Dallas Ceramic Co.

582 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Dallas Ceramic Company and International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local No. 150. Cases 20- CA-9143 and 20-RM-1734 July 28, 1975 DECISION AND ORDER BY MEMBERS FANNING, KENNEDY, AND PENELLO On October 22, 1974, Administrative Law Judge Earldean V. S. Robbins issued the attached Decision in this proceeding. Thereafter, Respondent filed ex- ceptions and a supporting brief , and General Coun- sel filed an answer to Respondent's exceptions and supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision ' in light of the exceptions and briefs and has decided to affirm the rulings,2 findings, and conclusions I of the Administrative Law Judge and to adopt her recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the Respondent, Dallas Ceramic Compa- ny, Sacramento, California, its officers, agents, suc- cessors, and assigns, shall take the action set forth in the said recommended Order. ' We hereby correct the inadvertent error in par . I of the ALJD which stated that the Union filed the petition to read "The petition in Case 20- RM-1734 was filed by the Employer on February 12, 1974." 2 The Respondent has excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to over- rule an Administrative Law Judge's resolutions with respect to credibility unless the clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect . Standard Dry Wall Products, Inc., 91 NLRB 544 (1950), enfd. 188 F.2d 362 (C.A. 3, 1951). We have carefully examined the record and find no basis for reversing her findings. Respondent's motion to reopen the record for the purpose of presenting testimony excluded by the Administrative Law Judge or testimony regard- mg the composition of the unit is hereby denied as it raises no substantial issues. i In sustaining the finding of the Administrative Law Judge that Respon- dent violated the Act by conveying to employees that it was futile to seek union representation and that their grievances could best be redressed by bargaining individually with Respondent, we rely also on the actions and statements by Respondent's representatives demonstrating to employees that it was taking steps, including steps necessary to the opening of a new warehouse, to redress the employee grievances solicited by Monaco and Cortopassi and the further statement of Bnttingham that it would not be possible to open a new warehouse in the event that the Union won the election since "they would be engaged in a long struggle with the Union." Considered in its totality , we are satisfied that Respondent's actions and statements were calculated to and did convey to employees the futility of selecting the Union to represent them, Member Fanning would find that Respondent 's refusal to recognize and bargain with the Union as the exclusive representative of the employees in the appropriate unit violated Sec. 8(aX5) of the Act. Although the Adminis- trative Law Judge dismissed the 8 (aX5) allegation of the complaint on the basis of the Board's decision in Steel-Fab, Inc., 212 NLRB 363 (1974), and the General Counsel failed to file exceptions to the dismissal on the same basis, Member Fanning would find that this issue was fully litigated at the hearing. For the reasons expressed in his dissent in Steel-Fab, he would find that the bargaining order based on only a violation of Sec. 8(a)(l) is inadequate to deter the repetition of similar conduct in the future . Without Board rec- ognition of the legitimacy of the Union 's majority status, the Employer will be free to withdraw recognition after a period of unproductive compliance bargaining. Accordingly, Member Fanning is convinced that only a finding of an 8(aX5) violation, with the appropriate bargaining order, will be ade- quate to ensure the employees the results they would have obtained had not Respondent engaged in the prohibited conduct DECISION STATEMENT OF THE CASE EARLDEAN V. S. ROBBINS, Administrative Law Judge: This case was heard before me in Sacramento, California, on August 8, 1974. The charge in Case 20-CA-9143 was filed by International Brotherhood of Teamsters, Chauf- feurs, Warehousemen and Helpers of America, Local No. 150, herein called the Union, on April 25, 1974, and a copy thereof was served on the Respondent on April 26, 1974. The complaint issued on May 30, 1974, alleging that the Respondent had violated Section 8(a)(1) and (5) of the Na- tional Labor Relations Act. The petition in Case 20- RM-1734 was filed by the Union on February 12, 1974. Pursuant to a stipulation for certification upon consent election approved on March 4, 1974, an election by secret ballot was conducted on April 5, 1974, which resulted in two ballots cast for and two cast against the Union, with no void or challenged ballots. On April 10, 1974, the Union filed timely objections to the election, a copy of which was served on Respondent. On May 30, 1974, the Regional Di- rector determined that said objections raised matters simi- lar to that alleged as unfair labor practices in Case 20- CA-9143 which could best be resolved through a hearing and ordered that Case 20-RM-1734 be consolidated for purposes of heanng with Case 20-CA-9143. The basic issue herein is whether certain conduct of Re- spondent is sufficient to warrant setting aside the election and if so, whether Respondent engaged in acts of interfer- ence, restraint, and coercion of such serious and substan- tial character and effect as to render the conduct of a free, fair rerun representation election doubtful or impossible, requiring the issuance of a bargaining order. Upon the entire record,' including my observation of the 'Subsequent to the close of the hearing , Respondent filed a motion to reopen the record. The motion is based on certain rulings made by me during the course of the hearing, (1) excluding evidence proffered to estab- lish the nonsupervisory status of Foreman Bill James on the grounds that a determination of his status was not material to any issue herein ; (2) exclud- ing evidence proffered to establish that no 8(a)(1) activity was directed to- ward James on the grounds that no evidence had been adduced by General 219 NLRB No. 105 DALLAS CERAMIC COMPANY 583 demeanor of the witnesses, and after due consideration of the posttrial briefs filed by the General Counsel and Re- spondent, I make the following: FINDINGS OF FACT 1. JURISDICTION Respondent, a Texas corporation with its principal office in Dallas, Texas, and facilities located in various states of the United States, including a warehouse in Sacramento, California, is engaged in the manufacture and sale of ce- ramic tile. During the year preceding the issuance of the complaint herein, Respondent in the course and conduct of its business operations has sold and shipped goods valued in excess of $50,000 directly to customers located outside the State of Texas and during that same period of time has purchased and received goods and materials valued in ex- cess of $50,000 directly from suppliers located outside the State of Texas. The complaint alleges, the answer admits, and I find, that Respondent is, and at all times material herein has been, an employer engaged in commerce and in operations affecting commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. LABOR ORGANIZATION The complaint alleges, Respondent admits, and I find that the Union is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. Facts Respondent is engaged in the wholesale distribution of ceramic tile from 42 warehouses in locations throughout the United States, including one in Sacramento, California, which is the only location involved herein. Employed at the Sacramento warehouse, during the period material herein, were warehousemen Kirk Horch, Ray Williams, Carroll Terry, Jr., and Lawrence Thomas Knobloch, Warehouse Foreman Bill James, and Warehouse Manager Ed Corto- passi.2 During the week prior to February 8, 1974,3 the four warehousemen began discussing their dissatisfaction with their working conditions and means of improving same. They considered the possibility of a 1-day strike and reject- ed it in favor of seeking union representation . Horch con- tacted Tony Santos, an organizer for the Union , to arrange a meeting between Santos and the warehousemen to dis- Counsel as to conduct directed toward James ; and (3) restricting the scope of Respondent's cross-examination to exclude evidence as to the actual ef- fect of Respondent's conduct on the employees' desire for union representa- tion . Respondent made offers of proof which were rejected by me. Even assuming that my rulings were erroneous , there is no showing that failure to consider such proffered evidence would be prejudicial to any substantial rights of Respondent. I therefore deny the motion to reopen the record. Cortopassi is an admitted supervisor. 3 All dates herein will be in 1974, unless otherwise indicated cuss union representation and all four warehousemen met with Santos on February 9. Following an explanation from Santos as to the procedure for obtaining union representa- tion, the four warehousemen signed cards authorizing the Union to represent them for purposes of collective bargain- ing. Santos told the employees that he would request recog- nition from Respondent, and, if refused, would file a repre- sentation petition with the Board. On Monday, February 11, Santos and another union agent, Jack Klaahola, talked to Cortopassi at the Sacra- mento warehouse. Santos' undenied testimony is that he told Cortopassi that the Union represented the warehouse- men and gave him the four authorization cards and a vol- untary recognition agreement. Cortopassi looked at the cards one by one, then said there was nothing further they could do, that he would have to notify Respondent's Dal- las, Texas office. He returned the authorization cards and said he would have someone there the next day, Tuesday, or on Wednesday. Cortopassi asked what alternative Re- spondent would have to recognizing the Union. Santos said if the employees wished, a strike could be called. The following morning, February 12, Santos returned to the warehouse and met with Cortopassi, Respondent's La- bor Counsel Robert Gwinn, and John LoMonaco, Respondent's executive vice president. Santos offered to show Gwinn the authorization cards. Gwinn said he didn't want to see them, that Respondent desired a representation election and he would file a representation petition with the Board, which he did in Case 20-RM-1734 4 Later that morning, about 10 a.m., Cortopassi called the warehousemen off the floor for a meeting with LoMonaco whom he introduced as being in charge of all of Respondent's warehouses. According to the undenied testi- mony of Knobloch and Terry, whom I credit, LoMonaco first read a statement of Respondent's policy as to unions. He said Respondent had received a demand for recogni- tion from the Union. He said they were shocked and sur- prised that the employees sought a third party to represent them, since Respondent was a small and growing company that had always been able to work things out on a man-to- man basis. LoMonaco said he saw no reason for interfer- ence from a third party. He further stated that unions weren't all that advantageous, that some unions have a rather unsavory reputation, and that this Union, in particu- lar, had a bad reputation. He said Respondent refused to recognize the Union and would use every legal means pos- sible to fight it. LoMonaco said he'd probably be there for the next few days and would like the opportunity to sit down with the employees and discuss their problems. On the following day, Wednesday, February 13, Lo- Monaco again spoke to the assembled warehousemen. Ac- cording to the undenied testimony of Knobloch and Terry, he reiterated the statements he made the day before and suggested that it would be a good idea if the warehousemen could have weekly sessions with Cortopassi after work to discuss their problems.5 On Thursday, February 14, Cortopassi requested that Knobloch remain after work to talk to him. According to Santos did file a representation petition later that day, which he with- drew upon learning that Gwinn had in fact filed a petition. 5 Terry testified that there had been no such sessions previously. 584 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Knobloch's undenied testimony 6 Cortopassi said he real- ized he had made mistakes, that he had been "chewed out," and he "just wanted to know if there was any way to get together and iron things out among [themselves] with- out a third party." He said he was particularly surprised at Knobloch going to a third party. Knobloch said he couldn't speak for the other warehousemen but he would tell them what Cortopassi said. On Friday morning , February 15, Cortopassi ap- proached Terry in the back, outside the warehouse. He asked Terry what his feelings were on the situation. Terry assumed he was referring to the Union but did not answer. Cortopassi stated how long he had been with Respondent and said Respondent had treated him very well. Cortopassi said he knew he had a mess on his hands ' and he hadn't had time to talk with the employees . He asked if Terry had any ideas on how to alleviate the situation and said he wanted an opportunity for the employees to air their prob- lems with him. Terry said he would have to think about it. Later that day, Cortopassi asked the four warehousemen to remain after work to talk to him. They all did and Cor- topassi provided beer . There was some general conversa- tion. Then Cortopassi asked what their grievances were. He said he wanted to make amends and perhaps work it out among themselves. Terry said he was upset about the lack of seniority because with 6 months seniority he was only making $2.50 an hour, yet Knobloch, who was employed in November 1973, started at $3.10 an hour . Williams com- plained about lack of opportunity for advancement and specifically mentioned two employees who had finally left Respondent's employ because they could not move into management. Horch said the health insurance coverage was not satisfactory . He complained about having to wait I year before being covered and that the carrier was not prompt in paying claims. Knobloch complained about the crowded conditions in the warehouse .8 Cortopassi asked why they felt they had to go to the Union instead of com- ing directly to him. Knobloch said he was afraid they would be fired and he needed his job.' On February 27, Respondent's representatives again spoke to the warehousemen . Knobloch testified that Lo- Monaco and someone he introduced as Dick Lee 10 came to the warehouse about the time for morning coffeebreak. LoMonaco said he would like to speak to the warehouse- men for a few minutes. They then assembled in the show- room. LoMonaco thanked the warehousemen for being open and forthright with Respondent in identifying their grievances. He said some of the grievances were being rec- tified, that they were in the process of changing the health plan to reduce the waiting period from a year to 6 months. He further said Respondent had probably been negligent at the Sacramento warehouse in overlooking potential 6 Cortopassi did not testify. 7 Terry testified that he understood Cortopassi to be referring to "the warehouse being jam-packed and hard working conditions." 9 Terry testified that the warehouse was very crowded and it was difficult tout up orders. This is from the undenied testimony of Knobloch and Terry. 10 Terry testified that Lee was introduced as the manager of one of Respondent's warehouses in Dallas who was responsible for finding loca- tions for new warehouses. management material . He admitted that the warehouse was overcrowded and said he didn't think that reducing the amount of tile would alleviate the situation satisfactorily, that Respondent was considering a new warehouse, and Lee was there to find a suitable location . LoMonaco also stated that perhaps anyone interested in going into man- agement would be considered for a management-trainee program at the new warehouse . He said he would like to 1 speak to the warehousemen individually." Later that day, LoMonaco spoke individually to the warehousemen. Knobloch testified that about noon Lo- Monaco asked him to come into the office , which he did. There was some general discussion . Then LoMonaco said Williams had expressed an interest in becoming manager of the new warehouse. He said he wanted to find out Knobloch's plans and goals for the future and if he would be interested in a management-trainee program working with Williams in the new warehouse at $4.45 an hour and perhaps managing a warehouse within 6 months to a year. Knobloch said he was interested . LoMonaco said he knew this was in violation of the labor laws, but he felt that the law was unfair to the employer. He said the employees had been square with Respondent and Respondent wanted to be square with them and see if they could work things out among themselves. He also said that unfortunately, due to the union issue, there could be no promotion or new ware- house until after the representation election. He also said, win, lose, or draw, there would be a new warehouse. Lo- Monaco further stated that Lee would be in the city for the next few days selecting a site for the new warehouse and would be consulting with Williams and Knobloch from time to time. He also said that they had asked Williams to take a map and map out the location of their customers to determine what central location would be needed for the new warehouse . Although it is not clear from the record as to which conversation he was referring to, Knobloch fur- ther testified that LoMonaco said it was company policy to promote from within and mentioned special managers who had once been warehousemen. Terry testified that after lunch that day, Cortopassi asked him if he would like to talk to LoMonaco . Terry said yes, and immediately went to see LoMonaco. Cortopassi was present. LoMonaco repeated his earlier statements re- garding a new warehouse in Sacramento . He said Williams had been offered a position as manager of the new ware- house, Knobloch had been offered the position of foreman, and Horch had been offered a management -trainee posi- tion. LoMonaco asked Terry if he was interested in the manager-trainee program. He said there was no reason that Terry shouldn't start at $3.85 an hour. He further stated that he knew what he was saying was an unfair labor prac- tice, but he felt the labor laws were unfair to managment and this was the only way he could deal. Terry said he was interested, but would have to think about it.1 i i Terry's testimony, though less detailed, was essentially corroborative of Knobloch's and LoMonaco did not deny Knobloch's version Lee did not testify. '2 The account of the Knobloch-LoMonaco and the Terry-LoMonaco conversations are from the testimony of Knobloch and Terry, respectively, whom I credit . Their testimony as to these conversations is undenied except that LoMonaco denies saying that he knew he was violating the Federal labor laws. LoMonaco testified that he pointed out that there were very DALLAS CERAMIC COMPANY 585 The next day, Lee showed Williams and Knobloch pic- tures of warehouses that he had been inspecting in Sacra- mento and asked their opinion as to the area. On Friday evening, March 1, after work as they were sitting around drinking beer, Lee asked if he could speak to them. Corto- passi and the four warehousemen were present. Lee said Respondent was sincere in its offer to work things out among themselves and that Respondent could be trusted. He spoke about how long he had been with Respondent and how he had always been treated well. He said he had been shown around the city, and the new warehouse loca- tion, and he was excited about it. He said he didn't think a third party was needed, that the whole thing holding them up was the union election, and "he hoped everything would work out" and the employees would do "the right thing." 13 After Lee left Sacramento, during the month of March, Cortopassi took Williams and Knobloch to see the new warehouse and bought them lunch. He said Respondent was sincere and they had the opportunity of a lifetime. All they had to do was be square with Respondent and Re- spondent would be square with them. From time to time during that month, Lee telephoned and asked to speak to Knobloch or Williams. During these conversations, he told Knobloch what the progress was on the new warehouse, such as when he would be out to sign the lease. He always asked how the warehousemen were holding up and wheth- er they were still with Respondent.14 Knobloch testified that about a week and a half before the April 5 election, LoMonaco and Robert Brittingham, Respondent's president, talked to him and Williams in Cortopassi's office. Brittingham said he wanted to get right to the point. He understood that an arrangement had been made and they were ready to go through with their end of it, but that he had heard that the warehousemen were los- ing their enthusiasm for the whole thing. Brittingham said, "Let's lay it on the line," he wanted an answer as to wheth- er they were going to go through with it or not. He said before they made any final commitments, they wanted to know how the employees were feeling. Knobloch asked him if he meant that if the Union won the election, there would be no new warehouse. Brittingham replied that he didn't see how that would be possible, since they would be engaged in a long struggle with the Union. Williams in- quired as to what would be his commission on sales as the warehouse manager. LoMonaco said since it took some time for a warehouse to become established he would be given a 3 percent commission instead of the 6 percent re- strict laws governing what could and could not be done by management and that although this was not his preferred method of communicating with employees, they had to be very careful as to what they did or said . He also made a general denial that he ever made any statement to any employee that his position, promotion, or future with Respondent was dependent upon the outcome of the election. He further denied making any promises of promotion, salary increase, or other benefit if the employees voted against the Union. His testimony did not include an account of these con- versations and he did not deny discussing management positions and wage increases with Knobloch and Terry as testified by them . Neither Knobloch nor Terry testified that anyone other than Brittingham specifically stated that the promises of benefit depended upon the outcome of the election. 13 This is from the undenied testimony of Knobloch and Terry, whom I credit. 14 This is from the undenied testimony of Knobloch. ceived by other warehouse managers. After Williams indi- cated some dissatisfaction with this arrangement, Britting- ham said he did not see any reason why Williams should not receive the same commission as the other warehouse managers. Although Brittingham's testimony did not pur- port to be an account of the entire conversation and he did not deny some of the statements attributed to him by Knobloch, his account does differ from that of Knobloch. Thus, in answer to counsel's query as to whether during the conversation with Knobloch there was any discussion as to the future of the new warehouse if the Union won the elec- tion, Brittingham admitted that Knobloch asked, "Mr. Brittingham, if the Union wins the election, are you still going to open the warehouse." Brittingham testified that in answer, "I indicated to Mr. Knobloch that that was a hard question to answer at this time; that it depended on the outcome of the election; and if the Union won, it depended on what conditions the Union was going to impose on us. And, therefore, I could not answer directly at that time just when we would open the new warehouse." Brittingham tes- tified that prior to Knobloch's question, "I had explained ... that I was out here to answer any questions that they had regarding the Dallas Ceramic Company. I explained to them that we had already committed ourselves that we had signed a 5-year lease on a warehouse, and that, no matter what the outcome of the election was, that we had recog- nized the crowded condition of our present warehouse and we recognized that we had to have another warehouse in Sacramento." I credit the testimony of Knobloch as to this conversa- tion. He impressed me as an honest and forthright witness. However, apart from his demeanor on which I rely, I have taken into account certain inherent inconsistencies in Brittingham's testimony and other evidence which tends to generally corroborate Knobloch's veracity. Thus, Knobloch's testimony in other respects is essentially cor- roborated by Terry and, except for portions of this conver- sation, is undenied even though Respondent had under its control all of the participants in these various conversa- tions and discussions-Cortopassi, Lee, Williams, and Horch. Yet none of them were called to testify. The infer- ence is that their testimony would not contradict Knob- loch. LoMonaco did testify, yet 'he did not deny Knobloch's account of any of the conversations, and even though he was present during the Brittingham-Knobloch conversation, he did not testify in corroboration of Brittingham's account. Furthermore, Knobloch' s version is more consistent with the question asked by Knobloch. Both Brittingham and Knobloch testified that Knobloch asked if the new warehouse would open in the event the Union won the election. There would have been no reason to ask this question if, as asserted by Brittingham, he had already assured them that a lease had been signed, Respon- dent was committed, and no matter what the outcome of the election Respondent recognized that it had to have a new warehouse in Sacramento. The question is much more consistent with Knobloch's version of the statements pre- ceding his question. Also, Brittingham's version of his care- fully qualified answer to Knobloch's question which left the possibility of the new warehouse uncertain depending upon the Union's demands is inconsistent with his alleged 586 DECISIONS OF NATIONAL LABOR RELATIONS BOARD positive assurance just prior to the question that Respon- dent was committed to opening the new warehouse regard- less of the outcome of the election. On the same day Brittingham talked to Knobloch, he also spoke to Terry. According to Terry's undenied testi- mony, Brittingham told him that if he thought Respondent "was going to do the job for [him], then go ahead that way, but if [he] thought they weren't, go the other way." The election was conducted on April 5. Two ballots were cast for the Union and two against. The Union filed timely objections alleging: (1) On or about February 27, 1974, the Employer promised employees increased benefits in order to de- ter them from supporting the Union. (2) On or about February 27, 1974, the Employer promised to promote unit employees to supervisory and managerial positions in order to deter them from voting for the Union. (3) On or about February 27, 1974, the Employer promised employees improved facilities in order to de- ter them from voting for the Union. (4) On or about February 27, 1974, the Employer questioned employees concerning their Union activi- ties. The new warehouse was not open at the time of the hearing herein; LoMonaco testified that they expected it to open within 60 days. The site was leased in mid-March. He also testified that he had not yet made a final decision as to who would be the manager; however, Williams has been assigned to supervise the move to, and the stocking of, the new warehouse and is presently engaged therein. B. The Union's Majority Status The complaint alleges, Respondent admits, and I find that the appropriate unit is: All warehousemen and forklift drivers employed by Respondent at its Le Grande Boulevard, Sacramento, California, location; excluding all office clerical em- ployees, guards and supervisors as defined in the Act. Six persons are employed in the Sacramento warehouse, including Cortopassi who is admittedly a supervisor. Re- spondent contends that Bill James should be included in the unit, General Counsel contends he should be excluded. It is not necessary to determine his status since the remain- ing four employees signed valid authorization cards on February 9, 1974. Each of these four employees were em- ployed by Respondent at its Sacramento warehouse on February 9 and at all times material thereafter. According- ly, I find that as of February 9, 1974, and continuing there- after, the Union represented a majority of Respondent's employees in a unit appropriate for purposes of collective bargaining. C. Discussion The record clearly establishes that LoMonaco by his February 12 and 13 speeches to the assembled employees and Cortopassi by his February 14 and 15 conversations with the warehousemen, individually and collectively, so- licited their grievances. Since Respondent had no previous practice of soliciting employee grievances and since both LoMonaco and Cortopassi made it clear that the sole rea- son for the meetings was to determine the grievances un- derlying their resort to union representation, it can only be inferred that the solicitation of grievances carried with it an implied promise to rectify their complaints and is thus vio- lative of Section 8(a)(1) of the Act. Reliance Electric Com- pany, 191 NLRB 44 (1971); Emery Air Freight Corporation, 207 NLRB 572 (1973). Furthermore, in the overall context of the two LoMona- co speeches, his statement that Respondent had always been able to work things out on a man-to-man basis, that he saw no reason for interference from a third party, and that unions weren't all that advantageous was intended to, and did, convey to employees that it was futile to seek union representation and their grievances could best be redressed by bargaining individually with Respondent. In the circumstances, I find that these statements constitute interference, restraint, and coercion in violation of Section 8(a)(1) of the Act. Illinois Concrete Pipe Company, 203 NLRB 223 (1973); Chesterfield Chrome Company, 203 NLRB 361 (1973). In response to Cortopassi's solicitation of their griev- ances, the warehousemen indicated four complaints-over- crowded conditions in the warehouse, lack of opportunity for advancement, the 1-year waiting period for insurance coverage, and Terry's dissatisfaction with his wages. There- after, on February 27, LoMonaco informed the assembled warehousemen that Respondent was in the process of recti- fying their grievances, specifically that Lee was there to locate a new warehouse which would alleviate the over- crowded working conditions, the health plan was being changed to reduce the waiting period from 1 year to 6 months, and with the opening of the new warehouse the warehousemen would have opportunities to move into management . Later that day LoMonaco told Terry and Knobloch that Williams would manage the new warehouse and they could be placed in management-training pro- grams. Terry was promised a raise from $2.50 to $3.85 an hour and Knobloch was promised a raise from $3.10 15 to $4.45 an hour. I find that the promise of the wage increase and the opportunity to enter a management-training pro- gram were made in direct response to the employees' iden- tification of the grievances underlying their desire for union representation and were designed to induce them to abandon their support of the Union and therefore violative of Section 8(a)(1) of the Act. Penn Pipe & Supply Co., 208 NLRB 9 (1973). Similarly, I find the announcement as to the change in the health benefit plan and the opening of a new warehouse to be violative of Section 8(a)(1) of the Act, notwithstanding Respondent's contention that these changes were implemented in accordance with plans for- mulated prior to the advent of the Union. Even assuming that this is true, LoMonaco admits that the final decision as to the new warehouse was not made prior to his Febru- ary I I visit and the changes were announced to the em- 15 This is the wage rate Knobloch listed on his authorization card. DALLAS CERAMIC COMPANY 587 ployees as part of the steps Respondent was taking to recti- fy their grievances. In this context the announcements con- stitute interference with and coercion of employees in the exercise of their rights under Section 7 of the Act. Waters Distributing Company, 182 NLRB 967 (1970). I also find that, in the context of the particular conversa- tions and of Respondent's general conduct, Cortopassi's interrogation of Terry was coercive and therefore violative of Section 8(a)(1) of the Act. I further find that Brittingham's statement to Knobloch and Lee's interroga- tion of Knobloch was designed to elicit information as to whether the warehousemen were going to vote against the Union and constituted interrogation in violation of Section 8(a)(1) of the Act. The complaint alleges that Respondent violated Section 8(a)(1) of the Act by Brittingham's threat to deny employ- ees previously promised benefits. I find that this does not constitute a separate violation of the Act. Rather, it was intended to underscore that Respondent's promise of bene- fits depended upon the employees abandoning support of the Union. I further find that the record is devoid of any evidence to establish that Respondent, through Cortopassi, created the impression of surveillance of employees' union activities, as alleged in the complaint.16 For the reason set forth in Steel-Fab, Inc., 212 NLRB 363 (1974), I do not find that Respondent violated Section 8(a)(5) of the Act. The Objections to the Election With respect to the Union's objections to conduct affect- ing the election, inasmuch as the conduct described therein was found hereinabove to constitute unfair labor practices and to have been reasonably calculated to undermine the employees' adherence to the Union, I find that the objec- tions are meritorious. In view of this finding, I conclude that the Employer's conduct must have reasonably affected the results of the election. I therefore recommend that the results of the election held on April 5, 1974, be set aside. Due to my further finding that Respondent's conduct has undermined the Union's majority and rendered doubtful or impossible the holding of a free and fair rerun election, requiring a bargaining order remedy, I further recommend that the representation petition herein be dismissed. CONCLUSIONS OF LAW 1. Respondent is an employer engaged - in commerce within the meaning of Section 2(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. Respondent has interfered with, restrained, and coerced employees in violation of Section 8(a)(1) of the Act by conveying to employees that it would be futile or of no advantage for them to designate or select the Union as their collective-bargaining representative ; bargaining indi- vidually with employees regarding wages, hours, and other 161 have considered , and rejected, General Counsel's argument that the Lee telephone calls created an unlawful impression of surveillance. terms and conditions of employment; making promises of benefits to employees in order to induce them to reject the Union as their collective-bargaining representative; an- nouncing to employees improvements in benefits and working conditions in order to induce them to reject the Union as their collective-bargaining representative; inter- rogating employees regarding their union activities and sympathies; and soliciting the employees' grievances un- derlying their union activities. 4. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. 5. On February 9, 1974, the Union was designated as the majority representative, for purposes of collective bargain- ing, of Respondent's employees in the unit described as follows: All warehousemen and forklift drivers employed by Respondent at its Le Grande Boulevard, Sacramento, California location; excluding all office clerical em- ployees, guards and supervisors as defined in the Act. The aforesaid unit is a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 6. By the unfair labor practices found to have been com- mitted, Respondent has undermined the Union's majority and the likelihood of the conduct of a free and fair rerun representation election has been impaired. 7. Respondent has not violated the Act in certain re- spects as set forth above. THE REMEDY Having found that Respondent has engaged in certain unfair labor practices, I shall recommend that Respondent cease and desist therefrom and take certain affirmative ac- tion in order to effectuate the policies of the Act. Since I have found that Respondent's violations of Section 8(a)(1) of the Act have undermined the Union's majority and ren- dered doubtful or impossible the holding of a free and fair rerun election, I recommend that Respondent be ordered to recognize and bargain with the Union as the exclusive bargaining representative of its employees in the unit found appropriate, and upon request embody in a signed agreement any understanding reached. N.L.R.B. v. Gissel Packing Company, Inc., 395 U.S. 575 (1969). It is apparent that Respondent's course of conduct was calculated to un- dermine the Union's majority. Thus, Respondent, after re- fusing to recognize and bargain with the Union, deliber- ately embarked upon a course of action designed to identify the grievances underlying, its employees' desire for union representation and to convince them that their de- mands could best be met through- direct dealing with Re- spondent and that union representation would afford them no advantages. The promises to redress the grievances which were the focal point of employee interest and the positive steps taken in this regard, and the announcements thereof, is likely to have had a significant impact on the employees' freedom of choice rendering the election an in- accurate register of employee desire on the question of union representation. The fact that the insurance coverage has been changed to reduce the waiting period, that the 588 DECISIONS OF NATIONAL LABOR RELATIONS BOARD new warehouse is being readied for opening , that Williams has been assigned to supervise such preparation , thus giv- ing employees the impression that Respondent is, in fact, complying with its promises of promotion to managerial position have had effects which cannot be expunged through traditional Board remedies. It is thus highly un- likely that a second election would reflect a free and un- coerced employee choice. As the Board has said in a simi- lar case : "Such conduct must, of necessity , have a strong coercive effect on the employees' freedom of choice, serv- ing as it does to eliminate, by unlawful means and tactics, the very reason for a union's existence. We can conceive of no more pernicious conduct than that which is calculated to undermine the Union and dissipate its majority while refusing to bargain. Neither is there any conduct which could constitute a greater impairment of employee's basic Section 7 rights under our Act, especially since such con- duct by its very nature has a long lasting, if not permanent, effect on the employees' freedom of choice in selecting or rejecting a bargaining representative ." Teledyne Dental Products Corp., 210 NLRB 435 (1974). Upon the basis of the foregoing findings of fact, conclu- sions of law, and the entire record in this proceeding, and pursuant to Section 10(c) of the National Labor Relations Act as amended, I hereby issue the following recommend- ed: ORDER17 The Respondent, Dallas Ceramic Company, Sacramen- to, California, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Soliciting from its employees grievances underlying their union activities, to discourage their interest in Inter- national Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, Local No. 150, or any other labor organization. (b) Telling its employees that it would be futile, or of no advantage, for them to designate or select the Union as their collective-bargaining representative. (c) Bargaining individually with employees regarding wages, hours, and other terms and conditions of employ- ment. (d) Making promises of wage increases, promotions to supervisory or managerial positions, improved health in- surance benefits, improved working conditions, or other benefits in order to induce them to reject the Union as their collective-bargaining representative. (e) Interrogating its employees regarding their union ac- tivities and sympathies. (f) Announcing to employees improvements in benefits and conditions of employment in order to induce them to reject the Union as their collective -bargaining representa- tive. (g) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of rights guaranteed in the Act. 2. Take the following affirmative action necessary to ef- fectuate the policies of the Act: (a) Upon request, recognize and bargain collectively with International Brotherhood of Teamsters , Chauffeurs, Warehousemen and Helpers of America, Local No. 150, as the exclusive representative of the employees in the follow- ing appropriate unit, and upon request embody in a signed agreement any understanding reached. All warehousemen and forklift drivers employed by Respondent at its Le Grande Boulevard, Sacramento, California location; excluding all office clerical em- ployees, guards and supervisors as defined in the Act. (b) Post at its place of business in Sacramento , Califor- nia, copies of the attached notice marked "Appendix." 18 Copies of said notice, on forms provided by the Regional Director for Region 20, after being duly signed by Respondent's representative, shall be posted by Respon- dent 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 Re- spondent to insure that said notices are not altered, de- faced, or covered by any other material. (c) Notify the Regional Director for Region 20, in writ- ing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. IT IS ORDERED that all allegations of the complaint which have not been sustained be dismissed. IT IS FURTHER ORDERED that the election held on April 5, 1974, be set aside and the petition in Case 20-RM-1734 be, and it hereby is, dismissed. 17 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. 18 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 read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT solicit from our employees their griev- ances underlying their union activities, in order to dis- courage their interest in International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local No. 150, or any other labor organi- zation. WE WILL NOT promise our employees wage increases, promotions to supervisory or managerial positions, improved health insurance benefits, improved working conditions or other benefits in order to induce them to reject the Union as their collective-bargaining repre- sentative. WE WILL NOT coercively interrogate our employees DALLAS CERAMIC COMPANY 589 regarding their union activities and sympathies. WE WILL NOT tell our employees that it would be futile, or of no advantage, for them to designate or select the Union as their collective-bargaining repre- sentative. WE WILL NOT bargain individually with employees regarding wages, hours, and other terms and condi- tions of employment. WE WILL NOT announce to our employees improve- ments in benefits and working conditions in order to induce them to reject the Union as their collective- bargaining representative. WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees in the exercise of their rights to engage in organizational activity or collective bargaining or to refrain from such activities. WE WILL, upon request, recognize and bargain with said Union as the exclusive representative of our em- ployees in the appropriate bargaining unit composed of all warehousemen and forklift drivers employed at our Le Grande Boulevard, Sacramento, California, lo- cation ; excluding all office clerical employees, guards and supervisors as defined in the Act, and embody in a signed agreement any understanding reached. DALLAS CERAMIC COMPANY