Furnas Electric Co.

Furnas Electric Company and International Union, United Automobile, Aerospace & Agricultural Implement Workers of America (UAW). Cases 13-CA-8069 and 13-CA-8723 June 4, 1970 DECISION AND ORDER By MEMBERS FANNING, MCCULLOCH, AND JENKINS On June 30, 1969, Trial Examiner Harry R. Hinkes issued his Decision in the above-entitled proceeding, finding that Respondent had engaged in and was engaging in certain unfair labor prac- tices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. The Trial Examiner also found that Respondent had not engaged in certain other unfair labor prac- tices. Thereafter, Respondent filed exceptions to the Trial Examiner's Decision and a supporting brief, the Charging Party filed exceptions and a supporting statement, and the General Counsel filed a brief in support of the Trial Examiner's Decision and an answering brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its powers in connection with this case to a three- member panel. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and briefs, and the entire record in the case, and hereby adopts the findings,' conclusions, and recommenda- tions of the Trial Examiner, with the following modifications. We find, contrary to the Trial Examiner, that the no-solicitation and no-distribution rules were suffi- ciently modified, and the notice of the modification was sufficiently conveyed by the Respondent on or about February 20, 1968, to correct their illegality. Notwithstanding this finding, we find, in agree- ment with the Trial Examiner, that the promulga- tion of the illegal rules took place within 6 months of the charge relating thereto. We further note that these rules, although not enforced, were maintained during the Union's organizational drive. The sub- sequent modification of the rules, correcting their These findings and conclusions are based, in part, upon credibility determinations of the Trial Examiner to which the Respondent has ex- cepted After a careful review of the record, we conclude that the Trial Ex- aminer's credibility findings are not contrary to the clear preponderance of all the relevant evidence Accordingly, we find no basis for disturbing those illegality, does not have the retroactive effect of validating these prior violative acts, nor does it preclude the Board from issuing an appropriate cease-and-desist order' Accordingly, we find that the actions of the Respondent prior to February 20, 1968, in promulgating and maintaining illegal no- solicitation and no-distribution rules were in viola- tion of Section 8(a)(1) 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 the Respon- dent, Furnas Electric Company, Batavia, Illinois, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Threatening loss of benefits and imposition of additional duties if the Union is selected by the employees. (b) Creating the impression that it is engaged in surveillance of the union activities of employees. (c) Unlawfully interrogating employees concern- ing their union membership, activities, and desires. (d) Maintaining a no-solicitation rule which prohibits union solicitation by employees during nonwork time. (e) Maintaining a no-distribution rule which prohibits the distribution of union literature by em- ployees in nonwork areas during nonwork time. (f) Discouraging membership in the Union or. concerted activities for the purpose of mutual aid or protection by discharging or otherwise dis- criminating against employees because they have engaged in union or concerted activities. (g) Interfering with, restraining, or coercing its employees in the exercise of their rights under the Act by granting them wage raises or by improving the terms or conditions of their employment, pro- vided, however, that nothing in this Order shall be construed as requiring the Respondent to vary or abandon any wage raise or improvement in employ- ment conditions which it has heretofore established. (h) In any other manner interfering with, restraining, or coercing its employees in the exer- cise of their right to self-organization, to form, join, or assist the Union, or any other labor organization, to bargain collectively through representatives of their own choosing, or to engage in other concerted activity for the purpose of collective bargaining or other mutual aid or protection or to refrain from any such activity. findings Standard Dry Wall Products , Inc , 91 NLRB 544, enfd 188 F 2d 362 (CA 3) % Allen-Morrison Sign Co, Inc, 79 NLRB 903, Levi-Strauss and Co, 172 NLRB No 57 183 NLRB No. 1 1 2 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2. Take the following affirmative action which we find will effectuate the policies of the Act: (a) Offer to employees Eloise Guennette and Kay Vander Valk immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without preju- dice to their seniority or other rights and privileges, and make them whole for any losses they may have suffered by reason of the discrimination against them in the manner set forth in the section of the Trial Examiner's Decision entitled "The Remedy." (b) 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 reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (c) Notify those employees who were dis- criminatorily discharged if presently serving in the Armed Forces of the United States of their right to full reinstatement upon application in accordance with the Selective Service Act and the Universal Military Training and Service Act, as amended, after discharge from the Armed Forces. (d) Post at its Batavia, Illinois , place of business copies of the attached notice marked "Appendix."3 Copies of said notice, on forms provided by the Re- gional Director for Region 13, after being duly signed by Respondent's 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 employees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that said notices are not al- tered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 13, in writing, within 10 days from the date of this Order, what steps have been taken to comply herewith. IT IS FURTHER ORDERED that those portions of the complaint as to which no violations have been found are hereby dismissed. 3 In the event that this Order is enforced by a Judgment of a 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 " APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT threaten loss of benefits and imposition of additional duties if a union is selected by the employees. WE WILL NOT create the impression that we are engaging in surveillance of your union ac- tivities. WE WILL NOT unlawfully question you con- cerning your union membership, activities, and desires. WE WILL NOT promulgate or maintain a no- solicitation rule which prohibits union solicita- tion by you during nonwork time. WE WILL NOT promulgate or maintain a no- distribution rule which prohibits the distribu- tion of union literature by you in nonwork areas during nonwork time. WE WILL NOT discourage either membership in a union or concerted activities for the pur- pose of mutual aid or protection by discharging or otherwise discriminating against you because you have engaged in union or con- certed activities. WE WILL NOT interfere with, restrain, or coerce you in the exercise of your rights under the National Labor Relations Act by granting you wage raises or by improving the terms or conditions of your employment, provided, however, that we are not required to vary or abandon any wage increases or improvements in employment conditions which have been heretofore established. WE WILL NOT in any other manner interfere with, restrain, or coerce you in the exercise of your right to self-organization, to form, join, or assist the International Union, United Automo- bile, Aerospace & Agricultural Implement Workers of America (UAW), or any other labor organization, to bargain collectively through representatives of your own choosing or to engage in other concerted activity for the purpose of collective bargaining or other mu- tual aid or protection or to refrain from any such activity. WE WILL offer to employees Eloise Guen- nette and Kay Vander Valk immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or other rights and privileges, and we will make them whole for any loss of pay they may have suffered because of the discrimination against them. WE WILL notify any of the above-named em- ployees to whom we have been ordered to make offers of reinstatement, if presently serv- ing in the Armed Forces of the United States, of their right to full reinstatement, upon appli- cation, in accordance with the Selective Ser- vice Act and the Universal Military Training FURNAS ELECTRIC COMPANY 3 and Service Act, as amended , after discharge On October 16, 1968 , the Union filed additional from the Armed Forces. charges against said Respondent which were served All our employees are free to become or refrain on the Respondent on or about the same date. Pur- from becoming members of the above -named suant thereto, a complaint in Case 13 -CA-8723 Union , or any other labor organization . was issued on October 30, 1968, in which Case Dated By FURNAS ELECTRIC COMPANY (Employer) (Representative ) (Title) 13-CA-8069 was consolidated . On October 31, 1968, the Regional Director filed his report on ob- jections to the Respondent 's conduct affecting the results of the June 24 , 1968, election . In it the Re- gional Director referred to the issues concerning the Respondent's conduct in the June 24, 1968, election and in Case 13-RC-1 1356 to a Trial Ex- aminer for a report and recommendation con- solidating said hearing with the hearing in Cases 13-CA-8069 and 13-CA-8723. By answer duly filed, Respondent denied the commission of any un- fair labor practices as alleged in the consolidated complaint. A hearing was held before me at Geneva , Illinois, from March 3 through 7, 1969, inclusive , at which all parties were represented and were afforded full opportunity to participate , examine witnesses, and adduce relevant evidence . Briefs have been received from the parties and have been given care- ful consideration. Upon the entire record in this proceeding, I make the following: This is an official notice and must not be defaced by anyone. 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. Any questions concerning this notice or com- pliance with its provisions may be directed to the Board 's Office, Room 881 , U.S. Courthouse and Federal Office Building, 219 South Dearborn Street, Chicago , Illinois 60604 , Telephone '312-353-7572. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE HARRY R. HINKES , Trial Examiner: Pursuant to a charge filed on September 29, 1967, by Interna- tional Union , United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), hereinafter called the Union, and served on Furnas Electric Company ( herein called the Em- ployer or Respondent ) on or about October 2, 1967, as well as an amended charge filed by said Union on December 12, 1967, and served on Respondent on or about the same date , a complaint in Case 13-CA-8069 was issued on January 23, 1968, alleging the commission of specified unfair labor practices by the Respondent. On December 27, 1967, said Union petitioned for certification as representative of the Respon- dent 's production and maintenance employees in Case 13-RC-11356 . An election held pursuant thereto on January 29 , 1968, was lost by the Union and objections to the Respondent 's conduct were filed by the Union . On May 23, 1968, Respondent received the Regional Director 's report on these objections in which he directed a second election. On May 31, the Chicago Regional Office received Respondent 's exceptions to the Regional Director's report . On June 24, 1968, a second election was held which the Union again lost. Once again the Union filed objections to the Respondent's con- duct. FINDINGS OF FACT I. JURISDICTION Respondent is, and has been at all times material herein , a corporation duly organized under and ex- isting by virtue of the laws of the State of Delaware. It maintains a place of business at Batavia , Illinois, where it is, and has been at all times material herein, engaged in the manufacture and sale of magnet coils, electrical apparatus , and contact as- semblies. During the past calendar or fiscal year, a representative period, Respondent manufactured, sold, and shipped finished products valued in excess of $1 million from its plant in Batavia, Illinois, directly to customers located outside the State of Il- linois . During the same period it received goods and materials valued in excess of $1 million directly from points outside the State of Illinois. The com- plaint alleges and Respondent 's answer admits that Respondent is, and has been at all times material herein , an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED The complaint alleges and Respondent 's answer admits that International Union , United Automo- bile, Aerospace & Agricultural Implement Workers 427-258 O-LT - 74 - 2 4 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of America (UAW) is a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. The Issues The parties appear to agree that the following are the issues presented by this proceeding: 1. Were the Respondent 's solicitation and dis- tribution rules a violation of Section 8(a)(1) of the Act. 2. Was Respondent 's discharge of employees Kay Vander Valk and Eloise Guenette a violation of Section 8(a)(1) and/or 8(a)(3) of the Act. 3. Was Respondent 's 3-day suspension of em- ployee Alan Carlson a violation of Section 8(a)(4) of the Act. 4. Was Respondent 's announcement and grant of employee benefits prior to the election of June 24, 1968, a violation of Section 8(a)(1) of the Act. B. The No-Solicitation and No-Distribution Rules A company rulebook was distributed to Respon- dent's employees on April 10, 1967. Thereafter, as new employees were hired , the rulebook was dis- tributed to them as well. Among its rules were the following: No solicitation or collecting of. contributions for any purpose whatsoever is allowed on com- pany property unless authorized by the Indus- trial Relations Department. There shall be no distribution of literature, written or printed matter , of any description on company premises unless authorized by the Industrial Relations Department. There is no evidence that the employees were ad- vised by the Respondent that these rules were not in effect, not enforced, or limited in their applica- tion until February 20, 1968, subsequent to the election of January 29 , 1968. On February 20, 1968, Respondent President Lisman spoke to the employees over the public announcing system ad- vising them that these rules would be applicable only to violations which occur on company time. A notice was posted to that effect as well and the two rules in question were stricken from the rule- book. Thereafter , new employees receiving the rulebook would not find those two rules therein. There is no evidence , however, that employees who had been hired prior to February 20, 1968, received such an amended rulebook. In Stoddard-Quirk Manufacturing Co., 138 NLRB 615, the Board set forth the tests to determine the legality of no-solicitation and no-distribution rules, at least for nonretail establishments . In it the Board held that the right of employees to solicit on plant premises must be afforded subject only to the restriction that it be on nonworking time. A rule prohibiting union solicitation by employees during nonworking time even though limited to work areas would be presumptively invalid . On the other hand, a rule forbidding union solicitation during worktime in any plant area will be presumptively valid. A rule forbidding distribution of union literature by em- ployees in nonwork areas during nonwork time would be presumptively invalid . Its prohibition in work areas , however, would be presumptively in- valid . Its prohibition in work areas , however, would be presumptively valid even though such rule ap- plies both to nonwork and work time. _ Here, the no-solicitation rule makes no distinc- tion between worktime and nonwork time . The no- distribution rule, in addition , makes no distinction between work and nonwork areas. Both rules, therefore , are presumptively illegal . Their promul- gation within 6 months of the charge relating thereto constitutes a violation of Section 8(a)(1) of the Act as an interference with the rights of em- ployees guaranteed by the Act. Levi Strauss and Co., 172 NLRB No. 57; Allen-Morrison Sign Co.-, Inc., 79 NLRB 903. Counsel for the Respondent , however, argues for the dismissal of this allegation of the complaint, cit- ing the fact that Respondent directed its superviso- ry and management employees both orally and in writing that they could not bar employee represen- tatives from soliciting union memberships during nonworking hours. Such a modification of the no- solicitation rule, even if conveyed to the rank-and- file employees , would hardly constitute sufficient correction of the presumptive illegality of both rules. Moreover, there is no evidence that such cor- rection was ever conveyed to the rank-and-file em- ployees. Counsel for the Respondent further ar- gues, however, that these rules were not enforced, citing the fact, as testified to by some employees, that union literature was seen throughout the plant and that some employees were solicited for mem- bership in the Union during work hours as well as nonworktime. He cites Aerodex, Inc., 149 NLRB 192, where a no-solicitation rule covering nonwork- ing as well as working time was held valid by the Board . In that case , however, unlike this case, the Respondent 's president in a speech to the em- ployees had informed them that it applied only to company time . The mere fact that union literature could be found throughout the plant was insuffi- cient indication that the Respondent's no-distribu- tion rules had been modified to permit distribution. An employee might well conclude that the per- petrators had been discovered and were being punished in accordance with the rulebook. FURNAS ELECTRIC COMPANY Similarly, the fact that some employees were openly solicited for union membership in con- travention of the presumptively illegal no-solicita- tion rule of the Respondent proves little. The number of such incidents, at least as far as this record is concerned , is miniscule compared to the number of employees affected . Moreover , such at- tempts were apparently made without the knowledge of management agents or supervisors, so that their acquiescence in such a modification of the written rule can hardly be assumed. At the most, we are left with presumptively invalid rules which were not enforced by the Respondent. Such lack of enforcement, however , is insufficient to rebut the presumption that the rule as written was illegal. Mason & Hanger- Silas Mason Co., Inc., 167 NLRB 894; Dudley Manufacturing Corp., 167 NLRB 107; J. H. Rutter-Rex Manufacturing Co., Inc., 86 NLRB 470. The announcement on February 20, 1968, that the two rules would be applicable only to violations which occur on company time was insufficient to correct the illegality . For one thing, we cannot as- sume that the president 's speech to the employees over the public announcing system on that day reached all of the employees , some of whom un- doubtedly were absent and others of whom may not have been within earshot of the loudspeakers. The change in the written rules which took place thereafter apparently was not made to the ru- lebooks in the hands of employees already em- ployed but only to the rulebooks issued to em- ployees hired thereafter . Certainly , for a revocation of an illegal rule to be effective , its publication should be as extensive and complete as the promul- gation of the illegal rule was. This was not the case here . It follows, therefore, that these rules, which were presumptively invalid as written , were main- tained by the Respondent thereafter without effec- tive modification despite the attempted modifica- tion of February 20, 1968. On the other hand , it appears that neither of these rules was enforced by the Respondent and I shall, therefore , recommend the dismissal of that portion of that allegation of the complaint. Counsel for the Respondent argues that the ac- tion of the Regional Director in setting aside the election of January 29 , 1968, was improper. That issue , however, which concerns the Union 's objec- tions to the Respondent's conduct affecting that election , is not before me either for a report, a recommendation , or a decision. C. Respondent's Discharge of Employees Kay Vander Valk and Eloise Guenette Kay Vander Valk (hereinafter referred to as Kay) and Eloise Guenette (hereinafter referred to 5 as Eloise ) were employed as surface grinders in Respondent 's department 8 which was under the supervision of Foreman Ed Obenlander, admittedly a supervisory agent of the Respondent . Working on the same shift with Kay and Eloise in department 8 were setup man Bob Potts , lapping machine opera- tor Connie Stanley , and grinders Jane Barker and Betty Hensen. On May 25 , 1967, Eloise was at Obenlander's apartment , babysitting for Obenlander's child. Kay and Jane Barker, on their way to attend a union meeting, stopped by Obenlander's apartment where Kay left her child , Eloise agreeing to babysit for both children . At the union meeting both Kay and Barker received authorization cards to pass out among Respondent's employees . After the meeting Kay and Barker, accompanied by Kay's husband and a friend of Barker , returned to Obenlander's apartment where they found both Eloise and Oben- lander . According to Kay, Obenlander asked where the girls had been and Kay answered that they had been to a union meeting. Kay further testified that she then walked over to Eloise and handed her a union card telling her that Barker and she had signed one . Obenlander remarked that he did not blame the girls for wanting to get a union into the factory. Kay's testimony was corroborated by Barker as well as Eloise. Obenlander, however, denied any talk about the Union or his asking them anything. I credit Kay's version of this conversa- tion rather than Obenlander's, for reasons dis- cussed later. Kay, Barker, and their escorts left , but Eloise and Obenlander remained for a while at the apartment. According to Eloise , Obenlander said that "We probably would be all sorry and we would lose the profit-sharing , the Christmas bonus , and all the things that we did have then," but Obenlander de- nied saying this . Here , too, I credit Eloise's testimony rather than Obenlander's. A few days later , according to Kay, Obenlander asked to see the union card . Kay took one out of her purse and showed it to him asking him if he wanted to sign too , to which Obenlander replied, "- No," foremen were not allowed to join unions. This conversation was not denied by Obenlander, and I credit Kay's testimony. Kay, Eloise , and Barker attended another union meeting in early July 1967. Shortly thereafter, Kay overheard Obenlander ask Eloise , "Are you going to be the union steward if the Union gets in?" Eloise answered, "Sure, why not?" This conversa- tion was corroborated by Eloise and both grinders testified that all -four grinders were present. One of the grinders , Hensen , called as a witness for the Respondent , failed to deny that conversation. 6 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Obenlander, however, did deny such a conversa- tion . Similarly, on another occasion , both Barker and Kay testified that Obenlander asked if the girls were passing out union cards and warned them not to get caught because they were being watched. This conversation was allegedly in the presence of Kay, Eloise , Barker, Hensen, and lapping machine operator Stanley , and both Hensen and Stanley, called as witnesses for the Respondent , failed to deny it . Barker corroborated the conversation testified to by Kay, but Obenlander denied talking about union solicitation . On another occasion, ac- cording to Barker , Obenlander asked Bob Potts, the setup man in that department , "guess where these girls were last night?" Kay, Eloise , Hensen, and Barker were allegedly present and one of them said that they had been to a union meeting. This , too, is not denied by Hensen , or by Potts, but is denied by Obenlander. Kay also testified that about this same time Obenlander told the girls that they would have to set up their own machines if the Union got in. Barker corroborates this testimony and although Hensen and Stanley were both present, allegedly, neither denied the conversation . Despite Obenlan- der's denials of the testimony of Kay , Eloise, and Barker, I do not credit his testimony , not only because witnesses for the Respondent failed to cor- roborate him but also because I find his testimony unreliable, as discussed later. Prior to August 1967 , according to the testimony of Kay , the grinders of the shift following the one in which Kay, Eloise , Barker, Hensen, and Stanley worked would arrive around 4 p.m. and stand by the girls while they were working and finishing up. They would talk to the girls and ask how the work went . Also, it was customary for the girls of the first shift to leave their machines during the last half hour of work to clean up and be ready to punch out at the quitting time. There were no limitations on their use of the washroom nor were they prohibited from taking their parts to inspection themselves. In August 1967 , however, Obenlander met with the entire grinding department and informed them that certain rules were going to be enforced . No longer would they be permitted to leave their machines during the last half hour nor stand by the punchout clock a few minutes early . They were to stay at their machines at all times and not talk to anybody. Visits to the washroom would be limited to one at a time and such absences would be limited to 5 minutes. Moreover, Potts was to take the parts done by the grinders to inspection . After the whole department objected to this procedure, Obenlander modified his instruction to permit the girls to go to inspection at least once in the morning and once in the afternoon . The testimony of both Eloise and Barker is corroborative of Kay's testimony . Neither Potts nor Hensen denied it. Obenlander admitted talking to the grinders about the time spent by them in washrooms and telling Kay not to be in the de- partment when another shift was working . There is no denial , however, of the specifics related above and I credit that testimony. Kay further testified that on another occasion in August 1967 she was talking to employee Myrtle Carmichael who operated the lapping machine on the shift following Kay's . Obenlander came up and told Kay not to stay after work and talk with the girls on the second shift . When Kay asked "Why the sudden change," he replied that there had been too much union talk going around the factory and that Kay was not to discuss union activities with anybody or pass out union cards . Obenlander failed to deny this conversation and I credit Kay's testimony. In early September 1967, Obenlander brought their hair nets to the grinders and told them that they would have to wear them for their own safety. According to the undenied testimony of these grin- ders they were the only ones in the plant who had to wear them. That afternoon all the grinders spoke to Respondent Works Manager Krause and com- plained of Obenlander 's supervision as well as his new limitations on their activities . When one of the girls stated that Obenlander had personal problems and was taking it out on them , Krause replied that he was aware of Obenlander 's personal problems and that he would look into the matter. According to the girls, Krause told them that they were good employees . Krause, while corroborating the rest of this conversation, could not remember if he had told them they were all good workers. The next morning General Foreman Philips told the girls in the presence of Potts , according to Eloise , that he , Philips, did not like anyone going over his head or Mr. Obenlander's head . This state- ment is not denied by Philips, Potts , or Hensen and is corroborated by both Barker and Kay. About the same time Obenlander came up and , according to Eloise , told them that he was the foreman and if the girls had problems that they should tell him about them . Again, Kay and Barker corroborate this con- versation while Hensen does not deny it. Oben- lander, however , does deny speaking with the grin- ders about their visit to Krause . I do not credit Obenlander 's testimony. On September 19, 1967, the grinders and Connie Stanley took their usual 10:30 break. As they sat down, Kay said she was going to the washroom and left. This was corrobarated by both Barker and Eloise . A conversation then ensued among the girls during which Eloise said that she "wasn 't going to kiss anybody's rear end, any foreman or anybody, for my job. I didn 't say any names . I didn 't refer to FURNAS ELECTRIC COMAPNY anybody. It was a statement that I made." Stanley then asked Eloise, "Are you referring to me?" Eloise did not reply, the bell rang, and, as break- time ended, Kay returned. Stanley then asked Eloise to apologize to her, to which Eloise replied "I didn't say it was you. I didn't say any names." Stanley then went to Obenlander. Barker's testimony was generally corroborative of Eloise's. According to her, Eloise said that "If there weren't so many brown nosers or people kissing somebody's behind none of this would have happened in the first place. She didn't mention any names." Hensen testified that she heard Eloise say "We all must stick together. There is too many brown nosers around here and we shouldn't be kissing nothing- Bob Potts and Ed Obenlander. We shouldn't be kissing their ass." When counsel for the Respon- dent asked "Did she say that to Cornelia Stanley," Hensen answered, "Yes." Also, in answer to a similarly leading question from counsel for the Respondent, "Was Kay Vander Valk present during this conversation," Hensen answered, "Yes."t Stanley's testimony concerning this incident is substantially different. According to her, Eloise looked at her and said "If you continue working here you'll be kissing Ed and Bob's-." To this Stanley allegedly replied, "Eloise, you don't mean that." Eloise answered, "Yes, I do," and asked Kay "Isn't that right?" Kay replied, "You're damned right it's right." Stanley further testified that she asked Eloise, "You don't mean what you said to me," but Eloise replied, "You're damned right I mean it." She then went to Obenlander and asked him to go to Foreman -Philips. When Obenlander asked "What is wrong?" Stanley allegedly replied, "Go to Mr. Philips' office and I will tell you there." Obenlander's version of this incident differs in material respects from the version given by Stanley. According to him, Stanley related to him that Eloise had told her that "if she were to continue doing her job and listening to what Mr. Obenlander and Mr. Potts said she would be a brown nose or worse than that, worse words than that; that she should go along with the rest of them and not listen to what Mr. Potts told or ask him to do anything and this would cause Potts to lose his job for not having any work." This rather elaborate recital is to be contrasted with Stanley's testimony to the effect that she told Obenlander nothing, only asking him to go to Philips. Moreover, Obenlander's testimony is at variance with an affidavit given by him to a Board agent. In that affidavit Obenlander says nothing about Stanley's complaint to him except 1 Counsel for Respondent persisted in using leading questions to his own witnesses , despite my repeated warnings that the answers to such questions would not have much probative value At one point I suggested that he avoid questions answerable by "Yes" or " No" as such questions 7 that she "came up to me and said that if I didn't get her out of here at that time she was going to pull out every hair in Eloise Guenette's head." It is sig- nificant that Obenlander's statement in that af- fidavit was given in response to the agent's question "what happened that day prior to the girls' termina- tion?" Moreover, Respondent's attorney was present when the affidavit was given. Finally, I note that Kay Vander Valk's presence is not mentioned by Obenlander either in his testimony or in his af- fidavit. Obenlander further testified that after Stanley told him what had happened he took her to see Philips where Stanley again related what happened. Philips, however, did not corroborate this version of the event. According to him, it was Obenlander who told him that Kay and Eloise intimidated Stan- ley. Philips then tried to calm Stanley who was cry- ing and sent her to the washroom. Obenlander went back to the department. Later Philips called Obenlander and told him that Obenlander was going to have to discharge Kay and Eloise on grounds of insubordination and instructed him to bring the girls to his office and discharge them there. Accordingly, Obenlander sent Kay and Eloise to Philips' office where Obenlander accom- panied them. There the two girls were discharged, but the details of the termination interview are re- lated somewhat differently by the participants. According to Kay, as they entered Philips' office, Obenlander turned to the girls and said they were discharged. When the girls asked for a reason, Obenlander replied that Stanley was upset and that the girls had called her names . Kay denied making any statement to Stanley , explaining that she was not there. Eloise corroborated Kay's absence. Philips then said Kay was also insubordinate. Kay denied being insubordinate, claiming that Oben- lander had told her that she was one of his best workers and that she wouldn't have to worry about losing her job. She then turned and asked "isn't that right, Ed?" to which Obenlander answered "yes." Kay still pressed Philips for a reason for the discharge. Philips then retorted, "How about lack of work?" Kay answered that they had plenty of work and that Philips knew it. Thereupon, Philips replied that Eloise and Kay were " instigators, that we was instigating everything going on in that de- partment, and we were causing trouble." Kay then said that the only troublemakers were Obenlander and Potts. Philips said, however, that Obenlander had reported Kay fighting with Potts. Kay explained that Potts had accused her of turning out wrong were often improperly leading Although counsel objected vigorously to my suggestion, I note Wigmore's agreement Wigmore , Evidence §705 (3ded ) 8 DECISIONS OF NATIONAL LABOR RELATIONS BOARD parts. This Kay had denied and , at her request, Obenlander and she had gone down to the inspec- tion room where they checked the parts and found them perfect. When they returned , Obenlander told Potts the parts were perfect to which Potts replied that he had checked them , not in the inspection room , but in the toolroom . They thereupon went to the toolroom and found that the parts were wrong according to the toolroom gauges . Obenlander then instructed Kay to follow Potts instructions, which she did. After explaining this incident to Philips, Kay once again demanded a reason for the discharge, arguing that her behavior was not insubordinate. Philips replied , " I don't have to give you a reason." Philips ordered her to punch out her timecard and go home . When she went to get her timecard she found it was already punched out. Eloise corroborated Kay's version of the incident, adding that she told Philips that during the break, while Kay was away in the washroom , Eloise had said that she, Eloise , was not "going to kiss any- body's rear end, any foremen or anybody, for my job," but did not mention any names or refer to anybody. Philips testified that after Obenlander and Stan- ley had come to him with the name-calling story he spoke to Works Manager Krause and recom- mended the discharge of Eloise and Kay because "the girls" were not paying attention to their work and they had caused Stanley some distress by name-calling . According to him , the alleged name- calling constituted a "false, vicious or malicious" statement and the failure to attend their machines constituted insubordination giving cause for im- mediate dismissal under company rules. He further testified that Obenlander had warned the girls on the morning of September 19 not to leave their machines unattended, but when Obenlander returned to the department after visiting Philips with Stanley he found Kay and Eloise talking and reported this to Philips . When Obenlander came to Philips' office with Kay and Eloise and told them that they were discharged , Obenlander allegedly said they were discharged for leaving their machines and not paying attention . To this Philips added that they could be terminated for "in- timidating" another employee and instructed Oben- lander to discharge them for insubordination and see that they get punched out . Philips' version of the incident was corroborated by Obenlander. Neither Philips nor Obenlander attempted any in- vestigation to determine whether Stanley's version of the name-calling or Kay's and Eloise 's version was correct . Moreover, Obenlander admitted that Philips had spoken to him "on many occasions" about the machines being idle ever since March or April 1967. Nevertheless , Obenlander issued no written warning slips to any of the girls for leaving their machines , for talking , for idleness , or for turn- ing their backs on the machines when the machines were running . Indeed , when asked by counsel for the General Counsel , " Do you remember turning their back on the machines at all?" Obenlander replied, "No." With respect to Obenlander's testimony that Kay and Eloise talked while work- ing, I note that Respondent 's, witness , Hensen, testified that all the grinders talked during work hours . Barker testified that when Obenlander told all the grinders to cease talking , they all abided by this instruction . I note further that Works Manager Krause admitted that the alleged inattentive machine operation continued for at least a month after Kay and Eloise were terminated . No discipli- nary action was, however , undertaken . Indeed, it appears that instead Obenlander and Philips in- stituted a system of relief operators after these ter- minations. There is no question that an employer may law- fully discharge an employee for any reason pro- vided the reason is not conduct protected by the Act. Moreover, the General Counsel has the bur- den of proving that the discharge was for an unlaw- ful reason . The Board has held, however, that the General Counsel proves a prima facie case of un- lawful discharge by showing that: the discharged employees had made com- plaints about working conditions which were a protected, concerted activity, that Respondent was aware of such complaints and resented them, that the discharges were made soon after the complaints were registered , and that Respondent contemporaneously refused to give a reason for the discharges to the discharged employees . These facts warrant the inference, unless rebutted , that the complaints were the reason for the discharges . ( Interboro Contractors, Inc., 157 NLRB 1295, 1301.) Under such tests it is clear that the General Coun- sel has, in this proceeding , established a prima facie case of unlawful discharge. It became incumbent upon the Respondent to rebut such inference. This it has failed to do . Obenlander and Philips resented the action of the grinders complaining to Krause about working conditions . Both said as much to the grinders . Eloise and Kay, however, were particu- larly offensive to Obenlander by reason of their union activity of the months previous. It seems clear beyond question that he and Philips regarded Kay and Eloise as ringleaders . Philips indicated as much when he called them "instigators, instigating everything going on in that department and causing FURNAS ELECTRIC COMPANY trouble." It is also clear that they undertook to rid themselves of these two employees, with or without reason . The testimony of Philips and Obenlander raises two distinct grounds for the discharge of Kay and Eloise : insubordination and the making of false, vicious, or malicious statements concerning Stan- ley, either of which would be sufficient for their im- mediate dismissal under company rules. With respect to their alleged insubordination, I note the testimony of Obenlander to the effect that Kay and Eloise were guilty of talking while work- ing. Respondent's witness Hensen, however, testified that such behavior was common among all the girls. As respects inattentiveness during the machines' operation, I note the testimony of Oben- lander to the effect that Philips had spoken to him on many occasions about the machines being idle ever since March or April of 1967. If this were a serious offense, it would appear natural for Oben- lander to have issued some warning slips to some of the girls for leaving their machines or for idleness in March, April, June, July, August, or September. He did not do so, however. If Kay and Eloise were the outstanding delinquents in this respect, one would expect further that, with their departure from the employ of the Respondent, conditions would have improved, but Works Manager Krause admitted that this inattentive machine operation continued for at least a month after Kay and Eloise were ter- minated and continued without any disciplinary ac- tion being taken. Moreover, it appears that some of the offending inattentiveness of the grinders was, not only permitted by Obenlander but even en- couraged. Thus, it is undenied that Obenlander told his grinders He didn't care if there was any reading going on in the department ... he didn't care what we did when he was there, just to watch what we did when the big wheels were around. Obenlander himself read newspaper during work hours. Also, during July and August he repeatedly called Kay from her work to write personal letters for him, answer his telephone, and clean his desk. Hensen also left her machine to stand by Kay whom she asked to write personal letters for her. Accord- ing to Kay, even Stanley sold nylons during work hours. Although Stanley denied doing this on work- time, I do not credit her testimony. Stanley's denial is weakened by other portions of her testimony which were contradicted by Respondent's wit- nesses. Thus, although Stanley denied that she talked during work, but that only Kay and Eloise did so, Hensen testified that all the girls talked. Also, although Stanley testified that only Kay and Eloise stopped work before lunch time and returned late from lunch, Hensen testified that she herself left before lunch to wash and occasionally 9 returned late. Obenlander, in his testimony, also ac- cused Kay and Eloise of pacing back and forth on the day of the discharge despite his warning to cease. In the affidavit given by him to a Board agent, however, there is no mention of Kay's pac- ing. Additional doubt is cast on Respondent's argu- ment that these girls were discharged for insubor- dination. Philips testified that he told Krause that because of the Stanley incident he was going to ter- minate Kay and Eloise for insubordination. Krause, however, testified that Philips did not tell him the reason for discharging them. I conclude that the absence of Kay and Eloise from their machines or their inattentive operation of those machines was not the real reason for their discharge. Similarly, I conclude that the alleged name- calling incident which Respondent labels as a false, vicious, or malicious statement uttered by Eloise and Kay was not the reason for their summary dismissal. I have carefully considered the demeanor of the several witnesses who testified about this in- cident concerning Stanley. I am persuaded that the version given by Kay and Eloise and corroborated by Barker is a more credible one. Not only was their presentation more persuasive, but it suffered from none of the inconsistencies and contradictions which beset the versions given by Respondent's wit- nesses. Stanley testified that Eloise told her "If you con- tinue working here you will be kissing Ed and Bob's-." Eloise, however, testified that she told the assembled grinders while Kay was in the washroom that she, Eloise, "wasn't going to kiss anybody's rear end" for her job, referring to no one in particular. Eloise's testimony was corroborated by Barker. Stanley's testimony was corroborated by Hensen. But the probative value of Hensen's testimony is considerably diminished in view of the fact that her answers were given in response to leading questions from counsel for the Respondent. More doubt is cast on Stanley's testimony in view of Obenlander's contradiction of other portions of her testimony. Thus, although Stanley testified that after the alleged name-calling incident she went to Obenlander and asked him to go to Philips, refusing to tell Obenlander what had happened until she got to Philips' office, Obenlander testified that Stanley told him what had happened and repeated the story when they went to Philips' office. Obenlander's testimony, however, is contradicted by an affidavit which he gave earlier to a Board agent, wherein he stated only that Stanley came up and told him she would pull out Eloise's hair if Obenlander did not get Stanley out of there. Philips, in turn, contradicts some of Obenlander's testimony. Thus, although Obenlander testified that Stanley told him and 10 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Philips what had happened, Philips testified that it was Obenlander who told him about the incident. Finally, it appears to me that Philips and Oben- lander misconstrue the company rule with trespect to false, vicious, or malicious statements. Stanley's version of Eloise's statement was merely that by continuing to work she , Stanley , would be " kissing Ed and Bob's-." This would hardly appear to be a "false , vicious, or malicious statement " concerning Stanley. Rather, such statement, if made, could be deemed an interference with or coercion of Stan- ley. Indeed, Philips in his testimony referred to that statement as "intimidation " of Stanley . But inter- ference with or coercion or intimidation of another employee does not give rise to immediate dismissal under the rules of the Company, but only to the im- position of "penalty points" warranting a 1-day layoff. Assuming, nonetheless , that the alleged state- ment was made to Stanley and constituted a "false, vicious, or malicious" statement, it would appear only reasonable for an employer to satisfy himself that such a statement was made before summarily dismissing the alleged offender. Neither Philips nor Obenlander, however, made such an effort. I am further convinced that had they made such an ef- fort they would have found that neither Eloise nor Kay was guilty of such remarks to Stanley. I base this conclusion on the fact that Stanley's version was not corroborated by anyone except Hensen and Hensen did so only after counsel for the Respon- dent put that critical issue to her in the form of a leading question. Barker, on the other hand, did corroborate the version given by Eloise and Kay, including the statements that Kay was not even present during the incident. In effect, this was cor- roborated by the testimony of both Philips and Obenlander, neither of whom testified that they were told that Kay was present. I conclude that neither insubordination nor the making of a false, vicious, or malicious statement was the real reason for the discharge of Eloise and Kay. Rather, the inference remains that their union and concerted activities were the real reasons for the discharges. I have concluded that Kay and Eloise had engaged in concerted and protected ac- tivity as well as union activity. Their union activity consisted of solicitation for the Union. Obenlander saw Jay give Eloise a union card on May 25, 1967. He was also aware of Eloise's union activity when he asked her if she was going to be the union steward. Reference has already been made to the several instances in which Obenlander spoke with Kay and Eloise about their union activities. In addi- tion, Kay and Eloise also engaged in concerted pro- tected activity when they as well as the other grin- ders went to Krause to complain about Obenlan- der's supervision.2 Obenlander and Philips knew of this complaint as evidenced by their immediate out- spoken objection conveyed to the grinders for their going "over his head." Although all the grinders had participated in this concerted protected activi- ty, Eloise and Kay, however, were singled out as "instigators," a result that is easily understood because of their known union activities. Thus, about I week after they had engaged in protected concerted activity they found themselves discharged in a termination interview which was marked by vacillating reasons advanced by Philips culminating in his remark that he did not have to give any reason for the discharges. I conclude that Obenlander and Philips singled out Eloise and Kay, the known union leaders, and discharged them for the protected concerted activity in complaining about work conditions to Krause. D. The 3-Day Suspension of Alan Carlson Employee Alan Carlson attended the union meet- ing on May 25, 1967. There he received about 50 authorization cards which he later passed out and succeeded in obtaining the signatures of about 20 employees to these cards. In addition, he spoke to other employees about the Union almost every day. On December 4, 1967, he left his department during his coffeebreak period and went to depart- ment 37 which was about 200 yards away. There he checked the timecard rack to see if certain employees who were on a list of names from the Union were still employed by the Respondent. He was seen doing this by an inspector who spoke to him. Respondent's Vice President Swaim walked by at the same time. On his way back to his own de- partment, he stopped to speak with some employ- ees in another department and saw Works Manager Krause there as well. Swaim testified that he saw Carlson looking at the timecards, as a result of which he requested Krause to find out what Carlson was doing out of his department. Krause testified that he saw Carl- son out of his department talking to two other em- ployees. On the following day, according to the uncon- tradicted testimony of Carlson, Carlson's super- visor, Foreman Brown, asked Carlson if he had left his department the previous day. Carlson admitted that he had and Brown told him that this was against the rules but that he did not think Carlson would receive a violation warning. Nevertheless, on the next day, Brown told Carlson that he had to 2 Better Val-U Stores of Mansfield, Inc, 161 NLRB 762 FURNAS ELECTRIC COMPANY give him a violation warning . To this Carlson replied , " It was a good thing that ... I wouldn't receive any days off ... because I would have filed charges with the NLRB." Continuing, Carlson testified that Brown "just looked at me a little strange and he said he was familiar with such activi- ties because he himself had worked in organizing unions." Later the dame day, however, Brown showed Carlson the warning slip which Carlson had signed . On it had been added , "accumulate 6 points, 3 day's layoff; layoff 12-78-11 per Floyd Brown." According to the uncontradicted testimony of Carlson, Brown told him that Brown had told Respondent's industrial relations manager, Polzien , what Carlson had said and Polzien had replied, "Well, give him 3 days off." Upon closer questioning , however , Carlson testified , " He gave me the impression that he had told Mr . Polzien what I told him about filing charges and Mr. Pol- zien to the effect said that in that case we will give him 3 days off." Counsel for the General Counsel argues that the direct and precipitating cause of Carlson 's layoff was his statement that he might file unfair labor practice charges , a violation of Section 8(a)(4) of the Act, citing Hydraflo Valve & Manufacturing Co., 158 NLRB 730, 736. The question , however, is whether Carlson 's layoff was due to his threat to file an unfair labor practice charge. There is no question but that Carlson 's behavior in absenting himself from his department was a violation of company rules . There is also no question that this violation was his second violation and that as a result he had accumulated a sufficient number of penalty points warranting a 3-day layoff. I am not convinced that the layoff was precipitated by his threat to file charges . Carlson's testimony was weakened when he stated that Brown "gave me the impression that he had told Mr . Polzien what I told him about filing charges," and "Mr . Polzien to the effect said that in that case we will give him 3 days off." The 3-day layoff was fully warranted under company rules and Carlson himself agreed that the rulebook penalties were "automatic." His "impressions " of what Brown had told Polzien and what Polzien had said lacks sufficient probative value to establish that the layoff was due, instead, to his threat. I conclude, therefore, that counsel for the General Counsel has not sustained his burden of proof to establish that Carlson's 3-day layoff was a violation of Section 8(a)(4) of the Act. E. Respondent's Announcement and Grant of Employee Benefits Prior to the Election of June 24, 1968 As related earlier in this Decision, the Union held its first meeting in May 1967. It thereafter con- 11 ducted an organizational campaign at Respondent's plant and on December 27, 1967, filed a petition for certification as representative. The election of January 29, 1968, which was held pursuant thereto was lost by the Union. On February 2, 1968, the Union filed objections to conduct affecting the results of the election. The Regional Director for Region 13 of the National Labor Relations Board issued his report on these objections on May 21, 1968, and directed the hold- ing of a second election . This report on objections and direction of a second election was received by the Respondent on May 23, 1968. On May 27 , 1968, the management action com- mittee of the Respondent, consisting of certain su- pervisory and executive personnel , met to discuss, among other things, the wage levels and benefits of Respondent 's employees . It was noted at that meet- ing that Respondent had not granted a general wage increase since October 1966 and that its wage program had been interrupted or deferred because of union activity. The minutes of that meeting further state: It was the concensus of the committee that since the Company had received the majority of votes in the Union election held in January and that we were entitled to a certificate of election , we would no longer defer action on improving our employees rates and benefits. The committee approved a 20-cent-per-hour in- crease to be effective June 3 , 1968, and, in addi- tion, approved a change in the paid vacation schedules to allow 20-year employees a 4-week va- cation and 10-year employees a 3-week vacation. Prior thereto the vacation practice had been to allow 4 weeks to 25 -year employees and 3 weeks to 15-year employees . The committee also approved one additional paid holiday and decided to consider further general wage increases to be effective in September 1968 if business conditions continued to improve. On June 3, 1968, Respondent President Lisman addressed the employees and informed them that effective on that date employees would receive a wage increase and other benefits . Among other things, Lisman said: I am sure that many of you are tired of the long, drawn out union organizing campaign to which you have been subjected for the past 14 months. The Union started their organizing drive in April of 1967. Since that time the company has been working under a serious handicap, and you have been victimized by it. Under the law, the company is prohibited from changing the rates of pay, the fringe benefits, and other conditions of employment, while a union organizing campaign is in progress. 12 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ... I am sure that all of you can appreciate this unfair position in which the company is placed and that our delay in making changes and granting benefits was not one of our choice but rather due to legal compulsion. When the Union failed to obtain a majority of the votes of our employees in the NLRB elec- tions held on January 29th of this year, we ex- pected to receive the certificate of election to which we were entitled , so that we would be legally free to launch our program of changes for your benefit. Unfortunately , the Union refused to accept defeat and raised many questionable and unfounded objections to the conduct of the election in order to further delay any program that we have in mind plac- ing in effect with our relationship with you. ... We do not intend to have you further vic- timized by this procedure and have determined to carry out action to make changes in our em- ployment relationship which we have felt are long overdue , not through any fault upon our part but due to legal barriers which stood in our path and due to unfounded objections made by the Union to the NLRB. ... We have now become disgusted with in- decision on the election outcome and have de- cided to renew our employee relationships as they have been in the past. Lisman also announced the wage increase and addi- tional paid holiday approved by the committee as well as the elimination of the Company 's demerit system and the institution of overtime on a seniority basis, all of which represented improvements in the terms and conditions of employment for Respon- dent 's employees. Lisman's talk to the employees was followed by a letter signed by Industrial Relations Director Pol- zien dated June 17, 1968 , in which the "improved benefits " in the employees ' terms of employment were elaborated on and explained. The second election was held on June 24, 1968, and once again the Union lost. The complaint in Case 13-CA-8723 alleges that the Employer 's offer and grant of certain specified benefits were made "in order to induce its employees to refrain from becoming or remaining members of the Union and/or from giving support or assistance to the Union " in violation of Section 8(a)(1) of the Act. The basic principles affecting an employer 's right to confer benefits to his employees while a representation election is pending have been stated repeatedly by the Board: Although the granting of benefits during the relevant period preceding an election is not necessarily cause for setting aside an election, the Board has set aside elections where it ap- pears that the granting of the benefits at that particular time was calculated to influence the employees in their choice of a bargaining representative. In the absence of evidence demonstrating that the timing of the announce- ment of changes in benefits was governed by factors other than the pendency of the elec- tion, the Board will regard interference with employee freedom of choice as the motivating factor. The burden of establishing a justifiable motive remains with the employer. (The Bal- timore Catering Company, 148 NLRB 970, 973.) The Board has further held that additional bene- fits granted while objections to a representation election are pending and unresolved, and with the possibility that a second election may be directed by the Board, would be suspect. Northwest En- gineering Company, 148 NLRB 1136, 1145. Here the direction of a second election was more than a possibility. Respondent had received such direc- tion on May 23, 1968. Four days later the Re- spondent's management action committee dis- cussed increased employee benefits and recom- mended the changes which were announced to the employees on June 3, 1968. There is no doubt, therefore, that Respondent's grant of new benefits as well as their announcement was made by the Respondent knowing full well that a second elec- tion had been directed. Under such circumstances, counsel for the General Counsel has established a prima facie case that the grant of these benefits at such a time was a violation of Section 8(a)(1) of the Act, interfering with the exercise of a free choice in the June 24 election. The burden then passed to the Respondent to establish a justifiable motive. Counsel for the Respondent argues that the Com- pany "was experiencing a serious and vital person- nel problem for failing to implement the recom- mendations of the Management Action Committee. Other industries in the area were attracting appli- cants for employment on the basis of their higher wages and more liberal fringe benefits. Conditions became so bad that the company was not getting any responses to their advertisements for help, and no applicants for employment were appearing at the door of the personnel office." The record, however, lacks sufficient evidence of probative value to support the argument of counsel for the Respondent. In support of its argument that the grant of addi- tional benefits was motivated by business con- FURNAS ELECTRIC COMPANY siderations, Respondent submitted copies of four want ads it placed in local newspapers between September 24 and October 29, 1967. One ad called for a secretary, two ads called for missile guidance controllers, aircraft crew chiefs, radar technicians, ship electricians, electrical technicians, stock selec- tors, and material handlers. The fourth ad called for an assembler-wirer and inspectors for the punch press department. In none of these ads was any specific salary shown. The ad for a secretary merely said that the salary would be "commensurate with ability and previous experience." The ad for assem- bler-wirers and inspectors merely said "These openings pay well and our employees enjoy an ex- ceptional benefit program including regular wage reviews." The other two ads said nothing about benefits or pay. Counsel for the Respondent also submitted a number of newspaper ads placed by other em- ployers in the area during May and June 1968 These were ads for assemblers, drill press opera- tors, machinists, food packaging, warehousing, and processing trainees, chemical operators, unskilled male laborers, printers, cost accountants, helpers plant trades, light assembly workers, electronic testers, beginning draftsmen, and clerk typists. In all of these ads the hourly rate was prominently dis- played. Counsel for the Respondent also points to the testimony of Polzien on this issue: Q. (By Mr. Cusack))Mr. Polzien, were these exhibits 23 and 24A to 24T inclusive [the help wanted ads placed by the Respon- dent as well as by competitive employers in that area] considered by the management ac- tion committee in the discussion of the wage program in the period from September of 1966-strike that-in the period from the time they appeared in those newspapers and when the wage increase was granted on June 3, 1968? A. They were. Other than the answer of Polzien to counsel's leading question , the record is devoid of any testimonial evidence establishing that Respondent had difficulty filling its jobs because of competitive pay rates from local employers. The mere conclu- sionary statement of witness Polzien quoted above is, in my opinion , insufficient evidence of Respon- dent's "serious and vital personnel problem." If in- deed there was a " serious and vital personnel problem" there should have been some direct testimony on that score. The mere fact that the Company placed a few ads for help in September and October 1967 does not necessarily lead to the conclusion that the needs continued until May and June of 1968 when the ads of competing employers 13 appeared. Moreover, the Respondent's labor needs were not at all like the occupations advertised for by the competing employers of that area. Finally, there is no evidence that the Respondent had any difficulty in filling the positions for which it ran ads. Polzien's statement that the Company's ads and the competing employer's ads were considered by the management action committee when it met to discuss employee benefits is not corroborated. One would expect that such motivation would have been mentioned to the employees when Lisman ad- dressed them. Lisman, however, made no mention whatever of any difficulty obtaining help or retain- ing help. His repeated reference was merely to the delayed benefits which he thought the employees deserved. Moreover, he specifically expressed dis- appointment with the indecision of the election out- come and told them that the Company's "delay in making changes and granting benefits was not one of our choice but rather due to legal compulsion," adding that the Union refused to "accept defeat" and raised "unfounded objections to the conduct of the election" to delay Respondent's program, thus emphasizing its generosity while blaming the Union for any delay in benefits. The timing of these opinions so near the date fixed for the second elec- tion makes it evident to me that Respondent's pur- pose was to induce employees to vote against the Union, N.L.R.B. v. Exchange Parts Co., 375 U.S. 405, and constitutes an interference with the rights of employees protected by the Act, in violation of Section 8(a)(1), requiring a remedial order. F. Other Unfair Labor Practices The complaint, as amended, in Case 13-CA-8096 alleges a number of other activities by the Respondent constituting unfair labor practices within the meaning of Section 8(a)(1) of the 'Act. Thus, at paragraph VII of the complaint it is alleged that the Respondent instituted a change from biweekly paychecks to weekly paychecks. Record evidence indicates that this change was instituted around September 15, 1967, long before the Union petitioned for certification as representative of the Respondent's employees and there appears to be no connection between it and the union campaign. I shall, therefore, recommend dismissal of this allega- tion of the complaint. At paragraph VIII(c) it is al- leged that Obenlander told the employees on or about May 25, 1967, that there would be fixed production schedules if the Union became their bargaining agent. At paragraph VIII(d) it is alleged that Obenlander told the employees on June 1, 1967, that they would not be allowed to get away with mistakes if the Union became their bargaining agent. At paragraph VIII(f) it is alleged that Super- 14 DECISIONS OF NATIONAL LABOR RELATIONS BOARD visor Philips on September 18, 1967, threatened employees with discharge, if- they protested in con- cert. There is insufficient record evidence to sup- port these allegations and I shall therefore recom- mend the dismissal of such allegations. Also, at paragraph VIII(g) of the amended complaint it is alleged that the Respondent threatened on January 22, 1968, that the selection of the Union might have serious effects on the employees. Such a state- ment was made, according to record evidence, shortly before the January election. I do not con- sider such a statement, however, to be a threat to, interference with, intimidation of, or coercion of the employees within the meaning of Section 8(a)(1). Certainly it cannot be denied that the results of an election "may have serious effects" on the employees participating, but this does not necessarily mean harmful effects. Paragraph VIII(h) of the amended complaint alleges that the Respondent threatened on January 22 that the em- ployees would lose benefits and legal rights if they joined the Union. Record evidence indicates that on that day the Respondent told its employees You will be paying dues and assessments as well as losing your freedom. The Union would undoubtedly demand a contract that requires everyone to join the Union and pay dues whether you want to or not. If you fail to pay, they will probably enforce their right to de- mand that the Company discharged you. You will lose your right to conduct your own affairs in a way you feel is best for you. You would have to do business through a middleman-the union official who now has great power and does not readily give it up. If you fail to follow the union rules , you can be fined or expelled from the union. These comments in my opinion do not constitute any threat of what the Employer would do if the employees joined the Union. At most it constituted the Employer's opinion of what the Union might do and not what was within its power to make come true. Lenkurt Electric Company, Inc., 169 NLRB 941. 1 shall therefore recommend the dismissal of this allegation of the amended complaint. Finally, paragraph VIII(i) of the amended complaint alleges that President Lisman on January 22, 1968, told the employees they could lose their jobs for failure to follow union rules if the Union became their bar- gaining agent. Record evidence indicates that on that day a letter signed by Lisman was distributed to the employees in which they were told that if they joined the Union they would "lose your freedom through restrictions under union rules that may be placed upon your right to improvement, by transfer to another department .... lose your right to refuse to join a union which right is given you under Section 7 of the National Labor Relations Act ... lose your right to continuous employment, wages and security in your job if a strike is called." Here , too, the disadvantages of union membership expressed in terms of losses are not within the power of the Respondent to effectuate but are merely its predictions of what the Union can do to the employees . I shall recommend the dismissal of this allegation of the amended complaint as well. The complaint in Case 13-CA-8069 , however, alleges a number of other incidents as unfair labor practices . Although these have not been categorized by any of the parties as issues in this proceeding , they were , nevertheless, fully litigated. Thus, I have found on the basis of the testimony ad- duced at this hearing that the Respondent, through its admittedly supervisory agent Obenlander, told the employees they would have to set up their own machines if the Union got in . This represented an additional job duty and supports the allegation at paragraph VIII(a). I have also found that Oben- lander told Eloise that the employees would "probably be all sorry and . .. would lose the profitsharing , the Christmas bonus, and all the things that we did have then ." This supports the complaint's allegation at paragraph VIII(b). I have also found that Obenlander told the girls that they were being watched and warned them not to get caught passing out union cards , supporting the complaint at paragraph VIII(e). I have also found that Obenlander interrogated the employees concerning their union membership activities and desires, supporting the complaint's al- legation at paragraph IX. These activities of the Respondent are clear violations of Section 8(a)(1) of the Act in that they created an atmosphere of fear tending to interfere with the employees' exer- cise of their rights under the Act and require a remedial order. IV. THE OBJECTIONS TO THE ELECTION OF JUNE 24, 1968 A. Objection I Objection 1 by the Union to conduct affecting the outcome of the election held on June 24, 1968, alleges that the Company resorted to the use of deceitful and misleading campaign utterances ... to create an at- mosphere of fear amongst its employees, calcu- lated to influence their vote against the Union by repeatedly misrepresenting to its employees, that dire consequences were sure to follow should they vote in favor of union representa- tion in the election. FURNAS ELECTRIC COMPANY 15 Under III(E) above I have concluded that the Company had predicted additional job duties and the loss of certain employee benefits if the Union got in , and that these activities were committed during the critical period which in this case began running from the date of the first election in Janua- ry 1968. (The Singer Company, 161 NLRB 956, fn. 2.) Such activities have been found not only viola- tive of Section 8(a)(1) of the Act but are also reason for setting aside the election held on June 24, 1968, and I recommend that Objection I be sustained. B. Objection 2 The Union alleges in Objection 2 that the Com- pany engaged in activities deliberately calculated to convey to its employees that the designation of the Union as their collective bargaining agent was futile; that the employees had nothing to gain , and much to lose, because the Company could refuse to negotiate a labor agreement with the Union, and that they would not sur- render their right to having the final word on all the decisions affecting its employees; and finally, that the outcome of the election could not change this fact. I find insufficient evidence in this record to sup- port this objection of the Union nor does counsel for the General Counsel or counsel for the Charg- ing Party cite record evidence in their briefs to sup- port this objection. I recommend this objection be overruled. C. Objection 3 The Union's Objection 3 alleges that the Com- pany appeared at the plant gate on the morning of the election to distribute anti-union literature which gave cause to many employees to be- lieve they were under surveillance with the result that they were afraid to stop and take literature from the union agents, and, inti- mated other employees who were assisting the union agents in the distribution of literature to the extent that they felt their jobs were in jeopardy and prematurely left the distribution to enter the plant. Record evidence indicates that on the morning of June 24, 1968, Respondent President Lisman and other managment representatives stationed them- selves on public property in front of the Company's parking lot. There, as company employees came to work, they handed them a mimeographed sheet signed by Lisman which urged the employees to vote against the Union at the election that was to be held that day. Union organizers also stationed themselves in front of the Company's parking lot and also distributed circulars to the employees. The union representatives , however , were stationed be- hind the Company's representatives so that the em- ployees were contacted by the company representa- tives before reaching the union representatives. One union representative testified that some of the employees accepted the management circulars but did not stop for the union circulars as they normally had done before. He added that Lisman and the other management representative sometimes talked to the employees as they stopped to take the circu- lars. The nature of their conversation or the length of these conversations is not indicated. The union representative admitted, however, that no one con- nected with management stopped or impeded him from distributing his handbills that day. Counsel for the Respondent urges that this objec- tion to the election be overruled citing the fact that the management activities took place off company property, in the same area in which union represen- tatives were distributing their campaign literature, and, that the union representatives were not im- peded by management representatives. He agrees that the Employer could not address a captive au- dience in the 24-hour period prior to the election but argues that this was not a captive audience and Respondent's behavior was merely an exercise of his right of free expression under Section 8(c) of the Act. Counsel for the Charging Party argues, however, ... the Furnas Electric Company is a pater- nalistic company in which the President of the Company occupies an exalted position in rela- tion to the employees. The Union urges that the Board recognize that the personal ap- pearance of the highest company executive to electioneer as employees enter the plant on election day had the effect of interfering with the fair conduct of the election by the Board. The Board in Peerless Plywood has outlawed employer captive meetings in a 24-hour period before the election. Mr. Lisman by stationing himself in front of the plant at a route which employees must cross circumvented the semi- isolated period the Board imposes on cor- porate executives and imposed himself beyond that which the Board should tolerate and inter- fered with the fair conduct of the election. I do not agree with the position of counsel for the Charging Party. The Peerless Plywood Company case, 107 NLRB 427, held that: ... Employers and unions alike will be prohibited from making election speeches on Company time to massed assemblies of em- 16 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ployees within 24 hours before the scheduled time for conducting an election . [ Emphasis supplied. ] Counsel for the Charging Party would equate the distribution of management circulars with the deliverance of a speech . Assuming that such equa- tion is proper it remains undisputed that it took place not on company time but before the em- ployee 's arrival at his work station . Moreover, it took place off company property , was not to a massed assembly , and admittedly was not coercive. I conclude that the doctrine of Peerless Plywood does not relate to the behavior of management representatives on election day as revealed by this record. Nor can I agree with the argument of counsel for the Charging Party that Lisman 's mere appearance to distribute inoffensive antiunion literature on election day had the effect of interfering with the fair conduct of the election . I know of no decision supporting this theory nor has counsel for the Charging Party cited any. Counsel for the Charging Party argues that Lisman occupied an "exalted position ." There is no record evidence to support this argument, but even if there were I know of no rule which forbids electioneering by "an exalted position" holder . Compare, for example, Mall Tool Company, 112 NLRB 1313, where the Board refused to invalidate an election although the em- ployer 's president visited the plants in two different cities and talked individually to about half of the employees at their places of work but without threats or promises of benefits . The Board refused to carve out any special conditions for that com- pany president. Here I see no reason for carving out any special exception for Respondent President Lisman and I find no authority or logic for creating special exceptions where the electioneering took place on election day and in conformity with the Peerless Plywood limitations . I shall therefore recommend that Objection 3 to the election be overruled. D. Objection 4 Here the Union objects, claiming that The Company ... impinged upon the free cho- ice of its employees in the election by an- nouncing wholesale changes in Company pol- icy which directly affected the employees; the promise and implementation of new benefits throughout the critical period , up to and in- cluding the day of the election, all calculated to influence and control the outcome of the election. In III(D), above , I have discussed the Company's announcement and grant of wage increases and cer- tain employee benefits which occurred on June 3, 1968, and were explained in a letter from Industrial Relations Manager Polzien 2 weeks later, on June 17. 1 have found that the Respondent has not satisfied its burden of establishing a justifiable mo- tive for the benefits promised and given the em- ployees shortly before the election. Indeed, I have concluded that its purpose was to induce employees to vote against the Union in the upcoming election. Such activity is an interference with employee freedom of choice and constitutes reason for setting aside the resulting election . I recommend that Ob- jection 4 be sustained. E. Objection 5 The Union's Objection 5 alleges that The Company ... interfered with the orderly procedure of the election when they omitted names of eligible employees from the list of eligible voters, changed the status of others, and instructed their agents to challenge their right to vote ; attempted to interfere with the procedure for voting agreed to by both parties and submitted to the Board for prior approval, all of which were calculated to intimidate the employees involved and to influence their cho- ice in the election. The record contains no evidence of the allega- tions contained in this objection. I therefore recom- mend that Objection 5 be overruled. CONCLUSIONS OF LAW 1. By its promulgation of no -solicitation and no- distribution rules prohibiting solicitation and dis- tribution of literature on company premises without regard to whether the solicitation was on work or nonwork time or the distribution was in work or nonwork areas, the Company has engaged in unfair labor practices within the meaning of Section 8(a)(1) of the Act , and its later modification of these rules was not sufficient to correct their il- legality. 2. By its threat of additional duties and lessened employee benefits if the employees vote the Union in, the Company has engaged in unfair labor prac- tices within the meaning of Section 8(a)(1) of the Act. 3. By telling the employees that their union ac- tivities were being watched, the Company created the impression of surveillance in violation of Sec- tion 8(a)(1) of the Act. 4. By interrogating its employees about union activities and desires , without demonstrating any legitimate justification therefor , the Company vio- lated Section 8(a)(1) of the Act. FURNAS ELECTRIC COMPANY 17 5. The Respondent's discharge of employees Eloise Guenette and Kay Vander Valk interfered with their right to engage in concerted activities for the purpose of mutual aid or protection in violation of Section 8(a)(1) of the Act and discriminated against them in order to discourage membership in a labor organization in violation of Section 8(a)(1) and 8(a)(3) of the Act. 6. The Company's announcement and grant of employee benefits prior to the election of June 24, 1968, was for the purpose of inducing employees to vote against the Union and constituted an inter- ference with the exercise of the rights guaranteed by the Act in violation of Section 8(a)(1) of the Act. 7. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. 8. The Company's 3-day suspension of employee Alan Carlson was not motivated by his threat to file charges with the Board and was not, therefore, in violation of Section 8(a)(4) of the Act. THE REMEDY Having found that the Respondent has engaged in certain unfair labor practices, I shall recommend that it cease and desist therefrom and take certain affirmative action which I find necessary to effectu- ate the policies of the Act. Having further found that the Respondent discharged employees Eloise Guenette and Kay Vander Valk in violation of Section 8(a)(1) and (3) of the Act, I shall recommend that the Respon- dent offer them immediate and full reinstatement to their former or substantially equivalent positions without prejudice to their seniority or other rights and privileges and make them whole for any loss of earnings suffered by reason of the discharge by pay- ment of a sum of money equal to that which they normally would have earned as wages from the date of discharge to the date of Respondent's offer of reinstatements less any net earnings during said period (Crossett Lumber Co., 8 NLRB 440) and, in the manner described in F. W. Woolworth Com- pany, 90 NLRB 289, together with interest thereon at the rate of 6 percent per annum as set forth in Isis Plumbing & Heating Co., 138 NLRB 716. Having found that the Respondent violated Sec- tion 8(a)(1) of the Act by its promulgation and maintenance of a rule prohibiting union solicitation during nonworktime and distribution of union literature in nonwork areas, I shall recommend that it cease and desist from maintaining such rule and notify its employees appropriately. Finally, consistent with the terms of the order consolidating Case 13-RC-11356 with the two complaints, I shall order that Case 13-RC-11356 be severed and remanded to the Regional Director for Region 13 for further action in accordance with Section 102.62(a) of the Board's Rules and Regula- tions. [Recommended Order omitted from publica- tion. J