Jays Foods, Inc.

JAYS FOODS, INC. 423 Jays Foods, Inc. and Robert Lull and Retail Clerks Union Local 1550, affiliated with Retail Clerks International Association, AFL-CIO Nielsen Brothers Cartage Co., Inc. and Robert Lull. Cases 13-CA-14889, 13-CA-14955, and 13-CA- 14890 February 24, 1977 DECISION AND ORDER BY CHAIRMAN MURPHY AND MEMBERS FANNING AND JENKINS On September 3, 1976, Administrative Law Judge Sidney J. Barban issued the attached Decision in this proceeding. Thereafter, Respondents, Jays Foods, Inc., and Nielsen Brothers Cartage Co., Inc., filed exceptions and a brief, and the General Counsel filed exceptions and a brief. The Respondents and the General Counsel filed answering briefs to the respec- tive exceptions. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings,' and conclusions of the Administrative Law Judge and to adopt his recommended Order as modified herein. We agree with the findings of the Administrative Law Judge that when Respondent Jays Foods contracted out its delivery operation on November 14, 1975, to Nielsen Brothers Cartage Co., Inc., and discharged its truckdrivers, it did so for discriminato- ry reasons in violation of Section 8(a)(1) and (3) of the Act. However, we do not agree with the Adminis- trative Law Judge's recommended remedy for such conduct, which does not require Respondent Jays Foods to resume its delivery operations and to offer reinstatement to the 26 discriminatees. As the Administrative Law Judge correctly points out, the remedy of resumption of operations is the normal remedy in the factual situation here, particu- larly since the record shows that such a resumption of operations would not create any undue hardship. Respondent Jays Foods is a successful and finan- cially sound operation and had conducted its own delivery operations for over 30 years. Although Jays Foods has contracted out this work to Nielsen, the 1 Respondent Jays Foods has excepted to certain credibility findings made by the Administrative Law Judge It is the Board's established policy not to overrule 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 delivery trucks and other equipment continue to be housed on Jays Foods' property and, in fact, the trucks still have Jays Foods' name on them. The truckdrivers, now employed by Nielsen, report to Jays Foods' premises, the same as before the con- tracting out. There they are dispatched daily by a dispatcher employed by Nielsen from an office in Jays Foods' plant. Under the provisions of the contract between Jays Foods and Nielsen, the agreement can be canceled upon 30 days' notice in writing by either party, and Jays Foods has the right to repurchase the vehicles at a certain time period in accordance with the condi- tions set forth in the contract. Thus, the physical and legal ties of the delivery service operations have not been completely severed, and Jays Foods' resumption of the delivery operation at any time could be easily effected. Apparently, the reason the Administrative Law Judge did not consider it necessary to order Jays Foods to resume the delivery operations is that he considered the status quo as providing a substantially adequate affirmative remedy for the unfair labor practices. He indicated he was strongly influenced by the fact that Nielsen had eventually voluntarily hired 23 of the 26 discharged employees to perform Jays Foods' delivery operation in apparently the same manner as before. He also was persuaded by the fact that the wages and other benefits of the drivers may be better than those enjoyed before Jays Foods contracted out the operation. We find the rationale of the Administrative Law Judge unconvincing and legally unsupportable under the facts of this case.2 Admittedly, the discriminatees are paid a higher hourly rate working for Nielsen. However, part of the higher wage scale can oe attributed to normal raises which were periodically given, and it is pure specula- tion to assume, as does the Administrative Law Judge, that the truckdrivers would not have received similar raises, or that they would receive pay cuts if they returned to work for Jays Foods. Moreover, the record shows that the discriminatees received mone- tary benefits at Jays Foods which they do not enjoy at Nielsen, such as substantial yearly bonuses and free meals and coffee. Furthermore, as the Administrative Law Judge specifically noted, the seniority and job security at Nielsen, where they are now employees with low seniority, may not compare with that enjoyed at Jays Foods. Our concern also is that the remedy recommended by the Administrative Law Judge permits Respon- carefully examined the record and find no basis for reversing his findings. 2 Cf, e g, Walker Company, 183 NLRB 1322 (1970), Bruce E Kronen. bergh and Herbert Schoenbrod d/b/a American Needle & Novelty Company, 206 NLRB 534 (1973); Akron Novelty Manufacturing Company, 224 NLRB 998 (1976), Serv-U-Stores, Inc, 225 NLRB 37 (1976), Sunflower Novelty Bags, Inc, 225 NLRB 1331 (1976). 228 NLRB No. 54 424 DECISIONS OF NATIONAL LABOR RELATIONS BOARD dent Jays Foods to be rewarded for its illegal activity. The organizational efforts of its employees have been effectively frustrated and Jays Foods has succeeded in avoiding union organization. We find that the payment of the modest amount of backpay required and the posting of the notices recommended by the Administrative Law Judge are insufficient remedies to effectuate the policies of the Act. In brief, the remedy recommended by the Adminis- trative Law Judge falls short of making the discrimi- natees whole. The record shows that three truckdri- vers who had been discriminatorily discharged have not been hired by Nielsen. In accepting a job with Nielsen the other discriminatees are required under the union security of the collective-bargaining con- tract to join a union not of their own choosing. Indeed, they must join a union which the majority of the employees in the Jays Foods' unit had earlier rejected. For the above reasons we shall require Respondent Jays Foods to resume its former operations and reestablish the status quo ante, to the extent necessary to provide jobs for those who desire reinstatement in Jays Foods' employment as provided below. ADDITIONAL REMEDY Having found that Respondent Jays Foods has engaged in certain unfair labor practices, we shall order it to cease and desist therefrom and take certain affirmative action necessary to effectuate the policies of the Act as recommended by the Administrative Law Judge in the Remedy provided for in his Decision. For the reasons discussed above, however, we have found that the Administrative Law Judge's refusal to require Respondent Jays Foods to resume its delivery operations would not effectuate the policies of the Act. Accordingly, we shall order that Respondent Jays Foods reestablish that operation and reinstate the employees discriminatorily discharged when the delivery work was contracted out. We shall also award the employees involved backpay based on the earnings they normally would have received from the date of their discharge to the date of Respondent Jays Foods' offer of reinstatement, less any net interim earnings, which shall be computed on a quarterly basis, in the manner set forth in F. W. Woolworth Company, 90 NLRB 289 (1950), with interest at the rate of 6 percent per annum as set forth in Isis Plumbing & Heating Co., 138 NLRB 716 (1962). ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge as modified herein and hereby orders that the Respon- dent, Jays Foods, Inc., Chicago, Illinois, its officers, agents, successors, and assigns, shall take the action set forth in said recommended Order as so modified: 1. Substitute the following for paragraph 2(b): "(b) Reestablish its delivery operations and offer to the following employees immediate and full reinstate- ment to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or other rights and privileges, and make each of them whole for any loss of earnings they may have suffered in the manner provided in the section of the Board's Decision and Order entitled `Additional Remedy': "Siebert Kuiken Gerald Dildine Richard McCormick Charles Merrick Jack Whelan Raymond Prince Paul Knott James Chapman Albert Philp Dennis Altgilbers Robert Lull Edward Sallay Henry Goodman Craig Mullins Thomas Richards Lawrence Rossi Charles Dietz David Butkus James Paluch Raymond Hansen Robert Vitner Lauren Hodson Gary Redelsperger Ronald Davis Charles Vogel John Short" 2. Delete paragraph 2(c) and reletter the following paragraphs accordingly. 3. Substitute the attached notice for that of the Administrative Law Judge. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Act gives all employees these rights: To form, join, or assist labor organizations To bargain collectively through represen- tatives of their own choosing To engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection To refrain from any or all such activities, except as may be required by a legal agree- ment between an employer and the represen- tative of the employees. WE WILL NOT discharge or discriminate against our employees because they join or help Retail JAYS FOODS, INC. 425 Clerks Union Local 1550, affiliated with Retail Clerks International Association, AFL-CIO, or Local 705, International Brotherhood of Team- sters, Chauffeurs, Warehousemen and Helpers of America, or any other labor organization. WE WILL NOT grant or promise to grant increas- es in wages or other benefits in order to induce our employees not to engage in union activities. WE WILL NOT threaten to withhold wage in- creases or other benefits because our employees engage in activities on behalf of a union. WE WILL NOT threaten to close our operations, or any part of our operations, or contract out our operations, or sell our equipment because our employees have engaged in activities on behalf of a union. WE WILL NOT coercively interrogate our em- ployees concerning membership in or activities on behalf of a union. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of rights guaranteed by law. WE WILL offer Edward Olson immediate and full reinstatement to his former job or, if that job no longer exists, to a substantially equivalent job, without prejudice to his seniority, or other rights and privileges, or working conditions, and, WE WILL make Edward Olson whole for any loss of pay or other benefits suffered by him as a result of the discrimination against him. WE WILL resume our delivery operations and take the delivery operations away from Nielsen Cartage. We shall offer the employees named below immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent jobs, without prejudice to their seniority, or other rights, privileges, or other working conditions: Siebert Kuiken Richard McCormick Jack Whelan Paul Knott Albert Philp Robert Lull Henry Goodman Gerald Dildine Charles Merrick Raymond Prince James Chapman Dennis Altgilbers Edward Sallay Thomas Richards Charles Dietz James Palach Robert Vitner Gary Redelsperger Charles Vogel John Short Lawrence Rossi David Butkus Raymond Hansen Lauren Hodson Ronald Davis Craig Mullins WE WILL make the employees named above whole for any loss of earnings or benefits they may have lost by reason of their discharge on November 14, 1975. JAYS FOODS, INC. DECISION STATEMENT OF THE CASE SIDNEY J. BARBAN, Administrative Law Judge: This matter was heard at Chicago, Illinois, on April 26, 27, 28, 29, and 30 and May 4, 5, and 6, 1976, upon complaints issued in the above cases consolidated by an order issued on January 27, 1976.1 The consolidated complaints allege that (a) Respondent Jays Foods, Inc. (herein sometimes Jays) interrogated employees concerning union activities; granted a wage increase to induce employees to refrain from union activities ; threatened to withhold a wage increase from employees engaging in union activities; advised employees that management of Jays was angry and would sell its trucks and contract out its delivery operations because employees had engaged in union activities; and stated that employees would lose benefits if a union were selected as their representative , all in violation of Section 8(a)(1) of the Act; (b) Respondent Jays, on or about November 14, 1975, ceased its delivery operations, sold its trucks, and contracted its delivery operations to Respon- dent Nielsen Brothers Cartage Co ., Inc. (herein sometimes Nielsen Cartage), and discharged 26 named employees, because its employees had engaged in union activities, all in violation of Section 8(a)(1) and (3) of the Act; (c) Respondent Nielsen Cartage refused to hire 5 named employees (who had been discharged by Jays) because they had engaged in union activities, in violation of Section 8(a)(1) and (3) of the Act; (d) Nielsen Cartage is and has been a successor employer with respect to the delivery operations of Jays, and at all material times had knowledge of Jays' alleged unfair labor practices in ceasing its delivery operations, selling its trucks, and contracting its delivery operations to Nielsen Cartage and discharging its employ- ees; and (e) Jays, on or about December 1, 1975, discharged Edward Olsen because of his union or other protected concerted activities in violation of Section 8(a)(1) and (3) of the Act. The answers of Jays and Nielsen Cartage ( sometimes jointly referred to as the Respondents) deny the commis- sion of the alleged unfair labor practices , but admit allegations in the complaints sufficient to justify the assertion of jurisdiction over Respondents under current standards of the Board. (Jays produced and distributed snack foods in a recent annual period of a value in excess of $50,000 which it shipped in interstate commerce ; Nielsen, engaged in the trucking and delivery business, an essential link in the chain of interstate commerce, in a recent annual period performed services valued in excess of $50,000 for enterprises which shipped goods valued in excess of $50,000 I Charges in Cases 13-CA-14889 and 13-CA-14890 were filed on November 19, 1975, and charges in Case 13-CA-14995 on December 9, 1975. A consolidated complaint in Cases 13-CA-14889 and 13-CA-14890 issued on January 22, 1976. Complaint in Case 13-CA-14955 issued on January 26, 1976. 426 DECISIONS OF NATIONAL LABOR RELATIONS BOARD directly in interstate commerce.) Respondents' answers admit that Chicago Truck Drivers, Helpers and Warehouse Workers Union (Independent) (herein the Independent Union) 2 and Local 705, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (herein the Teamsters), and Retail Clerks Union Local 1550, affiliated with Retail Clerks International Association, AFL-CIO (herein the Retail Clerks), are labor organizations within the meaning of the Act. Upon the entire record in this case,3 from observation of the witnesses and their demeanor, and after due consider- ation of the briefs filed by General Counsel, Jays, and Nielsen, I make the following: FINDINGS AND CONCLUSIONS A. Jays' Operations 1. Description: Jays asserts that it is the largest indepen- dent snack food producer and distributor in the United States with annual gross sales in excess of $30 million (Resp. Exh. 10). This operation which began, apparently in a small way, in 1938, acquired its first tractor-trailer in 1942 or 1943. At times material to this proceeding in 1975 (all dates herein are in 1975 unless otherwise noted), Jays operated a manufacturing plant in Chicago, Illinois, at which it produced or processed certain snack foods. These products are distributed to certain distribution points in Chicago (and perhaps elsewhere) operated by Jays, which are referred to herein as "branches," and to independent distributors located in four States. To make deliveries from its plant to its branches and distributors, and among branches and distributors (referred to herein as delivery operations), Jays had acquired and owned 27 tractors and 35 trailers and leased 2 additional tractors. These were located at Jays' plant out of which the truckdrivers employed by Jays in its delivery operations were dis- patched.4 At the time Jays sold this equipment and contracted out its delivery operations, it also had three additional trailers on order which had not then been delivered. Immediately prior to November 17, when Jays contracted out its delivery operations, it employed 26 truckdrivers in this operation. Jays also employs driver-salesmen at various branches who take Jays' products from the branches and deliver them to various grocery stores and other retail outlets on the routes assigned to each individual driver. As is customary in this type of industry, the driver-salesmen are expected to be on the lookout for new accounts in their area and to aggressively push their employer's products. Other operations of Jays not directly involved in this proceeding are not detailed in the record. 2. Managerial and supervisory personnel: Principally involved in this proceeding are the following: Leonard Japp, Sr., is president of Jays and clearly controls its day-to-day operations. 2 Sometimes referred to as Fenner's Union in the transcript in reference to the executive director of the Independent Union. 3 General Counsel's motion to correct the record by deleting the word "liar" at p 1262, 1. 18, and inserting the word "lawyer" in its place, which is unopposed, is hereby granted. * The term "truckdnvers" or "drivers" will be used to refer to employees engaged in Jays' delivery operations to drive tractor-trader equipment, in Silas Martilla is executive vice president for marketing of Jays and is in charge of Jays' sales activities, and, prior to November 17, had responsibility for the delivery operations described above. John Staton, whose status is at issue in this proceeding, is either the shipping supervisor, as he described himself in his prehearing affidavit to the General Counsel, or the assistant shipping supervisor, as he insisted in his testimony. The title is not important here. In his affidavit, Staton states that he has authority to hire and fire dock employees who work at Jays' plant, which employees apparently, as normal in the industry, load and unload trucks and handle merchandise on the docks at Jays' plant. At the hearing, Staton testified that he has authority to fire dock employees, but only makes recommendations as to their hire, some of which are not followed.5 I am satisfied from observation of the witnesses and from the record as a whole (e.g., Staton's presence with management at meetings concerned with truckdrivers' working conditions) that Staton's authority is greater than Jays' witnesses admit. In any event, since he exercises one authority-the right to fire-set forth in the statutory definition, he is clearly a supervisor within the meaning of the Act, and I so find. Arthur L. Timmons, Sr., whose status is also in dispute, carries the title of assistant to the sales manager, special projects. It is stated that Timmons is assistant to Martilla and Leonard Japp, Jr., but the record indicates that he principally reports to the former. Timmons is a son-in-law of Japp, Sr., and though he does not himself own stock in Jays, nor is he an officer of the corporation, his wife owns a substantial amount of such stock and is a member of the board of directors of Jays. One of Timmons' functions is to visit consumers who have purchased Jays' products and have made a complaint. He discusses customers' com- plaints and attempts to explain the situations and appease the complainants. He may, offer the customer fresh product for the product complained of. Timmons' reports of products complained of are brought to production supervi- sors for corrective action. Timmons represents Jays at openings of new stores of chain grocery firms, arranging for the display of Jays' products. When Jays contemplates expanding into a new territory, Timmons would investigate the area and may talk to grocery managers in that area on behalf of Jays. He makes a report on this investigation to Martilla. He has some responsibility with respect to overdue accounts of some chain stores supplied by Jays, although his testimony concerning this function tended to be somewhat evasive to the point of being facetious. In the absence of either the manager or the assistant manager of one of Jays' branches, Timmons will fill in for the absent manager, sometimes for several weeks, but it is denied that he exercises the supervisory authority which admittedly the manager and the assistant manager possess. On occasion, Timmons has been assigned to ride with Jays' truckdrivers and do a timestudy of their work. In this function, contradistinction to Jays' "driver-salesmen," who deliver its products to retail outlets S At one point Staton testified that he did not have authority to recommend discharge. To the extent that this is inconsistent with his poor testimony that he has the right to discharge employees, Staton's denial is not credited. JAYS FOODS, INC. 427 Timmons has given truckdrivers road tests and written examinations required by Government regulations and certified to these facts as an authorized representative of Jays. Timmons testified that he also has gone out on a route to substitute for an absent driver-salesman. Timmons is paid on a salary basis, and receives in addition a commis- sion based on Jays' gross volume of sales. Martilla and Japp, Jr., are the only other individuals receiving such commission. Based on his income during a recent period, it would seem that Timmons' income from Jays will substan- tially exceed $30,000 annually. The facts set forth and the record herein demonstrates that Timmons is identified with and is part of the manage- ment of Jays. In the circumstances of this case, the employees would reasonably understand that Timmons spoke for Jays in matters affecting their employment. Considering all of the factors involved-particularly Tim- mons' close relationship to the owners of the business, his authority to represent Jays in dealings with the public, his frequent substitution for admitted supervisors (it was not shown that employees were informed that he had, as claimed, less authority than the absent manager) and his testing, examining and certification of Jays' truckdrivers as qualified to be employed-in light of the provisions of Sections 2(13) and (2) of the Act, I find that Arthur L. Timmons, Sr., is an agent of Jays within the meaning of the Act, and that Timmons' conduct, as set forth hereinafter, is attributable to Respondent for the purposes of the Act. See Aircraft Plating Company, Inc., 213 NLRB 664 (1974). As noted above, it is admitted that the managers and assistant managers of Jays' various branches are supervi- sors within the meaning of the Act. At times material to this proceeding, William Brand was manager and Donald C. Skafgaard, Jr., was assistant manager of Jays' West Branch where Edward Olson was employed at the time of his discharge. B. Background and Summary of Facts There have been several attempts to organize different parts of Jays' operations, some of which resulted in proceedings before the Board. The earliest of these brought to my attention is reported in 129 NLRB 690 (1960). In that instance, in June 1959, a local of the International Associa- tion of Machinists sought to represent the maintenance workers employed by Jays to maintain approximately 115 vehicles used in the delivery of its products. Jays opposed the organization attempt, but, in an election on July 21, 1959, the employees voted for the IAM by an overwhelming majority. Prior to certification, the IAM presented Jays with a contract which it had with another area employer. Determining that the rates in the IAM contract were higher than those it was then paying its maintenance employees, Jays' maintenance supervisor, Judkins (apparently the same maintenance supervisor described in the present record), was instructed to contract out the maintenance operations. A final decision was made to close the maintenance department on July 30, 9 days after the election and the maintenance employees were discharged on July 31. The Board found that the maintenance employees were dis- charged because they had sought to exercise their right to collective bargaining guaranteed by the Act and that Jays had thereby violated Section 8(a)(1) and (3).6 The Court of Appeals for the Seventh Circuit set aside the Board's Decision and Order, 291 F.2d 317 (1961). For some time Jays also seems to have had considerable dispute and litigation with Local 1 of the Bakery Workers. See 148 NLRB 310 (1964) (sustaining union objections to election); Jays Foods, Inc. v. Local Union #1, American Bakery and Confectionery Workers' International Union, AFL-CIO, 57 LRRM 2495, 50 LC 1 19,324 (C.A. 1, 1964) (dismissing Jays' petition for review of Board's Order directing an election), cert. denied 379 U.S. 969 (1965); 255 F.Supp. 822 (1966) (involving a state court suit against the bakers union). In 1973, the Independent Union (also called Fenner's Union) won an election conducted by the Board and was certified as the bargaining representative of Jays'truckdriv- ers. Jays' vice president, Martilla, testified that Jays and the Independent Union came to an agreement on the terms of a bargaining contract . It appears that the Independent Union then advised the drivers that if they did not accept this agreement that Union would no longer represent them. When the drivers rejected the contract proposal, the Union on February 13, 1974, advised the employees that the Union would no longer negotiate for them and withdrew as the employees' collective-bargaining representative. Jays then requested the Regional Office of the Board to revoke the certification of the Independent Union and on March IF, 1974, the certification was revoked. Jays, however, assured the drivers that it would pay the various raises which had been agreed to with the Independent Union. In 1975, Jays' employees became involved in two union organizational attempts. In July, the Retail Clerks filed a petition to represent the Company 's driver-salesmen. The Retail Clerks lost the election on October 2, 1975. Mean- while, a group of Jays' truckdrivers, on September 26, upset at the results of the Company's request that they forgo the wage raise promised for July 1, sought the assistance of the Teamsters. A further meeting between the Teamsters and the truckdrivers was set for October 4. However, on October 3, Jays suddenly announced to the truckdrivers that the wage raise they had been asked previously to forgo until the first of the year would be granted immediately. Moreover, as discussed in more detail hereinafter, just 2 days before granting this raise to the truckdrivers (and 1 day before the Retail Clerks election), Jays asserts that it informed Adolph J. Nielsen, president of Nielsen Cartage, that Jays would contract out to Nielsen the delivery operations in which the truckdrivers were then employed. The truckdrivers were notified of this on November 14 and Nielsen Cartage took over Jays' delivery operations on November 17, employing some, but not all, of Jays' truckdrivers. 6 In coming to this conclusion the Board and the Trial Examiner discredited Jays' contention that it had long considered contracting out its maintenance operations. It is also noted (as discussed further hereinafter) that the Trial Examiner in that case placed some emphasis on the fact that, prior to contracting out its maintenance work, Jays did not make a comparative cost study and offered no proof that the contracting out had actually been economically motivated. 428 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Edward Olsen, who had been one of the observers for the Retail Clerks at the election on October 2, was disch'rged on December 1. Case 13-CA-14889 Case 13-CA-14889 essentially involves the charge that Jays discontinued its delivery operations , sold its trucks, contracted out its delivery operations , and discharged its truckdrivers engaged in those operations because of the drivers' activities in respect to the Teamsters and that Jays engaged in certain independent violations of the Act. 1. Union activity About the last of June 1975, Jays called a meeting of its truckdrivers in the late afternoon at the plant . Martina, Staton, Joe Whalen (vice president in charge of advertising and a son-in-law of Japp, Sr.), and Judkins were present for management. Martina advised the employees that, because of certain economic strictures which the Company was experiencing, Jays was trying to cut back on expenditures. He referred to the 32-cent-per-hour raise that would be due the truckdrivers on July 1 under the commitment made to them after the Independent Union withdrew as their representative, and requested their cooperation in agreeing to forgo the increase until the first of the following year. After the management personnel had left the room, the truckdrivers, led by Robert Lull, voted to agree with the Company's request and Lull advised Martilla that the truckdrivers would cooperate and the wage increase could be deferred as Martina had requested. The truckdrivers, or some of them, thereafter became disillusioned with this decision, based mainly on their discovery that the Company had thereafter employed a new production supervisor who they thought was being paid in part with their deferred pay raise. For some time they discussed contacting the Teamsters. Six truckdrivers (Lull, Kuiken, McCormick, Goodman, Paluch, and Hodson) finally met with agents of the Teamsters, on September 26, at the Teamsters hall. All of them signed authorization cards for the Teamsters. At this meeting the Teamsters agents told the employees that the Teamsters would not be interested in becoming involved unless assured that a majority of the truckdrivers desired representation by the Teamsters. It was agreed that the six employees would attempt to have as many of the truckdrivers as possible attend a meeting with Teamsters agents on Saturday, October 4. During the succeeding week, this was much talked about among the truckdrivers with the result that almost all the truckdrivers employed by Jays attended the meeting at a local motel. However, for reasons not shown by the record, the Teamsters agents did not appear as promised, and did not contact the truckdrivers to explain that they would not come to the meeting. Knowledge of this activity to secure representation by the Teamsters was soon known to Jays. Thus, when Staton r This clearly referred to Martilla's promise to abide by the wage provisions of the proposed agreement with the Independent Union 8 At the hearing, General Counsel offered Chapman's prehearing affida- vit assertedly to rebut an implied charge of recently fabricated testimony inherent in the cross-examination of Chapman. I rejected this offer. General returned from vacation in September, he was told that the truckdrivers were contacting the Union. (Staton states that he does not recall who told him this and denies that he knew what union was involved .) Staton thereupon ques- tioned several truckdrivers as to whether the employees had contacted the Union, and asked why they would want a union, stating his understanding that the employees had an agreement with Martilla.7 Staton received only negative responses from the employees to his questions. Staton's conduct is alleged as interrogation violative of the Act. This will be dealt with hereinafter. 2. Alleged interference with, and restraint and coercion of employees a. The October 3 meeting After the close of the representation election on October 2, which was lost by the Retail Clerks, Martilla advised Japp, Sr., that Martilla was going to hold a meeting with the truckdrivers the next evening and intended to advise them that Jays would restore the wage increase which had been deferred since July 1. At the meeting on October 3, attended by Martina, Staton, Whalen, and Judkins on behalf of Jays, Martilla told the truckdrivers that he had intended to have a meeting with them for some time but that he had been too busy. After a few queries on operational matters, according to the credited testimony of truckdriver Robert Lull, Martilla told the employees that the Company's financial condition, as shown by an auditor's report, had so improved that Jays could give the truckdrivers their deferred raise immediately "rather than wait until the first of the year." Lull testified that then Martilla asserted that he had heard that "a few of you fellows have contacted a union," that if he knew who the employees were who were involved in this, he would not give them the raise, but since he did not know, he would have to give the raise to all. Martina further stated, "I don't know what the hell you fellows want, but if you want a union, why don't you go back to Fenners' union because he got you this [holding up the proposed agreement with the Independent Union]," and "you fellows aren't loyal to anyone but yourselves." This version of the October 3 meeting was substantially supported by the testimony of General Counsel's witnesses James Chapman,8 Gary Redelsperger, James Paluch, and Richard McCormick. In addition, Ronald Davis, a truck- driver who came in at the very end of the meeting, recalled, on cross-examination, that he had heard Martina "say something about why don't you guys try to get Fenner's union back in here." Martilla's version of this meeting differs from Lull's principally in his denial that he knew about the truckdriv- ers' union activity at the time and, therefore, did not indicate at the meeting that he knew about their union activity; in his denial that he said that if he knew who was involved in the union activity those employees would not Counsel complains of this in his brief. I have since reconsidered my ruling in light of the discussion of Rule 801(d)(l) in Redden and Saltzburg , Federal Rules ofEvidence Manual (Michie 1975), and have some question whether my ruling was correct. However, since I credit Chapman the issue is not important. JAYS FOODS, INC. 429 receive the raise; and in his denial that he advised the truckdrivers to go to Fenner's Union if they wanted a union. Martilla states he did advise the employees "that it was my opinion that not all of them really deserved [the raise ] in view of things that had happened since the first of July but because of the fact that I didn't specifically know who these people were . . . I would give everyone the 32 cent an hour pay raise," and that this "was living up to the commitment that we had had with them after Fenner's union walked away."9 Martilla's denials were substantially corroborated by Whalen and Staton. Whalen also recalled that Martilla "said something like, `I 'm not sure that everyone deserves a blanket raise , but that's according to the agreement and we are going to live up to it., " I have credited Lull's version of this meeting because he impressed me as an honest straightforward witness whose testimony was corroborated by other witnesses. Davis' testimony as to the single remark he heard at the end of the meeting, in particular, impressed me as having the ring of truth and accuracy in support of Lull's version. I do not credit Martilla's denial that he was aware of truckdriver union activity. The record as a whole , as discussed herein, convinces me that Respondent was well aware of this activity. Staton's admissions have been referred to previ- ously. Respondent gives no convincing reason for announcing this raise on the day before the men were scheduled to meet with the Teamsters. The men understood that the raises had been deferred to January . The timing of this action, Martilla's antiunion comments at the meeting, and remarks made by Japp, Sr., after the meeting, as discussed below, in light of the entire record, are convincing and I fmd that the grant of the wage raise was to counteract the truckdrivers' union activities. I further fmd that Martilla's statement that he would not give the raise to those active in union activities, if he knew them, contained an implied threat of reprisal for those who continued in such union activity. By such conduct Respondent interfered with , restrained, and coerced its employees in violation of Section 8(a)(1) of the Act. b. Aftermath of the October 3 meeting (1) Immediately after the meeting and on their way out, truckdrivers Ronald Davis and Charles Dietz went into the dispatch office. Davis states that while they were there, Japp, Sr., came into the office and spoke to them. According to Davis, Japp said he hoped that the men were happy with the 32-cent raise which they had received. Japp further said that he heard that the men were "going to have a meeting tomorrow," and, in answer to Davis' affirmative reply, then asked if Davis and Dietz were going to the meeting. Davis indicated that this depended on his wife's plans for him, and that Dietz replied that he did not think he could attend. Japp expressed his disapproval of their attending the meeting and stated that he knew who the troublemakers were who were trying to get the Union in- Lull, Goodman, and Vitner-and said that if the employees signed cards to bring the Union in, he would "close the 9 At another point, Martilla testified that he told the men, more specifically, that some did not deserve the raise "because of the kind of work they had been performing" since July 1. He asserted that this comment was doors." Davis asserted that Japp also questioned the employees as to their opinion of the Union. Davis replied that his wife thought that Jays' benefits were equal to what the Union might secure, but, since he held a union withdrawal card, "it would help me to carry my card, because I wasn't getting any younger." Japp, who states that he does not know Davis or Dietz, denied that he had a conversation with any employee of the character related by Davis. Japp, in particular, testified that he left the plant about 3 or 3:30 in the afternoon and was not present on the premises at the time of the meeting with the men or thereafter. Japp could give no reason for recalling what time he left the plant on that day, except that as "a general thing, if the plant wasn't running, I left early." He could not remember, on cross-examination, what time he left the plant on the next following Friday, and stated that he was able to recall his movements on October 3 after counsel jogged his memory on the subject, though he could not recall what counsel said. Dietz did not testify. Neither counsel called him, nor was there any showing that he was available to testify. No other witness recalled seeing Japp, Sr., about the plant after the meeting. Counsel for Jays, in his brief, places particular stress on the time element involved as impeaching Davis. Thus, Davis, who came in at the very end of Martilla's meeting with the men, asserted that the conversation with Japp occurred "shortly after the meeting," at "approximately 6:15 p.m." Counsel points out that the meeting began about 5 p.m., was of short duration, and was over no later than 5:30 p.m. My impression of Davis at the hearing was that of a rather intent witness trying to give accurate testimony. I do not believe that he fabricated this incident out of whole cloth. After giving careful consideration to the factors set forth above and the entire record, I credit Davis' account set forth. I find that by the threat made by Japp, Sr., to "close the doors" if the employees brought the Teamsters in, Jays violated Section 8(a)(1) of the Act. I do not believe that in the circumstances of this case, Japp's remarks conveyed an impression of surveillance, as General Counsel alleges. The record shows that the drivers' activities were much dis- cussed by the drivers and by supervisors, and were known to Jays' management. Without some clearer indication that Japp was referring to a surreptitious source, I find that this allegation has not been proved. The allegation of illegal interrogation of Davis by Japp will be considered hereinaf- ter. General Counsel agrees that no proof was adduced in support of allegation VI(h) of the complaint that Japp, Sr., threatened to withdraw certain benefits if the Union came in. It will be recommended that this allegation be dismissed. (2) After the meeting, truckdriver Lull, together with some other truckdrivers, and Supervisor Staton went to a nearby tavern. During the course of a conversation in which Lull was asserting that he hoped there would be a good turnout of drivers at the meeting the next day, for he felt that "Jays is sure afraid of the Teamsters," Staton called based upon a rather vague, unspecific, and undocumented statement made by Shipping Supervisor Neal that some of the truckdnvers were "dogging it." 430 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Lull aside, apart from the other men, and told him, "Bob, you know the old man is talking about selling the fleet." Lull replied that he had heard this for a long time, to which Staton answered, "Well, this time the old man is serious." Staton admitted in his testimony that, in this conversa- tion, he told Lull "if the fellows keep fooling around like this, the old man is liable to sell the semi-truck operations." The record makes it quite clear that Staton was referring to the drivers' union activities.10 Staton gave two reasons for his statement to Lull on this occasion. He first said that this statement expressed his opinion "that management was going to get fed up with the harassment they were getting. . . . All these meetings we had, so forth, and discontent."" He further stated that he was prompted to say this to Lull by seeing a stranger wandering around the plant who someone told him was Nielsen of Nielsen Cartage 12 Staton denied that anyone in management told him, prior to November, about the "sale of the cartage operation." Based upon my assessment of Staton's testimony, and the whole record, I am not inclined to credit his denial. I fmd that by Staton's threat that the trucking operation would be sold if the employees continued in their union activities, Jays violated Section 8(axl) of the Act. c. Other alleged violations of Section 8(a)(1) (1) Driver James Paluch testified that in the month of October, sometime after the October 3 meeting, when he was at Jays' North Branch operation, Art Timmons, who frequently substituted for branch managers, engaged him in conversation. After an initial greeting, Timmons said, "I hear you guys are starting this union stuff again," to which Paluch answered that he did not know anything about it and did not want to know. (Paluch, in fact, had been one of the group that originally visited the Teamsters hall and had signed an authorization card.) Timmons then stated, "Well, I'll tell you one thing, you are getting the old man pretty mad and he is going to sell the trucks." Timmons recalled being at the North Branch in October, but denied substituting for the branch management at the time. He did not recall having any conversation with Paluch during this period, but denied having the conversa- tion attributed to him by Paluch. Timmons further admit- ted that during this period in October, he heard "scuttle- butt" and hearsay of union activities on the part of the tractor-trailer drivers, stating that the "scuttlebutt .. . flowed throughout." 13 Timmons, like Staton, testified that he was not informed of or consulted about the impending "deal" with Nielsen prior to November 14. 'o Staton's attempt to deny that he "knew" of the men's union activities, but only "assumed" they had contacted the Union was not persuasive. Indeed, the conversation at the tavern from which he withdrew with Lull necessarily informed him that there was to be a union meeting with the Teamsters. Staton in his prehearmg affidavit stated that "by this time," he "knew" the drivers had contacted the Union. I do not credit Staton's denial that he was aware at that time of "any union activities by the drivers," or that he did not know the drivers had contacted the Union. 11 Later, Staton stated that by "harassment" he did not "necessarily mean Union harassment," and then said, "I didn't mean union." In the absence of any better explanation, and on the record as a whole , I find, as has been noted, that Staton was indeed speaking of the drivers' union activities. 12 Nielsen's testimony, however, was that when Nielsen first came to the I find that Timmons made the statements testified to by Paluch as set forth above. (2) Driver Siebert Kuiken testified that on or about November 5 Supervisor Staton said to him, "I heard that you fellows are going to join the Union or talking about joining the union, and ... if you do ... the Old Man is going to sell the fleet." When Kuiken protested that he had heard this before, Staton replied that "this time he means it." Staton, in substance, admits this conversation. I find that by Staton's threat to Kuiken and Timmons' threat to Paluch that if the drivers persisted in their union activity Jays would sell its trucks, which the drivers were employed to drive, Jays violated Section 8(axl) of the Act. As has been noted hereinabove, Jays' management and supervisors engaged in considerable interrogation of em- ployees concerning their union desires and activities. Much of this questioning occurred in a context of coercion and restraint, and several of the employees refused to answer candidly. Respondent offers no valid reason to justify this course of conduct. On this record, I fmd that Staton's admitted interrogation of several employees, Japp's ques- tioning of Davis and Dietz, and Timmons' questioning of Paluch had a natural tendency, in the circumstances, to interfere with, restrain, and coerce the employees in the exercise of their rights under the Act and, therefore, by such conduct, Respondent Jays violated Section 8(a)(1) of the Act. 3. The decision to contract Jays' delivery operations a. The negotiations For a long time prior to 1975 several cartage companies in the Chicago area, including Nielsen Cartage, had sought to have Jays contract out Jay's delivery operations. These advances had uniformly been resisted by Jays on the basis that it was performing a highly successful operation in an efficient manner. According to the testimony of Martilla and Adolph Nielsen, it would appear that Nielsen was specifically well regarded by Jays' management because of personal friendship between the Nielsen and Japp families. Nielsen and Martilla were members of the same country club and met there at regular intervals. Nevertheless, Nielsen's requests that his company be considered to take over Jays' delivery operations had been rejected over a period of 5 years prior to 1975. Martilla and Nielsen recall that the latter again broached the subject of Nielsen Cartage taking over Jays' delivery operations at a meeting at the country club in May 1975. Martilla states that Nielsen said he could perform the plant Staton was instructed by Jays' management to give Nielsen the drivers' logbooks. Staton admits that Martilla told him to give the logs to Nielsen and that he did so. At this point, I am convinced Staton was informed of Nielsen's purpose in the plant. 13 Beyond this admission , on direct examination, Timmons tended to be rather vague , and seemingly evasive, about this "scuttlebutt." He agreed he "knew something was going on," but not "the nature of what was discussed." Though he denied that he "knew the semi-truckdrivers were trying to get a union," he also agreed that was the nature of the "scuttlebutt" which he heard from branch managers and assistant branch managers (who are, as noted previously, supervisory personnel). Timmons was uncertain as to the particular persons who relayed this information to him , but he was certain that he had not heard it from Japp, Sr. JAYS FOODS, INC. operation more economically than Jays and that he (Martilla) replied that "it is still our opinion that we are doing a pretty darn nice job with it." Martilla states, rather summarily, that he spoke to some management people about this inquiry, but clearly aroused no immediate interest. Martilla states, and Nielsen confirms, that Nielsen again brought up the subject at the country club on August 24. Martilla asserts he remained skeptical that Nielsen knew enough about Jays' operations to be able to say he could do a better job, and that, in any event, in order to contract out the operation Jays would have to dispose of its tractors, trailers, and equipment. Nielsen replied that he was sure he could purchase the equipment. Martilla states that he invited Nielsen to visit Jays' operations to see if he could come up with some concrete figures upon which to make a proposal. The two witnesses assert that Nielsen visited Jays' plant during the first week in September, observed the operation, and was given certain drivers' "logs" which he took away with him. According to Martilla and Nielsen about a week later, possibly on or about September 8 or 9, Nielsen presented Martilla with a written proposal based upon a "representative week" in Jays' operations, July 22-August 2. Martilla, on this occasion, states he introduced Nielsen to Thomas Stanislawski, Jays' executive vice president and treasurer, for discussion of the value of Jays' delivery equipment. It is stated that they agreed to accept the book value of the equipment. Martilla and Nielsen next met, as they testified, at the country club on September 17, when Martilla suggested that Nielsen present another proposal based upon a more recent week in the delivery operations. Nielsen agreed to visit the plant again. Martilla says that the two men discussed the number of drivers Nielsen would employ if he obtained the contract and that Nielsen said he could do the job with 23 drivers. Jays was then employing 26 drivers.14 In addition, Martilla, who was aware that Nielsen Cartage had a bargaining agreement with the Independent Union, expressed concern that Jay's opera- tions might be shut down because of a strike by Nielsen Cartage employees, which Martilla said had never occurred with Jays' employees.15 Nielsen assured Martilla that he need have no worry on that score, that Nielsen would take appropriate action to prevent it. On September 30, Nielsen gave Martilla a second written proposal based upon Jays' operations for the week of September 21-27. On October 1, Martilla called Nielsen and told him "it looked like we had a deal," and that Nielsen should prepare a formal contract for Jays' consid- eration. Nevertheless, Martilla said that Jays wished to go over Nielsen's computations with him in detail because "[we] didn't necessarily agree with his computations." Nielsen delivered a written contract proposal the next day. As discussed below, the parties came to a final agreement, on October 9, subject to certain authorities which Nielsen Cartage was required to secure from the Interstate Com- merce Commission (ICC). 14 In fact, however, the first proposal assertedly presented on September 8 or 9 and the next proposal on September 30 were based on employing 22 drivers. The discrepancy is not explained, nor is there any explanation of how Nielsen determined he could accomplish the work with four fewer drivers. 431 In contrast to the above version of these events, which tends to place much of the negotiations prior to the latter part of September, when the truckdrivers became particu- larly active in seeking help from the Teamsters, Nielsen in his prehearing affidavit, made December 9, refers to only one meeting with Martina at the country club, in the third week of September; says that he was invited to and visited Jays' operations after that, "in late September;" that Martilla asked for Nielsen's prices "at the end of Septem- ber," which Nielsen furnished, whereupon Martilla "a day or two later" called "and said it looked as if we had a deal." At the hearing, Nielsen asserted that his affidavit was in error. It is noted, however, that one part of Nielsen's cost computations, which Martilla asserts (with some doubt) was presented to him by Nielsen on or about September 8 or 9, is inexplicably dated October 1, 1975. From my observation of the witnesses and consideration of the facts, I am persuaded that such contacts and discussion as may have occurred before September 17 were more casual and less definite than the witnesses indicated in their testimony, and that some later events may have been transposed to a slightly earlier time. On October 9, Nielsen met with Martilla, Stanislawski, and Japp, Sr., with some other management personnel present part of the time. After Nielsen agreed to slightly reduce the price he was asking to perform Jays' delivery operation, Jays agreed to contract the operation to Nielsen. In an effort to expedite the process of securing operating authority from the ICC, Nielsen Cartage requested emer- gency operating rights to haul Jays products in interstate commerce. When Nielsen, who had continued telephone contact with Martilla in the interim, advised the latter on November 7 that the ICC had granted the necessary authority, Martilla pressed Nielsen to take over immediate- ly. Nielsen advised Martilla that this could not be done before November 17. On Friday evening, November 14, Jays' truckdrivers were assembled at the plant where they were advised by Martilla that Jays' delivery operation was being taken over by Nielsen on Mcnday and that their employment with Jays was terminated. Martilla introduced Nielsen who told them that he intended to hire as many of them as he could. Nielsen stated that he would require 22 or 23 drivers for the operation, but that, under Nielsen Cartage's contract with the Independent Union, certain employees of Nielsen Cartage had the right to bid on this new work, and he would not know until the next day the full number who would desire to transfer. Nielsen made arrangements with the men to come to his office the next day to make application for employment. The contract between Jays and Nielsen Cartage for the performance of Jays delivery operation became effective November 17. 15 Jays' management apparently had a constant concern that umomza- tion of its employees would lead to interruption of its operations and opposed union organizing efforts on that ground, as set forth in literature distributed to the driver-salesmen. (G.C. Exh. 16) 432 DECISIONS OF NATIONAL LABOR RELATIONS BOARD b. Jay's reasons for contracting out its delivery operation According to Martilla and other management witnesses, Jays decided to contract out its delivery operation for three reasons: (1) Nielsen's figures indicated that Jays might save considerable money ; (2) sale of Jays' equipment would release a considerable amount of capital invested in equipment ; and (3) Martilla would be relieved of responsi- bility ofoverseeing the delivery operation. (1) Projected savings. At one point, as has been noted, Nielsen prepared an estimate of his price for performing Jays' delivery operation for the week of July 27-August 2. Based on using 22 drivers, Nielsen estimated he would have charged Jays $21,232.01 for that week. Jays' records showed a cost of $23,203.32 for that week. A worksheet drawn up by Stanislawski also showed that, for the first 35 weeks of 1975, Jays' cost for the delivery operation averaged $22,552.22 per week. A second estimate made by Nielsen for the week of September 21 to 27 was that Nielsen Cartago could have performed the operation for that week for $18,492.80, based on a payroll of 22 drivers. No evidence was presented as to Jays' costs for this latter week, as was done for the prior week, so no comparison can be made. Assuming there was a typical week in Jays' delivery operation, the week of September 21-27 would not seem to be one of them. It is noted from Stanislawski's 35-week analysis (Resp. Exh. 13) that weekly delivery costs tended to vary widely. Martilla testified that he and Stanislawski were sure that Nielsen could not save Jays as much as indicated, but said that the figures indicated that there would be a saving. At the hearing General Counsel objected to Respondent's offer to prove that Jays had actually enjoyed a saving in its delivery operation since Nielsen Cartage took over, The objection was sustained on the ground that Respondent's motive must be determined as of the time the operation was contracted out, not by its subsequent experience. Jays' counsel agreed that, even if the evidence showed that Jays had made a mistake and had not saved any money, this fact would not have probative value in assessing Jays' motive. Since the hearing, however, I have had access to Jays Foods, Inc., supra, which was not cited to me at the hearing. As noted in that case, the Trial Examiner based his decision, in part, on the fact that Jays made no comparison of costs either before or after contracting out its mainte- nance operation. While I am not persuaded that my ruling at the hearing was wrong, I have given careful consider- ation to the facts Respondent states it would have proved if it had been permitted. According to this offer, Stanislawski compared Jays' experience from January through March 1975 with payments made to Nielsen Cartage for delivery services for the same period in 1976. Stanislawski further adjusted Jays' costs by taking into account the 32-cent raise given in October and a second 32-cent raise which it is 16 The union scale referred to was not identified . Manifestly it was not that of the Independent Union for that union was not seeking to organize Jays at the time. it Stanislawski at a later point denied that the word "union" came up in his discussions with Martilla in reference to these matters and asserted that he was sure that he "never discussed the union scale in any of [his] computations " On direct examination, Stanislawski admitted such a alleged would have been given the drivers by Jays in January 1976. It is stated that the figures show an average saving of roughly $1,000 a week on such a basis. (General Counsel, of course, had no opportunity to cross-examine this material.) Notably, moreover, Stanislawski went further in his comparative cost analysis: he felt impelled, or was request- ed by Martilla, to make an analysis of how much more Jays' delivery operation would have cost (and consequently how much more it saved by farming it out) if Jays had been paying the union scale during this period.16 This, obviously seems to indicate, contrary to Jays' insistence, the employ- ees' abortive attempt to secure representation by the Teamsters was a factor in the decision to contract out the delivery operation. Two instances of testimony by Jays' management bear significantly upon this issue. In the midst of testifying about his discussion with Martilla concerning the figures in Respondent's Exhibit 13, and the possible savings which it indicated, Stanislawski stated, "Well, we discussed about the 32 cent an hour, which would be additional savings and then plus another additional that was promised to the drivers at the time and we also discussed that should we get involved in paying the men more, say union scale at the time, which I don't know what it was, I think about $7 and some cents there, the savings would be greater." (Emphasis supplied.) This conversation clearly took place before September 30, for Stanislawski specifically places his next following conversation with Martilla at "the latter part of September. I'd say about September 30." 17 Also bearing on this issue is the testimony of Japp, Sr., with respect to his conference with Martilla and Stanislaw- ski, in early October, when Japp apparently gave his consent to contracting out the delivery operation to Nielsen Cartage. In the course of testifying about the discussions that day, Japp testified, "I can't remember anything that was said, but I know that we did say that if we could get out of the trucking business and give it to somebody who knew how to do it, we could then get back to selling our merchandise which we knew something about, because going through all these litigations, why it was taking up a lot of our time and costing a lot of money that we didn't have.... " (Emphasis supplied.) Japp later stated that he was "refer- ring to the litigation that we had with the driver- salesmen an d the union, and stuff like this that we went through before, and it costs a lot of money." 18 In the circumstances, and upon the record, I fmd that this statement referred to concern over union activities of the truckdrivers. I do not credit Japp's testimony to the contrary. c. The contract; present operations There is no evidence of ownership or control by Nielsen Cartage or its management in Jays, or by Jays or its management in Nielsen Cartage , other than the terms of the discussion of the "union scale" in connection with his most recent computations made at Martilla's request in preparation for hearing of this matter 18 Japp denied that this statement indicated concern about possible litigation involving the truckdrivers, but admitted that the litigation concern- ing the driver-salesmen had been completed at this time. JAYS FOODS, INC. contract which they executed on November 17. The record does show that the close personal r('. itionship between the parties permeated their contractual dealings. Thus, after Jays' management succeeded in getting Nielsen to slightly lower his price, Japp, Sr., admonished Nielsen to be sure of his figures, saying that because of their personal relation- ship he did not want Nielsen to be hurt by their deal. As part of the contract, Nielsen Cartage paid Jays $62,632 for the tractors purchased from Jays; $22,569.06 for parts, supplies, and equipment; and agreed to pay Jays $76,448 for Jays' trailers, payable at the rate of $1,830.66 per month over a 4-year period. The record shows that these sums had been paid as agreed up to the time of the hearing. It appears that Nielsen has acquired the two diesel tractors which had formerly been leased by Jays, and has purchased the three trailers which Jays had previously ordered. Since November 17, the equipment used in transporting Jays' products has been kept on Jays' premises, as was the case before the contract was made. The truckdrivers, now employed by Nielsen Cartage, report to Jays' plant, as before, where they are daily dispatched by a dispatcher employed by Nielsen Cartage from an office on Jays' premises. (There is no indication of any charge to Nielsen for use of Jays' premises.) The employees are covered by Nielsen Cartage's contract with the Independent Union, have been required to join that union by the terms of the agreement, and appear to receive better wages and benefits under that contract than they received from Jays. However, it may be that their seniority rights are less. Under the provisions of paragraph 1(c) of the contract between Jays and Nielsen Cartage, the agreement can be cancelled upon 30 days' notice in writing by either party. Nielsen Cartage agrees to give Jays exclusive use of certain listed vehicles from November 17, 1975, to November 17, 1980, with the right of Jays to repurchase the vehicles at certain annual periods in accordance with stated condi- tions. The contract sets forth the rate which Nielsen will charge for each vehicle per week, with provisions for increased or decreased charges according to the conditions set forth. 4. Analysis and conclusions The facts in this case are convincing that Jays subcon- tracted its delivery operation and discharged its drivers because of their union activities. For a considerable number of years, Jays had resisted efforts of outside cartage firms to take over Jays' delivery operation notwithstanding arguments to the effect that such firms could do the work more economically and efficiently. It is plain that Jays considered it important to retain in its own hands the flexibility of immediate control and supervi- sion of the daily operation carrying its fragile products to i9 For reasons previously noted, I have found that the discussions between Nielsen and Jays with respect to the former taking over Jays' delivery operation did not become serious until the late part of September, when the employees began contacting the Teamsters, leading to a tentative decision on October 1, and a firm decision on October 9, to contract out the operation 20 In the only other successful organization of Jays' employees by a union not favored by Jays, the Company also contracted out the maintenance operation involved there. Though the Independent Union once briefly 433 the various distribution points. As Martilla put it, Jays considered that "we are doing a pretty darn nice job with [the delivery operation]." Jays' business success indicates this was an understatement. Why then did Jays in the fall of 1975 suddenly sell its trucks and subcontract out its delivery operations? 19 The answer is clearly indicated in Jays' hostility to the employ- ees' activities on behalf of the Teamsters, by the threats by various supervisors and management that the delivery operation would, indeed, be contracted out and the trucks sold (or that the doors would be closed) because of the employees' union activities, and by the testimony of Japp, Sr., and Stanislawski, as found above, to the effect that the possibility of the Teamsters coming in was a substantial factor in the decision to subcontract the operation.20 In defense of its action in subcontracting out the work, Jays contends that when it did so it was unaware of the drivers' union activities, and, in any event, was motivated by the financial savings and operational benefits to be secured. The overwhelming evidence is that the drivers' union activities were well known to Jays' management and supervisors, and I so find. While I find the cost comparisons relied upon by Jays to be something less than accurate presentations of probable savings by contracting to Niel- sen,21 I have no doubt that some dollar savings may have been realized by Japp. I do not believe, however, that Jays would have departed from 35 years of highly successful business practices, abandoning its complete control over a complex delivery system, involving speedy dependable delivery of fragile perishable products which require special handling by experienced personnel, but for the advent of the drivers' effort to bring the Teamsters into the operation. In addition to the factors which have been previously set forth, I note that although Jays claims negotiations were initiated in May with Nielsen concerning contracting out this operation, and though Jays assertedly found it neces- sary to cut back on expenses between May and July because of adverse market conditions, no effort was made during that period to act on Nielsen's contention that he could perform the deliveries more economically than Jays. However, after the drivers began their union activity, the negotiations became accelerated and the decision made. The applicable legal principles have recently been set forth in N.LR.B. v. Townhouse T. V. & Appliances, Inc., 531 F.2d 826 (1976), as follows: It is well settled that an employer violates Section 8(a)(3) and (1) of the Act by subcontracting part of an integrated business and dismissing the persons em- ployed therein if the action is motivated at least in part by antiunion considerations. N.L.R.B. v. National Food Stores, Inc., 332 F.2d 249 (7th Cir. 1964); N.LRB. v. George Roberts & Sons, Inc., d/b/a The Roberts Press, 451 F.2d 941, 945-946 (2d Cir. 1971). Of course, as represented Jays' truckdrivers, when the drivers rejected the deal made by the Company and the Independent Union, the latter withdrew. The employees were told by Martilla that Jays still favored the Independent Union. 21 In each case estimates of yearly savings were made by extrapolating Nielsen's estimate based on a single week's activity. The asserted experience after contracting to Nielsen is based on noncomparable periods which is also probably affected by changes in Jays' business activities 434 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Townhouse argues, the converse is true, i.e., an employ- er does not violate Section 8(a)(3) and (1) if he makes a decision to subcontract solely for sound business reasons. Jays Foods Inc. v. N.L.RB., 292 F.2d 317 (7th Cir. 1961); N.L.R.B. v. Rapid Bindery, Inc., 293 F.2d 170, (2d Cir. 1961). Based upon the above, and the entire record in this case, I find that Jays, by contracting out its delivery operations to Nielsen and by discharging its truckdriver employees, 22 on or about November 14, because of their union activities, violated Section 8(a)(1) and (3) of the Act. D. Case 13-CA-14890 The allegations of the complaint in Case 13-CA-14890 assert that Respondent Nielsen Cartage refused, on or about November 15, to hire Siebert Kuiken, Robert Lull, James Paluch, Henry Goodman, and Richard McCormick (who were among the drivers discharged by Jays the day before) because of their union activities. Nielsen, on November 14, requested that all of Jays' drivers who wished to work for Nielsen Cartage appear for interviews at his office the next morning. As the men arrived, they were requested to fill out employment applications and were then interviewed in groups. Later that afternoon, Nielsen or another agent called the appli- cants to inform them as to who had been rejected and who would be employed. At that time, eight Nielsen Cartage employees had bid to transfer to the work at Jays. Nielsen hired 15 of the applicants from Jays. Among those not hired were the five named in the complaint. These were among the oldest, and presumably the most experienced, employ- ees in Jays' delivery operations.23 These five were also in the front rank of the employees seeking Teamsters repre- sentation. Nielsen's asserted reasons for deciding which of the applicants he would hire leave much to be desired. At the hearing, and in his prehearing affidavit, Neilsen asserted that he relied upon ( 1) his examination of the drivers' logs, (2) records from the State of Illinois showing the drivers' moving violations (MVR's), and (3) his interviews with the drivers. However, General Counsel proved, and counsel for Nielsen Cartage concedes, that Nielsen had not received the MVR's on November 15 when the men were informed as to who would be hired and who would not. Nielsen never explained how the drivers' logs (involving hundreds of pieces of paper), which he last examined on September 30 for the purpose of making a cost proposal to Jays (and not for the purpose of determining who should be hired), aided him in making his selections. Nor did he point out the factors in the interviews which influenced his decision.24 22 These employees are. Siebert Kuiken, Richard McCormick, Jack Whalen, Paul Knott, Albert Philp, Robert Lull, Henry Goodman, Thomas Richards, Charles Dietz, James Paluch , Robert Vitner, Gary Redelsperger, Charles Vogel, John Short, Gerald Dildine, Charles Merrick, Raymond Prince, James Chapman, Dennis Altgilbers, Edward Sallay, Craig Mullins, Lawrence Rossi, David Butkus , Raymond Hansen, Lauren Hodson, Ronald Davis. 23 Kuiken was Ist in seniority, McCormick 2d, Lull 7th,Goodman 8th, and Paluch 1 I th, among 26 employees. 24 Counsel for Nielsen Cartage indicates that Nielsen relied also on General Counsel contends that Nielsen was informed by Jays of the identity of the five union adherents and acceded to Jays' request that these five not be employed. This is denied by Nielsen. The key to General Counsel's conten- tion is the testimony of Lull, which I credit, that on November 15 Supervisor Staton told Lull that during the week previous Nielsen had come to him with a list of drivers he was going to employ; that Staton told Nielsen that there were drivers on the list who Staton would not employ; and that Nielsen replied that was "the way Si[Martilla] wanted it." 25 General Counsel contends that this may be accepted as an admission against interest binding on both Jays and Nielsen Cartage. There is no showing in this record of any connection between the two Respondents other than long-term and apparently deep friendship of their managements and the contractual relationship between them which is the subject of this case. There is no common ownership, nor interlock- ing directors or officers. Nor is there any showing of a common labor relations policy or joint control over employees of either of them, except as may inhere in their contractual relationship. Staton is shown to be a supervisor of Jays, but not of Nielsen. In the circumstances I find that Staton's statement to Lull cannot be held an admission binding on Nielsen. Though General Counsel's evidence raises strong suspicions that Nielsen failed and refused to hire the five named drivers on November 15 because of their union activities, it does not prove the allegation of the complaint and I shall recommend that it be dismissed.26 E. Case 13-CA-14955 The complaint in Case 13-CA-14955 alleges that Jays discharged Edward Olson on December 1, 1975, because of his union or other concerted activities protected by the Act. 1. Olson's union activities Edward Olson had been employed by Jays as a driver- salesman at Jays' West Branch for over 20 years. In 1975, Olson contacted the Retail Clerks Union in an effort to have that union organize Jays' driver-salesmen, persuaded a number of his fellow workers to meet with representatives of the Retail Clerks, and secured signed authorization cards from a majority of his fellow workers at the West Branch. These activities were open and carried on largely around the West Branch. The employees' activities on behalf of the Retail Clerks, as had the truckdrivers' activities on behalf of the Teamsters, came readily to the attention of Jays' supervisors. Thus, the branch manager, Brand, quickly found out about the employees' meeting with the union. I find that Jays' management was aware of Olson's orga- nizing activities on behalf of the Retail Clerks. information in the drivers' applications. Nielsen asserts that after the interviews, he "sat in my office with the applications and determined which 15 drivers I was going to hire." This was not mentioned in his preheanng affidavit. I am persuaded that this was an afterthought at the hearing. 25 Staton admitted speaking to Lull on this occasion, but denies saying that he had spoken with Nielsen about the selection of drivers. Both Staton and Nielsen deny that they had a conversation such as that related in Lull's testimony. 26 The record shows that the five men have since been hired by Nielsen in January 1976. JAYS FOODS, INC. At the election conducted by the Board on October 2, 1975, Olson was the union observer at the West Branch. As previously noted, the Retail Clerks lost the election. After the election was concluded, according to Olson's credited testimony, Japp, Sr., approached him and extended his hand in a handshake, and in an unfriendly insincere tone said, "Thanks a lot, Ed."27 2. Events leading to Olson's discharge The incidents which allegedly triggered Olson's discharge concerned the manner in which he served two customers on his route-a Jewel store and a National store-on Friday, November 28, the day after Thanksgiving, and his failure to come in to work on Saturday, November 29, to serve these two customers. Jays' branches are not normally open on Saturday, for the driver-salesmen normally work a 5-day week. The rule with respect to a week in which a holiday falls is somewhat different. Although Jays' witnesses were not altogether consistent with respect to whether the rule had been changed in 1975, they were agreed in general that driver- salesmen were permitted to work a 4-day week in a week in which a holiday fell on a working day, provided the driver- salesman had provided for his customers' needs, that is, took care of his 5-day schedule in 4 days.28 Branches are normally open on Saturday in a week in which a holiday falls on a working day and salesmen may service their customers on that day. On Friday, November 28, Olson arrived at the Jewel store on Mannheim Road on his route at 2:10 p.m.29 The receiving clerk at the store refused to accept delivery of Jays' products on the ground that receiving hours at the store ended at 2 p.m. Olson sought permission from the store manager to make the delivery and was refused. Earlier in the day, at the National store on his route, Olson examined the Jays' products on the shelves, determined that there was a sufficient amount for the weekend, and did not deliver any additional products.30 After returning to the West Branch that afternoon, Olson performed his normal end-of-week paperwork, ordered his products for the following Monday delivery, loaded his truck, and was checked out by Branch Manager Brand. Brand noticed that no sale was listed for the Jewel store (stated to be the largest account on Olson's route), and asked Olson about it. After Olson explained, Brand gave a noncommittal reply, indicating that he was satisfied with the explanation.31 Olson signed out, telling Brand, "Good night. See you on Monday." Brand, however, denies that he knew that Olson had made out his weekend inventory, or made his Monday order (but none for Saturday), or that he heard Olson say he would see Brand on Monday, thus, in effect, contending he had no reason to know, on Friday 27 In making this finding, I have considered Japp's apparent denial of this testimony 28 Each driver is scheduled to visit each customer on his route on a designated day of the week. In a holiday week, the dnver-salesman had to fit into his schedule the customers missed on the day of the holiday. 29 Jays claims it was told by the store manager that Olson arrived at 220 p.m. The p I oint is not important. Olson's is the only direct testimony on the point and credit it. As will be noted hereinafter, I am persuaded that Jays' witnesses tended to overstate or exaggerate Olson's shortcomings. 30 Again, Jays claims that it was told Olson had not been seen at the National store. Olson's direct testimony is credited. 435 afternoon, that Olson was not coming in on Saturday morning. Brand admitted, however, that Olson's records, which he had before him, did not contain certain markings which were customary to indicate that Olson intended to visit the Jewel store the next day. On Saturday, November 29, 7 of the 24 driver-salesmen at the West Branch came to work. Brand checked the records of the remaining salesmen, and made notes of seven customers for whom no sales were shown for Friday. Brand asked Donald C. Skafgaard, the assistant branch manager, to investigate three of the stores listed, including the Jewel and National stores on Olson's route, Brand stating that he would take the remaining four. Skafgaard later reported that the Jewel store was almost completely out of Jays products, and the manager would not accept a later delivery that day. He reported that the National store was "out of product," and that he would replenish the stock at that store. Skafgaard also returned to the West Branch to pick up more product to be delivered to the third store on his list, which also had not been served on Friday by another driver-salesman.32 Brand states that the four stores on his list were adequately supplied. Brand spoke with Olson when the latter came to work on Monday, December 1, and advised him that he was suspended until further notice. Brand states that he then spoke with Skafgaard, who told him that this was an "[i]mpossible situation . . . he just doesn't do the job, hasn't done the job for this week, and this Jewel, we have never had a situation like this. We not only lose the business for the entire weekend, but we might even lose the account." Skafgaard went even further in his testimony, asserting that he told Brand that Jays might lose the entire Jewel account and the entire National account because of Olson's failure to serve these customers on Saturday. I doubt that these things were said as reported. In the first instance, Skafgaard had actually worked at the West Branch for only a very few weeks as assistant branch manager, previously having been a salesman at another branch, and would hardly have been quite so assertive about past experience at the West Branch. Further, as shown by Brand's testimony of his conversation with Martilla set forth hereinafter, Brand seems addicted to the use of "impossible" to score the point he is trying to make. Lastly, I do not believe that the two men were concerned about losing these accounts as stated. The National store was served on Saturday, and no difficulty was experienced in supplying the Jewel store on Monday, December 1. After suspending Olson, Brand then called Martilla, advising him of the situation involving the Jewel and National stores on Olson's route. Brand states that he told Martilla that Olson was "not trying," and was working "with the least momentum possible. The results the same, the least. It's an impossible situation." According to Brand, 3i Olson says Brand merely replied, "Oh," indicating that he was satisfied. Brand asserts that he said, "Okay, well take care of it " 32 This driver-salesman was not criticized or disciplined for failing to serve this customer or for not coming in on Saturday Skafgaard carefully explained that the delivery to this third store was not really necessary, in contrast to the situation at Olson's customers. The explanation was less than persuasive . Thus, if the third store needed additional stock, as seems to have been the case, since Skafgaard made a special trip for this purpose, I would have expected that the other salesman would have at least been criticized. 436 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Martilla agreed that it was "an impossible situation," and asked what Brand wanted to do. When Brand insisted upon Olson's immediate termination, Martilla stated, he suggest- ed a lighter penalty, pointing out that Olson had to be employed 4 more weeks to get his yearly bonus, which he would lose if discharged before the end of the year. Martilla finally told Brand to write up Brand's recommendation for Olson's termination and to transmit it to Martilla. Olson was discharged by Brand in a telephone call later in the day, on December 1. 3. The asserted reasons for Olson's discharge Brand testified that the reasons for Olson's discharge were set forth in the termination of employment memo which he submitted to Martilla on December 1. This stated: Very poor sales, lowest in West Branch. Caused by least amount of on job sales time, 4 days only week of 11 /29/75. He allowed two accounts, one Jewel and one National, to be out of stock on Jays items for the week- end 11/29 & 11/30 due to no-sale by him 11/28/75. s s s s s No arrangements made by E. Olson for delivery of product on Saturday 11/29/75. He knowingly permit- ted and approved out of stock for Customers & resultant loss of sales to Customers & Jays when he checked out for the week 11/29/75 disregarding oppor- tunity available for completing his Route Sales on 11 /29/75, increasing his sales commissions and satisfy- ing Jays Customers. The memo further stated that Olson was not recommend- ed for reemployment. Brand further testified that Olson was the first or among the first, to check in every day; that he "was continually twenty-four" among the driver-salesmen at the West Branch in dollar volume of sales; that Olson brought in very little new business; and that Brand frequently spoke to Olson about these matters, to which, Brand stated, Olson would reply that he was doing the best he could, and that he had all the retail outlets on his route. Martilla testified that Brand had also told him that "some years prior," when some routes opened up, "Olson had not bid for routes on which he could have made considerably more money." Respondent Jays further asserts that a comparison of Olson's production for the period from July until he was terminated with his replacement's production for the period from December until mid-April 1976 shows that the replacement produced a higher dollar volume of sales 33 Upon analysis, however, most of these criticisms do not appear to stand up well. While Olson's dollar volume of sales, with the exception of I or 2 weeks, was consistently in the lower half of the group at the West Branch, he was not, 33 In a memo apparently prepared by Brand and signed by Skafgaard, which was given General Counsel during his investigation of the case as a basis for Olson's discharge , it was additionally claimed that Olson "Dawdled around - A M reload - coffee - mens room - and would be among last to leave for route " No testimony was adduced in support of these contentions 34 Thus, while Olson was ranked 24th in 22 weeks during the 2-year as Brand testified, "continually twenty-fourth" (indeed, during much of the time referred to by Brand there were only 23 regular routes at the West Branch).34 While Brand did not seem too certain on cross-examination about the new accounts which Olson had brought in, he did agree that just before Olson was discharged, Olson had solicited and secured a good new account which was thereafter served by his replacement. While ranking salesmen by dollar volume may be a useful technique to incite sales competition among the salesmen, it is not a very accurate way to compare actual effort. Thus, the record indicates that the various routes are different in size and sales potential. This is borne out by Brand's comment that Olson could have bid on other routes on which he could have made considerably more money. It is further noted, as set forth below, that Olson's replacement continued to have low rankings among the West Branch salesmen after Olson's discharge. The contention that Olson's replacement performed more satisfactorily than Olson seems highly questionable. The periods and the conditions compared are very different. Among other items, the replacement is credited with income from the good new account secured by Olson just before his discharge. Moreover, it is noted that, for the first 21 weeks after Olson's discharge, the replacement was ranked 24th among West Branch salesmen on 8 occasions, and on 9 occasions was ranked between 20th and 23d. Olson's failure some years ago to bid on a more lucrative route may (or may not) indicate a lack of sales aggressive- ness on his part, but he was obviously privileged to use his seniority in this way so long as he properly covered the route that he did bid on. Respondent argues in its brief that Olson's production was affected by the fact that he ate lunch at home about three times a week (Olson stated that his home was convenient to his route), instead of eating in a restaurant along the way, and by Olson's admission that he sometimes rested for short periods at home. However, it is not shown that this prevented Olson from adequately covering his route. There is no evidence of any occasion prior to November 28-29 that Olson may not have properly served any customer on his route. Nor is there any showing that Jays was aware that Olson stopped by his home during the day, except for a conversation between Skafgaard and Lull at a New Year's Eve party in 1975, after Olson was discharged.35 Lull testified that he had a conversation with Skafgaard at a New Year's Eve party in 1975, at the home of another former truckdriver for Jays, in which, in response to query from Lull, Skafgaard told him (Lull) that Martilla had instructed Skafgaard to follow Olson because he was prounion and because his sales were down; that Skafgaard had caught Olson at home at 11 o'clock in the morning when he should have been on his route; that Skafgaard had checked a few of Olson's big stores and found they were out period referred to by Brand, and was 23d in 25 weeks, he was ranked 22d during 16 weeks, 21st during 15 weeks, 20th during 11 weeks, 19th during 4 weeks, 15th during 3 weeks, and in I week each was ranked 3d, I Ith, 12th, 16th, 17th, and 18th among the diver-salesmen at the West Branch. 35 Counsel for Jays asserted that there was common talk at the West Branch that Olson went home during the day to care for his pigeons. There was no proof of such gossip. Olson denied that he did so. JAYS FOODS, INC. of merchandise; and that Olson's replacement with 3 months' experience with Jays had higher sales than Olson; and that Jays "was going to court" on January 7 with respect to Olson3e Skafgaard denied Lull's testimony, except that he stated he had "no recollection" of telling Lull about meeting Board agents about the Olson matter . Skafgaard further denied that anyone had discussed Olson's union activities with him, or that anyone had told him to follow Olson, or that he had done so. I credit Lull. He not only seemed to be an honest witness, as has been noted, but his testimony is consistent in detail with the record as a whole. 4. Analysis and conclusions Respondent Jays' motive for discharging Olson presents a very disturbing problem. Olson clearly failed to serve a Jewel store, the largest customer on his route , on November 28 (perhaps without his fault), and also failed to come in on November 29 to serve that customer .37 I have no doubt that this would be upsetting to the management of Jays, though, as I have noted, I believe the testimony on this score was somewhat exaggerated. In such circumstances, the dis- charge of a new employee might not be noteworthy, although the record indicates that the discharge of driver- salesmen by Jays is not frequent. However, the discharge of a salesman with over 20 years' seniority who apparently had never done anything like this before requires closer consideration.38 Indeed, the record shows that Branch Manager Brand had developed such an hostility toward Olson that he was unwilling to permit Olson to continue at work for the 4 more weeks necessary that he might get his yearly bonus. Jays seeks to account for that hostility by showing that Olson's dollar volume was usually near the bottom of those driver-salesmen employed at Jays' West Branch, which Jays attributes to a lackadaisical attitude on Olson's part. On the other hand, the record shows that Jays' management was aware that Olson's route as such was a low-producing route 39 Notwithstanding Brand's testimony that he constantly spoke to Olson about his production- which is fairly normal procedure in respect to salesmen in this type of industry-there is no evidence that Olson was in any danger of losing his job prior to his activities on behalf of the Union and his serving as one of the observers at the election on October 2. As has been found, Jays is clearly hostile to unionization of its operations. The record further shows that Japp, Sr., Jays' chief executive officer, was concerned over the margin of the Company's victory over the Retail Clerks in the election, and indicated his personal displeasure at Olson's role, immediately after the election. The fact that Branch Manager Brand was actively seeking to secure a reason to discharge Olson is shown by Skafgaard's admission to Lull after Olson was terminated. 36 In fact, Jays had an appointment to meet with representatives of the Regional Office on January 7 to present Jays' defense to the charge that Olson had been discriminated against. 37 1 am not so sure, notwithstanding Assistant Manager Skafgaard's testimony, that Olson failed to serve a National store on that occasion. 38 The record shows that in one other case a driver -salesman was given one or more warnings before discharge. 437 Respondent Jays manifestly had the right to discharge Olson because he was a poor salesman, or for failing to serve his customers, or for not being aggressive enough, if such was the case. However, on the basis of the above analysis and the record as a whole, I am convinced that Olson was discharged for his union activities and the reasons advanced by Jays are pretexts. It is therefore found that Respondent Jays, by the discharge of Edward Olson, violated Section 8(a)(1) and (3) of the Act 40 CONCLUSIONS OF LAW 1. Respondent Jays Foods, Inc., and Respondent Niel- sen Brothers Cartage Co., Inc., are each an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Chicago Truck Drivers, Helpers and Warehousemen Workers Union (Independent); Local 705, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America; and Retail Clerks Union Local 1550, affiliated with Retail Clerks International Associa- tion, AFL-CIO, are each a labor organization within the meaning of Section 2(5) of the Act. 3. By ceasing its delivery operations, selling its trucks, and contracting out its delivery operation to Respondent Nielsen Cartage because of the union activities of Jays Foods' employees, Respondent Jays Foods engaged in and is engaging in unfair labor practices in violation of Section 8(a)(1) and (3) of the Act. 4. By discharging the following named employees on November 14, 1975, because of the union activities of its employees, Respondent Jays' Foods engaged in and is engaging in unfair labor practices in violation of Section 8(a)(l) and (3) of the Act: Siebert Kuiken, Richard McCormick, Jack Whalen, Paul Knott, Albert Philp, Robert Lull, Henry Goodman, Thomas Richards, Charles Dietz, James Paluch, Robert Vitner, Gary Redelsperger, Charles Vogel, John Short, Gerald Dildine, Charles Mer- rick, Raymond Prince, James Chapman, Dennis Altgilbers, Edward Sallay, Craig Mullins, Lawrence Rossi, David Butkus, Raymond Hansen, Lauren Hodson, Ronald Davis. 5. By discharging Edward Olson on December 1, 1975, because of his union activities, Respondent Jays Foods engaged in and is engaging in unfair labor practices in violation of Section 8(axl) and (3) of the Act. 6. By threatening to sell its trucks and contract out its delivery operation by threatening to close its doors because of the union activities of its employees; by granting benefits to its employees to discourage union activities; by threaten- ing to withhold benefits because of employee union activities; and by coercively interrogating its employees concerning union activities, Respondent Jays Foods en- gaged in and is engaging in unfair labor practices in violation of Section 8(a)(1) of the Act. 39 Notwithstanding the somewhat higher dollar volume produced by Olson's successor on the route, the successor continued to rank low among the salesmen at the West Branch. 90 In coming to this conclusion, I have noted and considered Jays' argument that no other election observer for the Retail Clerks was discharged. It is not necessary that Respondent discharge every union adherent to effectively chill union activities among the employees. 438 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 7. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. 8. Except as found hereinabove, Respondent Jays Foods did not engage in unfair labor practices as alleged in the complaints in this matter. 9. Respondent Nielsen Cartage did not engage in unfair labor practices as alleged in the complaints in this matter. THE REMEDY It having been found that Respondent Jays Foods, Inc., has engaged in certain unfair labor practices in violation of Section 8(a)(1) and (3) of the Act, I shall recommend that it cease and desist therefrom and take certain affirmative action to effectuate the policies of the Act. It having been found that Respondent Jays Foods, Inc., unlawfully discharged Edward Olson, it will be recom- mended that Respondent Jays Foods, Inc., offer Olson immediate and full reinstatement to his former job, or, if such job no longer exists, to a substantially equivalent job, without prejudice to his seniority and other rights, privileg- es, or other working conditions , and make him whole for any loss of earnings or benefits suffered by reason of such discrimination, by payment to him of a sum of money equal to the amount he would have earned from the date of his termination as found herein to the date of Respondent Jays Foods' offer to reinstate him as aforesaid , less his net earnings during that period, in accordance with the Board's formula set forth in F. W. Woolworth Company, 90 NLRB 289 (1950), with interest thereon at the rate of 6 percent per annum, as set forth in Isis Plumbing & Heating Co., 138 NLRB 716 (1962). Respondent Jays Foods having unlawfully terminated and contracted out its delivery operation to Respondent Nielsen Cartage, and having unlawfully discharged the 26 employees who were employed in that operation, General Counsel contends that in order to restore the situation as it was before Respondent Jays engaged in these unfair labor practices, Jays should be required to resume its delivery operation and reinstate the discharged employees with whatever backpay and benefits lost by reason of their unlawful discharge . This is, indeed, the Board's normal remedy in cases such as this where ordering such resump- tion of operations would not create any undue hardship. See Townhouse T. V. & Appliances, 213 NLRB 716 (1974), and cases cited therein. There is no showing that such a remedy would create any undue hardship here. Jays appears to be a financially sound company; it had conducted this delivery operation successfully for over 30 years; the trucks continue to be housed on its property and used exclusively in its delivery operation as before; and the contract between Jays and Nielsen Cartage makes clear that the parties contemplated that Jays might well wish to buy the trucks back and resume these operations. However, it does not seem to me that it is necessary to order Respondent Jays Foods to resume the delivery operation (if it does not desire to do so) in order to provide 41 1 am to some extent concerned as to whether their seniority and job security may not compare with that enjoyed with Jays. a substantially adequate affirmative remedy for these unfair labor practices. In coming to this conclusion, I am strongly influenced by the fact that Respondent Nielsen Cartage has voluntarily hired 23 of the 26 discharged employees to perform Jays' delivery operations, apparently as before. The evidence is that their wages and benefits may be better than those they enjoyed before Jays contracted out the operation.41 Under the circumstances, I believe that an order requir- ing Respondent Jays Foods (1) to reimburse the 26 named employees for any loss of pay and benefits because of their discharge (in accordance with the Board's policies set forth above) until such time as those employees obtain, or have obtained, substantially equivalent employment,42 and (2), in the event that Respondent Jays Foods resumes the delivery operation contracted to Nielsen Cartage, or otherwise withdraws such delivery operation from Nielsen Cartage, to offer those employees reinstatement to their former jobs, or, if those jobs no longer exist, to substantially equivalent jobs, without prejudice to the employees' senior- ity and other rights and privileges, or other working conditions, would constitute an appropriate affirmative remedy. See, e.g., Savoy Laundry, Inc., 148 NLRB 38 (1964). I shall so recommend. The complaint against Respondent Nielsen Cartage alleges, and General Counsel argues, that Respondent Nielsen Cartage is a successor to Respondent Jays Foods with respect to the delivery operations involved here, and as such is responsible for remedying those unfair labor practices which relate to the contracting out of those operations. It is, of course, well settled that a purchaser who "acquires and operates a business of an employer found guilty of unfair labor practices in basically unchanged form under circumstances which charge him with notice of unfair labor practice charges against his predecessor " may be held responsible for remedying his predecessor's unlawful con- duct. See Golden State Bottling Co., Inc. v. N.L,R.B., 414 U.S. 168 (1973). Where the purchaser cannot be charged with knowledge of the predecessor's unfair labor practices; however, the purchaser may not be held responsible for remedying those practices. Ramada Inns, Inc., 171 NLRB 1060 (1968). The circumstances of this case arouse great suspicion that Nielsen knew that Jays was seeking to forestall its employees' attempts to bring the Teamsters in by contracting out the operation, but the circumstances are not strong enough to support a finding that Nielsen knew or should be charged with knowledge of Jays Foods' unfair labor practices. It is therefore found that Respondent Nielsen Cartage is not responsible for remedying Respon- dent Jays Foods' unfair labor practices. Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I issue the following recommended: 42 Whether employment by Nielsen Brothers Cartage, Inc., or by any other employer, constitutes substantially equivalent employment, if in dispute, can be determined in a compliance hearing. JAYS FOODS, INC. 439 ORDER43 The Respondent, Jays Foods, Inc., Chicago, Illinois, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Discouraging membership in or activities on behalf of Local 705, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, or Retail Clerks Union Local 1550, affiliated with Retail Clerks International Association, AFL-CIO, or any other labor organization, by discharging its employees or in any other manner discriminating in regard to their hire or tenure of employment, or any term of condition of their employment. (b) Granting or promising to grant wage increases or other benefits in order to induce its employees to refrain from union activities. (c) Threatening to withhold wage increases or other benefits to induce its employees to refrain from union activities. (d) Threatening to terminate its operations or any part of its operations or to sell its equipment because its employees have become members of a union or have engaged in activities on behalf of a union. (e) Coercively interrogating its employees concerning membership in or activities on behalf of a union. (f) In any other manner interfering with, restraining, or coercing employees in the exercise of rights guaranteed under Section 7 of the National Labor Relations Act. 2. Take the following affirmative action which is necessary to effectuate the policies of the Act: (a) Offer Edward Olson immediate and full reinstatement to his former job, or, if that job no longer exists, to a substantially equivalent job, and make him whole for any loss of earnings he may have suffered by reasons of his discharge, in accordance with the provisions of the section herein entitled "The Remedy." (b) In the event Respondent Jays Foods, Inc., resumes its delivery operations which were contracted to Nielsen Brothers Cartage, Inc., on or about November 17, 1975, or withdraws such delivery operations from Nielsen Cartage, offer the employees named below immediate and full reinstatement to their former jobs, or, if those jobs no longer exist, to substantially equivalent jobs, in accordance with the provisions of the section herein entitled "The Remedy." (c) Make the employees named below whole for any loss of earnings or benefits they may have lost by reason of their discharge on November 14, 1975, to the date Respondent Jays Foods, Inc., offers them reinstatement, or until such earlier time as each secures, or did secure, substantially equivalent employment, in accordance with the provisions of the section herein entitled "The Remedy": Siebert Kuiken Richard McCormick Jack Whelan Paul Knott Albert Philp Robert Lull Henry Goodman Thomas Richards Charles Dietz James Paluch Robert Vitner Gary Redelsperger Charles Vogel Dennis Altgilbers Edward Sallay Craig Mullins Lawrence Rossi David Butkus Raymond Hansen Lauren Hodson Ronald Davis John Short Gerald Dildine Charles Merrick Raymond Prince James Chapman (d) Preserve and, upon request, make available to the Board and its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to facilitate the effectuation of the Order herein. (e) Post at its plant and branch operations in and about Chicago, Illinois, copies of the attached notice marked "Appendix." 44 Copies of said notice, on forms provided by the Regional Director for Region 13, after being duly signed by an authorized representative of Respondent, shall be posted by it 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 Respondent to ensure that said notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director for Region 13, in writing, within 20 days from the date of this Order, what steps Respondent has taken to comply herewith. IT IS FURTHER ORDERED that the complaint be, and it hereby is, dismissed as to alleged violations of the Act not found in this Decision. 43 In the event no exceptions are filed as 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. 44 In the event the Board's Order is enforced by a Judgment of the 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 "