Mexia Textile Mills

In the Matter Of MEXIA TEXTILE MILLS and TEXTILE WORKERS ORGANIZING COMMITTEE Case No. C-794.-Decided March 16, 1930 Textile Industry-Interference, Restraint, and Coercion : anti-union state- ments ; speech to persuade employees to refrain from joining union and to form a union of their own ; surveillance of union meeting ; attempt to intimidate union organizer-Unit Appropriate for Collective Bargaining : employees of the re- spondent, excluding administrative, supervisory, and office workers ; agreement as to-Representatives : majority established through consent election-Collec- tive Bargaining : charges of failure to bargain collectively dismissed -Discrimni- nation : discharge : for union membership and activity ; to discourage member- ship in the union ; charges of, dismissed as to two, sustained as to four em- ployees-Reinstatement Ordered-Back pay: awarded to discharged employees. Mr. L. N. D. Wells, Jr., for the Board. Mr. W. W. Mason, of Mexia, Tex., for the respondent. Mr. Raymond J. Compton, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Charges and amended charges having been filed by Textile Work- ers Organizing Committee, herein called the Union, the National Labor Relations Board, herein called the Board, by Edwin A. Elliott, Regional Director for the Sixteenth Region (Fort Worth, Texas), issued its complaint dated April 6, 1938, against Mexia Textile Mills, Mexia, Texas, herein called the respondent, alleging that the re- spondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the complaint, ac- companied by notice of hearing, were duly served upon the respond- ent and the Union. In respect of the unfair labor practices, the complaint alleged in substance that the respondent (1) discharged W. H. Sims, Osborne Kennedy, Mrs. W. H. Sims, Mrs. Osborne Kennedy, Frank Murdock, and Buster Hughes, because they and each of them joined and as- sisted the Union, thereby discriminating in regard to the hire and 11 N. L. R. B., No. 106. 1167 1168 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tenure of their employment and discouraging membership in the Union; (2) refused to bargain collectively with the Union as the ex- clusive representative of all the respondent's employees, except those engaged in executive, supervisory, or office capacity, said employees constituting an appropriate bargaining unit; and that by these and other specified acts and conduct the respondent interfered with, re- strained, and coerced its employees in the exercise of their right to self-organization and to engage in concerted activities for their mutual aid and protection as guaranteed in Section 7 of the Act. On April 15, 1938, the respondent filed its answer to the complaint, admitting the allegations concerning the nature of its business, deny- ing the alleged unfair labor practices, and stating affirmatively that the discharges had been for cause. Pursuant to notice, a hearing was held in Mexia, Texas, from May 2 to 5, 1938, inclusive, before Peter F. Ward, the Trial Examiner duly designated by the Board. The Board and the respondent were represented by counsel, participated in the hearing, and were af- forded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing upon the issues. During the course of the hearing, the Trial Examiner granted a motion by counsel for the Board to amend the complaint with respect to certain alleged dates. At the close of the hearing, the Trial Examiner noti- fied the parties to the proceeding that they were entitled within 10 days from the receipt of the Intermediate Report to request oral argument before the Board in Washington, D. C. On July 11, 1938, the Trial Examiner filed an Intermediate Re- port, copies of which were duly served upon all parties. He found that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the Act. He accordingly recommended that the respondent cease and desist from engaging in its unfair labor practices; that it reinstate to their former positions, with back pay, the six employees found by him to have been discriminatorily discharged by the respondent; and that it no- tify the Union in writing of its willingness to bargain collectively. Thereafter, the respondent filed exceptions to the Intermediate Re- port, and requested opportunity for oral argument before the Board. Prior to the granting of such request, the respondent filed a motion to reopen the proceedings herein for the purpose of adducing addi- tional evidence. The Board denied this motion on August 20, 1938. Pursuant to notice served upon the respondent and the Union, oral argument on the exceptions to the Intermediate Report and on the record was had before the Board in Washington, D. C., on October 12, 1938. The respondent was represented by counsel and presented its argument. The Union did not appear. MEXICO TEXTILE MILLS ET AL. 1169 The Board has reviewed the rulings of the Trial Examiner on motions and objections to the admission of evidence and finds that no prejudicial errors were committed. The rulings are hereby af- firmed. The Board has also considered the exceptions of the re- spondent to the Intermediate Report and except in so far as they are consistent with the findings, conclusions, and Order set forth below, finds them to be without merit. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT The respondent, a Texas corporation, has its office and principal place of business in Mexia, Texas, where it is engaged in the manu- facture, sale, and distribution of cotton ducking, drill, and other cotton materials. The principal raw material used in the manu- facture of these articles is cotton. In 1937 the respondent used cotton valued at $331,168.69, approximately 10 per cent of which was purchased and transported from outside the State of Texas. During the same year its total sales of finished products were in excess of $600,000, and approximately 50 per cent of such products were shipped by railroad and truck to points in States other than the State of Texas. The respondent employs approximately 210 employees in the operation of its Mexia plant. II. THE ORGANIZATION INVOLVED Textile Workers Organizing Committee is, a labor organization affiliated with the Committee for Industrial Organization, herein called the C. I. 0., admitting to its membership all production em- ployees of the respondent, excluding supervisory and clerical per- sonnel. III. THE UNFAIR LABOR PRACTICES A. Interference, restraint, and coercion During the month of August and. the early part of September 1937, Howard Lee, organizer for the Union, undertook the organiza- tion of employees in the respondent's plant. On or about Septem- ber 1, 1937, Plant Manager J. G. Coman shut down the plant and ordered the overseers to instruct the employees to assemble in the weave room. To the employees thus assembled he exhibited a union application card which he read aloud and discussed in detail, to- gether with some union literature which had been circulated as part of the union campaign. Coman told the employees that he felt they should have consulted with him before becoming members in any union; that they should be sure they understood the import of the application card before signing it; that it gave outsiders the 1170 DECISIONS OF NATIONAL LABOR RELATIONS BOARD right to "check off" on their pay in any amount in support of strikes in other districts, and that he would be forced to pay such "check off" to the Union for the support of strikes and organiza- tional activities in other localities. He discussed the union litera- ture that promised a 20-per cent increase in wages, a 40-hour week, and better living conditions, and told the assembled employees that the company could not raise wages or reduce hours because of com- petition; and pointed out that the respondent was endeavoring to give them as favorable living and working conditions as was pos- sible. He recommended a "dime company union" with small dues in preference to an outside union having a dollar per month dues. Coman further referred to the history of other mills in other States being forced to shut down, sell their machinery, and go out of busi- ness because of their inability to make a profit and at the same time comply with the requirements of union contracts. He went on to discuss the financial affairs of the respondent, stating that it had paid no dividends to stockholders, and could not therefore meet the proposed demands. This talk by Coman was clearly coercive and intimidatory, and was designed to interfere with and prevent the self-organization of the employees in a labor organization of their own choosing. It was an attempt to coerce the respondent's em- ployees to substitute for a union of their own choosing a "dime" or inside union preferred by the respondent, by discrediting the Union and by linking the possibility of a shut-down with the choice of the Union as the bargaining representative of the employees. During the organizing period of the Union further coercive state- ments were made to employees by Smith, plant superintendent, and Bradford, overseer of the carding room. On one occasion, Smith dis- cussed the Union with Wade Lunnas, an employee in the carding room, telling him : "You boys are fixing to play hell . . . furthermore, if you boys carried this C. I. 0., we can shut this mill down tighter than hell." Bradford also pointed out to Lunnas that the "Union wasn't worth one dime to anybody." Frank Murdock, a boiler-room em- ployee, testified that Bradford had urged the desirability of "some kind of a ten per [sic] cent union . . . just a mutual outfit among the hands," and on another occasion wanted him to write to "some place in Mississippi" to verify the fact that "some union went in and left them all on starvation and relief out there, and then quit them." When questioned as to his conversations with Murdock regarding the Union, Bradford testified that "We had some little hurrahs . . . he asked when I was going to sign up, and I asked him when he was go- ing to sign up, things like that." Neither Bradford nor Smith denied the foregoing conversations with Lunnas. We find that Bradford and Smith made the statements attributed to them by Lunnas and Murdock. MEXICO TEXTILE MILLS ET AL. 1171 On the evening of September 19, 1937,1 Smith and Bradford ad- mittedly were, and were seen by employees, sitting in their car diag- onally across the street from the W. B. A. Hall in Mexia, where a union meeting was in progress, remaining there 30 or 40 minutes prior to the adjournment of the meeting at approximately 9 o'clock. When the meeting was over, Lee, the union organizer, walked toward the Majestic Hotel where he was registered and which was but two blocks from the W. B. A. Hall. After talking with W. B. Abshur, one of respondent's employees who had attended the meeting, Smith and Bradford followed along after Lee, parking across the street from the hotel for a period of 4 or 5 minutes before entering it. The union members were aware that Smith and Bradford were spying on the meeting, and Osborne Kennedy, secretary-treasurer of the Union, tes- tified that when he emerged from the meeting hall, he was told by Abshur that Smith and Bradford had asked him if that was Lee who had come out of the hall ahead of the others, and that they), were going to follow Lee to his hotel. There had been rumors to the effect that the organizer might be "tarred and feathered" and "run out of town," and it was suggested that they had "better go up there and try to protect" Lee. Accompanied by Perk-ins,-president of the Union, and Sims, a member of the bargaining committee, Kennedy then proceeded to the hotel, followed by a considerable number of the union mem- bers, for the purpose of protecting Lee. When Smith and Bradford approached the entrance of the hotel they were met by the group of union members. Sims accosted Smith and Bradford and asked them what they were doing there and what they meant by following Lee. After replying that Sims had no right to question them as to what they were doing there or for whom they were looking, Smith and Bradford entered the hotel lobby. Prior to their entrance, Kennedy had gone upstairs to warn Lee that he had been followed and might be in danger of bodily harm. After leaving Lee in his room, Kennedy came down to the lobby and found Sims arguing with Smith and Bradford. Sims had followed them to the desk where they were talking to the hotel manager and continued to argue concerning the reason for their presence in the hotel. Sims objected to Smith keeping his hand in his hip pocket while talking to him and asked that he remove it. When Smith refused, Sims ad- mittedly was "mad" and "got hold" of Smith's hand. At this mo- ment, Kennedy appeared on the scene and the four men entered into a heated discussion, which was terminated by the threat of the man-:, ager to call the police. Both sides subsided, Smith and Bradford leaving shortly thereafter. 1 During the healing, the complaint was amended upon motion of counsel for the Board to correct the date from September 16, 1937, to September 19, 1937. 1172 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Lucas, the hotel manager, testified that he had never seen Smith and Bradford in the hotel before; and that he was informed at the time that they were "mill officials" who were "after" Lee. Both Smith and Bradford avowed that their only purpose in going to the hotel was to "go to the washroom," and denied any intention of seeing Lee. However, on cross-examination Smith replied to the question as to whether he had not thought of going to the washroom until after entering the hotel: "Maybe I had, and maybe I didn't." Lunnas, without contradiction, testified that Bradford told him at a later date that "Lots of people thought they [Smith and Bradford] were going up there, maybe, to carry the man for a buggy ride. They were not. They were going up there to have a friendy talk with him." It was also the undenied testimony of Buster Hughes, an employee, that on September 16, 1937, 3 days before the union meet- ing held on September 19, 1937, and 4 days before Lee and the bar- gaining committee of the Union presented their proposed contract to the respondent, Bradford told him that "the man that come in here and started any trouble like that, a union, ought to be tarred and feathered, and run out of town." On the same occasion, Brad- ford further stated, in referring to Lee, that "I don't think he will be here Monday morning to present no contract." From the foregoing facts, we are convinced that Smith and Brad- ford went to the Majestic Hotel for the express purpose of intimidating Lee, to the end that he would be induced to leave the community and abandon the promotion and organization of the Union. It is evident that Smith's and Bradford's conduct in spying on the union meeting and afterwards following the union organizer to his hotel, under the circumstances set forth above, afforded a reasonable basis for the belief by the union members that their concerted action in proceeding to the hotel was necessary to protect Lee from whatever intimidation and coercion Smith and Bradford might exercise. It is clear that the conduct of Smith and Bradford was designed to coerce, restrain,, and interfere with the employees in the exercise of their right to self- organization. We find that by the afore-mentioned acts the respondent has inter- fered with, restrained, and coerced its employees in the exercise of the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through respresentatives of their own choosing, and to engage in concerted activities for the purpose of collective bar- gaining, as guaranteed in Section 7 of the Act. B. The discharges W. H. Sims and Osborne Kennedy were both employed on the night shift in the weaving room at the time of their discharge. They had joined the Union on August 25,1937, shortly after which time Kennedy I MEXICO TEXTILE MILLS ET AL. 1173 was-elected to the position of secretary-treasurer, and Sims became representative for the weaving room on the union bargaining com- mittee. When Kennedy and Sims reported for work on the evening of September 20, 1937,2 they were each advised by H. J. Tyree, their overseer, that Manager Coman was having them discharged because of their participation in the trouble at the hotel the night before, dis- cussed above in Section III A. Tyree told Kennedy : "The old man is having you and Bill fired for the ruckus last night." Sims, who had been relieved from duty because of a sore arm, had started away from the plant when Tyree called him back and advised him that "they were going to have to let me and Kennedy out." Both men were paid off and discharged at that time. Although the respondent in its answer and during the hearing alleged that one of the reasons for their discharge was "drinking" both on and off the job, the record clearly supports the finding that the immediate cause of their discharge was their altercation with Smith and Bradford in the Majestic Hotel. Coman, who specifically ordered their discharge, testified that such discharge was "because of an attack on Mr. Smith and Mr. Bradford," and "For that reason only; at that time that was the only reason, ..." We have previously found that the circumstances surrounding the hotel incident support the conclusion that Sims, Kennedy, and the other union members, were motivated by a reasonable conviction that Lee was in danger of personal harm or intimidation. Conse- quently, it follows that Sims and Kennedy's participation in pro- tecting the interest of the Union by taking care that no harm befell its organizer, was legitimate concerted activity for the mutual aid and protection of the members of the Union. It was only natural that they should exert every effort to see that a flagrant unfair labor practice was not perpetrated under their very eyes. The respondent admits that it was for this very activity in behalf of the Union that they were discharged, but contends that the hostility displayed by Sims and Kennedy in their altercation with Smith and Bradford justified their discharge. We are convinced, however, that it was not this display of hostility which motivated the discharge of Sims and Kennedy, but the fact that they were the aggressive leaders of concerted union activity which prevented the respondent from suc- ceeding in its efforts to defeat organization of the Union. Even assuming that it was solely the hostile attitude of Sims and Kennedy which actuated the respondent in discharging Sims and Kennedy, the technical assault which occurred was one likely to occur under similar circumstances and not of sufficient gravity to separate it from the concerted activity of the union members as a whole. Further, 2 During the hearing, the complaint was amended upon motion of counsel for the Board to correct the date from September 17, 1937, to September 20, 1937. 164275-39-vol. xi 75 1174 DECISIONS OF NATIONAL LABOR RELATIONS BOARD it must be emphasized that if the unlawful conduct of Smith and Bradford in expressing the respondent's antagonism toward the Union, spying upon the union meeting, and following the union organizer to his hotel, had not directly provoked the incident, the reason asserted for the discharge of Sims and Kennedy would not have existed. We must conclude, therefore, that the respondent has discriminated in regard to the hire and tenure of employment of Sims and Kennedy because of their activity in behalf of the Union, thereby discouraging membership in a labor organization. At the time of their discharge Kennedy operated a set of looms on a piece-work basis, and Sims was employed as a warp man earning 25.62 cents an hour for a 10-hour day. Both Kennedy and Sims were unemployed at the time of the hearing. Mrs. W. H. Siins and Mrs. Osborne Kennedy are wives of the afore-mentioned W. H. Sims and Osborne Kennedy. Prior to their discharge, Mrs. Kennedy was employed by the respondent as a weaver, and Mrs. Sims as a spooler and warper tender. On Septem- ber 20,1937 ,3 Mrs. Kennedy received a week's notice of discharge, and on September 21, 1937,4 Mrs. Sims received a similar notice. How- ever, both quit work on September 24, 1937, before the allotted time had expired, for the given reason that they were ill. When advised of her discharge, Mrs. Kennedy was told by Overseer Tyree that "Mr. Smith said your work wouldn't be satisfactory any more after- with your husband out." Marks, overseer of the spinning and warping department, likewise told Mrs. Sims : "May, the old man told me to give you a week's notice," and when asked the reason, replied, "Well, I haven't got anything against you or your work, just because your husband was let out." Coman, plant manager, tes- tified as follows: "When her husband was discharged, I didn't feel that he was a desirable employee to keep around there, and as he was living in one of our houses with his wife, I gave his wife a week's notice . . . that we would not need her after a week." When questioned as to the reason for Mrs. Sims' discharge, Coman replied : "Well, the reason that I have just give for Mrs. Kennedy applies to her." No contention was made during the hearing, nor does the record show, that either Mrs. Sims or Mrs. Kennedy were discharged for any other reason than that their husbands had been discharged, and that the respondent did not desire either Sims or Kennedy to continue to live in the respondent's houses, which they would do so long as their wives remained in its employ. Where the respondent 8 During the hearing, the complaint was amended upon motion of counsel for the Board to correct the date to read as stated above. 4 See footnote 3. MEXICO TEXTILE MILLS ET AL. 1175 has thus made union membership and activities a bar to the employ- ment not only of a union member himself but of members of hays family as well, we have held such action was but a means of making more effective the discouragement of union affiliation.5 Although the immediate cause of Mrs. Sims and Mrs. Kennedy's discharge was the fact that their husbands had been discharged, the antecedent cause was the respondent's discrimination against union members in regard to hire and tenure of employment with intent to discourage membership in the Union. Mrs. Kennedy was a loom operator at the time of her discharge, earning an average of from $20 to $22 for every 2 weeks' work. Mrs. Sims earned 28 cents an hour as a warper tender, and worked from 8 to 10 hours a day. Frank F. Murdock was first employed by respondent in 1933 as a weaver, but in 1934 assumed the duties of fireman and watchman which he performed -until discharged on November 17, 1937. Mur- dock joined the Union in the latter part of August 1937 and was elected to represent the power plant and yard employees on the union bargaining committee. In addition to his duties as fireman and watchman, Murdock was in charge of the supply room. There was and had been a rule against smoking in the supply room, which had been ignored by the employees for some time. Approximately 2 or 3 weeks prior to Murdock's discharge, the rule was again enforced and he was ordered to prevent anyone from smoking in the supply room under penalty of discharge if he failed to do so. However, smoking was permitted in the boiler room, which was but a short dis- tance from the steps leading down from out-of-doors to the supply room under the mill proper. On November 16, 1937, Travis Ward, a mill employee, called Mur- dock from the boiler room to permit him to enter the supply room. En route from the boiler room to the supply room, Murdock, who was smoking a cigar, passed A. N. Brannon, foreman of the engine and boiler rooms. Brannon was walking toward the engine room accom- panied by Alex Bronson, an engine-room employee, and C. T. Carter, a fireman in the boiler room. Upon observing that Murdock was smoking, Brannon turned and followed him to the head of the stair- way leading to the supply room where he stood for a moment before returning to the engine room. When Murdock reported for work the following day, he was called into Brannon's office. Brannon informed 5 Matter of Memphis Furniture Manufacturing Company and Furniture Workers Local Union No. 1174, United Brotherhood of Carpenters and Joiners of America, 3 N. L R. B. 26; enforced in Memphis Furniture Manu facturing Company v. National Labor Rela- tions Board, 96 F. (2d) 1018 ( C. C. A. 6th, 1938 ) ; certiorari denied, 59 S. Ct. 91 (1938). See also Matter of Mansfield Mills, Inc. and Textile Workers Organizing Committee, 3 N. L. R . B. 901. 1176 DECISIONS OF NATIONAL LABOR RELATIONS BOARD him that he was discharged because he had been seen smoking in the supply room, and told him to call for his pay at the office. Without offering any explanation concerning the act of which he was accused, Murdock admittedly called Brannon a "God-damned liar" and hit him in the face. When Murdock arrived at the office to receive his pay, Brannon was telling Coman what had happened. Murdock again called Brannon a "God-damned liar" and attempted an assault upon him. At the hearing, Brannon testified that Murdock had the cigar "in his mouth, the last I seen of him going down the stairs" and that "The top step was the margin" which served as a demarcation for smoking. However, Murdock contended that "When I got to the steps, the door, that was the dead line for smoking, I turned and-I taken a draw, and threw my snipe of cigar down." Murdock further testified that when he returned from the supply room Bronson asked him "What was the old man on you about a while ago?" and explained that after Brannon returned to the engine room he had said : "Why in the hell, I don't see why a man can't do what I tell him," and later said "something about smoking" to Carter. Carter corroborated this conversation, and stated that when he questioned Brannon as to what Murdock had not done, Brannon replied : "Quit smoking in the sup- ply room." Ward, who accompanied Murdock into the supply room, did not testify at the hearing. The respondent further contended at the hearing that Murdock was negligent in permitting the water to rise too high in the boilers and thus necessitating otherwise unnecessary repairs. Although Mur- dock admitted that he had been warned that someone in the boiler room was permitting the water to rise too high, no mention was made of this fact at the time of his discharge. The evidence is convincing that Murdock was discharged because of the respondent's conviction that he failed to observe the smoking rule. The circumstances surrounding the incident which led to his discharge allow for a reasonable misapprehension on the part of Brannon in making the conclusion that he did. Furthermore, Mur- dock made no effort to explain what had actually happened, but im- mediately struck Brannon in a flare of temper over what he believed was a personal injustice. We find that the record does not support the allegations of the com- plaint that Murdock was discharged because of his -union membership or activity. Buster Hughes had been employed as a picker operator by the re- spondent since July 1933. It was Hughes' duty to weigh the laps of cotton as they came from the machine, permitting only those of the correct weight to be marked and passed on to the carding machines, and re-running those not meeting the requisite weight standard. For MEXICO TEXTILE MILLS ET AL. 1177 several weeks prior to Hughes' discharge on December 16, 1937,8 Su- perintendent Smith and Overseer Bradford had been endeavoring to determine the cause of a wide variance of yarns and cloth coming from the weaving machines, which had been giving a great deal of trouble. A check-up finally revealed that the laps coming from Hughes' ma- chine were not proper in weight, although he had listed them as correct. Coman testified that when Bradford reported to him in the presence of Superintendent Smith that the trouble had been located and was due to the improper weights of laps which Hughes permitted to go through, he instructed Smith to verify Bradford's finding. Smith reported that Bradford's check was correct and that Hughes' mark was found on the bad laps. When Hughes reported for work the following day, he was told by Bradford that it was his laps that had been caus- ing the trouble. Bradford testified that he weighed a couple of the bad laps in the presence of Hughes, but that Hughes paid no atten- tion to him and said that "he didn't give a damn, he was ready to quit anyhow." Because of this attitude and failure to offer to do better, Bradford then discharged Hughes for "neglect of duty." Bradford further testified that he had warned both Hughes and the one other picker operator three or four times every week during the period the respondent was endeavoring to locate the trouble that they should watch the weights, and that Hughes had replied that he would. Hughes denied at the hearing that he had been warned that bad laps might be interfering with production, but admitted that Smith had worked "a little bit every day" on the picker in an effort to eliminate the mak- ing of bad laps. We believe that Hughes did have knowledge of the efforts being made to locate the source of the trouble occurring in the weaving process. When Hughes signed his "Termination of Employ- ment" record, he admitted that some of the bad laps were weighed by him, but that the man on the other shift often used his mark and could also have made some of the laps in question. Owen, a cardroom employee who ran the laps weighed by Hughes, testified that he had complained to Hughes that the cardroom em- ployees were receiving the blame for his carelessness in permitting bad laps to go through. Both Owen and Wilson, another cardroom employee, also testified that there had been no trouble with the laps since Hughes had been discharged. Although Hughes had actively participated in union affairs, he was not an officer of the Union and held no position of responsibility therein. While his case is not free from doubt, in view of the fore- going facts and the record as a whole, we find that the respondent has not discriminated against Hughes because of his affiliation with the Union. 9 During the hearing, the complaint was amended upon motion of counsel for the Board to correct the date from December 8 , 1937, to December 16, 1937. 1178 DECISIONS OF NATIONAL LABOR RELATIONS BOARD C. The refusal to bargain collectively 1. The appropriate unit On October 25, 1937, the respondent and the Union entered into a written agreement which provided for the holding of an election and stated that in the event that the Union received a majority of the ballots cast in such election the respondent would recognize the Unior, as the exclusive representative of all the employees of the respondent, except administrative, supervisory, and office workers. The complaint alleges that all the employees of the respondent, except those en- gaged in executive, supervisory, or office capacity, constitute a unit appropriate for the purposes of collective bargaining. In its answer, the respondent admits the above allegation, and during the course of the hearing no evidence was offered to show that any other unit is the appropriate one. This unit is a normal industrial unit and we see no reason to modify it. We find that all employees of the respondent, excluding adminis- trative, supervisory, and office workers, constitute a unit appropriate for the purposes of collective bargaining, and that said unit will insure to the employees the full benefit of their right to self-organiza- tion and to collective bargaining and otherwise effectuate the policies of the Act. 2. Representation by the Union of a majority On November 6, 1937, a consent election was held pursuant to the written agreement between the respondent and the Union. Of the 199 employees within the appropriate unit who were eligible to vote, 169 cast ballots in the election. The count revealed that there were 110 ballots cast in favor of the Union, and 59 against the Union, thus establishing that the Union had been selected as their bargaining representative by a majority of the employees in the appropriate unit. We find that on November 6, 1937, and at all times thereafter, the Union was the duly designated representative of the majority of the employees in the appropriate unit, and pursuant to Section 9 (a) of the Act, was the exclusive representative of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, and other conditions of employment. 3. The alleged refusal to bargain The first attempt to bargain was made on September 20, 1937, at which time Lee and the local bargaining committee of the Union pre- sented a proposed contract to the respondent. Coman, representing the respondent, gave the committee a rather unfriendly reception, but agreed to submit the proposed contract to the board of directors. MEXICO TEXTILE MILLS ET AL. 1179 The following day he informed the Union that the directors had re- fused to sign the contract. No further negotiations were carried on until after the holding of the consent election on November 6, 1937. On November if, 1937, the respondent and union representatives resumed their negotiations for the first time after the consent elec- tion. The Union was represented by its president, W. C. Perkins, its secretary, Osborne Kennedy, and by Mr. and Mrs. Bernard Egan, of Houston, Texas. Egan was at that time State director for the Com- mittee for Industrial Organization, and Mrs. Egan held credentials as-the State representative of the Textile Workers Organizing Com- mittee. The same contract which had been submitted on September 20, 1937, with exception of the proposed wage increase which had been reduced from 20 per cent to 15 per cent, was again made the basis of negotiations. During the meeting, the proposed contract was discussed section by section, Egan explaining its meaning and terminology. The respondent's representatives stated that they wished to consider the contract further and requested that the meet- ing be adjourned to a later date. It was mutually agreed to meet on November 22, 1937, and the meeting terminated with all present in a friendly mood. As agreed upon, a second meeting was held on November 22, 1937, at which time the Union was informed by Coman that the directors had refused to sign a contract which would grant a closed shop, an increase in wages, or a shortening of hours, because any agreement of that nature would place the respondent out of competition with other textile mills and would force it to operate at a loss. The meeting was not a friendly one, and ended abruptly with the union representatives charging the respondent with a failure to bargain in good faith. Following this meeting, the respondent posted a notice to its employees which set forth the demands made by the Union, together with the following statement : The mill is not in position to sign an agreement along above lines as so doing places it out of competition with other mills. We offer you work under present conditions of hours, wages and general working conditions, will use our best endeavors to keep the mill in continuous operation and give you the same fair treatment we have in the past. The past month has seen a de- cided drop in production and increase in second quality goods. This must be corrected. Market for our products is at the lowest level in years with no immediate prospect of improvement. We are glad to secure sales now that will assure us of a new dollar for an old one, and will consider ourselves fortunate if we can maintain continuous operations through the winter.7 7 Board Exhibit No. 13. 1180 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Through the efforts of John Lebus, Field Examiner for the Board, negotiations between the respondent and the Union were again re- sumed, and a-meeting was arranged for January 19, 1938. At this meeting the proposed contract was again discussed in detail. The respondent agreed to the provisions regarding the duration of the contract, seniority rights, and cooperation with respect to securing legislative tariff protection, and to a modification of the arbitration clause providing for a grievance committee instead of the proposed arbitration board. However, it did not agree to the provisions in regard to wages, hours, and a closed shop. The respondent pointed out that an increase in wages was impossible because of the fact that it manufactured only ducking and cheaper materials, the largest cost factor of which was wages. The respondent also stressed that it was $80,000 in debt and had paid but one dividend since its estab- lishment in 1925, which was declared in 1937 to avoid payment of the surplus profits tax on money intended to be working capital. The respondent likewise maintained that a decrease in hours was pro- hibitive for the same reasons, inasmuch as it could not maintain its present production and shorten hours without additional employees, which in turn would increase its operating costs. The respondent had been created for the twofold purpose of profit and of giving employment to the people of Mexia only, and its stock had been sold to the citizens of Mexia with that understanding. For this reason, it was asserted that to operate a closed shop would force local employees to join the Union or would make it necessary to em- ploy outside labor contrary to its original policy as a local enter- prise. The Union then suggested that a preferential shop provision be substituted for that of the closed shop, which change was to be submitted to the board of directors for its approval because of its express disapproval of a closed-shop contract. A final meeting took place on February 2, 1938, at which time the Union was apprised of the directors' decision that they considered a preferential shop to be equally detrimental to respondent's em- ployment policy. The remainder of the meeting was devoted to a discussion of the various proposals, accomplishing no definite re- sults. At the close of the meeting, Lebus suggested that the re- spondent submit a memorandum to the Union setting forth those proposals which it understood to have been agreed upon during ne- gotiations, together with a statement of its position in the matter. Egan testified that when the meeting was over "everybody seemed to be in a good humor," and that both he and Coman expressed their mutual regrets that they had been unable to effect a definite agree- ment. MEXICO TEXTILE MILLS ET AL. 1181 The respondent complied with Lebus' suggestion, and in addition wrote a letter to the Regional Director offering the respondent's books for examination by any auditor selected by him, so that the respondent's position with respect to wages and hours could be verified. A copy of the memorandum of agreement was sent to the Union, but no request was made by either party for further nego- tiations. From the foregoing, it is clear that after the consent election the respondent accorded recognition to, and was at all times willing to meet and negotiate with, the Union as the exclusive bargaining agency of its employees. Although Manager Coman gave the Union representatives a rather unfriendly reception on September 20, he did agree to submit the proposed contract to its board of directors. In any event, no claim is made that the respondent refused to bargain on that date. While the respondent refused to make any concessions in regard to the wages, hours, and closed-shop provisions of the contract, we do not think that under all the circumstances set forth above the respondent refused to bargain collectively in good faith. Although the respondent showed a disposition toward going over the heads of the Union's representatives by posting the notice to its employees after the meeting of November 22, 1937, under all the circumstances we are not inclined to find lack of good faith on that ground alone. We find that the record does not support the allegations of the complaint that the respondent refused to bargain collectively with the Union. Accordingly, the allegations of the complaint that the respondent has engaged in unfair labor practices within the meaning of Section 8 (5) of the Act will be dismissed. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE We find that the activities of the respondent set forth in Section III above, occurring in connection with the operations of the re- spondent described in Section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend- to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. THE REMEDY Having found that the respondent engaged in certain unfair labor practices we shall order it to cease and desist therefrom, and to take such affirmative action as will effectuate the policies of the Act, in- cluding the reinstatement of Mr. and Mrs. W. H. Sims and Mr. and 1182 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Mrs. Osborne Kennedy to their former positions without prejudice to their seniority and other rights and privileges. We shall further order the respondent to make them whole for any losses of pay they have suffered by reason of their respective discharges by payment to each of them a sum equal to the amount which he normally would have earned as wages from the date of his discharge to the date of the offer of reinstatement less his net earnings 8 during said period. Upon the basis of the foregoing findings of fact, and upon the entire record in the proceeding, the Board makes the following : CONCLUSIONS OF LAW 1. Textile Workers Organizing Committee is a labor organization, within the meaning of Section 2 (5) of the Act. 2. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (1) of the Act. 3. By discriminating in regard to the hire and tenure of employ- ment of W. H. Sims, Osborne Kennedy, Mrs. W. H. Sims, and Mrs. Osborne Kennedy, thereby discouraging membership in the Union, the respondent has engaged in and is engaging in unfair labor prac- tices, within the meaning of Section 8 (3) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. 5. The respondent has not discriminated in regard to the hire and tenure of employment of Frank Murdock and Buster Hughes, and has not thereby discouraged membership in a labor organization, within the meaning of Section 8 (3) of the Act. 6. All employees of the respondent, excluding administrative, supervisory, and office workers, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9 (b) of the Act. 7. Textile Workers Organizing Committee is and has been at all times since November 6, 1937, the exclusive representative of all em- 8 By "net earnings" Is meant earnings less expenses, such as for transportation, room, and board, incurred by an employee in connection with obtaining work and working else- where than for the respondent , which would not have been incurred but for his unlawful discharge and the consequent necessity of his seeking employment elsewhere . See Matter of Crossett Lumber Company and United Brotherhood of Carpenters and Joiners of America, Lumber and Sawmill Workers Union, Local 2590 8 N. L. it. B. 440. Monies received for work performed upon Federal , State, county, municipal, or other work-relief projects are not considered as earnings but, as provided below in the Order, shall be deducted from the sum due to the employee , and the amount thereof shall be paid over to the appropriate fiscal agency of the Federal , State, county, municipal, or other government or governments which supplied the funds for said work-relief projects. MEXICO TEXTILE MILLS ET AL. 1183 ployees in such unit for the purposes of collective bargaining within the meaning of Section 9 (a) of the Act. 8. The respondent has not engaged in unfair labor practices, within the meaning of Section 8 (5) of the Act. ORDER Upon the basis of the above findings of fact and conclusions of law, and pursuant to Section 10 (c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the respond- ent, Mexia Textile Mills, a corporation , and its officers , agents, suc- cessors, and assigns, shall: 1. Cease and desist from : (a) Discouraging membership in Textile Workers Organizing Committee, or any other labor organization of its employees, by discriminating in regard to hire or tenure of employment or any term or condition of employment; (b) In any other manner interfering with, restraining, or coercing its, employees in the exercise of the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing , and to engage in concerted activities for the purpose of collective bargaining and other mutual aid and protection , as guaranteed in Section 7 of the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Offer to W. H. Sims, Osborne Kennedy, Mrs. W. H. Sims, and Mrs. Osborne Kennedy, immediate and full reinstatement to their former positions without prejudice to their seniority and other rights and privileges; (b) Make whole said W. H. Sims, Osborne Kennedy, Mrs. W. H. Sims, and Mrs. Osborne Kennedy, for any loss they may have suffered by reason of their discharge by payment to each of them, respectively, of a sum of money equal to that sum which he normally would have earned as wages from the date of his discharge until the date of the offer of reinstatement , less his net earnings during said period; de- ducting, hcwever, from the amount otherwise due to each of said employees monies received by said employees during said period for work performed upon Federal, State, county, municipal, or other work-relief projects; and pay over the amount so deducted to the appropriate fiscal agency of the Federal , State, county, municipal, or other government or governments which supplied the funds for said work-relief projects; 1184 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (c) Post immediately, and keep posted for a period of at least sixty (60) consecutive days, notices in conspicuous places, throughout its plant, stating that the respondent will cease and desist in the man- ner set forth in 1 (a) and (b), and that it will take the affirmative action set forth in 2 (a) and (b), of this Order; (d) Notify the Regional Director for the Sixteenth Region in writ- ing within ten (10) days from the date of this Order what steps the respondent has taken to comply herewith. AND IT IS FURTHER ORDERED that the complaint be, and it hereby is, dismissed in so far as it alleges that the respondent has engaged in unfair labor practices within the meaning of Section 8 (5) of the Act, and that the respondent has engaged in unfair labor practices within the meaning of Section 8 (3) of the Act by discharging Frank Mur- dock and Buster Hughes.