United Mine Workers

UNITED.-MINE WORKERS W. A. Boyle, George J. Titler and John Owens, as agents for the International Union, United Mine Workers of America and as members of the Joint Industry Contract Committee established by the National Bituminous Coal Wage Agreement of 1950, and Edward G. Fox, Quin Morton, III, and Hamilton K. Beebe as agents for the Coal Operators Signatory to the National Bituminous Coal Wage Agreement of 1950 and as Members of the Joint Industry Contract Committee established by that Agreement and Arthur J. Galligan and Dixie Mining Company, Intervenor. Case 5-CE-6 November 4, 1969 SECOND SUPPLEMENTAL DECISION AND ORDER On August 27, 1963, the National Labor Relations Board issued its Decision and Order in the above-entitled proceeding, concluding that the Protective Wage Clause of the National Bituminous Coal Wage Agreement of 1950, as amended, is an agreement prohibited by Section 8(e) of the Act, and ordering Respondents to cease and desist from (a) maintaining, enforcing, or giving effect to the clause, and (b) entering into, actively maintaining, and giving effect to or enforcing any other contract or agreement, express or implied, whereby operators signatory thereto agree to cease or refrain from handling, selling, transporting, or 'otherwise dealing in any of the products of any other employer or from doing business with any other person, in violation of Section 8(e) of the Act.' On May 14, 1964, the Board received a motion filed by Respondent- Unions; stating that on April 2, 1964, they had negotiated and executed with representatives of the Respondent Operators named in the Board's Order a new agreement, known as the Bituminous Coal Wage Agreement of 1950, as amended April 2, 1964, which agreement fully and completely supplanted and superseded the 1958 Agreement. The Respondents' motion requested the Board to determine that the 1964 Agreement was not violative of Section 8(e) of the Act, and that Respondents therefore be adjudged to be in compliance with the Board's Order and that the case be closed. On August 7, 1964, the Board issued a Supplemental Decision and Order Denying Motion in which it concluded that the 1964 Agreement was nothing more than an implied union signatory agreement placing restrictions on subcontracting which are not "strictly germane to the economic integrity of the principal work unit" and was therefore not valid under Section 8(e) of the Act. Accordingly, the Respondent Unions' motion to be adjudged in compliance with the provisions of the '144 NLRB 228. 479 Board's Order was denied.2 On August 4, 1965, the United States Court of Appeals for the District of Columbia Circuit remanded the case to the Board for further consideration.3 Subsequently, on March 3, 1966, the Board, pursuant to the Court's remand, remanded the case to the Regional Director for Region 5 with instructions that a hearing be held before a Trial Examiner, for purposes of entering findings and conclusions, and to recommend an appropriate order, after hearing evidence on three issues which are set forth in the attached Trial Examiner's Decision. On May 11, 1969, the Board granted the motion of Dixie Mining Company to intervene and the proceeding came on for hearing in March 1967. On June 20, 1967, Trial Examiner Frederick U. Reel issued his Decision in the above-entitled proceeding, finding that the Respondents had not engaged in the unfair labor practices alleged in the complaint. Thereafter, the General Counsel, the Intervenor, and Respondent Quin Morton III filed exceptions to the Trial Examiner's Decision, and supporting briefs, and Respondents W. A. Boyle, George J. Titler, and John Owens, as agents for the International Union, United Mine Workers of America, filed cross-exceptions to the Trial Examiner's Decision, and a supporting brief. 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, cross-exceptions and briefs, its earlier Decision, Supplemental Decision, the Court's remand order, and the entire record in this case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner. The Court of Appeals remanded this case to the Board for consideration of certain issues in the light of the Board's characterization- of the Protective Wage Clause as "a union standards clause" and the Court's holding in certain decisions that "such a clause would not ordinarily violate 8(e) so long as it was germane to the economic integrity of the principal work unit; or sought to protect and preserve the work and standards [the Union] has bargained for." In view of the Trial Examiner's findings and conclusions on the issues remanded to him which we find are supported by the record in this case, we find that the Protective Wage Clause was adopted by the contracting parties in order to protect and preserve the "unit work" of employees covered by the contract by precluding the subcontracting of "unit work" to operators who did not maintain union standards. In so finding, we reject our dissenting colleague's view that the clause plainly violates Section 8(e) in its application to single employer "work units" '148 NLRB 249. '350 F.2d 801. 179 NLRB No. 80 480 DECISIONS OF NATIONAL LABOR RELATIONS BOARD because of its failure to distinguish between "substitute" and "supplemental" coal. First, as the Trial Examiner noted, the record contains no evidence as to the extent to which individual coal producers who sign the agreement enter into contracts for the sale of coal other than that which they produce. Second, the record does contain evidence that some individual coal producers - signatory and nonsignatory alike - do not engage in the practice of purchasing coal from other producers to supplement their own production; that it is a quite general practice for such, individual producers to sell their entire production to the operator - whether signatory or nonsignatory - from whom they lease the lands they mine; and that such coal is subsequently prepared for sale and is sold by the lessor-operator. In the light of this evidence, we agree with the Trial Examiner that the parties' stipulation that "the purchasing of coal by one producer from another producer is an essential marketing practice within the industry" does not establish the invalidity of the clause as applied to single employer "work units." Moreover, the Lewis affidavit submitted in support of the above stipulation indicates that many of the purchases made by one producer from another producer involve "substitute" coal. We also reject our dissenting colleague's conclusion that the stipulation establishes a prima facie case of violation of Section 8(e) as it is applied to associationwide "work units," and that it was incumbent on the Respondents to come forward with evidence rebutting such prima facie case. As the Trial Examiner found, the record discloses that the ostensible purpose of the clause is to prohibit the purchase of "substitute" coal by a signatory operator from operators whose labor conditions enable them to sell more cheaply, and discloses, as well, a potentially widespread area for lawful application of the clause. In, our opinion, the incidence of "supplemental" coal purchases by members of multiemployer work units reflected in this record is insufficient either to establish that the parties entered into this clause to achieve a secondary objective or that its failure to distinguish between "substitute" and "supplemental" coal gives it a wider application than is required to permit achievement of the admittedly lawful objective of preserving unit work and work standards. The statistical evidence introduced by the General Counsel to prove an unlawful application of the clause as to multiemployer units demonstrates that at all times when operators in such units were engaged in purchasing nonunit coal, the mines in the unit were producing at less than capacity, and that in 3 of the 4 years the productive capacity of the units involved exceeded the total amount of coal sold by operators in that unit. Only in 1 year did the total amount of coal sold exceed productive capacity, and, then, only by a di minim is amount of less than 2 percent. Obviously, the Union has a legitimate interest in restricting outside purchases of nonunit coal in order to promote fuller mining of existing capacity, and in preventing operators from purchasing "substitute" coal under the guise of "supplemental" coal. Moreover, ` it does not appear that practical means exist whereby either the Union or operators within a particular multiemployer unit can know at the time of any particular purchase that it involves "supplemental" coal because there is no unit coal available or idle capacity within the unit. This is not to say that the clause may not have been applied to purchases of coal which in hindsight may be seen to have involved "supplemental" coal. It is to say that the evidence of such application of the clause as was produced by the General Counsel does not constitute a prima facie case that the clause is not germane to the economic integrity of the work units. Accordingly, and as this Board has accepted the Court's view of the legality of protecting unit work through the medium of a union standards clause,4 we find that the Protective Wage Clause does not contravene Section 8(e), and we shall dismiss the complaint. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, and upon the entire record in this case, the National Labor Relations Board hereby orders that the complaint herein be, and it hereby is, dismissed. MEMBER JENKINS, concurring: I have previously indicated, at least with respect to the 80 cent welfare payment required per ton of coal purchased by union operators for resale on which the Union's 40-cent welfare payment had not been made, that the "work unit" which the clause sought to protect was nationwide in scope, and that the 80-cent clause therefore had a work protection object and did not violate the Act. Raymond O. Lewis, 148 NLRB 249. My colleagues, in finding the protective wage clause presently before us does not violate the Act, now seemingly agree that it does not become unlawful simply because the work it protects may be outside the scope of work performed by the individual producer, or even by a multiemployer association of such producers. I have no difficulty accepting this conclusion since it is embraced within my previously-stated view, above; it is unnecessary at this point for me to consider whether the "work unit" protected by the wage clause is nationwide in scope as I found it to be in the case of the clause protecting the welfare payments. Accordingly, I join in dismissing the complaint. CHAIRMAN MCCULLOCH, dissenting: I disagree with the decision to dismiss the complaint. 'See for example,,S.E. McCormick, Inc, 159 NLRB 84, International Union, United Mine Workers of America, 165 NLRB No 49 UNITED MINE WORKERS 481 This case was originally submitted to the Board on an agreed statement of facts. A Board panels found that the Protective Wage Clause (PWC) in the collective-bargaining agreement between Respondents, and Union and Employers, violated Section 8(e) of the Act.' The Board rejected the Respondents' argument that the PWC had a lawful object of preserving the work and work standards of employees covered by collective-bargaining contracts Rather, the Board found, the purpose of the clause was "to create pressure conducive to the extension of the Union's contract to unorganized producers . ." in making these findings the Board assumed, without deciding, that the contract unit, rather than the various associationwide and single-employer units covered by the National Bituminous Coal Wage Agreement, was the appropriate unit for purposes of deciding whether the object of the clause was to preserve work for employees in the unit. In accordance with its finding of violation of the Act, the Board ordered Respondents to cease giving effect to the PWC. Thereafter, Respondent Union filed a motion which stated that the Union and Respondent Employers had signed a new collective-bargaining agreement which no longer included the PWC, and requested the Board to find that the new agreement was not violative of Section 8(e), that the Board's previous order had been complied with, and that the case be closed. A Board majority' denied the motion upon the ground that in place of the unlawful PWC, the contracting parties had substituted another provision (known as the 80-cent clause) which was equally unlawful, and therefore there had been no compliance with the Board's Order.8 The Board said that the new clause "realistically appraised, is nothing more than an implied union signatory agreement restricting the subcontracting of work to operators under contract with the UMW, without regard to unit considerations." As a preliminary to this conclusion, the Board rejected the Union's contention that there existed a single industrywide bargaining unit, and instead found that the Union's national contract covered a multiplicity of such units. Subsequently, the validity of the "80 cent clause" was challenged in a separate unfair labor practice proceeding, and a Board majority' reaffirmed its earlier conclusion that the "80 cent clause" was invalid under Section 8(e) of the Act.'° The Board majority also reaffirmed its previous finding that there was no single industrywide bargaining unit, but rather a multiplicity of single employer and multiemployer association bargaining units corresponding to the units for which spearate negotiations are conducted with the Union. Further, the Board held, the `unit' for which subcontracting clauses may lawfully seek to preserve work are units appropriate for collective bargaining within the meaning of Section 9 of the Act." Meanwhile, the Union sought review of the Board's Order in the PWC case." The Court of Appeals remanded the case to the Board for the declared reason that it was uncertain of the Board's finding with respect to the "work unit."' E It pointed out that the Board's initial decision assumed that the unit consisted of the totality of workers covered by the contract, whereas in the subsequent related proceeding the Board found that the proper units are the employees of the various multiemployer groups and individual operators with whom the Union contracted. The Court also discussed some of the consequences which might result from different "work unit" findings. The Board accepted the remand and referred the case back to the Regional Director with instructions to arrange a hearing before a Trial Examiner to receive additional evidence bearing on three issues which are set out in the attached Trial Examiner's Decision. The Trial Examiner was then instructed to prepare and issue a Supplemental Decision based on the evidence received at the reopened hearing as well as on the record previously made, and in the light of the opinion of the court of appeals. The Trial Examiner has issued his Supplemental Decision recommending that the complaint be dismissed. My colleagues have adopted this recommendation. I think that the Trial Examiner is wrong in his findings and that the members of the majority are wrong in adopting them. The first question covered by the remand order of the Board was the scope of the "work unit" or "units" covered by the PWC The Trial Examiner found, and a majority of Board members agree with him, that the terms "work unit" and "bargaining unit" are synonomous. Hence there exists not one "work unit" but a multiplicity of such units, some covering the employees of only a single employer, others covering multiemployer units of greater or less extent. The second question in the remand order is whether employees in the "work units" have a primary interest" in regulating the purchase of "supplemental coal" because employers in such units have the capability of producing all the coal required by an individual employer in the unit in order to fulfill his sales commitments. "Supplemental coal," the parties have stipulated, is coal which an operator cannot produce from his 'Chairman McCulloch, Members Rodgers and Leedom '144 NLRB 228 'Chairman McCulloch , Members Fanning, Leedom, and Brown, Member Jenkins dissented '148 NLRB 249 'Chairman McCulloch, Members Fanning, Brown, and Zagona, Member Jenkins dissented "International Union , UMWA (Dixie Mining Company ), 165 NLRB No 49 "144 NLRB 228 "Lewisv N L R B, 350 F 2d 801 (CA.DC) 482 DECISIONS OF NATIONAL LABOR RELATIONS BOARD own facilities, either because his facilities are inadquate to produce the volume of coal required, or because they cannot produce the particular grade, quality, size or mix of coals desired by the consumer. Some of the employers also do not themselves produce any coal for sale. These are "preparers" who purchase all their coal from others. As to "work units" which consist of a single employer's employees, whether these are "producers" or "preparers," the PWC by the very definition of "supplemental" coal cannot have a function of preserving the work for or the work standards of the employees in the unit since these employers must purchase coal from others. As the Court stated in remanding this case to the Board: But when an operator's sales contracts include grades, types and qualities of coal he cannot produce in his own mines, he must purchase "supplemental" coal from other producers. Ordinarily such purchases would not appear to threaten the employees' jobs. Failure of the clause to distinguish substitute coal from supplemental coal may give it wider application than is required for protection of the employees of any one operator. Accordingly, the PWC is plainly a violation of Section 8(e) as to single-employer units. As to multiemployer units, the Trial Examiner considered only two of the larger multiemployer units because the General Counsel was able to offer evidence only as to these two "after a year of trying to come up with some meaningful figures which would relate to Point 2 of the remand." The Trial Examiner ruled that the General Counsel had the burden of proving the extent to which the PWC applies to "supplemental" coal purchased by the employers in each "work unit." I submit that the Trial Examiner was in error in failing to distinguish between ultimate burden and the burden of going forward with the evidence. It seems obvious that if the employers in any "work unit" are able to purchase all the "supplemental" coal required from other employers in the same unit, the Respondents should be able to produce the figures to support this contention. It is unreasonable to require the General Counsel to produce statistics of employer sales, capacity, and purchases, which, as the fact proves, is an almost impossible task for him with his limited and inexperienced personnel, when the Respondents with their thorough knowledge of their own operations and industry practice, are so much better able to produce meaningful statistics." I do not mean to imply that because proof of violation of the Act is difficult, the burden shifts to a respondent to prove non-violation. But I do think that the stipulation of the parties with respect to "supplemental" coal, 14 and the finding, in which the Board majority concurs, that there are a multiplicity of "work units," is sufficient to establish, prima facie, that the PWC has a prohibited object in multiemployer as well as single "work units" and that the burden of going forward to offset this prima facie case by showing that the PWC has a legitimate work preservation or work standards function shifted to Respondents, who are so much better able than the General Counsel to prove this by evidence. Respondents incontestably have not met this burden. Moreover, although the statistics adduced by the General Counsel showing productive capacity and sales for two of the most important associationwide units are in general valueless to prove the extent to which the employers in these units must purchase coal from nonunit sources,' S in one of these units during 1963, total sales exceeded productive capacity by about 725,000 tons which is evidence that for this year, members of this association had to purchase substantial tonnages of coal from nonunit sources in order to meet their commitments.16 Because the PWC fails to distinguish between "substitute" and "supplemental" coal, its effect extends beyond protecting the work and work standards of employees in the "work units." Accordingly, I would affirm the Board' s original holding in the case and find that the PWC violates Section 8(e) of the Act. "Cf Pratt & Whitnevv NLRB , 3101`2d 676 (C A 5) The Trial Examiner explicitly ignored the stipulation in reaching his conclusion that the PWC was lawful At no time did Respondents repudiate the stipulation There is nothing in the Court's remand as I read it, that requires ignoring it On the contrary , the court's opinion refers to the facts included in the stipulation as data in the case There is every reason therefore for accepting the stipulation as the parties intended it should be accepted , as a statement of fact in lieu of evidence "A comparison of total "work unit" capacity and total "work unit" sales is not necessarily meaningful because , as the parties stipulated, certain purchasers may require a particular grade , quality, size or mix of coals which a vendor may not be able to supply from his own mines Total capacity may thus be meaningless unless employers in the "work unit" can supply the different varieties of coal required by unit employer customers Further, for a variety of reasons producing enterprises are rarely able to function at theoretical capacity over extended periods of time "The third question posed in the remand order need not be answered because it was based on the assumption that the Board would find that the "work unit" included all employees covered by union contract The Board majority has found above that there is not one but a number of "work units " TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE FREDERICK V REEL, Trial Examiner. This proceeding was heard at Washington, District of Columbia, on March 30, and April 24 through 26, 1967, pursuant to remand from the National Labor Relations Board, which in turn acted pursuant to an order of the United States Court of Appeals for the District of Columbia Circuit, remanding the case to the Board ' Prior steps in the litigation are reported at 144 NLRB 228, 148 NLRB 249, and 350 F.2d 801 I shall assume that all persons who have occasion to read, apply, or review this Decision are familiar with, and have ready access to, the three decisions just cited, and I shall endeavor to avoid unnecessary repetition of matters set forth therein 'The caption of the case has been amended to reflect substitution of parties Respondent and the Board's granting of Dixie Mining Company's motion to intervene UNITED MINE WORKERS Upon the entire record, including my observation of the demeanor of the witnesses, and after due consideration of the briefs filed by General Counsel, by the Union (see 144 NLRB at 229, fns. I and 2), by the Intervenor, and by the Bituminous Coal Operators Association as amicus curiae, I make the following SUPPLEMENTAL FINDINGS OF FACT A Events Since the Decision of the Court of Appeals The Court of Appeals remanded the case to the Board in a Decision issued August 4, 1965. On March 3, 1966, the Board remanded the case to the Regional Director with instructions that a hearing be held before a Trial Examiner, who was to enter findings and conclusions, and to recommend as appropriate order , after hearing evidence on the following three issues (1) the scope of the "work unit" or "units", as the case may be, covered by the Protective Wage Clause; (2) whether employees in the "work unit" or "units" have a "primary interest" in regulating the purchase of "supplemental coal" because the unit includes employees of employers , who taken together, have the capability of mining and producing all grades, types and qualities of coal in the quantities which one or another employer in that unit may be required to purchase in order to enable it to obtain and fulfill sales orders; (3) whether, notwithstanding the "primary interest" of employees in restricting the freedom of their employers to make purchases of "supplemental" and "substitute" coal, the Protective Wage Clause bears only an incidental relationship to protecting the work standards provided in the National Bituminous Coal Wage Agreement of 1950, as amended, because, either by effect or design, the Clause operates to compel the unorganized segment of the industry to become signatory to the Agreement On May 11, 1966, the Board granted the motion of Dixie Mining Company to intervene in this proceeding. The proceeding came on for hearing in March 1967. At the hearing , General Counsel explained that the delay between the Board 's Order remanding the case and the holding of the hearing was caused by the difficulties which General Counsel had experienced in collecting the data which he deemed necessary to introduce into the record to shed light on the issues raised in the order of remand. After introducing into evidence the data in question, General Counsel rested The balance of the hearing was devoted to evidence adduced by Intervenor and by the Union. B The "work unit" The term "work unit" does not appear in the Act The statute does refer to "the unit appropriate for the purposes of collective bargaining" and in labor law jargon that phrase has been simplified to "bargaining unit." In the instant case, the contract in question has been adopted in several "units appropriate for collective bargaining." The facts establish that the Bituminous Coal Operators Association and the Southern Coal Producers Association executed this contract on behalf of their members, so that under familiar principles each of those associations constitutes a single multiemployer appropriate bargaining unit . Other smaller associations which sign on behalf of their members likewise constitute multiemployer 483 bargaining units Other coal operators, independent of any association , likewise signed this contract , and the employees of each of them likewise comprise appropriate bargaining units. If the Court of Appeals, from whose decision the Board took the term "work unit," used the term as interchangeable with "bargaining unit," then the "work units" are, as described in the preceding paragraph, the employees of all the employers in a particular employer association and the employees of each independent signatory . The Union and the Bituminous Coal Operators Association are of the view, however , that the term "work unit" is not synonymous with "bargaining unit, " and that the former embraces all of the bargaining units covered by this contract . Intervenor likewise finds the "work unit" to be different from "bargaining unit," arguing that the "work unit" is limited to the employees of a single employer, even in multiemployer bargaining units. General Counsel and counsel for Respondent Morton take the view that "work unit" and "bargaining unit" are synonymous The term "work unit" in this context first appeared in District No 9 I A.M v. N L R.B., 315 F.2d 33, 36 (C.A.D.C. per Fahy, J.). In that case, the "bargaining unit" was a multiemployer unit, and the court sustained the finding of a violation of Section 8(e) because the sanctions of the contract in question ran against employers "not parties to a contract with" the Union. The "principal work unit" to which the court referred was the single multiemployer unit. The case thus seems to militate against Intervenor' s construction (that "work unit" is confined to employees of a single employer ), but sheds no light on whether the court viewed the term as implying something different from "bargaining unit." Subsequent cases in which the court used the term "work unit," quoting from the District 9 case, shed no further light on the question . In the instant case, however, the court seems to indicate that it is using the term as synonymous with "bargaining unit ." The court states (350 F.2d at 802). The Board's counsel assumes that the "work unit," which governs the application of Sec 8 (e) here, consists of the employees of individual mine operators. But the Board ' s opinion assumes that the unit is the totality of workers covered by the contract , i.e., workers representing 74 to 79 per cent of national bituminous coal production. Finally, in a subsequent, related proceeding, the Board found that the proper units are the employees of the various multi-employer groups and individual operators with whom the Union contracted. [Footnote omitted.] The last sentence just quoted refers to the Board's Supplemental Decision of August 7, 1964, 148 NLRB 249. In that Decision the Board stated that the contract "covers a multiplicity of bargaining units rather than a single industrywide unit " As it is this language to which the court appears to refer when it uses the expression "proper units" in a paragraph dealing with "work unit," this analysis would lead to the conclusion that the several expressions are synonymous One difficulty with this approach is that it gives rise to the question why, if the Board spoke so clearly in its Supplemental Decision , did the court find it necessary to remand the proceeding to ascertain the Board 's view. The court refers to the Supplemental Decision as being only a "subsequent related proceeding," and also refers to what it regarded as a divergence between views expressed by the Board in its original Decision and those expressed in its brief to the court . The Board itself, in its Supplemental 484 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Decision, said with respect to the "appropriate" or "bargaining" unit that in its original decision it "reserved decision on this issue " 148 NLRB at 253. It may be that the court simply desired to have the Board reconsider the entire matter. In any event, upon such reconsideration. I find that for reasons indicated above, I cannot accept Intervenor's argument that the "work unit" is limited to employees of individual employers Also, for reasons similar to those expressed by Trial Examiner Hunt in International Union, United Mine Workers, Case 5-CE-8, I cannot accept the Union's argument that all the signatories constitute a single units I therefore find that "work unit" and "bargaining unit" are synonymous or coextensive C The Coal - Producing Capacity of the Units The Board's second question on the remand is whether and to what extent each of the units here involved "includes employees of employers who, taken together, have the capability of mining and producing all [the] . . coal which one or another employer in that unit may be required to purchase in order to obtain and fulfill sales orders " The phrasing of the question suggests that the Board was concerned primarily if not exclusively with the multiemployer bargaining units. In any event, the record contains no evidence as to the extent to which individual coal producers who sign the agreement enter into contracts for the sale of coal other than that which they produce The General Counsel, who bears the burden of proving the illegality of the clause, stated at the hearing that he was offering evidence on this point only with respect to the two large employer associations because "they are the only ones we could get after a year of trying to come up with some meaningful figures which would relate to Point 2 of the remand." In his brief, General Counsel argues that the independent producers buy "supplemental" as well as "substitute" coal, and that the Protective Wage Clause is necessarily invalid insofar as it applies to their purchases of "supplemental" coal But the sole authority cited for the fact that such producers', buy "supplemental" coal is the original stipulation which recites that "the purchasing of coal by one producer from another producer is an essential marketing practice within the industry," and that statement in turn refers for its support to the affidavit of John L Lewis (Exhibit 19 attached to the stipulation) which recites that "in many instances" such purchases were of "substitute" and not of "supplemental" coal As I see it, one of the reasons for the remand was to give General Counsel an opportunity to show to what extent the Protective Wage Clause applies to "supplemental" as well as to "substitute" coal. I cannot accept his argument based on the original stipulation, this material was before the Court of Appeals which sent the case back for further evidence I turn, therefore, to the new material offered by General Counsel pertaining to the purchases of coal by members of the two largest multiemployer units. These statistics show that in the larger unit, the Bituminous Coal Operators Association, in both 1962 and 1963 (the last full years the Protective Wage Clause was in effect), the productive capacity of the mines in that unit, over 100 million tons, exceeded the amount actually produced by over 13 million tons, and exceeded the amount sold by approximately 5 million tons. In 1962 the productive capacity of the mines in the Southern Coal Producers Association, somewhat over 28 million tons, exceeded their actual production by about 2 million tons, and exceeded the amount sold by about 400,000 tons. But in 1963 the productive capacity of that group exceeded its production by less than I million tons, and the amount sold exceeded productive capacity by about 725,000 tons. General Counsel argues that this last statistic proves that the Protective Wage Clause is operative in cases where the employer is required to buy "supplemental" coal Once again, however, merely establishing that the clause has some applicability, in that purchases of "supplemental" coal occur in the industry, falls short, in my judgment, of establishing the invalidity of the clause. The ostensible purpose of the clause is to prohibit the purchase of "substitute" coal by a signatory operator from operators whose labor conditions enable them to sell more cheaply. This valid objective of preserving work for the employees in the unit is not rendered invalid because an occasional incidental effect is to inhibit the purchase of coal which the employees in the unit could not have produced The statistics cited above attest the validity of the clause, at least as applied in the major multiemployer unit, and in t year in the second largest unit The fact that in l year the clause also operated with respect to "supplemental" coal in the latter unit no more taints the entire matter with illegality than the incidental secondary effect of primary picketing destroys the legality of a primary picket line The validity of the clause must turn on its overall impact, not on hindsight applications to particular units The statistics referred to above establish that the clause has at least a potentially widespread lawful application, and that compared with its apparently lawful incidence, its arguably illegal application was minor and incidental. Even in the year when in one unit sales exceeded capacity by 725,000 tons, production was 760,000 tons short of capacity, so that the impact of the clause even in such circumstances should in theory be equally divided between discouraging "substitute" coal and applying to necessary purchases of "supplemental" coal. The clause therefore appears to meet the test of validity implied in the second issue remanded, and at least its general overall lawful application in this regard is such that General Counsel has failed to establish its invalidity merely by showing, after the fact, that it may on occasion have some "secondary" impact Intervenor urges that the Protective Wage Clause must be held invalid as applied to "preparers" of coal for marketing, who do not themselves mine or "produce" coal All the coal handled by such nonproducers is "supplemental" coal in the sense that none of it could be produced by the employees of the "preparer," as the latter is not engaged in coal production. But the "preparers" described in this record sell their coal to larger coal producers and distributors. Such purchasers, if signatory to the contract, are properly concerned with whether the coal which they purchase from the preparer was produced under labor standards comparable to those set forth in the basic contract.' Requiring the "preparer" to guarantee to his customers that the coal he sells them was produced under union standards does not establish any invalidity in 'Examiner Hunt's decision was affirmed by the Board, 165 NLRB No 49, issued while this decision was being reproduced for issuance and distribution 'If the "preparer" sold to a nonsignatory , the Protective Wage Clause would appear to be invalid as applied to the "preparer " But there is no showing that preparers sell to nonsignatories UNITED MINE WORKERS 485 the Protective Wage Clause, but instead merely illustrates the basic reason why the clause exists; namely, to prevent the marketing of coal produced under substandard conditions to operators whose employees, employed under the contract, are idled by the purchase of "substitute" coal.' D Does the Protective Wage Clause , by Intent or Effect, Compel the Unorganized Segment of the Industry to Sign the Agreement' The Board in its original Decision in this matter expressly rejected General Counsel's contention that the Protective Wage Clause bound the signatory operators to purchase coal only from each other 144 NLRB at 237, footnote 10 The Board's Order remanding the case implies that the issue is open to reexamination , for the order invites evidence on whether "either by effect or design, the Clause operates to compel the unorganized segment of the industry to become signatory to the Agreement." Both by "design " and by "effect " the Protective Wage Clause manifestly encourages the unorganized segment of the industry to become signatory to the agreement. A signatory is presumed to be in compliance with the Protective Wage Clause unless and until his noncompliance is established by procedures provided in the contract . As the clause requires signatories to purchase only coal mined or produced under conditions as favorable to employees as those provided in the contract, purchase from another signatory affords the purchaser assurance that he is observing his contractual obligation. Indeed , it would not be easy for nonsignatories to meet the labor standards set in the basic contract , for among these standards is participation in a Welfare and Retirement Fund which nonsignatories would find it difficult to match Testimony in the record shows what would be reasonably inferred in the absence of such testimony , namely, that employers who did not sign the agreement lost customers because of that failure to sign The question before me on remand , however, is not whether the clause operated to encourage the unorganized segment of the industry to become signatory to the agreement , but whether it operated to compel such a result . Of course, if no reasonable alternative existed to succumbing to the "encouragement," then "encouragement " is merely a euphemism for "compulsion ." But this record suggests that reasonable alternatives did exist . Thus, when Intervenor had to stop selling coal to a signatory , Intervenor marketed its coal elsewhere Orville Oney, a coal operator called as a witness by Intervenor , operated for a period of time as a signatory and for another period as a nonsignatory, and testified that the change "didn't make any" difference in his operations or marketing Operator Ed Worley, a witness for Intervenor, testified that cancellation of his contract with the Union did not significantly affect his operations . Operators not signatory to the agreement may market their coal not only to other nonsignatory operators but also to consumers or to brokers dealing with consumers Intervenor's witness Cloyd McDowell, president of the Harlan County Coal Operators 'Respondent Morton, called as a witness by Intervenor , testified that two companies with which he had been associated purchased "supplemental" but not "substitute" coal The record does not establish from whom the coal was purchased or whether Morton 's companies were part of a multiemployer bargaining unit, nor does it indicate the amount of coal purchased Association, testified that he could not think of any company which went out of business because it could not sell to signatory operators. Intervenor contends that the Union's real concern is not with protecting the labor standards set up under the basic contract, but with bringing more operators and their employees within its orbit, and that the basic purpose of the Protective Wage Clause is to drive the unorganized segment of the industry into the Union's arms rather than to preserve labor standards In support of this theory Intervenor introduced evidence intended to establish that union representatives permitted operators to sign the basic agreement with oral understandings that the operators would not live up to its terms Without detailing the evidence, I note that the testimony in this respect of Robert Holcomb, president of the Intervenor, was contradicted by Union Representative Carson Hibbitts, and that Intervenor failed to substantiate Holcomb's version through the testimony of witness Ratliff, although Holcomb named Ratliff as having witnessed Hibbitt's alleged offer Ratliff in turn testified to a similar offer allegedly made to him by Union Representative Newsom, since deceased, but Ratliff admitted knowing that Newsom lacked authority to negotiate any such oral agreement Intervenor produced several witnesses who had defaulted in their welfare fund payments under the contract, and had been held liable in court to the trustees of the welfare fund. They and other witnesses called by Intervenor also testified that they did not pay the union wage scale, but there is no showing that any responsible union official agreed to their not doing so Assuming that they violated not only their welfare fund obligations but also their basic wage obligations, the record in this case warrants only the finding that the Union's failure to call them to account for the latter failure stems from the Union's lack of knowledge thereof and not from any oral agreement permitting variation from the contract terms. The Union would know of wage violations only if such matters were brought to its attention through regular channels, beginning with an employee's complaint to his steward Both General Counsel and Intervenor find in the testimony of Union Representative Hibbitts an admission that the purpose of the Protective Wage Clause was to promote union organization rather than to prevent the undercutting of labor standards Asked what he told local union officials in 1958 as to the purpose of the clause, Hibbitts testified We would sign a contract with these coal companies and they would go out and lease out some land and buy non-union coal and throw it on the market as union coal and cut their own employees off And the coal companies were chiselling on their men It was put in there to protect the union and protect the membership of the union I read that testimony as completely consistent with the avowed purpose of the clause, and consistent with other testimony in the record before me and with the original stipulation in this case, that the Protective Wage Clause is directed at restoring employment opportunities to employees covered by the contract which they were losing because cheaper labor was making it more profitable for signatory operators to buy cheap coal than to produce their own. Accordingly, I find that the Protective Wage Clause bears more than an incidental relationship to protecting the work standards set in the basic agreement, and that it operates to encourage, but not to compel, the unorganized 486 DECISIONS OF NATIONAL LABOR RELATIONS BOARD segment of the industry to become signatory to the agreement 5 RECOMMENDED ORDER The complaint should be, and hereby is, dismissed.6 CONCLUSIONS OF LAW I adopt the first two conclusions of law set forth by the Board in its original Decision, 144 NLRB at 238, 239. 1 amend the third conclusion there set forth by inserting the word "not" before "prohibited," and the fourth conclusion by inserting the word "not" before "violated" and before "violating " 'Such encouragement could , of course, result in violations of the type found in I L G W U v N L R B, 366 U S 731 , but no issue with respect thereto is presented in this case 'Should the Board disagree with my result and adhere to its original view that the clause is invalid , I would suggest that the Board consider eliminating par 2(a) of its Order relating to notice posting , as the clause has not been in effect for several years Cf Curtiss- Wright Corporation 145 NLRB 152, 157-158