Norfolk Shipbuilding & Drydock Corporation

In the Matter of NORFOLK SHIPBUILDING & DRYDOCK CORPORATION and INDUSTRIAL UNION OF MARINE & SHIPBUILDING WORKERS OF AMERICA Case No. C-626.-Decided May 12,1939 Shipbuilding and Drydock Industry-Interference, Restraint, and Coercion- Company-Dominated Union: domination of and interference with formation and administration ; role of supervisory employee in creation , growth, and adminis- tration of, responsibility of respondent therefor ; designation by foremen and assistant foremen of key employees to assist in the creation of ; support, use of company facilities and solicitation of membership during working hours as contrasted with denial of privileges to Union ; perpetuation of control of organi- zation through provisions of bylaws; disestablished, as agency for collective bargaining-Discrimination : lay-off, charges of, as to one employee, sustained- Employee Status : supervisory, lumber inspector as-Reinstatement Ordered- Back Pay: awarded employee laid off ; monies received by employee for work performed upon Federal , State, county, municipal, or other work-relief projects to be deducted and paid over to agency supplying funds for projects. Mr. Charles Y. Latimer, for the Board. Hughes, Little and Seawell, by Mr. Leon T. Seawell, of Norfolk, Va., for the respondent. Mr. W. J. Rowe, of Portsmouth, Va., and Mr. W. C. Iseloy of Hunt- ington, W. Va., for Intervenor. Miss Margaret Holmes, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges duly filed by Industrial Union of Marine and Ship- building Workers of America, herein called the Union, the National Labor Relations Board, herein called the Board, by Bennet F. Schauf- fler, Regional Director for the Fifth Region (Baltimore, Maryland), issued its complaint dated March 11, 1938, against Norfolk Ship- building and Drydock Corporation, Norfolk, Virginia, herein called the respondent, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the 12 N. L. R. B., No. 92. 886 NORFOLK SHIPBUILDING & DRYDOCK CORPORATION 887 meaning of Section 8 (1), (2), and (3)1 and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. In respect to the unfair labor practices, the complaint, as amended, alleged in substance that the respondent had dominated, supported, and interfered with the formation and administration of the Em- ployees Association of Norfolk Shipbuilding and Drydock Corpora- tion, herein called the Association; that the respondent had dis- charged and/or laid off James M. Creecy, for the reason that he had joined and assisted the Union; that by these and other acts and conduct, the respondent had interfered with, restrained, and coerced its employees in the exercise of their right to self-organization and to engage in concerted activities for their mutual aid and protection. Copies of the complaint and accompanying notice of hearing were duly served upon the respondent and upon the Union. The re- spondent filed an answer, which, as amended, objected to the Board's jurisdiction and denied the allegations of unfair labor practices charged. Pursuant to notice, a hearing was held at Norfolk, Virginia, on April 7 and 8, 1938, before Harlow Hurley, the Trial Examiner duly designated by the Board. The Board and the respondent were repre- sented by counsel and participated in the hearing. During the hear- ing, Metal Trades Department, American Federation of Labor, filed a motion for leave to intervene which motion was granted by the Trial Examiner. Thereafter the intervenor was represented but did not participate in the hearing. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bear- ing on the issues was afforded all parties. Numerous motions and objections to the admission of evidence were made and ruled upon at the hearing. At the close of the hearing, counsel for the Board moved that the pleadings be conformed to the proof, which motion the Trial Examiner granted. The Board has reviewed the rulings of the Trial Examiner and finds that no prejudicial errors were committed. The rulings are hereby affirmed. On May 11, 1938, the Trial Examiner filed his Intermediate Re- port. He found that the respondent had engaged in and was engag- ing in unfair labor practices affecting commerce, within the meaning of Section 8 (1), (2), and (3) and-Section 2 (6) and (7) of the Act. He recommended that the respondent cease and desist from the unfair 1 The complaint issued on March 11, 1938, contained allegations that respondent had engaged and was engaging in unfair labor practices affecting commerce within the meaning of Section 8 (1) and (2). During the hearing, with the consent of all parties, the complaint was amended to allege and the respondent 's answer was amended to deny, that the respondent had engaged and was engaging in unfair labor practices affecting commerce within the meaning of Section 8 (3). 888 DECISIONS OF NATIONAL LABOR RELATIONS BOARD labor practices so found; disestablish and withdraw recognition from the Association as the collective bargaining agent of its employees; and reinstate Creecy to his former position with back pay. Exceptions to the Intermediate Report were thereafter filed by the respondent. Pursuant to notice, a hearing was held before the Board at Washington, D. C., on January 19, 1939, for the purpose of oral argument. The respondent was represented by counsel and partici- pated in the argument. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENT The respondent is a Virginia corporation owning and operating a shipyard in Norfolk, Virginia. It is principally engaged in the business of repairing vessels, although it has in the past engaged in ship construction. The aggregate cost of materials purchased by the respondent for use in its business amounted to $250,000 in 1937 and $30,000 for the first 3 months in 1938. Steel, lumber, brass, and paints are the prin- cipal materials used, steel comprising over 50 per cent of the total expenditure. Ten per cent of these materials are directly purchased outside Virginia. The remaining 90 per cent are purchased through local jobbers in Norfolk. All the steel and half the lumber consumed by the respondent in its business are shipped into Virginia from other States. The respondent repaired 444 ships in 1937 for an aggregate billing price in excess of $1,000,000. The bulk of such repair work was performed on vessels engaged in interstate and foreign commerce.2 In its business of repairing vessels, the respondent competes with the leading shipyards on the Atlantic coast. At the time of the hear- ing, it employed approximately 300 persons. We find that the respondent is not only engaged in commerce to a substantial degree but is also engaged in the repairing and overhaul- ing of instrumentalities of commerce. A stoppage of the respondent's operations would burden commerce by depriving its instrumentalities 2 The following table gives a detailed break-down of the services rendered by the respondent in 1937: Repairs performed on tugboats , barges and car floats owned and operated by interstate carriers such as the Chesapeake & Ohio Railway________ $207,645 Repairs performed on vessels that ply up and down the Atlantic coast_ _ 440,719 Repairs performed on vessels owned and operated by foreign Interests ___ 39,196 Repairs performed on the James Fleet (vessels purchased by foreign interests and thereafter brought to respondent for repairs) ---------- 229,299 Repairs performed on vessels owned and operated by local carriers in the port of Norfolk_________________________________________________ 103,822 NORFOLK SHIPBUILDING Sc DRYDOCK CORPORATION 889 of the repairs necessary to their continued operation. We further find that the activities of.the respondent set forth hereinafter, occur- ring in connection with the operations of the respondent described in this section, have a close, intimate, and substantial relation to trade, traffic, transportation, 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." II. THE LABOR ORGANIZATIONS INVOLVED Industrial Union of Marine and Shipbuilding Workers of America is a labor organization affiliated with the Committee for Industrial Organization. It admits to membership workers employed in the shipbuilding, ship repairing and marine-equipment industries. Employees Association of Norfolk Shipbuilding and Drydock Cor- poration is an unaffiliated labor organization. Participation in its affairs is open to all employees of the respondent who-have been on the pay roll for 60 days or longer, except those in official or super- visory positions. M. THE UNFAIR LABOR PRACTICES A. Domination of the Association The Union commenced its organizational activities among em- ployees of the respondent in the late summer of 1937. On one occa- sion after the respondent became aware of this activity, its plant superintendent forbade union organizers to solicit membership and requested them to leave the shipyard. . Shortly after the advent of the Union, Gerald W. Bozarth, the respondent's lumber inspector, whom we find hereinafter to possess supervisory authority, undertook to form an inside union. His mo- tive in this undertaking, as explained by him at the hearing, was founded on a desire to keep the Union out of Norfolk. About the middle of September, Bozarth called all the respondent's foremen and several assistant foremen together to discuss the feasibility of organiz- ing an inside union. The group met in the respondent's apprentice school, the key to which was in Bozarth's possession. Bruning, the respondent's plant superintendent, was requested by Bozarth to at- tend the meeting and to address the assembled foremen and assistant foremen. Bruning stated that he had observed the functioning of an Employees Association at Newport News Shipyard ,4 advising the 8 Cf. Newport News Shipbuilding and Drydock Company, a Corporation, and Employees Representative Committee of the Newport News Shipbuilding and Drydock Company, Intervenor v. National Labor Relations Board , 101 Fed. (2d) 841 (C. C. A. 4th). 4 Newport News, Virginia. 890 DECISIONS OF NATIONAL LABOR RELATIONS BOARD foremen and assistant foremen that they could not participate in the affairs of such an association. Before the meeting adjourned, Bozarth requested the foremen to furnish him with the names of employees in the plant that he "could probably do something with." There- after the foremen and assistant foremen selected a key employee in each department to aid Bozarth in the creation of an inside union. Bruning subsequently reported this meeting to Rogers, vice president of the respondent, who instructed him to have nothing more to do with the matter. After the September meeting, Bozarth spent a day 5 at Newport News Shipyard, studying the labor organization Bruning had de- scribed. On October 8, 1937, he called a meeting of the 10 or 15 key employees who had been selected by their foremen or assistant fore- men pursuant to his request at the September meeting. Mimeo- graphed sheets, prepared by Bozarth on the respondent' s mimeo- graphing machine, setting forth the name, purposes, and motto of the Association, were distributed. During the next few days the employees who attended the October 8 meeting circulated these sheets in the plant for the purpose of securing signatures, after which they were collected by Bozarth. Bozarth explained, at the October 8 meeting, that he could not act as chairman, although he assigned no reason for this disability. Thereupon one Saunders, an employee in the pipe shop, was elected temporary chairman. A committee was appointed by Saunders to return that evening to consider bylaws for the Association. Bozarth, as an "ex-officio" member of the commit- tee, proposed certain bylaws which the committee accepted with a few immaterial alterations. Bozarth thereafter had the bylaws printed, for which expense he was reimbursed by the Association. None of the witnesses at the hearing could recall that the bylaws were ever voted upon or adopted at any meeting of the Association, al- though they were distributed in printed form at a subsequent meeting. The bylaws provide for a Representative Committee, composed of employee representatives elected from the various departments in the plant. The Representative Committee is the governing body of the Association, empowered by the bylaws to select officers and an executive committee from its membership and authorized to take ac- tion on such matters as may be referred to it by individual repre- sentatives. In it is vested the power to amend the bylaws. The by- laws provide that action of the Representative Committee becomes final upon agreement by the respondent. The bylaws also outline a 5 The record does not disclose whether this trip was made during a working day or, if so, whether or not Bozarth was paid by the respondent for the time thus spent. Hence we make no findings in those respects. NORFOLK SHIPBUILDING & DRYDOCK CORPORATION 891 grievance procedure which requires that final presentation of griev- ances shall be made to the respondent's general manager. On October 11, 1937, a meeting of the Association was held outside the respondent's gates. Bozarth and Saunders distributed applica- tion blanks, the printing of which Bozarth had arranged, to the 25 or 30 employees in attendance. On the following day a vigorous organizational program was commenced. Bozarth actively solicited membership during working hours with the assistance of the em- ployees selected by their foremen or assistant foremen to attend the October 8 meeting. Latham, assistant foreman on the dock, also solicited membership. During the organizational drive, Latham allowed an employee named Creecy e to report to Bozarth frequently during working hours "because I thought it was necessary for him to go." Bozarth, according to his testimony at the hearing, was "high-pressure salesman" for the Association and "could always get the men to sign up." On one occasion, Bozarth called into his office several dock employees who were unwilling to affiliate with the Asso- ciation. He "explained again about strikes and that if a strike should come in there we would all lose our jobs." After these remarks, some of the men present joined the Association, although one of them was already a member of the Union. On October 18, 1937, a meeting of the Association was held in the model loft, a building on the respondent's property, for the purpose of electing officers and an executive committee. Bozarth was present at this meeting. Six of the employees selected by their foremen or assistant foremen to attend the October 8 meeting were elected offi- cers of the Association. The printed bylaws of the Association were distributed to the approximately 45 employees in attendance. The newly elected executive committee met on the following day for the purpose of drawing up a request for recognition by the re- spondent. Bozarth was present and made recommendations to the committee. Bozarth impressed on the committee the necessity for speed, telling the members that "they had to get a complaint into the office so as to be recognized as a union, and by so doing, if they would recognize this association as the union, that they would be able to keep any other union from coming in." A request for wage increases was drawn up, the amounts of which were suggested by Bozarth. On October 20, this request was presented to various officials of the respondent but no action was taken because Rogers, the respondent's vice president, was out of town. Sometime between October 20 and 25, Bozarth advised the committee to increase its demands "in order to make a bargain." Thereupon the committee raised the amounts of 6 The alleged discriminatory discharge of Creecy is discussed in Section B. 892 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the wage increases it was requesting by a few cents, and presented the increased demands to Rogers upon his return. Rogers testified that he neither knew nor inquired whether the Association represented a majority of the respondent's employees at the time its requests were presented to him. On October 25, the respondent posted a bulletin in its yard which granted wage increases and contained a statement of the respondent's policy regarding hours of work and overtime, assertedly the result of negotiations with the Association. The actual wage increases granted in the bulletin were the ones first requested and presented to the respondent by the committee upon the suggestion of Bozarth. Thus the Association was established shortly after the Union com- menced organizing the respondent's employees. The avowed purpose for its creation was the curtailment of the growth and influence of the Union. The initial step in the formation of the Association was the September meeting called by Bozarth, attended by the respond- ent's foremen, assistant foremen, and plant superintendent. In the discussion which occurred at the September meeting concerning the feasibility of organizing an inside union, the respondent's plant superintendent directed attention to a labor organization which ex- isted at a neighboring shipyard. It is significant that the Associa- tion, as it developed, was patterned after such organization. Al- though the plant superintendent, the foremen, and the assistant fore- men, with the exception of Latham, withdrew from ostensible par- ticipation in the affairs of the Association subsequent to the Septem- ber meeting, Bozarth, a supervisory employee, was left to plan, guide, and direct the course of that organization with the assistance of a key employee from each department selected for that purpose by his foreman or assistant foreman. The Association conducted meet- ings on the respondent's property and solicited membership during working hours . In unmistakable contrast to these privileges accorded the Association by the respondent , union organizers had been re- quested to leave the respondent's shipyard. Bozarth, in addition to selecting the name , motto, purposes, and bylaws of the Association, attended its meetings and took the lead in soliciting membership. Latham, assistant foreman on the dock, participated in the member- ship drive. Six of the key employees chosen by their foremen or assistant foremen as Bozarth's aides in promoting the Association subsequently held offices in that organization. The negotiations which led to the wage increases granted in the bulletin of October 25 were carried on under the guidance of Bozarth . The actual wage increases granted in the bulletin were requested by the Association at Bozarth's suggestion and were granted without inquiry as to whether the Association represented a majority of the respondent's employees. With the posting of the bulletin of October 25, attribut- NORFOLK SHIPBUILDING & DRYDOCK CORPORATION 893 ing the concessions granted therein to the efforts of the Association, the inside union was completely established. Slightly more than a month elapsed between the September meeting and the posting of the bulletin of October 25. To summarize, the respondent, through the medium of Bozarth, who had the assistance of key employees selected by their foremen or assistant foremen for the purpose of aiding him in the establish- ment of an inside union, dominated the formation of the Association and participated in its administration 7 Moreover, apart from Bo- zarth's sponsorship and leadership of the movement, the respondent contributed support to the Association by extending to that organi- zation the use of its buildings for the conduct of meetings, its mimeo- graphing machine for the preparation of notices, and by permitting the solicitation of membership during working hours. Finally, per- petuation of the respondent's control of the Association and its poli- cies was assured through the provision in its bylaws that action of the Representative Committee, which is the governing body of the Association possessing the power, among others, to amend the bylaws, becomes effective only upon agreement by the respondent. Independ- ent action of the Association, subject as it must be to this limitation, could be effectively stifled by the respondent." The respondent contends that it was unaware of the formation of the Association and that it lent no support and gave no approval thereto. These contentions are without merit. In the first place, the September meeting of the foremen and assistant foremen, at which the initial plans for the Association were laid, was reported to the respondent's vice president. Subsequently these same foremen and assistant foremen designated key employees in the various depart- ments to assist Bozarth in the establishment of the Association, and the respondent accorded its sponsors the privileges heretofore dis- cussed. Hence, we cannot credit the assertion that the respondent was without knowledge of the formation of the Association. In view of our previous findings in this section, we cannot accord weight to the contention of the respondent that it lent no support and gave no approval to the Association. The respondent urges that it is in no sense responsible for Bozarth's activities in behalf of the Association since he is not a foreman. We shall now consider the facts determinative of Bozarth's status. Bozarth supervises the maintenance of the respondent's lumber yard, his duties consisting of inspecting all lumber that comes into the plant and keeping the railway track in repair. His title is that of 7 Cf. Matter of Eagle Manufacturing Company and Steel Workers Organizing Com- mittee, 6 N. L. R. B. 492, order enforced, as modified, in National Labor Relations Board v. Eagle Manufacturing Company, 99 F. (2d ) 930 (C. C. A. 4th). 6 Cf. National Labor Relations Board v. Pennsylvania Greyhound Lines, Inc., and Greyhound Management Company, 803 U. S. 261. 894 DECISIONS OF NATIONAL LABOR RELATIONS BOARD lumber inspector and he is the only employee in the plant who bears that title. He has under his supervision a crew varying in number from two to six men, over whom he exercises the power to hire and discharge. He is paid on a weekly basis, whereas employees other than foremen are paid by the hour. He is responsible to no foreman, but receives his orders from the same source as the foremen, namely, the plant superintendent. Bozarth's actual status is revealed by the fact that he enjoyed authority sufficient to summon the respondent's foremen and assistant foremen to the September meeting and by his activities during working hours in relation to Creecy, discussed in Section B, infra. Although not designated by the respondent as a foreman, Bozarth's duties and authority in the plant are manifestly of a supervisory nature and render him the immediate representative of the respondent in the lumber yard. Accordingly, we find that Bozarth is a supervisory employee of rank equivalent to that of fore- man. The respondent, having clothed Bozarth with supervisory duties and powers, must be held bound by his activities unless re- sponsibility therefor was effectively disavowed .9 It was not so dis- avowed. On the contrary, Bozarth was accorded privileges consonant with his supervisory status in connection with his activities in behalf of the Association, having in his possession the key to the respond- ent's apprentice school, which building he freely used for meetings, and openly soliciting membership and pursuing other activities of the Association during working hours and on the respondent's prop- erty. We find that the respondent, far from disavowing responsi- bility for Bozarth's activities in behalf of the Association, actively encouraged and supported such activities. We find that the respondent has dominated and interfered with the formation and administration of the Association and has con- tributed support to it, and has thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. B. The lay-off James M. Creecy, a negro, dock worker, was laid oft on November 11, 1937, allegedly for lack of work. Creecy had been employed by the respondent as one of the regular dock crew of 15 or 16 workers for 3 years immediately preceding his lay-off. He was the youngest man in point of seniority on the dock. It was conceded by the respondent that Creecy had always been a good, efficient worker. Creecy had joined the Union before the formation of the Associa- tion. Although the record does not disclose the specific nature of his union activities, it appears that Creecy never relinquished his union See Matter of Tennessee Copper Company and A. F. of L. Federal Union No . 81,164, 9 N. L. R. B. 117. NORFOLK SHIPBUILDING & DRYDOCK CORPORATION 895 membership. Because of his leadership and influence among the dock employees, Creecy was selected by Latham to attend the October 8 meeting of the Association. Throughout a major part of the organ- izational campaign of the Association, Creecy was Bozarth's chief aide on the dock, reporting to Bozarth frequently during working hours in regard to the affairs of the Association. On October 22, Bozarth talked to Creecy in his office concerning the latter's inability to secure members for the Association. Creecy's version of this con- versation is as follows : Q. What did Bozarth tell you on that occasion? A. He told me that he knew I belonged to the C. I. O. before he even started this union. Q. Yes? A. And held me out and to be a friend to me, he placed me in a position to help him organize this company union. He did that to save me, because, belonging to the C. I. 0., I would lose my job. Q. (By Trial Examiner HURLEY.) You mean he said that to you? A. Yes, sir. And he said about belonging to the C. I. O. and failing to get members to join the company union, that I had more interest in the C. I. O. than I did in the company union; therefore, I was just in good shape to lose my job. Bozarth denied having made these statements. At the hearing, however, Bozarth admitted that subsequent to the October 8 meeting of the Association he had become dissatisfied with Creecy's efforts to organize the dock and had admonished Creecy on October 22 about the latter's deficiency in that matter. Bozarth further testified that he had heard rumors of Creecy's union affiliation from various dock employees and that he may have told Creecy about such rumors dur- ing the conversation on October 22. These admissions, when con- sidered in the light of the admittedly "high-pressure" tactics indulged in by Bozarth in promoting the Association among the respondent's employees, convince us that Creecy's version of the conversation of October 22 is accurate. We find that Bozarth made the statements on October 22 attributed to him by Creecy, and, by reason of those state- ments, we find that Bozarth was aware of Creecy's union affiliation on that date. Shortly after this conversation occurred, Bozarth ap- pointed one Carrington to replace Creecy as his aide in advancing the Association on the dock. As a member of the executive committee of the Association, Creecy was present when the discussion concerning wage increases occurred prior to the posting of the bulletin of October 25. Bozarth testified at the hearing that in the discussion which ensued after he made his 896 DECISIONS OF NATIONAL LABOR RELATIONS BOARD recommendations to the committee concerning wage increases, "Creecy put up a lot of argument about the dock gang; it wasn't giving them enough, and (he) went out and started up a big fuss about that." After the bulletin of October 25 was posted, some question arose on the dock concerning overtime. In response to an inquiry about the matter, Latham told Creecy to stop "agitating." Creecy was working overtime when he was informed of his lay- off from the regular dock crew by Cannon, his foreman, on November 11. Cannon stated that the reason for laying him off was lack of work. Creecy then told Latham that he was willing to accept tempo- rary common labor on the dock if such were available. The following morning around 7 o'clock two common laborers were employed tem- porarily to assist in hauling barges. Creecy was not used for such work. On November 15, Creecy secured a job in the respondent's car- penter shop, to replace an employee who had been injured. He had worked one-half day when the foreman of the carpenter shop laid him off, saying, according to Creecy's testimony, "that Mr. Cannon said he couldn't put on any more help in the carpenter shop because he didn't have anything to do for the men he did have." Creecy was busy while working in the carpenter shop. Creecy then took the matter up with Rogers, who stated, "Mr. Cannon had the prob- lem, he didn't feel like he want to work me, that is, if Mr. Cannon didn't." Although they testified at the hearing, neither Cannon nor Rogers offered any explanation of this incident. About a week later, Bozarth sent for Creecy and asked him if he knew the reason for his lay-off. Bozarth testified that Creecy "admitted" on that occasion that he was a member of the Union. Although Creecy has returned to the plant in search of work several times since his lay-off, he has not been reinstated to any employment. The respondent contends (1) that on or about November 11, 1937, it experienced a general decline in business; (2) that an injury to its railway dock on or about November 11, 1937, necessitated a general reduction in forces in certain departments, including the dock; (3) that Creecy was laid off because he had less seniority than other dock workers. We shall now consider these contentions. With respect to the first and second contentions, the respondent introduced evidence to show that it docked considerably fewer ships in the 5 months' period following November 11, 1937, than in a like period immediately preceding November 11. This reduction in the number of ships docked, however, is not reflected in the respond- ent's receipts for the period. 1937 was a record year, the total receipts exceeding those in 1936 by 50 per cent. The receipts for the first 3 months in 1938 were somewhat in excess of those for the same period in 1937. The record does not disclose the particular operations or NORFOLK SHIPBUILDING & DRYDOCK CORPORATION 897 sources from which this income was derived. While the increase in the respondent's income is not necessarily determinative of the volume of its work on the dock, it patently contradicts an assertion of a decline in its general business. Another circumstance indicates that there was no material decline in the amount of work on the dock on the date of Creecy's lay-off, inasmuch as Creecy and two other mem- bers of the regular dock crew were engaged in overtime work on November 11. We are convinced that the evidence does not substan- tiate the contention of the respondent that it experienced a general decline in business on or about November 11. The testimony concern- ing an injury to the railway dock was undisputed and we accept such injury as a fact. However, the evidence is conclusive that there was no general reduction in forces because of such injury. Only two employees, Creecy, and a worker in the lumber yard who had but 1 week's seniority in the respondent's employ, were laid off on or about November 11. Thus, irrespective of the existence or non- existence of valid reasons for a general reduction in forces, it appears that there was no general reduction on or about November 11. With respect to the third contention, it is true that Creecy had less seniority than the other regular dock workers. The respondent's plant superintendent, however, testified that the respondent did not adhere to seniority rules in reducing its forces. Despite the absence of a general seniority policy in the respondent's plant, Cannon, fore- man on the dock, testified that he applied a rule of departmental seniority whenever it became necessary to reduce his crew, and that Creecy was laid off in accordance with such rule. However, other considerations, viewed in connection with the absence of a fixed and generally operative seniority policy in the respondent's plant, impel us to the conclusion that Cannon was not adhering to a rule of departmental seniority in selecting Creecy for lay-off on November 11. At the time of his lay-off, Creecy was a member of the regular dock crew of approximately 16 men. It is the usual practice of the respond- ent to shift its regular employees from one job to another to avoid laying them off when work is slack. Creecy had never before been laid off but had worked in departments other than the dock on numerous occasions during the 3 years of his employment, the first 2 years of which the respondent had a smaller volume of business than in 1937. In addition to its regular dock crew, the respondent constantly se- cures common laborers to assist in the dock work from the groups of men who frequent the docks in anticipation of temporary employment. Although two such laborers were hired the morning after Creecy's lay-off, Creecy was not given any temporary work on that day. The record does not disclose that Creecy made application for this work before the two men were hired; however, on the preceding day he 898 DECISIONS OF NATIONAL LABOR RELATIONS BOARD had informed Latham of his willingness to accept common labor on the dock whenever it became available. Furthermore, Creecy has not been employed as a common laborer at any time since November 11, although he has returned to the plant several times in search of work and although it is conceded by the respondent that temporary com- mon laborers have been hired from time to time since November 11 to assist in dock work. Thus the respondent did not adhere to its usual practice of shifting employees in laying Creecy off on Novem- ber 11 and did not use him for temporary work on the dock there- after. Indeed, its determination not to continue him in its employ is apparent from its express refusal to allow him to work in the carpenter shop on November 15, although work was available. Under all the evidence, we find that Creecy's seniority rating was not a factor considered by the respondent in laying him off on November 11. We are of the opinion that Creecy's persistent adherence to the Union, coupled with his increasingly ineffective support of the com- pany-dominated Association, induced the respondent to lay him off on November 11. Having joined the Union before the advent of the Association, Creecy retained his union membership throughout the organization and growth of the Association. In marked contrast to his continued loyalty to the Union, Creecy did not devote himself whole-heartedly to the establishment of the Association. He had been selected by Latham, assistant foreman on the dock, as one of the key employees who attended the October 8 meeting of the Association and throughout the formative period of the Association Bozarth fre- quently conferred with Creecy concerning its affairs. It appears, however, that Bozarth grew impatient with Creecy's ability as an organizer for the Association. Bozarth's dissatisfaction with Creecy's efforts in behalf of the Association was expressed in the conversation of October 22, at which time Bozarth warned Creecy against display- ing a greater interest in the Union than in the Association. Further- more, Bozarth's displeasure with Creecy's attitude toward the Asso- ciation was effectively displayed when, shortly after the October 22 conversation, he selected another dock employee to replace Creecy as his aide in promoting the Association on the dock. In addition to his failure to measure up to Bozarth's expectations as an organizer for the Association, Creecy aroused the antagonism of both Bozarth and Latham with respect to the bulletin of October 25. During the negotiations which preceded the posting of the bulletin, Creecy did not readily accept Bozarth's proposals with regard to the wage in- creases to be requested by the Association. After the bulletin was posted on October 25, Latham warned Creecy to stop "agitating" with respect to its provisions. Creecy was laid off about 2 weeks after these incidents occurred. NORFOLK SHIPBUILDING & DRYDOCK CORPORATION 899 The respondent denied that it at any time possessed knowledge of Creecy's union affiliation. This denial cannot be accorded weight in view of our previous finding that Bozarth knew of Creecy's member- ship in the Union on October 22, and on that occasion threatened Creecy with the loss of his job because of his loyalty to the Union and lack of interest in the Association. Under all the circumstances, we find that the respondent discrim- inated in regard to Creecy's hire and tenure of employment by laying him off on November 11, 1937, because of his membership in the Union and defection from the Association, thereby discouraging mem- bership in the Union and encouraging it in the Association, and thereby interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act. THE REMEDY We have found that the respondent has dominated and interfered with the formation and administration of the Association and has contributed support to it and we shall order it to cease and desist from these unfair labor practices. We find that the Association is incapable of serving the respondent's employees as their bona fide representative for the purposes of collective bargaining, and that its continued existence would thwart the purposes of the Act and render ineffective our order restraining the unfair labor practices to which it owes its existence.10 Therefore, we shall affirmatively require the respondent to withdraw all recognition from and completely dis- establish the Association. We have found that the respondent has discriminated in regard to the hire and tenure of employment of James M. Creecy, thereby dis- couraging membership in the Union. We shall require the respondent to offer reinstatement to James M. Creecy and to make said Creecy whole for any loss of pay he has suffered by reason of his lay-off by payment to him of a sum equal to the amount which he normally would have earned as wages from the date of his lay-off to the date of the offer of reinstatement, less his net earnings during said period.- 10 Cf. National Labor Relations Board v. Pennsylvania Greyhound Lines, 303 U. S. 261. 11 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 discharge and the consequent necessity of his seeking employment elsewhere. See Matter of Crossett Lumber Company and United Brotherhood of Carpenters and Joiners of America, Lumber and Sawmill Workers Union, Local 2590, 8 N. L. 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. 169134-39-vol. 12-58 900 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Upon the basis of the foregoing findings of fact and upon the entire record in the case, the Board makes the following: CONCLUSIONS OF LAW 1. Industrial Union of Marine and Shipbuilding Workers of Amer- ica and Employees Association of Norfolk Shipbuilding and Drydock Corporation are labor organizations within the meaning of Section 2 (5) of the Act. 2. The respondent, by dominating and interfering with the forma- tion and administration of Employees Association of Norfolk Ship- building and Drydock Corporation, and by contributing support to it, has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (2) of the Act. 3. The respondent, by discriminating against James M. Creecy in regard to hire and tenure of his employment and thereby dis- couraging membership in the Industrial Union of Marine and Ship- building Workers of America and encouraging it in the Employees Association of Norfolk Shipbuilding and Drydock Corporation, has engaged in unfair labor practices within the meaning of Section 8 (3) of the Act. 4. The respondent, by interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed by Section 7 of the Act, 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. 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, Norfolk Shipbuilding and Drydock Corporation, and its officers, agents, successors, and assigns, shall : 1. Cease and desist from : (a) Dominating or interfering with the administration of the Employees Association of Norfolk Shipbuilding and Drydock Cor- poration, or the formation or administration of any other labor organization of its employees, and contributing support to said Asso- ciation, or to any other labor organization of its employees; (b) Discouraging membership in Industrial Union of Marine and Shipbuilding Workers of America, or any other labor organization of its employees, and encouraging membership in Employees Asso- ciation of Norfolk Shipbuilding and Drydock Corporation, or any NORFOLK SHIPBUILDING & DRYDOCK CORPORATION 901 other labor organization of its employees, by discharging or laying off any of its employees or by discriminating in any other manner in regard to their 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 through representatives of their own choosing, and to engage in concerted activities for the purposes of collective bargaining or other mutual aid and protection, as guaranteed in Section 7 of the National Labor Relations Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Withdraw all recognition from Employees Association of Norfolk Shipbuilding and Drydock Corporation as the representa- tive of any of its employees for the purpose of dealing with the respondent concerning grievances, labor disputes, wages, rates of pay, hours of employment, and other conditions of employment, and completely disestablish said Association as such representative; (b) Offer to James M. Creecy immediate and full reinstatement to his former position, without prejudice to his seniority and other rights and privileges; (c) Make whole said James M. Creecy for any loss of pay he may have suffered by reason of the respondent's discrimination in regard to his tenure of employment, by payment to him of a sum of money equal to that which he normally would have earned as wages during the period from the date of such discrimination to the date of the offer of reinstatement, less his net earnings Y2 during said period; deducting, however, from the amount otherwise due him, monies re- ceived by Creecy during said period for work performed upon Fed- eral, State, county, municipal, or other work-relief projects, and pay over the amount, so deducted, to the appropriate fiscal agency of the Federal, State, county, municipal, or other government or govern- ments which supplied the funds for said work-relief projects; (d) Post immediately in conspicuous places in each department of the respondent's plant copies of this Order; (e) Maintain such posted notices for a period of at least sixty (60) consecutive days from the date of posting; (f) Notify the Regional Director for the Fifth Region in writing within ten (10) days from the date of this Order what steps the respondent has taken to comply herewith. ' See footnote 11, supra.