Sharkey's Tire & Rubber Co., Inc.

SHARKEY'S TIRE AND RUBBER CO., INC 261 Sharkey's Tire & Rubber Co., Inc. and Teamsters, Chauffeurs, Warehousemen and Helpers, Local Union No. 59, a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Help- ers of America. Case 1-CA-10006 January 14, 1976 DECISION AND ORDER BY CHAIRMAN MURPHY AND MEMBERS FANNING AND JENKINS On December 31, 1974, Administrative Law Judge Thomas A. Ricci issued the attached Decision in this proceeding. Thereafter, Respondent filed exceptions and a 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 brief and has decided to affirm the Administrative Law Judge's rulings, findings,' and conclusions 2 to the ex- tent consistent herewith, and to adopt his recom- mended Order as modified herein. On March 6, 1974,3 the parties entered into a con- sent election agreement providing that Board-con- ducted elections be held on March 21 at Respondent's New Bedford and North Dartmouth facilities. On March 13, 1 week before the scheduled elections, the Respondent laid off six unit employees at its New Bedford location; a seventh was laid off on March 23,4 Six of the seven were union support- ers. The Administrative Law Judge found that the layoff was not solely for economic reasons and that Respondent's action in laying off the six employees was an attempt to discourage union activities and therefore violated Section 8(a)(1) and (3) of the Act. We disagree with the Administrative Law Judge's finding and conclusions concerning the layoff, al- i In the absence of exceptions thereto, we adopt pro forma the Adminis- trative Law Judge's dismissal of those 8(a)(1) allegations of the complaint which were predicated upon allegedly coercive statements attributed to van- ous management representatives and his dismissal of the 8(a)(5) allegation involving the requirement that employee Furtado support his 1-day absence from work with a medical certificate 2 Upon examining the entire record, including the Administrative Law Judge's Decision, we find no basis for Respondent's contention that the Administrative Law Judge failed to act in a fair and impartial manner in resolving the issues before him 3 All dates are in 1974 except where otherwise stated. 4 Although the record is unclear , it would appear that a total of 10 em- ployees were laid off on March 13, 1 employee outside the unit at New Bedford and the other 3 layoffs occurring at the Respondent's Hyannis and Brockton locations No employees were laid off at the North Dartmouth facility. though we do find that one of the employees laid off on March 13, Thomas Nunes, and Raymond Nunes, who was laid off on March 23, were discharged in violation of Section 8(a)(3) of the Act for reasons discussed elsewhere in this Decision. The record reveals that the Respondent was aware that it was sustaining a loss during 1973 as the result of a slowdown in business and the loss of one of its stores. During the early part of January 1974, the Respondent's comptroller prepared a preliminary statement for 1973 which showed that the Company had in fact suffered substantial losses. When the president of the Company was informed of the comptroller's findings he had the Company's books and record turned over to an independent certified public accountant for auditing. The accountant be- gan his audit on or about February 10, and on Feb- ruary 19 sent the Respondent's president a letter with a preliminary report confirming the fact that the Company had sustained substantial losses. The letter also contained several recommendations as to what could be done to help alleviate the problem and re- quested a meeting, after preparation of the final re- port, between the accountant and Respondent's top management to discuss the recommendations. The meeting between the accountant and Respondent's management occurred sometime in early March, dur- ing which several decisions were made as to how to best effect economies in their operation. One of these was a decision to reduce the payroll by $2,000 a week. To achieve this a 10-percent cut was made in the salaries of the Company's vice president, its comptroller, and its credit manager. The president's salary was completely eliminated. This amounted to a weekly salary reduction of $650. The balance of the proposed reduction was achieved by a decision to eliminate some office personnel, a decision to not replace personnel who had left voluntarily, and a de- cision to lay off some of the production employees. As a result, 10 employees were laid off on March 13. The Administrative Law Judge also relied on the timing of the layoffs and the fact that 6 of the 10 people laid off on March 13 were unit employees at the New Bedford location and 6 out of the 7 unit employees laid off in March were apparently union supporters. He concluded that these facts "strongly suggest[ed] something other than a random hand guiding the pinpointed discrimination." However, the record does not support these inferences. The New Bedford unit had 16 eligible employees, 12 of whom or 75 percent attended at least one of the Union's meetings and signed cards. Therefore, it was mathematically probable that in a nondiscriminatory layoff of seven employees, five or six union support- ers would be affected. In addition, there is no direct 222 NLRB No. 40 262 DECISIONS OF NATIONAL LABOR RELATIONS BOARD evidence that on March 13 the Employer knew which of his employees were in favor of the Union. Finally, the record shows that with one possible exception the Respondent followed a basic seniority pattern in lay- ing off these employees. On the question of the timing of the layoffs, again, the record does not support an inference of unlawful motive. The record shows that, shortly after discuss- ing its options with its outside accountant in early March, the Respondent cut the salaries of its execu- tives, cut out some of its telephones, cut back on truck delivery days, and cut down on purchases, as well as laid off employees throughout its entire oper- ation. Therefore, the layoffs on March 13 were mere- ly part of the overall attempt to economize. This conclusion is not altered by the fact that the Respondent recalled a number of its employees with- in a short period of time after the election. Here again, the Respondent was simply reacting to the ex- isting business situation in that, at the time of the recalls, Respondent's business had increased and ad- ditional manpower was required. Moreover, Respon- dent subsequently laid off employees again when business took another turn. Therefore, in the absence of evidence that Respon- dent had knowledge as to the individual union sym- pathies of all or most of those selected for layoff and in view of the clear evidence of Respondent's eco- nomic distress and meetings attempting to deal with the problem,' we find, contrary to the Administrative Law Judge, that the General Counsel has not sus- tained his burden of proving that the overall selec- tions for layoff on March 13 were motivated by dis- criminatory reasons.6 We are in agreement, however, with the Adminis- trative Law Judge's findings that Raymond Nunes and his brother Thomas Nunes were selected for lay- off because of their union activities and that this con- duct was in violation of Section 8(a)(3) of the Act. Raymond and Thomas Nunes were both active supporters of the Union during the organization campaign which preceded the Board-conducted elec- tion of March 21. Thomas Nunes was one of the six unit employees selected for layoff at Respondent's New Bedford facility on March 13. Raymond Nunes was one of the most senior employees in his depart- ment and he was not included in this general layoff. On March 21, Raymond Nunes served as the Union's observer at the Board election and when he arrived for work on the morning of March 23, his next scheduled workday, he was notified by Respon- 5 For the reasons stated in his partial dissent, Member Jenkins would find that the layoffs of March 13 were for discriminatory reasons and hence violative of Sec 8(a)(3) of the Act 6 Slaughter Company, 172 NLRB 60 (1968) dent that he was being laid off. Raymond Nunes was the only employee laid off on March 23 and he testi- fied, without contradiction, that at the time of his layoff there was regular work, waiting for him to do. Respondent contends that the employees were se- lected for layoff on the basis of seniority and, while the record evidence generally supports this conten- tion, such is not the case with respect to the Nunes brothers. Both Thomas and Raymond Nunes had greater seniority than employees who were retained and, as previously mentioned, Raymond Nunes was one of the most senior employees in his department. Respondent also contends that all of the laid-off em- ployees, including the Nunes brothers were laid off solely because of Respondent's poor economic con- dition and that they were to be recalled as soon as the situation improved. However, the record evi- dence demonstrates an extreme reluctance on Respondent's part to recall the Nunes brothers when it began rehiring employees.' For example, employee Lunny, had been laid off on March 13, testified that on one of his visits to the plant inquiring about recall he was asked by Foreman Norman if he wanted to run the tire mold. When Lunny responded that this was Tommy Nunes' job, Norman told him that Tom- my was not coming back. Upon learning of this con- versation, Tommy Nunes called Norman and asked for an explanation. Norman replied simply that "we don't want you back here." At the hearing, Respon- dent attempted to explain this incident on the basis of Tommy Nunes' allegedly poor attendance record prior to the layoff. However, the Administrative Law Judge found this explanation implausible, as do we, when Respondent adiruttedly did not rely on this al- leged deficiency in selecting Thomas Nunes for lay- off and at no time thereafter ever informed him that this was the reason he was not being recalled. Even stronger evidence of Respondent's attitude toward the recall of the Nunes brothers is shown by the following incident. In late April while Thomas and Raymond Nunes were still awaiting recall, Re- spondent placed an advertisement in a local newspa- per seeking experienced tire changers. Although the Nunes brothers had the qualifications Respondent was seeking, no effort was made to contact them, even though Respondent was eventually forced to hire two inexperienced individuals and train them at its New Bedford facility. On the basis of the foregoing, we conclude that Respondent selected Thomas and Raymond Nunes for layoff because of their union activities. Although there is no direct evidence that would establish that Respondent had knowledge of Thomas Nunes' union sympathies at the time of his layoff on March 13,$ we 'The Nunes brothers were both eventually recalled in July SHARKEY'S TIRE AND RUBBER CO., INC 263 believe that such knowledge can be readily inferred from the circumstances of his selection for layoff; namely, Respondent's unexplained departure from its overall policy of selecting the employees for layoff strictly on the basis of seniority. Also, the total lack of any justification for the Nunes brothers inclusion in the layoff, when considered in conjunction with Respondent's extreme reluctance to recall them when jobs for which they were qualified became available, leads inescapably to the conclusion that Respondent was treating the Nunes brothers as discharged rather than laid-off employees. Since we can perceive of no legitimate reason for telling the Nunes brothers that the layoff was temporary, when in fact Respondent did not intend to recall them, we must infer that Respondent's actions were designed to mask a dis- criminatory motive. Accordingly, we find that Respondent's selection and inclusion of Thomas and Raymond Nunes in its otherwise valid layoff was vi- olative of Section 8(a)(3) and (1) of the Act. A majority of this Panel, Members Fanning and Jenkins, would also adopt the Administrative Law Judge's finding that Respondent violated Section 8(a)(5) of the Act when, after the Union had been certified, it unilaterally granted 25-cent-an-hour wage increases to employees Sylvia and Furtado.9 The Administrative Law Judge found that these wage increases were granted without prior notifica- tion to the Union 10 and that, contrary to Respondent's contention, the raises were not occa- sioned by a change in the work responsibilities of Sylvia or Furtado. He also found that although thereafter the Respondent offered to withdraw the wage increases and the Union declined the offer this in no way detracted from his conclusion that Re- spondent bypassed its, statutory obligation to bargain with Union concerning such changes, and that by engaging in such conduct Respondent violated Sec- tion 8(a)(5) of the Act. Members Fanning and Jen- kins agree and in 'addition they would note that ac- quiescence cannot be found in circumstances such as 8 Respondent-was clearly aware of the union sympathies of Raymond Nunes because just prior to his layoff Raymond Nunes had served as the Union's observer at the Board election. 9 Chairman Murphy dissents from this finding While normally the grant of wage increases without prior consultation with the collective-bargaining representative would violate the duty to bargain, here the increases were of relatively small amounts to only two employees. When prior to their imple- mentation the Union inquired as to the raises, Respondent asked the Union what the Union wanted it to do about the raises, suggesting they might be withdrawn The Union said it did not want the raises withdrawn There is no indication that these two wage increases had any effect on the bargain- ing In these circumstances , the Chairman finds these unilateral actions do not rise to the level of unlawful refusals to bargain cognizable under our statute. 10 Employee Sylvia testified without contradiction that when he was in- formed of his raise by Foreman McCarthy he was admonished to tell no one about it this where the employees have already been notified of their increases and the Union is being asked to consider what is in effect a fait accompli. 1I Here, Re- spondent cannot purge itself by belatedly offering the Union the empty choice between acquiescing in its unilateral and unlawful action and shouldering the blame for denying wage increases to employees it represents. 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, as modified herein, and hereby orders that the Respondent, Sharkey's Tire & Rubber Co., Inc., New Bedford, Massachusetts, its officers, agents, successors, and assigns, shall take the action set forth in the said rec- ommended Order, as so modified: 1. Delete the names Bento Barcelas, Steven Lun- n., Michael Sylvia, Peter Sylvia, and Manuel Vivei- ros from paragraph 2(a). 2. Substitute the attached notice for the Adminis- trative Law Judge's notice. MEMBER JENKINS, dissenting in part: I would adopt the Administrative Law Judge's De- cision in its entirety and consequently, unlike my col- leagues, I would find that the layoff of March 13 was carried out for discriminatory reasons rather than for reasons of economy. The layoff of March 13 was 1 week before a Board-scheduled election; it affected an unusually high number of union supporters; 12 and it was car- ried out by a Respondent whom we have found used this layoff as a cover for the discrimination practiced against union activists, Thomas and Raymond Nunes. Indeed, we have found that during the March 13 layoff itself Respondent discriminatorily selected Thomas Nunes for layoff and that a little over a week later it again acted in an unlawful and discrimi- natory fashion by laying off Raymond Nunes. These factors alone should cause anyone to view Respondent's alleged justification for the layoff with a high degree of suspicion. However, we need not speculate for in my judgment Respondent's econom- ic defense falls of its own weight. Respondent asserts that the layoff was dictated purely by the precarious financial situation in which it found itself. Yet, if such were the case, Respondent was fully aware of its financial condition for at least 3 months prior to the layoff and took no action at all until I week before ii Cf. Langlade Veneer Products Corporation, 118 NLRB 985, 988 (1957). i2 At the New Bedford facility , five of the six unit employees laid off on March 13 were union supporters. 264 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Board-scheduled election. When Respondent did act, the measures taken were minor indeed for a Company allegedly on the brink of bankruptcy. The layoff of only 10 of some 40 production and mainte- nance employees," even when considered in con- junction with other economic measures put into ef- fect, could hardly be expected to produce any dramatic turnaround in Respondent's financial con- dition. This is even more evident when the short du- ration of the layoff is taken into account. Some em- ployees were recalled in a few weeks, and within a month and a half of the layoff Respondent adver- tised for experienced help and hired two new em- ployees while the two leading union adherents were still on layoff status. My colleagues' reversal of the Administrative Law Judge's findings concerning the layoff is based upon his alleged overreliance on the high percentage of union supporters affected by the layoff and upon the alleged economic justification for Respondent's ac- tion. As to the former, I think the Administrative Law Judge made it quite clear that his conclusions concerning the layoff were not predicated solely on the statistical improbability that in a random selec- tion of seven unit employees for layoff at the New Bedford location six of them would be union sup- porters. Obviously, he considered this to be of signifi- cance, as do I, but, as I think I have already indi- cated, this is by no means the only evidence which would support the finding of a violation here. The real focus, if there is to be one, should be placed on the Administrative Law Judge's rejection of Respondent's economic defense on the basis of its inherent implausibility. Respondent offered no docu- mentary evidence to support its assertion, and, after listening to the oral testimony of Respondent's wit- nesses, the Administrative Law Judge simply did not believe that the layoff was dictated solely by finan- cial considerations. I think the Administrative Law Judge was entitled to draw such a conclusion and I would not disturb his findings. 13 Respondent also laid off one office employee APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing in which all parties had the opportu- nity to present their evidence , it has been found that we violated the National Labor Relations Act, as amended, and we have been ordered to post this no- tice and we intend to carry out the Order of the Board and abide by the following: WE WILL NOT lay off or discriminate against any of our employees for engaging in concerted or union activities. WE WILL make whole Thomas Nunes and Raymond Nunes for any earnings they lost as a result of our discrimination against them, plus 6-percent interest. WE WILL NOT grant individual unilateral raises to any employees while we are under the statu- tory duty to bargain collectively with their cho- sen exclusive collective-bargaining representa- tive. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of their rights to self-organization, to join or assist Teamsters, Chauffeurs, Ware- housemen and Helpers, Local Union No. 59, a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, or any other labor organization, and to engage in other concerted activities for the pur- poses of collective bargaining or other mutual aid or protection, or to refrain from any and all such activities. SHARKEY'S TIRE & RUBBER CO., INC. DECISION STATEMENT OF THE CASE THOMAS A. Ricci, Administrative Law Judge: A hearing in this proceeding was held at New Bedford, Massachu- setts, on November 12, 1974, on complaint of the General Counsel against Sharkey's Tire and Rubber Co., Inc., here- in called the Respondent or the Company. The charge un- derlying the complaint was filed on August 2, 1974, and the complaint issued on August 20, 1974. The essential issue of the case is whether the evidence offered in support of the complaint suffices to prove the Respondent in March 1974 laid off seven employees for periods varying between 2 weeks and a few months, for the purpose of discouraging their prounion activities and thereby violated Section 8(a)(3) of the Act. Upon the entire record and from my observation of the witnesses I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The Respondent is engaged in the State of Massachu- setts in the tire retreading business and in the wholesale and retail sale and distribution of automobile supplies and SHARKEY'S TIRE AND RUBBER CO., INC 265 accessories, with its principal office in the city of North Dartmouth, Massachusetts. In the course of its business it normally causes large quantities of automotive parts and other materials to be brought from other States to its Mas- sachusetts operation and substantial quantities of such products to be sold and transported out of the State. Annu- ally the Company buys and receives goods valued in excess of $50,000 from out-of-state sources. Its annual volume of business is approximately $2-1/2 million. I find that the Respondent is engaged in commerce within the meaning of the Act. II. THE LABOR ORGANIZATION INVOLVED I find that Teamsters, Chauffeurs, Warehousemen and Helpers, Local Union No. 59, a/w International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Help- ers of America, the Charging Party herein called the Union, is a labor organization within the meaning of Sec- tion 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES A. The Principal Issue This Company does business at four locations: New Bedford, North Dartmouth, Hyannis, and Brockton. The largest operation is at New Bedford , where, in addition to a retail store, there are also a warehouse and a tire retread shop. Self-organizational activities among the employees started at the very beginning of February 1974, and cen- tered at New Bedford, where most of the men worked. The Union filed a Labor Board petition (Case 1-RC-13139) asking for a single election among the production and maintenance employees at two locations , New Bedford and North Dartmouth.' On March 6, the parties signed a consent election agreement and on March 21 a Board-con- ducted election was held-one at New Bedford and the other at North Dartmouth. Sixteen employees were eligible to vote in New Bedford and four at North Dartmouth. The Union won both elections. On March 13 the Respondent laid off a number of em- ployees, most of them working at New Bedford, and on March 23, it laid off still another New Bedford man-Ray- mond Nunes-perhaps the principal union activist. Com- pany witnesses assert that 11 persons all told were laid off in March, but the record is not clear with precision exactly how many persons'were sent home at that time throughout the Company's four locations, nor, in fact, the identity and job classification of every last individual involved. But it is clear 7 employees were released of the total of 16 rank-and- file persons then working at the New Bedford location and, that of these, 6 were among those who had attended union meetings and signed union cards . They were all recalled before issuance of the complaint on August 20. It is alleged that the layoff of these seven workmen in March was moti- vated by an intent to chill the union movement and to discourage them from voting in favor of the Union in the 1 This first petition was later amended to limit the unit sought to New Bedford, and a second petition filed for the employees at North Dartmouth imminent elections, and that by such discrimination against each of them the Respondent violated Section 8(a)(3) of the Act. Denying any illegal purpose in its action, the Respon- dent contends in affirmative defense that the mass layoff was dictated by economic considerations alone-the as- serted fact it had lost about $200,000 during the prior year, 1973, and was on the brink of insolvency. It is a circumstantial case, the question presented being one that can be answered favorably to the complaint only as a matter of inference arising, if warranted, from all of the relevant facts of record. When Donald Correia, vice president and manager of the business, discharged these employees, he called them into his office to explain his action; he told them the Company had been losing money for a long time, expenses had to be reduced, the payroll had to be cut, the layoffs were only temporary, and the men would be recalled as soon as improved business war- ranted. They were asked by their supervisors to leave their home telephone numbers to facilitate recall. Correia even took care to tell the men the action was in no way related to their union activities. There is no evidence, nor is it claimed, that the union matter was mentioned at all by anyone in connection with the many layoffs. In the circum- stances, if it can be said the Respondent's real purpose in the layoffs was something other than the reason articulated by Correia that day, the finding must rest on the related and pertinent facts proving a contrary intent. B. The Case in Support of the Complaint It is important in a case of this kind to separate fact from argument and objective testimony from distracting colora- tion and conclusionary statements. Raymond Nunes, later himself laid off, testified that, when he heard a rumor in the morning that some employees were to be released, he quickly ran to the Union's office to report that "everybody that was getting laid off at Sharkey's were all the people that were going to vote for the Union." This, in the face of the witness' admission he had no idea then who, or how many persons, were going to be laid off. There are like statements revealing emotional involvement spoken by other witnesses. There were also many factual assertions in no sense supported by probative evidence, and this is par- ticularly true of factual claims that, if in fact established, would have had a significant bearing on the heart question one way or the other. The rule of law that unfair labor practices can only be proved by a preponderance of the substantial evidence on the record as a whole (N.L.R.B. v. Glenn Raven Silk Mills, Inc., 203 F.2d 946, (C.A. 4, 1953) refers to relevant subsidiary facts objectively established, not to mere argumentative claims however articulated on the record transcript. The heat of the hearing notwith- standing, the following facts, said to support the complaint, do appear clearly enough. (1) The Company knew during 1973 that it was losing money. In January 1974 Manuel Correia, the company president, received a financial report so alarming, he said, that he immediately flew from Florida to New Bedford and quickly consulted with his son, Donald, his comptroller, Mr. Kenneth Fluegel, and the Company's certified public 266 DECISIONS OF NATIONAL LABOR RELATIONS BOARD accountant, Mr. Peter Kane, a private practitioner. (2) Not a word of any intended layoff of employees was voiced by any management agent to any employee until March 13. (3) Meanwhile, early in February the employees started signing union cards, the Union filed its election petition with the Board on February 6, the Company and the Union signed, on March 6, a consent election stipulation, and all parties awaited elections scheduled for March 21. (4) On March 13, the Respondent laid off 10 employees and an 11th on March 23. Of the entire group, six who are named in the complaint worked at New Bedford, and signed union cards and had attended union meetings. A seventh man, Bento Barcelas, apparently also working at New Bedford, is not shown to have been active for the Union. One more was an office girl, not involved in the pending elections. Still another was a salesman, also ex- pressly excluded from the agreed-on voting groups. And one of the New Bedford men laid off had acted as the union observer at the March 21 election, and was released on his first day at work after the balloting. (5) All seven of the New Bedford men were told they would soon be re- called; five of them were recalled, some only 2 weeks later, the rest after a further period of time. (6) Late in April, while Thomas Nunes and Raymond Nunes was still await- mg recall as promised, the Respondent placed an advertise- ment in the New Bedford newspaper seeking experienced tire changers, like the Nunes brothers. It hired two such persons in consequence and put them to work in the New Bedford location, no efforts being made to contact either Thomas or Raymond Nunes. (7) And, finally, the Compa- ny was strongly opposed to having a union represent its employees. On each of the following days-March 5, 13, 15, and 18-it sent personal letters to each of its employees urging them to vote no in the coming elections. A conclusionary finding of illegal motivation in a cir- cumstantial evidence case may never be based on an out- of-context selection from all the relevant facts. The Re- spondent was offered every opportunity to offer its affir- mative defense aimed at offsetting the compelling in ference of illegal intent very persuasively arising from the foregoing facts. C. Alleged Economic Justification The entire thrust of the defense is that the Company had lost such large amounts of money during the year 1973 that extreme remedial steps had to be taken as quickly as possi- ble to avoid complete collapse of the business. In so dan- gerous a financial situation it is reasonable to expect that the corrective measures will be taken without delay, and that in extent they will bear some rational relationship to the amount of losses to be recovered. Thus, the timing of the mass layoff in relation to the moment when the Re- spondent first became aware of what it now calls an impos- sible situation, is therefore a very important element in the persuasiveness or lack of persuasiveness in its contention of discharge for lust cause. Likewise, the impact of its as- serted remedial action must also be appraised in the light of the monumental losses it is supposed to have recovered. On the question of when the company officials first learned of its financial stress the Respondent's witnesses gave conflicting testimony. Donald Correia started by say- ing that he first learned of the 1973 losses "around the latter part of February" 1974. He then added the slow- down in business had been noticed "for quite a while." Donald Correia also said that in his office "a couple" of profit-and-loss statements are prepared during every year, and that this had also been done in 1973. "I believe we had one in the mid part of the year." Asked again, then, did the Company make profit-and-loss statements during the year, in complete reversal he said: "No, we don't." Another witness for the Respondent was Kenneth Flue- gel, the Company's full-time comptroller. He said that at the end of the year he always prepares a financial invento- ry report with full financial summaries from the records, and that he did this in final form in January 1974 for the prior year. He added he sent this report to Manuel Correia, the president, in Florida "the first part of January of '74." Fluegel continued to testify that there followed a meeting in the Company's "Dartmouth office," and still another meeting in the office of the outside accountant, Mr. Kane, where the economic problem and possible remedies were discussed by management. He put this last conference, at- tended also by President Correia, at "the end of February of [sic] the first of March." The president's testimony is different. He said, "We knew in '73 that we had had a loss," and that he received Fluegel's full year report "in January." "The minute I received the figures I sat down and studied them for a while . . . I called Pete Kane in Fall River . . . I got on the plane that night at 10 o'clock and flew right here . . . ." He then added that "upon ar- rival here in this area" he immediately conferred with, his son, with Fluegel, and with Accountant Kane, where it was decided "to cut the payroll" and effectuate economics. The Company also called Kane as a witness, who said that after receiving Fluegel's end-of-the-year report he had a tele- phone conversation with Mr. Correia in Florida "around the latter part of January, 1974." Except for a letter dated February 19, 1974, from Kane to Manuel Correia, giving the accountant's estimate that the Company had "a loss of approximately $200,000" in the year ending December 31, 1973, and suggesting exten- sive economics, no documentary proof, of company re- cords or otherwise, was offered in evidence to support the affirmative defense. Exactly what the "losses" were, there- fore, or just what had caused them, remains I very unclear. Manuel Correia said one of the forced savings to the Com- pany was that he ceased drawing a salary and another that the rent was reduced, what with him personally owning the real estate anyway. It strains credulity to believe that the Company did not know all along in the year 1973 it was losing money, if in fact it was losing any. I think the record in its entirety, considering especially the testimony of Flue- gel, the full-time comptroller, would support a finding the Respondent was well aware of its financial condition even before Fluegel's facts were presented to the income tax private accountant. But there can be no question the Com- pany knew all about its records very soon in January, for the fact stands absolutely clear on the president's own ad- missions. Insofar as the employees were concerned, the Company did nothing about this impossible condition for over a SHARKEY'S TIRE AND RUBBER CO., INC 267 month and a half, not even hinting to the personnel their jobs might be in danger. There is no explanation offered, plausible or otherwise, of why no action came until the very moment when the date for the union elections was set and the Company knew the day of reckoning was at hand. There is `no avoiding the conclusion it wanted the employ- ees-to vote "no," and one way to increase the chances was to put a little fear of possible further reprisal into their minds. Daniel Correia told the men on March 13 they should go ahead and vote, that they would be called back. It is one thing for a man to vote free of worry about his job; it is something else again to vote while wondering about the employer's pleasure in possible recall. But there is more in this record to show that the March layoffs were related to the union activities and not to any economic considerations. 1. Raymond Nunes was a more outstanding union activ- ist; he acted as union observer at the election on March 21. He was off work the next day and when he arrived on the morning of March 23, Saturday, was also summarily dis- charged, although, as he testified without contradiction, there was regular work waiting for him to do. The only explanation for this action offered by the Respondent again is simply the unsupported assertion that it was neces- sary to release another man. - 2. When the election took place at the New Bedford location, 16 rank-and-file employees were eligible, includ- ing the 7 who were laid off and are now listed in the com- plaint. Eight employees voted for the Union and seven against. Of the seven men laid off, six-Lunny, M. Sylvia, P. Sylvia, Manuel Viveiros, Thomas Nunes, and Raymond Nunes-attended union meetings and were therefore ac- tive in favor of the Union., The record does not show whether Barcelas, the seventh man laid off, had anything to do with the union movement. It does appear that about six others at New Bedford also attended union meetings but were not selected for layoff. I doubt an inference of overall intent to select out the unioneers can rest on these numerical factors alone. At best it appears nine production and maintenance employees were laid off at New Bed- ford-the office girl and the one salesman being outside the area of union activity 'altogether. Nevertheless, with the prounion vote being 8 out of 15, the fact 6 prounion men are found in the total of 9 persons released strongly sug- gests something other than a random hand guiding the pin- pointed discrimination. 3. The company witnesses said at the hearing they se- lected on the basis of seniority. They did not, for Raymond Nunes enjoyed very great seniority indeed, and Thomas Nunes was senior to at least one other man retained. Flue- gel said the Company made'a mistake in the case of Ray- mond Nunes, but it is not a likely story in view of the special treatment accorded him immediately following the union election. But failure to follow semority-a certainly objective and neutral criterion-again points the finger of suspicion at the high percentage of unioneers selected for hurt. 4. All the men were 'told they would be recalled, but instead of recalling Thomas and Raymond Nunes, both experienced tire changers, the Respondent placed an ad in the newspaper on April 26 and 27 calling for "Experienced Truck Tire Person to repair and change truck tires... . Experienced only need apply." Two men applied and were hired right away. If the two Nunes, like all the rest, accord- ing to the Respondent, were laid off temporarily only be- cause of the economic stress of the moment, why were they not also recalled? In view of the very clear language of the newspaper ad, I find totally unconvincing the Respondent's answer to this question-that the two men were taken on at New Bedford only to be "trained" for future transfer to other locations. The management agents were not credible witnesses. Lunny testified that on one of his visits to the plant in- quiring about recall, his foreman, Henry Norman, asked did he want to run the tire mold. When he responded that it was Thomas Nunes' job, the foreman told him "Tommy's not coming back." Nunes heard of this and tele- phoned to ask Norman why he had said this, only to be told "we don't want you back here." Norman did not testi- fy. Donald Correia explained this incident by saying at the hearing that Nunes had had a bad record of absences in the past, before the layoffs, that he was not selected for layoff for such deficiency, that neither he-Correia-nor anyone else ever told the man this was the reason for not recalling him before July, but that nevertheless it was the reason why he was not called back sooner. If what Correia said at the hearing to explain away the foreman's plain statement that the Company did "not want" the men back were true, all some member of management had to do was tell him so. No one did; all Nunes knew is that he was awaiting recall. I do not credit Correia here. Both the Nunes were recalled in July, and have been at work since. I find no merit, however, in the Union's implic- it argument that, because the Company reinstated them after a charge had been filed on their behalf with the Board, it follows of necessity that the reason why they were initially released was an illegal one. 5. And finally, on this entire record, the factual conten- tion that the Respondent's business was virtually bankrupt by the spring of 1974 is unpersuasive. Losses in such amounts as $200,000 for 1 year, or decreases in total assets putting a company on the brink of bankruptcy, are not recovered by the temporary layoff of 8 or 10 employees for no longer than a few weeks or a month or two. Some of the laid-off men were recalled in just several weeks. By April 26, only a month and a half after the mass layoffs, the Respondent was advertising for men. Business, could not have been so terribly depressed if the complement of em- ployees in July was back to 35 from the 40 production and maintenance men who were at work at the beginning of March. In fact there is indication that the Company's busi- ness did not change appreciably from what it had been the previous year. The only objective information shown in this record about the business operations was read into the transcript from original books of the Respondent. It shows the following: 2 2 Whatever amount appears under this heading is included in the gross volume of sales figures The record is silent as to any relationship between the "Warehouse Operations" figure and payroll or other items ordinarily found in financial reports 268 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Warehouse Gross Volume Operation 2/ 1973 Jan. $154,815 $49,799 Feb. 144,800 51,910 Mar. 167,182 63,146 Apr. 202.690 83,146 May 200,807 78,251 June 183,451 58,786 July 183,681 66,980 Aug. 207,507 66,763 Sept. 171,888 51,021 Oct. 205,406 70,790 Nov. 163,066 46,851 Dec. 171,366 40,040 1974 Jan. $144,102 $29,340 Feb. 106,741 29,579 Mar. 152,083 48,169- Apr. 202,424 55,321 All this means that there is a normal decline in volume of sales in the winter months in the operations of this com- pany. Had the Company reduced the staff during Febru- ary, when its volume of sales was less than the comparable month of 1973, a certain picture would emerge. It did so instead in March, when the volume was much closer to what it had been the previous March. Had the Respondent advanced an economic justification based on financial claims bearing an at least rational relationship to the limit- ed steps it took and now seeks to justify, its defense might have been more convincing. I am not persuaded by the conclusionary testimony of the company officials, unsup- ported by external or documentary proof, that their reason for laying off the people exactly on March 13 was for fi- nancial reasons, and for financial reasons only. Given the very incriminating timing, -the clear opposition toward the union movement overtly proclaimed by man- agement, and the unpersuasive character of the alleged af- firmative defense, I conclude that the Respondent laid off the six employees on March 13, and Raymond Nunes on March 23, to discourage their union activities and that it thereby violated Section 8(a)(3) of the Act. D. Section 8(a)(1) The complaint lists several specific allegations of illegal, coercive statements attributed to management representa- tives. The record testimony fails to prove any of them. E. Section 8(a)(5) Following the March 21 elections, the Union was certi- fied by the Regional Director on March 29, 1974, as exclu- sive collective-bargaining agent for the two units of em- ployees, one at New Bedford and the other at North Dartmouth. The parties thereafter engaged in proper col- lective bargaining. One employee, Kenneth Furtado, said at the hearing he had 3 weeks earlier received a "70-cent increase . . . through the union negotiations." And Charles Fernandez, the Union's president, testified that he had al- ready sent to the Respondent "a contract proposal," and that "we have concluded it as far as I know." I do not understand why the General Counsel placed into the rec- ord as an exhibit a letter from the Union to the Respon- dent dated April 18, 1974, inviting negotiations. This is not a refusal-to-bargain case. An unfair labor practice is alleged against the Company in that it asked one man, after the Union's certification, to present a medical certificate to justify his absence from work one Saturday. The man was well when he left work on Friday afternoon, had someone else call in sick for him the next morning from his home, and, according to the uncontradicted testimony of Daniel Correia, there was as- signed contract work waiting for him the next day that no one else was available to do, the contract had to be can- celed, and the loss cost the Company "a awful lot of dol- lars." Furtado brought the medical certificate. The theory of illegality here is that since the Company had,no general practice in the past of requiring medical certificates in the case of absences for reasons of illness, by this one exaction against Furtado the Company unilaterally changed ex- isting conditions of employment in violation of Section 8(a)(5) of the Act. Furtado did not contradict Correia's explanation of how the employee's sudden indisposition inconvenienced the Company. There is evidence that in a number of instances in the past the Company did not re- quire medical certificates, but there is no basis for finding that the Respondent had always consciously passed over unscheduled absences in this sort of situation without com- ment. This matter of when medical certificates should be required is best left to the good judgment of the negotiating parties to decide. The Company did give two men small raises in pay be- fore it entered upon direct negotiations with the Union. Some time in May, shortly after his recall, Michael Silvia was given a 25-cent-per-hour increase, and Furtado, who never left, received an extra 25 cents an hour on or about June 1. Each man testified this was done without advance consultation with or notice to the Union. Indeed, Silvia's testimony is that when Eugene McCarthy, his foreman, told him of the raise, he said "he would give me another quarter and not to tell no one." McCarthy did not appear as a witness. Fernandez, of the Union, did learn about these raises after they were given, and his story is that at the first real negotiating conference, the Company's law- yer, Mr. Jason, asked did Fernandez want the raises with- drawn. Fernandez answered nothing should be changed now that it seemed the parties would reach agreement. Donald Correia virtually admitted that raises were given before the Union was told anything about them. His at- SHARKEY'S TIRE AND RUBBER CO., INC tempted explanation that in each instance the increases were occasioned by a change in work responsibility is un- convincing against the testimony of the employees them- selves. Correia even admitted having asked did Fernandez think the raises should be canceled. There is no question but that by giving these individual raises the Respondent bypassed the Union when it was under statutory obligation to recognize it as exclusive representative. I find that by granting the raises to Silvia and Furtado the Respondent violated Section 8(a)(5) of the Act. IV. THE REMEDY It having been found that the Respondent committed unfair labor practices it must be ordered to take appropri- ate remedial action. There is no occasion for ordering res- toration of employees to their employment, for each person who suffered illegal discrimination has already been put back to work. The Respondent must be ordered to make whole the seven employees named in the complaint, who were unlawfully laid off, for any loss of earnings they may have suffered in consequence of the illegal discrimination against them. V. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the Respondent set forth in section III, above, occurring in connection with the operations of the Respondent described in section I, have a close, intimate, and substantial relationship to trade, traffic, and com- merce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. CONCLUSIONS OF LAW 1. By temporarily laying off, in March 1974, Bento Bar- celas, Steven Lunny, Thomas Nunes, Michael Silvia, Peter Silvia, Manuel Viveiros, and Raymond Nunes, the Respon- dent has engaged and is engaging in unfair labor practices in violation of Section 8(a)(3) of the Act. 2. By unilaterally granting raises in pay to Michael Sil- via and Kenneth Furtado at a time when it was under obligation to bargain with the Union as exclusive majority representative of all its employees, the Respondent has en- gaged in violations of Section 8(a)(5) of the Act. 3. By the foregoing conduct the Respondent has en- gaged and is engaging in violations of Section 8(a)(1). 4. The aforesaid unfair labor practices are unfair labor practices within the meaning of Section 2(6) and (7) of the Act. Upon the foregoing findings of fact, conclusions of law and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: ORDERS 269 The Respondent, Sharkey's Tire and Rubber Co., Inc., New Bedford, Massachusetts, its officers, agents, succes- sors, and assigns, shall: 1. Cease and desist from: (a) Laying off or in any other manner discriminating against its employees because of their union activities. (b) Unilaterally granting increases in pay to individual employees at a time when it is under statutory duty to bargain with their exclusive collective-bargaining agent. (c) In any other manner interfering with, restraining, or coercing employees in the exercise of the rights to self- organization, to form, join or assist Teamsters, Chauffeurs, Warehousemen and Helpers, Local Union No. 59, a/w In- ternational Brotherhood of Teamsters, Chauffeurs, Ware- housemen and Helpers of America, or any other labor or- ganizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purposes of collective bargaining or other mutual aid or protection, or to refrain from any and all such activities. 2. Take the following affirmative action necessary to ef- fectuate the policies of the Act: (a) Reimburse Bento Barcelas, Steven Lunny, Thomas Nunes, Michael Silvia, Peter Silvia, Manuel Viveiros, and Raymond Nunes for any loss of pay or any benefits they may have suffered by reason of the Respondent's discrimi- nation against them. (b) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all pay- roll 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 recommended Order. (c) Post at its place of business in New Bedford and North Dartmouth, Massachusetts, copies of the attached notice marked "Appendix." 4 Copies of said notice, on forms provided by the Regional Director for Region 1, af- ter being duly signed by its representatives, shall be posted by the Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by it to insure that said notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director for Region 1, in writ- ing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. 3 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 ° 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"