Kenrich Petrochemicals, Inc.

910 DECISIONS OF NATIONAL LABOR RELATIONS BOARD WE WILL NOT by refusing to bargain collectively, as required above, or by granting wages increases without bargaining with the duly designated representa- tive of the employees in the unit described above , or in any other like or related manner, interfere with, restrain, or coerce employees in the exercise of the rights guaranteed them by Section 7 of the said Act. WE WILL, upon request by, or on behalf of, any employee who went on strike on October 2, 1962, and was not permanently replaced before October 24, 1962; immediately reinstate such employee to his former, or a substantially equivalent, position, without prejudice to his seniority and other rights and privileges, dis- charging, if necessary to effect such reinstatement , any employee hired since October 24, 1962, and in the event of a failure or refusal to reinstate any striker entitled to reinstatement as provided herein we will reimburse such striker for any loss of pay he may suffer by reason of such failure or refusal. TOM JOYCE FLOORS, INC., Employer. Dated------------------- By------------------------------------------- (Representative) (Title) This notice must remain posted for 60 days from the date of posting , and must not be altered , defaced, or covered by any other material. Information regarding provisions of this notice and compliance with its terms may be secured from the Regional Office of the National Labor Relations Board, 830 Market Street, San Francisco, California , Telephone No. Yukon 6-3500, Extension 3191. Kenrich Petrochemicals, Inc. and Eugene Geiss Local 350, Bakery and Confectionery Workers International Union of America and Eugene Geiss. Cases Nos. 22-CA-1852 and 22-CB-711. November 20, 1964 DECISION AND ORDER On July 9, 1964, Trial Examiner Sidney Sherman issued his Deci- sion in the above-entitled proceeding, finding that the Respondents had engaged in and were engaging in certain unfair labor practices. within the meaning of the Act, and recommending that they cease and desist therefrom and -take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent Company filed exceptions to the Trial' Examiner's Decision and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor- Relations Act, the Board has delegated its powers in connection with these cases to a three-member panel, [Members Leedom, Fanning, 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 Trial Examiner's Decision, the exceptions and brief,' and the entire record' 1 The Respondent Company has requested oral argument . This request is hereby denied; because the record, the exceptions , and brief adequately present the issues and the posi- tion of the parties. 149 NLRB No. 89. KENRICH PETROCHEMICALS, INC. 911 in these cases, and hereby adopts the findings,2 conclusions, and rec- ommendations of the Trial Examiner only to the extent consistent herewith.3 We adopt the Trial Examiner's conclusion that by enter- ing into and maintaining in effect the agreement of December 20, 1963, whereby the Company recognized the Union as the majority representative of its employees in an appropriate unit, the Respond- ent Company and Union violated Section 8(a) (1), (2), and (3) and 8(b) (1) (A) and (2) of the Act respectively. We rest our finding, however, solely on the fact that at the time the parties entered into the December agreement, both the Company and the Union knew that the Union did not represent a majority of the employees in the appropriate unit. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby adopts, as its Order, the Order recommended by the Trial Examiner and orders that Respondent, Kenrich Petrochemicals, Inc., its officers, agents, successors, and assigns, and Respondent, Local 350, Bakery and Con- fectionery Workers International Union of America, its officers, agents, representatives, successors, and assigns, shall take the action set forth in the Trial Examiner's Recommended Order. 2 We find no merit in the Respondent Company's contention that the Trial Examiner erred in refusing to direct the General Counsel , on the Respondent Company's demand, to furnish it with a statement of the Charging Party in the possession of the General Counsel. At the time the Respondent Company made its demand the Charging Party had not been called as a witness by the General Counsel, nor had testified in the case , but had been called by the Respondent Company as its own witness . The fact that the Company there- after was allowed to examine the Charging Party under Rule 43(b) of the Federal Rules of Civil Procedure did not in our opinion justify its demand for the production of the statement under Section 102.118 of the Board 's Rules and Regulations , Series 8, as amended. 3In adopting the Trial Examiner's 8(a)(1 ), ( 2), and ( 3) and 8 ( b)(1)(A) and (2) findings, we find it unnecessary to rely on that part of the Trial Examiner's decision in which he discusses the difference between a breach of contract and an unfair labor practice. TRIAL EXAMINER'S DECISION' The charges herein were served upon Respondents on February 6, 1964 , the com- plaint issued on March 11, and hearings were held before Trial Examiner Sidney Sherman on April 22 and June 2. After the hearings , a brief was filed by Respondent Company. The issues litigated were whether, by executing and maintaining in effect a certain agreement, the Company violated Section 8 (a)(1), (2), and (3) of the Act and the Union violated Section 8(b) (2) and (1) (A) of the Act. Upon the entire record, and my observation of the witnesses, I adopt the following findings of facts: 1. THE BUSINESS OF THE COMPANY Kenrich Petrochemicals, Inc., herein sometimes called the Company, is a New Jersey corporation with its principal office and plant at Bayonne , New Jersey, where it is engaged in the manufacture , sale, and distribution of chemicals and related prod- ucts. It annually ships to out-of-State points, products valued in excess of $50,000. The Company is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 912 DECISIONS OF NATIONAL LABOR RELATIONS BOARD IL THE LABOR, ORGANIZATION, INVOLVED Local 350, Bakery and Confectionery Workers International' Union of America, herein sometimes called the Union , is a labor organization within, the meaning of Section 2 (5) of the Act. III. THE UNFAIR LABOR PRACTICES The complaint alleges that the Company violated Section' 8'(a) (1), (2), and (3) of the Act and the Union violated Section 8(b)(2) and` (1) (A) by executing, on De- cember 20, 1963, and maintaining in effect thereafter , a collective agreement con- taining, inter alia, a union-security clause, notwithstanding that the Union was not- at the time of such execution the representative of the majority of the employees cov- ered by such agreement. The Company's answer admits the execution and maintenance of the foregoing agreement but, as an affirmative defense, alleges that: The Company had in the past "acted under" the provisions of certain collective-bargaining agreements between the Union and Holloway-Sucro Chemicals Corporation, hereafter called Holloway, which was affiliated with the Company, and which agreements covered the period from January 1, 1956, to December 31, 1963; after July 1962, when it relocated its plant, the Company replaced four of its seven employees with new employees who were not required to join the Union, although the Union's contract with Holloway imposed such a requirement; when the Union in October 1963 sought to negotiate a contract with it, the Company questioned the Union's majority status and asked for proof thereof; the Union thereupon filed with the Board a refusal-to-bargain charge against the Company; apprehending that the Board might find that the Union had lost its majority status as a result of the Company's failure to honor the union-security pro- visions of the Holloway contract, and that the Company was therefore obligated to bargain with the Union despite any such loss of majority status, the Company entered into a contract with the Union; as alleged in the complaint. The Union's answer was, in substance, a general denial. During the hearing both Respondents amended their answers to allege the further defense of res ajudicata or estoppel, based on the Regional Director 's appuroval of the Union's withdrawal of its refusal-to-bargain charge referred to above. A. Sequence of events There is no dispute that on December 20, 1963, the Company and the Union exe- cuted a contract covering the Company's production employees, and containing,. inter alia, a union-shop clause, which contract was for a term of 2 years beginning January 1, 1964, and it is agreed that when the contract was signed only three of the Company's seven production employees were union members. Without more, the foregoing facts would seem to establish the violations of the Act alleged in the complaint. However, in justification of their conduct the Respondents cite the following circumstances leading up to the execution of the foregoing contract. For some years prior to 1959, Holloway and the Company, which were under com- mon ownership and control, had shared the same premises at Maspeth, Long Island; where they manufactured somewhat different products. In 1959 Holloway sold all its assets to a third party. While Holloway continued in existence thereafter as a legal entity, it did not engage in any production work, and the Company was thereafter the only employer engaged in production operations at the Long Island plant. Of the four employees working for Holloway at the time it ceased operations, two or three transferred to the Company. In December 1960, a contract was executed by the Union and by Oscar Spiegelhalder as president of "Holloway-Sucro Chemicals Corp." This contract provided for a 3-year term, from January 1, 1961, to December 31, 1963, and contained, inter alia, a union-shop and checkoff clause and a clause requiring the employer-party to the contract to notify the Union whenever it needed new employees. It is not disputed that at the time this contract was signed the majority of the produc- tion employees at the Long Island plant were union members, and that, although the contract was purportedly signed on behalf of Holloway, all such employees were in fact doing work for the Company, and the terms of the contract were applied to them uniformly, at least until July 1962. Moreover, at the time that he ostensibly signed the contract for Holloway, Oscar Spiegelhalder was president of the Company. In July 1962, the Company moved to its present location at Bayonne, New Jersey, taking with it three or four of its old employees (who were all union members). Soon thereafter the Company hired four new employees, but failed to notify the Union in advance of such hires, and took no steps to require them to join the Union, and they did not, in fact, join the Union. KENRICH PETROCHEMICALS, INC. 913 In October 1963 when the Union requested that the Company negotiate a new contract, the Company had three union and four nonunion employees,' and on November 26, at a negotiation meeting, the Company's attorney, Rubenstein, expressed doubt of the Union's majority status and asked for substantiation thereof by a card showing. When the Union refused to make such a showing, Rubenstein indicated he would deal with it only if some proof were submitted that the Union represented a majority of the employees. However, after the Union, on December 6, filed with the Board a refusal-to-bargain charge, Respondent decided to resume negotiations, and on December 12 oral agreement was reached on contract terms. On December 16 the Union withdrew its charge with the approval of the Regional Director, and on December 20 the contract was formally executed. B. Discussion Respondents contend that, in view of the circumstances just related, the Board should find no violation, (1) because the Company acted under a good-faith belief that, although the Union had no majority in fact on December 20, 1963, it might be deemed by the Board to have a majority in law, on the theory that its loss of a de facto majority was due to the Company's unfair labor practices, and (2) because the Regional Director, by approving the Union's withdrawal of its refusal-to-bargain charge, in effect adjudicated the legality of the contract, on which the Union's request to withdraw the charge was predicated, and the Board is, in any event, estopped by the Regional Director's action. The second contention will be first considered. Res Judicata Even if it be assumed that the Regional Director's action was influenced by the fact that the parties had executed a contract, thereby settling their differences over the refusal-to-bargain issue, it is clear that any judgment he might be deemed to have thereby implied as to the legality of such contract was not based on a full hearing on that issue, but, at best, on an ex parte investigation, and that, in any event, another classical requirement of res judicator-identity of parties-has not been met here. Estoppel Turning to the question whether there is any estoppel here, it has been held in a strikingly similar case that the Board was not estopped from finding violations of Section 8(a)(1) and 8 (b) (1) (A) by a Regional Attorney's ostensible approval of an employer's agreement to recognize a minority union.2 Moreover, an essential element of estoppel is that a party has been misled, to his prejudice. Here, there is no evidence that the Company relied on the Regional Director's action in recognizing the Union and reaching an agreement. On the contrary, Rubenstein admitted that recognition was extended and oral agreement reached on December 12, before any contract was made by the Company with the Regional Office of the Board. While the contract was not formalized until a few days after the Regional Director's approval of the with- drawal of the charge, there is no evidence or contention that, absent such approval, the Company would have withdrawn its recognition of the Union. Accordingly, I find no procedural bar to the Board's consideration of the merits. The Substantive Issues The Company's "good-faith" defense raises the following questions: (a) Did the Union in fact lose its majority status by reason of the Company's unfair labor prac- tices? (b) If not, did the Company or the Union in good faith believe that this was the case? and (c) Was such belief a valid defense here? a. Was the Union's loss of majority due to the Company's unfair labor practices? It is well settled that an employer is obligated to recognize a union, despite loss of its majority status, where such loss is attributable to an employer's unfair labor prac- tices.3 Accordingly, if it were proper to find here that the Union lost its majority _'' i The Company was at that time checking ,off union dues and making welfare fund con- tributions, only with respect to the three union members 2 Stokely-Pan Camp, Inc. and Bordo Products Ca., d/b/a Stokely-Bordo, 130 NLRB 869, 871. 3 E.g., Gaylord Printing Co., Inc., 135 NLRB 510. 770-076-65-vol. 149-59 914 DECISIONS OF NATIONAL LABOR RELATIONS BOARD status as a result of the Company's unfair labor practices, it would be necessary to hold that the Company was justified in continuing to recognize the Union on Decem- ber 20, and executing a contract with it. The Company here is in the unique position of pleading its own unfair labor prac- tices as a defense to the instant complaint. Such alleged unfair labor practices con- sisted, according to the Company, in its failure to comply with the provisions of the 1961 contract (1) requiring prehire notice to the Union, and (2) requiring that new employees become union members within 31 days after hire and remain good-standing members for the term of the contract. It is not disputed that the Company failed to observe the foregoing provisions in connection with the four employees who were hired after the move to Bayonne and whose nonunion status destroyed the Union's majority. At the threshold of the instant inquiry, the question arises whether the Company was a party to the 1961 contract, so that the foregoing provisions were binding upon it. Indeed, the Company's answer, as already noted, appears to concede that it was not a party to the 1961 contract, contending only that it "acted under" such contract, which the answer concedes was between the Union and Holloway. However, at the hearing the Company's counsel asserted that this concession was improvident and was due to incorrect pretrial information, and that the Company was in fact originally named in the contract as a party thereto, but due to a misunderstanding such name was erased after the contract was executed and the name of Holloway substituted. It is not necessary to resolve this point, as I am satisfied that, even if, as appears to be the case, Oscar Spiegelhalder purported to execute the 1961 contract on behalf of Holloway, the use of Holloway's name on the contract was a misnomer, as the parties intended the contract to apply to the production employees currently working at the Long Island plant, all of whom were at that time working for the Company. I conclude, therefore, that the parties intended the contract to bind the Company rather than Holloway, and I will, for purposes of this Decision, treat the Company as so bound. However, I am aware of no Board decision holding that failure of an employer to enforce a union shop or a hiring hall 4 clause is per se an unfair labor practice. While such failure might constitute a breach of contract, it is clear from the legislative history of the 1947 amendments to the Act that Congress did not intend that such a breach be regarded as per se a violation of the Act.5 The Company contends that its contract breach here should, nevertheless, be held to have violated its bargaining obligations because it constituted a unilateral change in the conditions of employment of the Company's employees, and such unilateral action has been uniformly held by the Board to be unlawful. While the Board has held that unilateral enlargements of con- tractual benefits violate Section 8(a) (5) of the Act, such rulings are not at odds with the foregoing legislative intent. As already noted,° the reason assigned by Congress for opposing any treatment of contract violations as a refusal to bargain was that the enforcement of collective contracts "should be left to the usual processes of the law" and not to the Board. While applying to any conduct by a party which, as here, was in derogation of a duty imposed by contract, and was therefore remediable in a law court, such reason would not apply to a grant of benefits which was in addition to that provided by contract. Clearly, no action for breach of contract could lie where an employer, for example, unilaterally raises his employees' rate of pay above that specified in their contract. There is thus no inherent conflict between the Board rulings that such unilateral increases in contractual benefits violate Section 8(a)(5) and the congressional intent to exempt breaches of contract from the interdiction of Section 8(a) (5). 4 For purpose of this Decision, it is assumed that the requirement of prehire notice to the Union may properly be regarded as a preferential hiring clause. 5A provision in the Senate bill, which would have made it an unfair labor practice to violate the terms of a collective-bargaining contract, was deleted in conference, with the following explanation. Once parties have made a collective bargaining contract the enforcement of that con- tract should be left to the usual processes of the law and not to the National Labor Relations Board H. Conf. Rept. No. 510 on H.R . 3020, 80th Cong., 1st sess., pp. 41-42; Board's Legislative History of Labor Management Relations Act, 1947, vol. I, pp 545-546. See United Telephone Company of the West, et at, 112 NLRB 779, 782; The Assomtion of Westinghouse Salaried Employees v. Westinghouse Electrw Corporation, 348 U. S. 437, footnote 2. 6 ,See preceding footnote. KENRICH PETROCHEMICALS, INC. 915 In conformity with that intent, I find no violation of the Act in any breach of con- tract by the Company in failing to give prehire notice to the Union and in retaining in its employ, beyond the contractual grace period, nonunion employees. Accordingly, I find that the Union did not in fact lose its majority status as a result of any unfair labor practices of the Company. b. The "good-faith"' defense There remains to be considered the Company's contention that it believed in good faith that it had engaged in unfair labor practices which caused the Union to lose its majority status, and that it was this belief which induced it to recognize the Union. I find no merit in this contention because I am not convinced that the Company in fact entertained such belief or was motivated thereby, and it is clear in any event that such belief would not be a valid defense to the instant charge. The Company's counsel, Rubenstein,7 testified that a few days after the Union filed its charge against the Company he advised his "client" that in view of the prior con- tract between Holloway and the Union, and possibly between the Company and the Union, the Board might hold that any loss of majority status by the Union was due to the Company's failure to honor such contract, in which case the Company would be obliged to bargain with the Union. Rubenstein testified further that he added that, in view of the foregoing considerations, the Company had virtually no alternative but to deal with the Union, since there was a possibility of a strike, which might be held to be an unfair labor practice strike. According to Rubenstein, the Company took his advice and met with the Union. When pressed for the names of the representatives of the Company to whom he gave the foregoing advice, Rubenstein professed uncertainty, indicating that he "probably" spoke to Sechrist, the Company's president, and "maybe" to Rogge, the president of the Company's parent corporation. However, Sechrist testified that he had no recol- lection of any such advice and Rogge was not called as a witness, although the Com- pany was put upon notice by the Trial Examiner that an adverse inference would be drawn from the failure to call him. I infer, therefore, that Rogge would not have corroborated Rubenstein. Moreover, Respondent's trial counsel were hard put to explain at the hearing why the Company was so anxious to avoid an unfaii labor practice strike situation. When it was pointed out to them that the Company could obviate any backpay liability in such a situation by merely reinstating the strikers, upon application, Rubenstein agreed that this was so, but insisted that it was an "impossible situation" for an employer to have to choose between "hiring new employees whom it may subsequently have. to discharge when the unconditional offer for reinstatement is made . . . and running the risk that two, three, five years hence, the complaint will be dismissed." It is not clear from the foregoing just what Rubenstein regarded as creating an "impos- sible situation" for the employer-whether it was the problem of having to hire strike replacements, without being able to assure them of permanent tenure, or the problem of having to choose, when the strike ended, between either discharging such replace- ments or risking backpay liability. Nor does the Company's brief, filed after the hearing, attempt to clarify this point, as it alludes, in this connection, only to the "pecuniary liability" that the Company might incur in case of an unfair labor practice strike. The obscurity of Rubenstein's position on this point is in marked contrast to his articulateness and,lucidity in other areas. In any case, it is difficult to believe that Rubenstein, apparently a knowledgeable and resourceful practitioner, would decide to recognize a union, or advise his client to do so, on the basis of the speculative considerations cited by him. At the time of the negotiations with the Union there was no threat of a strike or any apparent reason to expect one. It would have been time enough to consider what to do to obviate the problems inherent in an unfair labor practice strike when and if such a strike, or threat of strike, materialized, or at least when and if the Regional Director decided to issue a complaint upon the Union's charge. Indeed, nothing in Rubenstein's testimony or argument adequately explains why, absent any strike or threat of strike, the Com- pany did not wait to see what action the Regional Director would take,on,the-charge before committing itself to a contract with the Union. Had the charge been dismissed, there could no -longer have been any danger of;the Company's becoming involyed,in an unfair labor practice strike. Accordingly, in view of the apparent conflict between Rubenstein's testimony and, that of Sechrist (if not, inferentially, of Rogge), as well as the implausibility of Ruben- 7 He was also one of the Company 's two trial counsels.. , 916 DECISIONS OF NATIONAL LABOR RELATIONS BOARD stein's version and of his efforts to rationalize it, I find that Rubenstein did not in fact give the alleged advice to the Company and that the Company's decision to recognize the Union was not motivated by a good-faith belief that it was under a legal duty to recognize the Union despite its loss of majority status.8 As there is no evidence or contention that the Union shared the Company's alleged good-faith belief that the Union had legal, though not actual, majority status on December 20, there is no need to consider this defense in relation to the Union's liability. c. The materiality of the Respondents' good faith In any case, it is well settled that any good-faith belief of the Company or the Union or both as to the latter's majority status would not have excused their conduct. In the Bernhard-Altmann case,9 in affirming a Board finding that the employer in that case violated Section 8(a)(2) and (1), and the union violated Section 8(b)(1) by executing a collective-bargaining contract at a time when the union did not enjoy majority status, the Supreme Court said: The petitioner, while taking no issue with the fact of its minority status on the critical date, maintains that both Bernhard-Altmann's and its own good-faith beliefs in petitioner's majority status are a complete defense. To countenance such an excuse would place in permissibly careless employer and union hands the power to completely frustrate employee realization of the premise of the Act-that its prohibitions will go far to assure freedom of choice and majority rule in employee selection of representatives. We find nothing in the statutory language prescribing scienter as an element of the unfair labor practices here involved The act made unlawful by § 8(a) (2) is employer support of a minor- ity union. Here that support is an accomplished fact More need not be shown, for, even if mistakenly, the employees' rights have been invaded It follows that prohibited conduct cannot be excused by a showing of good faith. Accordingly, good faith, even if proved here, would not avail the Respondents.10 I It is not necessary to determine what actually motivated such decision However, ab- sent any other plausible explanation, it is at least a permissible inference that the Com- pany felt it might obtain a more favorable contract from the Union while its majority status was still unsettled 9International Ladies' Garment Workers' Union, AFL-CIO v. N.L R B., and Bernhard- Altmann Texas Corp, 366 U S. 731, 738 10 The Company's brief attempts to distinguish the Bernhard-Altmann case, supra, on the ground that here, unlike there, the Union was an incumbent and the contract under attack was executed during the "insulated period" (i e, the last 60 days) of the Union's expiring contract, during which period no question concerning representation could have been raised See Deluxe Metal Furniture Company, 121 NLRB 995, 1000-1001, and Gen- eral Cable Corporation, 139 NLRB 1123 (extending the maximum contract-bar period to 3 years-the duration of the 1961 "Holloway" contract). However, while it is well settled that an employer may not during the term of a contract plead the incumbent union's loss of majority status as a reason for refusing to bargain with it with respect to griev- ances arising under the contract or changes in working conditions to take effect during the term of the contract (Hexton Furniture Company, 111 NLRB 3472, Shamrock Dairy, Inc., at al, 119 NLRB 998, 1001), I am aware of no case holding that an employer is re- quired during the term of a contract, to bargain with an incumbent union, which has lost its majority status, concerning the terms of a new contract to take effect after the cur- rent contract has expired Nor am I aware of any case holding that an employer may with impunity continue to recognize an incumbent union, despite its actual loss of majority status, for the purpose of negotiating a contract for a new term, provided that such con- tract is negotiated, as here, during the "insulated period" of the old contract. In City Cab, Inc., et al, 128 NLRB 493, cited in the Company's brief, it did not affirmatively appear, as it does here, that the incumbent union had lost its majority status, and the Board merely held there that it would not apply its Midwest Piping rule where, in the face of a rival claim (which is not supported by a timely petition), the employer negotiates a new contract with an incumbent union during the isulated period of its expiring con- tract. We are not dealing here with a violation under the Midwest Piping rule but with an invasion of the rights of employees such as prompted the Supreme Court to say in the Bernhard-Altmann case, supra, "There could be no clearer abridgment of Section 7 of the Act, assuring employees the right `to bargain collectively through representatives of their own choosing' . . . International Ladies' Garment Workers' Union, AFL--CIO v N.L.R.B. and Bernhard-Altmann Texas Corp.,'supi a, p. 737: KENRICH PETROCHEMICALS, INC. 917 Summary Upon consideration of all- the foregoing matters, I find that, by executing the December 20 agreement with a minority union,ll and maintaining it in effect, the Company violated Section 8 (a) (2) and (1) of the Act, and the Union violated Section 8(b)(1)(A) of the Act 12 Moreover, as the December 20 contract contained a union-security clause, which may lawfully be granted only to a union duly selected by a majority of the effected employees, I find that by adopting such clause, and maintaining it in effect, the Com- pany violated Section 8(a)(3) and (1) of the Act, and that by securing adoption of such clause, the Union violated Section 8 (b) (2) and (1) (A) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondents, as set forth above, which have been found to con- stitute unfair labor practices, occurring in connection with the operations of the Com- pany, described in section I of this Decision, 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 obstructing commerce and the free flow of commerce. V. THE REMEDY It having been found that the Respondents have engaged in unfair labor practices, it will be recommended that they be required to cease and desist therefrom, and take certain affirmative action. It will be recommended that the Company be ordered to withdraw all recognition from the Union as the representative of any of its employees, and that the Union be ordered to cease acting as such representative, unless and until the Union shall have demonstrated its majority status pursuant to a Board-conducted election among the Company's employees. It will also be recommended that the Company be ordered to cease giving force and effect to, and that the Union be ordered to cease seeking to enforce, the collective-bargaining agreement of December 20. However, nothing contained herein shall be construed as requiring the Company to vary the wage, hour, seniority, or other substantive terms of employment, which the Company has estab- lished in the performance of its contract, or to prejudice the assertion by its employees of any right that they may have thereunder. In addition, as it has been found that the Respondents executed and maintained in effect a contract containing a union-shop and'checkoff provision, it will be recom- mended that the Respondents be required jointly and severally to reimburse those employees of the Company who became members of the Union after the execution of said contract for moneys paid by them, or deducted from their earnings, for initiation fees, dues, assessments, or other obligations of membership in the Union.13 Interest on such moneys at 6 percent per annum is to be paid, in accordance with the Board's decisions in Isis Plumbing & Heating Co., 138 NLRB 716, and Quality Coal Corpora- tion, et al., 139 NLRB 492, the amount of such interest to be computed in the manner set forth in Seafarers International Union of North America, Great Lakes District, AFL-CIO, 138 NLRB 1142. "Respondents attempted at the hearing to show that a majority of the employees ad- hered to the Union after the execution of the contract. Such evidence was ruled Irrelevant, In view of the Supreme Court's rejection of analogous evidence in the Bernhard-Altmann case, supra. 12 International Ladies' Garment Workers' Union, AFL-CIO v. N.L.R B. and Bernhard- Altmann Texas Corp., supra. In its brief, the Company impugns the Charging Party's motives, pointing out that he is a member of the Union and objects to the 1964-66 contract only because of the in- adequacy of the benefits afforded by it. It is well settled that a charging party's motives are irrelevant. However, It may not be amiss to note that the vice of representation by a minority union Is not merely that it violates the principle of majority rule but also that, not being able to exert the same economic and legal pressures, such a union is not in as strong a position at the bargaining table as a majority union. See footnote 8, above. The foregoing danger inherent in representation by a minority union may well explain why even one who, like the Charging Party, is a member of such a union may prefer that it not negotiate a contract, binding upon the employees for a substantial period of time (2 years in the Instant case), until it achieves majority status and a more formidable bargaining position. 18 See Downtown Bakery Corp., 139 NLRB 1352, 1359, enfd. on this point 330 F. 2d 921 (CA. 6). 918 DECISIONS OF NATIONAL LABOR RELATIONS BOARD CONCLUSIONS OF LAW 1. Kenrich Petrochemicals, Inc., is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Local 350, Bakery and Confectionery Workers International Union of America, is a labor organization within the meaning of Section 2(5) of the Act. 3. By recognizing the Union as sole bargaining representative of its production employees, and executing a contract with it covering such employees, at a time when it did not represent a majority of such employees, and by maintaining such contract in effect, the Company has engaged in unfair labor practices within the meaning of Section 8 (a) (2) and (1) of the Act. 4. By including in such contract a union-security clause, the Company has violated Section 8 (a) (1), (2),and (3) of the Act 5. By executing, and maintaining in effect, such contract, the Union has violated Section 8 (b) (1) (A) and (2) of the Act. RECOMMENDED ORDER Upon the entire record in this case, and the foregoing findings of fact and conclu- sions of law, it is recommended that: A. The Respondent, Kenrich Petrochemicals , Inc., of Bayonne, New Jersey, its officers, agents , successors, and assigns, shall be ordered to: 1. Cease and desist from: (a) Contributing support to Local 350, Bakery and Confectionery Workers Inter- national Union of America, or to any other labor organization of its employees. (b) Recognizing Local 350, Bakery and Confectionery Workers International Union of America , as the exclusive representative of its production employees for the purpose of dealing with the Company concerning grievances , labor disputes , wages, rates of pay , hours of employment, or other conditions of employment, unless and until the said labor organization shall have demonstrated its exclusive majority status pursuant to a Board -conducted election among the Company 's employees (c) Giving effect to the collective-bargaining agreement , dated December 20, 1963, between the Respondents or to any extension , renewal , or modification thereof; pro- vided, however, that nothing herein shall be deemed to require the Respondent Com- pany to vary or abandon any wage, hour, seniority , or other substantive term of employment established under such agreement, or to prejudice the assertion by employees of any rights they may have thereunder (d) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of their rights guaranteed in Section 7 of the Act, except to the extent that such rights may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8(a)(3) of the Act. 2. Take the following affirmative action which is deemed to effectuate the policies of the Act: (a) Withdraw and withhold all recognition from Local 350, Bakery and Confec- tionery Workers International Union of America , as the exclusive bargaining repre- sentative of its employees for the purpose of dealing with the Company concerning grievances, labor disputes, wages, rates of pay, hours of employment, or other condi- tions of employment , unless and until the said labor organization shall have demon- strated its exclusive majority status pursuant to a Board-conducted election among the Company's employees. (b) Post at its plant at Bayonne , New Jersey, copies of the attached notice marked "Appendix A." 14 Copies of such notice, to be furnished by the Regional Director for Region 22 , shall, after being duly signed by its authorized representative , be posted by the Respondent Company immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to its'employees are customarily posted. Reasonable steps shall be taken by the Respondent Company to insure that such notices are not" altered, defaced, or covered by any other material. 14If this Recommended Order is 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." KENRICH PETROCHEMICALS, INC. 919 (c) Post at -the same places and under the same conditions as set forth in (b) above, and as soon as they are forwarded by the Regional Director, copies of the Respondent Union's notice herein marked "Appendix B." B. The Respondent, Local 350, Bakery and Confectionery Workers International Union of America, its officers, agents, representatives, successors, and assigns, shall be ordered to: 1. Cease and desist from: (a) Acting as the exclusive bargaining representative of the production employees of the Respondent, Kenrich Petrochemicals, Inc., for the purpose of dealing with said Company concerning grievances, labor disputes, wages, rates of pay, hours of employ- ment, or other conditions of employment, unless and until said Union shall have demonstrated its exclusive majority status pursuant to a Board-conducted election among the Company's employees. (b) Giving effect to the collective-bargaining agreement, dated December 20, 1963, between the Respondents, or to any extension, renewal, or modification thereof. (c) Causing, or attempting to cause, the Respondent Company to discriminate against employees in violation of Section 8(a)(3) of the Act by entering into, or maintaining, any agreement with the Respondent Company which requires, as a condi- tion of employment, membership in the Respondent Union, or in any like or related manner causing, or attempting to cause, the Respondent Company to discriminate against any employee in violation of Section 8 (a) (3) of the Act. (d) In any like or related manner, restraining or coercing the employees of Kenrich Petrochemicals, Inc., in the exercise of their rights guaranteed in Section 7 of the Act, except to the extent that such rights may be affected by an agreement requiring mem- bership in a labor organization as a condition of employment as authorized in Section 8(a)(3) of the Act. 2. Take the following affirmative action which it is deemed will effectuate the policies of the Act: (a) Post at its offices and meeting hall at Long Island City, New York, copies of the attached notice marked "Appendix B." 15 Copies of said notice, to be furnished by the Regional Director for Region 22, shall, after being signed by the Respondent Union's representative, be posted by it immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to members are customarily posted. Reasonable steps shall be taken by the Respondent Union to insure that said notices are not altered, defaced, or covered by any other material. (b) Mail to the said Regional Director signed copies of Appendix B for posting by Respondent Company at its Bayonne, New Jersey, plant, as provided above. Copies of said notice, to be furnished by the said Regional Director, shall, after being signed by the Respondent Union's representative, be forthwith returned to the Regional Director for disposition by him. C. Both Respondents shall be ordered to: 1. Jointly and severally reimburse those employees who became members of the Respondent Union after execution of the contract of December 20, 1963, for initiation fees, dues, assessments, or other moneys received by the Respondent Union in payment of their membership obligations, together with interest thereon, as set forth in the section of the Trial Examiner's Decision entitled "The Remedy." 2. Notify the Regional Director for Region 22, in writing, within 20 days from the date of receipt of this Order, as to what steps they have taken to comply therewith.16 16 See preceding footnote. 18 If this Recommended Order is adopted by the Board , this provision shall be modified to read: "Notify said Regional Director, in writing, within 10 days from the date of this Order, what steps the Respondents have taken to comply herewith." APPENDIX A 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 Labor-Management Relations Act, we hereby notify our employees that: - WE WILL NOT assist or support Local 350, Bakery and Confectionery Workers International Union of America, or any. other labor organization, or otherwise 920 DECISIONS OF NATIONAL LABOR RELATIONS BOARD interfere with the representation of our employees through a labor organization of their own choosing. WE WILL NOT recognize said Local 350, or any successor thereto, as the exclu- sive representative of our production employees for dealing with' us with respect to rates of pay, wages, hours of employment, or other terms and conditions of employment, unless and until said Local 350 shall be certified by the Board after having demonstrated its exclusive majority representative status pursuant to a Board-conducted election among our employees in the appropriate unit. WE WILL NOT give effect to our collective-bargaining agreement of December 20, 1963, with said Local 350, or enter into or enforce any extension, renewal, modification, or supplement thereof, or any superseding collective-bargaining agreement with said Local 350; we are not required, however, to vary those wages, hours, seniority, or other substantive terms of employment established under such agreement, and our employees are free to assert any rights they may have thereunder. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their rights guaranteed in Section 7 of the Act. WE WILL jointly and severally with said Local 350 reimburse those of our employees who became members of said Local 350 after the execution of the aforesaid collective-bargaining agreement of December 20, 1963, for moneys paid by them or deducted from their earnings for initiation fees, dues, assessments, or other obligations of membership in said Local 350. All our employees are free to become, remain, or refrain from becoming or remain- ing, members of the above-named or any other labor organization, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8(a) (3) of the National Labor Relations Act, as modified by the Labor-Management Reporting and Disclosure Act of 1959. KENRICH PETROCHEMICALS, INC., 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, 614 National Newark Building, 744 Broad Street, Newark, New Jersey, Telephone No. Market 4-6151, if they have any question concerning this notice or compliance with its provisions. APPENDIX B NOTICE TO ALL MEMBERS OF LOCAL 350, BAKERY AND CONFECTIONERY WORKERS INTERNATIONAL UNION OF AMERICA AND TO ALL EMPLOYEES OF KENRICH PETRO- CHEMICALS, INC. Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board, and in order ,to effectuate the policies of the Labor Management Relations Act, we hereby notify our members that: WE WILL NOT perform, enforce, or give effect to our collective-bargaining agreement of December 20, 1963, with Kenrich Petrochemicals, Inc.,-or enter into or enforce any extension, renewal, modification, or supplement thereof or any superseding collective-bargaining agreement with Kenrich Petrochemicals, Inc., unless and until we shall have been certified by the Board after having demonstrated our exclusive majority representative status pursuant to a Board- conducted election among employees of Kenrich in the appropriate unit. WE WILL NOT act as the exclusive collective-bargaining representative of the production employees of Kenrich Petrochemicals, Inc., unless and until we have been certified by the Board as such representative. WE WILL NOT cause or attempt to cause Kenrich Petrochemicals, Inc, to dis- criminate against employees in violation of Section 8(a)(3) of the Act by enter- ing into or maintaining any agreement with Kenrich which requires, as a condition of employment, membership in our organization, or in any like or related manner cause•or•attempt to cause.Kenrich to discriminate against any employee in viola- tion of'Section 8(a)(3) of the Act. • ' BROWNWOOD MANUFACTURING COMPANY 921 WE WILL jointly and severally with Kenrich Petrochemicals, Inc., reimburse those of its employees who became members of our organization after the execu- tion of the aforesaid collective-bargaining agreement of December 20, 1963, for moneys paid by them or deducted from their earnings for initiation fees, dues, assessments, or other obligations of membership in our organization. LOCAL 350, BAKERY AND CONFECTIONERY WORKERS INTERNATIONAL UNION OF AMERICA, Labor Organization. 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, 614 National Newark Building, 744 Broad Street, Newark, New Jersey, Telephone No. Market 4-6151, if they have any question concerning this notice or compliance with its provisions. Brownwood Manufacturing Company and Amalgamated Cloth- ing Workers of America, AFL-CIO. Case No. 16-CA-1979. November 20, 1964 DECISION AND ORDER Upon a charge and a first amended charge duly filed on December 19, 1963, and January 30, 1964, respectively, by the Amalgamated Clothing Workers of America, AFL-CIO (herein called the Union), against Respondent, Brownwood Manufacturing Company, the Gen-. eral Counsel for the National Labor Relations Board by the Acting Regional Director for Region 16, on April 24, 1964, duly issued and served upon the parties a complaint and notice of hearing. The com- plaint alleges that Respondent had engaged in and was engaging in, unfair labor practices affecting commerce within the meaning of Sections 8(a) (1) and 2(6) and (7) of the National Labor Relations Act, as amended. With respect to the unfair labor practices, the complaint alleges, in substance, that on October 18, 23, and 24, 1963, certain supervisors and agents of Respondent addressed assemblies of Respondent's employees on its premises and threatened them with loss of jobs and with other reprisals. On June 26, 1964, all parties to this proceeding entered into a stipulation wherein they agreed that the charges, the complaint, the answer, and the stipulation and exhibits attached thereto constituted the entire record in the case, and submitted the case to the Board for findings of fact, conclusions of law, and Decision and Order. They waived hearing before a Trial Examiner and the. issuance of a Trial Examiner's Decision but reserved their right to file briefs. On July 10, 1964, the Board issued an order approving stipulation transferring case to the Board and set a time for a filing of briefs. Briefs were thereafter filed by the General Counsel and Respondent; 149 NLRB No. 82.