to meet the requested demands. That this was in fact Respondent's position is borne out by the testimony of King. King testified that during the negotiations he took the position that wage increases must be related to increased productivity, that by productivity he means e This finding is based on the credited and uncontradicted testimony of President King. Meyers merely testified that he did not "recall" this statement. 4 N.L.R B. v. Truitt Mfg. Co., 351 U.S. 149, 152-154; George Mick, d/b/a Yakima Frozen Foods, 130 NLRB 1269, 1273. 920 DECISIONS OF NATIONAL LABOR RELATIONS BOARD profits, that he could not justify wage increases without profits to pay the increases, that it would not be sound business judgment to agree to higher wages and other money items because the Company was not- making enough profit to warrant it, and that whatever profits a company makes in a given year are not always available in liquid cash. King's testimony must also be considered in the light of the credited and undisputed testimony of employees Seagle, Seymour, and Wynn that in a talk to the employees just prior to the election in August 1962, King stated that Respondent could not afford to give raises, that the Company had bills which were overdue and had not yet been paid, and that he would not be able to sign anything that would cost the Company money because they just did not have it. It thus becomes crystal clear, I find, that Respondent was pleading a financial inability to pay the requested wage increase or any other money item. It does not follow that a claim of "inability to pay" arises only when those specific words are used or when the granting of the demands would force Respond- ent into bankruptcy or receivership. It is clear that Respondent's position was that it was not making sufficient profits and did not have sufficient liquid cash to warrant granting wage increases or agreeing to other money items. Upon consideration of all the foregoing and the entire record as a whole, I interpret and find Respondent's position to constitute a plea of "inability to pay" wage increases and other economic benefits within the meaning of the Truitt case, supra .8 When the Respondent agreed to have Tarrall examine its books as an impartial person, then permitted him to do so with the assistance of an accountant, and at the meeting of June 13 extended this offer to include any certified public accountant, I find that during that period Respondent satisfied the requirement that it in good faith attempt to substantiate its claim .9 However, Respondent's outright refusals, as previously found, on December 12, 1962, and on January 21 and 24, 1963, to make such attempts and its undue delay in this respect until about March 1 when the Regional Director obtained agreement to have Tarrall examine the books in an effort to settle the unfair labor practice charge filed on this issue, constitute, I find, further evidence of a lack of good-faith bargaining in violation of Section 8(a)(5) of the Act.io 3. Attempts to change the unit The first proposed draft of a contract which was submitted by the Union and which was discussed at the first meeting of November 26, 1962, contained a recognition clause requiring Respondent to "recognize the Union as the sole representative for the purpose of bargaining on all matters relating to wages, hours of work, and any terms and conditions of employment in the plant for all hourly employees," with the usual exceptions (General Counsel's Exhibit No. 3). Union Business Manager Radford testified that Respondent's Attorney Gardner took the position at that meet- ing that Respondent would recognize the Union for its members only. Union Repre- sentative Meyers testified that Gardner wanted the Union to delete the phrase "and any terms and conditions of employment." Meyers further testified that Gardner stated orally that the Union was to represent only union members. President King and Plant Manager McGraine denied that any representative of Respondent ever proposed a limitation on the Union's recognition to members only. The Respondent's first counterproposed draft contract was presented and dis- cussed at the second meeting held on December 12, 1962 (General Counsel's Ex- hibit No. 4). Despite the above-stated testimony of Radford and Meyers, the 8 See, e g, Peerless Distributing Company, 144 NLRB 1510 (where the Board held that by pleading that a grant of economic benefits "would have the effect of reducing its com- petitiveness, it follows that the Respondent was asserting its financial inability to grant economic benefits") ; Tennessee Chair Company, Inc, 126 NLRB 1357, 1358 (where the Board held that "we interpret the Respondent's position that it had not made any profits in 1958 to justify any wage increase as constituting a plea of 'inability to pay' a wage increase within the meaning of N L.R B. v. Truitt") ; Tennessee Coal cf Iron Division, United States Steel Corporation, 122 NLRB 1519, footnote 2 (where the Board made the same holding with respect to Respondent's position in "asserting its inability to meet the Union's economic demands from the operations of its zinc mine") ; and B. L Montague Company, 116 NLRB 554 (where the Board made the same holding based on a variety of reasons advanced by Respondent for refusing to grant a wage increase, one of which was that Respondent already paid wages equal to or higher than its competitors and therefoie it would be difficult for Respondent to obtain profitable orders). BGeorge Mick, d/b/a Yakima Frozen Foods, supra. 10 See, e g., insulating Fabricators, Inc, Southern Division, 144 NLRB 1325. SOUTHLAND CORK COMPANY 921 recognition clause in this draft did not limit recognition to members only." It pro- vided that the "Company recognizes the Union as the sole bargaining agency as certified September 7, 1962, by the National Labor Relations Board for all perma- nent" employees with the usual exceptions. "Permanent" employees are defined in the next paragraph to mean "all employees who have been continuously employed by the Company for a period of 180 calendar days." All other employees "shall be considered probationary employees." Union Attorney Murphy, the only witness for the General Counsel with respect to this meeting, testified that he did not recall anything specific said about the recognition clause at this meeting. However, Plant Manager McGraine admitted that Respondent's intention by this clause was to eliminate probationary employees from any representation by the Union during the period that the employee occupied that status. At the next meeting held on April 15, 1963, the Union presented another proposed draft of contract (General Counsel's Exhibit No. 8), which contained a recognition clause similar to the one in its original draft. This draft was discussed along with the draft submitted by Respondent at the December meeting. Murphy credibly testi- fied, without contradictions, that at this meeting Respondent's representatives "m- dicated 180 days as the time during which an employee had to work in order to acquire permanency of employment," that King stated "that the insurance carrier would not allow them to term an employee permanent before the expiration of 180 days," and that he asked King "to go back to the insurance carrier and see if they would reduce this period of time." Murphy explained that since Respondent was basing its recogni- tion on "permanent" hourly employment, he wanted "to get all the people in the ap- propriate unit under that permanency" and that he did not care how Respondent termed it "so long as we had all our people that [were] certified in the election within the area of representation." At the next meeting held on May 1, the parties discussed addtional draft pro- posals submitted by the Union (General Counsel's Exhibit No. 9). This was the first draft submitted by either party which contained a members-only recognition clause. Murphy admitted that this clause was dictated by him to his secretary and that the draft was prepared in his office. He testified, however, that this did not constitute a union proposal but was merely a resume of things discussed at pre- vious meetings, that the recognition clause in this draft was a proposal which had previously been made by Gardner, that Gardner was still insisting that the Union could not represent employees who were not members, and that Murphy's position was that the certificate spelled out whom they were representing and that it was not a matter for argument. Respondent's reprsentatives denied that they insisted on a members-only recognition clause. The recognition clause was not mentioned at the May 2 meeting, which Gardner did not attend. Prior to the next meeting, the Union submitted further written proposals to Respondent on May 15 (General Counsel's Exhibit No. 11). Murphy testified that these consisted of items on which agreement had been reached and on which there was still disagreement. These proposals again contained a members- only recognition clause and were discussed at the May 22 meeting. Also discussed were Respondent's further written proposals presented at this meeting (General Counsel's Exhibit No. 12). King testified that the members-only recognition clause contained in these proposals was copied from the members only recognition clause appearing for the first time in the Union's written submissions at the May 1 meet- ing, with agreed-upon deletions and additions (General Counsel's Exhibit No. 9). He denied that any member of Respondent's negotiating team ever took the positions that Respondent would recognize the Union for its members only At the meeting held on June 6, the parties again took up the Respondent's contract proposals which contained the members-only recognition clause (General Counsel's Exhibit No. 7). Irwin, King's secretary, testified that she copied this clause verbatim from the written proposals previously submitted by the Union on May 15 (General Counsel's Exhibit No. 11) and discussed at the May 22 meeting. Murphy rejected this proposed recognition clause because the Union was entitled by law to be recognized for the unit for which it was certified. In all proposals submitted by Respondent, the recognition clause continued to be limited to what was defined therein as "permanent employees." Contentions and Concluding Findings The unit for which the Union was certified on September 6, 1962, covered "all production and maintenance employees employed by Respondent at its Norfolk, it Nor did the unfair labor practice charge filed on January 28, 1963, contain any allega- tions that Respondent was limiting the Union's recognition to members only. 922 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Virginia, plant, excluding all office clerical employees, guards, professional em- ployees and supervisors as defined in the Act." 12 In accordance with long and well established principles, the Act required Respondent to recognize the Union "as the sole and exclusive bargaining agent , not only for the members of the Union, but for all employees" in the unit, whether they be designated as permanent or probationary, and that "the recognition required by [Section] 9(a) is not a bargain- ing matter." McQuay-Norris Manufacturing Company v. N.L.R.B., 116 F. 2d 748, 751 (C.A. 7), cert. denied 313 U.S. 565. The General Counsel contends that Respondent violated its obligations in this respect by attempting to change the unit into a members-only unit. The Respond- ent denies that it made any such attempt and concedes that it would be violative of its statutory obligation to limit the Union's recognition to is members. The General Counsel's statement in his brief that Respondent first introduced the concept of members-only recognition in its first contract proposal of December 12, 1962 (General Counsel's Exhibit No. 4), is not borne out by an examination of that document. A recital of the events, as previously set forth, discloses considerable confusion as to which party first made a written proposal containing such a limited recognition and as to the circumstances under which a members -only recognition clause began to appear in Respondent's draft proposals. On this state of the record, I am not persuaded that the General Counsel has sustained his burden of proving by a preponderance of the record evidence that Respondent took the position that it would recognize the Union as the representative of its members only. The General Counsel's further contention that Respondent attempted to change the unit by limiting its recognition of the Union as the bargaining representative only of those employees designated in the contract as "permanent," does have merit. As previously found, Plant Manager McGraine admitted that the recognition clause was drafted in this manner in Respondent's first proposed contract submitted on December 12, 1962, for the express purpose of excluding from union representa- tion all unit employees who were designated as "probationary" because they had not yet been continuously employed by Respondent for a "period of 180 calendar days." Respondent never varied from its limited recognition in this respect in all subsequent proposals. When Union Attorney Murphy sought to have the term "permanent employees" in Respondent's recognition clause broadened so as to enable the Union to represent all the employees in the unit for which it was certified, Respondent, in its later proposals, reduced the exclusionary period to 120 calendar days. As the Union had been certified as the exclusive representative of all pro- duction and maintenance employees, without any exclusions based on the number of continuous calendar days employed, Respondent's insistence on recognizing the Union as the representative only of those unit employees who had been continu- ously employed by Respondent for a specified period of calendar days, whether it be 180 or 120 or less, violated Section 8(a) (5) of the Act.13 4. Insisting on a no-strike clause while refusing to agree on an arbitration clause The Union's written proposals contained a grievance procedure which culminated in arbitration as the final step. Respondent's written proposals had no provisions for arbitration but contained a no-strike clause. Respondent was opposed to arbitration, and the Union was opposed to a no-strike clause unless the agreement was also to contain a provision for arbitration of grievances. However, Union Representative Meyers admitted that at the June 13 meeting both Attorney Gardner and President King finally agreed to an arbitration clause. Since Respondent did not insist to an impasse on its request for a no-strike clause while refusing to agree to an arbitration clause, but finally yielded on this point, I find that Respondent's conduct with respect to this issue did not constitute evidence of bad-faith bargaining within the meaning of Section 8(a)(5) of the Act.14 5. Refusal to meet further until the instant charges have been resolved As previously found, on June 20, 1963, President King refused to have any further discussions with Tarrall because "the Labor Board had slapped an unfair labor practice charge against his Company and he was not going to negotiate any more." 12 This is the unit alleged in the complaint and admitted in Respondent's answer 1 McQuaij-Norris Manufacturing Company, supra. 14 Accordingly, it is unnecessary to, and I do not, determine what the result would be had Respondent remained adamant. SOUTHLAND CORK COMPANY 923 About the same time, he also canceled a negotiating meeting previously scheduled for June 26. By letter dated July 15, Union Business Manager Radford expressed disappointment at King's cancellation of the last meeting date and expressed the Union's desire for a further meeting "with your company for the purpose of col- lective bargaining." King replied by letter, dated July 19, in which he stated that "a meeting with you would serve no useful purpose until the charges filed with the NLRB have been resolved." At the hearing in the instant proceeding, King reiterated his position in this respect. It is too well settled for extensive citation of authorities that "the filing of unfair labor charges by a union does not relieve an employer of its obligation to bargain in good faith under Section 8(a) (5)." 15 Accordingly, I find that by refusing to meet with the Union on and after July 19, 1963, Respondent violated Section 8(a)(5) of the Act. C. Alleged interference, restraint, and coercion In the latter part of January 1963, Attorney Murphy addressed separate meetings of Respondent's male and female employees. Murphy explained that 5 months had already elapsed since the Union's certification and that they had only been able to have two negotiating meetings; pointed out that their certification period was slipping away from them without having had enough meetings to get any results; and sug- gested that he be given the authority to call a strike if it becomes necessary. At both meetings, the employees unanimously voted to grant Murphy the authorization to call a strike. At the end of the workday on Thursday, March 7, Respondent posted a large "help wanted" sign on the telephone pole on its property, calling for male and female help to "inquire within." Similar signs were placed in the neighboring laundromats and drugstores. On Friday, March 8, a large number of applicants appeared at the plant throughout the day, in response to these signs. After filling out applications, the male applicants were openly escorted through the plant in small numbers by Produc- tion Superintendent Manges who showed them the various operations; female ap- plicants were escorted through the plant by Floorlady Parker in a similar manner. Applicants were questioned as to the type of work they were interested in or pre- ferred and whether they would be willing to work on a night shift if one were to be set up, and were told that they would be contacted at a later date. Attorney Murphy conceded that no applicants were, in fact, hired on March 8. Employees went on strike on the next workday, Monday, March 11. 1. Contentions of the parties President King testified that there had been an indication of an upsurge in sales for the second quarter of the year, which historically is a busier period; that Respond- ent's file had been depleted of satisfactory applicants and they wanted to build up a backlog of prospective employees who could be hired when business picked up; that there had been some tenseness in the plant which created a feeling that a strike might occur; and that, with business getting ready to increase, he did not want to be left without anyone to produce; and that it was for those reasons that they put up the "help wanted" notices. Floorlady Parker also testified that on March 8 she had heard rumors that there was going to be a strike. Respondent's witnesses also testified that on prior occasions "help wanted" signs had been posted on the premises and once before in supermarkets and laundromats; that it is Respondent's practice to hire employees from the adjacent neighborhood which was within walking distance; and that Respondent never used newspaper advertising except for a specialized type of work. On the other hand, employee witnesses for the General Counsel testified that they had never before seen "help wanted" notices posted on the premises. With respect to touring the applicants through the plant, Production Superintendent Manges testified that he had been put in charge of hiring after Plant Manager McGraine had left Respondent's employ early in the year and that he believed it to be a better practice to show applicants through the plant so that they would get a general idea of the kind of work that was done. The complaint alleges that Respondent's above-described conduct constituted an implied threat of discharge of employees because of their union membership and adherence. At the oral argument, the General Counsel contended that Respondent's conduct in touring applicants through the plant constituted, under the circumstances, a threat to the employees that they would lose their jobs if they had the temerity to 25 Skyline Homes, Inc. v. N.L.R.B , 323 F. 2d 642 (C.A 5). 924 DECISIONS OF NATIONAL LABOR RELATIONS BOARD go out on strike. In his brief, the General Counsel concedes that an employer has the right permanently to replace economic strikers and temporarily to replace unfair labor practice strikers. He asserts, however, that in this case Respondent was do- ing more than merely preparing to avail itself of such rights in the event the Union called a strike; he contends that "Respondent's activities on March 7 and 8, 1963, were intended to and did threaten employees with loss of their jobs if they persisted in attempting to secure a favorable contract through the efforts of their duly selected bargaining agent." 2. Concluding findings I am convinced and find that the primary motivating factor for Respondent's con- duct in posting the "help wanted" notices was an apprehension, created by the tense bargaining situation, of a work stoppage or strike sponsored by the Union and a desire to build up a reserve of potentially satisfactory employees whom it would immediately hire as strike replacements without loss of time or disruption to plant operations. I am not persuaded, however, that the record warrants the inferences which the General Counsel would have me draw from Respondent's conduct on March 7 and 8. There was nothing unlawful per se about Respondent's conduct in seeking to protect its plant operations by having a ready supply of help available in the event of a strike. The employees had in fact voted a strike authorization in the latter part of January. The admittedly tense bargaining situation was giving rise to rumors in the plant of a possible strike. Strongly militating against the General Counsel's position is the testimony of Union Attorney Murphy. He testified that on the morning of March 8 he was informed by Radford of the posting of the "help wanted" notices and the touring of the applicants through the plant, and that he then telephoned to Attorney Gardner and to King and questioned them about the matter. Murphy testified that he was told that Respondent was merely attempting to build up a backlog of satisfactory applicants and admitted that both Gardner and King assured him that none of the employees in the plant would be discharged in order to hire a new applicant. Also relevant in appraising Respondent's conduct is the fact that at the time when the notices were posted Respondent and the Union had already scheduled a negotiating meeting for March 15 16 and the further fact that it was about March 1 that Tarrall agreed to act as the neutral person who was to examine Respondent's books and financial statements. Upon consideration of all the foregoing, I am not persuaded that the preponderance of the record evidence supports the General Counsel's position or the allegation that Respondent's conduct on March 7 and 8, 1963, was violative of Section 8 (a) (1) of the Act. Accordingly, I will recommend dismissal of this allegation of the complaint. D. Alleged discrimination with respect to strikers Employees in the unit went out on strike on March 11, 1963, and commenced picketing Respondent's premises. Within the next few days, Respondent hired strike replacements and the plant continued to operate throughout the strike. By letter, ad- dressed to President King and dated May 2, Union Business Manager Radford advised that the Union "on behalf of all of your employees who have been on strike since March 11, 1963, hereby makes an unconditional offer to return to work im- mediately." In a reply letter, dated May 8, Respondent requested the Union to furnish the names of "those who wish to return to work." The Union submitted a list of names, enclosed in a letter to King, dated May 14. Union Attorney Murphy testified that the strike lasted "up until May 22." During the period from about May 20 to August 8, 1963, Respondent gradually offered reinstatement to all the strikers. During that period strikers who were willing to return to work were gradually reinstated, even if it became necessary to discharge replacements to make room for them. The General Counsel contends, as the complaint alleges, that Respondent's failure to reinstate the strikers immediately upon their unconditional application of May 2 constituted a violation of Section 8 (a) (3) and (1) of the Act. All parties conceded that the'validity of such a finding depends on whether the strike is found to be an unfair labor practice strike. The complaint alleges, and the answer denies, that the strike was caused and prolonged by Respondent's unfair labor practices. As all strikers who wished to return to work were in fact reinstated, the only affirmative remedy which would flow from a finding of a violation on the reinstatement issue would be an award of backpay, ranging up to a few months, to some strikers 16 This meeting was not canceled until March 12. SOUTHLAND CORK COMPANY 925 1. The nature of the strike As previously noted , at separate meetings of the male and female employees held in the latter part of January, the employees voted unanimously to grant to Union At- torney Murphy the authorization to call a strike if it should become necessary. On Friday, March 8, Union Business Manager Radford was informed by one of the employees about the posting of the "help wanted" signs on Respondent's premises and in other public places; that applicants were being interviewed and shown through the plant; and that the employees were afraid that they would be replaced. Radford thereupon telephoned to Murphy and relayed this information to him. Murphy testified that after giving the matter some thought, he telephoned to Radford the following morning and "advised him to call a strike for Monday morning and try to shut the plant down on Monday morning." Radford testified that "at the advice of Murphy, I called the strike." Picket signs were made and the employees began picketing on Monday morning, March 14, with signs which stated that the Union was "on strike against Southland Cork Co. unfair labor practices." As Murphy admittedly was the one who decided to, and did, call the strike, pursuant to prior employee authorization to do so when he deemed it necessary but with no further consultation with or authorization by the employees, Murphy's motivation for calling the strike becomes the Union's and the employees' motivation. Murphy testified as a witness for the General Counsel on the first day of the hearing in the instant case . On cross-examination that day, Murphy gave the following explanation for his decision to call the strike : In substance, Murphy felt that the Respondent's conduct in posting the "help wanted" notices and touring applicants through the plant was for the'purpose of creating employee fear of loss of their jobs; of replacing union members at an opportune time; and of thereby weakening the Union and strengthening Respondent's hand. He admitted that he had been told by Respondent's President King and Attorney Gardner on March 8, that none of the employees in the plant would be discharged in order to hire the new applicants, but he testified that he did not believe them and that- A. I thought you were going to have these employees ready to hire and have them on your list of people available for hiring immediately so that if at any time you felt in a secure enough position to do so, you would let people who were members of the Union go and hire other people. This was the feeling 1 had and this was the reason I called the strike. [Emphasis supplied.] Q. So, based on your impressions , something you were mind reading in regard to the Company, you called the strike? A. Yes, sir, based on those impressions. Q. Didn't you say at a later date in negotiations when we were talking about getting the people back to work , you weren't going to let us build up and get into a position of strength so that we could take a strike? A. I don't recall using those words . This was the feeling I had. Q. Wasn't this the feeling or wasn't this the intent, you called the strike before we could build up? A. In substance that it what it was. At another point, in response to Gardner's question as to whether he had not mis- calculated "based on mis-information and prejudice against the Company" which led him to "an ill-fated and abortive strike," Murphy testified that- A. It's entirely possible I made a miscalculation and received lots of mis- information. . . . At the time they had refused to bargain at all and that is the reason we called the strike ... . Murphy's cross-examination continued on the second day of the hearing. In response to Gardner's question as to what Murphy told Radford to indicate that the strike was over Respondent's unfair labor practices, Murphy testified- A. The long drawn out period in which no meetings were held, inability to get together on meetings, the refusal of the Company to give us financial data, you people were still pleading poverty. The whole pattern of conduct that you had gotten into with us by which the only thing we were getting was stalling tactics and certainly no evidence did we have of good faith , coupled with the information I had of some layoffs of union members. It is obvious from the foregoing, I find, that the immediate cause of the strike was Respondent's conduct in posting the "help wanted" signs and in interviewing and touring applicants through the plant. As I have previously found that on this record such conduct does not constitute an unfair labor practice , it follows, as 926 DECISIONS OF NATIONAL LABOR RELATIONS BOARD I further find, that the strike was not triggered by any unfair labor practice. There remains for consideration whether Respondent's prior unfair labor practice conduct in failing to meet with the Union promptly and with sufficient frequency and in refusing to make any good-faith attempt to furnish pertinent financial information, contributed to Murphy's decision to call the strike. An examination of Murphy's testimony does not convince me that it did. I am convinced and find that Murphy's testimony on cross-examination reveals (1) that his sole reason for calling the strike was his feeling that Respondent intended to discharge union members and hire the new applicants at the first opportune moment and his desire to act before Respondent built up to a position of strength where it could withstand a strike, and (2) that Murphy's later references to Respondent's prior conduct in failing to meet with the Union and in refusing to furnish financial data were second thoughts advanced to support the allegation in the complaint. In arriving at these conclu- sions, I have attached considerable significance to the facts (1) that during the week before the strike Respondent and the Union had already agreed to schedule a negotiating meeting for March 15, and (2) that about the same time arrange- ments were being made for Tarrall to examine Respondent's financial books as a neutral person. It would therefore appear that on March 8 these two facets of Respondent's prior conduct were no longer in the picture, or at least were not of such significance as to contribute to the decision to call the strike. Nor am I per- suaded that the strike was prolonged by any unfair labor practices herein found. By May 2, when the Union made an unconditional request for reinstatement on behalf of the strikers, the Respondent had been meeting with the Union with reason- able frequency and continued to do so. And it was not until May 19 that Tarrall made his first preliminary report to the parties, in which he indicated that he would take further action. I find that the preponderance of the credible record evidence does not sustain the allegation that the strike was either caused or prolonged by Respondent's unfair labor practices. 2. Concluding findings As I have found that the strike which commenced on March 11, 1963, was not an unfair labor practice strike, Respondent was not legally obligated to reinstate the strikers if no positions were available for them. All strikers had been replaced by newly hired employees within a few days after the commencement of the strike. Accordingly, I find that Respondent's failure to reinstate the strikers immediately following their unconditional request of May 2, is not violative of the Act. I will therefore recommend the dismissal of this allegation of the complaint. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent, set forth in section III, above , occurring in connection with the operations of the Respondent described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstruct- ing commerce and the free flow thereof. V. THE REMEDY Having found that the Respondent has engaged in unfair labor practices by refus- ing, in certain specific respects, to bargain collectively in good faith with the Union as the exclusive representative of all its employees in the appropriate unit, I will recommend that Respondent cease and desist from engaging in such unfair labor practices and that it take certain affirmative action designed to effectuate the policies of the Act, including a requirement that, upon request, it bargain collectively with the Union concerning rates of pay, wages, hours, and other terms and conditions of employment, and if an understanding is reached, embody such understanding in a signed agreement. Upon the basis of the above findings of fact and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. All production and maintenance employees employed by Respondent at its Norfolk, Virginia, plant, excluding all office clerical employees, guards, professional employees, and supervisors as defined in the Act, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 2. At all times since August 29, 1962, the Union has been, and still is, the ex- clusive representative of all the employees within said appropriate unit for the SOUTHLAND CORK COMPANY 927 purposes of collective bargaining in respect to rates of pay, wages , hours of employ- ment, or other conditions of employment, within the meaning of Section 9(a) of the Act. 3. By failing to meet and confer with the Union in good faith at reasonable times. and intervals during the period from September 1962 to April 15, 1963; by refusing, to make, and unduly delaying, any good-faith attempts to furnish the Union pertinent requested financial information; by insisting on recognizing the Union as the rep- resentative only of those unit employees who had been continuously employed by Respondent a specified number of calendar days; and by refusing at all times on and- after July 19, 1963, to meet and bargain with the Union because of the unresolvedi unfair labor practices charges in the instant case, the Respondent has engaged in- and is engaging in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 4. By the aforesaid conduct, the Respondent has also interfered with, restrained, and coerced its employees in the exercise of the Tights guaranteed in Section 7 of- the Act and thereby has engaged and is engaging in unfair labor practices within the meaning of Section 8(a)( I) of the Act. 5. The aforesaid unfair labor practices are unfair labor practices affecting com- merce within the meaning of Section 2(6) and (7) of the Act. 6. The Respondent has not engaged in unfair labor practices insofar as the com- plaint alleges violations of the Act not specifically found herein. RECOMMENDED ORDER Upon the entire record in this case , and pursuant to Section 10(c) of the National' Labor Relations Act, as amended, I hereby recommend that Respondent , Southlandi Cork Company, Norfolk, Virginia, its officers, agents, successors , and assigns , shall: 1. Cease and desist from: (a) Refusing or failing to meet with reasonable promptness and at reasonable- frequency, and to bargain collectively in good faith, with Construction & General' Laborers' Local Union No. 307, International Hod Carriers, Building & Common Laborers' Union of America, AFL-CIO, as the exclusive bargaining representative of all the employees in the following appropriate unit: All production and maintenance employees at Respondent's Norfolk, Virginia, plant, excluding all office clerical employees, guards, professional employees, and`, supervisors as defined in the Act. (b) Failing or refusing, upon request, timely to make good-faith efforts to furnish- the aforesaid Union with financial information pertinent to bargaining issues. (c) Insisting on recognizing the aforesaid Union as the bargaining representative- only of those unit employees who had been continuously employed by Respondent a specified number of calendar days. (d) Refusing, during the pendency of unfair labor practice charges, to meet and' bargain collectively in good faith with the Union, as the aforesaid exclusive bar- gaining representative , with respect to rates of pay, wages , hours of employment, and' other terms and conditions of employment. (e) In any like or related manner interfering with, restraining, or coercing em- ployees in the exercise of their rights guaranteed by Section 7 of the Act. 2. Take the following affirmative action, which is necessary to effectuate the policies- of the Act: (a) Upon request, meet with reasonable promptness and at reasonable frequency, regardless of the possible pendency of any unfair labor practice charges, and bargain- collectively with the aforesaid Union as the exclusive representative of all the em- ployees in the above-described unit, regardless of the number of calendar days they- may have been continuously employed by Respondent , with respect to wages, rates of pay, hours of employment , and other conditions of employment, and, if an under-- standing is reached, embody such understanding in a signed agreement. (b) Post at its Norfolk , Virginia, plant copies of the attached notice marked "Appendix B." 17 Copies of said notice, to be furnished by the Regional Director 17 In the event that this Recommended Order shall 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 is 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." 744-6 70-65-vol. 146-60 928 DECISIONS OF NATIONAL LABOR RELATIONS BOARD for the Fifth Region, shall, after being duly signed by a representative of the Re- spondent, be posted by it 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 Respondent to insure that such notices are not altered, defaced, or covered by any other material. (c) Notify the said Regional Director in writing, within 20 days from the date of ths Decision and Recommended Order, what steps the Respondent has taken to comply herewith.18 I further recommend that the complaint be dismissed insofar as it alleges violations of the Act not specifically found herein. 18In the event that this Recommended Order is adopted by the Board, this provision shall be modified to read: "Notify the Regional Director for the Fifth Region, In writing, within 10 days from the date of this Order, what steps the Respondent has taken to comply herewith." APPENDIX B 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 you that: WE WILL meet, upon request, with reasonable promptness and at reasonable frequency, regardless of the possible pendency of any unfair labor practice charges, and bargain collectively in good faith with Construction & General Laborers' Local Union No. 307, International Hod Carriers, Building & Com- mon Laborers' Union of America, AFL-CIO, as the exclusive bargaining representative of all our employees in the appropriate unit described below, regardless of the number of calendar days any unit employees may have been continuously employed by us, with respect to rates of pay, wages, hours of em- ployment, and other conditions of employment, and, if an understanding is reached, embody such understanding in a signed agreement. WE WILL NOT fail or refuse, upon request, timely to make good-faith ef- forts to furnish the aforesaid Union with financial information pertinent to bargaining issues. WE WILL NOT insist on recognizing the aforesaid Union as the bargaining representative only of those unit employees who had been continuously em- ployed by us a specified number of calendar days. WE WILL NOT refuse, during the pendency of unfair labor practice charges, to meet and bargain collectively with the Union, as the aforesaid exclusive bargaining representative, with respect to rates of pay, wages, hours of em- ployment, and other terms and conditions of employment. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their rights guaranteed by Section 7 of the Act. The bargaining unit is: All production and maintenance employees at our Norfolk, Virginia, plant, excluding all office clerical employees, guards, professional em- ployees, and supervisors as defined in the Act. SOUTHLAND CORK COMPANY, Employer. Dated------------------- By------------------------------------------- (Representative) (Title) 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, Ext. 2100, if they have any questions concerning-this notice or compliance with its provisions.