Tower Records

:382 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Tower Enterprises, Inc., d/b/a Tower Records and Depart- ment Store Employees Union, Local 1100 , Retail Clerks International Association, AFL-CIO. Case 20-CA-5615 May 11, 1970 DECISION AND ORDER BY CHAIRMAN MCCULLOCH AND MEMBERS BROWN AND JENKINS On January 29, 1970, Trial Examiner Louis S. Penfield issued his Decision in the above-entitled proceeding, finding that the Respondent had engaged in and was engaging in unfair labor practices within the meaning of the National Labor Relations Act, as amended, and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent filed exceptions to the Trial Examiner's Decision and a supporting brief and the General Counsel filed an answering brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in con- nection with this case to a three-member panel. The Board has reviewed the rulings of the Trial Exam- iner 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 Respondent's exceptions, the briefs, and the entire record in the case, and hereby adopts the findings,' conclusions2 and recommendations of the Trial Examin- er. ORDER Pursuant to Section 10(c) of the National Labor Rela- tions Act, as amended, the National, Labor Relations Board hereby adopts as its Order the Recommended Order of the Trial Examiner, and hereby orders that the Respondent, Tower Enterprises, Inc., d/b/a Tower Records, Sacramento and -San Francisco, California, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recommend- ed Order. ' In Section III, A, of his Decision, the Trial Examiner inadvertently referred to Store Manager Shaw as having acknowledged that, on May 21 after the receipt of the Union's demand for recognition, he talked to a number of employees The record shows that it was General Manager Schairer who on that occasion spoke with the employees We hereby correct this madvertance 4 We agree with the Trial Examiner's conclusion that the Respondent's granting of wage `increases to all of its hourly employees in violation of Sec 8(a)(1) requires a bargaining order See our decision in C & G Electric, Inc , 180 NLRB No 52 TRIAL EXAMINER 'S DECISION STATEMENT OF THE CASE Louis S. PENFIELD, Trial Examiner: This proceeding, with all parties represented, was heard before me in San Francisco, California, on October 7, 1969, upon a complaint of the General Counsel of the National Labor Relations Board, herein called the Board, and answer of Tower Enterprises, Inc., d/b/a Tower Records, herein called Respondent.' The issues litigated were whether Respondent violated Section 8(a)(1) and (5) of the National Labor Relations Act, as amended, herein called the Act. Upon the entire record, including consideration of briefs filed by the parties, and upon my observation of the witnesses, I hereby make the following: FINDINGS OF FACT t' 1. THE BUSINESS OF RESPONDENT Tower Enterprises, Inc., is a California corporation with its principal place of business located in Sacramen- to, California. Under the name Tower Records, Respond- ent is engaged in the retail sale of phonograph records and audio tapes at a location in San Francisco, California. During the past year, Respondent, in the course and conduct of the San Francisco business had gross sales in excess of $500,000. During the past year, Respondent purchased and received goods for use at its San Francisco operation valued in excess of $50,000. Such goods were purchased from suppliers located in the State of Califor- nia, but obtained by such suppliers directly from sources located outside the State of California. On the basis of the foregoing, I find that, at all times material herein, Respondent was engaged in a business affecting com- merce within the meaning of Section 2(6) and (7) of the' Act, and assertion of jurisdiction over its business to be appropriate. II.' THE LABOR ORGANIZATION INVOLVED Department Store Employees Union, Local 1100, Retail Clerks International Association , AFL-CIO, here- in called the Union, is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES The General Counsel alleges that at all times since May 21, 1969, the Union has been the statutory represent- ative of Respondent's employees at the San Francisco store, and that following the Union's request to bargain as such representative, Respondent not only refused to accord the Union recognition, but engaged in a course of unlawful conduct which should be remedied by direct- ' The complaint issued on July 30, 1969, and is based upon a charge and amended charge filed on June 2 and July 23, 1969, respectively Copies of the complaint, the charge, and the amended charge were duly served upon Respondent 182 NLRB No. 56 TOWER RECORDS ing a bargaining order. Respondent denies that at any time it became obligated to bargain with the Union as the statutory representative of its employees or that at any time it engaged in unlawful interference with its employees' statutory rights. At times material to this proceeding, Respondent employed some 19 persons at its retail store in San Francisco. The general manager of the corporation, John Schairer, had his headquarters in Sacramento, California, but normally visited the San Francisco operation once a week. Charles Shaw was the store manager and Herb Hoyt the assistant store manager in San Francisco who directly supervised the day-to-day store operation. It is conceded that Schairer, Shaw, and Hoyt were each supervisors within the meaning of the Act. Bob Morrison was the head clerk. The General Counsel claimed Morri- son likewise to be a supervisor properly excluded from the unit. At the hearing Respondent disputed this claim. Testimony concerning the duties of Morrison, however, disclosed that on occasions Morrison had full charge of the store, and that he had authority to suspend employees who engaged in misconduct. In its brief, Respondent withdrew its objection to Morrison's exclu- sion from the unit. I find Morrison to be a supervisor within the meaning of the Act properly excluded from the unit. A dispute exists as to the inclusion or exclusion of two additional employees. This issue will be discussed below. A. The Union's Organizational Efforts, the Request To Bargain, and the Wage Increase Commencing about May 15, Daniel Solomon, an employee of Respondent, began soliciting his fellow employees at Respondent's San Francisco store for mem- bership in the Union. He gave many of them union application cards together with addressed postage paid envelopes directed to the Union. Some cards were signed and returned to Solomon who thereupon forwarded them to the Union. Others were mailed directly to the Union by the employees themselves. By the morning of May 21, 1969, nine cards had been signed by Respondent's employees. Eight signed cards had been received at the union office by that time. The cards, in substance, set forth that the signer was applying for membership in the Union, and that he authorized the Union "to represent [him] for purposes of collective bargaining and handling of grievances. . . ." The eight cards in possession of the Union were each dated between May 15 and 17, 1969. Respondent,does not contest the validity of the signatures on any cards. It is conceded that each employee signing a card was on Respondent's payroll as of May 21, 1969.2 Steven Palampres. signed an application card dated May 20, 1969. Such card was not received at the union office, however, until May 22. An additional employee, R These eight cards were signed by the following employees Terry Rich, Richard Street, Michael T Grenshaw, Ed Hale, Maurice G Sandy, Mike J Edwards, Daniel J Solomon, and William H Davis, Jr 383 Michael D. Waggoner, signed a'chrd dated May 22, 1969. This was received at the union office 'on May 23. The dates on each appears to have been put on by the signer, and no evidence was adduced to support that these, or any other cards submitted, had not actually been signed on the dates appearing thereon. At approximately 3 p.m. on the afternoon of May 21, 1969, Union President Richard Williams visited Respondent's store and spoke with Store Manager Charles Shaw. After introducing himself, Williams advised Shaw that a majority of Respondent's employees had signed with the Union, and he handed Shaw what he describes as "the demand letter." This letter was dated May 21, 1969, was addressed to Shaw as manager of the San Francisco store, and was signed by Walter L. Johnson, secretary-treasurer of the Union. In sub- stance, the letter recited that the Union was thereby notifying Respondent that a majority of its employees in a unit comprised of "all selling and nonselling employ- ees," excluding supervisors and warehousemen, had designated the Union as their exclusive bargaining repre- sentative, and that the Union was therefore demanding "recognition for purposes of collective bargaining as the exclusive representative of such employees." The letter further represented that should Respondent doubt the majority representation, the Union would agree to an independent card check to prove its majority, and that the Union desired to meet with Respondent for the purpose of negotiating a collective-bargaining agree- ment at Respondent's "earliest convenience." It was requested that Respondent call the Union by telephone to arrange for a mutually agreeable date for such a meeting. The letter concluded by calling Respondent's attention to the fact that federal law protected the rights of the employees, and by stating that "discrimination against any of your employees, or a refusal to bargain with [the Union] will be brought to the attention of the proper authorities." Williams had the eight application cards above-noted with him when he visited the store. Shaw, however, did not ask to see them. After reading the letter, Shaw advised Williams that "he was only the store manager and that he would pass it on to higher headquarters or to Sacramento." Neither Williams nor any other union representative made any subsequent effort to com- municate by letter, telephone, or visit with anyone con- nected with management either in San Francisco or Sacramento. No representatives of, Respondent replied in any manner to the Union's so-called demand for recognition following Williams' visit to the store. John Schairer, Respondent's general manager, was in San Francisco on May 21. He was not present in the store, however, at the time that Williams came in with the demand letter. Upon Schairer's return to the store about 4 p.m. that same afternoon, Shaw showed Schairer the letter that Williams had delivered. Shaw acknowledged that thereafter he talked with a number of employees, and that in the course of such conversa- tions he apprised them that he had earlier been aware that there had been some union activity, but that until the Union had requested recognition he had not fully 384 DECISIONS OF NATIONAL LABOR RELATIONS BOARD known of its extent. There is no other evidence of oral threats or unlawful conduct, except what is related below, by Schairer or any other management representa- tive directed at the employees at this or any other time. Early in the evening of May 21, Schairer telephoned Russell Solomon, Respondent's president, in Sacramen- to, and read him the demand letter. During the course of this conversation, Solomon and Schairer agreed that the minimum wage for clerks in the San Francisco store should be raised from $1.75 to $2 per hour at once. According to Schairer at that time, there were 14 hourly rated employees who were receiving the $1.75 minimum rate . Schairer announced the increase to the few clerks who were working that evening , and the others were notified the following day. The increase first appeared in the paychecks that the clerks received on May 30. Respondent contends that a wage increase had been planned prior to the advent of the Union. In this connec- tion, Schairer testified that about May 1 he had become aware that there was discontent among Respondent's employees occasioned by a variety of things, including the low wage scale. Schairer states that he discussed the problem with Respondent's officers in Sacramento and it had been decided that some wage adjustments were in order. This decision was not announced to the employees, however. According to Schairer prior to May 21 he did no more than apprise the employees that he and the other company officers "were looking into the problems and hoped [they] would have some solution shortly." Schairer also concedes that prior to May 21, Respondent had reached no decision concerning specific raises to be accorded any individual employee. On the contrary, Schairer testified that it had been Respondent's intent to evaluate the ability of each employee before deciding on the amount of any increase. Schairer acknowledges that such individual evaluations had not been made by May 21. B. The Appropriate Unit, the Majority, and the Refusal To Bargain As set forth above, the Union seeks a bargaining unit comprised of the selling and nonselling employees at Respondent's San Francisco store. Respondent has no basic dispute with this unit claim. As noted above, Respondent concedes that the store manager, the assist- ant store manager, and the head clerk are each supervi- sors properly excluded from the scope of such unit. The General Counsel and the Charging Party, however, would exclude, and Respondent would include, Melinda Mitchell, classified as bookkeeper clerk and buyer, and William Doughty, classified as a warehouseman. Testimony shows that Mrs. Mitchell worked principal- ly on the selling floor with the other employees, that occasionally she made sales and took in money at the cash register, that she kept certain of Respondent's records, and that she was responsible for observing Respondent's stock of single records ' in the so-called "top forty," and for sending in purchase orders for "top forty" records as replacements were needed. Doughty worked principally as a shipping clerk receiving and unpacking records and other items in the back of the store, and moving these items to the front to replace diminished stock. Occasionally, Doughty would engage in selling. Both Mitchell and Doughty were paid salaries, rather than the hourly wage accorded the clerks. The reason for this is not explained. Neither received a wage increase on May 22. While it is apparently true that Doughty spent relative- ly little of his time selling and mostly functioned as a shipping, and receiving clerk, his work brought him in frequent contact with the selling clerks, and he appears to share much in common with them. Respondent's store is relatively a small one with no truly separate warehouse area. Under the circumstances, there seems no sufficient reason to exclude him from a unit comprised of the other employees with whom he works closely, and which is defined as including both "selling and nonselling employees." While Melinda Mitchell did a certain amount of book work and made out reports, she had no separate office and took no dictation She too occasionally did some selling; and also worked in close contact with the clerks at all times. The General Counsel argues her exclusion as a part of management because she used her own judgment and discretion in making orders for the needed "top forty" records, a function which it is claimed gave her the managerial power of pledging the employer's credit. General Counsel cites certain cases in which the Board has excluded persons with powers to pledge the employer's credit.3 These cases arise in the situa- tions where the authority was far more extensive than that which Mrs. Mitchell possessed. Mrs. Mitchell's purchase authority was applicable to only a small fraction of Respondent's business and appears so limited that it scarcely suggests any real exercise of a managerial function. Rather, her work, like that of Doughty, is for the most part related to and done in close association with the clerks, and like Doughty it would seem appropriate to include her in a unit comprised of selling and nonselling employees. I find a unit comprised of all Respondent' s selling and nonselling employees, including the bookkeeper and the warehousemen, but excluding supervisors as defined by the Act to be appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. As of May 21, 1969, such unit was comprised of 16 persons.4 As heretofore noted, on May 21, when Williams deliv- ered the demand letter to Respondent, he had with him application cards signed by eight of Respondent's employees.5 3 Weaver Motors Inc , 123 NLRB 209, Western Gear Corp , 160 NLRB 272, Grocers Supply Company, Inc , 160 NLRB 485 ' These include Louis Rhode, Mike Waggoner, Larry Mendellson, Daniel Solomon, Mike Crenshaw, Steve Palamores, Gordon Sandy, Terry Rich, Bill Davis, Richard Street, Ed Hale, Ernie Koeph, Stan Alperin, Mike Edwards, Melinda Mitchell, and William Doughty 5 See In 2, supra TOWER RECORDS As we have seen, the card of Steve Palamores was dated on May 20, 1969, but was not received in the union office till May 22, 1969. Respondent takes the position that this card should not be counted in determin- ing the majority as of May 21, because at that time it was not yet in the possession of the Union. I disagree. The function of an application or authorization card when used for majority determination is to signify that the signer had thereby designated a particular labor organization as his statutory representative at a particular time. Palamores' card appears to be in his own handwrit- ing, and it purports to recite that Palamores so designated the Union on May 20, 1969. Absent any conflicting evidence which would suggest a different date, it is reasonable to conclude the card was signed on the date which appears on its face. I deem it of no signi- ficance that thereafter the card did not reach the union office until May 22. It is Palamores' choice of a bargaining representative that concerns us, not the date his card arrived at the union office. Accordingly, I find the card of Steven Palamores to have been signed on May 20, 1969. Eight others had designated the Union as their repre- sentative prior to May 21. Adding the card of Palamores to these, I find that 9 of Respondent's 16 employees had in fact designated the Union as their representative on May 21. The card of Mike Waggoner indicates on its face that it was not signed until May 22, 1969, following the Union's initial demand for recognition. On May 22, Respondent had not expressly declined to accord the Union recognition, and the Union's demand delivered on May 21 is reasonably to be construed as a continuing one. The Board has held that cards obtained during a period where a demand for recognition is still outstand- ing may be used to compute the majority., Accordingly, I find that the card of Mike Waggoner may also be counted in computing the Union's majority at all times subsequent to May 22, 1969. Thus, when the Union first made its request for recognition, it had been designated as the bargaining representative by 9 of Respondent's 16 employees in the appropriate unit, and I so find. At all times after May 22 with the demand still outstanding, the Union represented 10 of Respondent's 16 employees in the appropriate unit and I so find. Accordingly, I find that at all times material after May 21, 1969, the Union had been designated by a majority of Respondent's employees in a unit appropriate for collective-bargaining purposes.' " Colonial Wax Products Division of Victrylite Candle Compam, 171 NLRB, Henry Colder Company, 163 NLRB 105 ' Respondent notes that on the face of the union application cards the following legend appears We, the Local Union Executive Board report affirmatively on this applicant whose application date is ___ " Following'this is a signature line for a local union executive officer It does not appear that the Executive Board ever considered or reported on any of the applicants, nor were any cards signed by an executive officer According to Respondent, this ommission should be viewed as a fatal defect invalidating all the cards ' I disagree The card on its face is an unequivocal authorization for the Union to represent the signer, as well as an application for membership The approval 385 Respondent concedes that at no time did it affirmative- ly reply to the Union's request to bargain, or in any other manner suggest a means whereby the Union could prove its majority through Board or independent sources. Respondent would excuse its failure to respond to the Union's demand by contending that the Union had a duty to follow up its May 21 letter by submitting proof of majority or in some other manner press its bargaining demands. I disagree. Not only does the letter itself constitute an unequivocal demand for recognition, it specifically asks for a reply from Respondent. Manager Shaw told Union Representative Williams that he intend- ed to pass the letter on to higher management. The letter was in fact given that same day to Respondent's general manager, and it was reasonable for the Union to assume that a reply of some sort would be forthcoming in the relatively near future without its taking further steps. Although Schairer now contends that Respondent doubted the Union's majority from the outset, it never so notified the Union. Absent a reply of any sort, Respondent's conduct may be viewed as a refusal on its part to bargain with the Union whether or not it was in fact the statutory representative of the employees, and I so find. Respondent, however, had a qualified right to refuse to bargain with the Union until the Union could establish its majority in some manner other than its mere assertion in a demand letter. This right, however, was not an absolute one, and could be forfeited should it be estab- lished that following the demand Respondent acted in a manner calculated to undermine the Union's claimed majority. Thus, we must next consider whether Respond- ent's refusal to bargain here took place in a fully lawful context, or whether in conjunction therewith Respondent engaged in unlawful conduct of a nature which resulted in a forfeiture of its right to have the majority determined by the Board or an independent source. Should the latter be the case it may become appropriate to direct a bargaining order This issue will be discussed below. C. Discussion and Conclusions The propriety of a bargaining order involves an appli- cation of the principle established by the United States Supreme Court in N.L.R.B. v. Gissel Packing Co., 395 U.S. 575, 614. Briefly stated the principle as recited by the Court, and followed by the Board, is that a bargaining order may be directed where the majority is established by authorization cards rather than by the election process in a situation where an evaluation of the quantity and quality of the unlawful conduct of the employer shows it to be of a character likely to interfere with employee free choice should an election later be conducted. It is reasoned that where such con- duct is sufficiently extensive and sufficiently directed at the employees' right of free choice, the card designa- lines relate to final steps in perfecting membership and do not purport to qualify the authorizations It is conceivable that membership might not be perfected until after representative status had been achieved The authorization, however, stands as unconditional, and serves to express the representation choice of the employees at the time of signing 386 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tions become a more reliable expression of employee choice than do votes in an election. In Gissel, the Supreme Court stated the following: The only effect of our holding here is to approve the Board's use of the bargaining order in less extraordinary cases marked by less pervasive prac- tices which nonetheless still have the tendency to undermine majority strength and impede the election processes. The Board's authority to issue such an order on a lesser showing of employer misconduct is appropriate, we should reemphasize, where there is also a showing that at one point the union had a majority, in such a case, of course, effectuating ascertainable employee free choice becomes as important a goal as determining employ- er misbehavior. In fashioning a remedy in the exer- cise of its discretion, then, the Board can properly take into consideration the extensiveness of an employer's unfair practices in terms of their past effect on election conditions and the likelihood of their recurrence in the future. If the Board finds that the possibility of erasing the effects of past practices and of ensuring a fair election (or a fair rerun) by the use of traditional remedies, though present, is slight and that the employees sentiment once expressed through cards would, on balance, be better protected by a bargaining order, then such an order should issue. With such rationale in mind, we must examine the extensiveness, the timing, and the character of the alleged unfair labor practices here to determine if "the possibility of erasing the effects" of such conduct and insuring a fair election by a cease-and-desist order is so slight "that the employee sentiment once expressed through cards would on balance be better protected by a bargaining order. . . ." The sole unlawful conduct charged in the instant case is the wage increase accorded the employees on May 21 under circumstances which are set forth above. The General Counsel claims that the amount of such increases and the timing make it apparent that they were both designed and calculated to undermine the Union's majority. It is urged that the granting of the increases constituted not only a manifest interference with employee right of free choice, but that the conduct took place in circumstances which call for not only a cease-and-desist order but also will support a bargaining order based on the Gissel rationale. Respondent contends that the wage increases had been earlier planned, and that their announcement and implementation within 24 hours of the union demand amounted to no more than a coincidence. Primarily, Respondent would claim that it engaged in no unlawful conduct whatsoever which would support any remedial order. Secondarily, Respondent would assert that even if the wage increases be viewed as unlawful interference, it was not a sufficient interference with employee free choice to warrant the imposition of the bargaining order remedy. Respondent's primary contention must be rejected. I do not question that on or about May 1, Respondent was apprised that problems existed among its employees at the San Francisco store, or that the most significant problem centered on the low wage scale. Without doubt, Schairer represented to the employees early in May that sometime in the near future he would undertake steps to alleviate all existing problems. Schairer acknow- ledges, however, that he made no promise of specific wage increases at this time, or that even within the management hierarchy prior to May 21 there had been agreement as to what increases were to be accorded or to whom they were to go. On the contrary, as we have seen, Schairer testified that management had concluded that wage increases should only be granted on an individual basis after a thorough review of the work performance of each individual employee. While intervening circumstances, not related to union organiza- tion, may have been time consuming, and may serve to explain why such individual review had not taken place, it is not contended that any determination had been reached prior to May 21. On this day, the Union delivered its demand letter. We note Schairer first talking to employees concerning union organization, and then taking up the question of the Union's demands with Respondent's president. While there is no evidence that in any of his conversations with the employees, Schairer voiced threats of reprisal or promises of benefits tied to union affiliation, his discussions made evident his concern with the union claim. Schairer's telephone con- versation with Respondent's president centered exclu- sively on the Union's demand received that very day. It was immediately after reading the demand letter that Schairer and President Solomon agreed that the 14 employees then making $1.75 should have their hourly wage increased to $2 per hour. This was a substantial across-the-board increase accorded to a substantial majority of the unit employees without regard to their individual work capacities. The decision was immediately announced to those employees who were still working on the evening of May 21, with the remaining employees being apprised of it on the following day. The inference is all but inescapable that this substantial across-the- board increase made in a manner contrary to plan at this time was triggered by the demand of the Union. Absent a credible explanation for a departure from the original planned review of individual work capacities, the most reasonable conclusion is that Respondent by granting and announcing the increases was seeking to undermine the Union's claimed majority and to diminish its capacity to establish such majority in an independent manner at a later date. The actual results which followed lend support to the accuracy of such a conclusion. As recited above, the likely effects soon appeared as a reality. On May 26, nine of Respondent's employees undertook to with- draw their union membership applications, signifying that they now felt that their problems could best be met by forming their own organization. The employees followed this by forming an employee group calling itself "Tower Power." This group endeavored to deal directly with Respondent. Whereas Respondent had no response whatsoever to the Union's request to bargain, TOWER RECORDS and only at a much later date had voiced doubts as to its majority; in marked contrast responded to the "Tower Power" demand, by meeting and discussing matters immediately without checking on majority status at all. Moreover, Respondent continued dealings with "Tower Power" until advised by counsel to cease. Under the circumstances, I find that Respondent by granting the 25-cent-an-hour wage increase on May 21 and 22 sought to undermine the Union's majority by meeting a substantial element of the earlier expressed discontent of the employees, thereby interfering with the basic employee rights guaranteed by Section 7 of the Act in violation of Section 8(a)(1) of the Act. Although Respondent's sole unfair labor practice was to grant the wage increase, the circumstances and the timing of such conduct make it necessary to reject Respondent's secondary claim as well. Respondent cor- rectly asserts that the election process is ordinarily regarded as the most reliable means of determining a majority bargaining representative. Respondent argues that circumstances here, even if deemed sufficient to support a cease-and-desist order, do not suffice to support a bargaining order absent a majority determination by the election process. It is well established there where an employer's unfair labor practices are relatively inconsequential, or not sufficiently aimed at interfering with the free choice of a bargaining representative, a cease-and desist order may be adequate to remedy the unlawful conduct and insofar as a majority issue may also exist it is to be resolved by the Board's representation procedures or some other independent means.8 The Gissel doctrine and the bargaining order remedy, however, become appropriate in situations where in fact a union's majority can be established by cards and the nature and "exten- siveness of the employer's unfair labor practices" appear to make subsequent free choice by the employees proble- matical. In any given case, therefore, we must consider whether what has occurred is likely to preclude the exercise of free choice by the election process. In the instant case, the wage increase and its timing presents a reasonably clear-cut situation. It is a fair assumption that in most instances where employees designate a union as their representative, a major consid- eration centers on the hope that such representative may be successful in negotiating wage increases. Certain- ly this appears to have been an important consideration in the instant case. A unilateral award of a wage increase by an employer following a union's demand for recogni- ton results in giving the employees a significant element of what they were seeking through union representation: It is difficult to conceive of conduct more likely to convince employees that with an important part of what they were seeking in hand union representation might no longer be needed. An employer may have the right to persuade the employees that representation is not in their best interests, but it does not have the right to threaten them or confer benefits on them which are designed to influence the employees against choosing E Aaron Brothers Co of California, 158 NLRB 1077 387 a representative. When, as here, an employer does so, free choice in a subsequent election becomes a matter of speculation, so long as the effects of the interference remain unremedied. Where, as here, the majority had signed cards prior to Respondent's acts of interference without knowledge of what, if any, benefits the Union designated might negotiate, the Gissel principle comes into play and the cards now appear as a more reliable guage of employer choice than an election. Accordingly, the wage increase in the instant case brings it within the Gissel doctrine and inasmuch as we have found a card majority, the direction of a bargaining order becomes appropriate. Respondent also resists entry of a bargaining order by claiming that at all times it had a good-faith doubt as to the Union's majority, and that a demonstrable turnover shows that any majority which the Union may have been able to claim on May 21 or 22 was subsequent- ly dissipated by turnover. Respondent's contention in this regard misconceives the rationale of Gissel. While prior to Gissel, the Board frequently spoke of the pres- ence or absence of good-faith doubts as to majority by an employer, after Gissel the primary reliance is placed upon evaluation of the unfair labor practices committed. As found above, the Union represented a majority of Respondent's employees at the time of its demand on May 21. Had Respondent refrained from unlawful conduct following the demand, subsequent turn- over might have become an appropriate consideration. However, on the very day of May 21, Respondent embarked upon an unlawful course of conduct which we have found above was designed and calculated to undermine the Union's majority and interfere with the employee's right of free choice. Respondent thus by its own unlawful conduct forefeited the right to challenge the Union's majority at a subsequent date, and subse- quent turnover became irrelevant in resolving the majori- ty issue. Respondent by granting the wage increases for the unlawful object of undermining the employees' interest in the Union can no longer question any seeming loss of majority since it may well have resulted from its own unlawful conduct. I find that Respondent by granting the wage increases under the circumstances described above, and declining to accord recognition to the Union which represented a majority of its employees in an appropriate unit, engaged in conduct violative of both Section 8(a)(1) and (5) of the Act, and such conduct to be appropriately remedied by both a cease-and desist order, and an order to bargain. IV. THE EFFECTS OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent set forth in section III, above, occurring in connection with the operations of Respondent set forth in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. 388 DECISIONS OF NATIONAL LABOR RELATIONS BOARD VI THE REMEDY Having found that Respondent engaged in certain unfair labor practices, I shall recommend that it cease and desist therefrom, and take certain affirmative action designed to effectuate the policies of the Act Having found that Respondent unlawfully refused to bargain with the Union as the exclusive representative of its employees in an appropriate unit, I will recommend that Respondent, upon request, bargain collectively with the Union and, in the event an understanding is reached, embody such understanding in a signed agreement Upon the basis of the foregoing findings of fact and upon the entire record in the case, I make the following CONCLUSIONS OF LAW I 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 interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed by Section 7 of the Act, as found above, Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(1) of the Act 4 By refusing, upon request, to bargain in good faith with the Union as the representative of its employ- ees in the unit found above to be appropriate, Respondent has engaged in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act 5 The aforesaid unfair labor practices affect interstate commerce within the meaning of Section 2(6) and (7) of the Act ORDER Upon the basis of the foregoing findings of fact and conclusions of law and upon the entire record in this proceeding, I recommend that Tower Enterprises Inc d/b/a Tower Records, its officers, agents, successors and assigns, shall I Cease and desist from (a) Refusing to bargain collectively with the Union as the exclusive representative of employees in the appropriate unit described above (b) Granting wage increases to its employees for the purpose of influencing their selection of a labor organiza tion as their bargaining representative (c) In any like or related manner interfering with or coercing its employees in the rights guaranteed them by Section 7 of the Act 2 Take the following affirmative action which I find will effectuate the policies of the Act (a) Upon request, bargain collectively with the Union as the exclusive representative of the employees in the appropriate unit, and embody in a signed agreement any understanding reached (b) Post at its San Francisco, California, place of business copies of the attached notice marked "Appen dix "9 Copies of said notice to be furnished by the Regional Director for Region 20, after being duly served upon Respondent's representative, shall be posted by Respondent immediately upon receipt thereof, and main- tained by it for at least 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other mate- rial (c) Notify the Regional Director for Region 20 in writing, within 20 days from the receipt of this Decision what steps Respondent has taken to comply herewith 10 , In the event that no exceptions are filed as provided by Section 102 46 of the Rules and Regulations of the National Labor Relations Board the findings conclusions recommendations and Recommended Order herein shall as provided in Section 102 48 of the Rules and Regulations be adopted by the Board and become its findings conclu sions and order and all objections thereto shall be deemed waived for all purposes In the event that the Board s Order is enforced by a judgment of the United States Court of Appeals the words in the notice reading Posted by Order of the National Labor Relations Board shall be changed to read Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board 10 In the event that this Recommended Order be adopted by the Board this provision shall be modified to read Notify the Regional Director for Region 20 in writing within 10 days from the date of this Order what steps it has taken to comply herewith APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT grant our employees wage increas- es for the purpose of influencing their choice of a labor organization as their bargaining representa tive WE WILL NOT refuse to bargain collectively with Department Store Employee's, Local 1100, Retail Clerks International Association, AFL-CIO, as the exclusive representative of employees in the appropriate bargaining unit The appropriate unit is All selling and nonselling employees employed at the San Francisco store, including the book- keeper and the warehouseman, but excluding supervisors as defined by the Act WE WILL bargain upon request with the above named Union as the exclusive representative of all employees in the unit described above with respect to wages, hours, and other terms and condi- tions of employment and, if an understanding is reached, embody such understanding in a signed statement WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them by Section 7 of the Act TOWER RECORDS 389 All our employees are free to become or remain This is an official notice and must not be defaced or refrain from becoming or remaining members of by anyone. the above-named or any other labor organization. This notice must remain posted for 60 consecutive TOWER ENTERPRISES, days from the date of posting and must not be altered, INC., D/B/A TOWER defaced, or covered by any other material. RECORDS (Employer) Any questions concerning this notice or compliance with its provisions, may be directed to the Board's Dated By Office , 450 Golden Gate Avenue , Box 36047 , San Francis- (Representative) (Title) co, California 94102, Telephone 556-3197.