Merle Lindsey Chevrolet, Inc.

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Merle Lindsey Chevrolet, Inc. and Indiana Joint Board, Retail, Wholesale, and Department Store Union, AFLCIO. Cases 25-CA-7595, 25-CA- 7595-2, 25-CA-7595-3, and 25-RC-6173 August 16, 1977 DECISION, ORDER, AND DIRECTION OF SECOND ELECTION BY CHAIRMAN FANNING AND MEMBERS PENELLO AND MURPHY On April 1, 1977, Administrative Law Judge Alvin Lieberman issued the attached Decision in this proceeding. Thereafter, Respondent and the Union filed exceptions and supporting briefs, the General Counsel filed a brief supporting the Decision, and Respondent filed an answering brief. Purs'uant 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, find- ings,' and conclusions of the Administrative Law Judge and to adopt his recommended Order, as modified herein.2 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 below, and hereby orders that the Respon- dent, Merle Lindsey Chevrolet, Inc., Muncie, Indi- ana, its officers, agents, successors, and assigns, shall take the action set forth in the said recommended Order, as so modified: 1. Substitute the following for paragraph 2(a): "(a) Offer to Elmer Fugitt and Garland Smith full and immediate reinstatement to their former posi- tions or, in the event that said positions no longer exist, to substantially equivalent positions, without prejudice to their seniority and other rights and privileges, and make them whole for any loss of earnings and other benefits suffered by them because of the discrimination against them, in the manner set forth in the section of the Administrative Law Judge's Decision entitled 'The Remedy.' " 2. Substitute the attached notice for that of the Administrative Law Judge. IT IS FURTHER ORDERED that the complaint issued on April 12, 1976, in this proceeding be dismissed. 231 NLRB No. 69 IT IS FURTHER ORDERED that the representation election conducted on March 2, 1976, in Case 25- RC-6173 be, and it hereby is, set aside, and that Case 25-RC-6173 be remanded to the Regional Director for Region 25 for the purpose of conducting a new election. [Direction of Second Election and Excelsior foot- note omitted from publication.] I Respondent and the Union have 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 carefully examined the record and find no basis for reversing his findings. 2 We agree with the Administrative Law Judge that by telling employees he wanted to ascertain and talk about their problems Respondent's president, Merle Lindsey, violated Sec. 8(aXl) of the Act. Uarco Incorporat- ed, 216 NLRB I (1974). In that case, the Board stated: IT]he solicitation of grievances at preelection meetings carnes with it an inference that an employer is implicitly promising to correct those inequities it discovers as a result of its inquiries. .... However, it is not the solicitation of gnevances itself that is coercive and violative of Section 8(aX I), but the promise to correct grievances or a concurrent interrogation or polling about union sympathies that is unlawful; the solicitation of grievances merely raises an inference that the employer is making such a promise, which inference is rebuttable by the employer. In the instant case, there is no evidence that Respondent made any statement or took any action to establish that it was not promising to remedy grievances and we therefore find that Respondent did not meet its burden of rebutting the inference. APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The Act gives all employees these rights: To engage in self-organization To form, join, or help unions To bargain collectively through represent- atives of their own choosing To act together for collective bargaining or other mutual aid or protection To refrain from any or all these things. WE WILL NOT question you about your union membership, activities, or desires. WE WILL NOT threaten you with loss of wages, commissions, or other benefits, and WE WILL NOT reduce your wages, commissions, or other benefits in order to discourage you from supporting the Indiana Joint Board, Retail, Wholesale, and Department Store Union, AFL-CIO, or any other union. WE WILL NOT threaten to discharge you or lay you off for supporting the above-named Union, or any other union. 478 MERLE LINDSEY CHEVROLET WE WILL NOT ask you to tell us what your grievances or complaints concerning your work are and WE WILL NOT promise to remedy or correct them in order to persuade you not to support the above-named Union, or any other union, or to discourage you from voting for, or supporting, the above-named Union, or any other union. WE WILL NOT fire you, lay you off, suspend you, discipline you in any way, or do anything else to your disadvantage because you vote for or support the Indiana Joint Board, Retail, Whole- sale, and Department Store Union, AFL-CIO, or any other union, or because you have not done so. WE WILL NOT in any other manner interfere with, restrain, or coerce employees in the exercise of the rights guaranteed them in Section 7 of the Act. WE WILL offer Elmer Fugitt and Garland Smith full and immediate reinstatement to their former jobs or, if those jobs no longer exist, to substan- tially equivalent positions, without prejudice to their seniority or other rights and privileges, and WE WILL make them whole for any loss of earnings and other benefits suffered because of the discrimination against them, at a rate of 6- percent interest per annum. WE WILL respect your right to form any union, to support any union, to help any union, and to deal with us through any union. WE WILL also respect your right not to do any of these things, except as required by law. All our employees are free, without any objection from us, to become or remain members of the Indiana Joint Board, Retail, Wholesale, and Depart- ment Store Union, AFL-CIO, or any other union, or not to become or remain members of the Indiana Joint Board, Retail, Wholesale, and Department Store Union, AFL-CIO, or any other union, except as required by law. MERLE LINDSEY CHEVROLET, INC, DECISION STATEMENT OF THE CASE ALVIN LIEBERMAN, Administrative Law Judge: Pursuant to a petition filed by Indiana Joint Board, Retail, I The following unit was agreed upon as being appropnate in the Stipulation for Certification (G.C. Exh. 44): All new and used car and truck salesmen employed by the Employer at its Muncie, Indiana establishment: ou r Ir XCLUDIN(i all office clerical employees. all professional employees, and all guards and supervisors as defined in the Act and all other employees. 2 G.C. Exh. I(x). : Objections 18 and 19 deal with speeches made by Respondent's officials on the day of the election. Wholesale, and Department Store Union, AFL-CIO (Union), on December 9, 1975, in Case 25-RC-6173 and a Stipulation for Certification Upon Consent Election (Stipulation for Certification) approved on January 21, 1976, by the Regional Director for Region 25 of the National Labor Relations Board a representation election was held on March 2, 1976, among certain employees of Respondent.' Five ballots were cast for the Union, nine against the Union, and two ballots were challenged. The Union filed objections to the election which were investigated by the Regional Director. Following this the Regional Director issued a report 2 in which he noted that "the matters alleged in Objections I through 17 are also alleged as unfair labor practices in [the complaints in 25- CA-7595, 25-CA-7595-2, and 25-CA-7595-3 ]." Accordingly, the Regional Director ordered that "a hearing be conducted to resolve the issues of. . . fact and credibility raised in . . . Objections I through 17. . . and Objections 18 and 19." 3 The Regional Director further ordered that "Cases Nos. 25-CA-7595, 25-CA-7595-2, 25-CA-7595-3 ... and 25-RC-6173 be ... consolidated for the purpose of hearing, ruling and decision by an Administrative Law Judge, and that thereafter Case No. 25-RC-6173 be transferred to, and continued before, the Board." The hearing in this consolidated proceeding, with all parties except the Union represented, was held before me in Muncie, Indiana, on several days between August 3 and September 16, 1976. In general, the issues litigated were whether Respondent had violated Section 8(a)(1) and (3) of the National Labor Relations Act, as amended, and whether Respondent engaged in conduct warranting the setting aside of the election. More particularly, the questions for decision are as follows: I. Did Respondent violate Section 8(aX1) of the Act by interrogating and threatening employees; giving them the impression that their union activity was under surveillance; and by soliciting and promising to rectify grievances? 2. Did Respondent violate Section 8(a)(3) of the Act by laying off two employees, Elmer Fugitt and Garland Smith, and by discharging a third employee, Terry Tarr? 3. Should the Union's objections to the election be sustained and the election set aside? Upon the entire record, 4 upon my observation of the witnesses and their demeanor while testifying, and having taken into account the arguments made and the briefs submitted,5 I make the following: FINDINGS OF FACT 6 I. JURISDICTION Respondent, an Indiana corporation, is engaged at Muncie, Indiana, principally in selling at retail, and servicing, new and used passenger automobiles and trucks, 4 Issued simultaneously is a separate order correcting obvious inadver- tent errors in the stenographic transcnpt of this proceeding. 5 Although all the arguments of the parties and the authorities cited by them, whether appeanng in their briefs or made orally at the hearing may not be discussed, each has been carefully weighed and considered. 6 Respondent's motions made at the conclusion of the hearing, upon which I reserved decisior.n are disposed of in accordance with the findings and conclusions set forth in this Decision. 479 DECISIONS OF NATIONAL LABOR RELATIONS BOARD including vehicles manufactured by the Chevrolet Motor Division of General Motors Corporation. During 1975, a representative period, Respondent's gross volume of business exceeded $500,000. During the same period Respondent purchased automobiles and related products valued at in excess of $50,000 from vendors located outside the State of Indiana. Accordingly, I find that Respondent is engaged in commerce within the meaning of the Act and that the assertion of jurisdiction over this matter by the Board is warranted. II. THE LABOR ORGANIZATION INVOLVED The Union is a labor organization within the meaning of the Act. Ill. INTRODUCTION Briefly, this case is concerned with events occurring during a campaign mounted by the Union to organize Respondent's salesmen which was climaxed by its defeat in a representation election. These included, the complaints allege, violations of Section 8(a)(1) of the Act by Respon- dent 7 and violations of Section 8(a)(3) consisting of Respondent's laying off two salesmen, Elmer Fugitt and Garland Smith, and its discharging a third, Terry Tarr. Respondent denies having committed the alleged viola- tions of Section 8(a)(1) of the Act. Admitting the layoffs and discharge, Respondent asserts that Fugitt and Smith were laid off solely because of poor business conditions and that Tarr was discharged principally because he referred to another dealer a customer who was sent to Respondent to buy an automobile. IV. PRELIMINARY FINDINGS AND CONCLUSIONS 8 A. Respondent's Business and Premises As found above, Respondent sells new and used passenger automobiles and trucks. Its premises are located on South Walnut Street in Muncie, Indiana. On one side of South Walnut Street, referred to during the hearing as the new car side, Respondent maintains its general offices and a showroom where it displays and sells new passenger automobiles and in which there are desks for salesmen. On the other side of the street, referred to during the hearing as the used car side, Respondent stores and sells used passenger automobiles and new and used trucks. On the used car side of the street is a building, called, at the hearing, the used car sales office, in which there are also desks for salesmen. 7 The nature of these claimed violations appear above in my statement of the questions for decision. I The purpose of these findings and conclusions is to furnish a frame of reference within which to consider the facts relating to Respondent's alleged unfair labor practices and to the conclusions to which they may give rise. To the extent that the contentions of the parties relate to the findings and conclusions made here they will be treated here, although they, as well as the findings and conclusions. may again be considered in other contexts. I Findings as to the manner in which Respondent classifies its salesmen are necessary in order to assess the validity of one of Respondent's defenses to the complaint's allegation that Elmer Fugitt and Garland Smith, classified by Respondent as used car salesmen, were laid off in violation of Sec. 8(a)(3) of the Act. Respondent contends, in this regard, that at the time of the layoffs its used car business had so fallen off as to require a reduction When, as is frequently the case, a salesman whose desk is on the used car side has business to transact on the new car side he does so at any unoccupied desk on that side. Similarly, when, as often occurs, a salesman whose desk is on the new car side has business taking him to the used car side he avails himself of any vacant desk there. B. Respondent's Classification of its Salesmen9 Respondent designates its salesmen assigned to desks on the used car side as used car salesman and those assigned to desks on the new car side as new car salesman. However, these designations, as shown by the evidence detailed below, are misnomers and entirely arbitrary. Respondent imposes no restriction on salesmen regard- ing the type of passenger automobiles they may sell, and salesmen regularly sell both new and used cars regardless of the location of their desks. Thus, as shown by the evidence, from January 1, 1975, until May 31, 1976, about 40 percent of all the used passenger automobiles sold by Respondent were sold by salesmen designated as new car salesmen. The evidence also shows that in the same period a substantial percentage, more than 20 percent, of all the passenger cars sold by salesmen characterized as used car salesmen were new passenger automobiles.' 0 It is also significant to note, in this respect, that in 1975 a salesman referred to by Respondent as a new car salesman sold more used passenger automobiles than new and that a similar situation existed during the first 5 months of 1976. Furthermore, Respondent conducts sales meetings every morning, except on Saturdays, tI at which virtually the only matter taken up is the sale of used automobiles. Neverthe- less, Respondent requires all salesmen, regardless of their classification, to attend these meetings. Additionally, from time to time Respondent places advertisements in a local newspaper offering for sale only used passenger cars and used trucks. Following a descrip- tion of the vehicles, the advertisements list the names of all salesmen, including those designated as new car sales- men.l2 The final significant item in my determination that Respondent's designations of its salesmen as either new car or used car salesmen are misnomers are the business cards Respondent issues to each salesman. These set forth the word "Salesman" preceded by the salesman's name, and the following legend, prominently printed in red: "NEW & USED CARS [&] TRUCKS." 13 Accordingly, I conclude that the proof does not support Respondent's classification of the employees on its sales staff as either new car or used car salesmen. I further in its used car sales staff, and that Fugitt and Smith were the least senior used car salesmen in its employ. t0 G.C. Exhs. 24 and 25. These exhibits were furnished to the General Counsel by Respondent. The former reports only the sales made by salesmen who were working for Respondent on December 31, 1975. Because Elmer Fugitt, designated as a used car salesman whose layoff is alleged in the complaint as having been violative of the Act, was laid off on December 10, 1975, the number and type of cars he sold in 1975 is not included in G.C. 24. " Respondent's premises are closed on Sundays. 12 G.C. Exh. 9. Although this exhibit consists of a certified copy of only one advertisement, it does not appear that it is different, in the respect here under consideration, from others. 13 G.C. Exh. 42. 480 MERLE LINDSEY CHEVROLET conclude, on the evidence set forth above, that Respondent employs only one class of salesmen and that they sell both new and used automobiles, regardless of where their desks are lcated or how Respondent refers to them. C. The Union's Campaign To Organize Respondent's Salesmen The Union began its campaign to organize Respondent's salesmen on December 8, 1975. On this date Donald Strack, the Union's president, met with salesmen employed by Respondent, including Elmer Fugitt, Garland Smith, Terry Tarr,'4 and Gary Bullock. At this meeting, which was held at the Holiday Inn in Anderson, Indiana, a municipality near Muncie, Strack discussed the manner in which those in attendance "could," as he put it, "get organized." In this connection, Strack passed out union literature, including handbills entitled "Do You Know." 15 On the next day, December 9, Fugitt posted one of these on the wall of Respondent's used car sales office. Also at this meeting Strack distributed authorization cards. Fugitt, Tarr, and Smith signed cards at the meeting. In addition they took blank cards for the purpose of having them signed by salesmen who were not present at the meeting. Upon the conclusion of the December 8 meeting some salesmen remained at the Holiday Inn and continued to talk about their unionization. However, being satisfied that the Union would not benefit Respondent's salesmen, Bullock did not participate in this discussion. Instead, he went home immediately after the meeting was formally adjourned. A short time later Fugitt, Smith, Tarr, and a few other salesmen employed by Respondent called at Bul- lock's home and there spoke to him about joining the Union. Additional union meetings were held at various times until about February 24, 1976. Fugitt and Tarr attended all and Smith went to some. On December 11, 1975, Respondent received a letter from the Union stating that it had "membership cards from a majority of [Respondept's] employees." 16 The letter also stated that the Union was desirous of arranging a meeting to negotiate a contract. A day or so later Respondent received the Union's formal petition for certification upon which, as noted earlier, a representation election was held resulting in the Union's defeat. After discussing the Union's letter with an associate, Merle Lindsey, Respondent's president, referred it for reply to Respondent's lawyer. Having done that, Lindsey left for Florida on December 14 and did not return until December 29. " Tarr was discharged on February 28. 1976. As is the case regarding the Fugitt and Smith layoffs, Tarr's discharge is alleged in the complaint as having been in violation of Sec. 8(aX3) of the Act. I G.C. Exh. 40. This handbill purports to set forth "What employers and supervisors can SOT do" among their employees during the course of a union organizing campaign. I'i G.C. Exh. 26. D. Bullock's Report to Lindsey About the December 8 Union Meeting As found above, Gary Bullock, Elmer Fugitt, Garland Smith, Terry Tarr, and other salesmen attended the meeting on December 8, 1975,17 at which the Union initiated its campaign to organize Respondent's salesmen. On December 13, 2 days after Respondent received the Union's request for a meeting to negotiate a contract and a day before Merle Lindsey, Respondent's president, went to Florida, Bullock informed Lindsey that he, Fugitt, Smith, and Tarr, among other salesmen in Respondent's employ, whom he also named, had attended the union meeting on December 8. Bullock also informed Lindsey that after the meeting Fugitt, Smith, and other salesmen came to his home and sought to persuade him to support the Union. E. Credibility of Terry Tarr and Garland Smith Two complaints were issued against Respondent, the first on January 27, 1976, (January complaint) and the second on April 12, 1976, (April complaint).'" The January complaint alleges numerous infractions of Section 8(a)(I) of the Act by Respondent. These are set forth in 13 separate paragraphs, some asserting multiple violations. All, except those set forth in paragraph 5(n), which was added to the January complaint by way of amendment during the hearing, are attributed to the conduct of Merle Lindsey, Respondent's president. Paragraph 5(n) refers to conduct allegedly engaged in by Dan Morris, Respondent's general sales manager. The testimony of the witnesses called by the General Counsel to support the foregoing allegations was denied or contradicted by Lindsey and Morris. It is apparent, therefore, that the resolution of these credibility conflicts will weigh the balance in favor of, or against, the General Counsel. The General Counsel called two witnesses to give evidence concerning Respondent's alleged violations of Section 8(a)(1) of the Act. One was Terry Tarr; the other was Garland Smith. Tarr is a glib young man whose demeanor did not impress me as being that of a sincere witness. He also appeared to be willing to stretch or embellish the truth and to lie as to unimportant, as well as important, matters when it seemed to serve his purpose to do so. Illustrative of the former was Tarr's testimony regarding his experience as an automobile salesman. In this respect Tarr stated that he had 10 "years of experience ... in the automobile business." However, the application for employment 19 he submitted to Respondent on January 23, 1975, shows that before that date he had less than 4 years of experience in this field. Further regarding unimportant matters as to which Tarr was untruthful was the testimony he gave concerning a luncheon conference between Elmer Fugitt and Donald i7 All dates referred to in this section fall within 1975. i8 Both complaints were heard as a consolidated proceeding. In addition to dealing with matters related to Sec. 8(a) I ) of the Act, as discussed in the text, the January complaint is also concerned with the layoff of Elmer Fugitt and Garland Smith. The April complaint deals only with the discharge of Terry Tarr. "i Resp. Exh. 15. 481 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Strack, the Union's president. In this respect Tarr related that Fugitt and Strack had lunch together preceding the union meeting on December 8, 1975. Yet, Strack, who had no reason to deny having had lunch with Fugitt on that day, testified that he first met Fugitt during the evening of December 8, immediately before the meeting. Tarr was equally untruthful regarding important matters. Thus, despite documentary evidence20 showing that Tarr was instrumental in having a customer sign his wife's name on a bank installment contract, Tarr denied having done so, offering the lame excuse that he did not remember the transaction. Finally, in this catalog of instances in which Tarr gave false testimony, again regarding an important matter, is the story he told concerning his referral of a customer, Leah Shanks, who was sent to Respondent to buy a used automobile, to a used car lot operated by his father. 21 On direct examination Tarr stated that he did not do so until after he had shown Shanks two automobiles from Respon- dent's stock, neither of which satisfied her. On cross- examination, however, he admitted sending Shanks to his father's lot before showing her any cars Respondent had for sale. Also regarding the Shanks incident Tarr related that immediately following his discharge he went to Shanks' home; that while he was there her telephone rang; and that Shanks picked up the telephone and spoke to the caller in his presence. Although Tarr was 9 feet from the telephone over which Shanks talked and was not listening on an extension, he testified, incredibly in my opinion, that he identified the voice of the caller as being that of Kim Pierce, a salesman in Respondent's employ, and that he heard what Pierce said to Shanks. For the foregoing reasons I have not placed any reliance on Tarr's testimony respecting Respondent's alleged violations of Section 8(a)(1) of the Act unless it has been corroborated by credible evidence. For the same reasons I have not credited Tarr's testimony, uncorroborated by credible evidence, regarding any other allegations of the complaints except where it contains admissions against his interest. This being so and, as Tarr was the only witness called by the General Counsel to support the 8(aX)1) violations appearing in paragraphs 5(e), (f), (i), and (j) of the January complaint, those allegations will be dis- missed.22 As noted above, Garland Smith was the other witness called by the General Counsel to support allegations of the January complaint dealing with violations of Section 8(a)(1) of the Act by Respondent. Although, as stated on brief by Respondent, Smith "exhibit[ed] a hazy memory at various points in his testimony" regarding dates on which certain events occurred, he impressed me as being a truthful witness. Accordingly, I have credited his testimony 20 Resp. Exh. 13. 21 Respondent asserts that this was the principal reason for Tarr's discharge. "2 At the end of the General Counsel's case-in-chief, pars. 5(h), (k), and (m) were dismissed for insufficient proof. 21 Having thus decided to credit Smith and having concluded that Tarr was not a truthful witness, I will make no further reference to credibility except when what is involved does not fall within the periphery of my discussion here. In addition, from time to time testimonial differences may be mentioned in appropriate footnotes. in its entirety and discredited Respondent's witnesses whose testimony was at variance with his, not only with respect to the allegations of the complaints concerned with Respondent's violations of Section 8(a)(1), but others as well.23 V. THE ALLEGED UNFAIR LABOR PRACTICES A. Facts, Contentions, and Conclusions Concerning Respondent's Alleged Independent 8(a)(1) Violations The remaining allegations of the January complaint dealing with Respondent's alleged violations of Section 8(aXl) of the Act involve interrogation, threats, and soliciting and promising to rectify grievances. Despite the denials in Respondent's answer, the evidence supports these allegations. Thus, at a sales meeting conducted by Respondent on December 10, 1975,24 a day after the Union's handbill "Do You Know" 25 was posted on the wall of the used car sales office, Merle Lindsey, Respondent's president, informed Respondent's salesmen that Respondent could avail itself of a flat rate book listing higher repair costs for the used cars they sold than those appearing in the flat rate book then in use. 26 Lindsey also announced to the salesmen, as he testified, that he "wanted to find out what kind of problems they were having" and that he "would talk to them concerning such problems." In accordance with the foregoing announcement Lindsey spoke to Garland Smith, a salesman, after the December 10 sales meeting. Lindsey inquired as to whether Smith had any problems. Smith replied, as he related, that he thought that what Lindsey was "talking about is this union activity." Taking advantage of the opportunity thus given him by Smith, Lindsey asked Smith, as the latter further testified, "why [he] wanted a union"? 2 7 Smith's response, as he stated, was that "if [a union] could make [him] more money, [he] would be interested [in it]." Several days later, on or about December 15, 4 days after Respondent received the Union's letter stating that it represented a majority of Respondent's salesmen, Dan Morris, Respondent's general sales manager, spoke to Smith and two other salesmen. On this occasion, as Smith testified, Morris told the salesmen that "if [they] had any brains, [they] wouldn't mess with [the Union]" and that if [they] did get a union in [respondent] would cut inventory in half and also cut the salesmen in half." 28 At first blush, the question put to Smith by Lindsey as to his reason for "wanting a union" might be deemed to have been uncoercive and, hence, not violative of Section 8(a)(1) 24 All dates referred to in this section fall within 1975. 25 G.C. Exh. 40. 26 Flat rate books in use in automobile repair shops set forth the cost of particular repairs. In computing its profit on the sale of a used car Respondent adds to the amount it pays for the vehicle reconditioning expenses, including repair costs listed in a flat rate book. 27 Lindsey denied asking Smith this question. 28 Morris admitted the conversation, but denied making the statements attributed to him by Smith. 482 MERLE LINDSEY CHEVROLET of the Act. However, the inquiry was preceded by Lindsey's threat to reduce the salesmen's earnings29 and followed by Morris' threat that upon the advent of the Union Respondent would halve its inventory and dis- charge half its salesmen. These threats, being inherently coercive and violative of Section 8(aXI) of the Act, imparted a coercive nature to Smith's interrogation by Lindsey. Federal Stainless Sink Div. of Unarco Industries, Inc., 197 NLRB 489, 495 (1972). As noted above, the January complaint alleges that in addition to violating Section 8(a)(1) of the Act by interrogating and threatening employees Respondent also violated Section 8(aXl) by soliciting and promising to rectify grievances. Lindsey's statement to Respondent's salesmen that he wanted to ascertain, and talk to them about, their "problems," made a day after the posting of the Union's "Do You Know" handbill on the wall of Respondent's used car sales office, thus indicating the Union's interest in organizing Respondent's salesmen, constituted in my judgment a solicitation of grievances coupled with an implied promise to rectify them. This combination of circumstances is violative of Section 8(a)(1) of the Act. Uarco Incorporated, 216 NLRB 1, 2 (1974). Especially is this so in view of the fact that the evidence does not disclose that officials of Respondent had made similar statements in the past. Reliance Electric Company, Madison Plant Mechanical Drives Division, 191 NLRB 44, 46 (1971), enfd. 457 F.2d 503 (C.A. 6, 1972). Accordingly, I conclude that Respondent violated Section 8(a)(I) of the Act by interrogating and threatening employees and by soliciting and promising to rectify their grievances. B. Facts, Contentions, and Conclusions Concerning Respondent's Alleged 8(a)(3) and (1) Violations I. Smith and Fugitt Garland Smith and Elmer Fugitt were hired by Respon- dent as automobile salesmen, respectively, on August 4 and September 22, 1975.30 Fred Bolton, another salesman, was hired on November 3. Fugitt was laid off on December 10 and Smith on January 5, 1976. As found earlier, Fugitt and Smith attended, and signed cards during, the union meeting on December 8. On December 9 Fugitt posted a copy of the Union's "Do You Know" handbill3' on the wall of Respondent's used car sales office. Dan Morris, Respondent's general sales manager, was in that office at the time, but not in the immediate area of the wall on which Fugitt posted the handbill. Also on December 9 Fugitt distributed union literature he had received at the union meeting the previous day to several salesmen in Respondent's used car sales office and 2" Inasmuch as the commission received by a salesman for selling a used automobile consists of a percentage of Respondent's profit on the car (G.C. Exhs. 16 and 17). if Respondent's profit is reduced by computing the cost of repairing and reconditioning the automobile on the basis of a flat rate book listing higher repair costs than the one then in use, the salesman's commission is correspondingly reduced. :"' Unless otherwise noted, all dates hereinafter mentioned in this section fall within 1975. :" G.(C. Exh. 40. in its new car showroom and spoke to them about signing union cards. Morris was in the new car showroom while Fugitt was doing so. On the next day, December 10, without any previous information to him that such action was contemplated, Fugitt was laid off by Merle Lindsey, Respondent's president. In laying Fugitt off Lindsey told him, as the latter testified, that Respondent's "used car sales had been down for December." In April 1976 Fugitt came to Respondent's premises to inquire about commissions he thought were still due him. While Fugitt was discussing this matter with a clerk in Respondent's office, Brad Razor, Respondent's new car sales manager, ordered him to leave. Upon Fugitt's refusal to do so immediately, Razor took his arm and walked with him to the showroom door. Criminal proceedings later brought against Razor by Fugitt growing out of this incident resulted in Razor's acquittal. In the same month, April 1976, Fugitt met by chance, and spoke with, Dale Tyte, district manager for the Chevrolet Motor Division of General Motors Corporation. 32 During their conversation Fugitt stated to Tyte, as Tyte related, that "when [he got] done with Lindsey he will no longer be your dealer here." Like Fugitt, Smith, on December 9, talked about the Union to several salesmen on both sides of Respondent's premises and gave them union cards. On December 13, as earlier found, Gary Bullock, a salesman in Respondent's employ who was not in favor of the Union, informed Merle Lindsey, Respondent's president, that Smith had attended the union meeting on December 8 and that after the meeting Smith had come to his house to persuade him to join the Union. On December 14, as already noted, Lindsey left for Florida and did not return until December 29. On December 24, during Lindsey's absence, Smith started his vacation. On January 5, 1976, immediately upon returning from his vacation and without earlier notice to Respon- dent's salesmen that there would be additional layoffs following Fugitt's, Smith was laid off by Lindsey. In laying Smith off Lindsey told Smith that he was doing so because "business had been slow and four men had not made their draw that month".33 Smith protested his layoff and said that "before [he] went on vacation [he] had already made [his] draw." Answering, Lindsey stated that in laying Smith off he was giving other salesmen, who had been with Respondent a longer period of time than Smith had, "a bigger piece of the pie." At this point in their conversation Smith adverted to the fact that Bolton had been hired as a salesman after he had been and asked "why Bolton was still working and [he] was laid off." Lindsey a2 It will be remembered that Respondent deals in Chevrolet passenger automobiles and trucks. 1:' Respondent's salesmen receive what is known as a "draw" against commission. At the beginning of each year Respondent issues a sales policy statement to its salesmen (G.C. Exhs. 16 and 17) in which the) are informed that "any salesman who does not make enough commissions to handle at least his draw for an) given two month period in a row . . . will be subject to an indefinite lay off." 483 DECISIONS OF NATIONAL LABOR RELATIONS BOARD responded that Bolton "was on the new car side and [he] was on the used."3 4 As already noted, the complaint alleges that by laying off Fugitt and Smith Respondent violated Section 8(a)(3) of the Act. Denying this, Respondent contends that the layoffs were motivated by economic necessity-a reduction in its used car business, and that Fugitt and Smith were selected for layoff because they were the least senior used car salesmen in its employ. Respondent further contends that the evidence does not establish that it had knowledge of union activity by Fugitt and Smith before their layoff. I reject these contentions. It is well settled that "knowledge such as Respondent claims it [was not shown to] have is a necessary ingredient of a violation of Section 8(a)(3) of the Act and must be shown to have existed before an unfair labor practice within the meaning of that section can be said to have occurred." 35 It is equally well settled that such knowledge, as well as motivation for discharge or layoff, "may be established by circumstantial as well as by direct evi- dence". Sam Tanksley Trucking, Inc., 198 NLRB 312, 316 (1972), enfd. 83 LRRM 2409, 71 LC 1 13,762 (C.A. 8, 1973). In Fugitt's case Respondent's knowledge of his union activity can be inferred from the suddenness of his layoff following his engagement in union activity. Thus, Fugitt attended the union meeting on December 8 and there signed a union card. On December 9, on Respondent's premises, he spoke about the Union to Respondent's salesmen, distributed union literature to them, and posted the Union's handbill, "Do You Know," on the wall of the used car sales office. On December 10 he was laid off. Cf. in this connection Tanksley, supra at 317. In Smith's case there is in the record direct evidence that Respondent had knowledge of his union activity before he was laid off. This is found in the report made to Lindsey, Respondent's president, by Bullock, a salesman who had attended the union meeting on December 8, that Smith had been present at that meeting and had come to his home after the meeting to persuade him to join the Union. I find, therefore, that Respondent had knowledge, before their layoff, that Fugitt and Smith had engaged in union activity. The next matter for consideration regarding the layoff of Fugitt and Smith is Respondent's claim that its sole motivation for laying them off was the reduction in its used car business. On brief Respondent argues, concerning this, that "Fugitt and Smith were laid off because business at the dealership, especially used car business, was indisput- ably down . . . In fact, December 1975 and December 1974 were the worst 2 months for used cars in the history of the Company." It would be expected that to bolster such an argument Respondent would have offered its business records in evidence. However, without explanation, Respondent did not do this. Its failure to do so leads me to believe that its :1 The quotations appeanng in the text are taken from Smith's testimony. Lindsey's version of his conversation with Smith at the time of Smith's layoff differs from Smith's in that Lindsey made no reference to Bolton. 11 The Pembek Oil Corporation, 165 NLRB 367, 373 (1967), enfd. 404 F.2d 105 (C.A. 2, 1968). :Is "A litigant's unexplained failure to offer material evidence warrants records would not have borne out its claim in this respect.36 Finally, as earlier noted, Respondent contends that it selected Fugitt and Smith for layoff because they were the least senior used car salesmen in its employ. This contention is based on Respondent's designation of its salesmen as either new or used car salesmen. I have found, however, that these designations are arbitrary misnomers having no factual basis. I have also found, in this regard, that Respondent employs only one class of salesmen and that they sell both new and used cars. In view of this it cannot be said that at the time of their layoff Fugitt and Smith were the most junior employees on Respondent's sales staff. They were both senior to Bolton, who was hired as a salesman on November 3, 1975, whereas Fugitt was hired on September 22, 1975, and Smith on August 4, 1975. "[T]he explanation of the [layoffs] offered by the Respondent [thus] failling] to stand under scrutiny," I find that it is false. This being the case, an inference can be drawn which is "unfavorable to respondent." N.L.R.B. v. Thomas W. Dant, et al. co-partners d/b/a Dant & Russell, Ltd. 207 F.2d 165, 167 (C.A. 9, 1953). The extent of the unfavorable inference which can be drawn in such a situation was spelled out in Shattuck Denn Mining Corporation (Iron King Branch) v. N.L.R.B. 362 F.2d 466, 470 (C.A. 9, 1966). There it was explicitly stated: If [the trier of fact] finds that the stated motive for [a layoff] is false, he certainly can infer that there is another motive. More than that, he can infer that the motive is one that the employer desires to conceal - an unlawful motive - at least where. . . the surrounding facts tend to reinforce that inference.37 Having found that Respondent's "stated motive" for laying off Fugitt and Smith "is false," I, as "the trier of fact," draw the inference that the actual motive for the layoffs was to discourage membership in the Union. One need not search far to find "surrounding facts tend[ing] to reinforce that inference." Regarding Fugitt, it consists of the suddenness of his layoff, coming 2 days after he started to engage in union activity. "The abruptness of a [layoff] and its timing are persuasive evidence as to motivation." N.LR.B. v. Montgomery Ward & Co., Inc., 242 F.2d 497, 502 (C.A. 2, 1957). Smith's layoff was less sudden. It was, nevertheless, equally abrupt. It will be remembered in this regard that on December 13, a day before Lindsey, Respondent's president, went to Florida, he was informed by Bullock that Smith had attended the union meeting on December 8 and had come to his home after the meeting to persuade him to join the Union. Had Lindsey not been busy preparing to go to Florida the next day it is quite likely, in the circumstances, that he would have laid Smith off on that very day. the inference that, if he adduced the evidence, it would not support his position." Bechtel Corporation, 141 NLRB 844. 852 (1963). 37 The principle thus enunciated in Shattuck Denn was specifically adopted by the Board in Atlantic Metal Products, Inc., 161 NLRB 919, 922 (1966). 484 MERLE LINDSEY CHEVROLET On December 24, while Lindsey was still in Florida, Smith began his vacation. Immediately upon its end and Smith's return to work on January 5, 1976, Lindsey laid Smith off. As in Fugitt's case, the abruptness and timing of Smith's layoff also furnishes persuasive evidence of its unlawful motivation. Accordingly, I conclude that by laying off Fugitt and Smith Respondent violated Section 8(aX3) and (1) of the Act. 2. Tarr Terry Tarr was employed by Respondent as a salesman from May 1972 until October 1974 and again from January 1975 until his discharge on February 28, 1976. Like Fugitt and Smith, Tarr attended union meetings, signed a union card, and talked about the Union to Respondent's salesmen. Respondent does not deny having had knowl- edge of Tarr's union activity before his discharge. Tarr's first period of employment with Respondent was terminated by his resignation following a fight with his father-in-law on Respondent's premises. Notwithstanding this, Tarr's stepfather, who operates a used car lot and to whom Respondent wholesales automobiles,3 8 prevailed upon Merle Lindsey, Respondent's president, to rehire Tarr. During Tarr's last period of employment by Respondent he was not a model salesman. Among other things, he was frequently late in arriving at Respondent's daily sales meetings and with apparent equal frequency he absented himself from them and from breakfast meetings sponsored by banks with which Respondent does business. He failed to wait on customers properly and promptly. He came to work with the odor of alcohol on his breath, resulting in complaints to Lindsey by customers. He persuaded a customer to sign his wife's name to a bank installment contract. He failed to pay a debt to a jeweler who was a customer of Respondent, thereby embarrassing Respon- dent. In addition, as Lindsey testified, Tarr "did not conform to company policy in many areas." Tarr's lack of comformity prompted Respondent's officials to talk to Tart to "attempt," as Lindsey further testified, "to get him to improve his work habits [, but they] were unsuccessful." The principal cause of Tarr's discharge on February 28, 1976, and which was, as Lindsey related, "the straw that broke the camel's back" was Tarr's referral of a lady, Leah Shanks, who was sent to Respondent to buy a used car by a business acquaintance of Lindsey, to his stepfather's used car lot.3 9 The General Counsel suggests that the reasons assigned by Respondent for Tarr's discharge were pretexts seized upon by Respondent to rid itself of an employee because he was a protagonist of the Union. I do not agree. :'x As explained by Kenneth Maynard. Respondent's used car sales manager at all material times, a wholesale transaction "is a sale made by {one automobile dealer] to [another ] dealer." :"! Lindsey. Respondent's president, testified that Respondent also took into account in discharging Tarr his "poor work performance land] conduct." "' See. in this regard. Vermeer Manufacluring Company,, 187 NLRB 888, 892 (1971). 11 A.L R.. ..4. 4. lcGahev Sr. el al. d b a Columbus Mfarble Works, 233 F.2d 406. 413 (.A. 5. 1956). Had Respondent been looking for a pretext to mask Tarr's discharge for supporting the Union it would not have had to wait until the Shanks matter came to light. If an excuse were in fact being sought by Respondent to remove Tarr from its sales staff because he was an adherent of the Union it could have been found long before then. Instead of merely talking to Tarr in an effort to improve his work habits, Tarr could have been discharged for any of the items set forth earlier in the compendium of Tarr's faults as an employee, or for some other reason which could have been trumped up by Respondent. Respondent not having taken advantage of any of these as an excuse to discharge Tarr as soon as his union activity came to its attention, as was the case regarding Fugitt and Smith, I cannot accept the General Counsel's pretext suggestion. 40 "An unlawful purpose is not lightly to be inferred. In the choice between lawful and unlawful motive, the record taken as a whole must present a substantial basis of believable evidence pointing toward the unlawful one."41 Upon careful analysis, I do not find such a substantial basis to be present in connection with Tarr's discharge. Accordingly, I conclude that Respondent did not violate Section 8(a)(1) or (3) of the Act by discharging Tarr. The complaint issued on April 12, 1976, will, therefore, be dismissed. Vl. THE OBJECTIONS TO THE ELECTION 42 The Board has held that the critical period within which objectionable conduct will be deemed to affect the results of an election starts on the date on which the representa- tion petition is filed. Goodyear Tire and Rubber Company, 138 NLRB 453, 454 (1962). It has also been held that "conduct violative of Section 8(a)(1) is, afortiori, conduct which interferes with the exercise of a free and untram- meled choice in an election." Dal-Tex Optical Conpany, Inc., 137 NLRB 1782, 1786(1962). The petition pursuant to which the election was held was filed by the Union on December 9, 1975. Respondent's violations of Section 8(a)(1) of the Act began, as I have found, with Respondent's threat on December 10, 1975, to reduce the earnings of its salesmen and ended with Garland Smith's discharge on January 5, 1976. This being the case, I conclude that the election held on March 2, 1976, must be set aside.43 Accordingly, my order will provide that that election be set aside and that a new election be conducted. VII. THE EFFECT OF RESPONDENT'S UNFAIR LABOR PRACTICES UPON COMMERCE Respondent's unfair labor practices occurring in connec- tion with its operations set forth in section 1, above, have a close, intimate, and substantial relationship to trade, 42 As noted at the outset of this Decision, the Regional Director "consolidated for the purpose of heanng, ruling and decision" the Union's objections to the representation election conducted on March 2, 1976, with the complaints issued in this proceeding. 43 Implicit in this conclusion are rulings sustaining the Union's objections to the election insofar as they track the allegations of the complaints found to have been supported by the evidence. In view of this, it is unnecessary to rule on the Union's other objections. 485 DECISIONS OF NATIONAL LABOR RELATIONS BOARD traffic, and commerce among the several States and tend to lead to disputes burdening and obstructing commerce and the free flow of commerce. VIII. THE REMEDY Having found that Respondent engaged in unfair labor practices within the meaning of Section 8(a)(l) and (3) of the Act, my Order will require Respondent to cease and desist therefrom and to take such affirmative action as will effectuate the policies of the Act. Concerning the affirmative action to be required of Respondent to remedy its unfair labor practices, Respon- dent argues that, even if Elmer Fugitt's layoff is found to have been violative of the Act, his reinstatement should not be ordered because of his altercation with Brad Razor, Respondent's new car sales manager, and his statement to Dale Tyte, district manager for the Chevrolet Motor Division of General Motors Corporation, that "when [he got] done with Lindsey he will no longer be your dealer here." These, Respondent contends, render Fugitt unfit for reinstatement. I do not agree. "Activities which .... warrant withholding the remedi- al provisions of the Act [include] such conduct as violence or threats of violence, seizure of property, attempts at unilateral dictation of terms of employment or other usurpation of working time, interference between an employer and its customers while continuing to work, engaging in harassing tactics [and] intermittent work stoppages to win unstated ends ... " Boeing Airplane Company, Seattle Division 110 NLRB 147, 150 (1954). 44 Neither Fugitt's altercation with Razor, nor his statement to Tyte falls within the foregoing rule. Accordingly, by way of affirmative action, Respondent will be required to offer immediate and full reinstatement to Fugitt and Garland Smith and to make them whole for any losses they may have suffered by reason of their layoff. Any backpay found to be due them shall be computed in accordance with the formula set forth in F. W. Woolworth Company, 90 NLRB 289 (1950), and shall include interest in the amount and manner provided for in Isis Plumbing & Heating Co., 138 NLRB 716 (1962). Upon the basis of the foregoing findings of fact, and upon the entire record in this case, I make the following: CONCLUSIONS OF LAW 1. Respondent is an employer within the meaning of Section 2(2) of the Act and is engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. By the following conduct Respondent has engaged in, and is engaging in, unfair labor practices within the meaning of Section 8(a)(l) of the Act. (a) Coercively interrogating an employee concerning his union sentiments. I 44 Upon review of Boeing Airplane Company, 238 F.2d 188 (C.A. 9, 1956) the court of appeals did not disturb the Board's rule, as set forth in the text, for determining the circumstances warranting the withholding of the remedial provisions of the Act. The court of appeals merely disagreed with its application to the facts in the case before it. 4' In the event no exceptions are filed as provided by Sec. 102.46 of the (b) Threatening employees with loss of benefits if they supported the Union. (c) Threatening to discharge employees for supporting the Union. (d) Soliciting grievances from employees and promising to remedy them in order to induce employees to refrain from supporting the Union. 4. By laying off Elmer Fugitt and Garland Smith, thereby discouraging membership in the Union, Respon- dent has engaged in and is engaging in, unfair labor practices within the meaning of Section 8(a)(3) and (1) of the Act. 5. Respondent did not engage in unfair labor practices within the meaning of Section 8(a)(3) or (1) of the Act by discharging Terry Tarr. 6. The unfair labor practices engaged in by Respon- dent, as set forth in Conclusions of Law 3 and 4, above, affect commerce within the meaning of Section 2(6) and (7) of the Act. Upon the foregoing findings of fact, conclusions of law, and upon the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following: ORDER 45 The Respondent, Merle Lindsey Chevrolet, Inc., Muncie, Indiana, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Coercively interrogating employees concerning their attitude toward, relationship to, knowledge of, activities on behalf of, or regarding any other matter relating to Indiana Joint Board, Retail, Wholesale, and Department Store Union, AFL-CIO, or any other labor organization. (b) Threatening employees with discharge, loss of benefits, or any other form of reprisal, or effectuating any such threats, for joining, assisting, or in any manner supporting Indiana Joint Board, Retail, Wholesale, and Department Store Union, AFL-CIO, or any other labor organization. (c) Soliciting grievances from employees and explicitly or impliedly promising to remedy or adjust them in order to interfere with the right of employees freely to choose a bargaining representative, or to induce employees to reject, or to refrain from activities in support of, Indiana Joint Board, Retail, Wholesale, and Department Store Union, AFL-CIO, or any other labor organization. (d) Discouraging membership in Indiana Joint Board, Retail, Wholesale, and Department Store Union, AFL- CIO, or any other labor organization, by discharging or laying off employees, or by discriminating in any other manner against employees in regard to hire or tenure of employment or any term or condition of employment. (e) In any other manner interfering with, restraining, or coercing employees in the exercise of their right to self- organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own Rules and Regulations of the National Labor Relations Board, the findings. conclusions, and 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. 486 MERLE LINDSEY CHEVROLET choosing, or to engage in other concerted activities for the purpose of collective-bargaining or other mutual aid or protection as guaranteed in Section 7 of the National Labor Relations Act, as amended, or to refrain from any or all such activities, except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment in conformity with Section 8(aX3) of the Act. 2. Take the following affirmative action which, it is found, will effectuate the policies of the Act: (a) Offer to Elmer Fugitt and Garland Smith immediate and full reinstatement to their former jobs, without prejudice to their seniority or other rights or privileges, and make them whole, in the manner set forth in the section of this Decision entitled "The Remedy," for any loss of earnings they may have suffered by reason of their unlawful layoff. (b) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (c) Post at its premises in Muncie, Indiana, copies of the attached notice marked "Appendix." 46 Copies of said notice, on forms provided by the Regional Director for 46 In the event that the Board's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant Region 25, after being duly signed by Respondent's representative, shall be posted by Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, includ- ing all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director for Region 25, in writing, within 20 days from the date of this Order, what steps have been taken to comply herewith. IT IS FURTHER ORDERED that the representation election conducted on March 2, 1976, in Case 25-RC-6173 be, and the same hereby is, set aside and that Case 25-RC-6173 be, and the same hereby is, remanded to the Regional Director for Region 25 of the National Labor Relations Board for the purpose of conducting a new representation election at such time as he deems that circumstances will permit the free choice of a collective-bargaining representative by the employees concerned. IT IS FURTHER ORDERED that paragraphs 5(e), (f), (i), and (j) of the complaint issued on January 27, 1976, be, and the same hereby are, dismissed. IT IS FURTHER ORDERED that the complaint issued on April 12, 1976, be and the same hereby is, dismissed. to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 487