Red Cab, Inc.

RED CAB, INC. 279 Red Cab, Inc. and Richard G. Covington Case 25-CA-3963 bargaining," it hardly effectuates the policies of our statute to condone such flagrant illegal conduct. November 22, 1971 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING AND JENKINS On July 8, 1971, Trial Examiner Paul Bisgyer issued his Decision in the above-entitled proceeding, finding that Respondent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. The Trial Examiner further found that Respondent had not engaged in certain other unfair labor practices alleged in the complaint and recommended that such allegations be dismissed. Thereafter, Respondent filed exceptions to the Trial Examiner's Decision and a supporting brief. The General Counsel filed limited cross-exceptions and a brief in support of the Trial Examiner's decision. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in 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 recommendations' of the Trial Examiner, as modified herein.2 We agree with our dissenting colleague that the unusual circumstances of this case may well have subjected these labor and management negotiators to a nightmarish experience. However, we cannot agree that the unhappy situation in which the employer found itself justified "forcible employer measures" specifically prohibited by Sec. 8 (a)(1), (3), (4), and (5) of this Act. Here the Respondent deliberately broke off bargaining, locked out and discharged its employ- ees, unilaterally changed working conditions, refused to reemploy an employee whose name appeared on an unfair labor practice charge, and refused to reinstate other employees in reprisal for their concerted activity. Surely, whatever "the realities of collective i In adopting the Trial Examiner's dismissal of the allegation that a supervisor promised a preference in cab selection to those who signed the back-to-work petition, we note that this issue turns upon an unresolved question of credibility, and, in any event, is cumulative and would not affect the remedy provided herein. In addition, we find that Respondent's lockout of employees on August ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Red Cab, Inc., its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Discharging, locking out, refusing to reinstate, or otherwise disciplining employees for seeking to induce employees to vote against ratification of an agreement tentatively reached by the employees' bargaining representative and the Respondent, or for engaging in other union or concerted activity for mutual aid and protection guaranteed by Section 7 of the Act. (b) Discouraging membership in Local 193, Interna- tional Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, or any other labor organization, by discharging, locking out, or refusing to reinstate employees or discriminating against them in any other manner in regard to their hire or tenure of employment or any term or condition of employment, in reprisal for their internal union activities. (c) Discharging or refusing to reinstate employees or otherwise discriminating against them because their names appeared in an unfair labor practice charge filed on their behalf as unlawfully terminated employ- ees. (d) Unilaterally establishing new terms and condi- tions of employment for its employees in the appro- priate unit described below, without first notifying and bargaining with the above-named Union, as their exclusive representative; soliciting employees to abandon a picket line and return to work as new employees under the unilaterally established terms; and preparing or participating in the circulation of a back-to-work petition or offering employees better terms and working conditions than those previously offered in order to induce them to sign the petition. The bargaining unit includes: All full-time and part-time drivers together with garage employees of the Respondent employed at its facility, exclusive of all personnel department employees, office clerical employees, porters, salaried employees, professional employees, guards, and all supervisors as defined in the Act. (e) Threatening to discharge or refusing to hire 17 was motivated by the same considerations as the discharges and constituted a separate violation of Section 8(a)(3) and (1). 2 Because the unfair labor practices found herein demonstrate Respondent's opposition to the policies of the Act, we deem it necessary to order Respondent to cease and desist from in any manner infringing upon the rights guaranteed its employees in Section 7 of the Act. 194 NLRB No. 41 280 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees in reprisal for their protected union and concerted activities. (f) In any other manner interfering with, restraining, or coercing employees in the exercise of their bargaining rights through their exclusive representa- tive, or in the exercise of their right to engage in union and concerted activities for mutual aid and protection as guaranteed in Section 7 of the Act. 2. Take the following affirmative action which is necessary to effectuate the policies of the Act: (a) Offer the drivers who were discharged on August 17, 1970, and have not yet been rehired immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority and other rights and privileges, and make them whole for any loss of earnings they may have suffered by reason of their unlawful discharge, in the manner set forth in the section of this Decision entitled "The Remedy." (b) If it has not already done so, restore to those drivers who have previously been rehired their former seniority and other rights and privileges and make them whole for any loss of earnings they may have suffered by reason of their unlawful discharge, in the manner set forth in the section of this Decision entitled "The Remedy." (c) Notify immediately the above-named individu- als, if presently serving in the Armed Forces of the United States, of the right to full reinstatement, upon application after discharge from the Armed Forces, in accordance with the Selective Service Act and the Universal Military Training and Service Act. (d) 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 or useful in analyzing the amount of backpay due and the right to reinstatement and employment under the terms of this recommend- ed Order. (e) Post at its terminal facilities in Indianapolis, Indiana, copies of the attached notice marked "Appendix." Copies of said notice, on forms provided by the Regional Director for Region 25, after being duly signed by Respondent's authorized representa- tive, shall be posted by Respondent 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 altered, defaced, or covered by any other material. (f) Notify the Regional Director for Region 25, in 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 writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith.3 CHAIRMAN MILLER, concurring in part and dissenting in part: It seems to me that both the Trial Examiner and my colleagues have not adequately taken into account the realities of collective bargaining. During a 6-month bargaining period, both the Union's representatives and Respondent's representa- tives were working arduously to work out a mutually acceptable set of conditions to enable them to accommodate to this Board's view that its cab drivers are employees. Respondent, prior to this Board's decision in an earlier proceeding, had treated them as independent contractors and their income had con- sisted of their fares less a fee and mileage rate paid by the drivers to Respondent for use of the vehicles. In the negotiations, Respondent wished to move away from the old lease system and convert to one more consistent with the concept that its drivers were employees---one which would have instituted a commission form of payment and which would have, for the first time, granted fringe benefits of the variety common to employees, but not to independent contractor compensation plans. The Union found its membership of a mixed mind about the conversion, but ultimately its representa- tives, believing they had succeeded in coalescing the diverse views of their constituents into support for a set of conditions which would make the transition feasible, agreed at the bargaining table to include a mutually agreeable commission schedule and certain new fringe benefits. Indeed, the union bargainers believed they had obtained so favorable a set of commitments from Respondent that they advertised the tentative agreement as "one of the best Taxi-Cab agreements in the country." Then followed a debacle of the type which gives experienced negotiators for both companies and unions nightmares. Stimulated by certain defecting members of the union negotiating team who broke ranks with their fellow-negotiators' and openly violat- ed their pledge to maintain unanimity in support of the package produced by their long and difficult negotiations, a factionalized membership hooted down the union leadership which attempted to present the proposed agreement for ratification, and the meeting broke up in disorder. Faced with this chaotic state of affairs, Respondent took action which, in my view, was designed to create the necessary leverage to bring about a settlement. It unilaterally instituted a change to the new type of changed to read "POSTED PURSUANT TO A JUDGMENT OF THE UNITED STATES COURT OF APPEALS ENFORCING AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD." RED CAB, INC. compensation arrangement, but at rates less favorable to the employees than those last offered to the Union. And because this involved a change from lease agreements to a genuine employee arrangement, it announced that those who wished to work under the changed employment conditions should file applica- tions to become Red Cab, Inc., "employees" rather than lessees. This step, too, produced factionalized reaction from the Union, the officers counseling patience, but some employees urging an immediate walkout. The upshot, within a few days, was a series of events which one party characterizes as a strike, and the other as a lockout. But the ultimate outcome was that some 5 weeks later the parties were successful in signing a contract bearing a striking resemblance to the one which was first agreed to between the negotiators-an outcome which those experienced in negotiations could probably have predicted would, sooner or later, follow the set of circumstances which I have described as occurring here. But such experienced observers would also, I think, conclude that the Respondent's tactical maneuver of putting into effect a set of conditions less favorable than those which the union leaders had recommend- ed, but which it had been unable to sell because of internal disagreements, in all probability hastened the day of agreement, as it was doubtless designed to do. Just as there are times when the forcible measure of union strike action is necessary to move an employer from uncertainty to a willingness to agree, so also are there times when rather forcible employer measures are necessary to accomplish a fusion of opposing factions within a union membership in such manner that it is possible to conclude a bargain. This was just such a case, and it would not surprise me in the least if the union leadership, if it were frank, would be among the first to concede it. Indeed, it will be noted here that members of the original union negotiating team led the back-to-work movement here-a phenomenon hardly characteristic of a typical strike situation. For us to attempt to fit this set of facts into our traditional molds, to hold that the actions taken by Respondent were "discriminatory discharges," illegal "interference" with Section 7 rights, and a "bypassing" of the Union and thus bad-faith bargain- ing, demonstrates our sometimes woeful inability to truly comprehend the realities of the world of collective bargaining.4 So, in substantial degree, I must dissent from the decision herein. On the other hand, once an agree- ment was reached, Respondent unquestionably had a duty to reinstate the strikers without discrimination, and to the extent that the majority decision finds a discrimination in reemployment, after the strike, of 281 employees who had reinstatement rights under our law as it normally applies to economic strikers, I would concur.5 4 The majority, in response to my dissent, recites a number of sections of the Act alleged to have been violated, characterizes the 'conduct once again in the phraseology we use when typical violations are found, and adds a rhetorical reference to "flagrant illegal conduct " None of this comes to grips with the issue of whether, in the context of a complicated set of bargaining conditions, the course followed with respect to the bargaining was designed to prevent agreement or instead was the only visible course which held out a hope for reaching agreement . Nor does it consider whether, in a realistic view of the context, the termination of operations on August 17, when an insufficient number of drivers were willing to work, for a variety of reasons, should be found to be an illegal `lockout" or "discharge " In fact, the majority response merely again demonstrates a too hasty willingness to affix our familiar labels to conduct which, in my view, ought to be more carefully evaluated in the light of a knowledgeable understanding of the total bargaining situation. 5 There would remain, as to some of these employees, factual questions as to whether they requested reinstatement, and as to whether some of them remained on strike after an agreement with a no-strike clause had been executed. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The Act gives all employees the following rights: To organize themselves To form, loin, or support unions To bargain as a group through a repre- sentative they choose To act together for collective bargaining or other mutual aid or protection. WE WILL NOT discharge, lockout, refuse to reinstate, or otherwise discipline employees for seeking to induce employees to vote against ratification of an agreement tentatively reached by the employees' bargaining representative and the Company or for engaging in other union or concerted activity for mutual aid and protection guaranteed by Section 7 of the National Labor Relations Act. WE WILL NOT discourage membership in Local 193, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Amer- ica, or any other labor organization, by discharg- ing, locking out, or refusing to reinstate employees or discriminating against them in any other manner in regard to their hire or tenure of employment or any term or condition of employ- ment, in reprisal for their internal union activities. WE WILL NOT unilaterally establish new terms, and conditions of employment for our employees in the bargaining unit described below without first notifying and bargaining with the above- named Union, as their exclusive representative; or solicit employees to abandon their picket line and 282 DECISIONS OF NATIONAL LABOR RELATIONS BOARD return to work as new employees under the unilaterally established terms. The bargaining unit includes: All full-time and part-time drivers togeth- er with garage employees of Respondent employed at its facility, exclusive of all personnel department employees, office cler- ical employees, porters, salaried employees, professional employees, guards, and all su- pervisors as defined in the Act. WE WILL NOT prepare or participate in the circulation of a back-to-work petition or offer employees better terms and working conditions than those previously offered in order to induce them to sign the petition. WE WILL NOT threaten to discharge or refuse to hire employees because of their protected union and concerted activities. WE WILL NOT discharge or refuse to reinstate employees or otherwise discriminate against them because their names appeared in an unfair labor practice charge filed on their behalf as unlawfully terminated employees. WE WILL NOT in any other manner interfere with, restrain, or coerce employees in the exercise of their bargaining rights through their exclusive representative, or in the exercise of their right to engage in union and concerted activities for mutual aid and protection as guaranteed in Section 7 of the Act. WE WILL offer all our drivers who were discharged on August 17, 1970, immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent posi- tions, without prejudice to their seniority or other rights and privileges, and make them whole for any loss of- earnings they suffered by reason of their discharge. RED CAB, INC. (Employer) Dated By (Representative) (Title) We will notify immediately the above-named individ- uals, if presently serving in the Armed Forces of the United States, of the right to full reinstatement, upon application after discharge from the Armed Forces, in accordance with the Selective Service Act and the Universal Military Training and Service Act. This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concerning this notice or compliance with its provisions may be directed to the Board's Office, 614 ISTA Center, 150 West Market Street, Indianapolis, Indiana 46204, Telephone 317-633-8921. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE PAUL BISGYER, Trial Examiner : This proceeding, with all parties represented,' was heard on March 16 through 18, 1971, in Indianapolis, Indiana, on the complaint of the General Counsel issued on January 12, 1971,2 as amended at the hearing, and the answer of Red Cab , Inc., herein called the Respondent or Company. In issue are questions whether the Respondent, in violation of Section 8(a)(1), (3), (4), and (5) of the National Labor Relations Act, as amended,3 discharged, locked out, and refused to reinstate employees because of their protected union and concerted activities; denied reinstatement to an employee because he was named in the unfair labor practice charge filed herein; unilaterally changed terms and conditions of employment without notice to, or bargaining with the Union, and dealt with individual employees ; prepared and participated in the circulation of a back-to-work petition in derogation of the Union's representative status; and threatened to discharge and refuse to rehire employees because of their protected union and concerted activities . The parties did not avail themselves of the opportunity to present oral argument at the close of the hearing but thereafter the General Counsel and the Respondent submitted briefs in support of their respective positions. Upon the entire record,4 and from my observation of the demeanor of the witnesses, and with due consideration being given to the arguments advanced by the parties, I make the following: 1 Local 193, International Brotherhood of Teamsters , Chauffeurs, Warehousemen and Helpers of America, herein called the Union, was permitted to intervene in this proceeding. 2 The complaint is based on a charge filed by Richard G Covington on September 29, 1970, a copy of which was duly served on the Respondent by registered mail the next day 3 Sec 8(a)(1) of the Act makes it an unfair labor practice for an employer "to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7." Insofar as pertinent , Sec. 7 provides that "[e ]mployees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection .. " Sec. 8(a)(3), with certain qualifications not material herein, prohibits an employer, "by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization . . Sec. 8(a)(4) prohibits an employer "to discharge or otherwise discriminate against an employee because he has filed charges or given testimony under this Act." Finally, Sec. 8(aX5) makes it an unfair labor practice for an employer "to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 9(a) " 4 In accordance with prior arrangement made at the hearing, and on notice to the Charging Party and the Union, the General Counsel submitted after the close of the hearing a stipulation signed by the attorneys for the General Counsel and the Respondent, identified as G C. Exh 29. No objection having been made, the document is received in evidence RED CAB, INC. 283 FINDINGS AND CONCLUSIONS 1. THE BUSINESS OF THE RESPONDENT The Respondent, an Indiana corporation, operates a taxicab system in Indianapolis, Indiana, where its principal office and terminal facilities are located. Its annual gross revenues exceed $500,000. During the past year the Respondent in the course and conduct of its business purchased goods and materials originating outside the State valued in excess of $50,000. It is conceded, and I find, that the Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED Admittedly, the Union is a labor organization within the meaning of Section 2(5) of the Act. M. THE ALLEGED UNFAIR LABOR PRACTICES A. The Evidence The events giving rise to the unfair labor practice charges herein are, as follows: 1. The Union's selection as bargaining representative of the Respondent's cabdrivers; contract negotiations Prior to August 17, 1970, the Respondent employed approximately 300 cabdrivers. Except for newly hired individuals without experience, drivers operated under full- time or part-time lease or rental agreements containing substantially the same terms and conditions. Pursuant to these arrangements, the drivers retained the collected fares but paid the Respondent a fixed fee per shift and a mileage rate for use of the vehicle. The newly hired inexperienced drivers, however, were paid on a commission basis during the first month or less of their employment, after which time, if proved to be satisfactory, they were required to sign a lease agreement to continue driving a cab. Although the Respondent alleged in its answer to the complaint that drivers were independent contractors and not employees covered by the Act, in its brief it has apparently abandoned this contention for the purposes of this case. In any event, 5 Red Cab, Inc., 173 NLRB 1262, 1264. It is undisputed that no change has occurred in the lease agreements, operating procedures , and the duties and functions of drivers since the Board's decision in the cited case. 6 Except as otherwise indicated, all dates refer to 1970. r The conceded appropriate unit, as described in the complaint, consists of: All full-time and part-time drivers together with garage employees of the Respondent employed at its facility exclusive of all personnel department employees, office clerical employees, porters, salaried employees, professional employees, guards and all supervisors as defined in the Act. However, the parties thereafter bargained separately for the garage employees, concluding an agreement for them in July Consequently, the issues in the present case relate only to the drivers. 8 It was the Respondent's position that, under rulings of the Internal Revenue Service, fringe benefits could not be given to drivers without impairing, for income tax purposes, the independent contractor relationship purportedly established by the lease agreements. 9 The Committee which approved the tentative agreement consisted of the evidence reflecs suc° complete control retained by the Respondent over the lease drivers, not only with respect to the ends to be achieved, but also with respect to the means of accomplishing those ends as to make the drivers clearly employees within the coverage of the Act and not independent contractors. Indeed, the Board has so held in another case in which it found the Respondent guilty of discrimination against one of its cabdrivers.5 There is no question that since August 17 the relationship between the Respondent and the drivers has been that of employer and employee. In February 1970,6 as a result of an election conducted by the Indiana Division of Labor, the Union was certified as the collective-bargaining representative of the Respon- dent's drivers.? A series of some 12 to 15 contract negotiating meetings then followed at which the Respon- dent was represented by its president, Richard Hunt, and other officials and the Union by its president, Maurice Day, its secretary-treasurer, Louis H. Floerke, and an employee- designated committee. In the course of these negotiations, it soon developed that the major stumbling block to agreement was a dispute whether to continue the lease arrangements with improved terms and conditions of employment, as the Union proposed, or whether to abandon those agreements and pay the drivers straight commissions and grant them certain fringe benefits,8 as the Respondent demanded. Making the Union's position even more difficult was the serious split among the drivers themselves whether to retain the lease system. Indeed, the conflict in views became apparent at the very inception of negotiations when the Union, in preparing its initial proposals for submission to the Respondent, conducted a poll of the membership which favored a lease arrangement only by a close vote. Happily, however-but not for long-the Union on August 4, with the unanimous concurrence of the Employee Committee, including Ben Edmonds and the Charging Party Richard Covington, leaders of the group advocating retention of the lease arrangement,9 resolved its differences with the Respondent and reached tentative agreement on the basis of the Company's commission proposal, eliminating the existing lease arrangement. Among other things, this agreement established a graduated scale of commissions to be paid drivers 10 and its adoption was made subject to ratification Rev. Oscar Hill, its chairman, and drivers Ben Edmonds, John Welker, Mary Pennell, Richard Covington, Leonard Sanders, and Floyd Marine. Edmonds and Covington were newcomers to the Committee . Edmonds participated in the August 4 and prior meeting, while Covington attended only the August 4 one. Although Edmonds, Covington, and Sanders originally objected at the August 4 meeting to the Company's commissions proposal and the discontinuance of lease arrangements , they eventually joined the other committeemen to approve the tentative agreement. It is also noted that, prior to the August 4 meeting, Edmonds had complained to the International Umon about the representation drivers were receiving from the Umon. 10 Specifically, the tentative agreement provided commissions of 42 percent on gross bookings up to $150; 46 percent on gross bookings of $151 to $250; and 48 percent on bookings over $251. The gross bookings figure reflected a compromise by the Respondent which originally proposed higher amounts This scale was known as the 42-46-48 arrangement. Provision was also made for new employees to be paid a straight commission of 40 percent during the first 30 days of employment. 284 DECISIONS OF NATIONAL LABOR RELATIONS BOARD by the drivers. The Com 'ertook to use its best efforts to sell the agreement ter ers. Union President Day promptly drafted a document, setting forth the results of the August 4 negotiations, and noting that the proposal was unanimously accepted by the Committee and that it could be "one of the best Taxi Cab Agreements in the country." Copies of this document were distributed among the drivers with a copy being posted on the bulletin board at the Respondent's terminal. A ratification meeting of drivers was scheduled for August 14. 2. Opposition to the tentative agreement; August 8 preratification union meeting; the Respondent's cancellation of lease agreements It was not long before Committeemen Ben Edmonds and Covington experienced a change of heart as to the desirability of the commission arrangement that they and the other committeemen had agreed to sell to the drivers. Instead, they and other drivers launched a campaign to defeat its acceptance. Accordingly, at a meeting on August 8 attended by about 60 out of some 300 drivers, which the Union called for the purpose of explaining the terms of the tentative agreement, Edmonds and his colleagues urged its rejection and succeeded in preventing Day and the Union's attorney, Leroy New, from making their presentation. The meeting adjourned in disorder without anything being accomplished. Word of the activities of the Edmonds-Covington group soon came to the attention of Company President Hunt. Apparently provoked by this turn of events and deciding not to wait for the formal ratification vote scheduled to be held on August 14, Hunt on August I 1 sent Day a letter. In it he referred to his sincere efforts to negotiate an agreement with the Union and expressed his surprise "at recent developments that are carrying on within . . . [the] driver organization." Continuing, the letter stated: Therefore, I am withdrawing our proposal as agreed to on August 4, 1970 and under the terms of the Lease Agreement, I am hereby terminating the Lease Rental Contract for all drivers, effective 6:00 a.m. August 17, 1970. If we are to maintain this company, we must have a good employee-employer relationship and we will consider any rehiring of the terminated lessees after careful screening. Effective Monday, August 17, 1970, the drivers will receive 40% of their gross bookings, wherein the company will furnish gas, maintenance, etc. By separate letter, posted on the Bulletin Board, we are hereby notifying our Lease Drivers as of this date. As indicated in the letter, the Respondent posted the following notice on the bulletin board in the drivers' room and on the front door of the building: TO ALL DRIVERS UNDER TERM OF CONTRACT DESIGNATED AS LESSEE Notice is hereby given that the present lease contract shall be terminated at the end of the work day on li There is evidence that on various earlier occasions during negotiations the drivers also considered calling a strike in support of the Sunday, August 16, 1970. A work day at Red Cab Inc. is considered as 6:00 a.m. the morning of the 17th. After 8 months of careful negotiations with the Teamsters' Local, including two lengthy discussions with the State Labor Board, we have decided to terminate lease agreements with the present drivers. It is our feelings that the Company cannot operate under present conditions, unless we maintain a good employ- ee-employer relationship and I feel that good employee- employer relationship is in the best interest of the public and the general welfare of of the Company and drivers combined. I quote from the State Labor Commissioner, that: "An employer certainly has a right to run his own Company." Lease contracts (independent contractors) are no longer in the best interest of the Company, or present lessees, and are cause to terminate such agreements. If any present lessees would like to become an employee of Red Cab Inc. they may do so by filling an application for consideration. This in no way effects present commission drivers and we will operate on a 40% commission to the drivers on their gross bookings. Undeniably, the announced new commission rates were inferior to those prescribed in the tentative agreement scheduled to be voted upon on August 14. As expected, the Respondent's action only served to aggravate the situation, causing the drivers seriously to consider among themselves the feasibility of calling a strike against the Company." The Union, however, made no direct response to the Respondent's letter, although Union President Day advised the drivers to continue working and wait to "cross the bridge when we got to it." Secretary-Treasurer Floerke also counseled several members of the Committee to ignore the Company's notice and to inform the drivers not to stop working as the Union intended to seek further negotiations. 3. The August 14 ratification ballot; the scheduled strike vote On August 14, the Indiana Division of Labor conducted a secret ballot among the drivers to determine whether or not to accept the tentative agreement. The proposition was defeated by a vote of 94 to 58 in a unit of some 300 eligible drivers. Immediately after the results were announced, Union President Day assembled the drivers to consider their future action. This led to a discussion of the Respondent's contemplated cancellation of the lease agreements on August 17, the drivers' threatened termina- tion, and the requirement of new employment applications in order to be considered for work on 40-percent commissions. Day testified that he did not regard those new terms and conditions of employment acceptable especially since the Respondent had previously offered higher commission rates. He further testified that to urge their acceptance by the drivers would put the Union "in a position of not being able to get the best contract" for them. In anticipation of the fast approaching effective date of the Union's contract demands but such action was either voted down by the membership or they were dissuaded by union officials from striking. RED CAB, INC. 285 newly imposed conditions of employment, it was suggested by Edmonds, Covington, and others that a strike vote be taken then and there in view of the fact that the defeated tentative agreements had embodied the Respondent' s final offer. However, the assemblage acceded to Day's advice that the strike vote be deferred to afford absent drivers the opportunity to participate. Accordingly, Day scheduled a strike vote for August 17 at 6:30 p.m. at the union hall unless the Respondent delayed putting into effect its new employment conditions. Strike vote notices were thereupon posted in the union hall and at the Company's terminal. In the meantime, the drivers continued to operate company cabs under the existing lease arrangements. 4. August 17 events; shutting down of operations Beginning about 4 or 5 o'clock in the morning of August 17, drivers appeared at the terminal for work, as they customarily did. Undisputably, employment was available to them only as new employees under the previously announced terms, which required the filing of a new application of employment, subject to the Respondent's approval, and a willingness to work on a 40-percent commission basis. A number of drivers who requested cab assignments that morning were denied them because of their refusal to submit a completed employment application form or to accept a 40-percent commission arrangement.12 Other drivers who had filled out an application form the same morning or a day or two before and were willing to work under the new conditions, were not given a cab or were told to wait because cab assignments were being withheld for the time being.13 There were also several drivers who had filed the required application but who did not take out a cab because of an alleged fear of the nonworking drivers or some other concern or reason or the fact that the Respondent had decided to close down its operations.14 Finally, there were drivers, manifestly dissatisfied with the newly imposed conditions of employ- ment or with the situation at the terminal, who congregated outside the terminal building at different times during the day, without seeking a cab assignment.15 When General Manager Jack Brooke a little after 5 a.m. asked a group of drivers standing outside the building whether they intended to go to work, they replied that they were not interested in working for 40-percent commissions. Brooke thereupon ordered them to leave as they were on private property. The drivers obeyed and congregated on the sidewalk. According to Covington's undisputed and credited testimony, Supervisor Cecil Jones assembled the drivers who were in the vicinity of Company's terminal and made an announcement that, under instructions from President Hunt, they were to remove their automobiles from the premises as the Company was "going to lock [the ] place up," and block the entrances and exits to the facility. The drivers complied and then returned to the sidewalk and other areas surrounding the facility. In the meantime, the Company proceeded to block access to the premises with cabs, transport carriers, and other vehicles, leaving only the main entrance open. Thereafter, no trespassing signs were posted around the premises. As a result of the foregoing events, no cabs left the terminal on August 17. There is testimony by Hunt which seems to attribute the suspension of operations , at least in part, to a firebomb threat that Brooke received from an unidentified telephone caller about 5:15 in the morning of August 17, and to fear of a few drivers to take a cab out on the streets. Brooke, however, testified that, despite the bomb threat, the Respondent would have kept its operations going had there been enough drivers willing to work manifestly under the Company's new terms. As Brooke further testified, "If the cabs are not on the lot they can't fire bomb them." Moreover, it is not claimed that any driver was discharged or denied reemployment on account of such misconduct. Except for an abortive attempt to resume operations on August 25, the terminal was shut down until September 25 when it was reopened under circumstances to be hereinafter discussed. It appears that following the closure, the drivers remained outside the premises, milling and standing around, and discussing in groups the situation confronting them. During the day other drivers came to the area and joined these groups. Although there is conflicting testimony, I find that later in the day a number of drivers began to picket, initially with handmade signs bearing the legend "On Strike." These signs, however, were subsequently replaced by lockout signs following the August 17 evening meeting considered below. As soon as the Union's offices opened about 8 o'clock the same morning, Covington, Edmonds, Highbaugh, and other drivers went there and reported the developments at the terminal to either President Day or Secretary-Treasurer Floerke. The drivers were told that nothing could be done if the Company was unwilling to let them take its cabs out. After being reminded of the strike vote scheduled for the evening, the drivers returned to the terminal area. 5. August 17 strike vote meeting; lockout picketing In accordance with the previously issued strike vote notice, the Union held a meeting at 6:30 in the evening of August 17, over which Day presided. Some 120 to 135 drivers attended. After reviewing the events of the day and the denial of employment except under the newly imposed conditions, Day and Attorney Leroy New explained the legal implications of the Respondent's action. They stated, as the drivers had been locked out of their jobs, they could not engage in a strike and therefore a strike vote was premature. New further advised them that they were free to picket the Respondent peacefully in protest to the lockout until the Respondent terminated the lockout and resumed operations, at which time they could either return to work under the Company's new terms or take a vote whether to strike. The drivers were also instructed that only signs indicating that they were locked out should be carried or displayed: 12 Credited testimony of drivers Covington, Ben Edmonds , and George drivers Mary Pennell, Virgil Arthur, Alice Wolfe, and Willie Wardell E. Crutcher. 15 Testimony of drivers John W . Bryant, Anthony N. Solhan, and James 13 Credited testimony of drivers Charles Rhea and Daniel Williams . Moore. 14 Testimony of the Respondent's general manager, Jack Brooke, and 286 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Shortly after the meeting ended about 7:45 p.m., the drivers went to the terminal. Finding it still closed, the drivers set up a picket line which they manned with handmade lockout signs. The next morning (August 18), Day arrived there with lockout signs which bore the Union's name and instructed them to remove or refrain from using strike signs 16 To give the picketing the official stamp of approval, Day put on one of the signs, walked a few paces and then handed the sign to a picket. The lockout picketing continued until August 25. 6. The Respondent's attempted resumption of operations on August 25; the strike vote and subsequent picketing with strike signs On August 25, the Respondent attempted to resume operations with drivers willing to sign new employment applications and accept the 40 percent commission ar- rangement. On that day a total of some 20 drivers drove cabs out of the company lot escorted by internal security police. Mindful of the Union's admonition not to strike unless the Respondent resumed operations, Committee Chairman Hill, Covington, and other committeemen decided to report this new development to the Union. Accordingly, Hill drove to the union hall where he alerted Day to the resumption of operations. Day thereupon prepared the following notice of strike vote to be held on August 28: The Red Cab Company Inc., had officially lifted their lockout and demanded that the drivers return to work under the company terms, therefore the drivers have no alternative other than take a strike vote. In the meantime the drivers are not returning to work, and a strike vote will be taken this Friday, August 28, 1970 between the hours of 9:00 a.m. and 6:00 p.m. at the local union hall, 849 South Meridian Street, Indianapolis, Ind. In the meantime, after a number of cabs had left the terminal, Company President Hunt addressed the- pickets and other nonworking drivers in the area. Proclaiming his intention to put 100 cabs on the street the next morning, Hunt invited the drivers to return, "make out these applications and get rolling." Three or five of the drivers responded to the solicitation, abandoned the picket line, and entered the building. Approximately 10 minutes later, five cabs left the -terminal, three of which were identified as driven by the former pickets. Hill then returned to the picket line, bringing with him the strike vote notice for posting and publication. Concerned over Hunt's intervening solicitation of the drivers to abandon the picket line and report for work on Hunt's unilaterally established terms and his expressed intention to put 100 cabs on the street, a decision was made by Hill, Covington, and others in the group to take a strike vote at the union hall at 6 in the evening without waiting until the August 28 scheduled date, which they believed would be too late to be effective. To reach as many drivers as possible, the telephone numbers of the individuals to be called were divided among the members of the group. Several drivers testified that they had not received such notice and were unaware of the accelerated August 25 voting date. Between 5 and 6 p.m. (August 25), drivers began arriving at the union hall to participate in the strike vote. Secretary- Treasurer Floerke tried, but to no avail, to dissuade them from proceeding with the vote because one had already been set for August 28. He also stated that a strike could not be sanctioned unless there was compliance with certain union procedures, such as a secret ballot and a two-thirds majority vote.17 When Floerke denied the drivers' request to use the Union's facilities to conduct the vote, the drivers assembled on the parking lot where, under the supervision of Hill, the balloting was held. The procedure utilized was for the voter to sign a register and then vote on a tally sheet his preference for or against calling a strike. The final tabulation showed a vote of 80 to 0 in favor of a strike.18 Following the balloting, the drivers returned to the picket line where they prepared signs stating that they were on strike. Although the strike was not formally authorized, some signs bore the Union's name while others did not. Several signs indicated that the drivers refused to take a cut in pay. This strike activity continued until, as later discussed, it was terminated when the Union concluded a contract with the Respondent on September 23. Although Day and Floerke informed the leaders of this activity that the strike was not authorized, it is perfectly clear that neither union official expected the drivers to return to work on the basis of 40-percent commissions which were below those previously offered the Union. The Respondent's attempt to operate on August 25 proved to be a complete failure and the terminal was again closed down. The Respondent presented some testimony that several cabs were being followed during the day; false service calls were received at the terminal; a bomb threat from an unidentified caller was received the same or next day; and it was not worthwhile trying to maintain operations. 7. Subsequent union efforts to reopen negotiations; the drivers' petition to the Union to sign contract At the instance of Committee Chairman Hill, Union President Day arranged a meeting with Company President Hunt in the latter part of August for the purpose of canvassing the possibility of settling the labor dispute. Out of deference to Hunt's wishes to exclude the other committeemen, only Day and Hill conferred with him. According to Day, Hunt made an additional offer, the details of which he could not remember. While leaving the terminal, Day was accosted by Covington and other pickets and taken to task for meeting with the Company without the entire committee being present. In response, Day declared his intention to avail himself of every opportunity to talk to the Company to try to end the dispute. However, nothing productive apparently came of Day's meeting with Hunt. On another occasion during the latter part of August, 16 There is some testimony that a stake sign was seen in the vicinity on 18 There is no evidence of the number of union members who were August 18' notified of the August 25 strike vote. It was estimated that there were about 17 Apparently, International authorization was also required. 270 union members at that time RED CAB, INC. 287 Day was approached by several drivers desirous of returning to work. This led to a discussion of circulating a petition among the members. Although voicing his reluctance to utilize such a procedure because he believed a better bargain could be achieved by further negotiations, Day prepared the following petition: REQUEST FOR LOCAL 193 TO SIGN BARGAINING AGREEMENT WITH RED CAB INC. The Red Cab drivers bargaining committee negotiated terms of a proposed working agreement under which commissions of 42%, 46% and 48% were to be paid to drivers, along with other benefits. The proposal was withdrawn and rejected by Red Cab. Red Cab closed it's operation, effective August 17, 1970. The undersigned drivers hereby request that Local 193, as the selected bargaining representative of Red Cab drivers, sign a 3 yr. bargaining contract for drivers with Red Cab which will contain the above commission schedule and benefits, if such agreement is available from the employer. About 50 or 60 copies were made so that several drivers could participate in securing signatures. This procedure was soon aborted when a driver brought a copy of the petition to the picket line where it was destroyed. After the Respondent's unsuccessful effort to reopen operations on August 25, a group of drivers, which included Hill, Edmonds, Covington, Highbaugh, and Solhan, held unofficial meetings of drivers, with Day's knowledge and acquiescence, to consider resumption of negotiations with the Respondent. At one meeting held on September 4 at St. Johns Church, which 40 to 50 drivers attended, Hill, Marlnee, and Pennell 19 were removed from the Committee and drivers Highbaugh and Fredericks were added. New contract proposals were then prepared and later given to Day for submission to the Respondent with a request for further negotiations. According to Day, he forwarded the group's proposals, as requested. These were subsequently rejected by the Respondent as "ridiculous" and no meeting was held. In Day's absence during several weeks in September, Covington also presented contract proposals to Floerke, urging him to seek negotiations. However, nothing came of those efforts. It is undenied that at no time did the Edmonds-Covington group ever go over the heads of union officials to bargain with the Respondent; on the contrary, they always utilized union channels. Probably, Hunt's refusal to meet with the Committee as part of the Union's negotiating team is attributable, at least in part, to his displeasure with the active opposition of the Edmonds-Covington group to a contract which was restricted to commissions and excluded a rental provision. Indeed, on September 4, when driver Rhea remained behind to man the picket line while the other drivers attended the St. Johns Church meeting, Hunt engaged Rhea in a conversation in which he blamed Edmonds, Covington, Sanders, Hill, and Solhan for keeping the drivers from returning to, work. Hunt remarked that Edmonds was "crazy" for "think[ing] you can operate this business on a dollar an hour," adding that "as long as .. . [Hunt] live[d] ... [Edmonds would] never go back to work here." As for Covington, Hunt stated "he had trouble with some baking company and now he's bringing trouble here." Hunt then proceeded to make disparaging remarks about Sanders, Hill, and Solhan and warned that he was going to reduce the number of black drivers he employed to 20 percent, which was all the law required him to hire, and that he was going to do the selecting. Rhea estimated that before the shutdown 70 percent of the Company's drivers were Black. Finally, Hunt suggested that, if Rhea had a family or needed money, he'd better look for work elsewhere as the Company had no intention of reopening operations soon. 8. The back-to-work petition; the execution of a bargaining contract; termination of picketing After the Company's unsuccessful attempt to resume operations on August 25, Marlnee and Pennell, original members of the Committee, and other drivers spoke to Day about returning to work. In Pennell's conversation with Day, she inquired whether it was permissible for her to secure from General Manager Brooke a list of drivers who had previously signed new employment applications in order to support a petition to go back to work. Day indicated that he had no objection as things were at a standstill anyway. Apparently assuming the leadership in the back-to-work movement Marine and Pennell then conferred with Brooke about the end of August or the first day or two in September concerning the drivers returning to work on the basis of the proposal the Company had withdrawn on August 11. They pointed out that this would enhance the prospect of securing signatures to a petition they intended to circulate than would a petition based on acceptance of the Respondent's most recently imposed terms-the straight 40-percent commissions. Brooke was manifestly pleased with this development and agreeable to their proposition. At their request, Brooke prepared the follow- ing petition in language assertedly suggested by them: We the undersigned-FULL TIME RED CAB EMPLOYEES, Desire to return to work, by accepting RED CABS, Contract proposal to Teamsters Local 193. NAMELY: As Follows: 42% on $150.00 Bookings 46% on 151.00 to 226.00 48% on 226.00 + We also accept the Fringe Benefits of $8.66 per month, on Hospital Insurance and $1.50 Voluntary matching Contribution to Teamsters Pension Fund. Also vaca- tion provisions as outlined in proposal.20 Additional copies were made for other drivers to assist in soliciting signatures. Brooke also furnished Marlnee and Pennell with the names, addresses, and telephone numbers 19 Hill, Marlnee, and Pennell were not present, the latter two not Committee as part of the Union's negotiating team. receiving timely notice of the meeting It is unnecessary to determine 20 This petition contained a column entitled "Name" and another whether such removal was effective as it related purely to an internal union "Former Dever #." Obviously, this was a recognition that the drivers' matter. In any event, the Respondent had ceased dealing with the earlier employment had been terminated. 288 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of the drivers who had previously signed employment applications to work on 40-percent commissions. This information was distributed among the cooperating drivers who then proceeded to solicit signatures. There is undisputed testimony by driver John W. Bryant that early in September Supervisor Gilbert Barnet came to his home with a petition and asked him to sign, asserting that he needed 10 or 15 more signatures before the drivers could return to work. Bryant declined to sign. James E. Childress also credibly testified, without contradiction, that about the middle of September he went to Supervisor Albert Belt's office and told him that he wanted to sign a petition which he heard was being circulated in order to return to work. Belt confirmed the existence of the petition and stated that many of the drivers who were picketing with him had already signed the petition and that Childress could sign the one on Belt's desk. Belt also told Childress, that if he knew other drivers who wanted to go back to work,, to send them to him to sign the petition and added that drivers could return to work either under a rental arrangement or on commissions plus fringe benefits.21 Childress then signed the petition and, as he evidently indicated a preference for the rental arrangement, Belt inserted an "R" alongside of Childress' name. Although Belt did not suggest that Childress stop picketing, Childress stated that it would only be fair for him to do so under the circumstances . The next day Childress conveyed Belt's invitation to join in the petition to four or five drivers. As a result of the back-to-work solicitation, more than 150 signatures were obtained. The signed petitions were then delivered to Brooke who in turn submitted them on September 14 to the Indiana Division of Labor for verification of the authenticity of the signatures. The Division promptly notified the Union of the receipt of the petitions. On September 23, the Division advised the Respondent and the Union that, "after examining the signatures on the petition and the list furnished by Red Cab, Inc. [it] finds that there is a majority signing the petition." When the Covington-Edmonds group learned of the petition the same morning, they severely criticized Day who disavowed responsibility for it. Covington further warned Day "that there was no way anybody was going to go back to work ... because . . . that building was going to come down brick by brick up there" and that "the Panthers was going to take over." Later in the day (September 23), President Hunt, the Company's attorney, Day and the Union's attorney conferred with the result that a contract was executed providing substantially the same terms and a strict commission arrangement as those contained in the proposal the Respondent had withdrawn on August 11. 21 There is a conflict in testimony which need not be resolved, whether Belt also stated that those who signed the petition would be given a preference in assignment of new or better cabs. Childress admitted that he was not induced to sign the petition for this reason. 22 See Resp Exh. 7 and G. C. Exhs. 3, 29A, and 29B 23 This preference for inexperienced drivers was in sharp contrast with the Respondent's wanted advertisements on August 17, when the cancellation of the leases became effective. 24 See Resp. Exh. 7. Included in the 90 nonrecalled former drivers are Charles Rhea, Verlon Sweatt and Michael F Elliott. There is no persuasive evidence that they were not employees on August 17, as the Respondent seems to suggest. While it appears that Sweatt and Elliott had been placed Surprisingly, no discussion was had on this occasion regarding the reinstatement of drivers; nor is there any evidence of any intervention by the Union to secure the recall of the individuals here involved. On September 24, the Union and the Respondent issued a joint news release, announcing the settlement of their labor dispute upon the terms proposed by the Company and the signing of a bargaining contract. The release further stated that the Company "will commence hiring drivers immediately." When this release was shown to the pickets by the internal security police, picketing terminated. 9. The resumption of operations on September 25; refusal to rehire approximately 90 former drivers Following the execution of the bargaining contract and the termination of picketing, the Respondent reopened its operations on September 25. To man its cabs, the Respondent rehired, as new employees, those of its former drivers who had filed new employment applications and signed the back-to-work petition. In addition, it began hiring the first week of its resumed operations new drivers who were not in its employ at the time of the August 17 events in preference to former drivers, whether or not the former drivers had also applied for jobs after picketing had ended or had filed new employment applications 22 Indeed, completely disregarding the pool of experienced manpow- er, the Respondent ran daily advertisements for drivers in local newspapers from October 23 until February 1971, noting its preference for applicants "with no previous cab experience." 23 As a consequence of this recruitment policy, there were approximately 90 former drivers still not recalled at the time of the hearing in this case.24 This number is far less than the number of new employees the Respondent had hired during the period from September 25 to March 11, 1971 .25 There is undisputed evidence of specific unsuccessful efforts by nine former drivers to secure employment with the Respondent after picketing had ended and operations were resumed. In accordance with customary procedures, these drivers, separately or, in groups at different times,26 approached the female-clerk in charge of issuing trip cards and cab keys and requested cab assignments. She thereupon directed them to Supervisor Marvin Edmonds or Omer Lloyd. Their ensuing experience was substantially the same. The supervisors informed them of the requirement of filing new employment applications with which they then complied. In response to their inquiries concerning their job on an "off list" which the Respondent maintained for drivers who failed to pay looney owed to it and which disqualified the individuals from driving until they arranged for discharge of their obligations, their leases were not canceled prior to that date. Moreover, General Manager Brooke admitted that Sweatt drove a cab on August 16 and that Elliott was removed from the list when he arranged to pay for cab damages he had caused. 25 See G. C Exh. 3, 29A, and 29B. 26 Richard Covington, Ben Edmonds, Richard Highbaugh, George Crutcher, Charles Rhea, Henry Williams, Michael Elliott, Verlon Sweatt, and James Childress Several of them applied for work on September 25 while the other drivers applied on September 29 or within that time period RED CAB, INC. 289 prospects, the supervisors observed that they had not signed the back-to-work petition; 27 that since the supporters of the petition had previously agreed to return to work and were instrumental in ending the work stoppage, the Company was obligated to hire them first; and that business had suffered by reason of the strike with the result that there were insufficient jobs available even to take care of all of the drivers who had signed the petition. In concluding the interviews, the named individuals were advised that their new applications would be screened and kept on file for consideration for future employment. According to the uncontradicted testimony of Henry Williams, one of the above applicants, he visited the terminal about a month after submitting his new applica- tion and asked General Manager Brooke when he would be called back to work. Brooke's reply was negative, remarking that at one time "he had-[Williams] coming back to work but-[his] name showed up on the Labor Board list." Apparently, Brooke was referring to the unfair labor practice charge Covington had filed on, September 29 in the present case in which Williams and other drivers were named as employees unlawfully terminated and denied employment for engaging in protected union and concerted activity. Another of the nine named drivers, James Childress, had a different experience from the others. As noted earlier, Childress had voluntarily signed the back-to-work petition and abandoned the picket line. He and other former drivers reported for work about 8 a.m. on September 25. After a supervisor announced how operations were to be initiated, Childress proceeded to the window counter for a cab assignment. However, he was informed by the female clerk that he could not have one as he had been "red lined" and that she did not know the reason. He thereupon discussed the situation with Supervisor Lloyd who stated that "evidentally something has happened" and suggested that he be patient until the matter was "straightened out." After waiting a while and again being advised by Lloyd that the situation had not changed, Childress spoke to Brooke who indicated that the records had gotten mixed up or lost or "they couldn't find-[his] signature on them." In reply to his inquiry, Brooke disavowed any intention not to rehire him. Subsequently, Childress communicated with Brooke and was advised that things had not yet been straightened out. On a later visit to the terminal, Childress asked President Hunt about his chances of being rehired. Hunt answered that he might as well get another job as he was "a big trouble maker" who made "more noise and stuff than anybody around here"; that he even had his wife on the picket line; and that, in any event, the Company did not have much business and preferred inexperienced drivers. In addition, there is testimony by another former driver, John Bryant, that he did not apply for a job with the Respondent after picketing had ended because other former drivers had informed him that they had been turned 27 The drivers denied having ever seen the petition, although they admitted hearing rumors of its circulation. 28 The Respondent in its brief identifies the leaders of the "minority group" to be the "complainant Covington, Ben Edmonds, Tony Soihan and a few others." Actually, as noted above, approximately 90 drivers had not been recalled as of the time of the hearing. 29 N L.R B v. Draper Corporation, 145 F.2d 199 (C.A. 4), setting aside down. However, it appears from Respondent's Exhibit 7 that he had at an undisclosed time filed an employment application. As indicated above, neither he, the above- named individuals nor other former drivers listed in Respondent's Exhibit 7 had been recalled as of time of the hearing. B. Concluding Findings On the basis of the foregoing evidence, the General Counsel contends, in substance, that the Respondent, in violation of Section 8(a)(1), (3), (4), and (5) of the Act, discharged and locked out its drivers because of their protected union and concerted activity relating to the ratification of the tentative agreement, and thereafter refused to reinstate approximately 90 of these employees; that the Respondent denied reinstatement to driver Henry Williams for the additional reason that he was named in the unfair labor practice charge filed herein; that it threatened drivers with loss of employment because of their protected activity; and that it unilaterally established new terms and conditions of employment, dealt with individual employees and solicited their return to work on such terms, participated in the preparation and circulation of the petition and engaged in other acts in derogation of the Union's representative status. The Respondent, on the other hand, simply views the drivers' activity as nothing more than an unauthorized wildcat strike conducted by a dissident minority in opposition to the union leadership and the progress of contract negotiations' with the Respondent. It therefore argues that such interference with the bargaining process was not a concerted activity protected by Section 7 of the Act and hence its refusal "to reemploy the leaders" 28 was not an unfair labor practice. In support of its position, the Respondent relies on the principle expressed by, the court in the Draper line of cases.29 For the reasons hereinafter indicated, I find that this principle is not applicable to the situation here presented. It cannot be seriously denied that the Respondent discharged its drivers 30 on August 17 when the cancellation of the lease agreements became effective. This is plainly shown by the notice the Respondent posted at its terminal and the letter it sent to the Union, notifying it of the Company's action and its intention to "consider any rehiring of the terminated lessees after careful screening" on the basis of its newly imposed terms of employment. Certainly, clearer language is not needed to effect a severance of the employment relationship. Indeed, subse- quent events including, among other things, the rehiring of former drivers as new employees after filing the required employment application, even though their original appli- cation was apparently still on file with the Company, and the Respondent's refusal to recall the other drivers involved 52 NLRB 1477; Harnischfeger Corporation v. N.LR B., 207 F.2d 575 (C.A. 7), setting aside 103 NLRB 47; N.L.R.B v. Sunbeam Lighting Company, Inc, 318 F.2d 661 (C.A. 7), setting aside 136 NLRB 1248. 30 As found above, drivers were employees within the meaning of the Act on and prior to August 17, as they have concededly been since that date. 290 DECISIONS OF NATIONAL LABOR RELATIONS BOARD herein, confirm that a discharge was contemplated and accomplished.31 Equally clear is the fact that the discharge action was taken by the Respondent in reprisal for the campaign conducted by the Edmonds-Covington group to defeat ratification of the tentative agreement reached by the Union's negotiating team with the Respondent. Thus, upon learning of this campaign, which unquestionably displeased Company President Hunt, especially since Edmonds and Covington had previously concurred in the tentative agreement, Hunt informed the Union in his August 11 letter mentioned above that he was withdrawing the company proposal in view of the "recent developments that are carrying on within our driver organization" and that he was therefore terminating the lease agreements. This the Respondent did without even waiting for the results of the contemplated ratification meeting scheduled to be held 3 days later on August 14. However, all the Edmonds- Covington group was actually doing was to express dissatisfaction with the proposed agreement in an effort to secure ultimately further concessions from the Respondent through their bargaining representative. Undeniably, the employees had the right to reject the tentative agreement and implicit in this right was the privilege to engage in vigorous advocacy among themselves to achieve this objective. Whether or not they acted reasonably or wisely is not material in determining the permissibility of their conduct.32 Moreover, such activity related to the internal affairs of the Union into which the Respondent was statutorily barred from intruding.33 In 'a real sense, therefore, the anti-ratification conduct was union and concerted activity "for the purpose of collective bargaining-[and] mutual aid and protection" which Section 7 of the Act safeguards and for which the participants may not be lawfully discharged, much less all the drivers many of whom favored ratification.34 As the Board so aptly observed in Nu-Car Carriers: 35 The discharge of a dissident within a union when that termination is motivated by a desire to eliminate protest must inevitably result in an infringement under Section 8(a)(1) and 8(a)(3) of the employee's right to self- organization. We believe that inherent in that right is the privilege of protest and persuasion of others. Without this, effective employee representation be- comes a nullity. As the Respondent's conduct was inherently destructive of the drivers' protected rights, I find that the discharges 31 This is also evident in the back-to-work petition which General Manager Brooke drafted wherein the signers were identified as "Former Driver #." 32 N.L.R.B. v Mackay Radio & Telegraph Co., 304 U.S. 333, 344, N.L R B. v. Washington Aluminum Company, Inc, 370 U.S. 9, 16. 33 Jack Roesch, d/b/a Roesch Transportation Company, 157 NLRB 441, 448; cf. N L.R.B v. Wooster Division of Borg-Warner Corp., 356 U.S. 342, 349-350. 34 N L.R B. v. Nu-Car Carriers, Inc., 189 F.2d 756 (C.A. 3) enfg. 88 NLRB 75, cert. denied 342 U.S. 919; see also Simmons, Inc v. N.LR.B., 315 F 2d 143, 145 (C.A. 1), where the court sustained the Board's finding that the employer violated Sec 8(a)(l) by threatening employees with discharge in order to coerce their acceptance of the terms of a proposed bargaining agreement (134 NLRB 1038). 35 88 NLRB at 76-77. 36 NL.R.B v. Katz, 369 U.S. 736, 742-743. 37 Cf N LR.B v. Armour & Co, 154 F.2d 570, 577 (C A. 10). which became effective on August 17 violated Section 8(a)(1) and (3) of the Act. Moreover, I find that the Respondent's unilateral imposition of new terms inferior to those previously offered to the Union, as a condition of reemployment as new employees also amounted to punitive action condemned by the same provisions of the Act. By thus bypassing the Union in establishing new terms and conditions of employment and by dealing with the drivers directly in offering jobs on those terms, I further find that the Respondent acted in complete disregard of the bargaining duty it owed to the Union and thereby violated Section 8(a)(5) of the Act 36 As a result of the wrongful discharge of the drivers and the unwillingness of a sufficient number of drivers to operate cabs under the Company's unilaterally imposed terms37, the Respondent on August 17 closed down its terminal. I am not persuaded that the alleged threats of firebombing or violence that morning contributed to the shutdown to any significant degree, if at all. As discussed above, after operations ceased and the drivers' termination became an accomplished fact, the drivers began picketing the Respondent's premises to protest their discharge and conditions for rehire as new employees. This was not an unusual response. Such picketing has long been regarded as a protected, concerted activity to regain jobs unlawfully terminated. Certainly, this protection was not forfeited, as the Respondent argues, because the drivers, without obtaining union authorization engaged in a strike so designated by the several handmade picket signs which were carried the first and second days. However, if it is legally important to label the drivers' activity, the language of those few signs must not be evaluated in a vacuum but must be considered in the light of surrounding circumstances. Here, the evidence demon- strates that, technically speaking, there was no strike under the statutory definition as the drivers did not stop work but were discharged.38 On the other hand, assuming that the drivers' activity was a strike, they, as unlawfully discharged employees, retained their employee status 39 and as such were privileged to strike in support of their labor dispute with the Respondent over their lost jobs 40 Moreover, under settled authority,41 union sanction or compliance with internal union procedures is not a prerequisite for exercising this right. In any event, the strike signs were replaced with lockout signs shortly after the Union advised the drivers that they had been locked out and furnished them with signs containing such language. Indeed, to make 38 Sec. 501(2) of the Act defines the term "strike" as including "any strike or other concerted stoppage of work by employees (including a stoppage by reason of the expiration of a collective-bargaining agreement) and any concerted slow down or other concerted interruption of operations by employees." 39 Sec. 2(3) of the Act provides that the "term `employee' ... shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice-." 90 Sec. 13 states that "[nlothing in this Act, except as specifically provided for herein, shall be construed so as either to interfere with or impede or diminish in any way the right to stake, or to affect the limitations or qualifications on that right." Sec. 2(9) defines the term "labor dispute" as including "any controversy concerning terms, tenure or conditions of employment ... . 41 NLRB v 'Deena Artware, Inc., 198 F.2d 645, 652 (C.A. 6), cert. denied 345 U.S. 906. RED CAB, INC. 291 the picketing official Union President Day carried the first union sign. That this picketing thus had union sanction cannot be seriously questioned. I also find that the drivers' activity did not lose its statutory protection on August 25 when they replaced the lockout signs with strike signs. As previously noted, this action was taken on the Union's advice given on August 17 that they could strike the Respondent if the Respondent discontinued the lockout by resuming operations. Whether or not this advice was meaningful in the framework of the events here, it is perfectly clear that the so-called strike was in furtherance of the same lawful objective to secure reinstatement of the drivers to their former jobs. For this reason, I find, contrary to the Respondent's contention, that the so-called strike, like the prior lockout picketing, was a protected concerted activity and the drivers may not be deprived of their jobs for engaging in it, even though the strike was not authorized because they did not wait for the strike vote the Union had scheduled for August 28,42 or because they did not otherwise comply with internal union procedures 43 Lastly, I find no substantial business or other legitimate reason in the record for the Respondent's refusal to reemploy the nine named drivers 44 who personally applied for jobs after operations were resumed or in its failure to rehire the other former drivers who filed new employment applications. As these employees have been found to have been unlawfully discharged because of their earlier protected union and concerted activity, I conclude that the Respondent's refusal to reemploy them constitutes inde- pendent unfair labor practices under Section 8(a)(1) and (3) of the Act 45 As Henry Williams, one of the named individuals, was not rehired for the additional reason that his name was included in the unfair labor practice charge filed herein on his behalf, I further find that such discrimination violated Section 8(a)(4) of the Act. In making my above findings, I have given careful consideration to the Respondent's reliance on the principle enunciated by the court in Draper and followed in several other cases to justify the discharge and refusal to reinstate the drivers in question and perceive no factual basis for its position. In the cited cases,46 a dissident minority engaged in a wildcat strike which preempted or undermined the authority of the employees' exclusive representative in its negotiations with the employer, and thereby interfered with the normal bargaining process. As shown above, there was no such unwarranted wildcat strike by the Edmonds- Covington group. On the contrary, the picketing that occurred was to protest the unlawful discharges and the imposition of unilaterally established terms inferior to those previously offered to the Union, as a condition of 42 As indicated above, the Edmonds-Covington group, however, conducted its own strike ballot on August 25 which resulted in a vote of 80 to 0 in favor of striking. 43 N.L R B v. Deena Artware, Inc, supra. 44 Covington, Ben Edmonds, Highbaugh, Crutcher, Rhea, Henry Williams, Elliott, Sweatt, and Childress. 45 In view of the fact that the remedy of reinstatement and backpay would be the same, it is unnecessary to decide whether it would have been futile for the remaining discharged drivers to apply for reinstatement Certainly, the Act does not require unlawfully terminated employees to do so 46 N.L.R B. v Draper Corporation, 145 F 2d 199 (C.A. 4), setting reemployment as new employees. Accordingly, I reject the Respondent's contention as lacking in merit. In addition to the foregoing, I find that the Respondent engaged in other unfair labor practices during the course of the drivers' protected union and concerted activity. Specifically, I find that on September 4 President Hunt, after criticizing the activities of the drivers associated with the Edmonds-Covington group, warned both expressly and by implication that Edmonds, Covington, and other drivers would never return to work for that reason. Clearly, such an ominous threat for engaging in protected union and concerted activity, which later became a reality, violated Section 8(a)(1) of the Act. I further find that Hunt's solicitation of drivers to abandon the picket line and return to work as new employees under the unilaterally estab- lished terms on the occasion of the Respondent's abortive attempt to resume operations on August 25 necessarily undermined the Union's representative status in violation of Section 8(a)(5) and (1) of the Act. Similarly in derogation of the Union's bargaining status was the Respondent's conduct in acceding to the request of drivers Marlnee and Pennell to restore the Company's previously withdrawn offer of 42-46-48 percent commissions to induce the drivers to sign a back-to-work petition, as was its conduct in preparing and participating in the circulation of such a petition. There is room for little doubt that conduct of this nature also violated Section 8(a)(5) and (1) of the Act. IV. THE REMEDY Pursuant to Section 10(c) of the Act, as amended, I recommend that the Respondent cease and desist from engaging in the unfair labor practices found and in like and related conduct and take certain affirmative action designed to effectuate the policies of the Act. I have found that the Respondent unlawfully discharged all its drivers on August 17, 1970, and subsequently refused to rehire a substantial number of them when it resumed operations on September 25, 1970. I, therefore, recommend that the Respondent offer the drivers who have not yet been recalled 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 make them whole for any loss of earnings they may have suffered by reason of their discharge, by payment to each of them of a sum of money equal to that which each one normally would have earned from the date of discharge to the date of the offer of reinstatement,47 less his net earnings during the said period48 As for those drivers who have returned to work, it appears that they were rehired as new employees and that aside 52 NLRB 1477 (union agreed to postpone negotiating meeting to new date and employees struck to compel earlier meeting), Harnischfeger Corporation v. N.L R.B, 207 F.2d 575 (C.A. 7), setting aside 103 NLRB 47 (walkout because of dissatisfaction with the manner in which the union negotiating committee was bargaining); N.L R B v. Sunbeam Lighting Company, Inc., 318 F.2d 661 (C.A. 7), setting aside 136 NLRB 1248 (walkout while bona fide contract negotiations were in progress). 47 The record shows that the parties concluded a collective-bargaining contract on September 23, 1970. Consequently, the commissions therein provided shall govern the computation of backpay after that date. 48 See N.L.R.B. v Armour & Co., 154 F.2d 570, 577 (C.A. 10). As a number of drivers held other regular jobs at the time of their wrongful (Continued) 292 DECISIONS OF NATIONAL LABOR RELATIONS BOARD they also may have suffered loss of pay as a result of their unlawful discharge. Accordingly, I recommend that the Respondent take the same action concerning reinstatement and backpay with respect to these employees as is recommended above with respect to the nonrecalled employees. Backpay shall be computed with interest on a quarterly basis in the manner prescribed by the Board in F. W. Woolworth Company, 90 NLRB 289, and Isis Plumbing & Heating Co., 138 NLRB 716. To facilitate the computa- tion, as well as to clarify the named employees' rights to reinstatement and employment, the Respondent shall make available to the Board, upon request, payroll and other records necessary and appropriate for such purposes. I further recommend that the Respondent notify these employees of their right to reinstatement on application if they are serving in the Armed Forces of the United States. The posting of a notice is also recommended. Upon the basis of the foregoing findings of fact and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in com- merce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. All full-time and part-time drivers, together with garage employees of the Respondent employed at its facility, exclusive of all personnel department employees, office clerical employees, porters, salaried employees, professional employees, guards, and all supervisors as defined in the Act constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. At all times material herein, the Union has been the exclusive bargaining representative of the employees in the aforesaid appropriate unit within the meaning of Section 9(a) of the Act. 5. By discharging its employees and refusing to reinstate them to their former jobs because they engaged in union and concerted activities protected by Section 7 of the Act, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) and (3) of the Act. 6. By refusing to reinstate an employee because his name appeared in the unfair labor practice charge filed herein on his behalf as one of the unlawfully discharged individuals, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(4) of the Act. 7. By unilaterally establishing new terms and conditions of employment without first notifying and bargaining with the Union; by dealing with individual employees with respect to terms and conditions of employment in derogation of the Union's exclusive representative status; by soliciting drivers to abandon the picket line and return to work as new employees under the unilaterally estab- lished terms; and by preparing and participating in the circulation of a back-to-work petition based on the employees' acceptance of terms and conditions of.employ- ment contained in a tentative agreement it had previously withdrawn but which it reoffered to employees to induce them to sign the petition, the Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 8. By threatening to discharge and refuse to reemploy drivers in reprisal for their protected union and concerted activity, the Respondent has engaged, and is engaging, in unfair labor practices in violation of Section 8(a)(1) of the Act. 9. The aforesaid unfair labor practices affect commerce, within the meaning of Section 2(6) and (7) of the Act. 10. The Respondent has not violated the Act by promising employees a preference in selection of cabs to induce them to sign the back-to-work petition, as alleged in the complaint. [Recommended Order omitted from publication.] discharge in addition to driving for the Respondent, the earnings from the regular jobs, of course, may not be considered in determining the Respondent's backpay liability under the terms of this Order.