Cumberland Shoe Corp.

1130 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 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. If employees have any question concerning this notice or compliance with its pro- visions, they may communicate directly with the Board's Regional Office, 746 Fed- eral Office Building, 167 North Main Street, Memphis, Tennessee , Telephone No. 534-3161. Cumberland Shoe Corporation and Boot and Shoe Workers' Union, AFL-CIO. Cases Nos. 26-CA-1810 and 26-CA-2012. January 26, 1966 DECISION AND ORDER On February 3, 1965, Trial Examnier Eugene F. Frey issued his Decision in Case No. 26-CA-1810, finding that the Respondent had engaged in and was engaging in certain unfair labor practices within the meaning of the National Labor Relations Act, as amended, and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Deci- sion in that case. Thereafter, the Respondent and General Counsel filed briefs and exceptions to the Trial Examiner's said Decision and supporting birefs. The Respondent filed a motion to reopen the record for further hearing in order to introduce newly discovered material evidence. The General Counsel opposed the motion or in the alternative requested that the facts and issues of Respondent's motion be litigated at the time of the hearing scheduled in Case No. 26- CA-2012. On May 4, 1965, the National Labor Relations Board granted the Respondent's motion, remanding the case for further testi- mony before the Trial Examiner hearing the issues in Case No. 26- CA-2012, and the Regional Director for Region 26 consolidated the cases for hearing. On September 27, 1965, Trial Examiner Eugene F. Frey issued his Decision in the consolidated cases affirming his prior conclusion as to Case No. 26-CA-1810 and finding in Case No. 26-CA-2012 that Respondent had engaged in and was engaging in certain other unfair labor practices within the meaning of the Act, and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent and General Counsel filed briefs and exceptions to the Trial Examiner's Decision of September 27, 1965. Pursuant to the provision of Section 3 (b) of the Act, the Board has delegated its powers in connection with these cases to a three-member panel [Members Fanning, Brown, and Zagoria]. The Board has reviewed the rulings of the Trial Examiner made at the hearings and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial 156 NLRB No. 103. CUMBERLAND SHOE CORPORATION 1131 Examiner's Decisions, the exceptions and briefs, and the entire record in the cases, and hereby adopts the findings, conclusions, and recom- mendations of the Trial Examiner, with the exceptions and modifica- tions noted below. A. Case No. 06-CA-1810 As more fully set forth in the Trial Examiner's Decision, the Respondent is a manufacturer of shoes, with plants located at Chapel Hill and Franklin, Tennessee. The Charging Party, Boot and Shoe Workers' Union, AFL-CIO, hereinafter referred to as Union, as found by the Board to be the majority representative of the Chapel Hill employees, and the Respondent was ordered to bargain with it.1 In the present case, Respondent is charged with violation of Section 8(a) (5), (3), and (1) of the Act by closing the Chapel Hill plant without notice to or discussion with the Union and by discharging the employees because of their membership in and activities on behalf of the Union. At the Franklin plant the Respondent made conventional shoes by a "Goodyear welt" process; at Chapel Hill it used an injection-molding process for which it utilized two leased machines. It is undisputed that the Franklin plant had been financially successful, but Respond- ent had suffered sizable financial losses during the 2-year period when the Chapel Hill plant was in operation. Respondent in March 1964 determined that one of the plants must be closed, and concluded for a number of valid economic reasons that the Chapel Hill plant, rather than the Franklin plant, should be discontinued. On March 11 the Respondent communicated with the Union and arranged a con- ference for the following day. At the meeting on March 12, the Respondent informed the Union of the financial and operational experience at Chapel Hill, indicated that continued litigation of the pending Board case 2 was pointless and the Company would recognize the Union, but stated that since closing was inevitable negotiation of a contract would be useless. The Union was asked for suggestions, and in response to its inquiry was told that a wage cut would not prevent closing. Respondent informed the Union that one of the injection-molding machines would be moved to Franklin to complete existing shoe orders of large customers and that Respondent would try to employ as many Chapel Hill employees at Franklin as possible. Respondent pointed out, however, that as of that time there were some Franklin employees in layoff status who would be entitled to first consideration, which the Union agreed was proper. The method of 'Cumberland Shoe Corporation, 144 NLRB 1268, enfd . 351 F. 2d 917 (C.A. 6). albtid. That case was then pending before the court of appeals on the Board 's petition for enforcement of its Order. 1132 DECISIONS OF NATIONAL LABOR RELATIONS BOARD announcing the closing was discussed 3 and shortly after the meeting the Respondent supplied certain information requested by the Union 4 The plant was fully closed on April 1, 1964. One molding machine was moved to Franklin and the other was left idle at Chapel Hill. By the date of the first hearing in this case, about 41 employees had been transferred to Franklin; the approximately 100 remaining employees were terminated. The one injection-molding machine was used at Franklin to close out the pending orders 5 and in late Decem- ber 1964 or early January 1965 Respondent discontinued use of that machine 6 for valid business reasons. The Trial Examiner concluded in his first decision that the opera- tional and financial problems at Chapel Hill were dominant reasons for the shutdown, and the notice to and meeting with the Union con- stituted timely notice and good-faith bargaining concerning the clos- ing. But, because Respondent theretofore had consistently declined to bargain with the Union until the court of appeals had ruled upon its obligation to do so, the Trial Examiner found that: (1) Its opposi- tion to the Union had been established and therefore the real reason for transfer of the operation was not economic but an attempt to revive and continue the Chapel Hill operation in a nonunion plant and atmosphere, and (2) the Respondent's bargaining with the Union on the closedown was a shah. As he was of the view that the Respond- ent had not rebutted the p?4ma facie case thus established by the Gen- eral Counsel, the Trial Examiner held that the Respondent's conduct violated Section 8(a) (1), (3), and (5). In his second decision, inso- far as it relates to this case, the Trial Examiner reaffirmed his findings that the Respondent had violated the Act. We find merit in the Respondent's exceptions to these conclusions. As the Trial Examiner found initially, it is abundantly clear that the Chapel Hill operations were discontinued for compelling economic reasons. There is a complete lack of evidence of any recent or accom- panying antiunion activity by the Respondent, and the only matters upon which the Trial Examiner relied were the Respondent's failure to honor the Board's bargaining order pending a court determination a Respondent's attorney , William Al. Pate, asked Union Representative James M. Fowlkes not to mention the closing to employees before the Company sent notices, and the Union asked Respondent say nothing in the notice that might imply the Union was responsible. Pate agreed that the Union was not involved , and that the decision was based purely on the financial situation * Shortly after the March 12 meeting , Fowlkes telephoned Pate and asked for a letter stating the Company 's decision and the reasons therefor, and requesting a copy of the notice to the employees . On March 13, Pate sent the Union a letter with the requested information, on March 13 the Company sent notices to the employees , and on March 24 Pate sent a copy thereof to the Union. 6 Some recorders for those shoes were also processed as an accommodation to customers who had pending orders. 6 The injection -molding machine which had been left behind at Chapel Hill was eventually junked, because the lessor did not arrange to pick it up; the machine used at Franklin has since been returned to the lessor. CUMBERLAND SHOE CORPORATION 1133 thereon and the fact that the Board previously found coercive state- ments were made early in 1963 by minor supervisors at the two plants. These factors, standing alone, do not justify a finding of continuing antiunion motivation so strong as to outweigh the economic considera- tions and warrant an inference that the Respondent , in fact, closed its plant and terminated the employees because of their union member- ship and to avoid bargaining with the Union. Under these circum- stances, we find, contrary to the Trial Examiner, that there is insuffi- cient evidence upon which to find that the Respondent violated Section 8 (a) (1) and (3) by closing the plant. Further, we are satisfied that the Trial Examiner's view is correct as originally set forth, and that the Respondent did not in fact give the Union adequate notice and an opportunity to discuss all relevant matters, and hence that it bargained in good faith concerning the closing. While we do not consider that the Respondent, by this March 1965 conduct, fully complied with the Board's outstanding bar- gaining order in the prior proceeding, which has since been enforced by the Court of Appeals for the Sixth Circuit, we do not find that such conduct constituted a further violation of Section 8(a) (5) of the Act.7 Having found that the Respondent did not violate the Act as alleged in Case No. 26-CA-1810, we shall dismiss the complaint therein in its entirety. B. Case No. 26-CA-2012 As disclosed in the Trial Examiner 's Decision of September 27,1965, Georgia Shoe Manufacturing Company,8 which had been one of Respondent's two largest customers , purchased 80 percent of Respond- ent's stock about May 1964. Since that date , Respondent and Georgia Shoe discovered an expanding market for certain boots which had been manufactured at one of the latter's plants in Georgia. This plant was to be closed down for business reasons, and starting in August, Georgia Shoe began to ship bootmaking machinery to Chapel Hill. About October 5 , 1964, Respondent began to hire and train a work force at Chapel Hill to cut and fit the uppers for the boots to be made there. As part of its preparation , Respondent recalled former employ- ees and hired new employees, all of whom, including those experienced in cutting and fitting operations, required training in the use of the new machinery and a period of experience in which to acquire facility in performing the tasks . About January 15 , 1965, the usable produc- tion reached a level at which it was decided that full-scale operations ' It is well established that each new and separate demand creates the obligation to bargain and each new and different refusal constitutes a new and independent violation. West Penn Power Company, 143 NLRB 1316 , 1321 , reversed on other grounds 337 F. 2d 993 ( C.A. 3). 1 Herein referred to as Georgia Shoe. 1134 DECISIONS OF NATIONAL LABOR RELATIONS BOARD at Chapel Hill were feasible. The lasting and bottoming operations, which were the final steps in production of the boots, were started in January or early in February 1965, and Respondent between Jan- uary 28 and February 16 hired both former and new employees. On February 16, Respondent sent recall letters to 102 former Chapel Hill employees suggesting that they appear for interviews on February 20. At the time of the hearing, there were about 149 employees at the Chapel Hill plant, of whom 72 were former employees.9 1. It is conceded that the Respondent did not notify the Union of the reopening of the Chapel Hill plant. The Union learned of this from some of the employees, and on February 8 Union Agent Fowlkes telephoned Respondent Secretary Eve and requested negotia- tions.10 This request was repeated in a letter of February 9. On Feb- ruary 16 the Respondent by letter declined to meet with the Union until its majority status had finally been determined by the court of appeals. The Trial Examiner concluded, and we agree, that the Respondent violated Section 8(a) (5) by its failure to notify the Union of the reopening and its refusal to bargain with the Union upon request. We so find for the reason that in the face of the Board's determination of the Union's majority and the outstanding, unremedied order directing that Respondent bargain with the Union which order, as we have noted above, has now been enforced by the court of appeals, Respond- ent had a clear and continuing obligation to recognize and deal with the Union as the representative of its employees. This conclusion is not affected by the Respondent's notice to and discussion of the plant closing in March 1964, inasmuch as that meeting concerned only one phase of a multifaceted relationship and could not satisfy the Respondent's full legal duty in this regard. We shall therefore adopt the Trial Examiner's remedy insofar as it directs the Respondent to bargain with the Union. 2. The Trial Examiner also found, based on his analysis of the number of former employees recalled, the order in which reinstate- ment was offered, and the asserted reasons for the method adopted, that the Respondent recalled and rehired the former employees in a discriminatory manner in violation of Section 8(a) (3) of the Act. We do not agree. The record shows, and the Trial Examiner found, that Respondent rehired union adherents in the same ratio to nonunion adherents as 0 The record reveals that 24 former employees responded and were reemployed on various dates beginning February 16, 20 others advised Respondent that they did not desire re- employment at that time, and 40 made no response Letters to eight former employees were not delivered and were returned to Respondent. 10 During the February 8 conversation, Fowlkes mentioned the reopening of the Chapel Hill plant and Secretary Eve said the situation there was not clear at that time and he could not comment about it. CUMBERLAND SHOE CORPORATION 1135 had existed when the plant closed and that ultimately all former employees were recalled. Nevertheless, it was his view that, because the Respondent had not followed a seniority policy in making job offers and because he was not satisfied that a sufficient reason was shown for the procedure Respondent followed, an inference of dis- crimination was warranted to the extent the Respondent passed over union members of greater seniority by offering recall to nonunion employees and hiring new persons. However, the mere failure to recall on the basis of seniority does not justify a conclusion that the method was discriminatory, unless it is shown that the respondent departed from its customary procedures or there is some evidence of an intent to discourage union membership or undermine the union. In the instant case, the Respondent had not previously followed a seniority policy, so that there was no departure from former practices. And the only evidence here, the Respondent's continued refusal to bargain until action by the court of appeals, is inadequate for purposes of showing unlawful intent. Some independent evidence must be pre- sented of unlawful motive; we will not infer its existence from the fact that the Respondent elected to maintain its legal position before the court. Accordingly, we shall dismiss the complaint in this case insofar as it alleges violations of Section 8(a) (3) of the Act by the recall of employees. 3. The General Counsel contended and the Trial Examnier found that three Chapel Hill watchmen, Bennett Paul, Ira Hill, and Jack Sheffield, were discharged because they had engaged in concerted activity and that the Respondent thereby violated 8(a) (1). We find no basis for so concluding. As more fully set forth in the Trial Examiner's Decision, the three watchmen were employed at the Chapel Hill plant and were retained after it was closed in March 1964. Because they were work- ing fewer hours per week after the shutdown, they asked on about July 1 for extra work to give them a full 40-hour week. About July 15, Secretary Eve talked with them and the day watchman (a former cutting room foreman who apparently became supervisor of the other watchmen). Arrangements were made to assign some temporary work packing sample shoes and later they were assigned to clean up and sort defective shoes to prepare them for sale as factory rejects. Apparently the watchmen complained about this extra work, and they were aware the management was dissatisfied with their per- formance. On August 4, Secretary Eve and President Bransford had separate meetings with the three watchmen at which each was dis- charged. Paul was told that lie had been a "good hand" and when the plant reopened he would be recalled. Hill was told there had been a "lot of complaining" and "we are going to have to make a change, we are 1136 DECISIONS Or NATIONAL LABOR RELATIONS BOARD going to have to lay you off." All three were replaced shortly there- after and have not been recalled. The three watchmen had never joined the Union or engaged in any activity on its behalf, and their discharge is entirely unrelated to the other aspects of this case. However, the Trial Examiner inferred, in light of Respondent's long refusal to recognize the Union, that Respondent had a basic opposition to any concerted activity of its employees, and that this opposition, together with the circumstances of the termination (includ- ing the "apparently conflicting and vague reasons for discharge") and their immediate replacement, established a prima facie case of a violation of the Act which Respondent had not rebutted. We do not agree. Even assuming that the three watchmen were concertedly seeking added work, the crucial question is not whether they were so engaged but what in truth impelled the discharges." Were they terminated because they acted concertedly or because of some matter which would have forced the Respondent to take such action quite apart from their concerted activity? We are persuaded, on the particular facts of this case, that the Respondent acted for a legitimate reason inde- pendently of their concerted activity. In the first place, we find no basis for the Trial Examiner's infer- ence of a pervasive opposition by the Respondent to all forms of collective bargaining. The rejection of bargaining with the Union pending court action does not warrant a conclusion that extends beyond that fact alone. There is no evidence here that Respondent resented the group action, and in fact the Respondent sought to satisfy the employees by giving them more work. Secondly, we cannot conclude that the Respondent, after its attempts to satisfy the employ- ees' request were met with unsatisfactory performance and further complaints, was not justified in terminating the dissatisfied employees, particularly in the absence of some independent evidence which would indicate that these were not the Respondent's motives. In view of the above, we conclude that the Respondent did not violate 8 (a) (1) by this conduct, and we shall dismiss the complaint in this respect. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Cumberland Shoe Corporation, Chapel Hill, Tennessee, its officers, agents, successors, and assigns, shall : 1. Cease and desist from : (a) Refusing to recognize or bargain collectively in good faith with Boot and Shoe Workers' Union, AFL-CIO, as the exclusive n Norge Division, Borg-Warner Corporation, 155 NLRB 1087. CUMBERLAND SHOE CORPORATION 1137 representative of all employees in the heretofore certified Union with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment. (b) Interfering with the efforts of Boot and Shoe Workers' Union, AFL-CIO, to negotiate for or to represent the employees in the afore- said bargaining unit as their exclusive bargaining agent. (c) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of rights guaranteed them in the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Upon request, recognize and bargain collectively in good faith with said Union as the exclusive representative of Respondent's employ- ees in the heretofore certified unit with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment, and embody any understanding in a signed agreement. (b) Post at its Chapel Hill, Tennessee, plant, copies of the attached notice marked "Appendix." 12 Copies of said notice, to be furnished by the Regional Director for Region 26, shall, after being duly signed by the Company's representative, be posted by the Company imme- diately upon receipt thereof, and be maintained by it for 60 consecu- tive days thereafter, in conspicuous places, including Al places where notices to employees are customarily posted. Reasonable steps shall be taken by the Company to insure that said notices are not altered, defaced, or covered by any other material. (c) Notify the Regional Director for Region 26, in writing, within 10 days from the date of this Order, what steps have been taken to comply herewith. IT IS FURTHER ORDERED that the complaint in Case No. 26-CA-1810 be dismissed in its entirety, and the complaint in Case No. 26-CA-2012 be dismissed as to all allegations other than those specifically found herein to be unfair labor practices. 12 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 OF OUR CI LAPEL HILL, TENNESSEE, PLANT Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that : WE WILL NOT refuse to recognize or bargain collectively in good faith with Boot and Shoe Workers' Union, AFL-CIO, as the 1138 DECISIONS OF NATIONAL LABOR RELATIONS BOARD exclusive representative of all our employees in the appropriate bargaining unit set forth below, with respect to rates of pay, wages, hours of employment, and other terms and conditions of employment. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their rights to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choos- ing, and to engage in other concerted activities for the purposes of collective bargaining or other mutual aid or protection as guaranteed by Section 7 of the Act, or to refrain from any or all such activities. WE WILL, upon request, recognize and bargain collectively with the above-named Union as the exclusive bargaining representative of our employees in the bargaining unit described below, with regard to rates of pay, wages, hours of employment, and other terms and conditions of employment, and will embody any under- standing reached in a signed agreement. The bargaining unit is : All production and maintenance employees at our Chapel Hill, Tennessee, plant, excluding office clerical employees, watchmen, guards, and supervisors as defined in the Act. All our employees are free to become or remain, or to refrain from becoming or remaining, members of Boot and Shoe Workers' Union, AFI-CIO, or any other labor organization. CUMBERLAND SHOE CORPORATION, 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. If employees have any question concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, 746 Federal Office Building, 167 North Main Street, Memphis, Tennessee, Telephone No. 534-3161. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE The issues in this case are whether Cumberland Shoe Corporation , herein called Respondent, (1) in April 1964 closed its Chapel Hill, Tennessee, plant, and discharged all employees therein, because they supported and engaged in activities on behalf of Boot and Shoe Workers' Union , AFL-CIO, herein called the Union, in violation of Section 8(a)(3) of the National Labor Relations Act, as amended, 29 U.S.C. Sec. 151, et seq., herein called the Act, and (2 ) refused to bargain collectively with said Union as the exclusive bargaining representative of employees in an appropriate unit CUMBERLAND SHOE CORPORATION 1139 by taking the above action unilaterally, by its prior unilateral decision to take such action, and by its later refusal to bargain with the Union thereon, in violation of Sec- tion 8(a)(5) and (1) of said Act. The issues arise on a complaint issued by the General Counsel of the Board, through the Acting Regional Director for Region 26, on July 31, 1964,1 and the answer of Respondent admitting jurisdiction and closure of its plant on the date alleged, but denying the commission of any unfair labor prac- tices. On due notice a hearing was held on the issues before Trial Examiner Eugene F. Frey at Nashville, Tennessee, on September 10, 1964, in which all parties were repre- sented and participated fully through counsel or other representatives. All parties waived oral argument, but General Counsel and Respondent have filed written briefs which have been carefully considered in preparation of this Decision. Upon the entire record in the case, and from my observation of witnesses on the stand, I make the following: FINDINGS OF FACT 1. THE COMMERCE FACTS Respondent is a Tennessee corporation operating plants at Chapel Hill and Frank- lin, Tennessee, where it is engaged in the manufacture, sale, and shipment of shoes. In the 12 months prior to issuance of the complaint herein, Respondent had a direct inflow of materials to said plants valued in excess of $50,000, and a direct outflow of shoes from said plants, valued in excess of $50,000, from and to points outside the State of Tennessee. The Board has already assumed jurisdiction over Respondent's Franklin operations in Case No. 26-CA-1496 (Decision in 144 NLRB 502) and its Chapel Hill plant in Case No. 26-CA-1469 (Decision in 144 NLRB 1268, as cor- rected by Order of January 13, 1964, not officially reported). I find that Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION The Union is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Prior proceedings In January 1963, the Union began an organizing campaign at the Chapel Hill plant. By January 18 it had procured union authorization cards from a majority of employ- ees in the unit hereafter found appropriate , and on January 22 requested Respondent to bargain with it as statutory representative of workers in that unit. On January 18 the Union filed a representation petition in Case No. 26-RC-1888, in which the parties agreed on a consent election which was set for March 14, 1963 . The Union on February 19 filed charges of violations of Section 8(a)(1) and ( 5) against Respondent, and on March 5 withdrew its petition in the representation case. A complaint on said charges was issued in Case No. 26-CA-1469, in which the Board, after due hearing and a report of a Trial Examiner , issued its Decision and Order on October 29, 1963, finding that the Union had achieved a majority status among the Chapel Hill employees and that Respondent had violated the Act by illegal inter- rogation of and threats of reprisal and promises of benefits to employees during the campaign, and by refusing to bargain with the Union as the statutory bargaining agent of employees in the same unit as found herein, and ordered Respondent to cease and desist from such conduct and to bargain with the Union. The Union began a similar organizing campaign at the Franklin plant in March 1963, and filed a representation petition for that plant on June 17 , 1963 , in Case No. 26-RC-1988 , in which an election was held on August 15, 1963, which the Union lost. The Board certified the results of that election on August 23, 1963. The Union had filed charges on March 28 in Case No . 26-CA-1496 alleging that Respondent had violated Section 8(a)(1) by coercive conduct at that plant. After due hearing and report by a Trial Examiner, the Board on September 11, 1963, issued its Decision finding Respondent had violated Section 8 (a) (1) by threats of reprisal and interroga- tion of Franklin employees , and ordered that Respondent cease and desist therefiom.2 I The complaint issued after Board investigation of a charge filed May 1, 1964, by the Union. These findings recite the basic facts and proceedings in the two representation and two unfair labor practice cases noted above, of which I take official notice. 217-919-66-vol. 15 6-7 3 1140 DECISIONS OF NATIONAL LABOR RELATIONS BOARD B. The closing of Chapel Hill plant 1. Discussions with the Union On March 11 , 1964, Respondent's attorney, William M. Pate, asked Union Agent James M. Fowlkes for a meeting on the 12th to discuss the contemplated closing of the Chapel Hill plant. Pate and Duncan Eve, Respondent 's secretary , met with Fowlkes and Richard Coleman, another union agent, the afternoon of the l2th.3 At the outset Pate told the union men that Respondent had been contesting the Union's status as bargaining agent for that plant and had planned to let the court of appeals review that issue,4 but that in view of the continuing financial loss at the plant, Respondent saw no alternative but to close down the plant entirely , in which event continued litigation would be meaningless , so Respondent had decided to recognize the Union as bargaining agent, but since the closing of the plant appeared inevitable, it would be useless to negotiate a contract . The union men made no comment on this view. Pate said that in view of the financial situation , Respondent did not see how it could keep the plant open beyond April 1, but wanted to get the Union's ideas on the subject . He gave the union men balance sheet figures showing that the plant had lost over $359,000 in the 2 years up to January 1964, told the union men to examine the figures, and said he would be glad to answer any questions about them. The union men asked whether a shutdown could be avoided if the employees were willing to take a wage cut, stating that this had been successful in avoiding shutdowns in other plants in the East. Pate replied that some employees were getting no moie than the minimum wage, while others were paid more , but Respondent felt that since the plant had lost money ever since it opened , it did not see how it could keep the plant open even with a wage cut When the union men asked what would happen to the Chapel Hill employees , Page and Eve said that Respondent intended to move one injection molding machine from Chapel Hill to the Franklin plant ( about 35 miles away ) in order to complete certain shoe orders for two large customers who had been taking most of the Chapel Hill production . and that Respondent would try to employ as many Chapel Hill employees at Franklin as possible , but that there had been some layoffs at Franklin, and Respondent would have to give these workers first consider- ation in recalling personnel . Fowlkes agreed that this was true. The union men asked if Respondent owned the Chapel Hill plant. Pate explained that it occupied it under a 20 -year lease with the owner , the city of Chapel Hill, that Respondent had been trying to get other concerns to take over the lease, and it would continue its efforts to secure a buyer or sublessee to take over the lease, but that if it found another tenant, Respondent was still discontinuing operations there entirely. Fowlkes asked for a copy of the lease, and Pate promised to send it to him. The union men expressed disappointment at the decision to shut down , and Fowlkes commented that he had once told Coleman during the organizational drive that he did not see how that plant could ever be a success , because Respondent was making a cheap shoe there, and he did not see how it could sell. The union men asked if the closing had been announced to the employees , and Pate and Eve replied , no, but Respondent would like to announce it on the 13th, because Respondent wanted to shut down the operation by departments , to finish up orders on hand, and that this would probably take the next month. Eve asked the union men not to mention the closing to employees before the notice was sent out, and the Union in turn asked that Respondent not say anything in the notice to employees which might indicate that the Union was responsible for the loss of money at the plant or its closing. Pate agreed, saying that the Union had nothing whatever to do with the closing, that the decision was based purely on the financial situation. Shortly after the meeting ended, Fowlkes called Pate and asked him to send the Union a letter stating the Company's decision on closing with the reasons , together with a copy of the notice to employees. Pate sent the Union a letter on March 13, summarizing the substance of the discussion of the 12th, as Pate recalled it. On the same date Respondent sent all employees a letter announcing the closing, and on March 24, Pate sent a copy of it to the Union . On April 6, Respondent also sent the Union a copy of the Chapel Hill lease . The plant was finally closed down about April 1. Respondent has since held no discussion with the Union about the closing or any aspects of it. The Union has not requested any further meetings with 8 Fowlkes and Coleman had been in charge of the 1963 organizing campaign at Chapel Hill. 4 The Board in due course sought enforcement in the United States Circuit Court of Appeals for the Sixth Circuit of its Order of October 29, 1963, and the matter was then and is still pending before that court. CUMBERLAND SHOE CORPORATION 1141 Respondent after receiving the letter of the 13th , the closing notice, and the lease, although the letter had concluded with the invitation , "If you have any question about this situation, please let me know." 2. The background of the decision to shut down Respondent adduced substantial and credible proof showing that Respondent had been faced with serious and increasing financial problems from early 1962 onward. The Franklin plant had been in operation since 1958, and its earnings record improved as it went along. However, the Chapel Hill plant had lost money steadily ever since it was opened in May 1962. In the fiscal year ending March 31, 1963, it had an operating loss of about $188,000, and at the end of the next fiscal year that loss had mounted to a total of nearly $400,000 for the 2 years. In that period, Respondent's total net loss mounted to over $675,000. Most of the trouble at Chapel Hill arose from the fact that Respondent instituted a new shoe-making process there, using two new injection-molding machines which molded preformed soles to shoe uppers. The machine still had defects, which caused defects in manufacture and resulted in sub- stantial returns of defective shoes by customers, including Sears Roebuck & Co.6 Respondent also had problems in training new workers to operate the machine and handle the new process efficiently. After much discussion of the problem, manage- ment in July 1963 changed its capital structure so that it could sell more stock and issue bonds to procure more working capital. Despite this expedient, production problems at Chapel Hill continued, with large returns of defective shoes, new work- ing capital was quickly used up, and losses and company debt continued to mount.? Hence, in 1963 , management determined that one of the plants must be closed to cut losses. At first, President John S. Bransford and other directors felt that Chapel Hill should be retained, because they had high hopes for the new injection-molding process and that its products might prove so satisfactory that Sears Roebuck & Com- pany and Georgia Shoe Manufacturing Co., both large volume buyers, might take all its production and thus become the mainstay of that plant and make it profitable.8 Thus, during 1963 and early 1964, Respondent made overtures to various other shoe manufacturers, particularly those who used the cement molding process, to procure production contracts which would keep Chapel Hill in full operation while Respond- ent solved its mechanical difficulties there. When nothing came of these contracts, Respondent also tried to get some concerns to take over Chapel Hill and its lease as a complete shoemaking operation. Failing that, it tried to interest other types of manufacturers in the plant . When none of these efforts proved successful , manage- ment then examined operations at both plants and finally concluded, after compar- ing size, facilities, earning records, and other factors, to continue the Franklin opera- tion and close out Chapel Hill completely,9 and to move one injection molding machine to Franklin to continue production of existing commitments for molded shoes. In this posture , Respondent convened the meeting with the Union on i These facts are found on credible and mutually corroborative testimony of Pate, Eve, Fowlkes , and Coleman . Testimony of any of the witnesses at variance therewith is not credited. 6A major problem was getting a cement which would keep sole and upper together during stress of actual use. 9 Respondent had determined that the break -even point at Chapel Hill, from the profit point of view, had to be at least 200 cases of acceptable shoes a day, but the plant never reached that output before it closed . The problem at Chapel Hill also affected orders for Franklin 's shoes to some extent, as the same customers took products of both plants, and the same sales force handled products of both. This interrelation of the plants , plus the fact that top management at Franklin controlled both in all respects , makes it clear that the plants were essentially integrated , although using different shoe-making methods in some respects. s The Franklin plant put out only conventional shoes with the Goodyear welt. e Respondent concluded Franklin was the logical plant to keep because* It had far the better earnings record, with some profitable periods, its work force was experienced in making shoes by the Goodyear welt process , and it had much more floor space than Chapel 11111 , plus a separate attached warehouse , which Chapel Hill lacked. All of Respondent's executive and administrative personnel , and sales organization , were quartered at Franklin. The sole advantage of Chapel Hill was that it was a somewhat newer plant, with more modern layout. On the other hand, Franklin 's production had expanded into conventional-style boots in 1963, which were all taken by Georgia Shoe Manufactur- ing Co., and this segment of the business was building up. In addition , Franklin had just started production on cowboy boots. 1142 DECISIONS OF NATIONAL LABOR RELATIONS BOARD March 12, 1964, and when that discussion did not produce any practical or feasible solution, Respondent's board of directors met the morning of the 13th, and approved management's conclusion that the plant should be closed and one machine moved to Franklin to carry out commitments to the customers for the molded shoes The Chapel Hill operation was closed out gradually, and completely shut down about April 1, 1964. In that period, 1 molding machine was moved to Franklin, 1 Chapel Hill fitting room foreman was transferred to Franklin, and up to Septem- ber 10, about 40 other employees have been transferred. The remaining employees (about 100) were terminated. Since the transfer, Respondent has continued to improve that machine, and has partially overcome some of the production problems with the use of some more experienced workers from Franklin, so that quality has improved, and Sears has been placing reorders for shoes made on that machine, which has been operating at its capacity, about only 70 cases of shoes a day. At the time of the hearing, the Franklin plant was operating at capacity, with some over- time work, largely due to demands of the widespread distribution organization of one large customer, Georgia Shoe Manufacturing Co. In addition, that plant has expanded into the manufacture of boots and cowboy boots, made on conventional lasts. Respondent has continued its efforts to get rid of the Chapel Hill plant, to relieve itself of the continuing rental which is a dead loss. 3. Contentions of parties and concluding findings The record shows, Respondent admits, and I find, that at all times material herein all production and maintenance employees at Respondent's Chapel Hill, Tennessee, plant, excluding office clerical employees, technical and professional employees, watchmen and guards, and supervisors as defined in the Act have constituted a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. The Board found in Case No. 26-CA-1469 that the Union, in January 1963, became the statutory representative of employees in said unit within the meaning of Section 9(a) of the Act, and I so find. It must be presumed that such status has continued and existed in March 1964, in the absence of evidence showing the contrary.10 It is clear from the facts found above that, prior to the meeting of March 12, 1964, Respondent made no effort to notify, consult, or bargain with the Union about the Chapel Hill plant, its employees, its financial problems, the measures which Respondent took over a long period to solve or alleviate those problems, or its final determination to close the plant. All of these actions were unilateral. One conten- tion of General Counsel is that the single meeting at which the decision to shut down and the economic facts supporting it were disclosed to the Union, on the day before the shutdown was announced to employees, was in fact no notice at all nor bargain- ing in any sense, but merely the presentation of a fait accompli, and hence violated Section 8(a)(5) of the Act, under the Board and judicial decisions in Fibreboard Paper Products Corporation," even assuming that the shutdown decision was motivated solely by economic considerations. His broader claim is that the whole record requires the finding that the decision and its effectuation within a short period in March 1964, were unilateral acts motivated by long-continued union animus and violative of Section 8(a)(5), and that the same motivation made the shutdown and termination of employees pursuant thereto a discriminatory action in violation of Section 8 (a)(3) and (1). The economic facts outlined above make it clear that the operational and financial problems at Chapel Hill which Respondent was unable to solve in almost a year of effort were certainly dominant reasons for the shutdown. Claiming that economics controlled the decision, Respondent argues that it had a clear right to reach and carry out this decision on economic grounds unilaterally and without any bargaining with the Union, relying on Darlington Mfg. Co. v. N.L.R B., 325 F. 2d 682 (C.A. 4). The Board recognized in that case that it had found no decision making it illegal under the Act for an employer to close out his business entirely. On review, the court enunciated the principle that an employer could by unilateral action go out of business permanently, in whole or in part, regardless of his motive, without violation of the Act, provided it was not done under circumstances denoting a "runaway shop" situation to avoid further dealing with a union. The court did recognize that other courts had reached findings of violation where the facts did not involve complete 10 As the majority status as of January 22, 1963, was established by the Board Decision of October 29, 1963 it would appear that Respondent's duty to bargain with the Union continued for a reasonable period of time after that Order . See Royal Oak Tool d Machine Company, at al., 132 NLRB 1361, 1362 (footnote 4). 11130 NLRB 1558, enfd. 322 F. 2d 411 (C.A.D C.), affd. 379 U.S. 203. CUMBERLAND SHOE CORPORATION 1143 extinction of the business and an end of further participation by the employer in his former sphere of operation.12 However, I do not consider the primary principle stated by the court in the Darlington case applicable here, because Respondent's termi- nation of operations in one plant was not a complete termination of its molded shoe operation, and a cessation of its business to that extent, but involved only a removal of that operation, reduced in size, to its remaining plant, where it has since endeavored to build that operation up to a profitable basis. Further, in the Darlington case, while the Board recognized a dearth of exact precedent for the illegality of a uni- lateral discontinuance of a whole business, it still found that conduct to be a violation of both Section 8(a)(3) and (5) of the Act in a context of antiunion and coercive conduct which supported the conclusion that the employer acted to defeat the require- ment of collective bargaining with a union, and in retaliation for its employees' choice of that union as bargaining agent. While various aspects of that case, including the one at issue here, are under review by the Supreme Court on the Board's petition to review the decision of the Fourth Circuit Court of Appeals, I am constrained by overruled by the Board itself or the Supreme Court.1'3 Hence, I conclude that all the facts of this case must be considered together to determine whether Respondent's conduct before or after the decision to shut down and its implementation amounted to a failure to bargain in good faith, and was discriminatory toward employees. However, at the outset I will consider General Counsel's first, narrow contention, based on specific complaint allegations, that Respondent's single meeting with the Union did not amount to good-faith bargaining because Respondent had shortly before reached a rather sudden unilateral decision to shut down and was merely presenting the Union pro forma with a fait accompli which in effect precluded any genuine or effective bargaining on the shutdown or its effects. While it is true that Respondent had been under obligation at least since October 1963, to bargain with the Union on all matters relating to the Chapel Hill employees, General Counsel does not state when this obligation to bargain about the financial problems at that plant began. He does not say Respondent was required to advise the Union and bargain about the decision in July 1963, to change the capital structure, sell bonds, and borrow more money to secure working capital; nor is it claimed that the early discussions within management about whether to close down Chapel Hill or Franklin, or the continuing efforts to procure new business or new operators for the plant, had to be disclosed to or discussed with the Union. The first time it appeared that a drastic decision on the fate of the mill might have an effect on employees' future employment was when management about March 11 finally saw no alternative to a complete shut down and transfer of one machine and remaining orders to Franklin. Hence, I must assume that the crucial date was "on or about March 11, 1964," as alleged in the complaint, which was the first time it became clear to Respondent that, having exhausted all other resources and methods of possible rrehabilitation, it had to shut down. At that point, Respondent called in the Union to explain the decision it had reached, the basis for it, and to ask the Union for its views. Until the point of decision on action definitely affecting the employees had been reached, I cannot see how Respondent was avoiding any statutory obligation by not consulting the Union during its earlier attempts to solve the growing dilemma, for I cannot readily infer that earlier discussions with the Union would have produced some sound ideas or plans for putting the plant on a profitable basis, particularly when credible testi- mony of Union Agent Fowlkes shows that the union officials themselves had been dubious from the beginning about the prospects of successful operation of the plant. Hence, when Respondent called the Union for a meeting on the 11th, and they con- ferred on the 12th, this seems to be prompt notice and discussion consistent with a sincere attempt at negotiation to get the Union's help and ideas about a solution. The Union's response to Respondent's request for ideas was rather half-hearted, confined only to a suggestion of possible wage reductions, and questions about Respondent's legal interest in the plant. When Respondent indicated that the Union's one suggestion might not be enough to overcome a bad situation, the Union did not offer other suggestions, or ask for time to seek other solutions for consideration in later talks, but in effect agreed that the situation at this plant was hopeless. Respond- ent's written summary of the conference at the Union's request, plus later mailing of the lease for its perusal, is likewise consistent with a sincere effort to get help and ideas from the Union. But after receipt of these papers, the Union did not request further talks, or a suspension of the shutdown timetable, or raise any objection to Respondent's announced intent to soften the blow to the employees by hiring as many as possible at Franklin. These circumstances, while indicating that the nego- tiation was short and not productive, are not inconsistent with bona fide bargaining; 12 See 325 P. 2d at 686, 687. 13 Iowa Beet Packers, Inc , 144 NLRB 615, 616, 617. 1144 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and • Respondent's good faith is further shown by its gradual absorption of 40 employees (out of a work force of about 140) at Franklin through September 10, 1964, while at the same time continuing efforts to interest other businesses in taking over the plant and the lease. Recognizing the force of these circumstances, General Counsel claims a different picture arises when this conduct is considered in the context of Respondent's prior and subsequent conduct and other facts, which I now review: The Board's Decisions and Orders in the unfair labor practice cases show that Respondent has, since January 1963, displayed clear hostility toward the Union by its resort to coercive and illegal methods to thwart the Union's attempts to organize employees at both plants. At the Franklin plant, Respondent was ordered only to refrain from illegal interrogation of and threats to workers, but at the time of the events herein that plant was in effect nonunion , for the Union had lost the election there, and there was no finding other- wise that the Union had majority status there. That status and consequent Order to recognize and bargain occurred only at Chapel Hill. Respondent exercised its legal rights when it contested enforcement of that Order in the circuit court of appeals. The only break in that resistance came at the single meeting with the Union preced- ing the shutdown notice, but it is clear from the record, particularly testimony of President Bransford, that Respondent did not expect the Union to come up with any constructive suggestions at that meeting, and any such ideas would have been "entirely unexpected" and surprising. While this feeling was confirmed to some extent by Fowlke's remarks about the poor prospects of the plant, Respondent' s union animus and long-continued unlawful resistance to recognition of the Union 14 impels the inference that this single variation from that position occurred only after Respond- ent felt it could safely recognize the Union and bargain on this limited situation because the economic situation was so bad that the Union could hardly have come up with any ideas or solution that would justify Respondent in reversing the shutdown decision. Hence, these facts warrant the inference that Respondent's action on March l1 and 12 was an apparent compliance with the Board's Chapel Hill Order, while achieving its desire to retrench and get rid of an unprofitable plant as well as a work force in which the Union had majority status. This inference is further sup- ported by the fact that Respondent did not give up the troublesome injection molding operation entirely, but transferred it to the nonunion Franklin plant, where it has since made some progress in solving the mechanical problems in the process and succeeded in holding and continuing to serve at least two large customers with the output of that machine. It still owns the second molding machine which lies idle in the Chapel Hill plant; there is no proof that Respondent has been trying to sell it, and Respondent is still tenant of that plant under long-term lease, so it is not a farfetched inference that if Respondent overcomes the production problems on one machine to the satisfaction of its customers, common sense and good business judg- ment would probably dictate an attempt to expand the operation and put the other machine to good use.15 The salient facts in this whole sequence of events are that Respondent has effectively concentrated all its operations in an unorganized plant where the Union's attempt to achieve majority status was defeated decisively, and did this all after the Board's Decision established the Union's majority status, and Respondent's obligation to recognize it as bargaining representative, at Chapel Hill 16 Up to that point, Respondent still had two nonunion plants, both losing money but with Chanel Hill the worst offender, and it was still in doubt about which to close as a retrenchment measure. The Board's final Decision of January 13, 1964, exhausted "Besides the unlawful refusal to bargain at Chapel Hill, it is significant that the Board also found Respondent had made specific threats to employees to close that plant if the Union came into it. Since the Board has stated plainly that it will follow its own De- cisions until reversed by the Supreme Court (see footnote 13 above), I must conclude that Respondent's resistance to the enforcement of the 'Chapel Hill Order was taken at its own risk and does not detract from a finding that all of Respondent's unlawful conduct at that plant has continued, absent full compliance with the Board's Order. 11 This inference is not weakened by the fact that Respondent has openly rehired up to 40 of its Chapel Hill employees at Franklin since the transfer, after advising the Union of its intent to do so, and without objection from the Union, for its only ready source of labor skilled in the injection-molding process was the Chapel Hill workers. 16 No election was held at Chapel Hill because the Union withdrew its request for one after filing unfair labor practice charges regarding that plant. Thus, the Union's majority status there was not disclosed to Respondent until the hearing in Case No. 26-CA-1469, but the issue was left in doubt by the Trial Examiner's ruling which found no majority status, and not settled finally in the Union's favor until the Board's second Decision Issued January 13, 1964, after reconsideration. CUMBERLAND SHOE CORPORATION 1145 Respondent's administrative remedies, and resistance to enforcement of the Chapel Hill Order was the only defense left. Prior to this, as Bransford 's testimony clearly shows, the discussions among management officials and directors about Chapel Hill had been numerous and lengthy , but informal and not conclusive , and it was not until early March 1964 that management "suddenly realized," and the decision "crystallized," that Chapel Hill must be closed Then came the short meeting in which Respondent reversed position and recognized the Union for the short discus- sion about the shutdown and the reason for it, after which Respondent promptly carried out the shutdown but moved the molded shoe operation to the unorganized Franklin plant, where it has succeeded in resurrecting that operation , rather than discarding it completely .17 The transfer to Franklin and Respondent 's rather encouraging experience with the operation there alone afford strong support for the inference that it never in fact regarded the Chapel Hill operation as hopeless (as it now claims ), and that one real reason for transfer of the operation was not economic but to revive and continue it in a nonunion plant and atmosphere. Having considered carefully all the circumsatnces pro and con in the whole record, I must conclude that General Counsel has sustained the ultimate burden of proving by the requisite preponderance of credible evidence that Respondent shut down the Chapel Hill plant and terminated its employees there, in large part because they had in 1963 chosen the Union as their bargaining agent, and in order to avoid recognition of and bargaining with that agent, and that Respondent has failed to adduce evidence sufficient to rebut the prima facie case on this point made by General Counsel. I conclude and find that by said conduct Respondent has violated Section 8 (a)(1), (3), and ( 5) of the Act.18 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section III, above, occurring in connec- tion with the operations of Respondent described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow thereof. V. THE REMEDY Having found that Respondent has engaged in certain unfair labor practices, I will recommend that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. Having found that Respondent unlawfully shut its Chapel Hill plant and dis- charged employees therein for discriminatory reasons and in order to avoid bargain- ing with the Union as the statutory representative of these employees , I will make two recommendations which I feel are proper in the circumstances of this case to carry out the policies of the Act: (1) As Respondent is presently running its molded shoe operation , though at a reduced rate , with personnel from the closed Chapel Hill plant, but still has control of that nearby plant with another machine idle but available for operation , I recom- mend that Respondent be ordered to resume operations at the Chapel Hill plant, and that it offer to all employees in the unit aforesaid who were terminated at that plant (including such employees as it transferred to the Franklin plant ) immediate and full reinstatement to their former or substantially equivalent 'positions , without prejudice to their seniority or other rights and privileges , to the extent that positions may exist upon reopening of said plant ; all such employees for whom positions may not exist shall be placed upon a preferential hiring list from which they shall be offered reinstatement, prior to hiring of any new employees , at said plant as and when openings shall occur. I will also recommend that Respondent be ordered to mail to each person formerly employed at Chapel Hill, at his last known address, 17 This is in part due to the fact that Respondent's business prospects and production of all types has Improved since May 1964 , when about 80 percent of its stock was bought by Georgia Shoe Manufacturing Company, since which time Respondent has had the benefit of a much larger selling organization and wider market than before 18 Town & Country Manufacturing Company, Inc, and Town & Country Sales Company, Inc., 136 NLRB 1022 , enfd. 316 F . 2d 846 ( C A. 5) ; Esti Neederman, et at., d/b/a Star Baby Co., 140 NLRB 6718; Morrison Cafeterias Consolidated, Inc., at al , 148 NLRB 139 ; Elliott-Williams Co., Inc., 149 NLRB 1242 ( footnote 1). I have carefully considered other authorities cited by Respondent and find them not inconsistent with the principles stated in the above cases. 1146 DECISIONS OF NATIONAL LABOR RELATIONS BOARD signed copies of the attached notice marked "Appendix." 19 I will also recommend that Respondent make all such terminated employees whole for any loss of pay they may have suffered as a result of Respondent's unfair labor practices, by payment to each of a sum of money equal to that which said employee would normally have earned from the date of his termination to the date of a proper offer of reinstatement by Respondent, or the date that his name is placed by Respondent on a preferential hiring list as provided above, less his net earnings in said period, the backpay to be computed as prescribed in F. W. Woolworth Company, 90 NLRB 289, and with interest at the rate of 6 percent per annum to be added to the backpay due, computed as set forth in Ivis Plumbing & Heating Co., 138 NLRB 716. I will also recommend that Respondent preserve and, upon request, make available to the Board or its agents, all pertinent records which may be necessary to compute the backpay due, and the right of reinstatement or placement on the preferential hiring list, as the case may be, as recommended herein. (2) Having recommended resumption of the Chapel Hill operation with reinstate- ment or preferential listing of its employees, I will also recommend that Respondent bargain collectively with said Union, upon request, as the exclusive representative of said employees, and embody any understanding reached in a signed agreement. This recommendation includes the obligation to bargain at once, upon request, with said Union for former Chapel Hill employees presently working at the Franklin plant and performing the same functions on the same machine as they performed at Chapel Hill, but such obligation shall require bargaining only with respect to such rates of pay, wages, hours of employment, or other terms and conditions of employment, as may be connected with their employment on the injection molding machine at Franklin as though they were presently part of an active appropriate unit at Chapel Hill 20 In view of the nature and variety of the unfair labor practices committed by Respondent which indicate a fundamental disregard of the basic principle of collective bargaining and other rights of employees protected by the Act, I will recommend a broad cease-and-desist order. On the basis of the foregoing findings of fact and the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act, and the Union is a labor organization within the meaning of Section 2(5) of the Act. 2. All production and maintenance employees at Respondent's Chapel Hill, Ten- nessee, plant, excluding office clerical employees, technical and professional employ- ees, watchmen, guards, and supervisors as defined in the Act, constitute a unit appro- priate for purposes of collective bargaining within the meaning of Section 9(b) of the Act. 3. As of January 22, 1963, and at all times since, the Union has been the statutory representative of all employees in said unit for purposes of collective bargaining within the meaning of Section 9(a) of the Act. 4. By shutting down its Chapel Hill plant between March 13 and about April 1, 1964, in order to avoid bargaining with the Union as said bargaining agent, Respond- ent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (5) of the Act. 5. By the above shutdown, and termination of employees in said unit on various dates between March 13 and April 1, 1963, because said employees chose the Union as their bargaining agent, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (3) of the Act. 6. By all of the above conduct, Respondent has also interfered with, restrained, and coerced employees in the exercise of rights guaranteed by Section 7 of the Act, thereby engaging in unfair labor practices affecting commerce within the meaning of Sections 2(6) and (7) and 8(a) (1) of the Act. 7. Except as found herein, Respondent has not violated the Act as alleged in the complaint. [Recommended Order omitted from publication.] 19 Town & Country Manufacturing Company, Inc., et al., 136 NLRB 1022 , 1029, 1030; N.L.R.B. v. Brown-Dunkin Company, Inc., 287 F. 2d 17, 20-21 (C A. 10) enfg 125 NLRB 1379 ; and see Morrison Cafeterias Consolidated, Inc, supra. Contrast Jersey Farms Milk Service, Inc., 148 NLRB 1392. 20 See The Hurley Company, Inc., and Hurley Press, Inc ., 136 NLRB 551, 554. CUMBERLAND SHOE CORPORATION 1147 TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE On February 3, 1965, I, Trial Examiner Eugene F. Frey, issued my Decision in Case No. 26-CA-1810 finding that Cumberland Shoe Corporation, herein called Respondent, had violated Section 8(a)(1), (3), and (5) of the National Labor Rela- tions Act, as amended, 29 U.S.C. Sec. 151, et seq., herein called the Act, in certain respects, and recommending specific action by Respondent to remedy such unfair labor practices. On March 1, 1965, Respondent moved the Board to reopen the record in that case to permit introduction of alleged newly discovered evidence. On May 4, 1965, the Board granted the motion, directing a remand of the case for taking of testimony by the Trial Examiner hearing the issues in Case No. 26-CA-2012. In the latter case the Regional Director for Region 26 had issued a complaint on March 3, 1965,' alleging that Respondent had terminated three employees unlaw- fully in August 1964 and in October 1964, unilaterally reopened its Chapel Hill, Tennessee, plant, and thereafter failed to recall employees terminated when it was closed early in 1964, all in violation of Section 8(a)(1), (3), and (5) of the Act. Respondent joined issue on these claims by its answer admitting jurisdiction but denying the commission of any unfair labor practices On May 6, 1965, the Regional Director consolidated both cases for hearing. On due notice I conducted a hearing on the issues in both cases at Lewisburg, Tennessee, on May 18, 1965, in which all parties were represented and participated fully by counsel or other representative.2 All parties waived oral argument, but General Counsel and Respondent have filed written briefs which have been carefully considered in preparation of this Decision. Upon the entire record in the case, and from my observation of witnesses on the stand, I make the following: FINDINGS OF FACT 1. THE COMMERCE FACTS Respondent is a Tennessee corporation operating plants at Chapel Hill and Franklin, Tennessee, where it is engaged in the manufacture, sale, and shipment of shoes. In the 12 months prior to issuance of the complaint herein, Respondent had a direct inflow of materials to said plants valued in excess of $50,000, and a direct outflow of shoes from said plants, valued in excess of $50,000, from and to points outside the State of Tennessee. The Board has already assumed jurisdiction over Respondent's Franklin operations in Case No. 26-CA-1496 (Decision in 144 NLRB 502) and its Chapel Hill plant in Case No. 26-CA-1469 (Decision in 144 NLRB 1268, as corrected by order of January 13, 1964, not officially reported.) I find that Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II THE LABOR ORGANIZATION The above-named Union is a labor organization within the meaning of Section 2(5) of the Act. IH. THE ALLEGED UNFAIR LABOR PRACTICES A. Prior pioceedings The story of the Union's organizing campaign at both plants, and the ensuing representation proceedings and unfair labor practice cases involving both, have been narrated in my prior Decision in Case No. 26-CA-1810, and will not be repeated, but my findings thereon will be referred to where necessary herein. B. Case No. 26-CA-1810 The Board's order granting the motion to reopen the record in this case permitted Respondent to adduce further testimony on the status of the Chapel Hill plant as of and since the hearing of September 10, 1964, insofar as it bears on the motive of 1 This complaint issued after Board investigation of charges filed by the above Union on January 21 and February 3 and 23, 1965 2 By order of May 13, 1965, the Regional Director for Region 26 referred to me for ruling a petition of Respondent to revoke a subpoena duces tecum previously served on it by Counsel for General Counsel. After hearing argument, I denied the petition to revoke. The subpena dated May 4, 1964, the petition to revoke, and the order of refer- ence of May 13, 1965, are hereby placed In evidence and added to the file of formal plead- ings as General Counsel's Exhibit Nos. 1(t), (u), and ( v), respectively. 1148 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Respondent in closing that plant . On that subject Respondent adduced testimony of various plant officials, from which I find the following pertinent facts: Respondent had leased both injection-molding machines used at Chapel Hill before the shutdown . After moving one machine to the Franklin plant, Respondent operated it there full time, producing an average of about 60 to 70 dozen shoes a day in an 8-hour shift , from May through December 1964. Use of the machine was stopped in December 1964 or early January 1965 , and it was returned to the machine company which owned it.3 While using that machine to finish orders for Sears and a few other customers, Respondent advised them shortly after the shutdown at Chapel Hill that it would not supply products from that machine after pending commitments were completed , and it did not after the shutdown solicit new orders for injection-molded shoes . Respondent made this decision as a business matter, even though it had overcome some of the production problems with the machine at Franklin, as found in my first Decision. Respondent has taken no action since which would indicate its intention to resume production by the injection -molding process. The above facts confirm my original conclusion that the decision to shut down Chapel Hill was based in large part on economic considerations . However, the fact that Respondent only leased , rather than owning outright , the two injection-molding machines does not alter my prior conclusion that the actual unilateral shutdown of that plant, after a single short and unproductive discussion of the intended action with the Union , was not bona fide bargaining , for Respondent adduces no proof that the owner of the two machines had any control over their use by Respondent as lessee, or took any part in Respondent 's decision to close Chapel Hill, or its actual shutdown, or in its refusal to bargain with the Union about that action. While Respondent's later actions in phasing out the injection -molding operation appear to be legitimate economic moves, they do not condone or legalize its earlier failure to bargain bona fide with the Union about the initial shutdown and its effects on employees . Hence , on the additional facts adduced by Respondent in Case No. 26-CA-1810, I must adhere to my original findings of fact and conclusions of law and recommendations , except as modified below .4 Respondent , however, urges that testimony adduced by it in Case No. 26 -CA-2012 regarding its later recall or reemployment of former Chapel Hill employees at that plant, and the circumstances thereof, tend to show its lack of union animus or dis- criminatory motive in the initial shutdown and layoff of employees , which brings me to the record in Case No . 26-CA-2012. C. Case No. 26-CA-2012 5 1. The reopening of Chapel Hill and recall of employees In my first Decision I found that when Chapel Hill was shut down, Respondent's production of boots was building up at the Franklin plant s The record here shows that: In the following months, Respondent and Georgia Shoe Company discovered that the market for Wellington boots was expanding At the same time, Georgia Shoe Company was preparing for business reasons to close down one of its Georgia plants which made that type of boot. Starting in August, Georgia Shoe began to ship boot-making machines to Chapel Hill. Hence, starting about October 5, 1965, Respondent began to build up and train a work force at Chapel Hill to cut and fit uppers for the Wellington boots, in anticipation of a shutdown of the Georgia plant. Of the 20 people hired in October, 13 were former employees. In succeeding months the work force was expanded as training progressed and production increased, so that by February 1. 1965, 45 employees were on the payroll, of whom 26 were former employees . Though most of the latter were experienced in cutting or fitting operations , and were recalled because of that experience , they still had to be retrained in the use of new machinery for doing those operations on the Wellington boot, and as a result it was not until about January 15, 1965, that the work force reached a usable production of about 100 dozen pairs a day on those operations? 6 The other machine had been used only a short time at Chapel Hill, from the fall of 1963 to January 1964, when its use was abandoned due to defects . It was never used thereafter. * See Royal Plating and Polishing Co., Inc., 152 NLRB 619. 6 The findings herein are based on credited and uncontradicted testimony of witnesses of Respondent, and documentary evidence. 6 Franklin had been making the Wellington boot since 1963 on a small scale, but it became a major production item early in 1964, shortly before Georgia Shoe Company secured control of Respondent. 7 In this period, most of the usable components went to Franklin , a small portion to the Georgia plant. CUMBERLAND SHOE CORPORATION 1149 At that time Respondent and its parent corporation determined that it was feasible to begin full-scale boot production at Chapel Hill, they also had in mind the possible availability of other employees terminated at the shutdown, who had been advised that they might be recalled. The lasting and bottoming operations, which were the final steps in production of the completed boot at Chapel Hill, were started late in January or early in February. To handle the full production, Respondent from January 28 through February 16 added 46 more workers to the payroll for all opera- tions; 24 of them were former employees. On February 16, Respondent sent recall letters to 102 former Chapel Hill employees (including 67 in the appropriate unit) advising that it had resumed operations at Chapel Hill on a new type of shoe, and suggesting that they report to the plant to make new applications for work on Feb- ruary 20, at which time Secretary Eve would interview former and prospective employ- ees. Of the 102 employees 24 responded and were reemployed on various dates from February 16 onward; 20 others advised Respondent (by telephone or personal visit) that they did not desire reemployment at that time; and 40 did not respond to the letter in any way.8 At the time of the hearing herein the work force was up to about 149 employees, most of whom were still considered in training mainly to increase their production toward the desired goal of production of 300 dozen boots per day; 72 of this group were former employees.9 The record shows that. The Union was never notified by Respondent of the reopening of Chapel Hill, but after it learned the fact from workers, Union Agent Fowlkes requested Respondent verbally on February 8 and by letter of the 9th to meet with it for bargaining negotiations. Respondent replied by letter of February 16 that it would not meet with the Union until its majority status had been finally determined in Case No. 26-CA-1469, pending before the United States Court of Appeals for the Sixth Circuit (where the issue had been brought on the Board's petition for enforcement of its Order of September 11, 1963) [351 F. 2d 917]. In Fowlkes' talk with Secretary Eve on February 8, he had mentioned the reopening of time, and he could not comment about it. General Counsel contends that the unilateral reopening of Chapel Hill was a refusal to bargain in violation of Section 8(a) (5) of the Act, and that the failure of Respondent to recall and reinstate all former Chapel Hill employees who were union adherents, and the hiring of new employees in lieu of former employees, was a dis- criminatory measure to undermine the Union's established majority status and to avoid bargaining with it, in violation of both Section 8(a)(3) and (5) of the Act. Respondent's defense is that it reopened and restaffed Chapel Hill for bona fide economic reasons, and that it tried to recall all former Chapel Hill employees and rehired those who were available as its production needs expanded, but solely on the basis of length of service and efficiency, without regard to their union activity or lack of it In discussing the recall of employees, Respondent also claims the Board's Decision in 144 NLRB 502 cannot be considered as bearing on its motive, because of the pending court review. On this point, I disagree with Respondent, for it is settled law that the Board Decision, of which I take official notice, constitutes the law of the case as to Respondent's prior conduct and violation of the Act, unless and until it is reversed by the court of appeals (and the Board accepts the court's Decision) or by the Supreme Court.1° Hence, I must appraise Respondent's conduct at Chapel Hill on and after its reopening in light of the facts that: (1) It has been found guilty of an illegal refusal to bargain with the Union at that plant in late 1962 and and 1963, in which period it also engaged in other coercive conduct indicating that it did not have a bona fide doubt about the Union's majority status, but had engaged in such conduct in order to gain time in which to destroy that status; (2) such illegal 8 Eight former employees apparently did not get the letters for some unexplained reason, as their letters were returned to Respondent. As to all not responding Respondent took the position, as stated in its recall letter, that their failure to report on the 20th was a waiver of the offer of reemployment and an indication of lack of interest in working at the plant. 0 Although the February 16 letter indicated that former employees must sign "new applications in order that our records may be brought up to date," most of those recalled did not sign forms applicable to new employees, and there is no proof that they came back at the wages, benefits, and other status applicable to new or probationary employees. Marie Trout testified credibly that at the shutdown employees had been told they would be recalled later, and this is consistent with Respondent's attempts to place employees at Franklin, as found in my former Decision. 10 Insurance Agents' International anion, AFL-CIO (The Prudential Insurance Com- pany of America), 119 NLRB 768, 773; Local 1426, International Longshoremen's Asso- ciation, AFL-CIO (Heide and Company, Inc.), 128 NLRB 198, 205, 206. 1150 DECISIONS OF NATIONAL LABOR RELATIONS BOARD conduct has continued to date without rectification as required by the Board's Order; 11 I have already found in Case No. 26-CA-1810 (and reaffirmed herein) that Respondent's brief reversal of position by condescending to talk once with the Union the day before it closed Chapel Hill did not amount to bona fide bargaining about its unilateral closing of that plant.12 In light of this illegal conduct, I must conclude that Respondent's failure at any time to notify the Union of the reopening, and its refusal to bargain with the Union about it thereafter for the reasons stated in its letter, were merely a continuation of its prior illegal refusal to recognize the Union, and amounted to an unlawful refusal to bargain with it in violation of Sec- tion 8 (a)(5) of the Act. All of this unlawful conduct, which was reasonably cal- culated to continue to undermine the Union's status found by the Board, requires careful scrutiny of the manner and extent of Respondent's handling and recall of former employees, particularly known union adherents, and places the burden on it to adduce cogent proof to show nondiscriminatory recall of union adherents, as well as nondiscriminatory reasons for failure to recall others in that group and hiring of new employees in their place. The record shows that at the shutdown of Chapel Hill, 159 employees in the unit aforesaid were on the payroll and terminated, and that 49 of these were known union adherents who had signed cards.13 When Respondent transferred the injec- tion molding machine and its production to Franklin, it offered employment there to 64 Chapel Hill workers, including 12 union adherents, of whom 9 accepted the offer. There is no claim that Respondent discriminated against union adherents in these offers or transfers to Franklin. Respondent contends that when it began to rebuild the Chapel Hill force during the experimental and training period of Octo- ber 5, 1964, through January 15, 1965, it built up the payroll by gradual stages through recall of former Chapel Hill employees on the basis of seniority, compara- tive efficiency, and type of work done before, and also in part by hiring new workers. Insofar as the claim is based on efficiency, the defense is rendered suspect by Respondent's failure to offer any detailed testimony showing comparative efficiency of workers recalled as against those not recalled; its only witness on this point, Personnel Manager and Secretary Eve, who had no actual part in the appraisal and selection of workers, gave only vague, general testimony stating the conclusionary fact; Eve testified that Plant Superintendent Carlton Ellis had made the actual selec- tions, but although Ellis "analyzed very carefully" what employees to recall, be was not called to explain or justify his choice of employees, either specifically or by groups 14 However, absent specific testimony showing past comparative perform- ances or other facts which might bear on efficiency, I still think it proper to consider length of service as one factor bearing on efficiency, for it is well known in indus- trial life that an employee's efficiency normally improves with service.15 With this in mind, the record shows that the initial group of 11 workers taken on at Chapel Hill on October 5, 1964, for fitting work included Mary R. Calvert, who had far 11 Respondent has a clear statutory right to resist enforcement of the Board's Order, but it does so at its own risk (Phaostron Instrument and Electronic Company, 152 NLRB 352 (TXD), and on the cases cited above I conclude that the Board's findings in its prior Decision must presently be considered as facts judicially determined. 12 Respondent now admits that this meeting was held with the Fibreboard decision in mind , "to be sure that they weie protected insofar as having discussed this (with the Union) before the decision was made to close the matter," while the basic decision on the majority status of the Union was pending in the circuit court. This further indicates that the recognition of the Union was only a pro forma and technical legal step n Of the 49 workers who had signed with the Union before January 22, 1963 (the date of its demand for bargaining found in Case No. 26-CA-1469), 32 were no longer on the payroll on March 1, 1964, before the plant closed, for reasons not disclosed here, hence I do not consider them "employees" within the meaning of the Act for purposes of the issues here I cannot presume or infer that they left Respondent's employ be- cause of its unlawful refusal to recognize the Union in 1963 as found by the Board. 14 Respondent admitted that Ellis was as supervisor at all material times, and was superintendent of Chapel Hill at the time of the hearing It is well settled that failure of a party to call as witness a person who clearly has knowledge of the facts at issue justifies an inference that his testimony would not support the contention of that party. See Interstate Circuit v. United States, 306 U.S. 208, 266. 15 Eve admitted that older employees are considerably more efficient than new employees, and I think the same holds true generally in comparing performance of workers of varying lengths of service. CUMBERLAND SHOE CORPORATION 1151 greater seniority (and presumably experience) than any of the union adherents; 16 5 who began work as part of a group of 20 fitters and others hired on June 1, 1962; Kathleen Rutledge (hiring date July 16, 1962); Gwen Ragsdale (hiring date Novem- ber 20, 1963); 2 new fitters (Martha Gentry and Carolyn Crowell); and I new cutter (Thomas Barron). Rutledge and another fitter (Patsy Floyd) were the only union adherents, and Floyd was in the June 1, 1962, hiring group of which six joined the Union. The recall of Calvert and Rutledge fits the seniority-efficiency theory; in Rutledge's case it is the only answer, for she testified that Superintendent Ellis called her early in September 1964 about coming back, and in a later interview sug- gested she resign from another shoe plant to return; he actually took her back on October 5 when the new bootmaking machines were first available. Her training on the new machine was very short, although it took her several months to build up production speed. Since Ellis induced her to leave another job to work for Respondent, and she had less seniority than union fitters hired June 1, 1962, it is obvious that he took her back for efficiency reasons based on her past experience, as against other workers of the June 1, 1962, group, union or nonunion, as well as in preference to Marie Cook, a union fitter hired the same time as Rutledge, and Marie Trout, another union fitter of the June 1, 1962, group. The same inference holds true for Floyd. However, the defense breaks down in the case of nonunion fitter Gwen Ragsdale who was recalled, although her hiring date of November 20, 1963, gave her about 17 months less seniority and experience than 5 union fitters of the June 1, 1963 group,17 and 49 other nonunion fitters. Again, the defense does not hold up in the case of the two new fitters, for since Eve admits that it is easier to train a former worker than a new one, Respondent does not explain why it did not recall any of five union and nonunion fitters of the June 1, 1962, group, who were not offered or did not accept work at Franklin. For the same reason, the defense falls in the case of the new cutter, Barron, when union cutter Larry Bar- cheers (seniority from May 25, 1962) was available and in fact applied for recall sometime in October. The same inference of discrimination arises in the addition of 24 more employees in November and December and through January 25, 1965. While the defense is supported by the facts that union member Eddie Sharp, apparently not employed at the shutdown date (his seniority status does not appear) was hired as a cutter on November 9, union fitter Carolyn Haynes from the June 1, 1962, hiring group was recalled, and union fitters Carolyn F. Brown and Marilyn Vaughn were recalled with nonunion fitter Frances Collins, though their hiring dates (grouped in April and May 1963) gave them far less seniority than other union fitters in the June 1, 1962, group, and nonunion fitters Elizabeth Whittenburg (of that group) and Ruby Garrett (hired in 1958) were also recalled, it is significant that: (1) Respondent recalled six other nonunion fitters 18 of less seniority than Whitefield, Lee, Cook, and Trout, and five new fitters; 19 (2) three nonunion cutters (Jimmy Carlton, Christine Watson, and Charles Waters) were hired in preference to Larry Barcheers; (3) a new man, Glenn Burke, was hired, and a nonunion former injection molder (Stokeley Watkins) was recalled, for lasting work, passing over union injection molder Adrian Phifer and union lasters Earl Daugherty, Faye Walker, Peggy Wald- rop, and Margaret Hazlette, all with greater seniority dating from May and June 1962; (4) a new man, Lelon Wheeler, was hired, and nonunion injection molder Bernie Underwood was recalled, to do finishing, though the latter had many months' less seniority than union injection molder Lewis Wilson and union laster Tommy Lovins (both later recalled to do finishing); and (5) Respondent hired the first packer, a new girl, Anita Hargrove, instead of recalling any of union packers 11 Calvert was hired at Chapel Hill in February 1959, was transferred to Franklin when Chapel Hill shut down, and was brought back on its reopening. She did not sign a union card. 17 Judy Whitefield, Cornelia Lee, Marie Trout, Carolyn Haynes, and Myrtle Lovette As to the first three, the defense breaks down completely, but as to the last two a possible explanation for lack of recall lies in the fact that both were offered work at Franklin after Chapel Hill shut down, with Haynes accepting and Lovette declining it However, no inference of Haynes' lack of desire for work at Chapel Hill can be drawn, for Haynes was recalled and transferred back to that plant on November 17, 1964 ; -a slim inference can still be drawn from Lovette's rejection of work at Franklin, but none can be drawn, as of October 5, 1964, from her failure to answer the recall letter of February 16, 1965 18'Brenda Ghee, Frances Perrell, Frances Collins, Ann Molder, Ruth Ivery, and Lynda Giles. >e Geraldine Wright, Barbara Fishburn, Margaret Harvey, Ann Beech, and Clifford Green. 1152 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Catherine Hodge, Barbara Shaw, Frances Duckworth, Reba Wiser, or Betty S. Gip- son, all of whom were hired in June or July 1962 and before six former nonunion packers. The first charge herein, alleging discrimination in recall of employees, was received by Superintendent Carlton Ellis on January 27, 1965. This put Respond- ent on notice that its method of recall and hiring was questioned by the Union and would be investigated by the Board. In pursuance of its January 15 expansion deci- sion, Respondent took on 46 more employees between February 1 and 16: For fitting work, it hired 5 new workers, and recalled 6 former fitters, again passing over union fitters Whitefield, Lee, Cook, and Trout without credible explanation; for lasting, it recalled 8 former employees, 5 of them union members, but hired only I new worker while ignoring seniority and experience of union ]asters Tommy Lovins, Janice Taylor, and Melvin Newcomb; for finishing, it recalled 1 former injection molder of long seniority but also hired 2 new employees, passing over laster Lovins and injection molder Lewis Wilson, both union members hired in 1962 and whom it later recalled for finishing work; for packing, it recalled 6 former workers, including 1 union member, all with 1962 hiring dates except 1, and hired 1 new packer, but in the process again passed over union packers Duckworth, Shaw, Gipson, and Wiser; 20 for welting (apparently a new classification associated only with leather-soled footwear) Respondent recalled 3 Tasters, 1 union and 2 nonunion, and hired 8 new employees, but gives no reason why it passed over former union lasters Newcomb, Taylor, and Loving, and union fitter Peggy Doggett (later rehired for welting); and to handle sole leather (another new operation) it hired 5 new employees and recalled 1 nonunion laster, but does not explain why it did not try to convert union lasters Lovins, Taylor, and Melvin Newcomb before hiring new people. In response to its blanket February 16 recall letter to 102 former workers,21 and later attempts to recall specific workers, Respondent received 20 declinations and 40 more did not respond, the latter group including 23 union members. In this last period, it took on 58 workers, of whom 15 were union members formerly passed over, 9 were former nonunion workers formerly passed over, and 34 were new employees. General Counsel's contention is that Respondent 's overall hiring in these periods was discriminatory solely because there was a "disproportionate ratio of union adherents to nonunion adherents recalled or hired since October 5, 1964." In ascer- taining this ratio, I start with the fact that as of the shutdown date, there were only 49 union members on a payroll of 159 workers in the appropriate unit. The record shows that Respondent also recalled union member Marilyn Hargrove on March 8, 1965, although she had not been an employee during the month before the shut- down. Hence, as of the hearing date, Respondent had recalled or rehired 50 union members out of a payroll of 159 in the unit. Thus, at shutdown, the ratio of union to nonunion workers was about 1 to 3.24, while at the end of the hiring period it was 1 to 2.98, so that as of the hearing date Respondent had taken back union members in practically the same ratio as existed at the shutdown; hence the ratio theory on an overall basis does not support an inference of discrimination. Another circumstance militating against that theory is that during the total rehiring period, Respondent tried to recall, among others, all 49 union members on the payroll at shutdown; 22 of them did not respond to the February 16 recall letter, while 15 union members (including I not on the shutdown date payroll) accepted the offer, and 15 others (including 1 not on the payroll) had been recalled before that date, so that at the hearing date Respondent had 52 union members at work, apparently 3 more than at shutdown. However, the extent to which Respondent repeatedly passed over union members of greater seniority by extensive recall of nonunion employees and hiring of new ones in the early months of the rebuilding period,22 and the fact that it belatedly included 40 union adherents in the February 16 offer after notice that its rehiring policy was in question, all without any credible explana- tion therefor,23 warrants the inference that in this period it was slowly and deliber- ately building up and maintaining a predominantly nonunion work force ; and when it continued this practice to the end, thus establishing and maintaining the 2-to-1 23 It also passed over four nonunion packers, two hired in mid-1962 and two in 1963, also without explanation. 21 This included 40 union members, of whom at least 5 were already working at Franklin. 22 Up to February 17, 1965, 39 new workers were hired 23 Robert Meyer Hotel Company, Inc., d/b/a Robert Meyer Hotel, 154 NLRB 521. CUMBERLAND SHOE CORPORATION 1153 ratio of nonunion over union employees,24 without giving the Union any chance to discuss the manner and sequence of recall of former employees whom the Union had a continuing statutory duty to represent in such matters, the inference also arises that Respondent was thus trying to dissipate the Union's influence among the employees and its ability to carry out its statutory duties.25 Of all the pertinent facts and circumstances, I conclude that Respondent has failed to adduce cogent evidence in support of its defense which is sufficient to rebut the prima facie case made out by General Counsel, and I therefore find that Respondent from and after October 5, 1964, failed to recall or rehire former employees at Chapel Hill except in a discriminatory manner in order further to undermine and dissipate the Union's status as statutory bargaining agent of all employees in the unit aforesaid, in violation of Section 8(a) (1) and (3) of the Act.26 2. The discharge of three watchmen at Chapel Hill After Chapel Hill was closed, Respondent continued to use it as a warehouse for storage of finished and defective products and idle machinery. At the shutdown Respondent retained three out of five former night watchmen and general cleanup men to continue that work (Bennett Paul, Ira Hill, and Jack Sheffield), and also former Cutting Room Foreman Tom Garrett to serve as day watchman to manage the warehouse and as receiving clerk to handle material and products sent in for storage or other purposes. After the shutdown, the three night watchmen had far less to do than when the plant had been in production, and were working fewer hours per week.27 Hence, about July 1 they asked Secretary Eve to assign them extra work to give them a full 40-hour week. Around July 15 he talked to them with Garrett at Chapel Hill about it and finally arranged to send them some tempo- rary work in packing sample shoes. This job involved packing of 1 of a pair of 30 types of sample shoes in large sample cases for use by shoe salesmen in the field. Sales Manager D. L. Metcalfe, Jr., showed Garrett and the watchmen how to do it, and the four did that work for several weeks under the supervision of Metcalfe. In the last week of July and up to August 4 they also cleaned up and sorted defective shoes to prepare them for sale as factory rejects. These added jobs enabled them to put in 40 hours per week for a short time. Once, while packing samples a day or so before the termination of the three, President Bransford conferred privately at the plant with Garrett about complaints Garrett and others had made about their work, and then told Garrett in their hearing that he would talk to Eve and "get it straightened out." Shortly after, Garrett told the three nightmen to stop work on the sample cases, and thereafter they did only their usual watchmen stints, putting in 38 hours a week until August 4. On that date Eve and Bransford had separate meetings with the three watchmen at the plant. Eve told Paul that Respondent was making a change, that the watchmen had not been hired to do the type of work "that was coming up," so they would have to be laid off; Eve said he had nothing "against you personally," that Paul had been a "good hand," and when they reopened the plant in 30 days or so, Respondent would "replace" them in the plant. Eve told Hill there had been a "lot of complaining" and "we are going to have to make a 24 By the end of the hiring period, it had taken on 73 new workers all told While many of them were assigned to welting and sole leather operations, which were new, I cannot assume this was necessary because none of the former employees could have done this work, for the record shows that some former employees were taken back to do these jobs, though they had done other operations before, so that it is inferable that others would have shown the ability to do the new jobs if given the chances. 25 As the Union had achieved the statutory exclusive representative status for all em- ployees in the unit in 1963, as found by the Board, it is a fair inference that, if given a chance to negotiate with Respondent before or after the Chapel Hill reopening, it would have sought immediate recall of all terminated employees, at least on the seniority basis now professed by Respondent, before hiring of new employees, which might well have resulted in many of the recalled employees getting their jobs back earlier than they did. The Union would also probably have sought opportunity to get work for any of the 36 union adherents no longer on the payroll at shutdown who might be available 26 Cf. Elliott-Wslliams Co , Inc, 149 NLRB 1242 (footnote 1). 21 Before shutdown, their duties included cleaning and tending machines, disposal of scrap, loading and unloading of trucks, and miscellaneous jobs, all of which kept them busy an average of 40 hours per week, with occasional overtime. After shutdown they each worked only 38 hours a week for about 3 months, performing their regular watchman rounds, and during the remainder of their shifts doing occasional odd jobs under super- vision of Garrett. 1154 DECISIONS OF NATIONAL LABOR RELATIONS BOARD change, we are going to have to lay you off." Hill asked if they would consider letting him work at Franklin, and they said they would talk that over. The three were given final paychecks. On December 24, Paul wrote Eve asking the reason for the layoff and stating he was having trouble getting work. Eve replied by letter of December 31, which states: Dear Mr. Paul: Thank you very much for the nice letter I just received. Am sorry to hear that you have experienced trouble finding work. We under- stand more work will open up around the Lewisburg area after January 1. In the event we can call or write someone to help you, we will be glad to do so. It is possible we may be able to help you in our Chapel Hill plant if we re-open in the near future. After closing the Chapel Hill plant, it became necessary for our watchmen to take on different and more active duties. We realize you were not originally employed under these circumstances and are sorry for the various complaints that came up during the latter stages of your employment. Again we will be glad to help you locate immediate employment. Please write us if we can be of service. The three watchmen have never been recalled by Respondent, but shortly after their discharge Respondent hired three replacements. There is no proof that the three watchmen joined the Union or ever engaged in any protected activity on its behalf,28 and General Counsel contends only that they were discharged in violation of Section 8(a)(1) of the Act because of their con- certed complaints about their reduced workhours and requests for additional work. Respondent contends they were discharged because of their poor work on the sample cases, about which it had received complaints, and because they were not suited for the type of future heavy work which Respondent was beginning to handle in the plant. In light of its long-continued unlawful refusal to recognize the Union, which was resumed by its discriminatory handling of union adherents after the plant reopened, I must infer that Respondent had a basic opposition to collective bargain- ing and to concerted activity of its employees which is protected by the Act. This attitude plus the circumstances of termination of the watchmen, which includes apparently conflicting and vague reasons for discharge given by Eve to two of them, and their immediate replacement, raises a sufficient prima facie case of discrimina- tion to require Respondent to go forward with cogent proof to rebut it. In support of the defense, salesman Metcalfe and Bransford testified that: After Metcalfe showed the watchmen and Garrett how to pack the sample cases, he directed Garrett to have each watchman carefully pack only 2 cases per shift which would make 6 cases a day for the 3, and 5 days' work to complete the 30. He felt that this was a reasonable schedule, because it was only a sample sorting and packing job. However, when he returned from a week on the road, he found the men had done only 10 cases, so he complained to Bransford and Eve about it. Bransford on a visit to the plant talked to Garrett about their work, and also briefly talked to each watchman in the presence of Garrett, saying he should work faster on the sample cases. Bransford told Eve about their performance, and Eve then talked directly to Garrett about it. While Paul and Hill specifically denied that anyone ever com- plained to them about their work, Sheffield was never called by General Counsel to corroborate them on this (although he was apparently present during the hearing), and Paul admitted that before the discharge Eve once told him that Garrett had called him at Franklin almost daily making complaints. I am satisfied, and find, that the three watchmen knew before their discharge that management had been dissatisfied with their work on the sample cases, and told them so. However, I am also satisfied that their slow work on this job was not a serious matter, for while Metcalfe indicated that he hoped to have the cases finished by about mid-July, but did not get them until later, and sent them to salesmen as they were finished by other workers,29 there is no proof that the stretchout of his schedule caused Respond- ent any damage nor even any inconvenience other than Metcalfe's irritation at his inability to send out the cases as originally scheduled.30 21 They are excluded from the appropriate unit found by the Board in Case No. 26-C A- 1469 and found in my original Decision in Case No. 26-CA-1810. "Eve testified the cases were finished by the new watchmen. so Metcalfe testified that reports from salesmen after the discharges indicated some of the cases were improperly packed, with some samples missing, which indicated a sloppy packing by the watchmen, but this was not known by Respondent before the discharges. CUMBERLAND SHOE CORPORATION 1155 Bransford and Eve also testified that other reasons for the discharges were (1) complaints from the watchmen to Garrett, which he reported to Bransford, that they were dissatisfied with their added duties, saying they were not hired to do the "production work" of packing samples, but still wanted a 40-hour week, and (2) when heavy machinery began to arrive from Georgia at Chapel Hill for storage in the last weeks of July and early August, the watchmen were ordered to assist truck- drivers in unloading the trucks and moving machines to storage spots, but they did not do this, complaining to Garrett that it was not part of their work. The drivers complained to Garrett about their failure to help with this, and he notified top management. Bransford and Eve also testified that as a result both the sample work and machine unloading had to be done by the replacements. I am satisfied that the watchmen were advised at discharge of the above complaints about their work, for Hill, while professing not to recall what was said about complaints, refused to deny that company officers mentioned complaints from truckdrivers, hence I believe and find that Eve mentioned these specific complaints to them. However, the alleged refusal to handle the machinery is rendered suspect as a real motive for discharge because Bransford also testified that, after consultation with Eve, both officers con- cluded that Respondent would not be justified, because of their physical condition, in asking the watchmen physically to try to move the heavy machines, which tends to indicate that Respondent, not the watchmen, made the decision to take them off that work. Absent any union or labor animus, even this determination would be sufficient ground for replacing them with other watchmen able to do this work, especially since handling and storage of the machines was an essential job, though temporary, which had to be done when they arrived. However, the conflicting stories from management about the reason for the failure to handle the machines indicates that this reason is probably a pretext 31 This leaves only the slow sample case work which, while not a serious dereliction, was amply proved, and would nor- mally be sufficient ground for discharge, especially where it was given to them to satisfy their concerted complaints about lack of work. However, since it was not a serious matter and was advanced by Respondent with at least two other pretextuous reasons, it is also suspect. In this connection Respondent did not produce Garrett as a witness, though he was the direct supervisor in the best position to know and testify about the performance of the watchmen. Failure to produce him, of course, warrants the inference that his testimony would not support Respondent's defense, particularly since Bransford's testimony shows that most of management's com- plaints about the work at the plant was made to Garrett, and that he was discharged shortly after the watchmen, following a heated argument with Bransford about the performance of the four men, because Bransford felt he was responsible for the poor work being done at Chapel Hill. This testimony also indicates strongly that the trouble there stemmed largely from Garrett's inability or refusal to manage the watchmen properly, and further weakens the reasons advanced by Respondent. This leaves only the watchmen's continued concerted complaints about the additional work given them, even after this was done to satisfy their original complaints about a reduced workweek. That this was the sole and effective reason for their discharge is also indicated by the lack of proof that their basic watchmen duties were unsatis- factory, and the fact that Paul, who had been satisfactory as a night watchman for over 2 years, was at his termination promised by Eve consideration for work at Franklin, and in December Respondent in effect offered him possible reemployment at Chapel Hill (although it had already opened and was operating on a temporary or experimental basis), yet Respondent never followed through on this offer, even after the plant resumed full production in February 1965. I also note that Respond- ent offered no proof of the "different and more active duties" which the replacement watchmen were required to handle, after they finished the temporary additional work on the sample cases and handling of heavy machinery in August 1964. In all the circumstances, I conclude that Respondent has not adduced cogent evi- dence sufficient to rebut the prima facie case made by General Counsel as to the discharge of the watchmen, and I conclude and find on all the pertinent evidence that Respondent discharged Paul, Hill, and Sheffield on August 4, 1964, because of 81 Bransford also testified that the watchmen did unsatisfactory work in the cleaning and grading of defective shoes, but his testimony about this is vague and general, is not corroborated by Eve or Garrett, and it was apparently not mentioned to them at dis- charge, hence I conclude that this is another pretext for discharge advanced only at the hearing in an effort to build up their alleged unsatisfactory performance. 217-919-66-vol. 156-74 1156 DECISIONS OF NATIONAL LABOR RELATIONS BOARD their prior concerted activity , thereby restraining them in the exercise of their right to engage in concerted activities protected by Section 7 of the Act, in violation of Section 8 (a) (1) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section III, above , occurring in connec- tion with the operations of Respondent described in section I, above, have a close, intimate , and substantial relation to trade, traffic , and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow thereof. V. THE REMEDY Having found that Respondent has engaged in certain unfair labor practices, I will recommend that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. As Respondent has reopened Chapel Hill and resumed operations there, and has discontinued injection molding operations entirely, I will withdraw so much of my prior recommendation as required Respondent to resume operations at Chapel Hill and to bargain wit lithe Union about former Chapel Hill employees working at Franklin However, as Respondent has unlawfully continued to refuse to bargain with the Union about employees in the unit at Chapel Hill , I will repeat my recom- mendation that Respondent be required to bargain collectively with the Union, upon request, as the exclusive representative of all employees in the Chapel Hill unit found in my prior Decision , and, if an understanding is reached , embody the same in a signed agreement . This obligation will include the duty to bargain with the Union about the present status and job placement of any former Chapel Hill employees who may not have been reinstated to their former or substantially equivalent posi- tion at that plant. Respondent has apparently offered reinstatement to all former employees on the Chapel Hill payroll as of the shutdown date, and has reemployed all those who desired reemployment there, hence I will modify my prior recommendation to require Respondent to offer reinstatement to their former or substantially equiva- lent positions , without prejudice to seniority or other rights and privileges, only to such employees as the records show were not reinstated in such manner 32 As to backpay, I will modify my original recommendation for payment of backpay to all employees unlawfully terminated at Chapel Hill , to cover the period from their unlawful termination to the date of Respondent 's offer of reinstatement , or the date of their actual reinstatement there, if reinstated on a nondiscriminatory basis, and, if not, to the date when they would normally have been reinstated on a seniority basis, absent any discriminatory delay in recall or reinstatement . As it does not appear that any of them have been displaced by new employees , and that Respondent has found jobs for all who wanted reemployment , I will withdraw my prior recom- mendation of establishment of a preferential hiring list. Having found that Hill, Paul, and Sheffield were unlawfully discharged in viola- tion of Section 8(a)(1) of the Act, I will recommend that Respondent offer each of them immediate and full reinstatement to his former or substantially equivalent position , without prejudice to seniority or other rights and privileges , and make each whole for any loss of pay he may have suffered as a result of the discrimination against him , by payment to him of a sum of money equal to that which he would normally have received from the date of his termination to the date of a proper offer of reinstatement, less his net earnings in said period , the backpay to be computed as prescribed in F. W. Woolworth Company, 90 NLRB 289, with interest at the rate of 6 percent per annum to be computed and added as set forth in Isis Plumbing & Heating Co, 138 NLRB 716.33 I repeat my previous recommendation for the preservation by Respondent of all records necessary to assist in computation of all backpay due and readjustment of employees ' jobs for purposes of proper reinstatement. Since Respondent's unlawful actions found above continue to show a funda- mental disregard of the fundamental principle of collective bargaining and of basic rights of employees protected by the Act, I will recommend a broad cease-and-desist order. as This does not include the approximately 36 union members , or any other employees, who were not on the payroll in the stipulated 1-month period prior to April 1, 1964 ss National Packing Company, Inc, 14T NLRB 446; an Juan Lumber Company, 154 NLRB 1153. KORNER KAFE , INC. 1157 On the basis of the foregoing findings of fact and the entire record in the con- solidated cases, I make the following: CONCLUSIONS OF LAW I reiterate Conclusions of Law Nos. 1, 2, and 3 stated in my original Decision in Case No. 26-CA-1810, and add the following: 4. By shutting down its Chapel Hill plant between March 13 and April 1, 1964, and reopening and resuming operations, including recall of employees, therein on and after October 5, 1964, without notification to or consultation with said Union, in order to avoid bargaining with said Union as said bargaining agent, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a) (5) of the Act. 5. By the above shutdown, termination of employees in said unit on various dates between March 13 and April 1, 1964, and its discriminatory manner of recall and reemployment of former employees at said plant on and after its reopening, because employees in said unit chose the Union as their bargaining agent, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(3) of the Act. 6. By all of the above conduct, and by terminating other employees and refusing to reinstate them because of their concerted activities, Respondent has also inter- fered with, restrained, and coerced employees in the exercise of rights guaranteed by Section 7 of the Act, thereby engaging in unfair labor practices within the meaning of Section 8 (a) (1) of the Act. 7. The above unfair labor practices are unfair labor practices affecting commerce within the meaning of Sections 8(a)(1), (3), and (5) and 2(6) and (7) of the Act. 8. Except as found herein, Respondent has not violated the Act as alleged in the consolidated complaint. [Recommended Order omitted from publication.] Korner Kafe, Inc. and Chicopee, Holyoke, Westfield Bartenders, Hotel, Motel, Cafeteria and Restaurant Employees, Local 116, Hotel and Restaurant Employees and Bartenders International Union, AFL-CIO. Case No. 1-CA-5004. January 208, 1966 DECISION AND ORDER On October 25, 1965, Trial Examiner George J. Bott issued his Decision in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in certain unfair labor practices and recommending that is cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Deci- sion. Thereafter the Respondent filed exceptions to the Decision, and the General Counsel filed an answering brief to the Respondent's exceptions. Pursuant to the provisions of 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 Brown and Zagoria]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The 156 NLRB No. 107.