Houston Maritime Association, Inc.

HOUSTON MARITIME ASSN., INC. 615 Houston Maritime Association, Inc. and Its Member Companies and Leon H. Phelps, Harry C. Torry, Harold Mullins , Willie Earl Williams, and Robert Hensley Local 1351, Steamship Clerks and Checkers, Interna- tional Longshoremen's Association, AFL-CIO, and Leon H. Phelps, Harry C.Torry, Harold Mul- lins, Willie Earl Williams, and Robert Hensley. Cases 23-CA-1996, 1996-2, 1996-3, 1996-4, and 1996-5 and 23-CB-598, 598-2, 598-3, 598-4, and 598-5 November 30, 1967 DECISION AND ORDER By MEMBERS BROWN, JENKINS, AND ZAGORIA On November 17, 1966, Trial Examiner Milton Janus issued his Decision in the above-entitled proceeding, finding that the Respondents had not engaged in unfair labor practices as alleged in the complaint and recommending that the complaint be dismissed in its entirety, as set forth in the attached Trial Examiner's Decision. Thereafter, the General Counsel and the Respondent Association filed ex- ceptions to the Trial Examiner's Decision and sup- porting briefs. I 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 and briefs, and the entire record in the cases, and hereby adopts the findings, conclusions, and recommenda- tions of the Trial Examiner only to the extent con- sistent herewith. The Trial Examiner found that the charges herein were untimely filed and thus the finding of any violation was barred by the time limitation of Sec- tion 10(b). The General Counsel excepts to this finding. We find merit in these exceptions. As set forth in the Trial Examiner's Decision and reflected in the record, the Respondents, Houston Maritime Association and its Member Companies,2 and Local 1351, Steamship Clerks and Checkers, International Longshoremen's Association, AFL-CIO,3 have been parties to a collective-bar- gaining agreement at all times material herein. Although the contract between the Association and the Union makes no reference to the fact that the Union through its hiring hall is to be the exclusive source of referrals in employment, the practice has been in effect for many years and is understood by the parties to be controlling. The latter is likewise true with respect to other employers in the industry in the area not members of the Association. Local 1351, during all times relevant herein, was a "white" local and the sole source for referral of em- ployees who wished to work as clerks, checkers, or timekeepers in the Port of Houston, Texas. This case involves the efforts over a number of years by a group of Negro longshoremen to obtain work as clerks and checkers through the exclusive hiring hall of the Respondent Union. In the summer of 1963, as more fully set forth in the Trial Examiner's Decision, a group of Negroes, including the Charging Parties herein, visited Local 1351's hiring hall for the purpose of obtaining work through the Local, or, as an alternative, requesting the setting up of a separate Negro local of clerks and checkers. The then president, Vestal, of Local 1351, in substance, rejected both of the requests of the Negroes on the basis that the Local was not ac- cepting applications from Negroes. At the same time Vestal acknowledged that the problem of plac- ing Negroes as clerks and checkers was due to come up. Vestal stated he would like to take up the matter with Local 1351's executive board and, further, he informed the Charging Parties that the Local at its next membership meeting would vote on the question of accepting Negroes' applications.4 Subsequently, the executive board and the Local's membership voted to continue to bar Negroes from membership and from obtaining work through the Local's hiring hall. Shortly thereafter, in the latter part of September 1963, the Local, through its ex- ecutive board, adopted a policy of closing its re- gister of applicants to those then registered and refusing to accept any further applications.5 It is primarily the institution and enforcement of this freeze policy of Local 1351 with which we are concerned here, and whether such policy did in fact constitute an unlawful continuation and main- tenance by Local 1351 of its pre-September 1963 practice of barring Negro applicants from job op- portunities. The Trial Examiner found the existence of a union policy of rejecting Negro applicants at the Union's hiring hall prior to September 1963. He also found, and we agree, that the adoption by the Union in September 1963 of a freeze policy, whereby all applicants, white or Negro, were to be denied registration, was motivated by the Union's 1 The Respondent Association's and its member companies' exceptions 3 Hereinafter referred to as Local or Union. are limited to the Trial Examiner's alternative conclusions as to Respond- 4 Vestal did not testify at the hearing. ent Association's and its member companies' violations of Section ' We shall hereinafter refer to such policy as "freeze" or "freeze pol- 8(q)(1) and (3). icy." S Hereinafter referred to as Association. 168 NLRB No. 83 616 DECISIONS OF NATIONAL LABOR RELATIONS BOARD wish to continue rejecting Negroes' applicants. Nevertheless, the Trial Examiner concluded that since under the Union's freeze policy, the practice of refusing registrations was not directed against some applicants because of their race but was directed against all applicants, because of an excess of registrants entitled to referral through the hiring hall, the practice of rejecting all applicants not being illegal on its face could only be converted into an il- legal action by relying solely on a time-barred event, i.e., the pre-September 1963 rejection of Negroes' registration for job referrals.6 It is true that a mere surface statement of the Union's freeze policy, i.e., that no further appli- cants will be registered regardless of race, would not itself indicate whether a racially discriminatory factor is intrinisically built into its implementation, except to the white members and nonmembers who made use of the hiring hall and also to Negro appli- cants who had knowledge of the Union's racially discriminatory practices.? But the racial impact of the freeze policy does become plainly revealed upon consideration of the background of elucidating union conduct preceding the adoption of such pol- icy. Consideration of such relevant background is clearly proper in ascertaining the ingredients of the freeze policy and in determining what is really in- volved in the present maintenance of such practice. In thus appraising the policy, needless to say, we are not passing upon the validity of the Union's conduct during the pre-10(b) period before the freeze;" rather we decide only whether the main- tenance and continuation of the practice presently entails a preference in employment referrals on the basis of race alone, that would be violative of Sec- tion 8(b)(1)(A) and (2) of the Act. The Union, a white local, by its act of "freezing" its registrations effectively created a pool of white employees which constituted a preferred class in employment with the attendant benefits of seniority and possible attainment of union membership. 9 As a consequence, up until the summer of 1965, when Local 1351 adopted for the first time an alleged nonracial policy,10 a preferential hiring arrangement continued in effect which barred Negroes. In our opinion, the fact that this freeze policy was adopted by the Union more than 6 months prior to the filing of the charges herein does not detract from the further fact that the Union's racially discriminatory policy was, as a result of such "freeze," continued 0 The uncontradicted testimony of the Charging Parties is that at no time when they made application to the Union were they told that the reason for refusal was because of the "freeze policy." To the contrary, they were informed, in substance, that the Local was not accepting appli- cations from Negroes 7 Local Union No. 269, International Brotherhood of Electrical Work- ers, AFL-CIO (Mercer County Division , etc ), 149 NLRB 768, enfd 357 F.2d 51 (C.A. 3). 8 We make reference here to these events as evidence to be considered only for background. Local Lodge No. 1424, InternationalAssociation of Machinists , AFL-CIO v. N.L R.B., 362 U S 411, 424. and maintained from the time of its inception, through the time the charges were filed and sub- sequent thereto. We find, contrary to the Trial Ex- aminer, that by adopting a practice which in opera- tive effect created a preferred class in employment, the result was that the Union's previous policy of discrimination against Negroes as to job opportuni- ties solely on the basis of race was continued and maintained. Accordingly, the Union, by rejecting the Charging Parties' applications for registration for referral, breached its duty of fair representation and as a result engaged in unfair labor practices in violation of Section 8(b)(1)(A) and (2) of the Act. It The Trial Examiner in his Decision cited Bryan Manufacturing Co.12 as controlling with respect to the 10(b) issues in this case. Here, we are not deal- ing with a situation where a violation of the Act de- pended wholly on proof of a prior state of events outside the 10(b) period as in Bryan. To the contra- ry, here the maintenance of an illegally preferred group and the consequent unlawful rejection of the Charging Parties because of their race continued through the 10(b) period. Thus, the record shows that Leon A. Phelps, a Negro and one of the Charg- ing Parties herein, a number of times during 1964, including a visit a few days prior to Thanksgiving 1964, inquired at the hiring hall if there had been any change in the Local's policy with regard to the hiring of Negroes. At all times Phelps was denied the right to register and was informed in substance by the Local's agents that the matter of registering "colored" was being worked on but no final deci- sion had been made. Phelps again, on March 11, 1965, visited the hiring hall and asked Casey, who had become president of the Local in January 1965, if there had been any change in the Local's position about putting "colored" people to work. Casey in- formed Phelps the Local was working on it, pa- tience was needed, and that eventually some "colored" people would get work. Nothing more specific was offered by Casey. As a result of this conversation, Phelps on the same day filed his charge herein. On the morning of March 12, 1965, Phelps and the other Charging Parties again called at the hiring hall and again inquired of Casey if there wasn't a chance of getting some work through the hiring hall. Casey replied, "Yes, I think you are going to work here." However, when Phelps inquired if the Charging Parties would register then and there, Casey gave the Charging Parties for the 9 This pool, in fact, continued as a source of the Umon's job referrals up to the summer of 1965 at which latter time the Union adopted an alleged nondiscriminatory policy and opened its registrations. It is to be noted that the Union's new policy followed the filing of the charges herein and the enactment of the Civil R.ghts Act of 1964 which became effective July 2,1965 10 This, as fully described by the Trial Examiner in his Decision, is not an issue here, and we make no findings with respect to such new policy 11 See Vaca v. Sipes, 386 U.S. 171. 12 Local Lodge No 1424, International Association of Machinists, AFL-CIO v. N.L.R.B. (Bryan Manufacturing Co.), 362 U.S. 411. HOUSTON MARITIME ASSN., INC. 617 first time a new reason why the Charging Parties could not register. This was- to the effect that the Union had a lot of misfits on its rolls that had to be gotten rid of, that the Local was not accepting appli- cations even from whites , and that the Local had a backlog of applications . The Charging Parties were not informed when , if ever, they could register, or whether the Local was contemplating the adoption of a new, nondiscriminatory procedure. The result was that that afternoon the rest of the Charging Parties filed their individual charges herein. Since the preferred group continued to exist beyond the time of the filing of the charges herein , the refusals of employment to the Charging Parties solely on the basis of race , as evidenced in the record , within the 10(b) period , establish the violations independently of the time of the initial establishment of the freeze policy. Accordingly, we find contrary to the Trial Examiner that the Union by such conduct engaged in unfair labor practices which were not barred by Section 10(b) of the Act.13 The Trial Examiner, although recommending dismissal of the complaint in its entirety on the basis of his conclusions as to the applicability of the 10(b) statutory limitation, nevertheless set forth alternate conclusions and recommendations in the event the Board determined that the charges in the complaint were not barred by Section 10(b). We hereby adopt such alternate conclusions and recommendations.14 Accordingly, we hold that Local 1351 violated Sec- tion 8(b)(1)(A) and (2) of the Act by the operation and continuation of a referral and hiring system with the Houston Maritime Association and its member employers, whereby a preferred class of white registrants and white union members were given discriminatory preference over Negroes in job opportunities and union membership because of their race. Further, we find that Respondent Houston Maritime Association and its Member Companies, having participated in the pattern of un- lawful conduct found above, to be in violation of Section 8(a)(1) and (3) of the Act. 15 THE REMEDY Having found that the Respondents have engaged in certain unfair labor practices, we shall direct them to cease and desist therefrom and take certain affirmative action designed to effectuate the poli- cies of the Act. Accordingly, in view of the fact that the violations found herein were based upon the il- legal practice of discrimination against Negroes solely because of their race, and further, it is clear from the record herein, that such invidious prac- tices of Respondents were illegally continued, as found herein, up to and beyond the time of filing of the charges herein, we shall order the Respondents to accept the Charging Parties' applications under the same terms and conditions as applied in the case of white registrants who were admitted before Sep- tember 11, 1964,16 and we shall order the Respon- dents to make the Charging Parties whole for loss of earnings and any loss of seniority they may have suffered by reason of the discrimination practiced against them, which seniority and earnings shall be determined and computed as of the aforementioned 11 Local Union No. 269, IBEW, AFL-CIO (Mercer County Division, NECA, ETC.), 149 NLRB 768, enfd. 357 F.2d 51 (C.A. 3). 14 We do not, however, adopt the Trial Examiner's alternative conclu- sion as to the possible finding herein of an 8(b)(3) violation by the Re- spondent Union since we deem it unnecessary to consider and decide such question for the purpose of arriving at a decision herein. We are not in accord with the Trial Examiner's interpretation of our decision in Cargo Handlers, Inc., 159 NLRB 321. The discriminatees in Cargo were not union members but were, as in the instant case, applicants for referral through the union hiring hall However, with respect to the obligation of fair representation in the referral of applicants for employment, see Brotherhood of Locomotive Firemen and Enginemen (Phelps-Dodge Corp.) v. N.L R.B , 313 U.S. 177, cf Brotherhood of Railroad Trainmen et al., v. Howard et al., 343 U S. 768; Local Union No. 12, United Rubber Workers (The Business League of Gadsden), 150 NLRB 312, enfd 368 F.2d 12 (C.A. 5), cert. denied 389 U.S. 837. Cargo Handlers, Inc., 159 NLRB 321; Houston ChapterAGC, 143 NLRB 409; Miranda Fuel Co., 140 NLRB 181, 185, enforcement denied on other grounds 326 F.2d 172 (C.A. 2) Member Zagora agrees with his colleagues that the Respondent Union, as the bargaining representative for all employees and no less for appli- cants for referral through the union hiring hall, cannot discriminate in its representation. It may not treat Negroes differently from whites, Catholics differently from Protestants, or Democrats differently from Republicans In seeking the status as bargaining representative, the Union accepted the obligation to represent all fairly. Clearly, here it did not. Although joining in the finding of violations herein, Member Zagoria con- cludes only that Respondent Union violated Section 8(b)(1)(A) and Respondent Company Section 8(a)(1), deeming it unnecessary to consider or decide whether the Union also violated Section 8(b)(2) or the Company Section 8(a)(3). Local 12, United Rubber Workers, supra is Morrison-Knudsen Company, Inc. v. N.L.R.B., 275 F.2d 914, (C.A. 2); N L.R.B v. Houston Maritime Association, 337 F.2d 333 (C.A. 5); N.L.R B. v. Southern Stevedoring & Contracting Co., 332 F 2d 1017, 1019 (C.A. 5); Galveston Maritime Association, Inc., Local 1351, etc., 139 NLRB 352, enfd. in part sub nom. 329 F.2d 269 (C A D.C.). See also Local 12, United Rubber Workers, supra. 16 The record herein clearly establishes that the Charging Parties were denied the use of the Union's hiring hall for racial reasons at least as early as August 1963 , and that all of the Charging Parties herein would have been rejected from the hiring hall at any time within the 6-month period of limitations, prescribed by Section 10(b), because of the Respondent's un- lawful practices as set forth above. We deem this remedial action neces- sary in the public's interest and to recreate the conditions and relation- ships that would have been had there been no unfair labor practices of the nature of those found herein. (Consolidated Edison Co. v. N.L.R.B., 305 U S 197, 236; N L.R.B. v. Seven-Up Bottling Co. of Miami, Inc., 344 U.S. 344,348-349.) Member Jenkins would, on the basis of the invidious nature of the viola- tions found herein and under the authority vested in the Board by Section 10(c), order that the seniority of the Charging Parties be computed as of August 1963, at which time the record establishes that such illegal racial discrimination was practiced against the Charging Parties by Respondents and continued by subterfuge up to and beyond the time of filing of the charges herein. He considers that the Board's remedy, leaving uncor- rected the seniority discrimination between August 1963, the date it was first established to have occurred, and September 11, 1964, the com- mencement of the 10(b) period, permits the Union to continue to represent the discnminatees on a basis which includes this prior dis- crimination, and that this breaches the Union's duty offair representation, which if the Act is to be applied constitutionally cannot be subjected to the 10(b) cutoff date. Steele v. L & N Firemen, 323 U.S 210; Wallace Corp v. N.L.R B., 323 U S. 248, affg. 141 F.2d 87, enfg. 50 NLRB 138; see Vaca v. Sipes, 386 U S. 171, supra; Ford Motor Co. v Huffman, 345 U.S. 330; Phelps Dodge v. N.L.R.B., 313 U.S. 177, Local 12, United Rubber Workers, supra 618 DECISIONS OF NATIONAL LABOR RELATIONS BOARD date . Such earnings shall be computed in ac- cordance with the method prescribed in F. W. Woolworth Co., 90 NLRB 289, and such earnings shall include interest at 6 percent per annum, com- puted in the manner prescribed in Isis Plumbing & Heating Co., 138 NLRB 716, 717-721. CONCLUSIONS OF LAW Having found, contrary to the Trial Examiner, that Respondents engaged in unfair labor practices in violation of the Act, we hereby delete the Trial Examiner's conclusion of law number 3 and add the following: AMENDED CONCLUSIONS OF LAW 3. Local 1351 has restrained and coerced em- ployees in the exercise of rights guaranteed by Sec- tion 7 of the Act and in violation of Section 8(b)(1)(A) of the Act. 4. Local 1351 has caused, or attempted to cause, Houston Maritime Association, Inc., and its Member Companies, and other employers, to dis- criminate against employees in violation of Section 8(a)(3) of the Act, and by this action has violated Section 8(b)(2) of the Act. 5. By acquiescing in, and maintaining, an illegal hiring arrangement, Houston Maritime Associa- tion, Inc., and its Member Companies have engaged in unfair labor practices within the meaning of Sec- tion 8(a)(1) and (3) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that: A. Respondent Houston Maritime Association, and its Member Companies, their officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Maintaining , performing , or enforcing any ar- rangement with Local 1351, Steamship Clerks and Checkers , International Longshoremen 's Associa- tion, AFL-CIO, in any manner whereby job refer- rals or hiring are conditioned on the unlawful basis of race of union membership ; or maintaining, per- forming, or enforcing, by contract or otherwise, any like or related arrangement in any manner whereby referrals to available jobs or hiring are based or al- located on the unlawful basis of race or union mem- bership. " In the event that this Order is enforced by a decree of a United States Court of Appeals, in each Notice marked "Appendix A or B," there shall (b) Discriminating against Leon H. Phelps, Harry C. Torry, Harold Mullins, Willie Earl Wil- liams, and Robert Hensley, because of race or lack of union membership. (c) In any like or related manner restraining or coercing employees in the exercise of their rights guaranteed by the National Labor Relations Act, as amended. 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act: (a) Post at their offices in Houston , Texas, co- pies of the attached notice marked "Appendix A."17 Copies of said notice , to be furnished by the Regional Director for Region 23, after being duly signed by respective Respondent 's representative, shall be posted by them immediately upon receipt thereof, and be maintained by them for 60 consecu- tive days thereafter, in conspicuous places, includ- ing all places where notices to employees are customarily posted . Reasonable steps shall be taken by the Respondents to insure that said notices are not altered , defaced , or covered by any other material. (b) Post at the same places and under the same conditions as set forth in (a) above , as they are for- warded by the Regional Director , copies of the Respondent Local's notice marked "Appendix B." (c) Mail signed copies of the attached notice marked "Appendix A" to said Regional Director for posting at the hiring hall operated by Respond- ent Union, in places where notices to members and employees and prospective employees are customarily posted. Copies of the notice, to be furnished by said Regional Director , shall be returned forthwith to the Regional Director after they have been signed by an official representative of the Respondent Association for such posting. (d) Notify the Regional Director for Region 23, in writing , within 10 days from the date of this Order, what steps Respondent Association has taken to comply herewith. B. Respondent Union , Local 1351, Steamship Clerks and Checkers, International Longshoremen's Association, AFL-CIO, its of- ficers, agents , and representatives , shall: 1. Cease and desist from: (a) Causing or attempting to cause Houston Maritime Association, Inc., and its Member Com- panies, or any other employer, in the Port of Houston, Texas, to discriminate against employees or prospective employees by refusing to hire them on the unlawful basis of or union membership; or maintaining, performing, or enforcing, by agree- ment or otherwise, any like or related arrangement be substituted for the words "a Decision and Order" the words "a Decree of the United States Court of Appeals, Enforcing an Order." HOUSTON MARITIME ASSN., INC. 619 in a manner whereby referrals to available jobs are based on the unlawful basis of race or union mem- bership. (b) Discriminating against Leon H. Phelps, Harry C. Tony, Harold Mullins, Willie Earl Wil- liams, and Robert Hensley because of their race or nonmembership in said Local. (c) In any like or related manner restraining or coercing employees in the exercise of their rights guaranteed by the National Labor Relations Act, as amended. 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act: (a) Notify, in writing, Leon H. Phelps, Harry C. Torry, Harold Mullins, Willie Earl Williams, and Robert Hensley that Local 1351 will accept their applications for registration, without discrimination against them, when tendered by them, under the same terms and conditions as applied in the case of white registrants who were admitted before Sep- tember It, 1964, and they will be employed in ac- cordance with seniority as of September 11, 1964. (b) Post at its office, hiring hall, and meeting hall, copies of the attached notice marked "Appendix B."1S Copies of said notice, to be furnished by the Regional Director for Region 23, after being duly signed by Respondent Union's authorized representative, shall be posted by it immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to members and other persons using Respondent Local 1351's hir- ing hall are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (c) Post at the same places and under the same conditions as set forth in (b) above, as soon as they are forwarded by the Regional Director, copies of the Respondent Association and its Member Com- panies' notice marked "Appendix A." (d) Mail to the Regional Director for Region 23, signed copies of the attached notice marked "Ap- pendix B" for posting by Respondent Houston Maritime Association, Inc., and its Member Com- panies thereof, at their places of business in the Port of Houston, Texas, and vicinity, in places where notices to employees are customarily posted. Co- pies of said notice on forms provided by the Re- gional Director, shall, after being duly signed by a representative of Respondent Union, be forthwith returned to the Regional Director for such posting. (e) Notify the Regional Director for Region 23, in writing, within 10 days from the date of this Order, what steps Respondent Union has taken to comply herewith. C. The Respondents, Houston Maritime As- sociation, Inc., and its Member Companies, their officers , agents, successors, and assigns, and Local 1351 , Steamships Clerks and Checkers , Interna- tional Longshoremen's Association, its officers, agents, and representatives , shall take the following action: 1. Notify Leon H. Phelps, Harry C. Tony, Harold Mullins , Willie Earl Williams , and Robert Hensley, in writing, that the Respondent Em- ployers and the Respondent Union have no objec- '.ion to their employment or any other employees or applicants for employment , because of their race or membership or nonmembership in the Respondent Union. If they are presently serving in the Armed Forces of the United States, notify them of their right to full registration and employment upon ap- plication in accordance with the Selective Service Act and the Universal Military Training and Ser- vice Act, as amended, after discharge from the Armed Forces. 2. Jointly and severally make whole Leon H. Phelps, Harry C. Tony, Harold Mullins , Willie Earl Williams, and Robert Hensley for any loss of pay they may have suffered because of the disc crimination against them, in the manner and to the extent set forth in the section of the Board 's Deci- sion and Order herein entitled "The Remedy." 3. Respondent, Houston Maritime Association and its Member Companies shall preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records, and all other records necessary to analyze the amount of backpay due and the rights of employment under the terms of this Order. 4. Respondent Union, Local 1351, shall preserve and, upon request, make available to the Board or its agents, for examination and copying, registration for job referral records and any other documents or records or data showing job referrals, hiring, and work assignments of employees, mem- bers, and registrants made to the Association Em- ployers, which are necessary to compute and analyze the amount of backpay due and the rights of employment under the terms of this Order. is See fn. 17,supra. APPENDIX A NOTICE TO ALL STEAMSHIP CLERKS, CHECKERS AND TIMEKEEPERS 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 you that: WE WILL NOT maintain, perform, or enforce any arrangement with Local 1351, Steamship 620 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Clerks and Checkers, International Longshoremen's Association , AFL-CIO, in any manner whereby job referrals or hiring are conditioned on the unlawful basis of race or union membership ; or maintain, perform, or enforce, by contract or otherwise , any like or related arrangement in any manner whereby referrals to available jobs are based or al- located on the unlawful basis of race or union membership. WE WILL NOT discriminate against Leon H. Phelps, Harry C. Torry, Harold Mullins , Willie Earl Williams , and Robert Hensley, and we shall make them whole for any loss of pay they may have suffered since September 11, 1964, because of the discrimination against them. All of our employees are free to become or remain , or refrain from becoming or remaining, members of any labor organization. We will not dis- criminate in regard to hire and tenure of employ- ment, or any term or condition of employment, against any employee because of race or member- ship in or activities on behalf of any such labor or- ganization. HOUSTON MARITIME AS- SOCIATION, INC. AND ITS MEMBER COMPANIES (Employer) Dated By (Representative) (Title) Note: We will notify the above-named em- ployees if presently serving in the Armed Forces of the United States of their right to full registration and employment 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 consecu- tive 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, 6617 Federal Office Building, 515 Rusk Avenue, Houston, Texas 77002, Telephone 228-0611. APPENDIX B NOTICE TO ALL STEAMSHIP CLERKS, CHECKERS AND TIMEKEEPERS 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 you that: WE WILL NOT cause or attempt to cause Houston Maritime Association, Inc., any of its Member Companies, or any other employer, to discriminate against employees by refusing to hire them on the unlawful basis of race or union membership; or maintaining, performing, or en- forcing, by agreement, or otherwise, any like or related arrangement in a manner whereby referrals to available jobs are based or al- located on the unlawful basis of race or union membership. WE WILL notify, in writing, Leon H. Phelps, Harry C. Torry, Harold Mullins, Willie Earl Williams, and Robert Hensley, that we will ac- cept their applications for registration, without discrimination towards them, when tendered by them, under the same terms and conditions as applied in the case of white registrants who were admitted before September 11, 1964, and they will be employed in accordance with seniority as of September 11, 1964, and we shall make them whole for any loss of pay they may have suffered because of the discrimina- tion against them since that date. WE WILL NOT in any like or related manner restrain or coerce employees in the exercise of their rights guaranteed by the National Labor Relations Act, as amended. Dated By LOCAL 1351, STEAMSHIP CLERKS AND CHECKERS, INTERNATIONAL LONGSHOREMEN'S AS- SOCIATION, AFL-CIO (Labor Organization) (Representative) (Title) Note: We will notify the above-named em- ployees if presently serving in the Armed Forces of the United States of their right to full registration and employment 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 consecu- tive 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, 6617 Federal Office Building, 515 Rusk Avenue, Houston, Texas 77002, Telephone 228-0611. HOUSTON MARITIME ASSN., INC. 621 TRIAL EXAMINER"S DECISION STATEMENT OF THE CASE MILTON JANUS, Trial Examiner: Original and amended charges were filed by the individuals named in the cap- tions of these cases on various dates between March 11, 1965, and March 29, 1966. On April 13, 1966, the General Counsel of the National Labor Relations Board, by the Regional Director for Region 23, consolidated the cases and issued his complaint. As amended at the hearing, the complaint alleges that the Respondent Union and the Respondent Association and its member companies have, within the 6-month period preceding the filing of the original charge, main- tained and enforced a collective-bargaining agreement, arrangement, and understanding, and have engaged in a practice whereby the member companies are required to secure employees, applicants, and prospective applicants performing the work of clerks and checkers through the hiring hall system operated and administered by the Union; that in the operation of its hiring hall, the Union has refused employment to the Charging Parties and to other employees based upon racial considerations and upon their lack of membership and/or lack of good stand- ing in the Union; and that the Union has thereby violated Section 8(b)(1)(A) and (2), and that the Association and its member companies have thereby violated Section 8(a)(3) and (1). Respondents filed separate answers denying the com- mission of any unfair labor practices. A hearing was thereafter held on May 9 and 10, 1966, at Houston, Tex- as. The General Counsel and the Respondents were represented by counsel. The Charging Parties, with the exception of Harold Mullins, were present at the hearing, and testified on behalf of the General Counsel. After the hearing, briefs were filed by the General Counsel, the As- sociation and the Union, which have been duly con- sidered. Upon the entire record and my observation of the wit- nesses, including their demeanor while testifying, I hereby make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT EMPLOYERS Respondent Association is a Texas corporation with its principal office and place of business at Houston, Texas. Its member companies are engaged in the loading and discharging of cargo from vessels in various ports in Tex- as, including Houston. Among the purposes of the As- sociation is the negotiation of collective-bargaining agree- ments on behalf of its member companies with labor or- ganizations, including the Respondent Union. At all times material herein, there has been a collective-bargaining agreement in effect between the Association and the Union. These allegations are admitted by both Respond- ents. The complaint also alleged that the Association ad- ministers this collective-bargaining agreement on behalf of its member companies as well as negotiating it, but the Association's answer admits no more than that each of its member companies observes and administers its own em- ployment contracts, and that the Association has a func- tion to perform only when a question arises over the ob- servance of the agreement. In the absence of any evidence to the contrary, I find that the Association's answer on this point represent the actual state of affairs between the Respondents. During the year preceding the issuance of the com- plaint, the member companies of the Association furnished stevedoring services valued in excess of $500,000 to steamship companies operating vessels in in- terstate and foreign commerce. I find that the Association and its member companies are employers engaged in commerce within the meaning of the Act. II. THE RESPONDENT UNION Local 1351, Steamship Clerks and Checkers, Interna- tional Longshoremen's Association, AFL-CIO, is a labor organization within the meaning of the Act. III. THE UNFAIR LABOR PRACTICES This case involves the efforts over a number of years by a group of Negro longshoremen to obtain work as clerks and checkers through the Respondent Union. The Association bargains with respect to stevedoring and related work at the Port of Houston with seven ILA Locals: two for deep sea longshore work; two for coast- wise longshore work; two for warehouse and carloading work; and one, Local 1351, for clerks, checkers, and timekeepers, who do the clerical work associated with the industry. Of the six locals engaged in manual work, one in each of the three groups is a white, and the other is a Negro, local. During the period relevant here, Local 1351 was a white local, meaning that only whites were referred for work through its hiring hall, and only whites were ad- mitted to membership. Local 1351 is the sole source for referral of employees who wish to work as clerks, checkers, or timekeepers with members of the Associa- tion. Other employers in the industry who are not mem- bers of the Association also utilize the hiring hall facilities of Local 1351. The contract between the Association and the Union makes no reference to the fact that the Union is to be the exclusive source of referrals in employment, but the practice has been in effect for many years, and is understood by the parties to be controlling. The Charging Parties have worked as longshoremen through the hiring halls of one or more of the Negro lo- cals. Leon Phelps, the oldest of the group, and rightly re- garded as the leader in its efforts to obtain work through Local 1351, filed his original charge with the Board on March 11, 1965. The other charges were filed the next day. The 6-month period preceding the charges during which the commission of an unfair labor practice must be proved, therefore began on September 11, 1964. Over the objections of the Union, I admitted testimony with respect to the efforts of the Charging Parties to obtain referrals for work through its hiring hall before the start of the 6-month ]imitation period, in order to relate the events within that period with what had happened before. Thereafter, the Union also offered testimony which I ad- mitted, as to events during that earlier period, in order to substantiate its defense. According to Phelps, he and seven or eight other Negroes went to Local 1351's hiring hall in the summer of 1963 and spoke with Vestal, who was then president of the Local, about the possibility of getting work through the Local or, as an alternative, about setting up a Negro clerks and checkers local which would share the available work. Vestal said he was opposed to having a second clerks local at the Port, but that he had seen the problem 622 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of Negroes working as clerks as due to come up, and that he would talk it over with his executive board. He promised them that he would bring it up at the next mem- bership meeting of the Local, and take a vote on it. A few weeks later, Phelps and many of the same men returned to see Vestal and the executive board. After in- troductions, Phelps said he hoped their applications would be acted on favorably. Vestal then took up what was to be an oft-repeated theme in similar conversations thereafter, and told the Negroes that even if they were given work through the Local, they wouldn't be able to make a living at it, and that they couldn't get in the required number of hours set by the Local's constitution as a prerequisite for admission to membership. Phelps countered with the proposition that his group just wanted to make a start and would be satisfied with any opportuni- ty for work, no matter how few the hours. He also pointed out to Vestal and the Board that there seemed to be a shortage of checkers on the docks at some times, despite Vestal's statement that there were more checkers on their rolls than were needed. Vestal admitted that such shortages occurred, usually on a weekend after payday, and Phelps pointed out that the Negroes would be availa- ble to fill in at such times. Vestal then made two further points - that things would eventually work our for them, and some day they would get a break, but that the membership of the Local had voted down the proposition that Negroes be permitted at that time to work through the Local's hiring hall. On this note of immediate rejection coupled with a plea for pa- tience and hope, the meeting ended. Torry, Williams, and Hensley, who had accompanied Phelps to both meetings with Vestal, corroborated the important points of Phelps' story. Vestal did not testify. A month or so later, Phelps and a group of about 75 signatories sent a letter to Ralph Massey, president of the ILA South Atlantic and Gulf Coast District, telling him that some of them had recently applied unsuccessfully for membership in Local 1351, and asked him to look into the matter. Massey's answer is not in the record, but it did not result in any Negroes obtaining work through Local 1351. A number of times during 1964 when Phelps happened to be near the Local's hiring hall, he went in to inquire if there had been any change in its hiring policies with respect to Negroes, and would talk to whoever was at the desk. The answer was always that they were working on it, but that for the present, he could not register. On the last such occasion, a few days before Thanksgiving Day, 1964, Phelps had noticed that there weren't enough checkers around the docks. He went over to the hiring hall and said to the man at the desk, "You are real short of checkers, why don't you all give me a break over there checking." The answer was that they were working on it, but hadn't decided to put any colored on yet. Torry, Williams, and Hensley all testis ied that they had gone to the hall a few times during the early part of 1964, to see about getting work, but had always been refused the opportunity of registering. The morning of March 11, 1965, Phelps again went to the hall, and this time spoke to William Casey, who had become president of the Local a few months before. He asked Casey whether there was any chance in the Local's position about putting colored people to work as checkers, and Casey said it had been discussed, they were working on it, patience was needed, and that even- tually some colored people were going to get work down there. Casey offered nothing more specific, and Phelps decided that something more than patience was now called for. He went to the Board's Regional Office that af- ternoon, and filed charges against the Union and the As- sociation. The next morning, March 12, Phelps and the other Charging Parties went back to the hall to see Casey. Phelps again asked him if there wasn't a chance that they might really get some work there, and Casey surprised him by saying, "Yes, I think you are going to work here." But Casey then proceeded with the old refrain that the Negroes couldn't make a living working through the hall, that the Local was working on it, and that patience was needed. Grasping at the most hopeful of Casey's remarks, Phelps asked him if they couldn't register then and there. It was at this point that, for the first time, a new reason was introduced as to why Phelps and his group could not be allowed to register. Casey said the Union had a lot of misfits on its rolls whom they had to get rid of, that they were not accepting applications even from whites, and that they had a backlog of applications at that time. Again, nothing specific was offered about when they might actually be permitted to register or whether the Union was contemplating a new, nondiscriminatory procedure. That afternoon Torry, Williams, Mullins, and Hensley filed individual charges with the Regional Office. The testimony of Phelps and the other Charging Parties who testified is substantially undenied. The testimony of Casey lays the foundation for the Union's defense, that Negro applicants have been treated no differently than other applicants ever since September 1963, when the Union stopped taking any further applications to register for work through its hiring hall. Some background information on the Union's hiring hall operations is necessary at this point in order to put in context the Union' s reasons for refusing to permit the Negroes to register, with the legal issues in this case. In 1959, the Union had revamped its previous referral system in order to end the discriminatory treatment of ap- plicants and employees who were not union members. It was led to take this step because of an unfair labor prac- tice case which was begun in 1954 on charges filed by nonunion registrants , and which was not to run its full course until 1964.1 Thus, from 1959 until mid-1965, when other changes were made, to be described later, the Union operated its hiring hall without discriminating against white nonmembers. That is, it permitted white ap- plicants to register for work through its hiring hall, and as- signed them jobs in rotation within certain categories based on years of service as clerks or checkers. (In describing the 1959 referral system, it is to be understood hereafter that reference to an applicant means only a white applicant.) An applicant who was a high school graduate or had established its equivalency, who had no serious criminal record, and was not a Communist could register at the hiring hall, and would then be placed in the F extra category. Ahead of him in priority for referral was everyone in that category who had registered before him, and employees in categories F-1 and F-2 (employees with less than 2 years' service) and employees in catego- 1 Galveston Maritime Association, Inc, et al., 122 NLRB 692; Supple- mental Decision and Amended Order in 139 NLRB 352 , enfd. in part sub nom. Local 1351, Steamship Clerks and Checkers, etc. v N L.R.B , 329 F 2d 259 (C A.D C.), cert. denied 377 U.S. 993 HOUSTON MARITIME ASSN., INC. 623 ries E through A, reflecting more years of service, and eligibility for membership in the Union. An employee in F category who had worked 500 hours during the first year, and 1200 hours the second year was moved into E category and was invited to join the Union, provided only that he was not then over 45 years of age. If he was more than 45, he could not become a member, or be transferred out of F category, although he remained eligible for refer- ral from that category. According to Casey, this indiscriminate registration and nondiscriminatory referral of applicants on a strict seniority basis brought considerable headaches to the Union. Those classified in the lowest group had no as- surance of steady employment, and consequently, the better qualified of these tended to leave for more regular work. But as long as their names remained on the board, even though they might in fact be unavailable or difficult to reach, the Union considered itself obligated to keep calling them in rotation. By September 1963, the Union had a large backlog of registrants, including some who had not yet worked even a single day, while others had worked only a few days in the past year. There were about 150 men in the F extra group, while in a busy week at the Port there would be about 50 to 60 jobs available for them out of a total of about 350 jobs. In a slow week, the number of available positions might drop to about 200, for which only those in the higher categories would be called. Casey testified that the executive board of the Union decided to do something about the imbalance between re- gistrants and available jobs by putting its seniority lists into better order. Its decision was taken shortly after Phelps and his group first applied, and the solution adopted by the Board and approved by the members of the Local, in September 1963, was to refuse all further applications until the number of registrants became more manageable. From September 1963 on, no new registrations were accepted, thereby limiting the F extra category to those whose applications were already on file. There were ap- proximately 400 pending applications, and in the next 3 or 4 months the Union asked the applicants if they were still interested in employment through the Union's hiring hall. There were about 140 affirmative responses, and these registrants thereafter constituted the core of the F extra category. A small number of these, less than 10, had never worked, but no later than February 1964, they had all been referred for employment, thereby establishing themselves on the seniority ladder. To put it differently, no one was referred for employment through the hall after February 1964 who had not already been registered by September 1963. Because this proposition is important in my determina- tion of the case, I state here my reasons for finding that it is true. It is based on Casey's testimony to that effect which the General Counsel did not attempt to refute, and which I credit. Furthermore, I am satisfied that the Union's records were available for examination by the General Counsel, and that if these records had revealed any new applications after September 1963, the General Counsel would have used them to impeach Casey, and to establish that the Union's policy of rejecting all applica- tions after that date had not in fact been followed. I find, therefore, that from September 1963 through March 1965,1 a period of a year and a half, no one, white or Negro, was allowed to register for employment through Local 1351's hiring hall, and that only persons whose ap- plications had already been accepted by September 1963, were thereafter referred for work. As registrants in the F category accumulated additional hours of employment through 1964, they were moved into higher seniority groups. By January 1965, according to Casey, there were still about 100 people in the lowest group, but of these more than 40 could expect to move upwards because of the 45-year age limitation on admis- sion to the E category and to membership in the Union. The import of Casey's testimony is then, that early in 1965 the Union had achieved its objective of a reasonable balance between available work and registrants, and that it was now time to replenish the pool of applicants for the intermittent employment which was the lot of F extra re- gistrants. Other factors also contributed, early in 1965, to a reex- amination by the Union of its past practices in the regis- tration of applicants. Chief among these, I have no doubt, was that the operative provisions of Title VII of the Civil Rights Act of 1964 (78 Stat. 253, 42 U.S.C. Section 2000 et seq.) would become effective in July 1965, and that Section 703(c) of that Act makes it an unlawful employ- ment practice for a labor organization - (2) to limit, segregate, or classify its membership, or to classify or fail or refuse to refer for employment any individual, in any way which would deprive or tend to deprive any individual of employment oppor- tunities, or would limit such employment opportuni- ties of otherwise adversely affect his status as an em- ployee or as an applicant for employment, because of such individual's race, color, religion, sex, or national origin; There was also the factor of new leadership in the Union. Casey had become its president in January, and new counsel was obtained the following month both of whom were aware that affirmative action to end discrimination against Negroes in the operation of the hiring hall was now essential Before going on to explain what the Union did to adopt and follow a racially nondiscriminatory referral system (outside the scope of the complaint, but relevant as to motivation for previous actions), I consider it appropriate at this point to comment on what I consider the Union's true motivation to have been for what it did or failed to do between September 1963 and March 1965. There can be no question or doubt that Phelps and his group were not permitted to register for referral through the hiring hall in August 1963, solely because they were Negroes. Vestal, then president of the Union, and the executive board ad- mitted as much when they told them that the Local's membership had voted down the proposition that Negroes be permitted to work through the hall. Nor was Phelps' age a factor (he was then over 45) since whites over 45 had been allowed to register to work in the F category, although they could not advance beyond it. If charges had been filed within 6 months of their original application, I am satisfied that the Board, for reasons discussed below, would have found violations of Section 8(b)(1)(A) and (2) in the Union's rejection of the applications. But charges were not filed for another year and a half, and during that time other factors, legitimate enough by themselves, also motivated the Union to call a halt to registrations . These were a desire to place appli- cants and available jobs in better balance, the passage in July 1964 of the Civil Rights Act of 1964, necessitating a new approach to registrations, the desire to raise the caliber of applicants, and the fact that until the end of that 624 DECISIONS OF NATIONAL LABOR RELATIONS BOARD period, there was no serious shortage of registrants in the F extra category. There were, in other words, good reasons why the Union should want a breathing spell be- fore permitting the filing of new registrations under fair and objectively determined standards. On the other hand, the disingenuous answers given to Phelps and the other Negroes, that they couldn't make a living working through the Local's hiring hall, and that they should be patient, but never setting a definite date when patience would have its reward, incline one to reject as equally pretextual the reasons which the Union now advances for refusing to allow Negroes to register during that 18-month period. But as against the well-founded suspicion that the freeze was continued so long merely to keep Negroes out for as long as possible, there is the un- disputed fact that within the 6-month s1 atutory period of limitations, the Union treated all applicants for registra- tion alike. Whites were not allowed to register, not only to maintain a formal parity with the rejection of Negroes, but also because there were good, legitimate reasons in 1964 to overhaul the registration system. Because it has a bearing on the Union's reasons for continuing the freeze on registrations into 1965, it is ap- propriate to examine how the Union finally resolved its problems. In March 1965, the Union moved quickly to adopt an objective and nondiscriminatory hiring policy for the future. It contrasted with an expert in industrial psychology, Professor Osburn of the University of Houston, to study the content of, and necessary qualifica- tions for, the various types of jobs filled through its hiring hall, and to administer a written test for entrance into the system. Professor Osburn submitted job descriptions, and proposed that standard tests to determine speed and accuracy in clerical checking and numerical computations be used. There is nn need to relate the details of the scrupulous efforts of Professor Osburn and the Union to ensure that anyone who might be interested be informed of the test, and the fairness with which it was conducted and its results utilized. In order to apply, an applicant had to meet only three stated qualifications: (a) under age 45 by July 31, 1965; (b) high school diploma or equivalent; and (c) no serious criminal record or Communist Party membership. The notice which the Union distributed to all who expressed an interest in applying, stated that neither race, color, religion nor national origin would be an element in selecting applicants to be invited to work through its hiring hall, and that 50 people were needed im- mediately. Toffy, Mullins, Williams, and Hensley were sent individual letters and application blanks, inviting them to apply and assuring them personally that race would not be a factor in the selection of qualified appli- cants. They did not apply to take the test. Phelps was not invited to take the test because he could not meet the new age requirement. On July 17, 1965, the test was given to about 230 appli- cants. No count was made of the Negroes taking it, although Professor Osburn, who had sole responsibility for administering and grading it, estimated that in the lar- gest of the three rooms where the test was given, about 30 percent were Negroes. The 75 men who stood highest on the test were offered personal interviews, in order to check their high school diplomas and birth certificates and to note any physical defects which could interfere with job performance. Of those who appeared, the top 50 in the test ranking were all invited to work through the hiring hall, and all but 2 or 3 accepted. Among the top 50 were 10 Negroes, all of whom have since been referred for work through the hiring hall.2 Analysis and Conclusions Section 10(b) of the Act provides that "... no com- plaint shall issue based upon any unfair labor practice oc- curring more than six months prior to the filing of the charge with the Board. " As construed by the Supreme Court in Local Lodge No. 1424 International Association of Machinists v. N.L.R.B., 362 U.S. 411, Section 10(b) bars consideration of a complaint where the occurrences within the 6-month limitation period do not in themselves constitute an unfair labor practice. In such a situation, reliance on the commission of unfair labor practices before the limitations period would not be mere- ly "evidentiary," but would serve to "cloak with illegali- ty" what was otherwise lawful. The Court contrasted that situation with one in which conduct within the 6-month period in and of itself constitutes, as a substantive matter, an unfair labor practice; then, events occurring before that period may be utilized to shed light on the true character of matters occurring within the limitations period. Basing its holding on that distinction, the Court held that the enforcement, within the 6-month period, of a union-security clause, lawful on its face, was not an un- fair labor practice even though the clause had been illegal when executed, more than 6-months before the charge was filed. The Court, however, also noted that enforcement of an agreement within the 6-month period may itself constitute a substantive violation, even though entered into outside that period, where the agreement is invalid on its face, or was unlawfully administered, even though validly exec- uted.3 362 U.S. at 422-423. How has the Board applied these principles, and how are they to be applied in this case? It is conceded that neither the contract between the Union and the Association, nor the referral system which is administered exclusively by the Union, is illegal in and of itself. What is alleged to be illegal is the Union's prac- tice of refusing to refer Negroes within the 6-month limitation period, and the acceptance of that practice by the Association. I have found that the Union did reject Phelps and his group in August 1963, because of their race, and that it continued to reject their efforts to re- 2 In Whitfield, et al. v United Steelworkers oFAmerica, Local No. 2708, et al, 263 F.2d 546, 551 (C A 5), a case involving a somewhat similar factual situation where objective standards for promotion replaced previous discrimination based on race, the Court said, in words also ap- propriate here "The Union and the Company made a fresh start for the future We might not agree with every provision, but they have a contract that from now on is free from any discrimination based on race Angels could do no more " 3 The principles which the Board and Courts utilize, in regard to Sec- tion 10(b), to wntten contracts are equally applicable to unwritten prac- tices Thus, the fact that the Union's referral system was not included in the wntten contract with the Association, or that the Union's constitution or bylaws did not specifically bar Negroes from the hiring hall or from membership, do not excuse its actions if otherwise illegal,. It is immateri- al, in other words, that one may not be able to point to a written document containing an illegal provision, so long as the unwritten practice can be proved, and is, in fact, illegal. HOUSTON MARITIME ASSN., INC. 625 gister. The Union contends, however, that regardless of its former motives, it did not in fact treat the Negro appli- cants any differently than it treated other applicants between September 1963 and March 1965. It argues that it rejected whites and Negroes in order to regularize its application procedures and to place the available work in better balance with the number of registrants. I think the Union's position is well taken. and requires dismissal of the complaint. In order to find a violation here, I would have to hold that the Charging, Parties were deprived of an opportunity to register for employment during the limitation period, because of their race. It is true that I have found that the Union was motivated in September 1963, to adopt its policy of rejecting all appli- cants because it wished to continue rejecting Negroes. But proof of the commission of an unfair labor practice which is time-barred does not satisfy the requirement that an unfair labor practice within the limitation period must be independently proved.4 Such independent proof may be a showing that the time-barred illegal practice was con- tinued or maintained within the 6-month period, but the continuance or maintenance must, as a matter of sub- stance, itself be an unfair labor practice. In Great Lakes Carbon Corporation, 152 NLRB 988, enfd. 360 F.2d 19 (C.A. 4), and in Whiting Milk Corporation, 145 NLRB 1035, enforcement denied on other grounds 342 F.2d 8 (C.A. 1), the Board found certain contractual provisions to be illegally maintained and enforced within the 6- month period, although executed before their because the provisions were discriminatory on their face. In Local Union No. 269, International Brotherhood of Electrical Workers, AFL-CIO (Mercer County Division, etc.), 149 NLRB 768, enfd. 357 F.2d 51 (C.A. 3), the Board found to be illegal the maintenance within the limitation period of a contractual provision which was not illegal on its face, but whose operative effect inevitably was to per- petuate without change an illegal practice entered into be- fore the 10(b) period. Unlike the situation in the cases cited above, however, the rejection of Negroes, unlawful when effectuated in August 1963, did not remain unchanged. Within the 10(b) period, the practice of refusing registrations was not directed against some applicants because of their race but was directed against all applicants, because of an excess of registrants already entitled to referral through the hir- ing hall. The practice of rejecting all applicants is not il- legal on its face,5 nor does its operative effect follow in- evitably from the earlier, time-barred illegal practice. I could find the rejection of all applicants for valid reasons to be unlawful, only if I were to consider as determinative the Union's prior unlawful practice of rejecting some ap- plicants because of race. But this, it seems to me, would be something more than clarifying the true character of matters occurring within the limitation period - it would, rather, transform what is not in itself a substantive unfair labor practice into an illegal action, by relying solely on a time-barred event. In my discussion of the Section 10(b) issue, I said that I was satisfied that violations of Section 8(b)(1)(A) and (2) would have been established if the charges had been filed timely. As I think they were not filed timely, I shall recommend dismissal of the complaint in its entirety. With a lively appreciation of the possibility that others, no less reasonable than I, may well conclude that Section 10(b) does not bar the complaint, on the ground that re- jection of the Charging Parties within the 10(b) period was based on their race, I consider it my responsibility to explain, however briefly, why that would constitute a violation of the Act. A union selected by a majority of the employees in an appropriate unit becomes the exclusive bargaining representative of all the employees in the unit, including those who may have voted against representation, and those who were first hired after the union achieved its representative status. Because the majority's choice is imposed upon all the employees in the unit, the statutory bargaining representative must represent everyone in the unit fairly, and included in the duty of fair representation is an obligation not to invoke arbitrary or invidious clas- sifications, such as race, in the treatment of unit em- ployees 6 The Board has held that a breach of the duty of fair representation is in violation of Section 8(b) on the union's part, and of Section 8(a) on the employer's part.7 A summary of the composite holdings of the cases cited in footnote 7 would run as follows: a statutory representa- tive's duty to represent the employees in its unit fairly is breached, and the representative restains or coerces em- ployees in the exercise of rights guaranteed in Section 7, in violation of Section 8(b)(1)(A), whenever it subjects a segment of those employees to treatment which is arbita- ry, invidious or unfair; it violates Section 8(b)(2) if it causes or attempts to cause an employer to treat em- ployees whom it represents in a discriminatory manner, by the use of arbitrary, invidious or unfair considerations, to encourage or discourage union membership; and it vio- lates Section 8(b)(3) by negotiating a contract which is in breach of its duty of fair representation. Furthermore, an employer violates Section 8(a)(1) and (3) by entering into 4 News Printing Co, Inc , 116 NLRB 210 5 This case was not tried on the theory that a union which administers an exclusive referral system for employment violates the Act simply by refusing to continue accepting applications for registration at its hiring hall In any event, it is not the law that a union commits an unfair labor practice in seeking to match men to jobs through the use of reasonable standards which are not founded on lack of membership , or other union considerations , or on other unfair qualifications or classifications , such as race . N L R.B. v News Syndicate Company, 365 U S. 695; New York Typographical Union Number Six, International Typographical Union, AFL-CIO (The New York Times Company, et al), 144 NLRB 1555, enfd sub nom Lawrence F. Cafero v N.L.R B, 336 F.2d 115 (C.A. 2); Armored Car Chauffeurs and Guards Local Union No 820, Teamsters, (United States Trucking Corporation), 145 NLRB 225., Cf. A. Nabakowski Co, 148 NLRB 876, enfd sub nom. Sheet Metal Workers International Association Local 65, AFL-CIO, 359 F 2d 46 (C.A. 6), and Astrove Plumbing & Heating Corp. (Local Union No 2 o Fthe Umted As- sociauon of Journeymen, etc.), 152 NLRB 1093, enfd as modified, 360 F.2d 428 (C.A 2). s Bester William Steele v. Louisville & Nashville Railroad Co., etc, et al. 323 U.S. 192 The implications of the doctrine have been articulated in a number of subsequent Supreme Court , and courts of appeals , cases, many of which have been cited in the Board cases listed in fn. 7. On the whole subject, see the excellent presentation by Professor Sovern in Chapter 6 of his recent book, Legal Restraints on Racial Discrimination in Employment (The Twentieth Century Fund, 1966) 7 Miranda Fuel Company, Inc, 140 NLRB 181, enforcement denied 326 F 2d 172 (C A. 2), Independent Metal Workers Union, Local No 1 (Hughes Tool Company), 147 NLRB 1573, Local 1367, International Longshoremen's Association, AFL-CIO (Galveston Maritime Associa- tion), 148 NLRB 897, International Union, United Automobile etc. (Maremont Corporation), 149 NLRB 482, Local Union No 12, United Rubber, Cork, Linoleum & Plastic Workers of America, AFL-CIO, 150 NLRB 312, and Cargo Handlers, Inc, 159 NLRB 321. 626 DECISIONS OF NATIONAL LABOR RELATIONS BOARD unlawful arrangements, accepting the benefits thereof, or submitting to the unlawful demands of the statutory representative. With these basic principles freshly summarized, I turn to their application to the facts in this case. The Charging Parties were all longshoremen represented by one or more of the Negro longshore locals in the Port of Houston. They had never been employed as clerks or checkers by any member company of the Association in the unit for which Local 1351 was the statutory bargain- ing representative. The question that must then be an- swered is whether the Charging Parties were entitled to fair representation by the representative of employees in a unit which they have not been permitted to enter. It is well-established that an applicant is considered to be an employee under some sections of the Act, but not under others. Since an employer may not discriminate in regard to hire, to encourage or discourage membership in a labor organization, the Supreme Court has held that an employer violates Section 8(a)(3) if he rejects an appli- cant for employment because he is a union adherent;8 and a labor organization violates Section 8(b)(2) when it causes or attempts to cause an employer to discriminate against an applicant in violation of Section 8(a)(3).9 An employer also violates Section 8(a)(4) by rejecting an ap- plicant for employment because he has filed charges or given testimony under the Act. to On the other hand, because Section 8(a)(5) makes it an unfair labor practice for an employer to refuse to bargain collectively with the representative of his employees, the Board has held that that section was not violated by an employer's refusal to bargain with a union representing applicants.' 1 There is then no automatic equivalence between "ap- plicant" and "employee," and the right of employees to be free from arbitrary treatment at the hands of a union which represents them does not necessarily carry over to applicants, who are by definition, not employed in the unit. Nor do there seem to me to be compelling policy considerations, in the normal industrial situation, which favor extending to applicants a union's obligation to represent the employees in its unit fairly. An employer violates Section 8(a)(3) if he discriminates against appli- cants to encourage or discourage union membership, but he does not, as I understand the law, violate any provi- sion of Section 8(a) if he refuses to hire applicants simply because they are otherwise displeasing in his eyes, no matter how arbitrary, prejudiced, or unreasonable his ac- tion may be. If an employer who has sole control over hir- ing may act arbitrarily in selecting his employees, I do not see why a bargaining representative, with no responsibili- ty for selection or sponsorship of applicants for hire or promotion, should nevertheless have an affirmative duty to treat them as if they were already employed in its unit and protect them against the employer's own permissible arbitrariness. 12 In any event, I need not decide that question here. However, where an employer has granted to a union his own powers in selecting and choosing among appli- cants, through a hiring hall or other referral system, the rationale of the Steele case suggests another approach to the problem. Steele established that a union has a duty to represent employees in its unit fairly, on the premise that a union's exercise of a granted power to act in behalf of others involves the assumption toward them of a duty to exercise the power in their interest and behalf. 323 U.S. 192, 202. A union may not, in the operation of a referral system, discriminate between applicants on membership or other union considerations; and it should likewise be required to use, in the selection and referral of applicants, only such considerations, standards, or criteria as are reasonably related to its sole function of matching men to jobs. I am not unaware of the differences between the "grant of power" referred to in Steele, and the grant of an employer to a union to operate a hiring system on his be- half. The former arises directly from an Act of Congress and bestows on a bargaining representative the power to act as the exclusive agent of employees, requiring in return that it act in the employers' interest, in good faith and without hostile discrimination. The latter is a grant or delegation from an employer to a union to carry out, on the employer's behalf, a system for the orderly selection of employees. But in operating such a system, the union has a responsibility to those who seek to earn their livelihood in the industry, of providing them with a means for obtaining work. Because applicants for employment must use the union's hiring hall or go without work, the union's power over them should entail a corresponding obligation to exercise it in good faith and without hostile discrimination, since its power and status ultimately stem from its statutory authority to act as the exclusive bar- gaining representative. I would therefore hold, if Section l0(b)'s prohibition is inapplicable here, that Local 1351, because it was the ex- clusive hiring agent for employment with the Associa- tion's member companies , owed to the applicants who were dependent on it for an opportunity to work, a duty to treat them fairly and without invidious distinction.13 If Local 1351 had refused to consider the charging parties for employment within the 10(b) period because of their race, it would have acted arbitrarily toward them, breaching its duty to treat them fairly, and would have thereby violated Section 8(b)(1)(A) and (2).14 There is also an alternative ground here for finding a violation of Section 8(b)(2). Although it was not a condi- tion for registration for employment through the hiring hall that a white applicant already be a member of Local 1351, it is apparent that an important, if not the sole, fac- tor in denying the Charging Parties the opportunity of re- gistering, was that as Negroes they were considered to be 8 Phelps Dodge Corp v. N.L.R B, 313 U S 177. s N L.R B. v. George D. Auchter Company, et al., 209 F 2d 273 (C.A. 5) enfg. 102 NLRB 881 "John Hancock Mutual Life Insurance Company v. N.L R.B , 191 F 2d 483 (C.A D.C.). it Piasecki Aircraft Corporation, 123 NLRB 348, enfd. 280 F.2d 575 (C.A. 3), and Union Texas Petroleum, 153 NLRB 849. 12 A union's duty of fair representation has been extended to nonunit employees who performed the same duties as unit employees, The Brotherhood of Railroad Trainmen et al. v . Howard, et al., 343 U S. 768, and to nonumt employees whose jobs were in a direct line of progression to unit jobs, Dillard, et al, v Chesapeake & Ohio Ry. Co , 199 F.2d 948 (C A 4). Whether the union's duty should also be extended in favor of em- ployees in the same industry who do no unit work and whose present jobs are unrelated, in skills or qualifications, to unit jobs is as yet unanswered by the Courts. '3 I do not know of any square precedent for this proposition. As I read the Board's decision in Cargo Handlers, Inc , 159 NLRB 321, it is based on the assumption that the Negroes who were refused referral on racial grounds were already in the longshore unit represented by the union, and were not merely first-time applicants. 14 See cases cited in fn 7. HOUSTON MARITIME ASSN., INC. 627 ineligible for membership. The proviso to Section 8(b)(1)(A), of course, allows a union to prescribe its own rules for acquisition of membership, but it may not, nevertheless, cause an employer to discriminate against an employee or applicant to encourage or discourage union membership merely because its rules preclude the employee or applicant from joining the union.15 Here, the preference of whites over Negroes is attributable to the fact that the Union considered only whites to be potential members of Local 1351. Negroes could not be en- couraged thereby to change their race so as to become eligible for membership, any more than the discriminatee in Gaynor News Company, Inc., 93 NLRB 299, could be encouraged to change his parentage in order to satisfy that union's rule of admitting only sons of present union members. But, as the Court of Appeals said, in affirming the Board's Gaynor News decision: Discriminatory conduct, such as that practiced here, is inherently conducive to increased union member- ship. In this respect, there can be little doubt that it "encourages" union membership, by increasing the number of workers who would like to join and/or their quantum of desire. It may well be that the union, for reasons of its own, does not want new members . . . and will reject all applicants. But the fact remains that these rejected applicants have been, and will continue to be, "encouraged", by the dis- criminatory benefits, in their desire for membership. This backlog of desire may well, as the Board argues, result in action by non-members to `seek to break down membership barriers by any one of a number of steps, ranging from bribery to legal action.' A union's internal politics are by no means static; changes in union entrance rules may come at any time.16 In Gaynor, the discrimination, even though motivated by economic considerations, was held to have an inherent tendency to encourage membership in the union on the part of nonunion employees. Here, it follows, Negro ap- plicants, who could not expect to become members of Local 1351, would nevertheless be "encouraged" by reason of the discrimination practiced against them, to obtain membership therein. The complaint did not charge a violation of Section 8(b)(3), nor did I call to the attention of the General Counsel, as did the Trial Examiner in the Hughes Tool case, that the facts alleged might possibly encompass such a violation. Nevertheless, as the Board said in that case, 147 NLRB at 1576, "The procedural question.. . is whether, when facts have been alleged and fully litigated, the Board is precluded from finding violations of [Section 8(b)(3)] merely because the General Counsel chose not to allege as a legal conclusion that the pleaded and litigated facts violate [that] section of the Act." The Board held that it was not so precluded, and found that the refusal of the Respondent Union to process a grievance of an employee in the bargaining unit because he was a Negro violated Section 8(b)(3), under which labor organizations are prohibited from refusing to bar- gain collectively with an employer. Unlike Hughes, where the racially discriminatory contracts were not in issue in the unfair labor practice proceeding, the invalidi- ty of the Union's racially discriminatory practice was placed in issue in the instant case. With my usual caveat about the effect of Section 10(b), the Board may want to consider in this case whether the facts alleged and litigated also establish a violation of Sec- tion 8(b)(3). I offer the following rationale for such a find- ing: An employer violates Section 8(a)(5) if he refuses to bargain over the institution of a legal exclusive referral system to be operated by the union which represents his employees. 17 As the counterpart of the employer's obliga- tion, a union would be guilty of a refusal to bargain by in- sisting on adherence to an illegal provision in a referral system. 18 Thus, the perpetuation by the Union of a hiring practice which discriminated against Negroes may, I sug- gest, constitute a refusal on its part to bargain for a legally valid hiring hall system. There remain two additional points to cover in round- ing out my discussion of the possibility that Local 1351 has been guilty of violating the Act here. 1. The liability of the Association. I have noted that the exclusive refereal system is not mentioned in the agreement between the Association and Local 1351, and that the procedures used in referral through the hiring hall were adopted by Local 1351 without prior clearance by the Association. The Association urges that it cannot be held liable for the Union's acts over which it had no con- trol, where there is no evidence that its member compa- nies knew, or should have known of, or acquiesced in, any discriminatory practices on the part of the Union. It is true that the Union made no demands of the Associa- tion or the member companies that they refuse employ- ment to Negroes. There was no need to, since the Union refused to refer them, and it would have been futile for any applicant to apply directly to an employer for a job as a clerk or checker. There is no evidence that the Associa- tion knew that the Charging Parties had ever applied to the Union for registration, but I do not think it can realistically be said that the Association was unaware of the Union's racially discriminatory policies. The racial composition of all the ILA locals in the Port of Houston was a matter of common knowledge, and the fact that no Negroes had ever been referred by Local 1351 was obvi- ously based on its racial policies rather than on any disin- terest of Negroes to work as clerks and checkers. I there- fore conclude that the Association and its member com- panies violated Section 8(a)(1) and (3) by acquiescing in what they knew, or should have known, was the Union's practice of discriminating against applicants on the basis of their race.19 2. Remedial action. The five Charging Parties all ap- plied to be registered through Local 1351's hiring hall on March 12, 1965, and if their rejection was based on race, 15 N L R.B v. International Union of Operating Engineers, etc. (Sub Grade Engineering Co.), 216 F 2d 161 (C.A 8). 16 N.L R.B. v. Gaynor News Company, Inc., 197 F.2d 719, 722-723 (C A 2), affirmed 347 U.S 17 17 Houston Chapter, Associated General Contractors ofAmerica, Inc., 143 NLRB 409, enfd. 349 F.2d 449 (C.A. 5). 18 "Because collective-bargaining agreements which discriminate in- vidiously are not lawful under the Act, the good-faith requirements of See- Lion 8(d) necessarily protect employees from infringement of their rights ." Local 1367, International Longshoremen's Association, AFL-CIO, 148 NLRB 897,899 19 Cargo Handlers, Inc., 159 NLRB 321; Miranda Fuel Company, Inc, 140 NLRB 81, Maremont Corporation (International Union, United Automobile, Aircraft and Agricultural Implement Workers of America) 149 NLRB 482, Morrison-Knudsen Co., Inc v. N L.R.B., 275 F 2d 914 (C A. 2), enfd. as modified 123 NLRB 12. 336-845 0 - 70 - 41 628 DECISIONS OF NATIONAL LABOR RELATIONS BOARD they are now entitled to be referred on the same basis as other applicants. Before the Union's nondiscriminatory policies became effective some months later, applicants over 45 years of age could be and were registered for the F category, although they were not entitled to advance- ment into higher classifications. That would have been Phelps' situation if he had been accorded the same privileges as white overage applicants. I would have recommended, if a violation had been established, that the Charging Parties be allowed to re- gister now, without taking the Union's qualification test, and that they be awarded the backpay and seniority they would have earned if they had not been discriminated against on March 12, 1965, subject only, in regard to Phelps, to the limitation noted above. However, having found that the Respondent Union and the Respondent Association have not violated the Act in any of the respects alleged in the complaint, I recommend that it be dismissed in its entirety. Upon the basis of the foregoing findings of fact, I make the following: CONCLUSIONS OF LAW 1. Houston Maritime Association, Inc., and its member companies are engaged in commerce, and in ac- tivities affecting commerce, within the meaning of Sec- tion 2(6) and (7) of the Act. 2. Local 1351, Steamship Clerks and Checkers, Inter- national Longshoremen's Association, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. The Respondents have not engaged in any unfair labor practices as alleged in the complaint. RECOMMENDED ORDER It is hereby recommended that the complaint be dismissed in its entirety.