Kinard Trucking Co., Inc.

KINARD TRUCKING COMPANY, INC. 449 Kinard Trucking Company, Inc. and Highway and Local Motor Freight Employees, Local Union No. 667, affiliated with Inter- national Brotherhood of Teamsters , Chauffeurs, Warehouse- men & Helpers of America. Case No. 26-CA-1705. May 6, 1965 DECISION AND ORDER On September 3, 1964, Trial Examiner Rosanna A. Blake issued her Decision in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices, as set forth in the attached Trial Examiner's Decision. The Trial Exam- iner further found that the Respondent had not engaged in certain other unfair labor practices alleged in the amended complaint. She then recommended that the Board enter an order dismissing the entire complaint, as amended. Thereafter, the Union and the General Coun- sel filed exceptions to the Trial Examiner's Decision together with supporting briefs. Pursuant to Section 3 (b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel [Chairman McCulloch and Members Fanning and Jenkins]. The Board has reviewed the rulings made by the Trial Examiner at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and briefs, and the entire record in the case, and hereby adopts her findings and conclusions of law except as modified herein, but rejects her recommendation that the Board enter an order dismissing the complaint, as amended.' The record shows that in 1963 the Union, a Teamsters local, was the statutory representative of Respondent's employees in two appropriate units, and that Respondent recognized the Union as such representative and had collective-bargaining contracts with it which included wage provisions not expiring until early in 1964. In September 1963, the Respondent reduced the wages of the employees represented by the Union without first notifying either the Union or the other agencies referred to in Section 8(d) (3). In the following months Respondent committed certain other acts which, as the Trial Examiner found, vio- lated Section 8(a) (1) and (5)? In December 1963, the Respondent IIn the absence of exceptions or cross-exceptions thereto, the Board adopts pro forma the Trial Examiner's finding that the Respondent violated Section 8(a) (1), and also violated Section 8(a) (5) by bargaining directly with its employees. 2 Respondent promised its employees benefits if they repudiated the Union and also threatened them with loss of employment if they refused to renounce their union affilia- tion In addition, Respondent bargained directly with its employees. 152 NLRB No. 42. 789-730-66-vol. 152-30 450 DECISIONS OF NATIONAL LABOR RELATIONS BOARD again reduced the wages of the employees without notice to the Union, or to any other agency. The Trial Examiner found, and we agree, that an employer normally violates the statutory duty to bargain collectively by reducing the wages of employees represented by an exclusive collective-bargaining representative without giving advance notice to that representative; and that the violation is not affected by the fact that, as in the instant case, the employer also violates a collective-bargaining contract. The Trial Examiner found, however, that Respondent did not violate Section 8 (a) (5) by the unilateral wage cuts of September and Decem- ber 1963. The Trial Examiner reasoned that it would have been futile for the Respondent to give the Union advance notice and an opportu- nity to bargain, on the ground that more than 6 months earlier the Union had shown its own inability to bargain on the subject. Thus, the Respondent and the Union had come to a conditional agreement on a wage reduction in February 1963, conditioned on the approval by "higher officials" of the Teamsters. But higher officials of the South- ern Conference of Teamsters, with which the Union was affiliated, thereafter rejected the proposed reduction, and it was abandoned. This voiding of the February agreement, asserts the Trial Examiner, clearly proves the futility of any later attempt by the Respondent, in September or December 1963, to bargain with the Union about wage reductions. We do not agree with the Trial Examiner's refusal to find the alleged violations based on the two wage reductions, or with her underlying reasoning. Where an employer desires to effect wage reductions or make any other substantial alteration in the existing terms or condi- tions of employment, the congressional policy embodied in the Act requires that the employees be given the opportunity to have their chosen representative bargain collectively with their employer about the proposed change. Accordingly, the representative will have an opportunity to present arguments to the employer to dissuade him from effecting the change, and also an opportunity to propose alternatives or compromises which might moderate the change so as to accommo- date the interests of the employees as well as of the employer. It is possible, of course, that, once notified of the employer's desire to alter an existing term or condition of employment, the representative might accede and not request bargaining. Or, although engaging the employer in good-faith bargaining, the representative might be able to achieve the result of persuading the employer to withhold or modify the change. But any hypothesis as to what the Union in the instant case might have done or been unable to do, if the Respondent had noti- fied it of the proposed wage reductions, is irrelevant. What is relevant is that the Respondent gave the Union no advance notification, and hence no opportunity to ask for bargaining over the reductions. KINARD TRUCKING COMPANY, INC. 451 Whether advance notice would have occasioned such a request is irrel- evant, as well as entirely speculative, in view of the Respondent's refusal to give the Union any notice. As the Court of Appeals for the Fifth Circuit has pointed out, "The statutory requirement of good- faith bargaining ... may not be satisfied by speculative assumptions as to the acceptance or refusal of an offer based on a party's attitude in prior negotiations." s Thus, the two wage reductions clearly consti- tuted unlawful unilateral changes with respect to the existing terms and conditions of employment 4 In addition, the two reductions amounted to an unlawful "modifica- tion" of the collective-bargaining contracts then in effect within the meaning of Section 8(d).5 The Respondent's contract modification therefore affords an alternative and independent basis for finding a violation of Section 8(a) (5).6 Because of the 8(a) (1) and (5) violations found by the Trial Examiner, and also because of the additional 8 (a) (5) violations which we find as set forth above, we do not agree with the Trial Examiner's recommendation to dismiss the complaint. The Trial Examiner, citing but a single case involving but a single isolated violation, made the recommendation on the ground that the Respondent here has com- plied with all the other terms of the contracts except the wage provi- sions, and subsequently bargained in good faith with the Union on a new contract. But there is no evidence that the Respondent has ever expunged the effects of the unfair labor practices we have found, and particularly the effects of the unlawfully imposed wage reductions. Accordingly, we shall issue an appropriate remedial order. THE REMEDY We have found that Respondent violated Section 8 (a) (1) and (5) of the Act by unilaterally reducing wages (1) without giving advance notice to the Union, and (2) in modification of existing contract pro- visions without meeting the notice requirements of Section 8(d). 3 Armstrong Cork Company v. N L R B., 211 F. 2d 843 , 848; see also New Britain Machine Co, 105 NLRB 646, enfd 210 F. 2d 61 (C.A 2), where it was held that an employer cannot justify a refusal to bargain on the ground that any agreement reached would be subject to the approval of a third party , such as the union's members. d See Winn-Diceie Stores, Inc, 147 NLRB 788, 789 , where the Board stated: "An em- ployer is under a duty to bargain with the chosen representative of his employees con- cerning matters affecting their wages . . . and cannot unilaterally change established employment conditions without bargaining, regardless of the existence or nonexistence of a collective-bargaining agreement " 6 The reductions took effect during the term of the contracts but without compliance with the notice provisions of Section 8 (d). See John W Bolton & Sons, Inc , 91 NLRB 989. 6Member Jenkins agrees that the Respondent violated Section 8 ( a) (5) and (1) of the Act by instituting unilateral changes with respect to the existing terms and con- ditions of employment However, Member Jenkins does not find it necessary to deter. mine, nor does he here pass upon , the issue of whether the two wage reductions amounted to an unlawful modification of the existing contract within the meaning of Section 8(d). 452 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Effectuation of the Act's purposes requires not only that the Respond- ent be ordered to cease and desist therefrom and take conventional affirmative action appropriate to remedy the violations, but also that the wage reductions be revoked and the prior situation be restored until lawfully changed, and that the employees whose statutory rights were invaded by reason of the reductions, and who suffered losses in consequence thereof, be reimbursed for such losses. For the purpose of making whole those employees, we shall order- backpay to be awarded in the following manner. Liability shall com- mence from the date of the first wage reduction in September 1963. Respondent shall be liable to those of its employees affected by the reductions in an amount equal to the difference between what they actually received as wages and what they normally would have- received, absent any unlawful reductions, until the occurrence of the- first of the following events: (1) the reaching of a mutual agreement with the Union relating to the subject; (2) the bargaining to a bona fide impasse on such subject; (3) the failure of the Union to commence negotiations within 5 days of the receipt of Respondent's notice of its desire to bargain with the Union; or (4) the failure of the Union to thereafter bargain in good faith.? Backpay shall be computed on a quarterly basis in the manner set forth in F. W. Woolworth Company, 90 NLRB 289, with interest thereon, Isis Plumbing & Heating Co.,. 138 NLRB 716. ORDER Pursuant to Section 10 (c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that Respondent, Kinard Trucking Company, Inc., its officers, agents, suc- cessors, and assigns, shall : 1. Cease and desist from : (a) Bargaining directly with the employees in the two appropriate units herein defined and represented by Highway and Local Motor Freight Employees, Local Union No. 667, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, or unilaterally reducing wages or making any other changes affecting the terms and conditions of employment of such employees, or otherwise refusing to bargain collectively with the Union as the statu- tory representative of such employees. (b) Threatening employees with loss of employment if they remain members of the Union and making promises concerning their terms and conditions of employment in order to induce them to withdraw from the Union. 7 See Winn-Dixie Stores, Inc., supra. KINARD TRUCKING COMPANY, INC. 453 (c) In any other manner interfering with, restraining, or coercing ,employees in the exercise of their rights guaranteed by Section 7 of the Act, including the right to bargain collectively through an exclu- sive representative of their own choosing. 2. Take the following affirmative action which is necessary to effec- tuate the purposes of the Act : (a) Revoke the wage reductions instituted unilaterally in Septem- ber and December 1963, with respect to the employees in the two units represented by the Union, and revert to the wage scale which would have been in effect but for the Respondent's unlawful action. (b) Make the employees in the two appropriate units whole in the manner set forth in the section of this Decision entitled "The Remedy." (c) Post at the plant of the Respondent in Tupelo, Mississippi, copies of the attached notice marked Appendix." s Copies of said notice, to be furnished by the Regional Director for Region 26, shall, after being duly signed by an authorized representative of the Respondent, be posted by Respondent immediately upon receipt thereof, and be maintained by it for a period of 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that said notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director for Region 26, in writing, within 10 days from the date of this Order, what steps Respondent has taken to comply herewith. 8 In the event that this Order is enforced by a decree of a United States Court of Appeals , there shall be substituted for the words "a Decision and Order" the words "a Decree of the United States Court of Appeals, Enforcing an Order." APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the purposes of the National Labor Relations Act, as amended, we hereby notify our employees that: WE WILL NOT bargain directly with our employees in the two appropriate units represented by Highway and Local Motor Freight Employees, Local 667, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, concerning their terms and conditions of employment, or reduce wages or make any other changes affecting the terms and conditions of employment of such employees without giving the Union advance notice or complying with the requirements of 454 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Section 8 (d) of the Act, or otherwise refuse to bargain collectively with the Union as the statutory representative of the employees: in the two appropriate units, which are defined as follows : (1) Over-the-road drivers working out of the Tupelo, terminal. (2) City drivers working out of the Tupelo terminal. WE WILL NOT threaten our employees with loss of employment if they remain members of the Union nor make promises concern- ing their terms and conditions of employment in order to induce- them to withdraw from the Union. WE WILL NOT in any other manner interfere with, restrain, or coerce employees in the exercise of their rights guaranteed by Section 7 of the Act, including the right to bargain collectively through representatives of their own choosing. WE WILL make whole the above-described employees for any loss of pay they may have suffered as a result of our unlawfully reducing wages in September and December 1963, in the manner set forth in the section of the Board's Decision entitled "The Remedy." All our employees are free to become, remain, or refrain from becom- ing or remaining, members of the above-named or any other labor organization. KINARD TRUCKING COMPANY, 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, 746 Federal Office Building, 167 North Main Street, Memphis, Tennessee, Telephone No. 534-3161, if they have any question concern- ing this notice or compliance with its provisions. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE Upon a charge filed on December 17, 1963 , and amended charges filed on Janu- ary 8 and February 28, 1964, by Highway and Local Motor Freight Employees, Local Union No . 667, affiliated with International Brotherhood of Teamsters , Chauffeurs, Warehousemen & Helpers of America, the General Counsel, acting through the Regional Director for Region 26, issued a complaint on February 28, 1964, alleging that Respondent had engaged in conduct which violated Section 8(a)(1), (3), and (5) of the Act 1 In its answer, Respondent admitted certain allegations in the com- plaint. such as the commerce allegations, but denied having committed any unfair labor practices. 2The complaint was amended at the hearing to allege that certain conduct set forth therein violated Section 8 ( a)(3) as well as Section 8 ( a)(1) and (5) of the Act. KINARD TRUCKING COMPANY, INC. 455 Thereafter, pursuant to due notice, a hearing was held in Tupelo, Mississippi, on April 7 and 8, 1964, before Trial Examiner Rosanna A . Blake. All parties were represented and were afforded full opportunity to present evidence , to examine and cross-examine witnesses , and to file briefs . The parties waived oral argument. Sub- sequently, counsel for the General Counsel filed a brief as did counsel for Respondent. Having considered the entire record and the briefs , and from my observation of the witnesses while testifying, I make the following: FINDINGS OF FACT 1. JURISDICTIONAL FACTS AND CONCLUSIONS; THE LABOR ORGANIZATION INVOLVED On or about July 1, 1962, Kinard Trucking Company, Inc., Respondent herein, acquired from G. F. Kinard, d/b/a Kinard Trucking Company, the latter's assets, goodwill, name, accounts receivable, liabilities, and other trade assets, including its Tupelo, Mississippi, terminal.2 Respondent, a Mississippi corporation, has its prin- cipal office and place of business in Tupelo, Mississippi, where it is engaged in the business of interstate and intrastate transportation of freight Since July 1, 1962, Respondent has operated the same terminal, has been engaged in substantially the same business, and has employed substantially the same employees and supervisors as did Kinard Trucking Company. During the 12-month period prior to the issuance of the complaint, Respondent, in the course of its operations, received gross revenues in excess of $250,000 for the motor transportation of freight between the States of Alabama and Mississippi. Upon the foregoing undisputed facts, I find, as Respondent admits, that it is and at all times material herein has been an employer engaged in commerce within the mean- ing of Section 2(6) and (7) of the Act. Respondent admits and I find that Highway and Local Motor Freight Employees, Local Union No. 667, affiliated with International Brotherhood of Teamsters, Chauf- feurs, Warehousemen & Helpers of America, is a labor organization within the mean- ing of Section 2(5) of the Act. II. THE ALLEGED UNFAIR LABOR PRACTICES A. Background As stated supra, Respondent is a corporation which operates a trucking business in Tupelo, Mississippi. At the time of the hearing, it had four over-the-road drivers and seven city drivers. Prior to July 1962, the business was owned and operated by G. F. Kinard and was known as the Kinard Trucking Company. On or about July 1, 1962, the business was incorporated with Kinard as president.3 It is undisputed that the incorporation brought about no change in the type of business, supervision, rolling stock, equip- ment, employees, or customers. Accordingly, the business, both before and after the incorporation, will be referred to as the Company or Kinard. The Company has never had an ICC certificate and has always operated its over- the-road business under a lease arrangement with a certificated carrier. From about 1951 to 1959, Kinard operated under the rights of B & M Express, Incorporated, herein called B & M, hauling freight between Tupelo and Memphis, Tennessee, and between Tupelo and Birmingham, Alabama. During the same period, the Company operated city runs; i.e., runs to points within a 25-mile radius of the Tupelo terminal. Both classifications of drivers were hired and paid by Kinard. Sometime in 1952, Kinard entered into a "local pickup and delivery agreement" with Local 591, Teamsters, for the period between June 21, 1952, and June 20, 1955, and a Southeastern Over-the-Road Motor Freight Agreement with the same union for the period between February 1, 1952, and January 31, 1955. At that time Local 591, which apparently no longer exists, had its headquarters in Tupelo. Kinard testified without denial that he signed the contract when a Teamsters rep- resentative told him "sign the agreement today, or you are out of business tomorrow." Local 591 had not been certified by the Board as the representative of the Company's employees and the union representative did not offer proof-or claim to have proof- that a majority of the employees desired to be represented by Local 591. According 2 Respondent's records Indicate that the business was Incorporated sometime before July 1, 1962, not In July 1963 as alleged In the complaint and testified to by President Kinard a Kinard Impressed me as a truthful witness and I credit his testimony generally. However, as indicated infra, I believe that his memory was faulty in a few instances. 456 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to the undenied and credited testimony of General Counsel's witness, William T. Helms, about the time the agreements were signed, a union representative "came down to try to get everyone in the Union. So something came up over the deal- I don't know what-but Mr. Kinard said `Well, we had just better go ahead and get in the Union.' So we did." The Company had no contract with any union between 1955, when the two agree- ments mentioned above expired, and 1961. B. Kinard's contract with Transcon Lines In May 1959, B & M was bought out by Transcon Lines, herein called Transcon, and Kinard entered into an agreement with the latter Company. This agreement designated G. F. Kinard as Transcon's commission agent and transportation super- visor. Kinard's "obligations" as commission agent included: Furnishing adequate number of employees to handle the dock, pickup and deliv- ery, and office operation at Tupelo. In this connection you will retain full responsibility for the employees' wages and all related items, including work- men's compensation, payroll taxes and any retroactive wages or other pay settle- ment which may result, now or in the future. G. F. Kinard was to be paid a percentage of the revenue, less certain deductions, including his monthly salary as driver supervisor and the drivers' wages, social secu- rity, health and welfare, and other fringe costs. Kinard also leased his trucks to Transcon and the trucks were to be in the exclusive control of Transcon. Transcon also appointed G. F. Kinard to be its transportation supervisor and his duties were stated as follows: to supervise the drivers operating between Tupelo and Birmingham and Tupelo and Memphis. This supervision will include the right to discipline, hire, fire, and otherwise control the drivers employed in this operation. Mr. Kinard will also keep records of the time worked by the drivers, compute wages due them, and make payments to them by issuing a Transcon Lines draft covering the amount of their wages. Thereafter, Kinard's over-the-road drivers, who had been operating the Memphis and Birmingham runs under the contract with B & M, applied for employment with Transcon, were given new physical examinations, were hired, and were paid by Transcon drafts, signed by Kinard, on a Los Angeles bank .4 According to Respond- ent, the employees were carried on Transcon's payroll,5 and their W-2 (income tax withholding) forms named Transcon as their employer. A list of employee rules applicable to over-the-road or line drivers and typed on Transcon stationery was posted in March 1960. Certain of the rules were said to apply also to any and all of Kinard's employees. Two grievances filed by the Union during the Transcon period were addressed to Kinard as "Agent"for Transcon. Pursuant to ICC rules, the trucks bore the Transcon name in large letters and the Kinard name in much smaller letters. The same type lettering was used after Kinard leased the trucks to another carrier on or about November 11, 1963 (see infra), and, presumably, in the B & M days. According to over-the-road driver W. 0. McCarty, who had worked at the Tupelo terminal for approximately 11 years, the only difference to the employees after the change to Transcon was the sign on the trucks .6 I also credit McCarty's testimony *Although Kinard testified that he hired the drivers "subject to the approval of Transcon officials in Los Angeles," the agreement between Transcon and Kinard contains no reference to approval by Transcon officials anywhere Moreover, the applications for employment of Edward Smith and William McCarty, introduced into evidence by Re- spondent, show that they were interviewed by M. C. Neal, Kinard's bookkeeper, and "Approved By G. F. Kinard." The application of Jack Leslie was initialed by some- one other than Kinard and was forwarded to a Transcon official for review and approval. 6It is not clear that the payroll register entered into evidence by Respondent means that the employees were on Transcon's payroll. It may be only a payroll report sub- mitted by Kinard for, as set forth supra, the agreement provides that Kinard "will retain full responsibility for the employees' wages." In addition, Kinard's financial statements, entered into evidence by Respondent, list among Kinard's expenses , "salaries and wages," union welfare and pension fund, social security taxes, employees' insurance, employees' medical expenses , and unemployment taxes. 6 McCarty was referred to at the hearing as McCardy. The General Counsel's motion to correct the spelling is hereby granted. KINARD TRUCKING COMPANY, INC. 457 that about the time Transcon bought out B & M, he asked G. F. Kinard whom the drivers were working for and Kinard said that- we would be paid on a Transcon check but it would be signed by him and when Transcon paid him-he was commissioned agent-that they would either send him a bill or withhold the money he paid us, out of his check and he would pay them back, that we would still be working for him, just as we had always done.7 C. The 1961 collective-bargaining contracts Sometime in early 1961, the president of Local 667 handed G. F. Kinard two con- tracts which he signed without reading. Local 667 offered no proof that it repre- sented a majority of the employees and Kinard asked for none The union repre- sentative merely asked if Kinard had signed a contract and when Kinard said "No," handed him the contracts and he signed them. Both contracts expired on January 31, 1964. One of the contracts is entitled "Southern Conference Over-the-Road Motor Freight Agreement" and the other "Southern Conference Local Freight Forwarding Agreement." Article 2(a) of the over-the-road agreement and article 1(a) of the local freight agreement state that the employer recognizes that "the Local Unions affiliated with the Southern Conference of Teamsters are the exclusive bargaining representatives of all employees" in the covered classifications. Kinard admitted that he did not ask why he was being asked to sign a Southern Conference contract and also admitted that he did not have authority to sign a contract on behalf of Transcon. From 1961 on the Company's direct contracts with the Union were with Local 667 which has several thousand members and has its headquarters in Memphis. The complaint alleges that the Union, Highway and Local Motor Freight Employees, Local Union No. 667, affiliated with International Brotherhood of Teamsters, Chauf- feurs, Warehousemen & Helpers of America, is the majority representative of Kinard employees in two units: (1) the over-the-road drivers working out of the Tupelo terminal, and (2) the city drivers working out of the Tupelo terminal. Each month during the term of the contracts, Local 667 sent the Company a bill for union dues which the Company paid and it also made the health and welfare payments required by the contracts. It is undisputed that a majority of the city drivers working out of the Tupelo terminal and a majority of the over-the-road drivers working out of the Tupelo terminal have paid dues each month, without pro- test, either by way of dues deduction authorizations or direct payment to the Com- pany.8 And over-the-road drivers McCarty and Leslie testified that four of the five over-the-road drivers belonged to the Union while city driver John Blaylock, job steward for all the drivers, testified that 7 of 10 city drivers employed in October 1963 were members of the Union. In none of its dealings with Local 667 did Respondent question either the appro- priateness of the bargaining units or Local 667's majority status. In view of the past history of bargaining for the city drivers working out of the Tupelo terminal and the over-the-road drivers working out of the same terminal in separate units and the fact that they constitute distinct groups with little or no con- tact with Kinard drivers elsewhere, I conclude that the two existing units constitute units appropriate for collective bargaining within the meaning of Section 9(b) of the Act. I also find that at all times material herein Local 667 represented a majority of the employees in each unit .9 D. The negotiations with Local 667 in February 1963 It is undisputed that the Company has been on the verge of bankruptcy for sev- eral years. Transcon was interested primarily in long-haul operations, i.e., operations 7 Although Kinard denied having the above conversation , I am convinced it occurred and that he simply had forgotten it. It would be natural for the drivers to ask what, if any , effect the Transcon arrangement would have on them. And since, as a practical matter , it had none , I have no doubt that Kinard assured them that they would still be working for him As a matter of fact, Kinard admitted that there was "some con- versation with [McCarty ] about the way he was being paid Of course , I told him that regardless of what he was paid with , that I was still his boss , that there was no change in supervisors." 8 Although, after November 1963, Kinard had a number of drivers In other Mississippi towns, they are not involved in this proceeding. Respondent's contention that the Union 's majority was "coerced" Is discussed infra. 458 DECISIONS OF NATIONAL LABOR RELATIONS BOARD between major terminals, and repeatedly urged Kinard to get out of the short-haul operation because it was costing Transcon money. In February 1963 the Company's financial situation was such that it doubted whether it could stay in business if it had to continue to pay the wages set forth in the two contracts. Kinard so informed Local 667 officials in Memphis and a meet- ing was held in Tupelo which was attended by Local 667 President C. H. Augustine and Business Representative Harold H. Pennington. The latter officers agreed that Kinard could reduce wages below those set forth in the contracts, if the employees would agree and if "higher officials" of the Teamsters would allow the reduction.10 On February 14 each of the 17 employees agreed in writing to accept the proposed reduction "so that Kinard Trucking Co., The., may continue to operate until such time that the operation will permit the continuance of the Standard Agreement." However, in a letter dated March 11, 1963, Business Representative Pennington noti- fied Kinard that- the Southern Conference of Teamsters has rejected your proposal of February 14, 1963 for reduced wages and obligations under the Southern Conference Over-the-Road and City Pick Up and Delivery Agreement. This is to further advise that effective today March 11, 1963 each existing contract will have to be complied with in its entirety.1' On receipt of the above letter, the Company again began paying the contract rates. E. Respondent's wage ,eduction in September and its statement with respect to vacations In September 1963 Transcon notified Kinard that it was eliminating the latter's service between Tupelo and Memphis which "knocked out" approximately one-third of Kinard's revenue. On September 9 Kinard, without notification to the Union, reduced the rates of pay of both its city and over-the-road drivers. About the same time, Kinard admittedly told the drivers that it did not appear that the Company would be able to give them vacation pay in 1964 but that they would get it if the money was available. F. Respondent's termination of the Transcon contract and its contract with Deaton The Company's financial situation continued to deteriorate and in October Kinard canceled its contract with Transcon effective November 8. This left the three over- the-road drivers who had been driving the Transcon runs without jobs but did not affect Kinard's city runs or the peddle runs it had been operating.12 Kinard was of the opinion that the Company could continue operating only if it could get a contract with another carrier and almost immediately entered into a con- tract with Deaton Truck Lines, herein at times called Deaton, which had both truck- load (TL) and less than truckload (LTL) rights in northern Mississippi As a result of the new contract, Kinard added a number of peddle runs and he testified that he told the over-the-road drivers about the new runs and that "they could take whatever runs they wanted, that they could pick them as far as [he] was concerned ... accord- ing to seniority." Each of the drivers selected a peddle run and, according to the undisputed and credited testimony of drivers McCarty and Leslie, they received no "separation slip" from Transcon and were not "hired" by Kinard. After the Deaton contract, the drivers were again paid by Kinard checks. After cancellation of the Transcon contract, Kinard sold his three over-the-road trucks to Joe Winter who thereafter leased them to Deaton. 10 Business Representative Pennington testified that the Company had offered "on many occasions" to let him see its books. 31 Pennington explained that when his superiors recommend something "people in my capacity" normally follow the recommendation '2A peddle run is one on which the driver picks up and delivers freight door-to-door in an area between 25 and 200 miles from a terminal. The driver must also be able to make the round trip within an 8-hour period. In Kinard's case, the peddle runs were generally limited to a distance of between 25 and 50 miles from the Tupelo terminal. KINARD TRUCKING COMPANY, INC. 459 Kinard admittedly did not notify Local 667 about any of the above changes which meant, in effect, that the Company went out of the long-haul business. G. Respondent's statements to the drivers about the time of the change from Transcon to Deaton According to the testimony of driver McCarty, Kinard told the drivers in late October that- he was making a deal, or in the process of making a deal with Deaton Truck Lines and that Deaton ... was not Union and that he could not operate with Deaton ... under the Union and that he thought there would be plenty of work for everybody as soon as we could get out from under the Union and everybody get started to work. Driver Jack Leslie similarly testified that Kinard said he was "trying to change over to Deaton," that Deaton had labor troubles, and that "we wouldn't be able to work with Deaton ... and stay in the Union and if we would follow him and work with him, he felt everything would be all right." Dock Foreman William T. Helms testified that Kinard told the drivers that he was trying to get "hooked up" with Deaton, that "he couldn't get hooked up with [Deaton] if he was in the Union and it looks like if he didn't get hooked up with them, that he would just have to close down." Kinard, according to the testimony of driver Blaylock, said that "in order for us to change over from Transcon to Deaton . . . we would have to get out of the Union." 13 On or about November 4, Kinard talked to Dock Foreman Helms and driver Edward Smith and told them that he wanted them to see "if we could get all of the boys together and see about getting them out of the Union." 14 Kinard explained that he "couldn't personally go to the men and ask them to get out of the Union or tell them to get out of the Union because that would get him in trouble." Kinard said he needed to know by the following morning and asked Helms and Smith to get the drivers together that night, adding that they could take the men to dinner and he would pay for it.15 Helms and Smith took the city drivers to dinner that night. According to the undenied and credited testimony of Helms, he and Smith told the men that "Mr. Kinard said that he was going to have to get out of the Union to go with Deaton Truck Line" and that he asked Smith and himself to get them together "to see how they felt about getting out of the Union." 13 None of the foregoing testimony is denied and I find that Kinard made statements of the type set forth above I also credit the testimony of driver Leslie that during the same period Dock Foreman Joe Maddox told him Kinard was selling the trucks for the purpose of "getting rid of [drivers] West and McCarty." I do not credit Maddox's denial that he made any such statement primarily because his demeanor while testifying caused me to conclude that he was not a truthful witness Similarly, I do not believe that Maddox was telling the truth when he told Leslie that Kinard's purpose was to terminate West and McCarty and have given his statement to Leslie no weight in reach- ing my conclusions herein. 14 The complaint alleges and Respondent's answer admits that "At all times material herein, and on or about November 4, 1963, William T. Helms and Edward Smith were agents of the Respondent, acting on its behalf, within the meaning of Section 2(13) of the Act." Smith is G F. Kinard's nephew. Helms is a director of the corporation but explained that he did not ask to be one, that he was appointed, and accepted. As Helms put it in another connection, "Wouldn't you go along with a man that was writing your check . . . ?" Helms refused the dock foreman job originally because he did not want to get out of the Union As a result, he is classified as "checker." However, he substituted for Dock Foreman Maddox prior to November 1963, and took over Maddox's job when Maddox was transfered to Birmingham 15 The above findings are based on the undenied and credited testimony of Helms Smith was not a witness. Respondent sought to distinguish between Helms' testimony and the statement in his affidavit that Kinard said he wanted a meeting of the employees to "talk over getting out of the Union." Helms, however, testified that "it means the same thing to me" I agree that Kinard's meaning was clear whichever way he ex- pressed it." 460 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The drivers asked if Joe Maddox would still be their dock foreman and Smith said that Kinard had told him that Maddox was going to Birmingham as he in fact did 16 Helms further testified: So everybody agreed that they would get out of the Union if Mr. Kinard would take out a hospital insurance of about the same that we had with the Union and if he wouldn't cut pay any lower than the $2.50 that we were drawing. After leaving the restaurant, some of the drivers went to the terminal and Smith called Kinard on the telephone and reported that "everybody had agreed to get out of the Union" if he would get rid of Joe Maddox, if he would take out an insurance policy, and if he would not cut salaries any more than $2.50. Smith told the men Kinard had agreed. Driver John Blaylock testified that Helms and Smith said that "Kinard wanted to know how we felt about getting out of the Union and he needed to know something the next morning so he could let Deaton ... know." The men were "concerned," Blaylock explained, about Maddox, their insurance, and a salary cut. Smith told the drivers that Kinard had assured him Maddox would not be the foreman and later, on the telephone, Smith told Kinard the three things the men were concerned about and Smith reported that Kinard had said Maddox would not be the foreman, that Kinard would pay anything over $8 a month (the amount of the union dues) on hospital insurance, and that he had no intention of cutting anything.17 Both Helms and Blaylock testified that, as far as they knew, none of the drivers withdrew from the Union. H. The December pay cut On December 31 Kinard told the men that business was bad and that he was going to have to cut everybody's wages to $2. Kinard explained that he was cutting wages in order to stay in business and he "didn't know for sure whether he would have the money to pay for [the] week's work; that if anybody wanted to work under the situa- tion, he would appreciate it and they could clock in; those people who didn't want to work, knowing the circumstances, they could leave and he wouldn't feel hard of them." Everyone clocked in. It is undisputed that Kinard did not notify the Union about the foregoing reduc- tion in wages. 1. The new contract negotiated in February-March 1964 As set forth supra, the 1961 contracts expired on January 31, 1964. In late Sep- tember 1963, Local 667 notified the Company that it wished to negotiate "changes or revisions" for the period beginning February 1, 1964, and to enter into a "National Agreement." The letters went on to say that if the Company would not be repre- sented by any of the employer associations and wanted individual notice of the time and place of negotiations, to advise the Southern Conference in Dallas, Texas. There is no evidence that Kinard participated in the general negotiations but he did enter into negotiations with Local 667 after February 1, 1964. Thereafter, Kinard and Local 667 reached agreement on a 3-year contract. It provided for lower wage rates than those in the standard Southern Conference contract and pro- vided for new wage negotiations at the end of the first year; i.e., March 31, 1965. Since this contract differed from the standard contract, it had to be approved by the Southern Conference. It had not been approved at the time of the hearing. J. Analysis and conclusions 1. The alleged refusal to bargain a The duty to bargain I am convinced and find that, as Kinard testified, he is not opposed to unions and that he has never had any dispute with Local 667. I also find that his statements 19 Helms explained at the hearing that "no one wanted to get out of the Union and Joe Maddox be dock foreman, because they figured they would work two of three days and get fired. So, that's the reason Maddox, I guess, was brought up .. . . 17I credit the undenled testimony of both Blaylock and Helms. I find, therefore, that Kinard, Helms , and Smith made the statements set forth above. KINARD TRUCKING COMPANY, INC. 461 and actions were not motivated by "antiunion animus" in the usual sense but were prompted entirely by the Company's serious financial situation. However, it is too well established for me to hold otherwise that economic considerations do not excuse conduct which has the effect of interfering with the statutory rights of employees.18 It is equally well established that an employer violates the duty to bargain imposed by the Act by making changes in the terms and conditions of employment without giving the representative of his employees an opportunity to bargain about the pro- posed changes.'° b. Respondent's general defenses Before dealing with the basic issue, it is necessary to discuss certain defenses raised by Respondent to the refusal-to-bargain charge. According to Respondent, since the wage cuts constituted a breach of contract, the Union's only remedy was a suit for damages for breach of contract. I reject this contention because I cannot hold that the Company's duty to bargain was extin- guished either by the fact that there were collective-bargaining contracts or by the fact that its actions may also constitute breaches of those contracts. Many contracts provide that the employer will not discriminate against employees because of their union membership or activity. If the employer thereafter dis- criminates against union members, I do not believe that the fact that his action also violates the contract means that the union or the employee is limited to a civil suit for damages . Nor do I believe that the Board is barred from issuing and prosecuting a complaint set in motion by an unfair labor practice charge. Cf. N.L.R.B. v. Newark Morning Ledger Co., 120 F. 2d 262, 267-268 (C.A. 3). The chief reason for such a conclusion is, of course, that a civil action for damages will not provide a full and complete remedy for the violation of the public rights created by the Act. For one thing, a civil action will not result in an order directing reinstatement and the posting of appropriate notices which are parts of the remedy which the Board, with court approval, deems necessary to effectuate the policies of the Act. Similarly, in the instant case, a civil suit would not result in a bargaining order and notice posting which are normally included in the remedy provided in such cases. In short, in this case, as in others recently decided by the Board and the courts, the complaint is directed at and is seeking redress for the alleged denial of statutory rights under the Act; namely, the right of the Union to bargain about changes in terms and conditions of employment. Timken Roller Bearing Co. v. N.L.R.B., 325 F. 2d 746 (C.A. 6), cert. denied 376 U.S. 971; Smith Cabinet Manufacturing Com- pany, Inc., 147 NLRB 1506. Respondent also argues that it was under no duty to bargain with the Union because it did not represent an uncoerced majority of the employees. This conten- tion is based on two facts: (1) the employees originally joined the Union at the suggestion of Kinard, and (2) a member of management, Dock Foreman William T. Helms, was a member of Local 667 and voted in its elections. The short answer to the "coercion" contention is that even though the drivers joined the Union in 1952 at the suggestion of Kinard, by the fall of 1963, the date of the events here in issue, they affirmatively wished to be members of the Union. This is conclusively demonstrated by the fact that not one of the drivers withdrew from the Union notwithstanding an appeal by Kinard that they do so, an appeal which was communicated in part by "management" representative, Helms.20 Another answer is that to hold that an employer can avoid responsibility for unfair labor practices on the ground that he has violated the Act in the past would permit him to profit by his own prior illegal conduct. It would also encourage the commission of unfair labor practices in the hope that they can be used at some later date as a 19 See, for example, N.L R.B. v. Jones Sausage Co., at at., 257 F. 2d 878, 881-882 (C.A. 4). 10 Cf. N L.R.B. v. Benne Katz, etc., d/b/a Williamsburg Steel Products Co., 369 U.S. 736. 20Although Helms was a director of the corporation and acted as dock foreman from time to time prior to November 1963, and full time thereafter, I cannot find that his membership In Local 667, which has several thousand members, makes it an assisted labor organization. Cf. Nassau and Suffolk Contractors' Association , Inc., 118 NLRB 174, 180-182, 186. 462 DECISIONS OF NATIONAL LABOR RELATIONS BOARD defense to new violations of the Act.21 It is also at least questionable whether the employer can rely on events occurring many years earlier to attack the validity of a contract apparently valid on its face Cf. Local Lodge No. 1424, International Asso- ciation of Machinists, AFL-CIO (Bryan Manufacturing Co) v. N.L.R.B., 362 U.S. 411, 416. Finally, Kinard has never refused to bargain with the Union on the ground that it did not represent an uncoerced majority of the employees. On the contrary, his basic position is that he has bargained with Local 667 and he in fact negotiated a new contract with that Local shortly before the hearing in the instant case. Respondent also contends that the over-the-road drivers were not Kinard's employ- ees but the employees of Transcon during most of the period involved.22 It is clear that when the Union asked Kinard to sign the over-the-road agreement in 1961, he did not claim that he had no over-the-road drivers 23 Moreover, Kinard admitted at the hearing that he did not understand that he was signing on behalf of Transcon and had no authority to sign on behalf of that Company. He also admitted that when he sought approval of the wage cuts in February 1963, he did not obtain "authorization" from Transcon. He asserted, however, that he had authority to negotiate with Local 667 because he was Transcon's supervisor. In addition, Kinard's letter to the Union and the statements signed by the over-the-road drivers authorizing the cut are on Kinard-not Transcon-stationery. Similarly, Kinard did not "clear" the wage cuts in September with Transcon, his explanation being that he acted as the latter's agent. Furthermore, as previously noted, under the Kinard-Transcon agreement, Kinard retained "full responsibility for the employees' wages and all related items" and had the right to hire, fire, and otherwise control the drivers. It was also Kinard who collected the drivers' dues and submitted them to the Union and made the health and welfare payments under the contract It is true that the drivers applied for employment with Transcon, were hired, on paper at least, by Transcon, and were paid by Transcon drafts signed by Kinard. However, their wage rates and other terms and conditions of employment were not set by Transcon or governed by any contract Transcon may have had with any union but by the 1961 union agreement signed by Kinard.24 For the foregoing reasons, I conclude that whatever the technical situation may have been, the over-the-road drivers were never, as a practical matter, a part of the Transcon operation. On the contrary, the basic employer-employee relationship was between Kinard and the employees and all of the terms and conditions of employ- ment, except the wage rates after September 1963, were governed by the collective- bargaining contract signed by Kinard. Cf. N.L R B. v. McFarland, et at, d/b/a McFarland & Hullinger, 306 F. 2d 219, 220 (C.A. 10).25 It follows, therefore, and I find, that at all times material herein, a majority of the drivers in each of the appropriate bargaining units wanted to be represented by Local 667, that Kinard was under a duty to bargain for the over-the-road drivers, and that his duty to bargain was not extinguished by the existence of collective- bargaining agreements. 2z In E. Anthony & Sons, Inc. v. N L R B , 163 F. 2d 22, 27-28 (CAD C ), cert denied 332 U.S. 773, the Company sought to defend itself against a violation of Section 8(a) (3) of the Act on the ground that the Union to which the employee belonged was "dominated" by the employer. In rejecting this contention, the Court noted that the Company's "argument in actual essence is that if a company interferes with a union enough to make it illegal, employees can then be discharged for belonging to it That obviously cannot be so The process would be too simple To prevent unionization, all an employer would have to do would be to interfere with it " 22 This contention was raised for the first time at the hearing It was not raised in the related representation proceeding or in discussions which occurred prior to the hear- ing in the instant case x' As set forth supra, the Transcon-Kinard contract was entered into in 1959 and was not canceled until the fall of 1963. ''As noted supra, the financial statements introduced into evidence by Respondent list among Kinard's expenses "salaries and stages," union welfare and pension fund, social security taxes, employees' insurance, employees' medical expenses, and unemploy- ment taxes 25 The Board stated in Deaton Truck Lines, Inc., 143 NLRB 1372, that the "employer- employee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved but also the means to be used in reaching such end." KINARD TRUCKING COMPANY, INC. 463 c. Respondent's contention that it did not violate its duty to bargain The next question to be decided is whether, under all the circumstances, Respond- ent violated the duty to bargain imposed by the statute. As the Board noted in Times Publishing Company, 72 NLRB 676, 682-683, The test of good faith in bargaining that the Act requires of an employer is not a rigid but a fluctuating one, and is dependent in part upon how a reasonable man might be expected to react to the bargaining attitude displayed by those across the table. It follows that, although the Act imposes no affirmative duty to bargain upon labor organizations [as it now does], a union's refusal to bargain in good faith may remove the possibility of negotiation and thus preclude the existence of a situation in which the employer's own good faith can be tested. And in the words of Judge Learned Hand, speaking for the court in Lehigh Valley Coal Co. v. Yensavage, 218 F. 547, 553 (C.A. 2), a statute "should be construed, not as a theorem of Euclid, but with some imagination of the purposes which lie behind [it]." The facts set forth supra establish that when the Company's financial condition created doubts about its ability to continue in business unless its costs were reduced, Kinard did not ignore the Union to which the employees belonged and which, accord- ing to the complaint, is their exclusive bargaining representative. On the contrary, he explained his situation to the employees and officials of Local 667, sought their approval of a wage reduction, and offered to allow Local 667 officials to audit the Company's books to determine if and when he was able to return to the contract rates.26 Furthermore, both the employees and Local 667 officials agreed to the proposed reduction insofar as it was in their power to do so. After the Southern Conference refused, for an undisclosed reason, to approve the reduction, Kinard returned to the contract rates until he was forced to reduce wages or go out of busi- ness. Except for the wage cuts, the Company observed all other terms of the con- tracts, continued to transmit dues to Local 667, and made regular payments to the union health and welfare fund. Finally, only a few weeks before the hearing, Kinard and Local 667 officials reached agreement on new contract terms. Kinaid's conduct thus discloses that he recognized his statutory duty to bargain. Not only did he seek to work out a solution to his very real problems via collective bargaining but it appeared for a time that he had succeeded. It was only after the Southern Conference nullified the agreement reached at the bargaining table and only after it became apparent that future negotiations would be futile that Kinard engaged in the conduct which is alleged to constitute illegal "unilateral" action. That collective bargaining turned out to be futile was due entirely to Local 667's lack of authority to "bargain" in fact. Thus, even after the 1961 contracts expired, the only binding agreement it could "negotiate" was one which incorporated, in their entirety and exactly, predetermined terms; i.e., the contract negotiated or at least approved by the Southern Conference. Not only did Local 667 have no power to engage in the give-and-take of collective bargaining but its recommendations carried no weight. Its officials were nothing more than mere couriers for the Southern Conference, their authority being limited to transmitting to Kinard for his signature a document as to which he had no say as to terms and as to which Local 667 had no say except to the extent that it may have influenced the Southern Conference's deci- sion as to acceptable terms. It is clear, therefore, that Local 667 was without the necessary authority to "approach the bargaining table with an open mind and pur- pose to reach agreement consistent with the respective rights of the parties." L. F. Majure Transport Company v. N L.R.B., 198 F. 2d 735, 739 (C.A. 5).27 In view of all of the foregoing facts, I conclude that Kinard was under no duty to bargain with Local 667 because it could not engage in meaningful collective bargain- ing with Kinard. Cf. Times Publishing Company, et al., 72 NLRB 676, 685-686 28 26 As stated supra, Business Representative Pennington testified that the company had offered "on many occasions" to let him "look over [its] books" 27 I recognize that Local 667 was under no duty to bargain with Kinard about whether wages could be reduced during the contract term. But having waived its right not to bargain and having undertaken to bargain, it was under a duty to do so in good faith. It is also true that Kinard was invited to participate in the areawide bargaining in the fall of 1963 but I cannot believe that, as the employer of 11 drivers, he would have been able to "bargain" in fact even if he had been present physically 21Cf. Phelps Dodge Copper Products Corporation, 101 NLRB 360, 368, in which the Board found that because of the union's conduct the employer 's "normal obligation to bargain was suspended . . . . 464 DECISIONS OF NATIONAL LABOR RELATIONS BOARD But even if it is assumed, arguendo, that Kinard was under a duty to bargain, the Company's entire course of conduct convinces me and I find that it did bargain in good faith with Local 667, the alleged exclusive bargaining representative of the employees. In reaching these conclusions, I am aware that a "technical argument to the con- trary" can be made. Cf. Times Publishing Company, 72 NLRB 676, 685-687. Thus, the Company reduced wages in September without further consultation with the Union. But it is clear that it would have been futile for Kinard to engage in a second round of negotiations with Local 667 about the wage reduction because of the latter's lack of authority. It is also at least arguable that, bargaining having reached an impasse, Kinard was free to effectuate the reduction.29 Although the impasse argu- ment cannot be made with respect to the change from Transcon to Deaton in Novem- ber and the December wage cuts, there can be no doubt that because of Local 667's lack of authority, negotiations would have been just as futile in November and December as they were in February 1963. Furthermore, I have found that during the Transcon period, the over-the-road drivers were, as a practical matter, Kinard's employees and that the changeover to Deaton had no effect upon the basic employee-employer relationship. Of course, the Company's actions meant that the Tupelo to Birmingham runs were eliminated and were replaced with shorter runs; i.e., peddle runs. Unquestionably, this consti- tuted a change in the terms and conditions of employment of the over-the-road drivers but there is no evidence that their earnings were reduced thereby or that the peddle runs were in fact less desirable than the Birmingham runs. And although Kinard did not bargain with the Union, he gave the over-the-road drivers-i.e., the employ- ees in the over-the-road bargaining unit-the opportunity to select the peddle runs on the basis of their terminal seniority in accord with the provisions of the contract.30 In sum, I am of the opinion that a holding that the Company violated its duty to bargain would, as the Board said in Times Publishing, 72 NLRB at 686, "do injustice and not effectuate the policies of the Act." And here, as in that case, this conclusion is "reinforced" by subsequent events, namely the Company's continued compliance with all the contract terms, except wages, and its good-faith negotiations with Local 667 in February-March 1964, which culminated in a contract wholly acceptable to Local 667. But even were Ito conclude that Respondent violated its duty to bargain, I would recommend that no bargaining order issue, Respondent having, in my opin- ion, expunged the effect of its illegal conduct by its continuing recognition of and subsequent negotiations with Local 667. d. The General Counsel's contention that Respondent's actions violated Section 8(a)(3) of the Act Counsel for the General Counsel asserts in his brief that "it is clear . .. that Respondent's actions in changing its employees' working conditions and rates of pay were motivated by its desire to rid itself of the Union since it felt that it could no longer operate under the Union." He contends, therefore, that Respondent thereby violated Section 8(a) (3) of the Act. I cannot agree. The September wage cut, which was the subject of the futile February negotiations, followed Transcon's elimination of the Memphis run which reduced Kinard's revenue by one-third. The Transcon contract was canceled because Transcon was not inter- ested in short-haul business and Kinard believed that the Company's financial situa- tion would improve if it could get a contract with a carrier which could provide more local business. This Deaton was able to do, at least in part because of its less-than- truckload rights, and at the time of the hearing in April 1964 there had been some slight improvement in the Company's financial picture. The December wage cut, like the one in September, was motivated only by economic considerations. One and probably both cuts were applicable not only to the drivers but also to the office 20 N.L.R.B. v. Crompton-Highland Mills, Inc., 337 U S. 217, 223-225 $° As set forth supra, in the fall of 1963, Kinard told the employees that he did not believe he would have the money to give them their vacation pay in 1964 but would do so if the money was available. Since the contracts expired on January 31, 1964, the amount of vacation pay accruing under them in 1964 was negligible. Of course, when the contracts expired, Kinard was under no duty to give the drivers paid vacations but only to bargain in good faith with Local 667 on the subject Under all of the circum- stances, I cannot find that the above statement violated either Section 8(a)(5) or (1) of the Act. KINARD TRUCKING COMPANY, INC. 465 employees, who are apparently nonunion, and to Kinard himself. Finally, and most conclusive of all, is the fact that Local 667 approved the first wage reduction and in the spring of 1964, agreed to a contract incorporating the lower wage rates. 2. The alleged interference, restraint, and coercion As previously stated, Kinard concluded in November 1964 that he could continue in business only if he could change to a carrier which could provide him with more short-haul business. Although Kinard is not peisonally opposed to unions and bargained in good faith with Local 667, the only carrier he could do business with was Deaton which was having labor troubles. Kinard believed that this meant that he could make a "deal" with Deaton only if his Company was nonunion. Accordingly, in late October, Kinard told the drivers that he was trying to make a "deal" with Deaton, that they would not be able to work with Deaton and stay in the Union, and that he thought there would be plenty of work "as soon as we could get out from under the Union." When there was no indication that the drivers were getting out of the Union, Kinard took more direct action. As he told Smith and Helms, he "couldn't personally go to the men and ask them to get out of the Union or tell them to get out of the Union because that would get him into trouble." He therefore directed Smith and Helms to take the drivers to dinner and "see about get- ting them out of the Union " At the dinner, Smith and Helms told the men that Kinard said he "was going to have to get out of the Union" to go with Deaton and had asked Smith and Helms to get the drivers together and see how they felt about getting out of the Union. The drivers were "concerned" about Dock Foreman Maddox, about loss of hos- pital insurance, and a further reduction in pay. They were assured that Maddox would not be their foreman, that Kinard would pay the cost of insurance above $8 a month, i.e., the amount of the Union dues, and would not cut wages. As a result, the drivers agreed to get out of the Union although they did not in fact do so. Respondent contends that its conduct did not violate the Act because it neither threatened reprisals if the drivers stayed in the Union nor promised benefits if they got out. I cannot agree. Kinard, both directly and through his agents, Smith and Helms, told the drivers that they could not work for Deaton and stay in the Union. Such statements sug- gested, at the very least, that the jobs of union members would be in jeopardy under Deaton. The men also knew that Kinard might have to close down if he did not make a deal with Deaton whereas he predicted plenty of work as soon as they "got out from under the Union." Under these circumstances, the drivers could reasonably conclude that the fact that Kinard was not personally opposed to unions would not prevent him from employing nonunion drivers only if that was the only way he could stay in business. As the court said in N.L.R.B. v. W. C. Nabors, d/b/a W. C. Nabors Company, 196 F. 2d 272, 276 (C.A. 5), cert. denied 344 U.S. 865, when statements relating to job prospects "are made by one who is a part of management, and who has the power to change prophecies into realities, such statements whether couched in the language of probability or certainty, tend to impede and coerce employees in their right to self-organization, and therefore constitute unfair labor practices." Although it is probably true that the decision to transfer Maddox to Birmingham had been made before the meeting, it was announced when the drivers expressed their concern about working under Maddox if there was no union. It is also true that the drivers were not promised better insurance or higher wages without the Union but they were promised the same insurance and wages without, as with, the Union. In short, they were promised that they would not lose their hospital insurance coverage or have their wages cut by giving up their union representation. There can be no doubt that Kinard's promises were designed to overcome the employees' reluc- tance to abandon the Union and the announced purpose of the meeting was to cause them to withdraw from it. Cf. Watertown Undergarment Corporation, 137 NLRB 287, 300. Moreover, as a result of the meeting, the drivers agreed to get out of the Union although it is clear that they did not want to do so. Admittedly, they did not with- draw. But this was not because the reasonable tendency of the statements was not to bring about that result but because Kinard found that he could do business with Deaton even if his employees were union members. The test in such cases is whether the employer engaged in conduct which, it may reasonably be said, tends to interfere with the free exercise of employee rights under the Act. N.L R B. v. Wilbur H. Ford, d/b/a Ford Brothers, 170 F. 2d 735, 738 (C.A. 789-730-66-vol. 152-31 466 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 6). As the Court of Appeals for the Fifth Circuit pointed out more recently, the question to be determined is what interpretation the employees can reasonably give to the employer's actions and whether from the "listeners ' point of view," the state- ments constitute forbidden coercion , threats, or intimidation . Hendrix Manufactur- ing Company, Inc. v. N.L.R.B., 321 F. 2d 100, 103-104 (C.A. 5). In sum, I conclude that the undisputed evidence establishes that Respondent threatened the drivers with loss of employment if they remained members of the Union, promised them continued employment if they got out of the Union, and promised them the same hospital insurance and pay rates without, as with, the Union. It follows, therefore, and I find, that Respondent violated Section 8 (a) (1) of the Act by engaging in conduct which, it may reasonably be said, tended to interfere with the free exercise of employee rights under the Act. However, the record as a whole makes it clear that the employees were aware that Kinard was not "antiunion" in the usual sense, they continued to work for Kinard even though they did not withdraw from the Union , and there was no substantial change in the relationship between Kinard and Local 667. In Times Publishing, 72 NLRB 676, 686, footnote 11, the Board refused to find that certain statements violated the Act although "normally" statements of the type made are held to con- stitute a violation . In my opinion , such a conclusion can properly be made by the Board but, as a Trial Examiner , I am unable to conclude that Kinard's statements did not violate the Act. However, in view of all of the circumstances , it seems to me that their illegal effect was neither as great nor as long -lived as in the usual case. 3. The allegation that Respondent violated the Act by engaging in individual bargaining The complaint also alleges that Respondent, through its agents, Helms and Smith, bargained directly with the employees concerning rates of pay, wages, and other terms and conditions of employment thereby violating Section 8(a) (5) of the Act. I agree. Although Kinard had probably decided before the meeting to transfer Dock Fore- man Maddox, he might have changed his mind. However, when the employees expressed concern about working under Maddox if they got out of the Union, Kinard committed himself to transferring Maddox and made the transfer one of the "con- siderations" for the employees' agreement to get out of the Union. In any event, Kinard, through Smith and Helms, bargained about a substitute for the hospital insur- ance benefits under the contract and what the wage rates would be in the future. Finally, Respondent was bargaining about the "terms" on which the drivers would agree to withdraw from the Union and an agreement was reached in fact when he met their "terms." That Respondent thereby violated its duty to bargain with the statutory representa- tive of its employees and no other is too clear to require extensive discussion or cita- tion of authority. Medo Photo Supply Corporation v. N.L.R.B., 321 U.S. 678, 683- 684. M. REMEDY I have found that Respondent engaged in conduct which, it can reasonably be said, tended to interfere with the free exercise by its employees of their rights under the Act and bargained with the employees individually about the terms upon which they would-and did-agree to withdraw from the Union. However, having considered the case as a whole, particularly Respondent' s continuing compliance with all of the terms of the contracts except the wage provisions and its subsequent good-faith bar- gaining with Local 667, I conclude that a remedial order is not necessary to effectuate the policies of the Act.31 The purpose of an order is to expunge the effect of illegal conduct and it seems to me that the effect has been sufficiently expunged by later events. Accordingly, I find that a remedial order would serve no useful purpose. Cf. Bernhard Altmann International Corporation, 137 NLRB 229, 230, footnote 1. CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of Sec- tion 2(6) and (7) of the Act. 2. Highway and Local Motor Freight Employees, Local Union No. 667, affiliated with International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, is a labor organization within the meaning of Section 2(5) of the Act. u I attach no importance to the fact that the employees In fact failed to withdraw from the Union because it is immaterial whether Respondent 's coercive conduct succeeded or failed N.L.RB v. Illinois Tool Works, 153 F. 2d 811, 814 (C.A. 7). GLAZER'S WHOLESALE DRUG COMPANY, INC. 467 3. The above-named Union is and at all times material herein has been the statutory representative of Respondent 's employees in two units appropriate for col- lective bargaining : ( 1) the over-the-road drivers working out of the Tupelo terminal; and (2 ) the city drivers working out of the Tupelo terminal. 4. A preponderance of the evidence on the whole record does not support the allegation of the complaint that Respondent violated Section 8 (a) (3) of the Act by changing the terms and conditions of employment of the drivers in the above units or violated Section 8 (a) (5) of the Act by doing so without notice to or consultation with the Union. 5. A preponderance of the evidence supports the allegations of the complaint that Respondent violated Section 8 (a) (1) of the Act by threatening employees with loss of employment if they remained members of the Union and by making promises concerning their terms and conditions of employment in order to induce them to withdraw from the Union. 6. A preponderance of the evidence supports the allegations of the complaint that Respondent violated Section 8(a)(5) and (1) of the Act by bargaining with the employees concerning their terms and conditions of employment including the terms upon which they would and did agree to withdraw from the Union. 7. The unfair labor practices set forth in paragraphs 5 and 6 are unfair labor prac- tices affecting commerce within the meaning of Section 2 (6) and (7) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact, conclusions of law, and the entire record, it is recommended that the Board enter an order dismissing the complaint, as amended. Glazer's Wholesale Drug Company, Inc. and Dallas General Drivers, Warehousemen and Helpers Local Union No. 745, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Case No. 16-CA-2099. May 6,1965 DECISION AND ORDER On March 5,1965, Trial Examiner Fannie M. Boyls issued her Deci- sion in the above-entitled proceeding, finding that the Respondent had engaged in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in her attached Decision. The Trial Examiner further found that the Respondent had not engaged in certain other unfair labor practices alleged in the complaint and recommended that the complaint be dismissed with respect thereto. Thereafter, the Respondent filed exceptions to the Trial Examiner's Decision. 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 [Members Fanning, Brown, 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 the entire record in this case, 152 NLRB No. 43.