Servel, Inc.

In the Matter of SERvEL, INC. and UNITED ELECTRICAL, RADIO AND MACHINE WORKERS OF AMERICA, LOCAL No. 1002 Case No. C--1188.Decided March 25, 1939 Mr. Colonel C. Sawyer, for the Board. Mr. Charles I. Dawson, of Louisville, Ky., Mr. Isador Kahn, Mr. Louis L. Roberts, Mr. Daniel H. Ortmeyer, and Mr. Robert C. Enlow, of Evansville, Ind., and Mr. Richard C. Hunt and Mr. Newton Crane, of New York City, for the respondent. Mr. James Matles and Mr. Julius Emspals, of New York City, and Mr. Hovey C. Kirk, of Princeton, Ind. and Mr. William Sentner, of St. Louis, Mo., for the Union. Mr. Paul H. Schmidt and Mr. George R. Raves, of Evansville, Ind., for Servel Employees' Association and Servel Workers' Council. Mr. Sumner Marcus and Mr. George Rose, of counsel to the Board. Gas, Kerosene and Electrical Refrigerator Manufacturing Industry-Inter- ference, Restraint, and Coercion : anti-union statement of foremen and presi- dent ; anti-union letters including enclosures of anti-union literature ; transfer of employee member of union from one department to another to prevent his being candidate for inside labor organization ; discharges of eight employees because of their leadership in concerted activities including strike engaged in by employees for purpose of collective bargaining and other mutual aid and protection ; discharge of two employees in part because of employees fear of possible strike-Employee Representation Plan: form, analysis and operation ; domination of administration ; financial and other support ; recognition as rep- resentative of employees ; disestablished, as agency for collective bargaining ; employer encouragement of identification between employment and automatic membership; transfer or discharge of councillors from one voting "division" to another to prevent election to Council ; negotiation for adjustment of griev- ances performed in part under plan by employer representative ; use of re- spondent's property for plan meetings , elections and posting notices; flnancial support to plan from Association deriving income from retail store located on re- spondent's property etc. ; statements of respondent's president and foremen favoring plan and expressing hostility to labor organization ; "statement of policy"-Discrimination : discharges, for union membership and activity ; charges of not sustained as to some employees-Reinstatement Ordered-Back Pay: awarded to discharged employees. 11 N. L. R. B., No. 120. 1295 1296 DECISIONS OF NATIONAL LABOR RELATIONS BOARD DECISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly filed by United Electrical, Radio and Machine Workers of America, Local No. 1002, herein called the Union, the National Labor Relations Board, herein called the Board, by the Regional Director for the Eleventh Region (Indi- anapolis, Indiana), issued a complaint dated November 29, 1937, against Servel, Inc., Evansville, Indiana, herein called the respond- ent, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1), (2), and (3) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the complaint accompanied by notice of hearing were duly served upon-the respondent, upon the Union, upon Servel Workers' Council, at times herein called the Council, and upon Servel Employees' Association, at times herein called the Association. The Council filed its answer at the hearing. Likewise at the hearing, the charge, complaint, and the answer of the respondent were each amended. The complaint, as amended, alleged in substance that on various dates between February 20 and October 4, 1937, the respondent ter- minated the employment of or transferred to less desirable positions certain named employees,' 34 in number, and refused to reemploy and reinstate them because of their membership in and their affilia- tion with the Union and/or because they engaged in concerted activi- ties with the respondent's employees at its Evansville plant for the purposes of collective bargaining and other mutual aid or protection, thereby discriminating in regard to the employment of these persons and discouraging membership in the Union and discouraging their free choice of representatives for the purposes of collective bargain- ing and to engage in concerted activities for the purposes of col- lective bargaining or other mutual aid or protection; that the respondent formed, and dominated and interfered with the adminis- tration of, a labor organization of its employees known as Servel 1 The names of these employees are as follows : Earl Brammer, Roy Brents , Charles Carson, William Cavis, James Deckard, Boddie Delany (at times referred to in the record as Raddie Delaney ), John Gibson , George Grimm , Marion Grubb , Gladys Hays, Herschel Hopper, Allen Hullett, Ray Kanzler , Thurlow Jones, Gladys Kennada , William Kennada , Myron Leachman , Jessee Likens , Lloyd Long, George Ludwig, Merton McCool, John McIntosh , Harold Moore , Arthur Mundy , John Pascoe, Joseph Payne, Earl Rhoades, James Rogers , Leroy Rounder, Fred Schmidt, Russel Stultz , Jesse Sweet, Thomas Vinson, Harry Wingerter. SERVEL, INC., ET AL. 1297 Workers' Council, and contributed financial and other support to it; 2 that by the afore-mentioned acts, as well as by threats, conversations with individual employees, speeches, the publication of newspapers and advertisements therein, the publication of employee handbooks, and other booklets and pamphlets, and by the distribution thereof, and in various other ways, the respondent attempted to discourage and discouraged membership of its employees in the Union and interfered with their free choice of representatives and their right to engage in concerted activities for the purposes of collective bar- gaining and other mutual aid or protection. On December 3, 1937, the Regional Director granted the request of the respondent that it be given additional time in which to file its answer, which on December 9, 1937, it filed. The answer, as amended, denied, in general, the material allegations of the complaint, as amended. The Council in its answer denied the averments of the complaint, as amended, in so far as they related to it. Pursuant to notice a hearing was held from December 13 to 18, 1937, and from January 3 to 18, 1938, at Evansville, Indiana, before James C. Batten, the Trial Examiner duly designated by the Board. The Board, the respondent, the Union, and the Council were repre- sented by counsel and participated in the hearing. Full opportunity to be heard, to examine and cross-examine witnesses, and to produce evidence bearing upon the issues was afforded all parties. At the close of the Board's case counsel for the Board and for the Union moved to dismiss the allegations of the complaint, as amended, with respect to 11 persons therein named.3 This motion was allowed by the Trial Examiner. At the opening of the case counsel for the respond- ent moved to dismiss the complaint, as amended, and the various parts thereof, for want of jurisdiction of the subject matter. This motion was denied by the Trial Examiner. At the close of the Board's case the respondent moved to dismiss the amended complaint on the ground that the allegations thereof were not sustained by the evidence. This motion was allowed by the Trial Examiner in so far as the allegations of the complaint, as amended, related to Lloyd Long and Charles Carson, and otherwise was denied. Likewise at the close of the Board's case the Council moved to dismiss the allegations of the com- plaint, as amended, with respect to it, for lack of substantial evidence. This motion the Trial Examiner denied. The Trial Examiner made various other rulings on motions of the parties, and on objections to the admission of evidence. The Board has reviewed these rulings 2 Similar allegations were made with respect to Servel Employees ' Association. The complaint was later amended to omit all reference to this organization. 8 The persons so named were : John Gibson, Marion Grubb , Thurlow Jones, Ray Kanzler, Gladys Kennada, Jessee Likens, Joseph Payne, James Rogers, Russel Stultz, Jesse Sweet, Harry Wingerter. 1298 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of the Trial Examiner, and, except as otherwise indicated below, finds that no prejudicial error was committed. Said rulings are hereby affirmed except as indicated. On February 28, 1938, the Trial Examiner made his Intermediate Report, which was filed with the Regional Director and duly served upon all the parties, finding that the respondent had engaged in and' was engaging in unfair labor practices, within the meaning of Sec- tion 8 (1), (2), and (3) and Section 2 (6) and (7) of the Act, and recommending that the respondent cease and desist from its unfair labor practices; reinstate with back pay certain of its employees' found to have been discriminatorily laid off or discharged by the re- spondent; withdraw all recognition from and disestablish the Council as an agency for collective bargaining with the respondent; and take certain other appropriate action to remedy the situation brought about by the respondent's unfair labor practices. The Trial Examiner also recommended that the complaint, as amended, be dismissed as to certain employees 5 who the Trial Examiner found had not been discriminated against by the respondent. On March 31, 1938, the respondent and the Council filed exceptions to the Intermediate Report. The Union, although notified of its rights to do so, has filed no exceptions to the Intermediate Report. Pursuant to notice to all parties a hearing was held at the request of the respondent and of the Council, in Washington, D. C., on April 14, 1938, for the purposes of oral argument. The respondent and the Union were represented by counsel and participated in this hear- ing. The Council did not appear. The Board has considered the exceptions filed by the respondent and by the Council and the briefs submitted by these parties. In so far as the exceptions are inconsist- ent with the findings, conclusions, and order set forth below, the Board 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 is an Indiana corporation engaged in the manu- facture, sale, and distribution of gas-operated and kerosene-operated refrigerators, electric commercial refrigerator machines, and allied products. Its plant and principal place of business are located at Evansville, Indiana. It employs approximately 5,000 persons. `The names of these employees are: Earl Brammer , Roy Brents, James Deckard, Roddie Delany, George Grimm, Gladys Hays, Herschel Hopper, William Kennada, Myron Leachman, Merton McCool , John McIntosh, Harold Moore , Arthur Mundy, John Pascoe, Earl Rhoades, Leroy Rounder, Fred Schmidt, and Thomas Vinson. 5 The names of these employees are : William Cavis, George Ludwig, and Allen Hullett. SERVEL, INC., ET AL. 1299 In the course of its manufacture the respondent uses large quanti- ties of sheet metal, sheet aluminum, aluminum ingots, steel tubing, lumber, paint, enamel, varnishes, insulating materials, and cabinet hardware. During each of the years 1935, 1936, and 1937, the respondent caused to be shipped to the Evansville plant from outside the State of Indiana- over $1,000,000 worth of these materials. The sales of the respondent's finished products for the fiscal year ending October 31, 1937, exceeded $30,000,000, more than 90 per cent of which was shipped from the plant to customers located outside the State of Indiana. The principal market for these products is in the several States, the District of Columbia, and foreign countries, in- cluding Mexico, Panama, and other countries in Central and South America. II. THE LABOR ORGANIZATIONS INVOLVED United Electrical, Radio and Machine Workers of America, Local No. 1002, is a labor organization affiliated with the Committee for Industrial Organization. It admits to membership all employees of the respondent, except supervisory, office, and clerical employees. Servel Workers' Council is an unaffiliated labor organization, ad- mitting to membership all employees of the respondent, except super- visory and clerical employees. III. THE UNFAIR LABOR PRACTICES A. Domination of and interference with the administration of Servel Workers' Council, and support thereof Shortly after the enactment of the National Industrial Recovery Acts certain employees at the respondent's plant commenced to or- ganize themselves and their fellow workers into a labor organization affiliated with the American Federation of Labor. In July 1933 a local charter was issued to them by the Federation. Thereafter, on July 10, 1933, the respondent's vice president and general manager, one Nehrbas, summoned to his office 10 production employees from various divisions of the Evansville plant and asked them whether they were interested in establishing a plan of employee representa- tion.7 Upon their indicating interest, he presented them with a O The National Industrial Recovery Act (U. S. C., Title 15, Sec. 701) went into effect on June 16 , 1933. Section 7 (a) thereof secured to employees the right of self-organiza- tion and to bargain collectively through representatives of their own choosing. ' While acts of the respondent occurring before the effective date of the Act do not constitute unfair labor practices they are important , nevertheless, as explaining the respondent's acts and the situation as it existed after that date. See National Labor Relations Board v. Pacific Greyhound Lines, Inc ., 91 F. (2d) 458, 459 ( C. C. A. 9), 303 U. S. 272; National Labor Relations Board v. Pennsylvania Greyhound Lines, Inc., et at., 303 U. S. 261. 1300 DECISIONS OF NATIONAL LABOR RELATIONS BOARD draft of such plan, stating that they were at liberty to reject or modify it as they chose. The draft plan was some 35 paragraphs in length, charting a complete employee representation organization for the plant. The 10 employees thereafter constituted themselves a "Temporary Committee" and, as such, approved without change Nehrbas' plan. For the purpose of calling general attention to the proposal for forming such an organization, printed notices were placed on the time-clock cards of all persons employed at the plant stating that "a plan of organization for mutual benefit" was to be formed, that "workers representatives" would be elected to deal with employee matters, and that an election of such representatives would be held. The notices contained no mention of the specific details of the plan and assumed as a fact that the plan shortly would become operative. On July 17, 1933, at a meeting of all employees on plant property, Nehrbas, upon invitation of the Committee, delivered a prepared written speech, in part as follows : We have brought you together at this time to acquaint you with the progress in the preliminary work of forming a Workers Council of Servel Employees . . . It is true the management up to this time has assisted in carrying on the preliminary work and has picked a temporary committee of ten from among you to do the preparatory work for you . . . It is not the intention of any member of the management to dictate to you whom you should nominate or whom you should elect. This is wholly in your hands, and the temporary committee now working with the management on the preliminary plans goes out of existence when you elect the permanent council. Nehrbas further stated, in substance, that the plan would provide the employees with a medium for submitting their grievances to the respondent, that the employees should feel free to choose what repre- sentatives they wished under the plan, and that it was hoped that the operation of the plan would bring about a closer contact between the management and the employees. Nehrbas took the occasion to announce a 5-per cent increase in wages for all hourly workers. On July 21, 1933, in an election conducted by the Temporary Committee on the respondent's time and property, ten "councillors" or representatives were chosen by the employees to carry out the plan. The Temporary Committee then met with the councillors likewise on the respondent's property, and informed them of the Nehrbas plan, submitted a draft thereof to them, and communicated to them Nehrbas' statement respecting freedom of action. The councillors proceeded to select officers from among themselves, determined that SERVEL, INC., ET AL. 1301 the name of the organization to be set up under the plan should be "Servel Workers' Association," and appointed a committee to draft a constitution and bylaws for the organization. On July 31, 1933, this committee reported, and the councillors accepted, a constitution and bylaws which, save for a few immaterial changes, were identical in word and provision with the Nehrbas plan. The constitution and bylaws were executed by both the councillors and Nehrbas. They were not submitted to the employees as a whole for consideration or approval, nor was the opinion of the employees sought on the subject of whether they wanted an employee representation plan. Copies of the constitution and bylaws were posted throughout the plant within a few days after their adoption. The Servel Workers' Association, as it thus came into existence, was a form of employee representation plan admitting to membership all plant employees excluding supervisors. Persons newly employed by the respondent were to "be requested to make application for mem- bership." No meetings of the general membership were provided by the -constitution and bylaws, and none was contemplated. Nor were any dues imposed. The so-called "councillors" or employee repre- sentatives, not less than ten in number, were to be elected annually by the employees to serve a term of 1 year under the plan. For purposes of holding elections for councillor and of representation, the em- ployees were divided into 10 departmental voting groups, or "units of representation," adjustments in the constituency of any unit to be made only "in accordance with the recommendations of a joint com- mittee of council members and a Company's representative." Each unit of representation elected its own councillor. Only non-super- visory employees who had been on the company pay roll for a period of more than 1 year prior to an election, who were 21 years of age or over and American citizens, were qualified to be candidates for councillor, and a councillor ceased being one upon termination of his employment by the respondent or upon his transfer from work in one unit of representation to work in another, Eligibility to vote in elec- tions was confined to non-supervisory employees employed for a period of at least 60 days prior to an election. Officers of the council were to be chosen by the councillors from among their own number. All elections and council meetings were to be held on the respondent's time, and workers in the elections and councillors attending council meetings were to "receive their regular rates of pay" for time thus spent. The plan provided that the respondent "shall appoint a man- agement's representative, who shall attend all council meetings, but have no voting power. This representative shall keep the manage. ment in touch with the workers council and represent the management in negotiations with the council." The management's representative 164275-39-vol. xi-83 1302 DECISIONS OF NATIONAL LABOR RELATIONS BOARD was to "interview" the councillors "from time to time with reference to matters of concern to employees." Provision also was made for "a general committee of not to exceed five members to be appointed by the management to meet with the newly elected workers council at the regular November meeting for general discussion of policies and such other matters as may be brought up through a change of em- ployees' representation as a result of the general election and to assist the incoming councillors in their duties in every way possible." Under the plan "any matter which in the opinion of any employee requires adjustment" could be submitted in writing through his councillor for settlement, first, to the superintendent of the plant division where he worked, second, to the management's representative. "Failing to do so, the councillor and the management's representative will jointly bring the matter to the attention of the general manager." If that re- sulted in no satisfactory disposition the matter might be submitted to a joint committee of the councillors and "management's represen- tatives," and finally to an arbitration committee composed of the re- spondent's president, the chairman of the council, and a third person appointed by these two. The constitution and bylaws set forth that it was "understood and agreed" that councillors would have freedom to discharge their duties "without fear that individual relations with the company may be affected in the least" because of action taken "in good faith." The plan was subject to amendment by joint action of two-thirds of the councillors and the management's representative. The plan was terminable "on written notice by the management or the workers to terminate same." To defray expenses of conducting elec- tions and administering the plan, the respondent thereafter con- tributed various sums of money to the Council not exceeding $1,000 annually. On March 14, 1935, the councillors approved and adopted a consti- tution and bylaws for an organization known as the Servel Workers' Council. The chairman of the council of the Servel Workers' Asso- ciation testified that the reason for this action was the difficulty which the councillors had encountered in administering the plan under the old constitution and bylaws; also that the councillors were of the opinion that the National Labor Relations Bill then pending before the Congress, if enacted would render the Association illegal because of the participation of the management's representative in its affairs.R He also testified that the new constitution was adopted by the council- lors before the management's representative was informed thereof. The respondent in its brief states that Servel Workers' Council and Servel Workers' Association are one and the same organization, that 8 Cf. National Labor Relations Board v. Pennsylvania Greyhound Lines, Inc., etc., 303 U. S. 261. SERVEL, INC., ET AL. 1303 the councillors in adopting the constitution and bylaws of March 14, 1935, merely amended the constitution and bylaws of the Servel Workers' Association and changed its name a While it is not alto- gether clear whether the Association was terminated and the Council set up or whether the Association remained as the Council, the issue is without substance. We are satisfied that the Servel Workers' Council was in fact but a continuation of the employee representation plan organized as the Association, save for such changes as were accomplished by the new constitution and bylaws. The employees did not formally approve the adoption of the new constitution and bylaws. The purpose of the Servel Workers' Council was stated in the new constitution and bylaws as follows : The purpose of this organization shall be to promote cooper- ation between the Management of Servel, Inc. and its employees. A further purpose shall be to give the employees representation for collective bargaining for an orderly and expeditious pro- cedure for the prevention and adjustment of differences, affecting the following matters : (a) Hours of Labor. (b) Wage rates. (c) Working conditions. (d) Safety and accident prevention. (e) Promotion of health. (f) Efficiency and economy of operation. (g) Other matters affecting employees' interest. In general outline the organization remained the same form of employee representation plan as previously existed. Membership still was confined to employees of the respondent and ended with termina- tion of employment. No provision was made for meetings of the gen- eral membership, or for other means enabling the membership as a whole to determine matters affecting them as a group or groups, to formulate their group demands, and to take group action. For pur- poses of representation employees in the plant departments were to be segregated, in manner determined by the councillors, into not less than 10 "units of representation" called "divisions," each division to elect one representative or councillor for each 400 employees or fraction b The respondent's brief states, "The constitution of the Servel Workers' Council was amended by the Councilmen in March, 1935, and it was by this amendment that, among other things , the name was changed from Servel Workers ' Association." Further, "From 1933 to 1935 , the constitution of the Servel Workers' Council , then called the Servel Workers' Association , remained unchanged , but in the latter year the Council, under the Chairmanship of Mr. Daniel Mohr, pursuant to power conferred upon it by the original constitution, amended the constitution." 1304 DECISIONS OF NATIONAL LABOR RELATIONS BOARD thereof within it. Elections of councillors were to be conducted each June by secret ballot on the respondent's property under supervision of the councillors. All employees on the company pay roll at the time of election except officials of the respondent, foremen, superin- tendents, group leaders, or any person having the right to hire or discharge or regularly holding a supervisory position, were qualified to vote in an election for councillor. Eligibility for councillorship was the same as qualification for voting 10 A councillor was to be deemed to have vacated his office upon absenting himself from more than three consecutive meetings of the council, upon his permanent transfer by the respondent from one voting division to another, upon his becoming a supervisor, or upon the termination of his employment. The councillors formed, as before, a workers' council, and were re- quired to meet regularly once each month and to attend such special meetings as the council chairman might call." Officers of the council were chosen by the councillors from among themselves. The chair- man of the council was empowered to appoint committees from among the council. With respect to the management's representative, it was provided, "The Company shall appoint a representative who shall keep the Workers' Council in touch with the Management. The Man- agement's representative will be present at Council Meetings upon invitation by the Councillors." Any employee could make a sug- gestion to or request information from the councillor selected in his voting division or the council as a whole. The following procedure for handling employee complaints was provided : An employee may make a complaint directly to the Councillor of his division, or he may, at his discretion, first take the matter up with the Group Leader, Foreman, or Superintendent. Councillors shall endeavor to adjust complaints: First, with Foreman or Superintendent; Second, at regular meeting of Councillors. The Council shall report its recommendations or conclusions to the Management's representative. The Management's represent- ative shall then give his decision verbally, or in writing if re- quested, to the Council. If an agreement cannot be reached, the Council and the Management's representative will jointly bring the matter to the attention of the Works Manager by a committee appointed for the purpose. "The respondent's brief so construes the constitution and bylaws, "All employees of the Respondent other than those having managerial duties or supervisory powers, are entitled to vote, and only those eligible to vote may be Councilmen " ' A 1936 amendment changed the regular meetings of the council from weekly to monthly. SERVEL, INC., ET AL. 1305 If this joint committee shall fail to effect a satisfactory settle- ment, the President of the company shall be notified. In the event that the President and the joint committee fail to reach a satis- factory agreement the matter shall be submitted to a board of arbitration for settlement. The President and the Chairman of the Workers' Council each shall appoint a disinterested arbitrator, and these two arbitrators shall appoint a third. The findings of this committee shall be final. It was "understood and agreed" that councillors were to be free from discrimination by the respondent because of council matters under- taken in "good faith," and were to have the privilege of submitting such discrimination to arbitration. The constitution and bylaws were subject to amendment by a two-thirds vote of the councillors. There was no provision for termination of the plan. The new constitution and bylaws were executed only by the councillors then in office. How- ever, the provisions thereof relating to action by the respondent or its agents were submitted to the respondent for approval and it agreed orally to perform such portions12 With the exception of a few minor changes, the foregoing consti- tutes the employee representation plan which continued to be and now is in force at the plant. Annual elections of councillors by secret ballot have been conducted on the respondent's property under the supervision of the councillors or their agents. Each division holds its own elections and elects one councillor to represent it. In con- nection with the 1934 election the management's representative as- sisted the councillors in preparing the ballots and otherwise making arrangements. From the beginning of the plan in 1933 until May 1936, one Mohr was elected chairman of the council. He became ineligible to office in May 1936 and one Waterman succeeded him and since has been the chairman. Meetings of the councillors, a substan- tial majority of which are regularly attended by the management's representative, are held on the respondent's property. Employees do not attend. At no time has the arbitration machinery provided by the constitution and bylaws in connection with employee complaints been invoked. Complaints have reached the respondent's president in only two or three instances. Matters presented to the council are never discussed with the employees as a whole nor their decision obtained. Copies of the constitution and bylaws of the Council, and such amendments as the councillors from time to time may adopt are conspicuously posted on some 14 bulletin boards in the plant. How- 12 It is not clear whether this approval was secured in 1935 of 1936. However, it is immaterial which year it was. 1306 - DECISIONS OF NATIONAL LABOR RELATIONS BOARD ever, no amendments are submitted to the employees for approval or consideration. It is generally understood that the respondent is desirous of having all employees vote. Those who do not have been asked the reason by their superiors. Supervisors have relieved em- ployees at their work while the employees voted. Upon passage of the Act the respondent ceased the payments it therefore had made to the plan for meeting plan expenses. On August 7, 1935, Servel Employees' Association, an organization un- related either to Servel Workers' Association or Servel Workers' Council, undertook through its board of directors, upon the request of and after negotiations with the Servel Workers' Council to make a voluntary annual contribution to the Council of $1,000, payable in four installments. This donation has been continued until the present time. From the money thus received the Council not only pays mis- cellaneous expenses involved in the operation of the plan, but com- pensates councillors for time spent at council meetings at which no management's representative is present or in other organizational business, and likewise compensates various employees for time ex- pended in conducting the elections.13 The Servel Employees' Association is an association of the respond- ent's employees, formed in March 1935 for the purpose, among other things, of coordinating various social, educational, and mutual-aid activities in which the employees engage, and operating a retail store and related business activities. It acts through a board of directors composed of 11 directors, 10 chosen by the employees and one desig- nated by the respondent. The respondent's director acts as treasurer of the Association, keeps the accounts of all monies received and dis- bursed, and makes deposits of them in the bank. Among other things the constitution of this organization provides : The Personnel Director shall act as Company adviser to the Employees' Association. He shall act as interpreter or adviser on policies or actions affecting the management or the employees. He shall not have the power to veto any actions of the Board of Directors. In the event a disagreement arises, the matter shall be sub- mitted to a Board of Arbitration for settlement. This Board shall consist of one member appointed by the Board of Directors, one member appointed by the management and a third member chosen by the other two. 28 The respondent itself compensates councillors for time spent at council meetings when the management's representative is present, on the theory that such payment is permissible under the Act. One councillor testified that payments of this character are by separate check. SERVEL, INC., ET AL. 1307 A substantial portion, more than 90 per cent, of the total income of the Servel Employees' Association, apart from its mutual-aid fund which is dedicated solely to purposes of employee mutual aid, is de- rived from a retail store and related business activities which it con- ducts upon the respondent's property within the area occupied by the Evansville plant. Until November 1937 the respondent furnished gratuitously all rent, power, heat, light, electricity, clerical and other assistance, and accounting facilities, required in the conduct of this enterprise. However, on November 29, 1937, the respondent and the Association agreed that the Association should pay the respondent a monthly sum of $95 for these considerations, and such payments have since been made Y4 Prior to 1937 the councillors handled some employee grievances, matters involving individual or small groups of employees.15 No collective bargaining in behalf of the plant employees as a whole was engaged in by the Council with the respondent. Nor was any bas'c collective bargaining agreement, written or otherwise, providing for the wages, hours of service, and working conditions of such employees entered into by the Council with the respondent. In the latter part of 1936 and the beginning of 1937 employees in Department 56 of the plant, discontented with the amount of their earnings, sought, through certain of their number who assumed leadership, to present their grievance directly to their superiors, without intervention of the Council. As more fully discussed below,16 this dispute culminat- ed in a strike of short duration on February 10, 1937, and on Febru- ary 12 the matter was finally' settled by the respondent's grant of a 10-per cent wage increase to all employees.17 On February 20, 1937, the respondent, as found below, discriminatorily discharged the em- ployee leaders, contrary to the provisions of the Act prohibiting an employer from interfering with, restraining, or coercing its employees in their right to engage in concerted activities for purposes of collec- tive bargaining and other mutual aid or protection. 14 The decision to reimburse the respondent was rendered at a meeting of the board of directors of the Association upon the subject being brought up by the respondent's personnel director , Roberts. is In literature distributed by the respondent to its employees , the intimation was given or statement made that various gains in working conditions prior to 1937 affecting all employtes , viz, vacations with pay, wage increases , and so forth , as distinguished from adjustments of individual and small group complaints , were the result of action by the Council in bargaining with the respondent . However, those gains were apparently intro- duced by the respondent voluntarily and were not the result of Council action. Most of the statements of achievements by the respondent to its employees were nothing more than "puffing statements " to promote the Council as a continuing labor organization. 16 See Section III, B, tinfra. 14 A bulletin issued jointly by the respondent and the Servel Workers' Council referring to this increase , stated, in part, "This increase has been made after careful joint con- sideration by the management and the Servel Workers' Council ." We entertain no doubt that the increase was directly brought about by the concerted action of the employees in Department 56, and not by formulated demand and action of the Council. 1308 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In March 1937 the Committee for Industrial Organization, a labor organization, began organizational activities among the plant em- ployees. On May 2, 1937, it issued a charter to the Union as a labor organization for these employees, and on that day two of the em- ployees named in the complaint, as amended, Thomas Vinson and Earl Rhoades, were elected president and secretary, respectively, of the Union. On May 12, 1937, the Servel Workers' Council and the respondent executed their first written "agreement." 18 Negotiations therefor were engaged in by a committee of council members and the man- agement. This "agreement" provided : After conference between the management and Servel Work- ers' Council, the following provisions are established, effective May 15, 1937, and until further notice, as the result of further conference between the management and the Council ... Servel, Inc. recognizes the Servel Workers' Council as the representative of an independent organization of its employees, in which organization its employees participate fully and freely, and which exists for the purpose of dealing with management concerning employees' grievances, labor disputes, wages, rates of pay, hours of employment and conditions of work. Conse- quently, Servel, Inc. continues to recognize the Servel Workers' Council as the collective bargaining agency for its employees with respect to rates of pay, wages, hours of employment and other conditions of employment. The Company also recognizes the right of every employee to discuss with the management in any way he pleases matters affecting his employment. He may discuss such matters per- sonally, or he may appoint some other individual or committee or organization to do it for him. We thus recognize the right of employees to bargain collectively through representatives of their own choosing and whom they may so authorize. The "agreement" further provided for wages, hours of service, hol- idays, and other working conditions of all employees. Job seniority in connection with "lay-offs, reemployment, transfers and promo- tions," was introduced and made subject to joint review by the division superintendent and respective division councillor. The "agreement" concluded : 16. The management will give prompt and careful consider- ation to any and all matters brought to its attention by the 18 while the respondent in its brief refers to the "agreement of May 12, 1937." the respondent itself has termed the document a "Statement of Policy ." See references thereto in Servel Employee Handbook , Board's Exhibit No. 13, SERVEL, INC., ET AL. 1309 Servel Workers' Council. Whenever company decisions are negative, full and complete facts and reasons will be given. 17. The Servel Workers' Council will use its influence at all times to foster and maintain peace and harmony between Servel employees and the management of Servel Inc. to the end that mutual progress and profit may be accomplished. In the latter part of May 1937 the respondent's president, Ruthen- berg, held a meeting of all the managerial and supervisory employees for the alleged purpose of discussing what he termed the "practical aspects of the Act," in order to assist them in answering questions of employees about the Union. Ruthenberg then knew of the Union's organizational. activities among the plant employees. Thereafter, pursuant to Ruthenberg's instructions, the foremen summoned to their offices most of the respondent's employees. The foremen who testified stated at the hearing that they in substance merely told the employees that they were not obliged to join the Union in order to retain their jobs, that they could join or not join as they pleased. Upon the rec- ord we are convinced that the foremen in many cases also told the employees or°intimated to them that the Union would be of no benefit to them. As hereinafter set forth and found, on May 22, 1937, Fred Schmidt, an old employee who was active in the Union and also one of the coun- cillors, was discriminatorily laid off by the respondent because of his union activities and for the purpose of preventing him from being a candidate for reelection as councillor in the June 1937 elections. Sim- ilarly, on May 27, 1937, the respondent transferred another employee, Herschel Hopper,1, the financial secretary of the Union, from his own department to a department in another voting division, for the pur- pose of preventing his being a candidate for nomination as councillor. We are satisfied with the truthfulness of Hopper's testimony respect- ing the statements of his group leader and foreman which clearly disclose that such purpose motivated the transfer. On June 3, 1937, the respondent's president transmitted a "personal message" to all of the respondent's employees, stating, among other things : A Personal Message to My Fellow Workmen I am informed that some of you have been told that I am in favor of the C. I. 0.20 The fact is that I am opposed to any or- ganization that attempts to deceive those it pretends to benefit ; that takes money from its members without an accounting; that attempts to set up a dictatorship or that has avowed Communists and Reds among its officers. 10 Hopper's transfer is considered hereafter. 20 The Committee for Industrial Organization , the labor organization with which the Union is affiliated. 1310 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Evidence indicates that the C. I. O. is guilty on all these counts, and for that reason I believe that you will not be permanently benefited by joining the C. I. O. or any other organization that follows such practices. You face the choice of continuing to cooperate with the man- agement of Servel, Inc., as you have done so well in the past, or of accepting the dictatorship of outsiders who have no knowledge of our business. If you join such an organization you will pay such dues and assessments as the outsiders dictate. Your money will be spent, not necessarily for your benefit, but as the outsiders may dictate. Your management believes in collective bargaining. You have an organization for this purpose in the Servel Workers' Council. It has repeatedly proven its ability to bargain successfully for your benefit. Let's continue to run our own business, keep our feet on the ground and avoid "foreign entanglements." On the following day the respondent's president sent a letter P addressed "Dear Fellow-Employee" to all plant employees, stating, in part : * * * I want to keep you informed about developments, and for that reason I am addressing this letter to your home where you can consider it deliberately and, if you wish, discuss it with your family and your friends. There is only one effective way by which you and I and our fellow employees can protect ourselves against interference by outsiders. We must resolves not to be persuaded by their argu- ments; not to be deceived by their unproven statements; not to be intimidated by their threats. We must resolve further to keep our fellow workmen firm in their faith. Virtually all of our factory workers have stated that they are opposed to interference by outsiders. Don't let the outsider tell you anything different. I am opposed to any outsider coming between the management and the working force of Servel simply because I feel sure the working force will get a better deal by continuing to cooperate with the Servel management than by joining an outside organiza- tion and paying out their good money for dues and assessments. Those dues and assessments will be any amount the outsider may dictate. The fellow who pays dues and assessments will have nothing to say about their spending. The chances are that no considerable part of his money will be spent for his benefit. SERVEL, INC., ET AL. 1311 On June 17, 1937, the respondent discharged Vinson and Rhoades, the two officers of the Union, for the reason, as hereinafter found, that they joined and were active in the Union. Thereafter, at vari- ous times prior to November 1937, the respondent's president wrote letters to the employees the import and effect of which was to make clear that the respondent was opposed to their joining the Union and that they would do well to rely upon the Servel Workers' Coun- cil for collective bargaining. In some of these letters there were en- closed copies of anti-labor literature, including ones vilifying the Committee for Industrial Organization. On November 22, 1937, the respondent, through its personnel direc- tor, Roberts, sent each employee a printed booklet entitled "Servel Employee Handbook," containing, in general, valuable information about the respondent, its plant, and rules and regulations. In an accompanying letter the employee was cautioned "to read it carefully and thoroughly." A paragraph in the booklet, captioned "LabQr Policy," opened with the statement in heavy type, "It is not necessary for any employee to belong to any organization in order to hold his or her job in this company." Then, setting forth that every employee may discuss with the management matters affecting his employment "personally" or through "some other individual or committee or organization," the paragraph concluded, "The Company thus recog- nizes the right of employees to bargain collectively through repre- sentatives of their own choosing." No reference was made to collec- tive bargaining in its essential attribute as a process for presenting through freely chosen representatives the group demands of all em- ployees for wages, hours of employment, and working conditions. The booklet also briefly described the Council, and stated, "It will be to your interest to get acquainted with the councillor of your divi- sion and familiarize yourself with the purposes and methods of the Council plan of employee representation." In the latter part of 1937, another booklet entitled "Let's Look at the Record," purportedly issued by the respondent and "the several employee organizations . . . the Workers' Council, Servel Employees Association (S. E. A.), and Servel Employees Federal Credit Union (S. E. F. C. U.)," was given to each employee. The booklet con= tained various cartoons and statements, principally extolling the virtues of the Servel Workers' Council, its importance as an integral part of the respondent's business, and stressing the theme that better working conditions could be expected through its cooperative efforts with the respondent. The record in this case manifests a misconception which apparently in some places still persists concerning the fundamental policy of 1312 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Act.21 As we recently had occasion to point out the existence of an organization for the presentation of employee grievances and demands establishes neither compliance with the Act nor the effectua- tion of its objectives if that organization in its action and functional structure is subject to employer compulsions and controls.22 Organi- zations so subject not only erect unlawful barriers to the full enjoyment by employees of their right to self-organization and col- lective bargaining, but, in consequence, are a fruitful source of industrial unrest.23 It is plain that the representation plan now known as the Servel Workers' Council had its inception in employer action. The re- spondent, through an important executive officer, formulated the plan, selected the employees to initiate its organization, and fur- nished the necessary assistance and means. It is immaterial that Nehrbas informed the Temporary Committee that they need not accept the submitted plan. Acceptance was inherent in the situation and in the respondent's economic power. That the plan was successfully launched, councillors elected, and a council set up, does not demonstrate an operative free will in the employees. Neither the establishment of the plan nor its provision was submitted to them for consideration or approval. Nehrbas' speech of July 17, 1933, made it apparent to all present that the respondent had definitely tied its industrial relations to the plan, that the plan was its response to Federal legislation and the efforts of some employees to establish a union of their own choosing. The wage increase which Nehrbas announced is typical of such situations.24 The plan as formulated and put into operation in 1933, while af- fording representation for presenting employee complaints and re- quests to the respondent, ignored completely the broader aspects of 21 This policy was recently stated by the United States Supreme Court in National Labor Relations Board v. Fansteel Metallurgical Corporation, 59 S. Ct. 490, 497, as follows : "We repeat that the fundamental policy of the Act is to safeguard the rights of self-organization and collective bargaining, and thus by the promotion of industrial peace to remove obstructions to the free flow of commerce " 22 Matter of Bethlehem, Shipbuilding Corporation, Limited and Industrial Union of Marine nad Shipbuilding Workeis of America, Local No. 5, etc, 11 N L. R Bi 105 23 National Labor Relations Board v. Pennsylvania Greyhound Lines, Inc, et al.. 303 U. S 261. The Report of the United States Senate Committee on Education and Labor on the National Labor Relations Bill stated , 77th Cong., 1st sess., Sen. Rep. No. 573: Practically 70 per cent of the employer-promoted unions have sprung up since the passage of section 7 (a) of the National Industrial Recovery Act. The testimony before the Committee has indicated that the active entry of some employers into a vigorous competitive race for the organization of workers is not conducive to peace in industry . It is the wish of the committee to prevent in so far as possible the perpetuation of bitterness or strife. 21National Labor Relations Board v The Falk Corporation, 102 F. ( 2d) 383 (C C. A 7th) ; National Labor Relations Board v American Potash & Chemical Corporation, 98 F. (2d ) 488 (C. C. A. 9th ), cert. den. February 27, 1939. SERVEL, INC., ET AL. 1313 self-organization and collective bargaining. The plan made no provi- sion for group assemblage and meeting of employee members to dis- cuss in a body matters affecting wages, hours, and other working conditions.25 It made no provision for group decision upon a course of action or for group instruction to plan leaders. On the contrary, the plan as devised foreclosed such discussion, decision, and instruc- tion. The council functioned insulated from collective action of its constituency, and attended by the management's representative. More- over, what measure of representation the plan afforded was subject to employer restraint and control, direct and indirect. Membership, and hence representation, was an attribute of employment rooted in the respondent's will to employ, not a matter of self-organization. Councillorship was closed to non-employees and terminable by dis- missal of the incumbent or his transfer to another voting group. Meet- ings of the council were in the presence of the management's repre- sentative. The procedure for handling employee grievances was so lengthy and involved such repeated submission to different employer representatives as to invite early capitulation. At one stage in the procedure, that involving inability of the councillor and the manage- ment's representative to settle a complaint, presentation of the griev- ance to the succeeding respondent's representative was to be made not by the councillor alone but by joint action of the councillor and the management's representative. Elections and council meetings were held on the respondent's property, and in other ways the operation of the plan depended upon the respondent's financial and other sup- port. The plan could not be amended without the respondent's ap- proval and could be terminated by its individual act. In short the plan as conceived and established by the respondent was an organiza- tion entirely its creature, capable of affording a degree of employer- controlled representation, but preventing true collective bargaining. The adoption of the new constitution and bylaws in March 1935 clearly was intended to and did permit continuation of the plan and preservation of its essential characteristics, after passage of the Act. However, the manner and character of the revision precluded elimina- tion of the employer influences and compulsions necessarily engendered by the respondent's participation in the formation of the plan and its subsequent domination and support. The employees were without opportunity to approve the new constitution and bylaws or to con- sider what revision they wished in order to obtain the benefits of the pending legislation. Patterned after the Servel Workers' Association and led by the same councillors, the Servel Workers' Council was hardly to be expected to reorganize and rid itself of domination in 25 National Labor Relations Board V. Pennsylvania Greyhound Lines, Inc., et at., 303 U. S. 261. 1314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD order to achieve true collective bargaining and gain basic collective bargaining agreements. Since the 1935 revision and since passage of the Act, the plan has been subject to substantially the same employer restraint, control, and support, direct and indirect, which existed theretofore. Although the new constitution and bylaws provide that employees "may become associated" with the Council, in practice membership apparently still is treated as automatic and as an incident of employment. There are no membership applications, cards, or dues. Nor is there any proof of a membership roll. We do not mean that membership in a labor organization may not include and be confined to all employees of an employer; nevertheless, where an employer prior to the Act has pro- moted, sponsored, and maintained a labor organization, and after July 5, 1935, by action encourages continuance of the identification which had existed between employment and membership, such employer is engaging in a form of unlawful support to that organization.26 The office of councillor under the new constitution and bylaws was open only to employees and was to be considered vacated in the event of a discharge of the councillor or his transfer to another voting "divi- sion." The retention, after the Act, of these provisions of the plan, continued the respondent's influence and opportunity for control over the office, and the exercise of that power in the case of Schmidt and Hopper constituted domination and interference with the administra- tion of the Council 27 The 1935 revision perpetuated the instrumentality of a manage- ment's representative as an integral part of the plan's procedure for handling complaints. As heretofore stated, it was understood that the management's representative would perform the duties of such posi- tion as continued and existent under the revised plan. While the new constitution and bylaws made attendance of the management's repre- sentative at council meetings depend upon "invitation by the Council- lors," he has, in fact, attended and participated in the substantial majority of such meetings which have been held since the Act.28 We are of the opinion that the continued functioning of the management's. representative under the revised plan cannot be found to be mere sys- tematic negotiation with the employees' representatives. In view of the origin of the plan and the position which the management's repre- sentative held in it prior to the revision, such functioning necessarily ze Such support is not to be confused with that accorded pursuant to a valid agreement under the provisions of Section 8 (3) of the Act. Cf. Matter of Williams Coal Company and United Mine Workers of America, District No 23, etc., 11 N. L It. B. 579. r' Compare a similar situation under Section 8 (3) of the Act in Matter of Consoli- dated Edison Company of New York, Inc, et at and United Electrical and Radio Workers of America, etc., 4 N. L. It. B 71, 104 28 It is apparent from the testimony of one of the councillors that the councillors did not consider the matter of "invitation" as of much significance. SERVEL, INC., ET AL. 1315 effects a continuous employer influence upon the formulation of de- mands and determination of action by the employee representatives. The plan, as revised, provides that in the event the council and management's representative cannot agree upon the settlement of a complaint or demand, the matter is to be presented to the respondent's works manager, and thereafter to its president, by a joint committee appointed for such purpose by the council and the management's representative. Thus, the committee to negotiate for the employees, itself includes representatives of the respondent. We repeatedly have held an employee representation plan to be dominated and inter- fered with by the employer if negotiation for adjustment of employee grievances, or collective bargaining thereunder, is performed in whole or in part in behalf of the employees by the employer's representative.29 The respondent in its brief makes the point that since the plan, as revised, may be amended by the council without the respondent's approval, it affords a "democratic form of organization." However, the existence of the amendment power does not establish absence of employer domination and interference. Moreover, as we recently stated : 30 ... Even if amendment by the employees were possible, viewed realistically, the Plan's purported importance to employer and employees has been so indelibly stamped upon; the minds of the respondent's employees by employer publicity that it is un- imaginable that an employee would attempt to limit employer control of the Plan by, proposing a substantive amendment. An employee cherishing his job would be unlikely to display such temerity. The plan as it now operates still is without provision for, meetings of all members or for group instruction to councillors. The continua- tion after the Act of the serious handicap to collective bargaining and group action resultant from this condition would by, itself create a strong suspicion that its retention was the result of company domi- nation. We do not find in the execution of the so-called "agreement" of May 12, 1937, between the respondent and the Council such demon- stration of collective bargaining as would give rise to a contrary in- ference. The document itself impresses us more as a statement by the respondent of prospective action and of industrial relation with the Council than an assumption of legal responsibility under an 3° Matter of International Harvester Company and Local Union No. 57, International Union, United Automobile Workers of America, 2 N. L R. B 310; Matter of Bethlehem Shipbuilding Corporation, Limited and Industrial Union of Marine and Shipbuilding Workers of America, Local No. 5, 11 N. L R. B 105 30 Matter of Bethlehem Shipbuilding Corporation, Limited and Industrial Union of Marine and Shipbuilding Workers of America, Local No. 5, 11 N. L R. B. 105 1316 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agreement.31 In any,, event, we are convinced, in view of the events antedating the execution thereof and the respondent's treatment thereafter of thei Union, that the respondent's signing was a tac- tical step intended to encourage adherence to a favored labor organization.32 The respondent's support to the Council has proceeded since the Act along substantially every front. Meetings of the Council, annual councillor elections, transaction of the business of the councillors, posting of council notices, all have been on the respondent's prop- erty.93 It is urged, however, that the grant of these facilities to the Council does not constitute support because the respondent has not denied similar use of its property, to other labor organizations. We do not believe this consideration relevant. Moreover, while the re- spondent was not requested by, and hence had no occasion to refuse, the Union or any other labor organization use of its property, it is clear, and was manifest to the Union, that had such a request been made by it, its request would have been rejected. We also view the annual payments of $1,000 from the Serve] Workers' Association to the Council, both before and after Novem- ber 1937, as a contribution by the respondent of support, within the meaning of the Act. Section 8 (2) of the Act is not limited to in- stances of direct employer support, but condemns the indirect yet equally effective forms of assistance which likewise are repugnant to the purposes and policy of the Act. While the management of the respondent has no voice in or control over the matter of the con- tribution of funds by the Servel Employees' Association to the Coun- cil, the creation and duration of the source of the funds, viz, the retail store and its related business activities have depended upon the respondent and been identified with it. The respondent is the 31 See Matter of St. Joseph Stock Yards Company and Amalgamated Meat Cutters and Butcher Workmen of North America, Local Union No. 159, 2 N L. R B 39, 53; and Matter of Harnischfeger Corporation and Amalgamated Association of Iron, Steel & Tin Workers of North America, Local 1114, 9 N. L R. B. 676, 682, concerning "statements of Policy." 32 In National Labor Relations Board v. American Potash and Chemical Corporation, '98 F. (2d) 488 (C. C. A. 9th), cert den. February 27, 1939, the Couit, in speaking of the employer's entering into certain agreements with an employer-dominated labor organization, stated : For more than a year following passage of the Act, the [employer-dominated] Association made some attempts to gain better wages and to relieve the unsatis- factory housing situation in Trona. These moves were for the most part fruitless until concessions on both matters were made by respondent in April, 1936, the high point of the Boras; and Potash Workers' Union organizing campaign. The Board justly inferred that such success, coming after a long period of chronic inability to bargain successfully, was due to respondent's desire to head off the American Fed- eration of Labor union rather than to any pressure from the Association. 83 See National Labor Relations Board v. Fansteel Metallurgical Corporation, 59 S Ct., 490, 493, 499; Matter of Fanisteel Metallurgical Corporation and Amalgamated Associa- tion of Ilion, Steel and Tin Workers of North America, Local 66, 5 N . L. R. B. 930, 946 , National Labor Relations Board v. Wallace Manufacturing Company, Inc , 95 F. (2d) 818 (C. C. A. 4th). SERVEL, INC., ET AL. 1317 owner of the property on which the store is located ; store rental and service charge is hardly commensurate with the consideration given; the respondent's director is the treasurer of the Association; its personnel director is "interpreter and adviser on policies and ac- tions" to the Association. The practice of this annual contribution is particularly vicious in view of the fact that part of it was dis- bursed to compensate the councillors. That the councillors testified that their official acts were not influenced by the source of their compensation and knowledge of the surrounding facts is, of course, without significance.34 The various afore-mentioned acts engaged in by the respondent through its officers and supervisory force to combat organization of the employees by the Union, constituted support of great importance to the Council. We are convinced that the letters of Ruthenberg and their enclosures; the meetings of the foremen with the employees held pursuant to Ruthenberg's instructions; the other above-men- tioned statements, written and oral, made by the respondent's manage- ment to the employees concerning the Union and the Council; the discharge and' transfer, respectively, of the two councillors because 'of their union affiliation; the dismissals of the two union officers, all were intended by the respondent to intimidate, threaten, and coerce, and had the effect of intimidating, threatening, and coercing the employees into adherence and advocacy of the Council and non- affiliation with the Union. The statements of Ruthenberg and the foremen, taken in the context of surrounding circumstances of the employer-employee relation existing, and the economic power of the employer'35 were not intended to be nor were they mere expressions of opinion, as the respondent now insists. They expressed in un- mistakable terms the hostility of the respondent toward the Union and its wish that the employees retain the Council as their bargaining representative." At the hearing the respondent offered in evidence certain cards circulated among the plant employees in March 1937 and signed by 95 per cent of them stating in substance that the subscriber "as a loyal employee of Servel, Inc." was opposed to "interference with s4 The Senate Committee on Education and Labor, in its report on the National Labor Relations Bill, supra, stated : . . . It seems clear that an organization or a representative or agent paid by the employer for representing employees cannot command, even if deserving it, the full confidence of such employees. And friendly labor relations depend upon abso- lute confidence on the part of each side in those who represent it 35 Cf Matter of Crawford Manufacturing Company and Textile Workers Organizing Committee, 8 N L. R. B 1237. ' National Labor Relations Board v. Fansteel Metallurgical Corporation, 59 S Ct. 490, 494; Virginia Ferry Corporation v. National Labor Relations Board, 101 F. (2d) 103, 105-106 (C C. A. 4th) ; National Labor Relations Board v The Falk Corporation, 102 F (2d) 383 (C. C A 7th) ; also, Virginian Ry Co. v. System Federation No. 1,0, etc, 84 F. (2d) 641 (C. C. A. 4th), 300 U. S. 515. 164275-39-vol. x! 84 1318 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Servel operations and my own employment by any individual or group," particularly "interference or coercion by individuals or groups not employed by Servel, Inc." The Trial Examiner refused to admit these cards and certain proof relating thereto. The re- spondent in its brief contends "that this evidence should have been admitted as it was in effect a secret vote approving the Servel Workers' Council, its constitution, method of operation, personnel and all other pertinent facts." Although we are of the opinion that this evidence constitutes no such approval, we nevertheless will, and do hereby, admit to the record said cards and all evidence, oral and documentary, relating to their circulation. This evidence shows that the circulation was carried out by the Council at the suggestion and instigation of the respondent after its president, Ruthenberg, had learned of the Union's organizational activities at the plant. Under these circumstances we are satisfied that the cards were signed under employer coercion and compulsion, and consequently cannot be treated as a voluntary expression. Moreover, as we have stated in similar cases, expressions of this character elicited from employees, directly or indirectly, are immaterial to the issue of whether an employer has dominated, interfered with, or supported a labor organization.s' The respondent also offered in evidence letters and written resolu- tions received by it from some 460 employees in response to Ruthen- berg's letters above mentioned. These employee letters and resolutions in substance reiterated the sentiment expressed in the Ruthenberg letters. Further, the Council offered in evidence a petition which it circulated among the employees during the hearing, and which a sub- stantial number of the employees signed, expressing satisfaction with the Council and requesting the Board to recognize it as their sole bargaining representative in this proceeding. The Trial Examiner refused to admit this evidence to the record. We think his ruling was sound and hereby affirm the same. It is immaterial to a determination of the issue of the respondent's domination of, interference with, and support to the Servel Workers' Council, or to the issue of the respond- ent's restraint and coercion of plant employees in their right of self- organization, what response the respondent had to the intimidatory letters of its president. It is equally immaterial to these issues whether i Cf. Matter of Emsco Derrick and Equipment Company ( D & B Division) and Steel Workers Organizing Committee, 11 N L R B 79 We have often he'd that the obtaining of statements from employees by an employer directly or indirectly asserting opposition to outside labor oiganizations and satisfaction with existing relationships is a violation of Section 8 (1) of the Act Matter of Sunshine Mining Company and Inter- national Union of Mine, Mill and Smelter Workers, 7 N L. R. B. 1252 , 1257; Matter of Arthur L Colton, etc and Amalgamated Clothing Workers of America, 6 N L R. B 355, 359. SERVEL, INC., ET AL. 1319 the employees were satisfied with an illegal labor organization or were desirous of having the Board accord it status.38 We find that the respondent dominated and interfered with the administration of Servel Workers' Council, and contributed support to said labor organization; that by said acts the respondent has inter- fered with, restrained, and coerced its employees in the exercise of the rights guaranteed them by Section 7 of the Act. B. Interference with, the right of _ self-organization guaranteed by Section 7 of the Act In view of the foregoing facts and the record, we find that the respondent, by the anti-union statements of its foremen to the plant employees in May 1937 as aforesaid, by the anti-union statements of its president contained in the above-mentioned letters of June 3, 1937, June 4, 1934, and other letters, and the use of anti-union literature in that connection, and by its transfer of Hopper,39 interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed them by Section 7 of the Act. C. The discriminatory discharges of Brammmer , Delany, Deekard, Brents, McCool, Leach,man, Moore and Grimm, and the allegedly discriminatory dischwrges of Ludwig and Hullett Earl Brammer, Roy Brents,40 James Deckard, Roddie Delany,41 Merton McCool, Myron Leachman, Harold Moore and George Grimm were discharged by the respondent on February 20, 1937. All of these men had worked as metal finishers in Department 56 of the respond- ent's plant, and were among the most competent of the 112 metal finishers employed in that department. The discharges were coinci- dent with a general reduction in plant force which included a lay-off on February 20 of 14 other metal finishers in the department. At the time of their respective discharges the eight above-named employees were informed that the reason for their dismissal was the reduction in force. That the men were in fact discharged and not merely laid off .is plainly shown. Among other things the form dismissal records prepared by their respective foreman or supervisor for the use of the respondent bear the following notation regarding each employee: "Would you reemploy ? No." "Would you try in another dept.? No." Ss See footnote 37. Cf. National Labor Relations Board v. The Louisville Refntino Company, 102 F (2d) 678 (C. C. A. 6th). 80 The cases of Schmidt , Vinson, and Rhoades are dealt with below. 40 Brents ceased work on February 19, 1937 , after being informed by the i espondent that be was to be laid off the following day. However, for the purposes hereof his case may be considered the same as the cases of the seven other named employees. 41 At times also referred to in the record as Raddie Delaney. 1320 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The employees in Department 56 assemble refrigerators on an assembly line. They are divided into work groups, and are com- pensated partly on an hourly, partly on a bonus basis. The award and amount of a bonus depend on productivity. Thus, the respond- ent has fixed standard rates of production for the various work groups in connection with their regular operations, and a bonus is paid each employee measured by the extent to which the work of his group successfully surpasses the standard rate established for it. In October 1936 the respondent, as a consequence of a change in its manufacturing process, was compelled to abandon the then exist- ing standard rates of production in force in Department 56. Pend- ing the lapse of time in which new standard rates could be devised and established, temporary rates were instituted based upon probable productivity, under the new process. These rates, however, proved objectionable to the employees in the department, for none was able to earn a bonus during the month. As a result of continuous em- ployee complaint about these rates the respondent on November 16, 1936, fixed new production rates, which the employees found to be more satisfactory. In December 1936 the respondent sent into the department certain so-called "time-study" men to make certain observations and gather information concerning the operations there performed, which the respondent desired to use in establishing new permanent rates of production. Some test studies which the general foreman of the department, one Axford, and his assistant, one McKinney, previously had made of the operations indicated that the department was ca- pable of producing 60 units an hour under the new process. How- ever, the studies made by the time-study men failed to demonstrate so high a rate of productive capacity. At the hearing McKinney testified that the principal cause for this disparity lay in the conduct of certain employees in the department, that when the time studies were being made these employees deliberately lagged in their work in order to prevent higher standard production rates from being set. During January 1937 further studies were attempted by the time- study men, but the slowing down in production which occurred when such attempts were made prevented the completion of satisfactory studies. On February 1, 1937, the respondent initiated permanent standard rates for the department. The new rates resulted in a substantial diminution of the earnings of the employees. Delany, who with Brammer had had many conferences with Axford prior to February 1 about a permanent standard rate, and had come to represent the employees in the matter, protested to Axford that the new rates were unfair. SERVEL, INC., ET AL. 1321 The employees continued disgruntled, and further protests were made in their behalf not only by Delany but by Leachman and McCool. On February 10 a number of employees in the department on the first shift informed Axford during their lunch hour that they would not return to work unless the new standard rates were decreased and their wage cuts restored. They were represented by Delany, Bram- mer, and one other employee,42 who acted as spokesman. Leachman also assumed leadership in the discussion. Axford replied that he would inform the employees within 2 or 3 days what the respondent would do about the matter. The employees were not satisfied, but upon being given this assurance returned to work. Later in the day Axford told the employees on the second shift in the department, when they reported for work, that he proposed to confer with the respondent's management that day about reduc- ing the standard rates and would inform them in the evening what its decision was. The employees in the second shift had been told by those on the first of the inconclusiveness of the effort which had been made to reach an adjustment of their grievance. Axford failed to report to the men and left for his home at his customary hour. Thereafter, during the evening lunch hour the employees learned of Axford's departure and felt aggrieved. They then told their super- intendent that they wanted to discuss with Axford the matter of the rates, and stated that they would not resume work until informed what statement the management had made to Axford about changing the rates. The leaders of these employees were McCool, Deckard, and Brents. About half an hour later Axford appeared accompanied by his superior, the superintendent of the division of which Depart- ment 56 was a part. Other supervisory officials joined them there- after. The employees stated through McCool, Deckard, and Brents that they wished to know then what the respondent proposed to do about establishing more favorable rates, and that they would not return to work until they were informed what the respondent's de- cision was. Axford and the other officials sought to persuade the men to return to work, saying that the respondent would decide the matter later. Some of the groups returned to work but others were not satisfied. The respondent then invited all the employees to the office of the vice president and works manager, one Baker. Baker chided the employees for acting like "babies" and asked what they wished. Deckard, who did most of the speaking, replied that the men wanted their pay increased. Baker suggested that the employees select two representatives who would present their grievances to the 42Axford testified that Delany, Brammer, and Payne "seemed to represent the men in the groups," McKinney testified to recalling Brammer as having been "right up in front." 1322 DECISIONS OF NATIONAL LABOR RELATIONS BOARD respondent the following morning. McCool nominated Deckard and Brents for this purpose, and these two were chosen. When the employees on the first shift reported to work the follow- ing day they were instructed by the respondent to proceed to the recreation hall. There they were addressed by Baker on the subject of the rates, and then requested to appoint representatives from each group to confer with the respondent on the subject. Grimm and Delany sought during the speech to voice their own opinions on matters raised by the speaker. Leachman made several nominations for representatives. Each of the groups then chose their repre- sentatives and returned to work. Thereafter, the representatives, 11 in number, including Brammer, Brents, Deckard, Grimm, and Moore, went to Baker's office for the conference. They found present not only representatives of the man- agement but several councillors of the Servel Workers' Council. Baker and the president, Ruthenberg, spoke to the representatives, criticized the method which the employees had followed the previous day to secure an adjustment of their grievance, and expressed the opinion that the employees should have resorted to the Servel Work- ers' Council for such purpose. One of the councillors volunteered that in his opinion it was shameful for employees who were earning as much money as the respondent's employees were to resort to activi- ties of the kind pursued the preceding day. At this point Ruthenberg stated in substance that any employee who caused other employees to lose work should be photographed and have his picture posted on every billboard and bulletin; board in Evansville in order that the com- munity might know who he was. Grimm and Deckard did most of the speaking.43 The conference concluded with Ruthenberg's promis- ing the representatives that something would be done about their wages within a day or two. On the following day, February 12, 1937, the respondent announced a general increase in wages throughout the plant of 10 per cent. This was satisfactory to the employees in Department 56 and to the respondent's other employees.44 Six days later, on February 18, 1937, the respondent curtailed its general plant production by 161/2 per cent and proceeded to lay off a number of the employees. Of the 112 metal finishers in Department 56, 22 were required to be laid off. The selection of these 22 rested with, Axford. There is no claim or showing that in making the decision, which Axford then made, any system of seniority or other similar procedure) was determinative. Among those dismissed from work were the eight above-named employees, Brammer, Delany, 4aAccording to Axford's testimony Grimm and Deckard frequently interrupted the respondent's officers. ** See footnote 17. SERVEL, INC., ET AL. 1323 Deckard, Brents, McCool, Leachman, Moore, and Grimm. However, as heretofore set forth, these employees were not merely laid off, to be -reinstated when full production was resumed '45 but were discharged. Axford testified that in choosing which employees would be dis- missed from work, as well as in deciding in the case of the eight that they would be dismissed from employment, the test which he applied was "their [the employees'] workmanship and their attitude towards producing parts, and, of course, the quality of their workmanship." 46 It is clear, and the record establishes, regarding the workmanship of the eight employees, that these employees were at least as com- petent as metal finishers who were not laid off, and, in some cases, were more competent. Axford admitted at the hearing that "they are good metal finishers." 47 The respondent contends that the eight men were discharged for "stalling" in their work, that is, for deliberately slowing down in their work operations, when the time-study men had sought to make observations in Department 56. It also advances with respect to a few of the men certain alleged supplemental reasons for their dismissals. The record does not support the respondent's contention that Grimm engaged in deliberate slowing of his work when the time studies were made. While Axford made a blanket assertion at the hearing that all, of the eight men had "stalled," the head of the re- spondent's time-study department, one Reynolds, testified on direct examination for the respondent that the only indication of inten- tional slowing down which he had found in connection with the time studies occurred in the work of Group 10. Grimm was employed in Group 5. The brief submitted by the respondent states that "as far as Grimm is concerned, there is little or no evidence of his actual stalling." Neither are we convinced from the record that Moore engaged in purposeful slowness. Axford testified that Moore "would slow up a 41 Some of the metal finishers who were laid off have since been reinstated by the respondent. 46 Axford also testified that in cases where all other considerations were equal, a seniority rule was applied However, there is no claim by the respondent that any such situation was presented with respect to any of the eight men . They all had been with the respondent a number of years, and the record establishes affirmatively , as shown below, greater seniority in a number of the cases. 44 Axford testified as follows : Q. They were laid off because they did not meet the qualifications, that you have set out here, as well as [the] men that you kept in there? A. No, I would not say that . . . As far as metal finishing is concerned, as metal finishers they meet that qualification , generally speaking. They are good metal finishers. The record is uncettain whether by "they" the interrogator included Moore and Grimm. However , the record shows that these two employees likewise were more competent than metal finishers who were retained Thus, Grimm , at the time of his discharge , had four other employees under him whom he was instructing in metal finishing. - 1324 DECISIONS OF NATIONAL LABOR RELATIONS BOARD little to try to get a better rate," that he, Axford, so concluded from his time-watch observations, of which he kept no record, that he be- lieved the "stalling" occurred in December and that the "time-study man" had complained once or twice about it. On the other hand, Moore worked in Group 9, and,' Reynolds, the man in charge of the time studies testified that he was able to secure "good time studies down there," that is, of the employees in Group 9, that he "would say the trouble did not amount to anything in 9." Axford testified that Moore also was discharged because he had proved a poor group leader. The evidence shows that in 1936 Moore acted as leader or supervisor of a group of employees, and that in December 1936 Axford had demoted him to the position of an ordi- nary employee because of alleged incompetence as a leader. How- ever, there is no evidence that at the time when the demotion in fact occurred, Axford or anyone else indicated to Moore, or that it was the fact, that Moore's asserted incompetence was so great as to warrant his permanent discharge upon the first occurrence of a decrease in production. There is no necessary conclusion to be drawn, and the respondent did not prove, that incapacity as a group leader means incompetency as a metal finisher. The contention that the respondent, having once taken action by demoting Moore, later revived the cause of the demotion as a basis for his discharge, im- presses us as a makeweight. We equally are unconvinced that McCool, Brents, or Deckard en- gaged in intentional dilatory conduct when the time studies were made. The testimony which the respondent introduced in support of its contention as regards these three men is self-contradictory and evasive. Axford testified that Reynolds, the man in charge of the time studies, complained to him of McCool's alleged"stalling" dur- ing the making of the studies, and that he, Axford, had discharged McCool for that reason. However, Axford thereafter in his testi- mony specifically denied that he discharged McCool because of any complaint by Reynolds and stated as the reason that his and Mc- Kinney's informal checks with a time watch had shown "stalling" by McCool. With respect to Brents, Axford testified that he was "not sure" whether Reynolds had included that employee among the employees concerning whom complaint was made, but "believed" that Reynolds had, that Brents had been discharged because of his and McKinney's time checks. As regards Deckard, Axford testified sim- ply that Reynolds .had complained of Deckard along with McCool. The record shows, however, respecting all three employees that they worked on the second or night shift and not on the day shift, that the time studies were attempted during the day shift, and few, if any, were made during the night shift. When this fact was called SERVEL, INC., ET AL. 1325 to Axford's attention, during the course of his testimony at the hear- ing, Axford stated that he wished "to qualify" what he had pre- viously testified about complaints being made to him by Reynolds regarding any of these three employees. Axford testified : Q. And those particular men [McCool, Brents, and Deckard] were complained about to you by this man [Reynolds] ? A. No, I wouldn't say that. It was the other men they com- plained about. Q. Did they complain to you, did the time study men complain to you about Brents, McCool and Deckard? A. No, only one complaint on Brents and that was sometime back, it was on a box leg operation. Axford then proceeded to state that he had discharged the three men because of his own stop-watch checks. No record of these checks was made or kept. McKinney, who assisted on these checks testified, when asked if any employees on the second and night shift had "stalled," that Deckard and Brents had lagged "to some extent, not a whole lot." Leachman, Brammer, and Delany were employed in Group 10 on the day shift. The evidence shows that when the time studies were made some slowing down occurred in the group among which these men were employed. However, the evidence does not establish satis- factorily Leachman's participation in the slowing down. In its brief, the respondent states, "As far as Leachman is concerned, the evidence tends to show that he was naturally a slower worker than some of the others, and it may well be that what was considered as stalling on his part was made up largely of his natural slowness." 4s The evidence does tend to show that Brammer and Delany "stalled." McKinney, the assistant foreman, was positive in his testimony con- cerning Delany, although Axford admitted in the course of his tes- timony that the slowing of work in Delany's operation could have been caused as much by the employee who worked with Delany as by Delany. Axford testified, "I am sure that most of it was his [Delany's] work, or half of it, at least." Axford did not recall the name of Delany's coworker. Section 8 (1) of the Act provides that employers shall not inter- fere with, restrain, or coerce their employees in the exercise of the fundamental rights which the Act in Section 7 secures to employees. Section 7 pronounces as a basic right of employees the right "to en- gage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection." In enacting these provisions it 48 The respondent's brief also states that Leachman will "be given a chance" at a posi- tion with the respondent "when, as, and if" an opening occurs. 1326 DECISIONS OF NATIONAL LABOR RELATIONS BOARD was the intent of the Congress that employees, irrespective of whether they are or are not members of a labor organization, have full freedom and liberty to enjoy the advantages of concerted action lawfully designed and engaged in to advance their economic and other interests as employees. The relevant issue, accordingly, as the respondent in its brief states, is whether Brammer, Delany, Deckard, Brents, McCool, Leachman, Moore, and Grimm, or any of them, were discharged by the respondent, through Axford, for engaging in con- certed activities with other of the respondent's employees for the purposes of collective bargaining and other mutual aid and protec- tion. If in selecting these eight men for discharge and in discharg- ing them Axford's judgment rested in whole or in part upon their leadership and participation in the concerted activities of the em- ployees in Department 56 to obtain a fair adjustment of the standard rates of production, and not upon the alleged "stalling" and other asserted reasons, then the respondent engaged in an unfair labor practice within the meaning of Section 8 (1) of the Act. We are satisfied from what has been set forth above, in the light of the entire record, that the respondent, through Axford, discharged the eight men not because of the so-called "stalling" on their part, if any, when the time-study men made their examinations, or for other reasons asserted by the respondent, but because of their leadership in the concerted activities engaged in by the employees in Department 56 to secure a schedule of standard production rates which would permit a satisfactory wage return to them. The fact that Brammer, Delaney, Deckard, Brents, McCool, Leachman, Moore, and Grimm, were willing to and did express and make articulate to the respondent on important occasions, especially in connection with the strike of February 10,411 the desires of their fellow workers for rates which would enable them to earn a satisfactory wage, despite the wish of the respondent, manifest in such incidents as the above-mentioned comment of Ruthenberg on February 11, that the employees yield the presentation of their requests and grievances to handling by the em- ployer-dominated Servel Workers' Council, 50 openly marked these men as independent leaders. That the respondent bore animus toward any employee who assumed leadership in the strike of February 10 4e While there is some reference in the record to the strike as a sit-down , we agree with the respondent that the evidence does not establish that such was the case., The respondent in its brief filed after the hearing states , "in our opinion no 'miniature sit- down strike' occurred at Servel . . . Respondent does not feel that the metal fin- ishers participated in a sit-down strike, however miniature . . . to refer to the strike of February 10, 1937, as a 'sit-down is, we believe , unintentionally misleading." 5° The subserviency of the Servel Workers' Council, brought about by the respondent's domination of that organization, is reflected in the above-mentioned statement of one of the councillors present at the February 10 meeting, the day preceding the wage increase of 10 per cent, to the effect that it was shameful for employees who were earning so much money to resort to concerted activities. SERVEL, I NC., ET AL. 1327 is, we feel, clearly shown by the remark of Ruthenberg on February 11, regarding the taking and posting of photographs of such em- ployees. The respondent in its brief urges that Ruthenberg, in mak- ing this statement, should be considered as "just making a general observation," that it was not "his intention to convey the idea that the names of the men who comprised the committee should be publicized in any manner." Without determining the existence of a specific intent of the kind stated we are satisfied that Ruthenberg did intend to express hostility toward the employee leaders. Ruthenberg was president of the respondent and a person of consequence, and his statements and expressions must be measured by the natural interpre- tation which the employees as reasonable men would place upon them under the circumstances. This same hostility is shown by the failure of the respondent to inform the eight employees at the time of the general lay-off that they were in fact being discharged without pros- pect of reemployment, and not merely being laid off pending an increase in production. As we have stated above, the record does not establish that six of the employees engaged in "stalling," nor do we feel that the respondent at the time of their discharge enter- tained such a belief or consummated their discharge upon such ground. In view of these circumstances, among others, we do not feel that any "stalling" which the evidence tended to show Brammer and Delany to have engaged in was an operative factor in their discharge. We find that the respondent on February 20, 1937, discharged Earl Brammer, Roddie Delany, James Deckard, Roy Brents, Merton McCool, Myron Leachman, Harold Moore, and George Grimm, and each of them, and has refused to reemploy and reinstate said em- ployees, and each of them, because of their engaging with other employees of the respondent at the Evansville plant in concerted activities for the purposes of collective bargaining and other mutual aid and protection; that by said discharges, and each of them, the respondent has discouraged and is discouraging the exercise of a free choice of representatives by the respondent's employees for the pur- poses of collective bargaining, and to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection, and otherwise has interfered with, restrained, and coerced its employees, and is so interfering with, restraining, and coercing them in the exercise of the rights guaranteed in Section 7 of the Act.51 Since their respective discharges, Brammer has earned $703.33; Delany, $50; Deckard, $302.29; Brents, $75; McCool, $815.42; Leach- chatter of Indianapolis Glove Company and Amalgamated Clothing Workcrs of America, Local No. 145,5 N. L R. B 231, 238 1328 DECISIONS OF NATIONAL LABOR RELATIONS BOARD man, $868.54; and Grimm, $186. Moore worked from May 3 to No- vember 30, 1937, at the wage rate of $1 per hour. Brammer, McCool, Leachman, and Moore obtained employment after their discharges with a corporation known as Briggs Indiana Corporation. At the time of the hearing each had been laid off from work by that com- pany. They all desire reinstatement by the respondent. A compar- ison of the amount of money earned by these men while employed by Briggs Indiana Corporation with the amount of their respective earn- ings during a comparable period with the respondent prior to Feb- ruary 20, 1937, discloses that these men have not had regular and substantially equivalent employment with Briggs Indiana Corpora- tion. In any event, however, we are of the opinion, and our order will provide, that their reinstatement is necessary to effectuate the purposes and policies of the Act.52 There is no claim and we find that the remaining of the eight employees have not obtained regular and substantially equivalent employment since their discharges. George Ludwig was employed by the respondent as a punch-press operator in Department 56. He was laid off by the respondent on February 20, 1937, at the time of the reduction in plant force. The respondent contends that it selected Ludwig for inclusion among the employees then laid off, because of inefficient operation of the punch press. While we are not satisfied that the record supports this con- tention, it is unnecessary that we so decide, for the evidence as a whole fails to establish that Ludwig was laid off or his employment terminated for engaging with other employees in concerted activities. Ludwig did not participate in the strike of February 10, nor in such other concerted activities. We agree with the Trial Examiner that the allegations of the complaint, as amended, in regard to Ludwig should be dismissed. Allen Hullett was laid off by the respondent on April 30, 1937. At that time he operated a band saw in the insulation room of the plant. The respondent takes the position that it then became necessary to eliminate one shift among the band-saw operators, that Hullett was selected for laying off because he had less service than the other band- saw operators, that the respondent regretted the need for laying Hul- lett off. Hullett evidently is a competent worker, and his foreman, Myer, has recommended Hullett's reemployment when production in- creases. However, the record is barren of any evidence that Hullett's termination of employment contravened the Act. We adopt the rec- ommendation of the Trial Examiner and will dismiss the allegations of the complaint, as amended, as to Hullett. sz See Matter of The Kelly-Springfield Tire Company and United Rubber Workers of Amenca, etc., 6 N. L. R. B. 325, 349. SERVEL, INC., ET AL. 1329 D. The discriminatory discharges of Schmidt, ViMM,son, and Rhoades Fred Schmidt was employed as a porcelain worker at the Evans- ville plant for 9 years. Prior to May 1937 he worked at porcelain "burning" in Department 59. He was among the first of the respond- ent's employees to become affiliated with the Union. He joined early in the spring of 1937 and was a member when the Union received its charter on May 2. The record shows that Schmidt was a staunch protagonist of the Union. He regularly attended its meetings, wore his union membership button at the plant, and engaged in soliciting fellow employees during lunch hours and in the evening. to become members of the Union. At the time Schmidt joined the Union, and theretofore since June 1936 he held office as one of the 13 councillors elected to the Servel Workers' Council. He represented approximately 140 employees in his division of the plant. In May 1937 Schmidt was a candidate for nomination to that office at a primary election scheduled to be held June 7. Under the rules governing the election, only persons actively employed by the respondent were eligible to be candidates. During this period Schmidt continued his affiliation with the Union. On May 22, 1937, while Schmidt was at work the leader of his work group, one Dukes, approached Schmidt and asked why he was not "burning" screen shields. It was one of Schmidt's duties to place on the loading carriage small pieces of porcelain known as screen shields after they had been dipped in enamel, and then to subject these pieces to a heat-treating process called "burning." Schmidt replied that he could not "burn" the screen shields because he was then assisting one Postlewaite, an employee with whom Schmidt worked, that unless this aid was forthwith given to Postlewaite a "load" of refrigerator lin- ings would be "missed." Schmidt adverted to the need under the circumstances for additional help; es on previous occasions of similar character he had been furnished temporarily the assistance of another employee. The principal duty of Schmidt was to "burn" or heat treat refrigerator linings after they had been sprayed with enamel by Postlewaite. Schmidt also was required to assist Postlewaite when the latter's spray gun failed to function, which happened several times a day, or when Postlewaite otherwise lagged in his work. It was important that these men not "miss" a load of linings. Dukes departed after his conversation with Schmidt but returned in a minute or two with the subforeman, Juncker, who inquired of Schmidt why he was not burning screen shields. Schmidt replied ca Schmidt testified that the employees on other shifts doing the same work as he did complained to him about their difficulties in burning the screen shields while having to do the other work. 1330 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that he was then occupied helping Postlewaite and burning the lin- ings, and that he would burn the screen shields as soon as he had caught up with the other work, that he did not want to "miss" a load. He again adverted to the need for additional assistance. Juncker left and returned in a moment 54 with the foreman, Gibson, who repeated the question about Schmidt's not working on the screen shields. Schmidt reiterated what he had told Dukes and Juncker. Gibson told Schmidt to burn the screen shields and Schmidt sought to explain that he would burn them shortly when he would "miss" no load. In any event, with Gibson still standing at his side, Schmidt finally did have an opportunity to burn the screen shields, and turned to do so. At that moment, and Schmidt's testimony as to what then occurred is uncontroverted, Gibson 65 seized Schmidt by the arm and stated that since he, Schmidt, had previously refused to burn the screen shields he would not be permitted to burn them then, that Schmidt should leave his work.66 The respondent in its brief contends that Schmidt was then discharged. In so far as the issue here presented is con- cerned, it is immaterial whether Schmidt was laid off or discharged.57 At the hearing the respondent sought to show that Schmidt made the burning of the screen shields depend upon his being furnished help, that he was insubordinate to his superiors in this respect and was discharged therefor. In view of the fact that it was Schmidt's duty to burn the linings and assist Postlewaite before burning screen shields, that Schmidt was industriously engaged at all times at this work, save when spoken to by his superiors, and that he actually com- menced to burn the screen shields when stopped by Gibson, we are not satisfied that Schmidt imposed any such condition. There is no claim that during his years of employment with the respondent prior to May 22 Schmidt ever had imposed any such condition. We are convinced that Schmidt merely made reference to the apparent need for help and assistance. Upon being instructed to leave his work Schmidt went to the super- intendent, Collins, who stated that he did not want Schmidt to return to his job until a time study was made of it. On May 24, 1937, a conference was held by the management to determine the situation respecting Schmidt. Among those present were the superintendent, Collins; the subforeman, Juncker; the forman, Gibson; Schmidt; w Schmidt described the action of his superiors as "pouncing " on him. 66 while the record tends to show it was Gibson who "jerked " Schmidt's arm, it may have been Dukes. 60 Gibson, the foreman , testified that "the clock showed he [ Schmidt] had a full minute in which lie had nothing to do." If this means that Schmidt idled one minute, it hardly seems significant, in view of the evident fact that Schmidt must have consumed more than a minute in the conversations with his superiors. 6' See Matter of Precision Castings Company, Inc. and Iron Molders Union of North America, Local 80, 8 N. L. it B 879. SERVEL, INC., ET AL. 1331 Postlewaite; and one Brackett, another porcelain burner. The man- agerial officials assumed the position that Schmidt had had sufficient time to burn the screen shields without assistance and, hence, had been insubordinate. Precisely what was meant by sufficient time is not clear. Juncker testified: "I maintained that he [Schmidt] did have time, and so did Mr. Collins and Mr. Gibson . . . I think Mr. Collins decided that Mr. Schmidt was out [discharged] . . . Because the time study had showed that he had plenty of time and for Fred's [Schmidt's] refusal to me and to Mr. Gibson." Juncker further testified : "If I remember correctly, Mr. Brackett's and Mr. Postlewaite's statements in that particular meeting were similar . . . They said they had time to do it; however, it was a tough job." At the conclusion of the conference Collins discharged Schmidt. On the following day Schmidt was informed by the plant personnel director that the respondent decided to lay him off for 2 weeks. As a result of his being laid off Schmidt was ineligible to run for councillor. During the period of his lay-off the primary and final elections for councillors were held, without Schmidt's name appear- ing on the ballot.58 Upon his return to work Schmidt was given a completely different job in another department. On August 24 all the employees in this department, including Schmidt, were laid off in an "inventory lay-off." When operations in that department were resumed Schmidt was not recalled. However, on December 7, 1937, he was reemployed to do sweeping work in Department 14, and was thus engaged at the time of the hearing. The afore-mentioned incidents leading to the lay-off of Schmidt occurred at a time when the respondent already was determined upon a course of action aimed to obstruct and defeat the Union in its organization of the Evansville plant employees. As heretofore men- tioned, the Union had been formally chartered as a labor organiza- tion for those employees 3 weeks before, had an office in Evansville, and was proceeding to invite acquaintanceship with the benefits of affiliation. To the respondent the Servel Workers' Council afforded in this situation an important medium for combatting membership in the Union.59 Through emphasis upon the Council, attended by employer restraints and coercion, the respondent could attempt, as it did, to confine and direct the employees' desires for organization into acceptance of the dominated Council and in that manner to sub- ss Schmidt testified, "The 2 weeks just covered the election period, one week covered the primary and the other week covered the final." 69 In National Labor Relations Board v. Pacific Greyhound Lines, Inc, 303 U. S. 272, 274, the Supreme Court of the United States observed regarding an employer-dominated labor organization there involved: During a period of three years it had been successfully used by the respondent as an instrument for preventing three successive attempts for the organization by respondent's employees of a union free from company domination. 1332 DECISIONS OF NATIONAL LABOR RELATIONS BOARD vert any wish they might have for affiliation with the Union. We already have indicated our opinion that the written agreement of May 16, 1937, between the respondent and the Council was induced by a desire of the respondent to stress the Council's function as an available bargaining agency and to "head off" prospective collective bargaining with the Union.611 The same end is disclosed in the letters which the respondent's president sent to the employees on June 3, .1937, about a week after Schmidt's lay-off, commending to them the Council as a fitting collective bargaining agency. We are satisfied that the respondent through its supervisory offi- cials, removed Schmidt from his position as porcelain burner, laid him off for 2 weeks, and thereafter refused to reinstate him to his former position, for the reason that he had joined the Union. It is plain, and we have no doubt that the respondent so considered, that Schmidt's continuing in office as councillor after his becoming a mem- ber of the Union would handicap if not seriously endanger the re- spondent's utilization of the Council, as an implement for ridding itself of the Union. The respondent's president hardly could have written with as much persuasiveness his letters to the employees ex- tolling the Council, if one of the newly elected Councillors was, him- self, a resolute charter member of the Union. Moreover, we are satisfied that the respondent did not wish to have in the Council an employee like Schmidt who in his term of office as councillor had shown himself to be a strong leader, and since had identified himself with the aims and policies of the Union. Schmidt's alleged insub- ordination of May 22 afforded the respondent, and constituted, the pretext it sought for terminating his employment and preventing him from being a candidate for reelection to the Council.61 While it is unnecessary to determine whether the incident was deliberately pro- voked by the respondent's agents, the record yields a strong inference that such was the case. The acts and attitude of Dukes, Juncker, and Gibson on May 22 evince an unnecessary stressing of a trivial incident. We do not believe that a competent worker, such as Schmidt was, who had been in the respondent's employ for 9 years, and had been selected by his fellow workers to represent them, would have been discharged solely for not burning screen shields at a time when he was engaged in other work. Nor do we find in Schmidt's subsequent employment with the respondent any reason for conclud- ing that Schmidt had not been the object of discrimination. Schmidt never was returned to his former department among the employees who had elected him as a councillor, nor were the various positions assigned to him substantially equivalent in pay or status to the job 80 See Section III A, supra 61 Matter of Consolidated Edison Company of New York, Inc., et al and United Electrical and Radio Workers of America, etc, 4 N L R B. 71, 104. SERVEL, INC., ET AL. 1333 which he held as a porcelain burner. The failure of the respondent fully to restore Schmidt to the position he had occupied constituted further discrimination against him, for having joined the Union con- trary to the respondent's wishes. The respondent urges that "even if it were to be assumed that Schmidt has been dealt with in a discriminatory way, there is no proof that any of these circumstances have been because of his affili- ation with the C. I. 0.," that "every supervisor" denied having knowl- edge of Schmidt's affiliation. We are of the opinion from the cir- cumstances heretofore set forth and the record that the respondent through one or more of its managerial and supervisory employees had knowledge of Schmidt's being a member of the Union, and acted thereon, in the manner above stated. Schmidt openly wore his button at the plant, and there is no claim that his affiliation was concealed. We find that the respondent discharged or laid off Schmidt on May 22, 1937, and thereafter reinstated him to positions not substan- tially equivalent to his former position, because of his membership in the Union and because of his engaging with others of the respondent's employees in concerted activities for the purpose of collective bar- gaining and other mutual aid and protection '112 thereby discriminat- ing in regard to the hire and tenure of said employee and discour- aging membership in a labor organization; that by said lay-off or discharge and reinstatement, and each of them, the respondent has interfered with, restrained, and coerced its employees and is interfer- ing with, restraining, and coercing them, in the exercise of the rights guaranteed by Section 7 of the Act. The positions which Schmidt has held with the respondent since his lay-off have not paid as high an hourly rate as did his position as porcelain burner. He was paid-in Department 59 a base rate of 55 cents an hour and also participated in a group bonus. His rate of earnings since in Departments 63 and 14 was 53 cents an hour. More- over, he participates no longer in any group bonus. Thomas Vinson and Earl Rhoades were discharged by the respon- dent on June 17,1937. Each was a competent workman and had been employed at the respondent's plant about 3 years. They both worked in Department 43C. Vinson loaded refrigerators on the assembly line; Rhoades operated an electric screw driver. On May 2, 1937, Vinson was elected the first president and Rhoades the first secretary of the Union. The men were active in union affairs. They solicited memberships for the organization, and in various other ways assisted in its attempt to unionize the plant employees. 12 Schmidt' s activities as a candidate for reelection to the Council constituted con- certed activities with other employees for the purpose of collective bargaining and other mutual aid and protection , within the meaning of Section 7 of the Act. 164275-39-vol. xi-85 1334 DECISIONS OF NATIONAL LABOR RELATIONS BOARD We are satisfied that for some time prior to the discharges of these two men the respondent, through the managerial and super- visory employees who were their superiors, had knowledge of their union affiliation and leadership. The respondent contends that only the foreman of the department, one Taylor, had any knowledge, and that this amounted to no more than a "notion" that Rhoades might be a member. 63 The direct and circumstantial proof, however, as well as the facts surrounding the discharges hereinafter discussed, goes much beyond that. About 2 weeks preceding the discharges the foreman, Taylor, pursuant to the instructions of the respondent's president, heretofore mentioned, held discussions concerning the Union with selected employees from each of the 16 departmental groups under his supervision. On that occasion he summoned Vinson and Rhoades, individually, to his office and told each, among other things, that he did not believe the Union to be a proper one with which to be affiliated, that the Servel Workers' Council was available for collective bargaining, and that employees who joined the Union were wasting their money. During the conversation with Vinson, Taylor observed that he had been informed that Vinson was "pretty well interested" in the Union. Vinson concluded from the manner of Taylor's speech that Taylor knew of his, Vinson's, union member- ship. Taylor told Rhoades that while the Union might be helpful to foreigners it could not aid him. At the hearing Taylor testified that he merely explained to his employees, including Vinson and Rhoades, that they would not have to join the Union to retain their employ- ment, that he was seeking to dissipate any misunderstandings on the subject. Under all the circumstances we cannot find that Taylor limited his statements in this fashion. We are convinced that in substance these statements were. no different from those which the president of the respondent at that very time was making in the let- ters sent to the employees. Similarly, about June 5 or 6, 1937, Vinson's group leader stated to Vinson that he knew of Vinson and Rhoades' affiliation, saying, "There ain't -a damn bit of use lying to me. You belong to it. I have got two more and there may be three men on my list that belong to the C. I. 0." About June 8 Taylor stated to Rhoades that he had heard that Rhoades was soliciting union memberships at the plant. One witness testified that everyone in Department 43C knew that the two men were members. On June 15 Rhoades was notified by Foreman Taylor that he was to be transferred to Vinson's job of loading refrigerators on the assembly line, that Vinson would be given one Williams' job at removing units from the assembly line, and that Williams would be es Taylor testified that in his conversation in early June with Rhoades, discussed below, "Mr. Rhoades volunteered and told me he was a member." SERVE, L, INC., ET AL. 1335 assigned to Rhoades' job operating the electric screw driver. The respondent takes that position that these proposed transfers were in pursuant of a company policy to train its employees in more than one job, in order to make available substitute workmen for filling unex- pected vacancies; that the occasion for making the proposed transfers arose in connection with the inability of the respondent shortly before June 15 to find a competent substitute to fill a certain vacancy in the department, also that its superintendent, one Campbell, had read an article in a trade magazine approving the making of transfers. Rhoades protested to the foreman his being transferred, on the ground that Vinson's job was less desirable. Taylor averred that the transfer was not "spite work," adding, "I am not doing this be- cause of union membership." Rhoades indicated to Taylor that he believed that that was the very reason. On June 16, the foreman, Taylor, informed Vinson of his proposed transfer. Vinson also protested, saying that he could not physically handle Williams' work for any length of time. He asked Taylor whether he, Vinson, would be restored to his old position if he could not continue at Williams' job. Taylor replied, "No, I don't know where you'll go." Vinson challenged the transfer as being a discrimi- nation, and asked to be permitted to present his grievance to the management through an employee committee "of his own choosing." Under the written agreement of May 16, 1937, above mentioned, be- tween the respondent and the Council, the respondent undertook to recognize the right of employees to present grievances to the man- agement and to negotiate with respect to them through a committee of the employees' own choice and independent of the Council 64 On June 16 a meeting was had between the superintendent, Camp- bell, and the three employees affected by the transfers, for the purpose of discussing the proposed shift. Vinson and Rhoades protested that the transfers were occasioned by their union membership. Con- vinced that the whole matter of the transfers had originated with Campbell's supervisors they requested Campbell to arrange the sub- mission of their grievance through an employee committee of their choice, either to the respondent's works manager, Baker, or to its president, Ruthenberg. Campbell stated that the transfers were in accordance with the above-mentioned policy, and offered to restore the men to their old jobs the following week if they would withdraw their protest. The men were not satisfied. Campbell then stated that he would arrange a meeting for them with Baker or Ruthenberg, and would notify them later in the day about it. & The respondent's brief states : "Workers with complaints are, however , entitled to appoint a committee of their own choosing to represent them in lieu of, or in addition to, the Council." 1336 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Campbell did not communicate that day with Vinson or Rhoades, but the following day told them in his office that it would be impos- sible for them to see Baker or Ruthenberg during the day; more- over, that Ruthenberg was of the opinion that Campbell and the men could settle the matter themselves. Campbell stated that instead of presenting their grievance through an employee committee the men might prepare a written statement and submit it; also that they might confer with the Council. He reiterated his suggestion of the previous day about reinstating them to their old jobs the following week if they would withdraw their protest, and finally said that if they did not want to do that they could quit. Vinson and Rhoades were dissatisfied and commented that they would have "to use their power." The two men left Campbell's office, followed by Campbell. The respondent contends that Vinson and Rhoades, upon so leaving, re- fused to work at the new jobs. This was denied by both employees. Taylor, the foreman, testified that it was his belief that the men were planning to return to work. We are satisfied that they did not so refuse, that upon discovering that their appeal for submission of their grievance had been futile they duly proceeded to their work. As they walked past the assembly line, the two men were asked ques- tions by various employees, and they paused briefly to answer them. At this juncture Campbell hurried toward the men, stopped them, and told Taylor to go with them outside the room and give them release slips terminating their employment. We are of the opinion and find that Campbell in following the two employees from his of- fice and ordering their discharge feared that the other employees on the assembly line might cease operations because of his treatment of Vinson and Rhoades. Campbell testified that before discharging the men he asked whether they intended to return to their jobs, and that they refused. Under all the circumstances of the case presented, we are unable to give credence to this testimony of a last-minute reprieve. Our conclusion is supported by the fact that before mak- ing out the releases, which were then made out, inquiry was made of Campbell about permitting the men to work, and his reply was that the issue was a closed one. The circumstances eventuating in the discharges of Vinson and Rhoades must be viewed in the light of the attack the respondent through its president and supervisory forces then was directing against the organization which these two men headed. We are con- vinced that the entire incident touching these men, commencing with the announcement on June 15 of their proposed transfers to less desirable positions and concluding with their discharges, stemmed SERVEL, INC., ET AL. 1337 from the antipathy of the respondent toward the Union. The na- ture of the proposal to transfer, together with the statements and acts of Taylor and Campbell, above mentioned, disclose an intent in the respondent to harry, caution, and discourage the two men because of their union activities, as well as to carry a warning to their fel- low employees on the assembly line and elsewhere of the respondent's attitude toward plant unionization. Vinson and Rhoades properly understood that the reasons assigned by the respondent for their transfers were not, nor were they intended to be, the real grounds therefor. We are not impressed with the existence on June 15 of any need to effectuate the asserted company policy, in one instance by assigning an employee work which was physically impossible for him to handle as a regular matter. The record does not establish that when the proposed transfers were first made known to these men, any indication was given them that the new jobs were to be of only short duration. The situation as it developed subsequent to June 15 narrowed itself to one of conflict : on the one hand the two employees seeking to defend themselves from threatened discrimination and what consti- tuted in effect a challenge to their organization; on the other, their superiors, intent on consummating, in part at least, the proposed discrimination and to avoid a presentation of the dispute by an employee committee to the higher officials of the respondent. The discharges of the men which followed proximately resulted from this conflict, and, accordingly from the intent of the respondent through- out to discriminate against them in their employment. Under these circumstances the discharges, themselves, must be held discrimina- tory, within the meaning of the Act. Moreover, to the extent that the respondent's fear of a strike formed an immediate factor in their discharges, this too made the dismissals illegal under the Act, for the statute preserves the right to strike for lawful cause, and prohibits employer interference with the rights of employees to engage in concerted activities for their mutual aid and protection.86 We find that the respondent discharged Thomas Vinson and Earl Rhoades on June 17, 1937, and each of them, because of their union membership and activities, thereby discriminating in regard to the hire and tenure of said employees, and each of them, and discour- aging membership in a labor organization; that in and by said discharges, and each of them, the respondent has interfered with, restrained, and coerced its employees and is so interfering with, restraining, and coercing them, in the exercise of the rights guar- anteed by Section 7 of the Act. 01 See Section III C, supra. 1338 DECISIONS OF NATIONAL LABOR RELATIONS BOARD E. Alleged discrimination against Rounder, Pascoe, Kennada, Cavvis, Hays, Mundy, McIntosh, and Hopper Leroy Rounder, John Pascoe, and William Kennada were em- ployed at the Evansville plant in August 1937. The plant was closed in that month for the taking of inventory and remained shut until October.,," When it reopened 54 employees, including Rounder, Pascoe, and Kennada, were not recalled to work. The three men were members of the Union. Rounder joined the Union in May 1937. However, there is no substantial showing that Rounder's affiliation was known to the respondent. He testified that he never wore his union button or told anyone of his affiliation. We disagree with the finding of the Trial Examiner that Rounder had greater seniority than other em- ployees whom the respondent recalled. In view of this want of proof, we conclude that the respondent's failure to recall Rounder to work in October was not occasioned by his union membership or activities. We accordingly find it unnecessary to consider the reasons assigned by the respondent for not recalling him. Gibson, his foreman, testified at the hearing that the respondent would em- ploy Rounder in a position for which he is qualified .117 Pascoe was employed as a porcelain sprayer in Department 59. As a result of a reorganization of the work in his department the respondent had no need for as many porcelain sprayers as it pre- viously had employed. We are satisfied that Pascoe was omitted froln, those recalled because his seniority was less than the other porcelain sprayers who were reemployed. Kennada worked as a metal inspector also in Department 59, and his job and that of another metal inspector similarly were abolished in the departmental reorganization. His seniority was not as great as that of the metal finishers who were recalled. While there is some suspicion of anti-union discrimination in the failure of the respondent to recall him, we do not feel that the record warrants such a finding. William Carvis was discharged by the respondent in the latter part of November 1937. He joined the Union in May 1937. In December 1936, upon his own request, Cavis was placed in the respondent's metal- finishing school to learn metal-finishing work. After several months of training he was given a position as a metal finisher. However, he proved unable to perform the work satisfactorily and was transferred 06 In some of the departments, the shut-down occurred a little before August 1937. 67 Cf. Matter of The Kelly-Springfield Tire Company and United Rubber Workers of America, Local No. 26, etc., 6 N. L. R. B. 325, 332, order enforced 97 F. (2d) 1007 (C. C. A. 4th). SERVEL, INC., ET AL. 1339 to a job as an off bearer on the hydromatic welder. He was engaged in such work at the time of the 1937 shut-down. Cavis was not recalled when the plant reopened, because of a com- pany rule that employees who did not succeed as metal finishers after being given training in the respondent's school were to be dismissed. In October 1937 a charge was filed with the Regional Director alleging, among other things, that the respondent had discriminated against Cavis in not recalling him to work. An understanding thereafter was reached between Cavis and the respondent to the effect that he would be reemployed and retained subject to his establishing his ability as a metal finisher. Pursuant thereto, on November 15 Cavis was reemployed, and 3 days later assigned to metal finishing. His work proved unsatisfactory. Cavis himself admitted this. He was then discharged. We agree with the Trial Examiner that the respondent has not discriminated in regard to the hire and tenure of employment of Cavis. Gladys Hays was discharged by the respondent on October 5, 1937. On September 27, 1937, she stayed home from work because of alleged illness. When she returned the following day, the plant doctor ob- jected to giving her a sick-leave release, stating that he did not believe she had been ill, that he did not think she had been sick during several previous absences, and that she apparently was not interested in her position since her marriage. Such a release was necessary in order for an employee who had been ill to continue working. Hays, neverthe- less, was given a slip and resumed her work. On October 4, 1937, she again absented herself, and testified that the reason therefor was a "cold." Upon her return the succeeding day the doctor refused to give her a sick-leave release, and she was discharged. The following day the discharge was the subject of a discussion by Hays and her superiors. Her foreman, Williams, and the employment manager, Becker, agreed to reemploy her after January 1, if she promised to rest herself. The doctor, however was adamant. He insisted that he would not permit her to work. As a result of his persistence, Hays has not been reemployed. The record shows that Hays joined the Union in May 1937 and was an active member, that she solicited her fellow employees to join. However, the circumstances surrounding the discharge do not estab- lish discrimination. Arthur Mundy was employed at the plant for 3 years, attaching units to a conveyor belt by means of an electric hoist. During the 1937 shut-down new machinery was installed in his department, and the operations which Mundy performed were changed from an 8-inch hoist to a 2-inch one. When he commenced work on October 4, 1937, after the shut-down, Mundy was unable to perform the new operation. 1340 DECISIONS OF NATIONAL LABOR RELATIONS BOARD He could not gauge the distance of the hoist accurately and continu- ally fouled the conveyor line. His foreman and superintendent in- structed him how to perform his new work, but he appeared unable to learn. He was discharged at the end of the day. Mundy joined the Union on May 2, 1937, and was an important union member. Prior to the time of his discharge he obtained 100 members for the Union. We believe, however, despite the somewhat arbitrary fashion in which Mundy'was discharged, that his dismissal resulted from his incapacity to handle the new work. We find that the respondent did not discriminate against him in his dismissal. John McIntosh, was employed by the respondent as a builder of kerosene hoods and occasionally worked at other jobs. He joined the Union in June 1937. Several days prior to the reopening of the plant in October, McIntosh was recalled to work in order to perform certain tasks preparatory to the reopening. He thereafter worked at evening blocks until October 22 when he was laid off by his fore- man, Taylor, for a period until November 3. He was told by Taylor that upon his return on November 3 he would be assigned his regular job of building kerosene hoods, that this work could not be begun immediately because the engineering department had not yet made the necessary arrangements. McIntosh accused Taylor of laying him off because of union membership. Taylor denied this. We are not convinced that this lay-off was discriminatory. McIntosh's union affiliation was well known to Taylor prior to the shut-down, and it does not seem likely that had Taylor wished to discriminate against McIntosh, he would have recalled him after the shut-down. There is nothing to show that in fact McIntosh's lay-off was not attributable to the reason given him. On October 24 McIntosh wrote an anonymous letter in connection with a contest that was then -being held in Evansville for the best statement on how to keep industrial peace. In this letter McIntosh, among other things, accused his foreman, Taylor, of "tyranny and favoritism," of speeding up work in order that the employees would not be paid as much, and of promoting his friends to higher positions. Reference was made to the Union. This letter came to the attention of the respondent, and at a conference shortly had by several of the plant officials, including Taylor, with McIntosh, McIntosh admitted authorship. Taylor then stated that he would not reemploy McIntosh in his department as he had planned to do. There is no substantial evidence establishing that McIntosh would not have been reemployed in November had he not written the letter. It is evident that Taylor discharged McIntosh because of McIntosh's criticism and the personal attack made on him in the letter. The refer- ence in the letter to the Union was incidental. SERVEL, INC., ET AL. 1341 Herschel Hopper was transferred from the department in which he was employed at the plant to another department. Hopper earned more money at the job to which he was transferred. The respondent in its brief offers to retransfer Hopper to his old position if he so desires. Under those circumstances we find it unnecessary to con- sider further the matter of Hopper's transfer. We find that the respondent has not discriminated in regard to the hire and tenure of employment, or any term or condition of employ- ment, of Leroy Rounder, John Pascoe, William Kennada, William Cavis, Gladys Hays, Arthur Mundy, and John McIntosh, and of each of them, as alleged in the complaint, and, accordingly, will dismiss the allegations of the complaint, as amended, in so far as they relate to these individuals and to Herschel Hopper. 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 respond- ent described in Section I above, have a close, intimate, and substan- tial relation to trade, traffic, and commerce among the several States and between the several States and foreign countries, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY It is essential in order to effectuate the purposes and policies of the Act that the respondent be ordered to cease and desist from certain activities and practices in which we have found it to have engaged, and in aid of such order and as a means for removing and avoiding the consequences of such activities and practices, that the respondent be directed to take certain affirmative action, more particularly described below. We have found that the respondent has since July 5, 1935, domi- nated and interfered with the administration of the Servel Workers' Council and contributed support to it. It is clear that the respondent must cease and desist from such practices. Moreover, the effects and consequences of the respondent's domination, interference, and sup- port with respect to the Council, as well as continued recognition by the respondent of the Council as a bargaining representative of its employees, will constitute a continuing obstacle to the free exercise by the employees of their right to self-organization and to bargain col- lectively through representatives of their own choosing. To the em- ployees the Council is an employer institution. It has been utilized by the respondent as an instrumentality to defeat the rights of its 1342 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees under the Act, and is utterly incapable of serving them as a genuine collective bargaining agency. We will order the respondent to withdraw recognition from the Servel Workers' Council as a bar- gaining representative and to disestablish it as such representative. We also have found that the respondent on February 20, 1937, dis- charged Earl Brammer, Roddie Delany, James Deckard, Roy Brents, Merton McCool, Myron Leachman, Harold Moore, and George Grimm, and each of them, and has refused to reemploy and reinstate said employees, and each of them, because of their engaging with other of respondent's employees at the Evansville plant in concerted activities for the purl os a of. collective bargaining and other mutual aid and protection. We also have found that the respondent discharged or laid off Fred Schmidt on May 22, 1937, because of his membership in the Union and because of his engaging with others of respondent's employees in concerted activities for the purpose of collective bar- gaining and other mutual aid and protection. We further have found that the respondent on June 17, 1937, discharged Thomas Vinson and Earl Rhoades, and each of them, because of their union membership and activities. Accordingly we shall order the respondent to offer each of these employees immediate and full reinstatement to his former position with the respondent, or if such position be abolished 68 then to a substantially equivalent position, without prejudice to his seniority and other rights and privileges; and to make said employees whole for any loss of pay they have suffered by reason of the re- spondent's illegal acts against them by payment to each of them of a sum of money equal to the amount which he normally would have earned as wages from the date of his illegal termination of employ- ment to the date of the offer of reinstatement, less his net earnings during said period o0 We also shall order the respondent to cease and desist from certain other practices and take certain other affirmative action. Upon the basis of the above findings of fact and upon the entire record in the case, the Board makes the following: 68 The record indicates that Schmidt's job has been discontinued. 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 elsewhere than for the respondent , which would not have been incurred but for his unlawful termination of employment and the consequent necessity of his seeking employ- ment 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. R. 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 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. SERVEL, INC., ET AL. 1343 CONCLUSIONS OF LAW 1. United Electrical, Radio and Machine Workers of America, Local No. 1002, and Servel Workers' Council are labor organizations, within the meaning of Section 2 (5) of the Act. 2. By dominating and interfering with the administration 'of Ser- vel Workers' Council and contributing support to it the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (2) of the Act. 3. By discriminating in regard to the hire and tenure of employ- ment of Fred Schmidt, Thomas Vinson, and Earl Rhoades, and each of them, thereby discouraging membership in a labor organization, the respondent has engaged in and is engaging in unfair labor prac- tices, within the meaning of Section 8 (3) of the Act. 4. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, the re- spondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (1) of the Act. 5. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. 6. The respondent has not engaged in unfair labor practices with respect to the persons whose names are listed in Appendix "A". 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 respondent, Servel, Inc., and its officers, agents, successors, and as- signs, shall: 1. Cease and desist from : (a) Dominating or interfering with the administration of Servel Workers' Council, or the formation or administration of any other labor organization of its employees, and contributing support to Ser- val Workers' Council or to any other labor organization of its employees; (b) Discouraging membership in United Electrical, Radio and Ma- chine Workers of America, Local No. 1002, or any other labor organi- zation of its employees by discriminating in regard to hire and tenure of employment or any term or condition of employment; (c) 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 1344 DECISIONS OF NATIONAL LABOR RELATIONS BOARD through representatives of their own choosing, and to engage in con- certed activities, for the purposes of collective bargaining or 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) Withdraw all recognition from Servel Workers' Council as the representative of any of its employees for the purpose of dealing with the respondent concerning grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of employ- ment, and completely disestablish Servel Workers' Council as such representative; (b) Offer to Earl Brammer, Roddie Delany, James Deckard, Roy Brents, Merton McCool, Myron Leachman, Harold Moore, George Grimm, Fred Schmidt, Thomas Vinson, and Earl Rhoades, and each of them, immediate and full reinstatement to their respective former positions'70 or if such positions be not available then to substantially equivalent positions, without prejudice to their seniority and other rights and privileges; and make them whole for any loss of pay they have suffered by reason of their respective discharges or termination of employment by the respondent by payment to each of them of a sum of money equal to the amount which he normally would have earned as wages from the date set opposite his name in this paragraph below to the date of the offer of reinstatement, less his net earnings Ti during said period, deducting, however, from the amount otherwise due to each of the said employees, monies received by him during said respective period for work performed upon Federal, State, county, municipal, or other work-relief projects ; and pay over the amounts so deducted to the appropriate fiscal agency of the Federal, State; county, municipal, or other government or governments which sup- plied the funds for said work-relief projects : Earl Brammer-Feb- ruary 20, 1937; Roddie Delany-February 20, 1937; James Deck- ard-February 20, 1937; Roy Brents-February 20, 1937; Merton Mc- Cool-February 20, 1937; Myron Leachman-February 20, 1937; Harold Moore-February 20, 1937; George Grimm-February 20, 1937; Fred Schmidt-May 22, 1937; Thomas Vinson-June 17, 1937; Earl Rhoades-June 17, 1937; (c) Post immediately notices in conspicuous places throughout its plant and maintain such notices for a period of thirty (30) con- secutive days, stating that the respondent will cease and desist in the manner set forth in 1 (a), (b), and (c), and that it will take the affirmative action set forth in 2 (a) and (b) of this Order; 70 By "former positions" is meant the positions respectively held by the employees on the dates set opposite their names in this paragraph. 71 See footnote 69. SERVEL, INC., ET AL. 1345 (d) Notify the Regional Director for the Eleventh 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, as amended, in so far as it alleges that the respondent has engaged in unfair labor practices in respect to the employees listed in Appendix "A", and Herschel Hopper, be, and it hereby is, dismissed. APPENDIX "A" Charles Carson William Cavis John Gibson Marion Grubb Gladys Hays Allen Hulled Thurlow Jones Ray Kanzler Gladys Kennada William Kennada Jessee Likens Lloyd Long George Ludwig John McIntosh Arthur Mundy John Pascoe Joseph Payne James Rogers Leroy Rounder Russell Stultz Jesse Sweet Harry Wingerter