R. J. Reynolds Foods, Inc.

PATIO FOODS, INC. Patio Foods, Inc. (Patio Foods, A Division of R. J. Reynolds Foods, Inc., Successor Employer)' and International Union of Electrical, Radio and Machine Workers, AFL-CIO. Case 23-CA-2569 November 20, 1967 DECISION AND ORDER BY CHAIRMAN MCCULLOCH AND MEMBERS BROWN AND JENKINS On August 8, 1967, Trial Examiner Benjamin B. Lipton issued his Decision in the above-entitled proceeding, finding that the Respondent had en- gaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent filed exceptions to the Trial Examiner's Decision and a brief in support thereof. The General Counsel filed an answering brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its powers in connection with this case to a three- member panel. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions, the briefs, and the entire record in the case, and hereby adopts the findings, conclusions,2 and recommenda- tions of the Trial Examiner, except as modified herein. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the Recom- mended Order of the Trial Examiner as modified below and hereby orders that the Respondent, Patio Foods, Inc. (Patio Foods, a Division of R. J. Reynolds Foods, Inc., Successor Employer), its of- ficers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recom- mended Order, as so modified: ' After the case had been transferred to the Board, Respondent [on September 6, 1967] moved to change the name of Respondent from Patio Foods, Inc., to R J. Reynolds Foods, Inc As none of the other parties has objected, the motion is hereby granted. [By Executive Secretary's Order, dated December 22, 1967, said Decision and Order is amended to designate the name of Respondent as set forth in the caption,] ' The Trial Examiner found that by sending the letter dated January 20 to its employees, Respondent had violated Sec 8 (a)(1). We hold, how- ever, that this letter contained no threat of reprisal and, therefore, did not exceed the privileged area of free speech See Forenta, Inc., 165 N LRB 641. Member Brown agrees with the Trial Examiner , for the reasons given by him, that this conduct of the Respondent violated 8(a)(1). 305 (1) Delete paragraph 1(c). (2) Delete the third indented paragraph of the Notice to All Employees. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE BENJAMIN B. LIPTON, Trial Examiner : Hearing was held in this proceeding on May I and 2, 1967, in San An- tonio, Texas, upon a complaint by the General Counsel' alleging that the above-captioned Respondent violated Section 8(a)(1) and (3) of the Act. Respondent generally denies commission of the alleged unfair labor practices. All parties appeared at the hearing and were afforded full opportunity to present relevant evidence , to examine and cross-examine witnesses , and to argue orally on the record. General Counsel and Respondent filed briefs, which have been duly considered. Upon the entire record in the case,' and from my obser- vation of the demeanor of the witnesses on the stand, I make the following: FINDINGS OF FACT I. THE BUSINESS OF THE COMPANY Patio Foods, Inc., herein called the Respondent, operates a plant in San Antonio, Texas, where it is en- gaged in the manufacture, processing, and sale of food products. During the year preceding issuance of the com- plaint, Respondent had a direct outflow in interstate com- merce of products valued in excess of $50,000, and a direct inflow in interstate commerce of purchased goods and materials valued in excess of $50,000. Respondent admits, and I find, that it is engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED International Union of Electrical, Radio and Machine Workers, AFL-CIO, herein called the Union, is a labor organization within the meaning of the Act. III. THE UNFAIR LABOR PRACTICES A. Issues and Positions The major and overriding question involves Respond- ent's discharge of 16 employees on December 13, 1966.3 The General Counsel's contention under the com- plaint is that Respondent planned and effected the group discharge so as to eliminate 15 of these employees because they were - wearing union buttons and were known adherents of the Union. Respondent's position is that the discharge was a reduction in force economically motivated by reason of a need to curtail production in order to overcome an unusually high inventory in a major line of its food products. Related to the circumstances of the discharge, certain coercive remarks of a supervisor are alleged as independent violations. It is further alleged that, subsequent to these events, Respondent mailed a ' Complaint was issued on March 24, 1967, based upon the Union's original charge filed and served on December 21, 1966, with later amend- ments. 2 General Counsel's motion to correct the record, without opposition, is hereby granted. The motion appears in the formal files of the Board. S All dates are 1966, except as otherwise specified. 168 NLRB No. 47 306 DECISIONS OF NATIONAL LABOR RELATIONS BOARD coercive letter to employees urging them not to sign a union card. B. Background 1. Prior proceedings In February 1965, organizational activity on behalf of the Union commenced with the signing of authorization cards. On June 15, 1965, the Regional Director approved an informal settlement agreement, in which inter alia Respondent agreed to offer reinstatement and pay bacl pay to 15 named employees, and to post notices for 60 days that it will not, on account of or related to union activities - discharge employees; interrogate employees; engage in surveillance; solicit employees to engage in sur- veillance; promise employees benefits; institute changes; threaten discharge, loss of benefits, employee blacklist- ing, and changes in work conditions; or in any other manner interfere with the Section 7 rights of employees. Simultaneous with the execution of this settlement agree- ment and waiver by the Union of all existing charges, the parties entered into a stipulation for certification upor consent election. On July 22, 1965, a Board election in, production and maintenance unit was conducted,4 with the resulting tally showing 413 eligible voters and 405 ballots cast, of which 160 were for and 235 against the Union. On December 7, 1965, the Regional Director rendered his report on objections, finding merit in certain of the Union's objections,5 and recommending that the election be set aside. On February 14, this recommenda- tion was adopted by the Board in a Decision, Order and Direction of Second Election.6 On March 15, a further settlement agreement was executed and approved in which Respondent agreed to offer reinstatement and make whole one named employee, and to post notices that it will not in any manner interfere with, restrain, or coerce employees. On June 16, 1967, the Board issued its Decision in Case 23-CA-2353,' containing a broad cease-and-desist order, and finding inter alia that in April 1966, Respondent had unlawfully enforced a no-solicita- tion rule by preventing distribution of union literature in nonworking areas on nonworking time, and discrimina- torily discharged two employees for engaging in such pro- tected activity under the Act.8 2. Union buttons From the outset of the organizational campaign, em- ployees undertook openly to wear union buttons at work in the plant. Alice Jordan testified, without contradiction, that the day after she signed a union card on February 28, 1965, she commenced wearing a union button, which was observed by Plant Superintendent William R. Green walking by her work station.9 An hour later, Supervisor Houston summoned her to Green's office. In substance, Green asked her how long she had to keep coming back to the plant in applying for a job before she was hired. She replied that it took 12 months. He said, "Oh you thought it was a pretty good job then?" In the remaining conver- sation, he stated that he just wanted to remind her how she obtained this job.'° Jordan estimated, from her personal observations, that before the July 1965 election some 100 to 140 employees wore union buttons in the plant, and that after the election until her discharge in April 196611 about 70 to 75 em- ployees wore buttons. C. Circumstances Surrounding Discharge of December 13 1. Description of relevant operations From the testimony, it appears that the food products distributed by Respondent from this plant are mainly in the form of canned and frozen goods.'t The issues herein pertain immediately to the "dinner department," shown as having about 120 employees in a payroll tabulation for the week ending December 13. As part of this depart- ment, there were described four or five production lines, each consisting of a long specially designed table,13 each having an immediate supervisor. These different lines are variously identified by the name of the supervisor or the particular food product being processed at the time. The line of Forelady Ramona Segura produced enchiladas, requiring 22 employees; or large tacos, requiring 16 em- ployees; or tamales, requiring 13 employees.14 Under Forelady Mary Ytuarte, a line produced small tacos, requiring 29 employees. Two "dinner lines," which produced combinations of food items, are each staffed by about 22 employees under separate supervision of Maria Ximinez Garcia and Carlota Cerna, respectively. The entire department is in the charge of Production Supervisor Patrick N. Scanlan. After discussion with Green, Scanlan schedules daily production; he will not produce an item if inventory on the item is too high. He assigns the (female) employees to the production lines, and supervises the actual operation of the lines. He testified that the line foreladies do not have regular em- 4 Cases 23-RM-157 and 23-RC-2455 5 Attached to the Regional Director's report, admitted into the record here by stipulation, is a preelection handbill of the Union accompanying the Union's objections in which the names of 117 employees are listed as constituting "The Patio Organizing Committee ." Further reference to this document will be made infra. 6 Holding of the election has been blocked by the pendency of com- plaint proceedings. ' 165 NLRB 446 8 Respondent also introduced a stipulation that, in 1967 , the General Counsel refused to issue complaints on charges in Cases 23 -CA-2219 and 23-CA-2601 No merit is found in Respondent's argument that it was being harassed by a multiplicity of charges filed by the Union, and that its own good faith is demonstrated by its willingness to execute settlement agreements , supra The Board's earlier findings are properly considered evidence relevant to the present case with respect to Respond- ent's union animus and against which the further alleged violations herein must be evaluated. Paramount Cap Manufacturing Company v. N.L.R B , 260 F.2d 109, 113 (C.A. 8), N.L R B v Reed & Prince Mfg Co, 205 F 2d 131 , 139 (C.A. 1) 8 Green's office is near the area where the employees punch their timecards 10 This early incident, within the 10(b) limitation period , was offered and is considered as background evidence, it indicates as of such time Respondent's awareness of the union buttons and its implied antagonism toward union activity. 11 165 NLRB 446, supra 12 The following products are listed at the bottom of Respondent's printed letter form: Mexican Dinners , Enchilada Dinners, Combination Dinners, Western Style Dinners , Barbeque Beef Dinners , Scrambled Eggs Breakfasts , Waffles 'N Sausage Breakfasts, Cheese Omelet Break- fasts, Beef and Chicken Tamales, Beef and Chicken Enchiladas , Cheese Enchiladas , Beef Tacos, Tortillas, Mexican Style Beans, Fried Beans, Chili, Menudo, and Barbeque Beef 13 Photographs of the lines or tables were introduced in evidence, as Resp Exhs. 5 through 10 '4 On the Segura line, of particular concern herein, enchiladas are run about 70 percent of the time , and large tacos`about 20 percent. PATIO FOODS, INC. 307 ployees under their supervision. The employees may re- port to the same line each day if the line is running. Or they may be temporarily reassigned to another line, or dispersed through the plant, if a line is curtailed or shut down. No particular employee belongs to a particular line all the time. The employees get to know the different functions pretty quickly, and are "wholly interchangea- ble." The dinner department employees are all paid a starting rate of $1.35 an hour and are raised to $1.40 an hour after a trial period. Not inconsistent with the forego- ing, the testimony elsewhere clearly establishes that the dinner department employees had regular assignments to a particular production line, in some cases continuing over a substantial length of time. 2. Union buttons in dinner department Guadalupe Hernandez testified that 22 named female employees in the dinner department (consisting of about 120 employees, supra) openly and visibly wore union but- tons at work on December 13, and for a period of about 60 days preceding such date. She indicated that during such 60-day period she had spoken to each of these 22 employees, and others in the dinner department, soliciting signatures on a "minimum salary wages petition."15 As further described infra, on December 13 Respondent discharged 16 employees on the Segura line of whom 15 were among the specified employees who wore union buttons.' 6 Forelady Segura testified in a positive vein that only three named employees on her particular line wore union buttons on and before December 13. By reason of her demeanor and the character of her testimony on this Gloria Aleman Mary Lou Aleman Martha Escobedo Regina Fabian Maria Hernandez Josie Morales Julia Moreno Juanita Salazar Clara Villarreal Christina Anthony Gloria Landin Frances Morales Minerva Botello Maria Olga Casias Agapita Cassn Olivia Hernandez Mary Lou Rodriguez 20/ Aurelia Leal Beatriz Pacheco Marcaria Rodriguez Frances Rodrigues Guadalupe Hernandez Eva Vasq+,ez question (as on others, infra), Segura is not credited. Respondent's showing that certain of the 22 employees were absent, mainly for 1 or 2 days, during the 60-day period before December 13 17 constitutes a minor discrep- ancy and does not, I find, detract from the essential credibility and purport of Guadalupe Hernandez' cor- roborated testimony. 3. The Segura line December 5-13 The following testimonial evidence is substantially un- disputed. Until September 5, the practice has been that when production on the Segura line was changed from enchiladas, requiring 22 employees, to large tacos, requir- ing 16 employees - usually the same 6 employees left and were shifted to another line or function in the plant. I" On December 5, such a change was made, but the six em- ployees selected for transfer were not the usual em- ployees. Guadalupe Hernandez had worked on the Cerna dinner line from April 1965 to November 1966, when that line was closed down and she was transferred to the small taco line of Ytuarte. On December 6, she had a union meeting at her home to which she had invited seven employees who were not wearing union buttons; only one of the invitees attended. The next day Hernandez was as- signed to, and Eva Vasquez was removed from, the Segu- ra line. As shown, on December 13 all 16 employees then working on the large taco line of Segura were selected for permanent severence. Set forth below is a roster of the Segura production line from December 5 through 13 - reflecting the discharges, the changes made during this period, and the employees who wore union buttons or were known union adherents. isch. 12/13 Wore Union Button Organiz - ing Corn- mittee 19/ Usually left large taco line Usuall} stayed large taco line tayed 12/5 eft 12 /5 Transf. to Segura line 12/7 Transf. from Segura line 12/7 x X X x x x x X x x x x x x x x x X X X x X x X x x x x x x X X x x X x x x x x X X x x x x x X X x x X x x X X X X x x x x x x x x x x x x x x x x x x x x x x x x x x x X x x x x X 11 Before the hearing, Hernandez annotated the names of the 22 em- ployees on the payroll list of the dinner department employees, in evidence as Resp. Exh I She knew each of these employees by sight but not necessarily by their full name, and Maria Casias assisted her in making the identification on the payroll list. 10 In corroboration of Guadalupe Hernandez, Mary Lou Aleman also identified the 15 button wearers, and 5 of the other discharged employees each testified concerning her own wearing of a union button '7 Eight employees were absent for I or 2 days; one employee for 3 days, two employees for 4 days, and one employee from October 24 through November 2, and on December 8 18 Unless (on relatively rare occasions and not on December 5) one em- ployee would privately arrange a trade or substitution with another em- ployee for a day or two '0 Listed in union handbill July 1965 as members of Patio Organizing Committee See fn 5 20 Absent December 12 336-845 0 - 70 - 21 308 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 4. The discharge and related conversations At 4 p.m. on December 13, the women on the Segura line were sent to the timeclock where Production Super- visor Scanlan told them their termination would be ex- plained in a sealed letter which he handed to each one by name.21 In response to questions, Scanlan and Segura told the employees on December 13 that it was not a layoff but a final discharge. Dated December 12, the letter was addressed to the particular employee and stated that employment was terminated "at the end of this work day, December 13," that a "final paycheck and a Christmas gift" (two checks enclosed) were being paid, and that full consideration would be given to an applica- tion "any time additional employees are needed." Shortly following the discharge on December 13, a conversation took place on the plant parking lot between Forelady Segura and Regina Fabian, in the presence of Julia Moreno and Clara Villarreal. Fabian asked them why they were not coming back to work, and Segura replied: - "It was concerning the Union." As Villarreal testified, she telephoned Segura at her home the next morning and ". . . told her that if we were fired, and she said, `Yes.' And I said, well, you know why, because we're in the union And she said, `Yes I know.' And then I said, `Well, you know that it's against the law to fire someone if you're in the union.' And then she said, `Yes, I know [Stumberg, Jr.] should not have done it."'22 This evidence reveals essentially an admission by Segura - a low ranking but the immediate supervisor of the discharged employees - that their termination on December 13 was motivated by reasons related to union activity. For purposes of the independent violations al- leged, it is not material whether Segura was in a position to know, or whether she was accurate in her stated con- clusion regarding Respondent's motivation. By their very nature, her statements were coercive and discouraging of union membership in a prospective sense. Technically at least, the alleged violations of Section 8(a)(1) are sustained. 5. Subsequent events; partial rehiring On December 19, the Segura line or table was reac- tivated, utilizing other employees in the dinner depart- ment; since then it has been operating 70 or 80 percent of the time. After December 13, Forelady Segura was as- signed work elsewhere in the plant and, sometime in January or February 1967, was returned as the super- visor of her original line making enchiladas and large tacos. In early or mid-January, the entire plant was put back on a "normal" 5-day week. Subsequent to December 13 (particular dates not shown), Respondent rehired Frances Rodriguez, Maria Olga Casias, Josie Morales, and Frances Morales as new employees. Plant Superintendent Green testified that they were selected for reemployment because they were 21 I would find from the testimony that Frances Rodriguez was not, at this time , given a discharge letter. She did not testify 22 Segura denied any conversation with Fabian, but testified she received telephone calls at her home from Villarreal on December 13 after the discharge , and from Julia Moreno, Josie Morales, and Martha Escobedo on December 14 Concerning the four conversations, Segura's version of the dialogue was virtually identical in each instance The em- good employees with good attendance records and were neat and capable in their work. In addition, the following data from Respondent's records are pertinent: Prior to the December 13 discharge, Respondent had hired 22 female employees in August, and 1 in September; 3 male employees in August, 4 in September, and 5 in October. From December 14 through March 23, 1967, 15 employees were taken off the payroll for various reasons, including quits and leaves of absence; and 5 employees were similarly removed from November 8 through December 12. From August I until December 13, there were 16 employees trans- ferred from, and 14 employees transferred into, the dinner department. From December 14 through March 31, there were 16 employees transferred from, and 11 em- ployees transferred into, the dinner department.23 The dates of hire for 14 of the discharged employees ranged from November 1952 (Guadalupe Hernandez) to November 1964 (Gloria Aleman); Frances Rodriguez was hired in September 1964, and Maria Hernandez in March 1966. Among the employees who were retained- in the dinner department alone the dates of hire for 21 female employees and for 13 male employees were more recent than November 1964-none of whom was identified (infra) as among those in the department who wore union buttons. D. Respondent 's Letters of January 20 Dated January 20, Respondent mailed to each em- ployee a letter stating: DON'T SIGN A UNION CARD BECAUSE- IF YOU DO YOU CAN LOSE YOUR RIGHT TO A SECRET ELECTION. DON'T LOSE YOUR RIGHT TO VOTE NO. DON'T SIGN ANY UNION CARD. General Manager Stumberg testified that, on January 18, he was given one of the handbills being distributed by Guadalupe Hernandez, Maria Hernandez, and Alice Jor- dan at Respondent's plant gate. The handbill is printed in versions of English and Spanish, and attached thereto is a blank authorization card and mail-back envelope. In its brief, Respondent relies on one of many paragraphs in the handbill, viz: THE LAW says that YOU have the RIGHT to or- ganize into a union of your own choice. It gives YOU the right to vote for union representation in a secret, government-supervised ballot. I find entirely untenable Respondent's contention that the law is contrary to the statement in the handbill, and that in view of such alleged misrepresentation by the Union, Respondent was justified in sending the letter of January 20. The right of employees to designate an agent or representative "of their own choosing" for the purpose of collective bargaining is a fundamental right under the Act ployee asked the reason for the discharge , Segura said she did not know; and each employee made the remark, with minor variation - "Well, we knew we had it coming, but not so soon." There was no mention what- soever of the Union, by Segura or any of these employees . Segura is not credited 23 Showing further interchangeability PATIO FOODS, INC. 309 which is protected against employer interference.24 The right of eligible employees to vote in a Board election, where one is appropriately being conducted, is similarly a basic franchise under Sections 7 and 9 of the Act. The two rights are mutually exclusive. A signed authorization card, as here involved, is merely a form of evidence of the designation of an agent, and is utilized, if at all, in Board proceedings for many and varied purposes and issues. A Board election may or may not be held or be necessary to ascertain a union's majority representation following the signing of authorization cards. In no circumstances, how- ever, does an employee "lose" or forfeit the right to vote in an election by virtue of signing a union card. Respondent's communication of January 20 conveys a gross distortion of the law and a serious deception prac- ticed by an employer upon employees, particularly those unsophisticated in respect to their statutory rights. Such conduct by Respondent constitutes, I find, a substantial interference with the exercise by employees of their right to self-organization within the meaning of Section 7, and is therefore violative of Section 8(a)(1) of the Act.25 E. Respondent's Economic Defense On conclusion of the General Counsel's case-in-chief, Respondent was requested to and did orally describe more definitively its reasons for terminating the 16 em- ployees on December 13. The position stated was that the discharge was strictly a reduction in force for the pur- pose of reducing "total production of the entire plant"; that (a) it was necessitated and motivated by an "abnor- mal period of sales," i.e., lower sales, and (b) by an im- proved preventive maintenance program resulting in higher units of daily production; and that the combination of these two factors created an inventory situation which was economically unfeasible to bear. In determining the selection of employees for discharge, Respondent argued that it had no precedent, as this was the first reduction in force in its history; it "does not maintain nor observe seniority practices, or policies, or records"; and it sought to terminate a group of employees which would not destroy "the flexibility of the plant" in its ability to produce the entire spread of products. Respondent's president, Louis Stumberg, testified in essential part: The Company markets its products through 60 brokers in the United States and all military installations worldwide, and it maintains inventories at 60 warehouses in the country in addition to its storage facili- ties in San Antonio. Its marketing program consists of ad- vertising, sales promotion, and broker bonuses. Generally a program is laid out several months in ad- vance because a "lead time" of 8 to 10 weeks is required to set up the advertising. Allocation of advertising money is directly related to the "sales curve," which is affected by outside influences; e.g., competition and weather. In the summer of 1966, sales were not up to expectations. As an example, sales of enchilada dinners, a prime item in August, were off nearly 35 percent. (Here, the Trial Examiner indicated that official company records would constitute the best evidence rather than the generalized conclusions of the witness.) Respondent introduced at this point handwritten compilations, derived from its records, viz: ADVERTISING EXPENSE 1965 1966 Percent of Increase Four Months (Sept. - Dec.) $ 53, 829.24 $ 201, 988.97 275.24% Average 13, 457.31 50, 497.24 PROMOTION EXPENSE September 109, 392.69 124, 316.89 13.6 % October 42, 236.03 56, 422.77 33.6 November 42, 932.47 45, 380.40 5.7 December 71, 850.97 91, 790.48 27.8 266, 512.16 317, 910.54 19.3310 66.603.04 79, 477.63 TOTAL CASES IN STORAGE July 277,633 286,333 August 193,885 298, 855 September 180,383 275,068 October 200, 731 280, 623 November 204, 527 273,398 December 232,860 240,102 1,240,019 1,654,379 26 24 Indeed, it is a right, peculiarly that of the employees, which long 25 Compare Forenta, Inc., 165 NLRB 641, and cases cited. predated this very Act and is regarded by the Supreme Court to be as 28 It is noted, for example, that the number of cases in July and great as that which an employer "has to organize its business and select its December of both years vaned about 3 percent, and that from November own officers and agents " N.L R.B v Jones & Laughlin Steel Corp, 301 to December 1965, the number of cases increased by 28,000, while in US 1,33 1966 the number decreased by 34,000. 310 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Continuing, Stumberg averred that the problem was created by a slowdown in sales in the summer of 1966 - attributed to a heat wave in the mid-West. Inventories built up in June and July had not moved out, and had further increased at the end of August. Warehouse space at the plant was overstocked; storage throughout the country involved high expenses; and a substantial amount of money was tied up in excess inventory. When sales dropped off, remedial action was taken by increasing promotional expenses, which action, however, was not effective on sales from 4 to 10 weeks.27 Gradually, sales did show improvement in,- October, and further in November, but not sufficient to pull down the invento- ries. In December and by the end of January, the invento- ry situation "improved markedly." On cross-examination, Stumberg explained that the ex- hibit, quoted above, reflects only the total cases of frozen products, with no breakdown as to department or product. It does not include inventories of canned goods or unfinished products, but does include thousands of cases of frozen meat which are finished, packaged, and ready for sale. Respondent was persistent in confining documented support for its position to the narrowly limited exhibit of certain inventories and promotion expenses, as shown above. Although in argument and testimony, it repeatedly referred to related sales and to unusual expenses of main- taining the inventories, it furnished no figures for sales or profits during the relevant periods. Comparatively higher inventories could, of course, be normally warranted and explained by expanding sales. Respondent's exhibit con- tains infirmities in many other respects, as Respondent was made aware at the hearing but failed to produce any further data. Inter alia, this evidence does not provide a representative basis for comparison with past and sub- sequent experience, and contains no breakdown of the in- ventories and expenses into departments and products-as to relate with probity to the termination of the Segura line as a means of resolving the inventory problem. Stumberg stated as a witness that, unless he is under a court order, he does not intend to bring in any figures on sales or profits (as requested by the General Counsel) for the last 6 months or for the entire years of 1965 and 1966. Respondent carries the burden of over- coming the General Counsel's clear prima facie case; it therefore withheld such evidence at its own risk . 211 In all these circumstances, I assign no probative weight to the exhibit nor to Louis Stumberg's related testimony. Even accepting, for argument's sake, the documentary material submitted, there is, for example, no significant variation between 1965 and 1966 as to the number of cases in storage for the month of December. And a serious question would appear as to whether the marked im- provement in December and January, to which Stumberg testified, could not have been fairly anticipated at the time of the discharge on December 13. Plant Superintendent Green testified that the inventory figures "very much" reflected increased production resulting from new cost accounting procedures and from changes made in 1966 which "tremendously" improved maintenance, reducing excess "down time." Further testimony given by Green and General Manager H. E. Stumberg, Jr., developed in substance that they held daily discussions during the currency of the in- ventory problem, and that they considered and attempted various courses of action to remedy the situation. In Oc- tober, the plant employees were encouraged voluntarily to take off a half day and then a full day on Friday; and in early November, all employees, except shipping, were placed on a 4-day week.29 A few days prior to December 13, it was contemplated that "maybe we're going to have to lay somebody off." In the morning on December 12, the decision was reached that 16 or 17 employees would be terminated as a reduction in force, and that the 16 em- ployees working on the Segura line that day were best suited for such reduction "to keep from tearing up the whole plant" and to maintain the necessary flexibility of the operations. The actual decision was made by General Manager Stumberg, and at the time neither he nor Green knew the names of the affected employees. No one else was informed or was aware of the impending discharge until the next day. On December 13, at 11 a.m., Produc- tion Supervisor Scanlan was first apprised of the decision, and at 4 p.m., without prior notice, the employees were handed the termination letters ,30 as earlier described. In net effect, Respondent's testimony is that the Segura line was selected for elimination on a purely arbitrary ba- sis. The interchangeability of plant employees, particu- larly in the dinner department, is shown by Respondent's own testimony. Although, as noted, most of the em- ployees on the Segura line had long tenure and were senior in service to many other employees, Respondent avowedly gave no consideration to the known per- formance records of the employees,31 and insisted to the point of adamancy that it had no seniority policy and such factor was never given recognition in regard to any decisions affecting the employees. It definitely deter- mined that the discharge would be permanent, assertedly because it did not then know whether it would ever again need these employees. In its 20-year history, it had never been confronted with such a problem and had no precedent to follow in the selection of the employees to be terminated. Further, it was aware of the hazard of an unfair labor practice charge regardless of how the em- ployees were chosen for termination. In two principal areas, at least, the testimony of Green and Stumberg, Jr., was decisively refuted and discredited. (1) Stumberg, Jr., was closely examined concerning the subject of annual Christmas gifts. He stated that the amount of the gift for each employee is determined entire- ly in his own discretion - depending upon such factors as the employee's ability and job performance, but utterly without regard to seniority. He was unable to recall or furnish any actual figures at the hearing and, upon specific request, Respondent supplied in a posthearing stipulation 32 a representative sampling of Christmas gifts 20 At a later point, Stumberg stated that sales (or shipments) from the plant lag approximately 3 weeks from sales that take place in the grocery store 28 1 find no grounds for privileged withholding by Respondent of rele- vant data on sales and profits, while at the same time it seeks to rely on generalized testimony and incomplete documentation for its economic defense 19 General Manager Stumberg agreed that normally the reduc tion of I day's work would curtail production by 20 percent so The letters were dated December 12, and were actually typed by a secretary on such date. Si Scanlan takes note of the employees in the dinner department who are faster workers, more obedient, neater, talk less, and are more desirable from a management standpoint He was not consulted with regard to the selection of employees for termination on December 13. 'IT X Exh I PATIO FOODS, INC. 31 1 made to employees together with their respective dates of hire. Without question and without variation, the stipula- tion demonstrates that the amount of the Christmas gift is related directly to length of service, or seniority. (2) Green originally testified that he could not remember any layoffs "whatever" in the last 9 years. Stumberg, Jr., could not recall any layoffs in the past, with the possible exception of a short period involving the canning depart- ment as to which his memory was vague. Green was then recalled as a witness for Respondent competent to testify on the subject. At this time, Green referred to a "splitting of the work," which he would not call a layoff. He described that, about 1963 in the tortilla department, the available work was divided by requiring selected em- ployees to take time off in alternate weeks.33 Rebuttal testimony by certain employees establishes that, in 1961, about 8 or 9 employees were laid off in the canning de- partment for about 3 months because work was slow; that, in 1963, 9 or 10 employees in the dinner department were laid off for lack of work on an alternating weekly ba- sis; and that the employees selected for these layoffs were the most recently hired. F. Concluding Findings on Discrimination Of the 16 employees discharged, 15 regularly and openly wore union buttons for a substantial period before the termination on December 13; and 13 of these 15 em- ployees were listed in a union handbill in July 1965 as members of the Patio Organizing Committee. In the en- tire dinner department of some 120 employees, only 22 were identified as wearers of union buttons during the period preceding the discharge. The disparate ratio is further accentuated by the fact that the only dischargee who did not wear a union button, Frances Rodriguez, was among the four employees chosen for rehire (sometime after January 1967). Thus, following such rehire, all of the 12 employees permanently severed from the payroll con- sisted of known union supporters. Such evidence by the General Counsel of dispropor- tionate selection of union adherents for discharge, while not in itself determinative, creates a strong inference of unlawful discrimination 34-considered in light of Respondent's other unfair labor practices, past and present, the admissions of Forelady Segura, and the unmistakable showing of its union animus. Plainly, there- fore, the burden was shifted to Respondent to demon- strate legitimate and substantial business justifications for its conduct.35 In the particulars already discussed and in the totality of its defense, it is my finding that Respondent failed to present a probative, plausible, or adequate explanation that the ostensible "reduction in force" was economically and not discriminatorily motivated.36 Such finding is war- ranted by the following factors in evidence, e.g.: (1) The highly circumscribed and self-servicing data from its records relating to the inventory problem which Respond- ent selected to introduce in support of its economic defense, refusing all requests to produce more representa- tive and probative documentary evidence; (2) the flaws and implausibilities, earlier described, in the limited economic data which Respondent did produce; (3) during the critical period of the inventory problem- from August through October - Respondent was actively in the process of hiring about 23 female employees and 12 male employees; and (4) the restoration of the Segura line shortly after Respondent's decision to eliminate it. In any case, whether or not Respondent had valid economic grounds for curtailing its employee comple- ment when it did, the record as a whole requires the hold- ing that discriminatory reasons motivated the selection of employees for termination on December 13.37 Inter alia: (1) The high degree of probability inherent in the dispro- portion of prounion employees picked by Respondent for severance; (2) the actions which Respondent took on December 5 and 7 in making assignments to and from the Segura line; (3) Respondent's determination and in- sistence that the terminations on December 13 were per- manent , rather than a layoff, particularly in view of the marked improvement as to the inventory problem in December and January, and the subsequent rehirings; (4) the comparatively long tenure of the employees discharged, and the fact that they were given no advance notice whatever; (5) the wholly arbitrary manner in which the Segura line was chosen for elimination, notwithstand- ing the record of interchangeability of the employees in the dinner department and, indeed, throughout the plant; (6) the adamant refusal of Respondent to consider seniority for purposes of this termination, while according controlling weight to such factor with respect to Christ- mas gifts; (7) the failure to consider relative job per- formance and capability of employees for purposes of this termination, while considering the same for purposes of rehiring and in other respects; and (8) Respondent's disin- genuous and discredited positions that it gave no recogni- tion to seniority for any purpose, and that it had no precedent in its 20-year history with regard to group ter- minations or layoffs. In view of all of the foregoing, I find and conclude that Respondent discriminatorily discharged the 15 em- ployees named in the complaint, in violation of Section 8(a)(3).38 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section III, above, occurring in connection with Respondent's opera- 33 In substantial part, I have found the testimony of Green and Stum- berg, Jr , to be evasive, changing , and self-contradictory 34 E g, N L R B V Somerset Classics, Inc, 193 F.2d 613 (C.A. 2), cert. denied 344 U S 816, N L R B v Camco, Inc , 340 F 2d 803 (C A 5), Ertel Manufacturing Corp, 147 NLRB 312, enfd 352 F.2d 916 (C.A 7); San Angelo Packing Co, 163 NLRB 842; United Butchers Abattoir, Inc , 123 NLRB 946. 3s See N L R B v Great Dane Trailers, Inc , 388 U S 26 Cf Monroe Feed Store, 110 NLRB 630, 636-637, enfd 237 F.2d 116 (CA 9). 3' E g , N L R B v Bedford-Nugent Corp, 379 F.2d 528 (C.A. 7), and cases cited in fn 34 38 In his brief, the General Counsel moves that the discharge of Frances Rodriguez on December 13 also be found unlawful, although she was not named in the complaint The contention is stated that she was a victim of the overall discriminatory action and was therefore entitled to relief Without passing upon the correctness of this contention , the General Counsel's motion, as to which no mention had heretofore been made, is denied The General Counsel's theory now presented as to Rodriguez is not the same as that involved with the 15 employees named in the com- plaint. It cannot be held that Respondent was properly afforded the oppor- tunity of defense concerning this additional employee, or that the issue was fully litigated 312 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tions described in section 1, above, have a close, intimate,' and substantial relationship to trade, traffic, and com- merce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that Respondent engaged in certain un- fair labor practices, I will recommend that it cease and de- sist therefrom and take certain affirmative action designed to effectuate the policies of the Act. In my opinion, a cease-and-desist order in its broad form is war- ranted by reason of the discriminatory discharges which "go to the heart of the Act."39 It will be recommended that Respondent offer to the 15 employees, found herein to have been unlawfully discharged, immediate and full reinstatement to their former or substantially equivalent positions, without prejudice to their seniority or other rights and privileges, and make them whole for any loss of earnings suffered by reason of the discrimination against them, by payment to them of a sum of money equal to that which they normally would have earned, absent the discrimination, from the date of the discrimination to the date of the offer of rein- statement, less net earnings during such period, with backpay computed on a quarterly basis in the manner established by the Board in F. W. Woolworth Company, 90 NLRB 289. Backpay shall carry interest at the rate of 6 percent per annum, as set forth in Isis Plumbing & Heating Co., 138 NLRB 716. Further, it will be recom- mended that Respondent preserve and make available to the Board, upon request, all payroll records, social securi- ty payment records, timecards, personnel records and re- ports, and all other records necessary and useful to deter- mine the amounts of backpay due and the rights of rein- statement under the terms of these recommendations. Upon the foregoing findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. Respondent is engaged in commerce within the meaning_of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. By discriminatorily discharging certain employees, as specified herein, thereby discouraging membership in the Union , Respondent engaged in and is engaging in un- fair labor practices within the meaning of Section 8(a)(3) of the Act. 4. By the foregoing, and by other acts and conduct in- terfering with , restraining , and coercing employees in the exercise of their rights guaranteed in Section 7 of the Act, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (a)(1) of the Act. 5. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in the case, it is recommended that Respondent , Patio Foods, Inc., San Antonio , Texas, its officers , agents, successors, and assigns, shall: 1. Cease and desist from: (a) Discouraging membership in International Union of Electrical , Radio and Machine Workers, AFL-CIO, or in any other labor organization , by discharging em- ployees, or in any other manner discriminating in regard to hire or tenure of employment or any term or condition of employment. (b) Expressly or impliedly threatening employees with discharge or other reprisal to discourage their union mem- bership or activity. (c) Interfering with the self-organizational rights of employees in signing union authorization cards. (d) In any other manner interfering with , restraining, or coercing employees in the exercise of the rights guaranteed in Section 7 of the Act. 2. Take the following affirmative action designed to ef- fectuate the policies of the Act: (a) Offer the employees named below immediate and full reinstatem,- ..,t to their former or substantially equivalent positions , without prejudice to their seniority or other rights and privileges , and make them whole for any loss of earnings , as set forth in "The Remedy" sec- tion of the Trial Examiner's Decision. Gloria Aleman Mary Lou Aleman Christina Anthony Minerva Botello Maria Olga Casias Martha E. Escobedo Regina Fabian Maria Hernandez Gloria S. Landin Frances Morales Josie Morales Julia Moreno Juanita H. Salazar Clara G. Villarreal Guadalupe Hernandez (b) Notify the above-named employees if presently serving in the Armed Forces of the United States of their right to full reinstatement upon application in accordance with the Selective Service Act and the Universal Military Training and Service Act, as amended, after discharge from the Armed Forces. (c) Preserve and make available to the Board or its agents all payroll and other records, as set forth in the section of this Decision entitled "The Remedy." (d) Post at its San Antonio, Texas, plant, copies of the attached notice marked "Appendix."40 Copies of said notice, on forms provided by the Regional Director for Region 23, after being duly signed by Respondent's representative, shall be posted by it immediately upon receipt thereof, and be maintained by it for 60 consecu- tive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respond- ent to insure that said notices are not altered, defaced, or covered by any other material. 90 N L R B v. Express Publishing Co , 312 U S. 426, N L R B v Entwistle Mfg Co, 120 F.2d 532 (C A. 4) 90 In the event that this Recommended Order is adopted by the Board, the words "a Decision and Order" shall be substituted for the words "the Recommended Order of a Trial Examiner" in the notice In the further event that the Board's Order is enforced by a decree of a United States Court of Appeals, the words "a Decree of the United States Court of Ap- peals Enforcing an Order" shall be substituted for the words "a Decision and Order " PATIO FOODS, INC. 313 (e) Notify the Regional Director for Region 23, in WE WILL offer the employees named below im- writing, within 20 days from the receipt of this Decision, mediate and full reinstatement to their former or sub- what steps have been taken to comply herewith.41 stantially equivalent positions, without prejudice to 11 In the event that this Recommended Order is adopted by the Board, this provision shall be modified to read "Notify the Regional Director for Region 23, in writing, within 10 days from the date of this Order, what steps Respondent has taken to comply herewith." APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to the Recommended Order of a Trial Ex- aminer 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 em- ployees that: WE WILL NOT discourage membership in Inter- national Union of Electrical, Radio and Machine Workers, AFL-CIO, or in any other labor organiza- tion, by discharging employees, or in any other manner discriminating in regard to hire or tenure of employment or any term or condition of employment. WE WILL NOT expressly or impliedly threaten em- ployees with discharge or other reprisal to discourage their union membership or activity. WE WILL NOT interfere with the self-organizational rights of employees in signing union authorization cards. WE WILL NOT in any other manner interfere with, restrain, or coerce employees in the exercise of the right to self-organization, to form labor organiza- tions, to join or assist the above-named or any other labor organization, to bargain collectively through representatives of their own choosing, and to engage in any other activities for the purpose of collective bargaining or other mutual aid or protection or to refrain from any or all such activities. their seniority and other rights and privileges previ- ously enjoyed, and make them whole for any loss of pay they may have suffered by reason of the dis- crimination against them. Gloria Alernan Maria Hernandez Mary Lou Aleman Gloria S. Landin Christina Anthony Frances Morales Minerva Botello Josie Morales Maria Olga Casias Julia Moreno Martha E. Escobedo Juanita H. Salazar Regina Fabian Clara G. Villarreal Guadalupe Hernandez All our employees are free to become, or refrain from becoming, members of the above-named labor organiza- tion, or any other labor organization. PATIO FOODS, INC. (Employer) Dated By (Representative) (Title) Note: We will notify the above-named employees if presently serving in the Armed Forces of the United States of their right to full reinstatement upon application in accordance with the Selective Service Act and the Universal Military Training and Service Act, as amended, after discharge from the Armed Forces. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or coN erect 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, 6617 Federal Office Building, 515 Rusk Avenue, Houston, Texas 77002, Telephone 228-0611.