Ertel Manufacturing Corp.

ERTEL MANUFACTURING CORP. 525 Ertel Manufacturing Corporation and District 90 of the International Association of Machinists and Aerospace Workers, AFL-CIO. Cases 25-CA-4214 and 25-CA-4214-2 November 28, 1972 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS JENKINS AND KENNEDY On February 10, 1972, Administrative Law Judge' Ivar H. Peterson issued his original Decision in this proceeding. Thereafter, the Respondent filed excep- tions and a supporting brief, and the General Counsel filed a brief in support of the Administrative Law Judge's Decision. On June 15, 1972, the Board issued an Order, remanding the instant proceeding to the Administra- tive Law Judge for the purpose of making findings of fact concerning the supervisory status of Austin Brooks and Bill Hart. On June 28, 1972, the Administrative Law Judge issued his Supplemental Decision. Thereafter, the Respondent filed excep- tions to the Supplemental 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 authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decisions in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge and to adopt his recommended Order, as modified herein. We agree with the conclusion of the Administrative Law Judge that Respondent violated the Act by discharging Mary Welch, Hubert Welch, and Nancy Ely. However, we find that these discharges violated Section 8(a)(1), but not Section 8(a)(3) of the Act as found by the Administrative Law Judge, because, in our view, there is insufficient evidence to support a finding that Respondent had knowledge of any union activity by these employees.2 The record reveals that on or about February 12, 1971,3 Mary Welch returned to work following an illness. At that time, she demanded that her supervi- sor, Victor Eichmiller, remove her replacement from the machine that she had operated prior to her illness and that he assign that work to her because of her seniority. After an argument ensued over this issue, William Ertel, Jr., Respondent's personnel manager, attempted to settle the problem. Thereafter, Mary Welch, having been refused this job assignment, informed Eichmiller and Ertel that she was going to the Labor Board to get her job back. On February 13, Mary Welch, after relating to Nancy Ely the incident with Eichmiller and Ertel, asked Ely if she would accompany her to the Labor Board. Ely stated that she would because she was receiving similar treatment. On February 15, Mary Welch, together with her husband, Hubert Welch, and other fellow employees, James McKinstry and Nancy Ely, went to what they thought was the Labor Board. Instead, they actually arrived at the Post Office, where a guard informed them that the Labor Board was closed due to a holiday. Later that same day, Mary Welch tele- phoned Ertel and advised him that she "had been to the Labor Board that day but it was closed and . . . tomorrow is another day."4 When Nancy Ely reported to work that evening, she informed Bill Hart that she, Mary Welch, Hubert Welch, and James McKinstry had gone to what they thought was the Labor Board, and that Mary Welch was going to file a "complaint" with the Board. After Hart questioned Ely whether she was going to be involved, Ely stated that she was not because she needed her job desperately. Hart then told Ely that if she wanted to keep her job, she should not get involved. On March 3, Nancy Ely complained to Austin Brooks that Mary Welch was constantly questioning her as to whether she would again go to the Labor Board. As a result, Brooks told Ely that he knew for a fact that whoever was involved with Mary Welch would be in a lot of trouble and that the Company would get rid of her the first chance they got. On March 4, Mary Welch, Hubert Welch, and Nancy Ely were discharged. Upon receiving her termination slip and paycheck, Ely asked Eichmiller why he had her discharged since he knew that she had obligations to her family and that she really needed the job. Eichmiller replied that she should have thought of her obligations when she continued to associate with Mary Welch who she knew was a troublemaker. The record clearly establishes that in attempting to seek out the National Labor Relations Board to complain regarding their working conditions, the three dischargees were acting in concert for their i The title of "Trial Examiner" was changed to "Administrative Law Judge" effective August 19, 1972 2 Member Jenkins finds it unnecessary to consider whetht;r the discharges of Mary Welch, Hubert Welch, and Nancy Ely were violative of Section 8(a)(3) as well as Section 8(a)(1) The remedy provided herein would be the same whether or not the discharges are also considered as 8(a)(3) violations He agrees that the discharges are clearly violative of Section 8(a)(1) 3 Hereinafter all dates are 1971 unless otherwise indicated 4 We do not adopt the Administrative Law Judge's apparently inadvertent error in finding in see 11, B, of his Decision that Nancy Ely made this telephone call The record clearly indicates that Mary Welch did so, as the Administrative Law Judge properly found in sec III of his Decision 200 NLRB No. 84 526 DECISIONS OF NATIONAL LABOR RELATIONS BOARD mutual aid and protection within the meaning of Section 7 of the Act. It is also apparent that Respondent knew of this activity engaged in by the three dischargees. Mary Welch informed Ertel that she had been to the Labor Board on February 15. In addition, Nancy Ely told Supervisor Hart that she and Mary and Hubert Welch had attempted to go to the Labor Board on that same day. With respect to Respondent's motive for terminating these three employees, the statements of Supervisors Hart, Brooks, and Eichmiller clearly indicate that Respon- dent discharged them because they attempted to seek out the Board to improve their working conditions. Accordingly, we find that Respondent violated Section 8(a)(1) of the Act by discharging Mary Welch, Hubert Welch, and Nancy Ely for the reason set forth herein.5 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge and hereby orders that Respondent, Ertel Manufacturing Corporation, Indianapolis, Indiana, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order. 5 Hoover Design Corporation, 167 NLRB 461 TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE (Hubert Lee Welch, Mary Welch, and Nancy Ely) because of their protected activities ; (c) whether the Respondent on or about March 12 unlawfully laid off and terminated night shift employees ; and (d) whether the Respondent by other action unlawfully interfered with the Section 7 rights of its employees. For the reasons hereafter stated, I resolve these issues against the Respondent and, accordingly, shall recommend that it take appropriate remedial action. Upon the entire record, including my observation of the demeanor of the witnesses , and after due consideration of the able briefs filed on December 20 by counsel for the General Counsel and counsel for the Respondent, I make the following: FINDINGS OF FACT 1. JURISDICTION The Respondent, an Indiana corporation, maintains a facility in Indianapolis, Indiana (among others in various sections of the United States), which is the only facility involved in this proceeding, where it primarily manufac- tures valve guides which are sold to various manufacturers of automobile and other motors. These articles of necessity must be finished so as to meet extremely close tolerances. During the week ending March 14 , the plant employed approximately 135 employees on the day shift and 44 on the night shift ; of these, 59 of the day shift and 27 of the night shift employees were in production and grinding, the area where the layoffs occurred. The Respondent admits, and I find, that it is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. I further find that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. THE ALLEGED UNFAIR LABOR PRACTICES IVAR H PETERSON, Trial Examiner: This case was tried at Indianapolis, Indiana, on August 3 to 6, and October 13-15, 1971, both inclusive. The charge in Case 25-CA-4214 was filed on March 17, and the charge in Case 25-CA-4214-2 was filed on May 6. The complaint and notice of hearing were issued on May 28 by the Regional Director for Region 25. The Respondent filed an answer, received June 16, denying that it had engaged in any activity violative of the Act Thereafter, under dates of July 23 and July 26, counsel for the General Counsel filed notices of intention to amend the complaint in certain particulars. At the opening of the hearing counsel for the General Counsel was granted permission to amend the complaint by deleting the name of one alleged discnmina- tee, by adding a substantial number of additional alleged discriminatees, and by further alleging that certain named supervisors in addition to threatening employees with discharge or other reprisals if they became or remained members of the union, or gave any assistance or support to it, did so in part because employees had engaged in protected concerted activities. The case involves four principal issues (a) Whether the Respondent unlawfully threatened its employees with respect to their union and protected concerted activities; (b) whether the Respondent discharged three employees A. Background The Respondent is not a stranger to Board proceedings. On June 5, 1964, the Board issued an order , following a hearing on a complaint alleging unfair labor practices, against the Respondent (147 NLRB 312) which thereafter was enforced by the Court of Appeals for the Seventh Circuit (352 F.2d 916). The Supreme Court denied certiorari (383 U.S. 945). Briefly stated, the June 1964 case involved the following issues: General interference with, restraint, and coercion of employees , interrogation, threats, warnings of surveillence and discrimination , the promulga- tion and enforcement of a rule prohibiting the solicitation of union membership or the distribution of union literature on the property of the Respondent, and the alleged discriminatory discharge, suspension, layoffs, demotions, and failure to call or recall or reinstate certain employees, all in violation of Section 8(a)(1) and (3) of the Act. This conduct occurred during an organizational campaign by the United Automobile Workers and, as will be seen, was strikingly similar in nature to the activities here involved and a substantial number of the same supervisors figured in both cases. A little over a year later, in Case 25-RC-2756, the union there involved had petitioned for an election and, in ERTEL MANUFACTURING CORP. 527 conjunction with the organizing campaign, the Board found that the Respondent threatened to close down the facility if a union came in. In consequence, when that union failed to win the election and filed objections, the Regional Director sustained the objections and the Board affirmed. In the course of that proceeding the Respondent applied for an injunction in the United States District Court for the Southern Distnct of Indiana seeking to restrain the Regional Director from conducting the hearing on the representation petition. The District Court found that it was without jurisdiction and, accordingly, dismissed the application. Ertel Manufacturing Corporation v. Little, 59 LRRM 2937 (July 1965). So far as appears, no union attempted to organize employees of the Respondent between 1965 and the current effort. B. The Concerted Activity of the Welches and Mrs. Ely On February 12, Mrs. Welch returned from about 6 weeks of sick leave and discovered that the machine which she normally operated, the reamer, was being operated by another female employee. She complained to her foreman, Victor Eichiiller, at some length and called Ertel into the discussion, and told them that she intended to take the matter up with the Labor Board. She got in touch with Mrs. Ely and McKinstry and, on February 15, together with them and her husband, they went to the Federal building intent on filing a complaint with the Board. However, that day was being observed as Washington's Birthday and the offices were closed. That evening Mrs. Ely related to Supervisor Loviscek their activities and she telephoned Ertel, Jr., and told him that they had been to the Board but had discovered that the offices were closed and that they intended to go again. The following day, February 16, Mrs. Welch and her husband, accompanied by McKinstry, met at the Federal building; there they were told by employees of the wage and hour division that the Board was not officed in that building. They then went to the Equal Employment Opportunity Commission Office, where McKinstry had previously filed a charge against the Respondent, and when Mrs. Welch explained her problem, the EEOC representative stated that that office could not be of any assistance to her, but that they were interested in McKinstry's problem. On that occasion Mr. Welch gave an affidavit in support of McKinstry's charge of racial discrimination. During the evening of that day, Mrs. Welch and McKinstry discussed the possibility of getting a union into the plant, and McKinstry stated that he would see what he could do. On March 3, before the second shift started, Mrs. Welch and her husband, accompanied by Dale and Robert Grisam and McKinstry, attended a meeting at the union hall. On that occasion, Mr. and Mrs Welch were told to count the timecards so that the union representatives would know the size of the bargaining unit at the plant. When they went to work, Mr. and Mrs. Welch stood at the I Counsel for the General Counsel sought to elicit testimony from Mrs Ely to the effect that Foreman Loviscek was told by her that Mr and Mrs Welch had attended a union meeting that day However, in view of the fact that Loviscek was deceased and no person other than Mrs Ely and Loviscek were involved in the conversation, I excluded the testimony timecard rack and counted the cards. According to Mrs. Welch, it took her approximately 5 minutes to perform this task and, at that time, Supervisors Carr, Eichmiller, and Aurs were standing a short distance away and could readily observe her actions. Later that evening Mr. and Mrs. Welch solicited an employee named Kenny to join the Union.' The following day, March 4, Mr. and Mrs. Welch and Mrs. Ely were terminated and, in each case, the reason placed on their unemployment form stated "Discharged due to a combination of lack of work and demoralization of co-workers and supervisors." Admittedly, no employee in the more than 50-year history of the Respondent had been discharged for this stated reason. The personnel folders of the discharged employees do not indicate what was meant by the reason given, and there is no record in these folders of any warnings or any discipline ever having been administered to them. Mr. Welch had worked continuously for the Respon- dent since 1953. The Respondent contends that Welch had been drinking on the job the entire time he had been employed, and that this problem became more aggravated during the 4 to 6 months prior to his termination. The Respondent sought to justify the failure to discharge him prior to March 4 on the ground that it had no replacement for him. However, the job that Welch had, that of a lathe operator, was termed by Foreman Eichmiller as semi- skilled, and other employees at times had been put on that job. It is, of course, true that in order to function as a lathe operator an employee would have to be able to read micrometers. Eichmiller further testified that, depending upon the individual, it would be possible to break an employee in on that job "in an hour or two." Counsel for the General Counsel points out that the basis for McKinstry's charge filed with the EEOC was the fact that Welch had replaced him on the job on which he (McKinstry) had been working. Thus, counsel argues, if the Respondent had terminated Welch at a time "they claimed that they should have, James McKinstry obviously could have been performing that work up until and including the date of Lee Welch's actual termination." C. Organizational Activity Following the March 4 Terminations On Monday, March 8, the Welches, Mrs. Ely, and McKinstry went to the union hall and furnished the Union with written statements concerning the events surrounding the termination of March 4. At this meeting, McKinstry and the others were given union buttons. From that date until he was terminated, McKinstry wore two umon buttons on his hat. On March 10, a union meeting was held at about 10:00 in the morning, before the beginning of the Wednesday evening work shift. In attendance were the Grisam brothers, Mr. and Mrs. Welch, Charles Walter, and McKmstry. McKinstry signed a union card on this occasion and the others were given umon buttons to pass Loviscek died on June 27, and it was not until the opening of the hearing that the complaint was amended to include the allegation involving him She did, however, relate that she had given Loviscek a copy of the statement she had given the Board and that Loviscek said he had shown it to Ertel, Jr , and supervisor Carl Enochs 528 DECISIONS OF NATIONAL LABOR RELATIONS BOARD out to other employees That evening McKinstry gave employee Richard Mitchell a union button and he saw the two Grisam brothers, Wayne Reilly and Edward Shattuck, wearing buttons while at work that evening. Walter also wore a button on March 10 but, after a conversation with an office employee, he removed it and did not thereafter wear a button. On March 10, Supervisor Aurs came up to McKinstry, noticed the buttons, and asked him what they represented. McKinstry responded that they represented the IAM During the course of the shift, McKinstry discussed the Union with other employees. During the evening of March 11, McKinstry and others continued to wear their buttons and McKinstry also engaged in union solicitation among other employees, primarily in the production and grinding area. On the evening of Friday, March 12, the Respondent laid off some 20-odd employees in the production and grinding department. The effect of this was, in substance, to stifle the union efforts inside the plant, although it appears that the laid off employees continued to attend union meetings and pass out union literature at the plant gates. D Other Interference, Restraint, and Coercion Mrs. Ely testified, without contradiction, that during a conversation with Foreman Hart during the afternoon of February 15, he asked whether she was going to be involved with Mrs. Welch in going to the Labor Board, and stated that employees who would engage in such conduct would be terminated. On March 3, Mrs. Ely was told by Austin Brooks, a setup man,2 that Mrs. Welch was going to be fired and that anyone who associated with her or participated in her activities would also be terminated. 111. THE RESPONDENT'S DEFENSE TO THE TERMINATIONS OF THE WELCHES AND MRS. ELY Foreman Eichmiller was responsible for the termination of the Welches and Mrs. Ely. After some vacillation, he testified that he had requested that Mrs. Ely be terminated over a period of months because she had been encouraging other employees to complain about their job assignments and, the evening before their termination, Mrs Welch and Mrs. Ely had engaged in a rather heated argument. Mrs. Welch testified that on February 12, after being assigned to a machine other than the reamer she had usually operated, she had a conversation with Ertel and Eichmiller, in which she asked the reason why she had not been assigned to run the reamer, and that Ertel said that he would speak to Eichmiller about the matter. Eichmmller refused to assign her to her formerjob, and she then stated that she was going to the Labor Board about the matter as she had more seniority than the woman Eichmiller had placed on the machine. She thereupon clocked out and went home As related above, Mrs. Welch and others attempted to visit the Labor Board office on the following Monday and Tuesday. On Monday evening Mrs. Welch went to the Ely home and telephoned Ertel. She asked him 2 In the prior case the Board determined that setup men were supervisors within the meaning of the Act Although in this proceeding the Respondent contended otherwise , it did not adduce any evidence to indicate that the duties of setup men had been changed since the prior proceeding I find "if he wanted me to come back into work " and also told him that she "had been to the Labor Board that day" but that the office was closed and then stated , "tomorrow is another day." Mrs. Ely refused to accompany her on February 16, stating that "she had talked to some people and they had told her to stay out of it." Thereafter, Mrs. Welch spoke to McKinstry about forming a union and the latter set up a meeting for March 3. She and her husband , the two Gnsam brothers, and McKinstry attended. As previously related, Mrs. Welch counted the timecards in the rack before going to work that evening. At lunch break , Mrs. Welch spoke to an employee named Kenny and asked him what he thought about bringing a union into the plant. The last day she worked was March 3. On March 4 her husband came home and handed her two checks , and the written statement concerning her discharge stated that she was terminated because of lack of work and demoralization of coworkers and supervisors . According to Mrs. Welch , she had never received any warnings or discipline concerning her job performance . She signed a union card on March 10. Ertel, Jr., denied that in the telephone conversation with Mrs. Welch she made any mention of having been to the Labor Board. He further stated that neither he nor any other management official knew that the terminated employees had been engaging in union activities. Ertel testified that he ordered the discharge of the Welches and Mrs. Ely on the recommendation of Foreman Eichmiller, that they had discussed the three employees many times, and that Eichmiller had recommended that, if he ever had a chance, he would like to replace them . Ertel related that in connection with the work assignment on the day she came back following her absence due to an accident, Mrs. Welch argued with Eichmiller and, at one point, "told me that Ike was a half-assed boss, and that I had to be pretty stupid myself to keep the son-of-a-bitch on the payroll, or to have him as a boss, or something of that sort." She argued, so he stated, that she was entitled to run the reamer because of her seniority, but that he (Ertel) explained that the Respondent did not run on a strict seniority basis, though it was true that employees with higher seniority usually ran the better bonus jobs.3 Ertel acknowledged that during the conversation Mrs. Welch did say something about going down to the Labor Board which, according to her, would instruct Ertel that the Respondent had to make assignments according to seniority IV. THE LAYOFFS OF MARCH 12 Paragraph (c) of the complaint alleged that on March 12 the Respondent laid off and thereafter failed and refused to recall approximately 25 night shift employees and then by name listed eight employees as having been included in the layoff, but "without limitation." At the outset of the hearing, counsel for the General Counsel moved to amend this allegation to list 20 employees? John Ertel III, president of the company, told Personnel Director Ertel, Jr., that he wanted to cut the valve guide production by they are supervisors 3 The reamer was a bonus Job whereas the machine to which she had been assigned was not 4 Those named are Billy Jean Medley, James D Banks, Steve ERTEL MANUFACTURING CORP. pproximately 200,000 pieces per month, as the company ias not "looking too good" financially and that valve production was out of line. Ertel, Jr., translated this cut in production to mean the lay off of 20 to 25 employees. Ertel II testified that since the beginning of 1970 business had seen slowly decreasing, and that about the middle of the ,ear the Respondent reduced hours from 52 to 44 per veek. The Company's policy is to pay its bills on the 10th and !5th of the month, in order to take advantage of discounts. [he large suppliers are paid on the 25th. He testified that nventory was holding steady during the first 6 months but .hat due to the deterioration of the economy customers were slow in paying and the amount of accounts receivable outstanding were increasing. Sometime earlier the Respon- dent had obtained an $800,000 line of credit with a bank with the arrangement that it would be diminished $135,000 each year. From December 1970 to the middle of 1971, the line of credit had increased from $400,000 to $595,000 by the middle of 1970 and was up to $665,000 as of September 30. He then succeeded in negotiating a new line of credit of $800,000 starting November 1, 1970. By February 28, 1971, the Company had borrowed $725,000 and, according to President Ertel, the accounts receivable kept increasing and inventories had reached an alltime high. Controller Don Hagan informed him that the cash balance about the middle of February of $65,000 was not large enough and the bills scheduled to be paid on February 25 could not all be met considering the rate that collections were coming in, and the taxes that had to be paid March 15. On Saturday, March 6, President Ertel conferred with controller Hagan, who made a compilation of the accounts receivable which, Ertel testified, were at an all time high of $200,000. The following table depicts the financial situation of the Respondent. Date 12/31/69 1/31/70 2/28/70 3/31/70 4/30/70 5/31/70 6/30/70 7/31/70 8/31/70 9/30/70 10/31/70 11/30/70 12/31/70 1/31/71 2/28/71 3/31/71 4/30/71 5/31/71 6/30/71 Cash Inventory A/C Receiv- able $131,346.37 $1,214,067.70 $702,174.17 50,864.46 1,236,787.01 783,072.40 54,675.78 1,281,471.04 881,802.65 38,329.92 1,293,069.62 936,876.35 197, 939.93 1,282,244.72 827,134.12 61,568.30 1,252,225.17 884,117.84 29,719.07 1,221,959.77 917,042.76 110,430.86 1,233,149.98 778,149.40 57,228.96 1,246,974.58 871,973.40 85,396.62 1,223,855.62 913,213.29 124,152.73 1,262,098.20 851,036.54 34,622.38 1,238,490.22 938,365.27 60,026.16 1,389,543.53 848,804.23 68,468.19 1,440,457.63 874,981.77 65,928.18 1,405,658.56 1,086,119.77 87,990.45 1,382,527.42 1,058,204.87 55,168.94 1,333,966.00 1,031,321.44 134,838.69 1,309,170.99 954,551.07 150,946.89 1,218,236.10 1,098,274.47 Bohannon, Dennis F. Fleenor, Dale Grisam, Robert Grisam, Janet Haely, George Harper, John W. Keatts, James McKinstry, Richard Mitchell, Judy Riley, Lelly Riley, Anna M. Rivers, Edward Shattuck, Zilda M. Taylor, Ida M. Thomas, Luther Thomas, Nancy Tillison, and Roger Tillison. Date Notes Payable 12/31/69 $400,000 1/31/70 475,000 2/28/70 525,000 3/31/70 595,000 4/31/70 595,000 5/31/70 595,000 6/30/70 595,000 7/31/70 595,000 8/31/70 595,000 9/30/70 665,000 10/30/70 665,000 11/30/70 665,000 12/30/70 665,000 1/31/71 725,000 2/28/71 725,000 3/31/71 640,000 4/30/71 640,000 5/31/71 640,000 6/30/71 720,000 529 Notes A/C Receiv- Payable able $545,000 $209,164.56 545,000 212,671.09 545,000 232,492.17 545,000 183,337.89 545,000 200,224.97 545,000 215,877.67 545,000 182,258.46 545,000 173,841.72 545,000 229,784.74 545,000 166,190.12 545,000 271,207.41 545,000 224,986.91 545,000 226,691.82 545,000 221,832.21 545,000 315,184.08 545,000 238,247.92 545,000 226,004.39 545,000 201,952.57 545,000 262,846.05 On Monday morning, March 8, President Ertel told Personnel Manager Ertel, Jr., that a decision had been made to cut production in the neighborhood of 200,000 valve guides per month. He told Ertel, Jr., to take the matter up with General Foreman Carr. Ertel, Jr., said that he could do nothing at that moment as he was leaving on a scheduled trip to Chicago but that when he returned he would take care of the matter. He determined to lay off the night shift in the finishing and grinding department, terming them a "residual force" and also noting that the night shift paid a premium. He selected the individuals to be laid off. While the Respondent, at the hearing, appeared to be taking the position that during the period around early March there was something unusual about the Respon- dent's production situation which, tied in with the general economic picture, necessitated a reduction in the level of employment, in its brief the Respondent does not appear to stress this aspect of its business situation. Both Ertel, Jr., and Controller Hagan testified that during the latter part of February the Respondent's cash position was in an unhealthy condition, especially in view of the need to pay bills on the 25th and Federal income taxes on March 15. Counsel for the General Counsel argues that "there was no economic justification for the terminations and the layoffs" and, secondly, that assuming there was economic justifica- tion the selection of individuals for layoffs was motivated by discriminatory rather than economic reasons. He points out that, although Hagan testified that on February 28 the Respondent had only $65,000 cash on hand and that he was holding some checks to suppliers, a somewhat unique situation, however, Hagan admitted, on cross-examination, that during his tenure as controller he had been in a similar cash position at least a half dozen times and that the Respondent had made no previous layoffs except in 1964 which layoff, as we have seen, was found to be an unfair labor practice. President Ertel indicated that the March 12 530 DECISIONS OF NATIONAL LABOR RELATIONS BOARD layoff would, in some fashion, improve the Respondent's cash position. However, as the foregoing table shows, the Respondent's cash position in the past had at times been lower than as of February 28; moreover, the Respondent received in cash something over $200,000 during the penod between February 28 and March 31, as an analysis of the accounts payable, the notes receivable, and an increase in the cash balance between those two dates shows. In addition, the inventory was reduced some $30,000, and it should also be noted that the Federal income taxes paid on March 15, the amount of which is not disclosed by the record, should be added to the cash revenue received during March. During the last 2 weeks of March, when some 24 fewer employees were on the payroll, the Respondent would realize a saving in actual payroll expenses of approximately $5,000. Counsel for the General Counsel further points out that there were no changes in the Respondent's hiring pattern prior to March 12. The turnover rate was approximately 40 per month, although it dropped beginning in March. Thus, counsel points out, a net reduction of approximately 27 employees could have been achieved in a month or 2 by not hiring new employees. For some weeks after the March 12 layoff, the Respondent did not hire new employees; however, when President Ertel received the new work schedules in the first 10 days of May, they showed that the two largest customers had increased their orders and, in consequence, the Respondent started rehiring. Only one of the laid off employees was recalled, who was not a member of the Union. Although the Respondent states that it does not follow any system of recalling laid off employees in preference to hiring new employees, it will be remembered that when the layoff occurred employees were informed that they might be recalled in 6 to 8 weeks.5 A close examination of the Respondent's profit and loss statements negate any implication that the Respondent's sales situation in February was deteriorating. The fact is that the February sales were at the highest point in many months. This is clearly demonstrated by the following chart.6 Excerpts from Profit & Loss Statements of Ertel Mfg. Corp. & Subsidiaries Labor Net OD. 1970 Net Sales Gross Profit Variance Profit Jan. $477,409.78 $203,271.01 $62,963.29 $38,449.58 Feb. 489,310.44 222,034.25 66,419.01 68,632.65 Mar. 496,555.25 214,959.06 55,927.85 51,188.43 Apr. 507,021.55 206,398.76 65,223.78 40,084.56 May 510,691.06 218,467.97 66,640.10 59,254.00 June 513,362.82 232,590.48 94,407.50 33,172.79 July 376,848.18 154,013.45 78,195.92 (21,709.09) Aug. 458,453.32 182,050.88 78,548.11 12,389.36 Sept. 435,456.84 169,041.67 88,491.93 (13,397.59) Oct. 460,918.66 175,364.16 99,700.92 (29,522.15) Nov. 518,140.35 211,614.68 86,965.77 23,694 48 Dec. 468,029.50 186,960.25 83,272.65 (21,151.22) 1971 Jan. 488,038.13 218,737.59 53,856.25 69,690.74 Feb. 575,825.22 247,693.31 79,754.66 51,611.11 Mar. 588,495.80 237,946.07 76,565.92 40,802.12 5 About 6 weeks after the layoff of March 12, the personnel folders of the employees here involved were marked "DNR," meaning "Do not rehire" General Foreman Carr testified that he was running out of space to store inventory. However, he admitted he could have purchased additional pans in which to store parts and that the Respondent had some 70 warehouses in various parts of the country. The Respondent was in fact producing more replacement parts than original equipment parts, and counsel for the General Counsel therefore suggests that replacement parts could have been shipped to various warehouses for storage since it is from such warehouses that the replacement parts are distributed. Carr's explanation of his production schedules shows what he has on back order on a given date in any month and also discloses that these figures are constantly changed throughout the production period so that there really is no way of accurately determining what the production needs at any given time were. However, the production schedules do show that in February and March production for the various major parts increased and also that several new part numbers appeared in the production figures in those months. Although the Respondent claimed that it had received cancellations of orders, none were in fact produced. By contrast, the sales figures in the profit and loss statements definitely indicate that sales increased. Aside from the dip in production in April, the evidence quite clearly shows that the Respondent was well above 1970 levels, thus tending to negate the contention that it was necessary to reduce actual production during the month of March. Concluding Findings Upon analysis, I reach the conclusion that the actions of the Respondent, as detailed above, demonstrate that the Respondent violated Section 8(a)(1) and (3) of the Act. Thus, Supervisors Brooks, Hart, and Aurs made statements clearly indicating the Respondent's hostility to unioniza- tion. The conduct here involved is markedly parallel to that in the earlier cases in 1964 The Respondent knew of the union drive shortly before the layoff and this activity involved only the employees on the night shift in the production and grinding department. Finally, the timing of events buttresses this conclusion, since union buttons were first worn on March 8 and during the following week, and the layoff occurred on March 12. I think these factors require the conclusion that the Respondent was motivated not by any concern about the level of production or the cash position, but rather by the efforts of certain employees to organize. See N.L.R.B. v. Erie Resister Corp., 373 U.S. 221 and McGraw-Edison Company, 172 NLRB No. 178, enfd. 419 F.2d 67 (C.A. 8, 1969). The termination of the Welches and Mrs. Ely on March 4, according to counsel for the General Counsel, shows "a classic example of first a shifting defense ..." and, 6 Controller Hagan explained the labor variance figures as follows Each man fills out a labor ticket The Company has a standard cost system, based on studies made by the engineering department, which establishes how many pieces an employee should be able to run in a given length of time A stanuard direct hours computation is made which reflects the amount of time that should be taken to complete a particular job This is then compared with the actual direct labor cost and the labor variance is simply the difference between the standard direct and the actual direct cost This is then translated into a percentage which gives the percent of deficiency ERTEL MANUFACTURING CORP. 531 secondly, "a demonstrated hostility toward any employees who would seek a Government Agency or act in concert to improve their working conditions ." He also calls attention to the fact that Mr. Welch had worked for the Respondent since 1953 and had "undeniedly earned a 25-percent bonus during that time." The fact that he drank whiskey on the job had been known and tolerated for many years. Although Foreman Eichmiller claimed that Welch was not dependable, no evidence to support this conclusion was adduced nor was that reason shown on his discharge slip. There is ample evidence that many employees, including supervisors, drank on the job ; indeed, it is undisputed that supervisors had been assisted out of the plant because of their inebriated condition. With respect to the layoff, I am persuaded that it was occasioned by the union activity of the employees. It should be noted that it was confined to the finishing and grinding department although , as General Foreman Carr testified, the necessity to reduce production would as well affect other departments of the plant . Moreover, only night shift employees were affected , whereas it is conceded that some day shift employees could as readily have been terminated. For the foregoing reasons, I conclude and find that the Respondent engaged in the unfair labor practices violative of Section 8(a)(1) and (3) of the Act. Upon the foregoing findings of fact and the entire record, I make the following: CONCLUSIONS OF LAW 1. Ertel Manufacturing Corporation is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. District 90 of the International Association of Machinists and Aerospace Workers, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. By terminating Hubert Welch, Mary Welch, and Nancy Ely on March 4, 1971, because of their support of and activity in behalf of the Union, the Respondent engaged in unfair labor practices affecting commerce within the meaning of Section 8(a)(3) and (1) and Section 2(6) and (7) of the Act. 4. By laying off the employees listed below on March 12, 1971, and subsequently terminating their employment, the Respondent engaged in unfair labor practices affecting commerce within the meaning of Section 8(a)(3) and (1) and Section 2(6) and (7) of the Act. Billy Jean Medley James D. Banks Steve Bohannon Dennis F Fleenor Dale Grisam Robert Grisam Janet Haley George Harper John W. Keatts James McKinstry Richard Mitchell Judy Riley Lelly Riley Anna M. Rivers Edward Shattuck Zelda M. Taylor Ida M. Thomas Luther Thomas Nancy Tillison Roger Tillison 5. By coercively interrogating and threatening employ- ees concerning their union and protected concerted activities, the Respondent violated Section 8(a)(1) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY In order to effectuate the policies of the Act, I find it necessary that the Respondent be ordered to cease and desist from the unfair labor practices found and from any other invasions of its employees' Section 7 rights and to take certain affirmative action. The Respondent, having discriminatorily discharged employees Hubert Welch, Mary Welch, and Nancy Ely, and having discriminatorily laid off the employees listed above on March 12, 1971, I find it necessary that the Respondent be ordered to offer these employees full reinstatement, with backpay computed on a quarterly basis, plus interest at 6 percent per annum, as prescribed in F. W Woolworth Company, 90 NLRB 289 (1960) and Isis Plumbing & Heating Co., 138 NLRB 716 (1962), from the date of the discharge or layoff, as the case may be, to the date reinstatement is offered. Upon the foregoing findings of fact, conclusions of law, and upon the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended:7 ORDER Respondent , Ertel Manufacturing Corporation , Indian- apolis, Indiana, its officers , agents, successors, and assigns, shall: 1. Cease and desist from: (a) Discharging or otherwise discriminating against any employee for supporting District 90 of the International Association of Machinists and Aerospace Workers, AFL-CIO, or any other union, or for engaging in concerted protected activities. (b) Coercively interrogating or threatening any employee about his union support or activities protected by Section 7 of the Act (c) In any other manner interfering with, restraining, or coercing its employees in the exercise of their rights under Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act: (a) Offer to Hubert Welch , Mary Welch, Nancy Ely, and the employees listed below immediate and full reinstate- ment to their former jobs or, if their jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or other rights and privileges , and make them whole for loss of earnings in the manner set forth in the Trial Examiner's Decision entitled "The Remedy." r In the event no exceptions are filed as provided by Sec 102 46 of the Rules and Regulations of the National Labor Relations Board , the findings, conclusions, and recommended Order herein shall, as provided in Sec 102 48 of the Rules and Regulations , be adopted by the Board and become its findings , conclusions, and Order, and all objections thereto shall be deemed waived for all purposes 532 Billy Jean Medley James D. Banks Steve Bohannon Dennis F. Fleenor Dale Grisam Robert Grisam Janet Haley George Harper John Keatts James McKinstry DECISIONS OF NATIONAL LABOR RELATIONS BOARD Richard Mitchell Judy Riley Lelly Riley Anna M. Rivers Edward Shattuck Zilda M. Taylor Ida M. Thomas Luther Thomas Nancy Tillison Roger Tillison Billy Jean Medley James D. Banks Steve Bohannon Dennis F. Fleenor Dale Grisam Robert Grisam Janet Haley George Harper John W. Keatts James McKinstry Hubert Welch Nancy Ely Richard Mitchell Judy Riley Lelly Riley Anna M. Rivers Edward Shattuck Zilda M. Taylor Ida M. Thomas Luther Thomas Nancy Tillison Roger Tillison Mary Welch (b) Notify immediately the above-named individuals, 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. (c) 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 records necessary to analyze the amount of backpay due under the terms of this Order. (d) Post at its plant in Indianapolis, Indiana, copies of the attached notice marked "Appendix." s Copies of the notice, on forms provided by the Regional Director for Region 25, after being duly signed by an authorized representative of the Respondent, shall be posted by the Respondent immediately upon receipt thereof, and be maintained for 60 consecutive days thereafter, in conspicu- ous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that the notices are not altered, defaced, or covered by any other material. (e) Notify the said Regional Director, in writing, within 20 days from the date of receipt of this Order, what steps the Respondent has taken to comply herewith .9 9 In the event that the Board's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall be changed to read "Posted pursuant to a Judgment of the United States Court of Appeals enforcing an Order of the National Labor Relations Board." 9 In the event that this recommended Order is adopted by the Board after exceptions have been filed, this provision shall be modified to read: "Notify the Regional Director for Region 25, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith." APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board having found, after a trial, that we violated Federal law by discharging the employees listed below for supporting a union, and by otherwise interfering with our employees' right to join and support a union: WE WILL offer full reinstatement to the following employees, with backpay plus 6 percent interest: WE WILL NOT discharge any of you for supporting District 90 of the International Association of Machin- ists and Aerospace Workers, AFL-CIO, or any other union, or for engaging in concerted activity protected by Section 7 of the National Labor Relations Act, as amended. WE WILL NOT coerce or question you or threaten you concerning union support or activities. WE WILL NOT unlawfully interfere with your union or protected concerted activities. ERTEL MANUFACTURING CORPORATION (Employer) Dated By (Representative) (Title) WE WILL notify immediately the above-named individuals, 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 concern- ing 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 SUPPLEMENTAL DECISION IVAR H. PETERSON, Trial Examiner: I issued my original decision in this proceeding on February 10, 1972. Under date of June 15, the Board remanded the proceeding to me to make additional findings and recommendations con- cerning the alleged supervisory status of Bill Hart and Austin Brooks. I made my findings of supervisory status relying in substantial part upon a prior determination by the Board, Ertel Manufacturing Corp., 147 NLRB 312, enfd. 352 F.2d 916 (C.A. 7), cert. den. 383 U.S. 945, that three named setup men, who held jobs similar to those occupied by Hart and Brooks, did in fact "responsibly direct the work of the employees in their respective ERTEL MANUFACTURING CORP. 533 departments, on their respective shifts, and are supervisors within the meaning of Section 2 (11) of the Act." Admitted supervisors of the Respondent stated that all setup men are essentially the same . Moreover, we have the undenied statements of Mark Kreger , the Respondent's personnel manager, to both Nancy Ely and Mary Welch that Bill Hart was a supervisor and foreman . In addition, James McKinstry testified that when he was assigned to Hart's department, he was told by then Personnel Director Spivey that Hart was his foreman and that he would take orders from him . After McKinstry reported to Hart's department, Hart assigned him to the machines that he worked on; moreover, McKinstry observed that all the other employees in the department were assigned to their various machines by Hart. At the time of the layoff, McKinstry observed that both Brooks and Eichmiller changed employees from one machine to another. When either Brooks or Hart did this, they did not consult anyone else and exercised their own judgment . In this connection, it is important to note that the machine assigned an employee may have an effect on his earnings, in that some machines are called bonus machines and others are nonbonus machines. On the latter, the employee would earn his fixed rate per hour, whereas on a bonus machine an employee was guaranteed his fixed rate and in addition had an opportunity to earn a bonus by increasing the production over the quota set for that machine. Mary Welch testified that both Brooks and Eichmiller assigned her to machines when she was employed by the men and foremen that attended these meetings regarding carrying out safety in the plant. Setup men report for work at least 15 minutes earlier than the other employees. As stated above, they attend the so-called safety or supervisory meetings attended only by foremen and setup men. Elmer Swift, a setup man on the day shift, replaces Foreman Eichmiller when he is on vacation as foreman over the night shift . Hart has sent employees home and granted time off without consulting Respondent. Her husband, Hubert, testified also that during the time he was employed he was assigned various machines by Brooks. He also testified that he observed Brooks attending the "weekly meetings" of setup men and foremen and that one of the subjects allegedly discussed at these meetings was the possibility of cutting out some employees. On the contrary, the Respondent adduced testimony that only the subject of safety was discussed at these meetings . However, Respondent's witnesses refused to answer directly what instructions were given to the setup anyone else. Eichmiller admitted that setup men are responsible to him for Carr's chalk board schedule. Moreover, Eichmiller testified that the rough grinding area is referred to as "Bill Hart's department"; in this he was supported by employee witnesses . I do not credit Carr's testimony to the contrary. In my opinion the foregoing facts, virtually undenied, establish that Hart and Brooks are supervisory employees. I so find.