Kri Constructors, Inc.

802 DECISIONS OF THE NATIONAL LABOR, RELATIONS BOARD KRI Constructors, Inc. and United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, Local No. 51. Cases 36-CA-4840 and 36-RC-4748 July 29, 1988 DECISION, ORDER, AND DIRECTION OF SECOND ELECTION BY MEMBERS JOHANSEN, BABSON, AND CRACRAFr On February 13, 1987, Administrative Law Judge Jay R. Pollack issued the attached decision. The Respondent, the General Counsel, and the Charging Party filed exceptions and supporting briefs, and briefs in opposition. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, t and conclusions,2 to modify the remedy,3 and to adopt his recommended Order as modified, and set forth in full below. The judge found, inter alia, that the Respondent violated Section 8(a)(3) by screening job applicants to determine suspected union sympathizers and re- fusing to consider those applicants. The judge de- ferred "the difficult remedial questions of the iden- tity of the discriminatees and the backpay due them to the compliance stage of the proceeding." I The Respondent has excepted to some of the judge's credibility find- ings. The Board's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cit. 1951). We have carefully examined the record and find no basis for reversing the findings. 2 The General Counsel and the Charging Party except to the judge's failure to provide a make-whole remedy for the employees found by the judge to have been unlawfully laid off or denied recall. We find merit in the exception. The Respondent contends that the judge granted a make- whole remedy only to employees Carney, Elizalde, and Paloma because, according to the Respondent, they are the only employees whom the judge found to have been discriminatorily terminated or laid off. Howev- er, contrary to the Respondent, the judge also found that by laying off employees in October and November 1984 in order to discourage union membership or support, the Respondent violated Sec . 8(a)(3) and (1) of the Act. The judge inadvertently failed to provide a make-whole remedy for these employees. Clearly, all employees unlawfully laid off or denied recall are entitled to a make-whole remedy. We shall modify the judge's recommended Order accordingly. 8 In accordance with our decision New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after January 1, 1987, shall be com- puted at the "short-term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 U.S.C. § 6621. Interest on amounts accrued prior to January 1, 1987 (the effective date of the 1986 amend- ment to 26 U.S.C. § 6621), shall be computed in accordance with Florida Steel Corp., 231 NLRB 651 (1977). In his recommended Order, the judge included a visitatorial clause. In the circumstances of this case , that clause is unwarranted . See Cherokee Marine Terminal, 287 NLRB 1080 ( 1988). Further, the judge extended the remedy to in- clude all job applicants regardless of what positions they sought. The judge stated that the "ambiguity was caused by Respondent's unlawful hiring prac- tices and, therefore, that ambiguity will not be re- solved in Respondent's favor." However, we cannot agree that the remedy should be extended to "include all job applicants regardless of positions." The complaint alleges as discriminatees certain named individuals, referring to welder applicants and pipefitter applicants and to other applicants presently unknown, but known to Respondent KRI. The context and language of this portion of the complaint clearly and logically put the Respondent on notice that at issue was its hiring policies with regard to applicants for pipefit- ter and welder positions. Moreover, the evidence adduced at trial related to the Respondent's hiring practices regarding welders and pipefitters. The General Counsel did not seek to amend the com- plaint to include all job applicants. Under the cir- cumstances, the remedy must be limited to appli- cants for the positions of welder and pipefitter. See generally Edwin R. O'Neill, 288 NLRB 1354 fn. 16 (1988), and cases cited there. ORDER The National Labor Relations Board orders that the Respondent, KRI Constructors, Inc., Coos Bay, Oregon, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to consider for employment job ap- plicants for the positions of pipefitter and welder because they are members or sympathizers of the Union or because they worked in establishments which had union contracts. (b) Discriminating against employees in regard to their rate of pay for the purpose of discouraging support for the Union. (c) Laying off, discharging, or failing to recall employees for the purpose of discriminating against them for supporting the Union or otherwise dis- criminating against employees in regard to hire or tenure of employment or any term or condition of employment for engaging in activity on behalf of a labor organization. (d) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) Make whole all employee applicants for the positions of pipefitter and welder for any losses they may have suffered by reason of the discrimi- 290 NLRB No. 88 KRI CONSTRUCTORS 803 natory refusal to consider them for employment in the manner described in the remedy section of the administrative law judge's decision as modified. (b) Make whole the employees unlawfully laid off in October and November 1984 for any losses they may have suffered by reason of the discrimi- nation against them in the manner described in the remedy section of the administrative law judge's decision as modified. (c) Make whole employees Terry Emerson, Eugene Thomas, Thomas Babcock, Dennis Carney, Jorge Elizalde, and Leonard Paloma for any losses suffered by reason of the discrimination against them in the manner described in the remedy sec- tion of the administrative law judge's decision as modified. (d) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (e) Remove from its files any reference to the unlawful discharge and layoffs and notify the em- ployees that this has been done and that the dis- charges and layoffs will not be used against them in any way. (f) Post at its Coos Bay, Oregon facility copies of the attached notice Marked "Appendix."4 Copies of the notice, on forms provided by the Regional Director for Region 19, after being signed by the Respondent's authorized representative, shall be posted immediately upon receipt and maintained for 60 consecutive days in conspicuous places, in- cluding all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to ensure that the notices are not altered, defaced, or covered by any other materi- al.5 (g) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. IT IS FURTHER ORDERED that the complaint is dismissed insofar as it alleges violations of the Act not specifically found. IT IS FURTHER ORDERED that the election in Case 36-RC-4748 is set aside and that the case is severed and remanded to the Regional Director for * If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading "Posted by Order of the Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." If the Respondent does not resume operations at Coos Bay. Oregon, copies of the signed notice shall be mailed by Respondent to the home addresses of all employees employed by the Respondent at Coos Bay, Oregon, from November 1984 to July 1985. Region 19 to conduct a second election whenever he deems it appropriate (if the Employer resumes operations at Coos Bay, Oregon). [Direction of Second Election omitted from pub- lication.] APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. Section 7 of the Act gives employees these rights. To organize To form, join, or assist any union To bargain collectively through representa- tives of their own choice To act together for other mutual aid or pro- tection To choose not to engage in any of these protected concerted activities. WE WILL NOT refuse to consider for employment job applicants for the positions of pipefitter and welder because they are members or sympathizers of a union or because they worked in establish- ments which had union contracts. WE WILL NOT discriminate against employees in regard to their rate of pay for the purpose of dis- couraging support for the United Association of Journeymen and Apprentices of the Plumbing and pipefitting Industry, Local No. 51, or any other labor organization. WE WILL NOT lay off, discharge, or fail to recall employees for the purpose of discriminating against them for supporting the Union or otherwise dis- criminate against employees in regard to hire or tenure of employment or any term or condition of employment for engaging in activity on behalf of a labor organization. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL make whole all our employee appli- cants for the positions of pipefitter and welder for any losses they may have suffered by reason of our discriminatory refusal to consider them for employ- ment, with interest. WE WILL make whole the employees unlawfully laid off in October and November 1984 for any 804 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD losses they may have suffered by reason of the dis- crimination against them, with interest. WE WILL make whole employees Terry Emer- son, Eugene Thomas, Thomas Babcock, Dennis Carney, Jorge Elizalde, and Leonard Paloma for any losses suffered by reason of the discrimination against them, with interest. WE WILL inform employees who were unlawful- ly discharged or laid off that we have removed from our files any reference to their discharges or layoffs and that the discharges and layoffs will not be used against them in any way. KRI CONSTRUCTORS, INC. Dale B. Cubbison, Esq., for the General Counsel. Lester V. Smith Jr., Esq. (Bullard, Korshoj, Smith & Jern- stedt), of Portland, Oregon; Charles Kelso, Esq. (Fisher & Phillips), of Atlanta, Georgia, and John D. McLach- lan, Esq. (Fisher & Phillips), of San Francisco, Califor- nia, for the Respondent. Francis J. Martorana. Esq. (O'Donoghue & O'Donoghue), of Washington, D.C., and Paul C. Hays, Esq. (Carney, Buckley, Kasameyer & Hays), of Portland, Oregon, for the Union. Patrick Brophy, Esq., of Dallas, Texas, for ARCO-Alaska, Inc. DECISION STATEMENT OF THE CASE JAY R. POLLACK, Administrative Law Judge. I heard these consolidated cases in trial at Portland, Oregon, on February 25-27, 1986, and in Coos Bay, Oregon, on Feb- ruary 28 and March 3-7, 1986. The cases arose as fol- lows: On October 17, 1984, United Association of Jour- neymen and Apprentices of the Plumbing and Pipefitting Industry, Local No. 51 (the Union) filed a petition for representation in Case 36-RC-4748 for all employees of KRI Constructors, Inc. (Respondent), performing plumb- ing and pipefitting work at Coos Bay. On November 14, 15, 20, and 21, 1984, a hearing on the petition was held under the supervision of the Regional Director for Region 19 of the National Labor Relations Board (the Board). Thereafter on December 24, 1984, the Acting Regional Director issued a Decision and Direction of Election in a unit of all employees, a unit significantly larger than that petitioned for by the Union. An election was conducted under the supervision of the Regional Di- rector on February 22, 1985. The results of the election were, out of 94 ballots cast, 12 in favor of representation by the Union, 66 against, and 16 ballots were challenged. Thereafter, the Union filed timely objections to the con- duct of the election. On January 8, 1985, the Union filed an unfair labor practice charge against Respondent and ARCO-Alaska, Inc. This charge was amended on April 2, 1985. Thereaf- ter, on April 10, 1985, a complaint was issued by the Acting Regional Director against Respondent and ARCO-Alaska, Inc., alleging violations of Section 8(a)(3) and (1) of the National Labor Relations Act. On that same date, the Acting Regional Director issued a notice of hearing on certain of the Union's objections to the conduct of election and an order consolidating the repre- sentation case and the unfair labor practice case for hear- ing before an administrative law judge. At the request of Respondent, the hearing was re- scheduled from April 30 to June 25, 1985. Thereafter, the hearing was rescheduled from June 25 to September 24 at the request of the General Counsel. Prior to the opening of the hearing on September 24, 1 engaged in a series of conference calls with counsel for the parties. The General Counsel's and Union's cases were based almost entirely on the testimony of Travis Ballard, Re- spondent's project manager from approximately August 1984 until January 1985. Ballard, a resident of Texas, was working on an oil project in the country of Angola. After his discharge by Respondent, Ballard gave affida- vits that purportedly established violations of the Act by Respondent and ARCO-Alaska. However, the General Counsel had not served Ballard with a subpoena until after he had left this country and gone to work in Angola. At the request of the General Counsel and Union, the hearing was opened on September 24 in order to place Ballard in noncompliance with the subpoena. Shortly thereafter, the General Counsel filed an applica- tion with the United States Court for the District of Oregon for enforcement of the subpoena. On October 3, 1985, the district court issued an order requiring Ballard to appear before me on January 7, 1986. On January 7, 1986, Ballard again failed to appear and I rescheduled the case for trial on February 25, 1986, regardless of Bal- lard's presence. Shortly thereafter, the General Counsel filed a petition for civil contempt with the district court seeking to compel Ballard's attendance at the February 25 hearing. The district court heard argument in the con- tempt case on February 24, but did not issue a decision until May 28, 1986, when it dismissed the petition for contempt on the ground that the subpoena had not been properly served. As mentioned earlier, I heard this case in trial during February and March 1986. Ballard never appeared at the hearing. Without Ballard's testimony, the General Coun- sel and Union had no evidence of any violation of the Act by ARCO-Alaska, Inc. and, accordingly, I granted ARCO's motion to dismiss the complaint against it. I also denied a request for a further continuance to obtain Ballard's attendance at the hearing based on the General Counsel's failure to properly serve the subpoena. The General Counsel and the Union sought special permis- sion to appeal my ruling. On May 29, 1986, unaware of the district court's ruling that no valid subpoena had been served on Ballard , the Board granted the General Counsel's and the Union's appeal on the dismissal as to ARCO-Alaska and the denial of a continuance and or- dered that the record be reopened pending the outcome of the subpoena enforcement proceedings. In view of the district court ruling that no valid sub- poena had been served on Ballard, I again closed the record on June 6 and denied the General Counsel's and the Union's request for a further continuance . However, KRI CONSTRUCTORS 805 on June 16, I reopened the record based on representa- tions by the Union and the General Counsel that Ballard had returned to the United States and could be properly served by July 15, 1986. A hearing date was scheduled for July 22, conditioned on proper service on Ballard. However, proper service on Ballard could not be effec- tuated. It is believed that Ballard left the United States and returned to Angola. On July 15, I closed the record for the third time and dismissed the complaint against ARCO-Alaska, Inc.' In closing the record, I left open the possibility that the General Counsel or the Union could move to reopen the record on proper service of a subpoena on Travis Ballard. However, no further motion to reopen the record has been filed. On the entire record, from my observation of the de- meanor of the witnesses, and having considered the posthearing briefs, I make the following FINDINGS OF FACT AND CONCLUSIONS 1. JURISDICTION Respondent is a Texas corporation that was working under contract with ARCO to build modules in Coos Bay, Oregon, for shipment by barge to the Alaska oil- fields in time for installation during the summer months of 1985. During the times material Respondent purchased and received goods and services valued in excess of $50,000 directly from sources located outside the State of Oregon. The complaint alleges, the answer admits, and I find that Respondent is an employer engaged in com- merce within the meaning of Section 2(6) and (7) of the Act. The complaint alleges, Respondent admits, and I fend that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. THE ALLEGED UNFAIR LABOR PRACTICES A. Background and Issues Respondent began working in August 1984 to build modules for ARCO for shipment to Alaska in the summer of 1985. Travis Ballard arrived at the Coos Bay jobsite in August 1984 to prepare for the construction that was scheduled to begin in October 1984. Gayle Hansen was hired by Ballard on October 10 to run the personnel office and interview prospective employees. On October 19, the Union filed a petition for representa- tion of Respondent's employees performing plumbing and pipefitting work. The General Counsel and the Union allege that Respondent, through Gayle Hansen, screened applicants in an attempt to avoid hiring union members and union sympathizers. It is Respondent's po- sition that Hansen was simply a clerical employee and that her words and conduct had no bearing on Respond- ent's hiring practices. ' Although the Union filed a timely request for review of the first dis- missal of the entire complaint against ARCO-Alaska, neither the General Counsel nor the Union filed a request for review of the July 15, 1986 dismissal of the complaint against ARCO-Alaska. Accordingly, under Sec. 102.27 of the Board's Rules and Regulations, the case against ARCO-Alaska. Inc. is closed. The General Counsel and the Union also allege that (1) Respondent laid off employees in October and No- vember 1984 in order to discourage support for the Union; (2) Respondent failed to recall from layoff and/or terminated employees in order to discourage support for the Union; (3) Respondent hired nonunion employees from outside the State and paid these employees higher wages than the previously hired union supporters; and (4) Respondent constructively discharged three pipe- welder employees by paying them wages less than the nonunion pipewelders. As indicated earlier, the Union's objections to the con- duct of the election have been consolidated for hearing. The objections, which are also alleged as unfair labor practices, are that Respondent (1) terminated and laid off employees because of their union sympathies ; (2) hired individuals based on their antiunion sympathies; (3) paid higher wages and benefits to nonunion employees; and (4) discriminated against the three pipewelders resulting in their constructive discharge because of their union sympathies. In support of its allegation that Respondent intended to eliminate union support by its hiring practices, the General Counsel and the Union sought the testimony of Travis Ballard. As indicated earlier, Ballard was never properly served with a subpoena. Based on Ballard's unavailability at trial, the Union of- fered his pretrial affidavits under Rule 804 (bX3) of the Federal Rules of Evidence contending that Ballard's ad- mission of unfair labor practices was a statement against interest and, therefore, an exception to the hearsay rule.2 The Union argued that Ballard was admitted to prac- tice as an attorney in the State of Texas and that the ad- mission of unfair labor practices could result in discipli- nary proceedings before the bar. According to Respond- ent, Ballard has been the subject of prior bar disciplinary proceedings. In considering the circumstances under which the statements were given, I was greatly influ- enced by the fact that prior to giving the statements in question Ballard had brought suit against Respondent in superior court in Oregon alleging an unjust discharge and further alleging that he was discharged because he had not more effectively discharged the plan or scheme of unfair labor practices established by Respondent. This particular fact made the statements appear to be in Bal- lard's interest rather than against his interest at the time the statements were made. Even assuming that the possi- bility of bar disciplinary proceedings is sufficiently against interest as to qualify under this Rule, a point I find extremely doubtful, Ballard's immediate pecuniary a Rule 804(bX3) states: (b) The following are not excluded by the hearsay rule if the de- clarant is unavailable as a witness: (3) Statement against interest-A statement which was at the time of its making so far contrary to the declarant'a pecuniary or proprie- tary interest, or so far tended to subject him to civil or criminal li- ability, or to render invalid a claim by him against another, that a reasonable man in his position would not have made the statement unless he believed it to be true. A statement tending to expose the declarant to criminal liability and offered to exculpate the accused is not admissible unless corroborating circumstances indicate the trust- worthiness of the statement. 806 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD interest was served by these statements supporting his lawsuit. In fact, Respondent settled the lawsuit for ap- proximately $30,000. The Union argued that Ballard's second of two affida- vits, although given prior to the settlement of his lawsuit against Respondent, was signed after the settlement agreement. The Union argued, therefore, that at the time the second statement was signed it was no longer in Bal- lard's interest to make statements against Respondent. However, I found that argument unpersuasive. Under all the circumstances, it would not appear that Ballard's signing of the second statement, which was consistent with his previously signed statement, would qualify as a statement so far contrary to Ballard's interest as to lead to the inference that a reasonable man in his position would not have made the statement unless he believed it to be true. I reaffirm my ruling that the affidavits are in- admissible hearsay and lack the necessary trustworthiness required of exceptions to the hearsay rule. B. Respondent's Hiring Practices Respondent is a wholly owned subsidiary of Kellog Rust Incorporated, the second largest contractor in the United States. Respondent is "the open shop construc- tion arm of the Kellog Rust Group" and is headquar- tered in Houston, Texas. Respondent's corporate labor relations policy provides: The development of labor relations policies for KRI projects is carried out by the Vice President of Op- erations assisted by the KRI Personnel Department. This team will establish the project labor approach based upon the findings of an Area Survey which considers such aspects as the available skilled labor pool, the workload in the area, the political climate and local labor and community attitudes. For every KRI open shop project, a Project Industrial Rela- tions Plan is prepared dealing with employment screening procedures, security plans, the media, and local contacts with judiciary and law enforcement agencies. Prior to the commencement of its operations in Coos Bay, Respondent conducted a survey to determine the viability of an open-shop operation in that area. That survey stated that the area was viable for an open-shop operation and indicated that the unions in the area were very weak. The document states that the American Builders and Contractors personnel "feel that the Coos Bay area is ideal for [Respondent's] purposes and they also feel that [Respondent] would have no union prob- lems." The survey concludes that "KRI can work open shop in the area with little or no union problems." While the survey mentioned several unions by name, it did not mention the Charging Party Union. Travis Ballard, Respondent's highest ranking official at the Coos Bay facility, was quoted in the newspapers and on television both before and after the filing of the Union's representation petition stating that Respondent was an open-shop or nonunion facility and preferred to continue to operate in that manner. Further, Respond- ent's advertisements in the local area newspapers for craftsmen indicated that the Company was an open-shop contractor and fabricator. It is clear that Respondent was intent on operating as an open shop or on a nonunion basis. The question is whether Respondent took unlawful action in an effort to preserve its open-shop or nonunion status. Gayle Hansen, called by the General Counsel as an ad- verse witness, was hired by Respondent on October 10, 1984, to run the personnel office at the Coos Bay jobsite. Hansen was hired by Travis Ballard and told that Re- spondent was an "open shop"3 company. Ballard told Hansen that Respondent needed skilled people to work on an open-shop basis. According to Hansen, Ballard said, "We're open shop and we're going to have to be careful of the union background." Hansen was aware of Ballard's often-quoted preference to remain open shop or nonunion. Based on her experience in the Coos Bay Area, Hansen could determine whether an employer listed by an applicant as a previous employer was union or non- union.4 At the beginning of her employment with Re- spondent, Hansen would write union or open shop next to the previous employer's name listed on a job appli- cant's employment application. Hansen testified that she gave all employee applicants her "open shop speech." The open-shop speech informed the applicants that Re- spondent was a Texas-based company building oil mod- ules for ARCO. Hansen told the applicants that Re- spondent was an open-shop company and preferred to remain open shop. Hansen then stated that open shop meant that employees crossed craft lines. An employee hired for one job, for example, as a pipefitter, could expect to be used by the Company in the warehouse or as a structural ironworker depending on the Company's needs. Hansen also informed the applicants that Re- spondent had previously had pickets on the job, that a union had filed a representation petition, and that there might be pickets on the job in the future. Hansen would make a notation on the job application of the employee applicant's remarks or comments to this open-shop speech. 5 3 Hansen originally testified that open shop meant that a company did not follow strict craft lines, but required employees to perform different jobs and perform different skills throughout a job. However, as the hear- ing progressed , Hansen began to concede that she and Ballard used the term open shop to indicate that a company was nonunion or did not have a union contract. 4 Ballard and Respondent's other supervisors were from out of State and did not have knowledge of the union or nonunion status of Oregon employers. 5 In early to mid-November, Hansen was advised by an attorney for Respondent not to write the previous employer's union or nonunion af- filiation on the job application . Thereafter, Hansen made comments on "post-it" slips (yellow paper that was attached with a removable adhesive to the job application). Hanson continued to make notations of the em- ployee's comments to her union shop speech, but stopped writing wheth- er the previous employers were union or not . Hansen testified that she attempted to white-out the comments about a previous employer's union affiliation on the job applications but since the comments could be read even after the white eradicator solution had been applied , Hansen did not attempt to white-out the comments on all the applications . In some in- stances where Hanson attempted to white-out the comments , she rewrote the comments on the yellow post-it slips. KRI CONSTRUCTORS 807 Hansen testified that she did not ask any applicants about their union background or union sympathies. How- ever, the comments Hansen received from employee ap- plicants and her notation of these comments seem to in- dicate that Hansen was seeking to elicit comments of dis- satisfaction or negativism toward unions . The applicants expressly stated that they would cross picket lines. Hansen explained that she asked open-ended questions and that the applicants volunteered the information re- garding their dissatisfaction with unions and their will- ingness to cross picket lines. One explanation for such re- sponses to Hansen's open-shop speech is that Ballard had been extensively quoted in the media expressing Re- spondent's desire to remain open shop and Respondent's desire to resist the Union's attempt at organization of its employees. Thus, it is not unlikely that an applicant would express antiunion or antipicket views to Hansen in an attempt to increase his or her chance of being hired. A review of the notations placed on the applications by Hansen reveals that she recorded employees' com- ments that they would cross picket lines, had worked under nonunion conditions in the past, had dissatisfaction with unions in the past, and had never belonged to a union. Further, some notations revealed Hansen's com- ments that she believed the applicant would cross a picket line or was "a good open shop person." The Gen- eral Counsel argues that the allegation that Respondent unlawfully screened employees for their union sympa- thies and backgrounds is established by the comments on General Counsel's Exhibit 7. That exhibit is the employ- ment application of Walter Nash, a local pipewelder whose experience was with employers in Alaska and Washington. On a post-it attached to the application, Hansen had written: "Are these previous employers union? If so, we aren't interested." The applicant in ques- tion had listed pipewelding experience with two firms in Alaska and one in Washington State. The applicant was not hired. Hansen testified that this comment was direct- ed to her secretary, but she did not further explain why Respondent would not be interested in this applicant if his previous employers were unionized. No other agent of Respondent testified to any lawful reason or explana- tion for this post-it. The second most damaging piece of evidence against Respondent was given by Hansen. Hansen testified that she called Don Laube, a personal friend and the manager of Chambers Plumbing and Heating, to check on the qualifications of applicant William Sandine for employ- ment as a pipefitter. Hansen testified that Laube specifi- cally told her that Sandine was a good plumber , but was not that experienced as a pipefitter. Laube, called as a witness by the Union, testified that he did not talk to Hansen about Sandine. Laube testified that he had known Sandine for over 20 years and that Sandine had been Chambers' only pipefitter. According to Laube, Sandine was responsible for all the pipefitting work done by Chambers Plumbing during that time period. Laube testified that he never would have told Hansen that San- dine was not a qualified pipefitter or otherwise criticized Sandine's work because to do so Laube would, in effect, be criticizing himself and Chambers Plumbing. Accord- ing to Laube, his conversation with Hansen was simply her asking whether Chambers Plumbing's employees would be willing to work alongside Respondent's em- ployees if Respondent subcontracted some work to Chambers Plumbing. Laube answered that his employees often work alongside nonunion employees on such a basis. Hansen testified again after Laube, but never rebutted or denied his testimony. Laube, a friend of Hansen, had no motivation to testify untruthfully and his demeanor on the stand was very convincing . I credit Laube com- pletely on this point and fmd that Hansen's testimony re- garding Sandine was a fabrication to cover Respondent's failure to hire a qualified applicant from the Coos Bay area. Hansen knew Sandine to be a long-time union member and apparently could fmd no truthful explana- tion for Respondent's failure to hire him. This is particu- larly important, since Respondent claims that it later had to hire applicants from outside the State because there were no qualified applicants in the area. There is some doubt as to Hansen's effect on Respond- ent's hiring. Hansen accepted applications and inter- viewed employees. Thereafter , the applications were passed on to Superintendents Dickie Stewart and George McConnell.6 George McConnell, now employed by Re- spondent at a different location, testified that in hiring he did not pay attention to Gayle Hansen's comments. Ac- cording to McConnell, Hansen did not know what type of skilled ' people Respondent required. Stewart was present during the hearing, but was not called to testify. According to McConnell, Respondent hired pipefitters from Houston in December and from Coos Bay subse- quent to that. McConnell testified that certain applicants were rejected because they had no welding experience or did not have the necessary pipewelding experience. However, McConnell never addressed the qualifications of certain applicants from the Coos Bay area who pos- sessed pipefitting or pipewelding experience. McConnell admitted that he was aware of Respondent's open-shop status and that he was responsible to ensure that Re- spondent remained an open shop. Robert Claassen, an applicant for employment as a pipefitter, testified that when he was interviewed by Gayle Hansen, he was told that Respondent was open shop and preferred to stay that way. Hansen told Claas- sen that Respondent had sent 18 welders and fitters from Houston, Texas. Claassen testified that Hansen told him that if the employees voted to organize that Respondent would move from Coos Bay. Claassen's job application indicated that he had 28 years' experience as a pipefitter. Hansen placed three plus marks on Claassen's application indicating that Hansen judged him to be an excellent prospect. On an attached post-it, Hansen noted that she had given Claassen her open-shop speech and that he seemed dependable. Hansen also included three question marks. The question marks were not explained by Hansen or any other witness . The three previous em- ployers were large union firms. Claassen was not hired. 6 Prior to December 1984, applications were also given to Lawrence Lutes, then a superintendent. 808 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Buster Clemens, an applicant for employment as a pipefitter, was also interviewed by Gayle Hansen. Cle- mens was interviewed by Hansen in October. On Cle- mens' job application Hansen made the notation that his two previous employers were "union." Clemens had worked as a pipefitter in Alaska and as a plumber locally in the Coos Bay area. After noting that she gave Cle- mens her union shop speech, Hansen remarked that Cle- mens "wanted to stay here." After noting that she men- tioned pickets, Hansen recorded that Clemens had an- swered "you've been fair." Clemens was not hired. Randall McDonald applied for employment with Re- spondent in October 1984. In a telephone conversation McDonald told Hansen that he had module experience in Alaska and Hansen stated that was the type of experi- ence Respondent was looking for. Subsequently, McDonald was told by Hansen that Respondent had all the pipefitters it needed. The three previous employers indicated on McDonald's application were union em- ployers. McDonald was not hired. In December 1984, Respondent's personnel manager, Gerald Smith, sent pipewelders and pipefitters from Texas and Utah to Respondent's Coos Bay facility. These employees were paid $12.10 per hour-$1.90 more per hour than the local pipewelders received.? These out-of-state recruits also received 20 cents per mile travel pay and up to a week's pay as a bonus . Hansen did not interview any of these employees. There was no satisfac- tory explanation why these out-of-town welders were paid a higher wage rate than the welders hired locally. Nor was it explained why Respondent needed to hire from out of state at additional expense while not hiring local workers. 8 Terry Emerson, a union member and welder hired by Respondent in October 1984, testified that Ballard told him that Respondent recruited these out-of-state welders because Respondent knew they would tend to be non- union workers. 9 7 The wage rates paid to the out-of-state recruits was $1.90 more per hour over the wage rates Respondent had listed in its newspaper adver- tisements. The out-of-state recruits had previously worked for Respond- ent or for some other large nonunion construction firms. 8 Respondent argues that it was required to hire from out of State be- cause there was a shortage of qualified applicants locally. However, no testimony was offered to support this argument. 9 This statement of Ballard was made after he had left Respondent's employ and was clearly hearsay statement . Respondent did not make a timely objection and, therefore, the evidence was admitted. During clos- ing argument, Respondent's counsel sought to exclude this hearsay appar- ently contending that he had misunderstood a previous ruling allowing a statement made by Ballard, during a time when Ballard was an agent of Respondent, as an admission by a party opponent. In the absence of an objection from the party against whom the evi- dence is being offered , hearsay is admissible and becomes part of the record. Alvin J. Bart, 236 NLRB 242, 243 (1978); Passaic Daily News v. NLRB, 736 F.2d 1543 fn. 15 (D.C. Cir. 1984). The theory is that having not objected to the hearsay, the opposing party apparently does not take issue with the evidence. Here, such an inference would clearly be a fic- tion. Respondent consistently took issue with any statement made by Bal- lard, particularly as here, when the statement was made after Ballard's termination by Respondent. Respondent has consistently taken the posi- tion that any statement made by Ballard is untrustworthy and that to credit Ballard without granting Respondent an opportunity to cross-ex- amine him would be contrary to the rules of evidence. Due to the cir- cumstances of Ballard's discharge, subsequent lawsuit against Respond- ent, and unavailability at trial, I treat Ballard 's statement as testified to by Emerson as hearsay and, therefore, give it no weight. Hansen testified that the wage rate for pipewelders in October and November 1984 was a flat rate of $10.20 per hour. However, she testified that she received a re- vised wage schedule from Respondent's Houston office (Gerald Smith) which reflected two wages rates for pipewelders. This latter wage schedule was backdated to June 1984, apparently to justify the higher wage rate for the out-of-state hires. Hansen could not explain why the wage schedule was backdated and Gerald Smith did not testify. George McConnell testified that the $10.20 was an entry level rate and that an employee could receive a merit rate to $12.10 after the employee proved himself. According to McConnell this merit system was in effect at the commencement of the job. t ° However, this testi- mony did hold up under cross-examination and McCon- nell later testified that the merit system was established in November or December. However, even with this re- vised time schedule, Respondent's witnesses were unable to explain why pipewelders hired locally and performing well were paid $10.20 per hour and out-of-state welders were hired in, not at the starting rate but, at $12.10 per hour the alleged merit rate. t t As stated earlier the Gen- eral Counsel and Union allege that Respondent paid the local pipewelders, thought to be union members, lower wages than the out-of-state welders, thought to be non- union, in order to discourage union activities in violation of Section 8(a)(3) and (1) of the Act. C. The Alleged Constructive Discharges Employees Steven Thomas , Terry Emerson, and Joseph Babcock were hired by Respondent in October 1984. All three were union members and were journey- men pipewelders . McConnell admitted that these three welders were competent and could not give any reason why these three were paid less than the welders hired from outside the State. After learning that the new out-of-state welders were earning an extra $1.90 per hour, Thomas, Babcock, and Emerson complained to Ballard. Ballard told the em- ployees that it was a corporate decision (meaning Gerald Smith in Houston) and the best Ballard could do was pay the employees $12.10 retroactive to the start of the week. The employees demanded $ 12.10 retroactive to the first day that an out-of-state welder received $ 12.10. Ballard said he could not do that and all three employees quit. 12 As mentioned earlier , the General Counsel and However, based on other facts and circumstances , more fully discussed infra, I draw the very same inference, i.e., that Respondent was hiring the out-of-state workers, who had worked nonunion in the past and were probably not union members, in an attempt to avoid hiring local workers who had worked for union employers or who were referred by the Union, and who probably were union members. 10 McConnell is not credited on this point. 11 The $10. 20-per-hour wage rate was used in Respondent 's employ- ment advertisements and in the hourly wage schedule utilized prior to the filing of the petition. 12 Emerson testified that after Ballard's discharge , Ballard told him that Respondent paid the three welders a lower wage in the hope that they would quit working for Respondent . For the reasons stated earlier, I treat this as hearsay and give it no weight, notwithstanding that Respond- ent made an untimely objection. KRICONSTRUCTORS Union contend that this conduct amounts to a construc- tive discharge of the three employees. D. The Alleged Unlawful Layoffs On October 30, 1984, Respondent laid off approxi- mately half of its work force and on November 7 it laid off the remaining employees. The reason advanced at the time of the layoffs was a shortage of materials. There is much conflicting testimony on the issue of whether there was in fact a shortage of materials resulting in the lay- offs. Robert Lelong, Respondent's material manager at the time of the layoffs, testified that the layoffs were not ne- cessitated by a lack of materials. According to Lelong, at the time of the layoffs he confronted Ballard" s and asked why Respondent was giving material shortage as a reason for the layoffs. Ballard refused to explain but as- sured Lelong that it was no reflection on Lelong's work. In support of his statement that the layoffs were not necessitated by a lack of materials, Lelong testified that it was usual for there to be material shortages on the job and that the normal procedure was to assign employees to another task while awaiting supplies. Lelong explained that certain company documents compiling problems were used to lay the groundwork for back charges on the contract. Lelong conceded that material was often delivered without the proper certifications, but testified that this did not require shutting down the job. Accord- ing to Lelong, it was standard practice to proceed with- out the certifications because the necessary documenta- tion would arrive a few days later. Lelong also stated that ARCO, Respondent's customer, allowed materials to be used without certification on hand on at least 10 occa- sions. It was not until December 1984, well after the lay- offs at issue, that Respondent ceased asking ARCO for permission to use materials while awaiting certifications. Finally, Lelong testified that he had not, prior to the in- stant hearing, heard that a lack of isometric drawings was a reason for the layoffs. Respondent offered substantial evidence to rebut Le- long's testimony. Thomas Walters, formerly Lelong's as- sistant, testified to a shortage of materials. The Union contends that Walters had no experience and that the documents he relied on related to events subsequent to the second layoff. William Tow, a laborer and carpenter, also testified to a shortage of materials. Further, Tow testified that mate- rials arrived at the jobsite without proper certification. The Union contends Tow was not on the jobsite during October and November 1984 and had insufficient experi- ence regarding the materials. George McConnell testified to both a shortage of ma- terials and a shortage of proper certification of materials. McConnell testified that he was not involved in the deci- sion to lay off employees and knew nothing about the layoffs until the day they were announced. r' Ballard and Lelong were still in Respondent 's employ at the time of these conversations. I. therefore, overruled Respondent's hearsay objec- tion. I found these statements to be admissions by a party-opponent under Sec. 801(d)(2), Federal Rules of Evidence, and by definition not hearsay. 809 Pipewelders Steven Thomas, Dennis Carney, Terry Neely, and Terry Emerson testified there was work for all the welders in the fabrication shop when they were laid off. E. The Alleged Unlawful Terminations By letter dated November 20, 1984, Respondent termi- nated 9 out of the 12 pipewelders employed in its fabri- cation shop. The nine pipewelders who were on layoff at the time were fired because of the rate of rejection of their welds. The General Counsel and the Union argue that the rejection rate was a pretext and that Respondent terminated the pipewelders because it knew from the representation case that 11 of the 12 employees were af- filiated with the Union. Respondent's knowledge of the union affiliation of the pipewelders is not at issue. Rather, the question is whether they were terminated be- cause of their union affiliation or because of the rate of rejection of their welds. Pursuant to Respondent's agreement with ARCO, X- Ray, Inc., an independent quality control inspection company, X-rayed the welds. In the welding of certain joints, more than one employee worked on the weld. Each welder had his own stamp or mark so that the indi- vidual welder would be known for each weld or portion of a weld. In welding two pipes or a pipe and a fitting together, the two pieces are first tacked in four spots. Then four passes are made around the pipe with welding material. The first pass is called the root pass, the second pass is the hot pass, the third pass is called the filler pass, and the final pass is the cap. At the start of the job, one welder would make the first two passes and another welder would make the final two passes. Elvin Reese, an inspector for X-Ray, Inc., testified that the X-ray process used to test the Respondent's welds re- vealed not only the faulty weld but also that portion of the weld that was at fault, thereby allowing X-Ray, Inc. and Respondent to identify the culpable welder. The testing by this independent inspection company com- menced prior to any union activity at the jobsite and was required by ARCO because of the nature of the job. There is no reason to suspect that the testing or submis- sion of the testing reports was in any way designed to discriminate against employees. The question presented is whether Respondent seized on these nondiscriminatory tests as a pretext to discharge the welders known to be affiliated with the Union. George McConnell testified that he met with Dickie Stewart to evaluate employees prior to their recall from layoff. According to McConnell, Respondent originally had set a rejection rate of 5 percent as acceptable, in other words, employees with a rejection rate in excess of 5 percent would not be retained. However, early in the job, there were unforeseen problems with the welding. In making their determinations regarding dismissal or re- tention of welders, McConnell and Stewart terminated all employees with a rejection rate of 20 percent or more, resulting in the discharge of 9 of the 12 welders. The remaining three welders, Emerson, Thomas, and Babcock, had rejection rates of approximately 6 per- 810 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD cent." McConnell and Stewart used the reports made by X-Ray, Inc. in calculating such employees ' rejection rate. McConnell testified that he assumed the accuracy of these reports and did not make further investigation or calculations. Had McConnell made further calculations he would have discovered that in many cases more than one welder had been charged for the same welding error. I credit McConnell's testimony that he relied on the accuracy of X-Ray, Inc.'s reports and that he made no further calculations. I believe that McConnell had more confidence in the calculations of X-Ray , Inc. than he would have in any separate calculation he could have made himself. I am convinced that McConnell accepted the representation of X-Ray , Inc. that an employee was only charged for his own errors and that McConnell was not aware that more than one welder had been charged with the same error. Another factor complicating the determination of whether Respondent was motivated by the welders' union sympathies in the discharges of November 20 is the testimony regarding the problems encountered by Respondent's welders in the initial welds done and tested on the job. Respondent's welders were experiencing a problem with the tacks (the first step in the welding process) cracking in many of the 8 -inch pipes. The welders dis- cussed this problem with McConnell and Quality Con- trol Manager James McLemore. This problem was dis- cussed in the shop and in a general meeting attended by all the welders and supervisors . Several of the welders, Don Davis, Terry Neely, Terry Emerson, and Joseph Babcock, testified that McConnell and McLemore told them that these initial welds on the 8-inch pipes would not be held against them. McConnell testified that he knew that the welders were having problems with the 8-inch pipes, but denied telling the welders that these errors would not be count- ed against them. Elvin Reese, the testing technician, con- firmed that the error rate in the 8-inch pipe was unusual- ly high and would have caused him to believe there was a problem with the pipe, especially since the error rate in the 3-inch pipe was very low. After the layoffs of October 20 and November 7, the procedure for welding the 8-inch pipe was changed. The company records indicate that ARCO and Respondent did not require the first 18 welds on 8-inch pipe to be rewelded because of a change in material . However, Mc- Connell counted all errors in the 8-inch pipe against the welders in determining their rejection rate , including the first 18 welds which had been "deleted due to a design change." The General Counsel and the Union contend that Re- spondent counted as errors welds that had no flaws or no visible flaws. I reject this contention. Although sever- al employees testified that in repairing rejected welds they were unable to find the flaw, that testimony was re- butted by the testimony of Reese and McConnell . First, many of the flaws that showed up in the x -rays were just 14 As indicated earlier, Emerson, Thomas, and Babcock, the three welders that survived the November 20 discharge, were then paid $1.90 per hour less than the new hires from out of State. not visible to the naked eye or not visible after the neces- sary grinding required to get to the spot of the flaw. Second and most important, after a weld failed to meet the inspection, the added cost of repair was the same to Respondent whether or not the flaw could be observed. In other words, Respondent incurred double labor costs when a weld was rejected whether or not the flaw was visible after grinding. I find insufficient basis to conclude that X-Ray, Inc. or McConnell intentionally inflated the rejection rates of the welders in this manner. The termination of pipewelder Dennis Carney de- serves special mention. Carney had only one error in four welds and that error was during the first 18 shop welds that were deleted because of a design change. Mc- Connell admitted that a welder's first two welds were x- rayed and if there were any errors his next four welds would be X-rayed. McConnell admitted that Respondent deviated from its own procedure in not allowing Carney to have more welds X-rayed . McConnell admitted that Carney was a good pipewelder. In fact, Carney had only four welds because he was assigned by supervision to repair the welds of other employees. Although Carney's rejection rate was 25 percent, it would have been zero if calculated correctly. It should have been clear to Mc- Connell and Stewart that Carney did not have a suffi- cient number of welds tested and that Carney was not given the same opportunity as other employees to estab- lish his abilities before being terminated. F. Analysis 1. The hiring practices The General Counsel and Union contend that Re- spondent violated the Act by screening job applicants in order to eliminate possible supporters of the Union. The job applications submitted in evidence tend to support that argument. Applicants who had previously been em- ployed by unionized firms had that fact highlighted on their job applications. Hansen had been instructed that Respondent was an open shop or nonunion and that it in- tended to remain as such. She was told to be careful in hiring union employees. No legitimate business justifica- tion was advanced for the notation of an applicant's past affiliation with a unionized employer. The only inference to be drawn from the highlighting of an employee's past association with a union or a business associated with a union is that Respondent considered such affiliation or sympathy in making employment decisions . Legal coun- sel told Hansen that it was unlawful to mark an applica- tion by referring to the past union affiliation but Hansen was not instructed to refrain from making any remarks elsewhere or from commenting on an employee 's union sympathies. Thus, Hansen gave employees her "open shop" speech and then memorialized their responses re- garding unions and picket lines . Again, no lawful expla- nation for making such notations was ever offered. Hansen's remarks on the application of an employee, "Are these previous employers union? If so we aren't in- terested" is a stunning admission of an intent to discrimi- nate against employees with a history of union represen- tation or affiliation. No actual union membership or ac- KRI CONSTRUCTORS tivities were required, the mere employment with "union employers" was sufficient to preclude employment by Respondent. How many other applicants were so com- pletely denied opportunity for employment is known only to Respondent and its agents. Hansen's statement to applicant Claassen that Re- spondent would move from Coos Bay if the employees voted to organize is further evidence that Respondent in- tended to ensure that it would remain open shop. Han- sen's falsification regarding the failure to hire applicant Sandine supports an inference that Respondent had an unlawful motive for the refusal to hire . See, e.g., Keller Mfg. Ca, 237 NLRB 712, 716 ( 1978); Party Cookies Inc., 237 NLRB 612, 623 (1978). See also Shattuck Denn Mining Corp. v. NLRB, 362 F.2d 466, 470 (9th Cir. 1966). Here, I draw the inference that Respondent's motive in not hiring Sandine-a motive that Respondent wished to conceal-was the unlawful motive of avoiding hiring union sympathizers. Hansen knew that Sandine was a long-time employee of Chambers Plumbing, a union con- tractor. Surrounding circumstances lead to the inference that this unlawful motive was not confined to Sandine but affected Respondent's hiring practices with regard to other pipewelders and pipefitters. Hansen's deliverance of her open-shop speech and me- morialization of the employees' reaction or comments constitute further evidence that Respondent intended to screen out applicants who tended to sympathize with unions. Based on the applicants' willingness to supply negative information about unions, it seems clear that the applicants sensed that Respondent intended to remain open shop or nonunion and that comments negative to unions would enhance an applicant's chance of hire. Subsequent to the filing of the petition, Respondent began hiring pipefitters and pipewelders from out of state. The timing of these events is an important factor in determining whether Respondent was motivated by its desire to avoid hiring union sympathizers. Second, ' the hiring of these out-of-state employees was against Re- spondent's self-interest.15 This labor was more expensive. Respondent paid travel expenses and a wage rate of $1.90 per hour in excess of what it had been paying to pipewelders hired locally but who had been referred by the Union. The Board stated in Big E's Foodland, 242 NLRB 963, 968 (1979); Hoboken Shipyards, 275 NLRB 1507 (1985): Essentially, the elements of a discriminatory re- fusal-to-hire case are the employment application by each alleged discriminatee, the refusal to hire each, a showing that each was or might be expected to be a union supporter or sympathizer, and further show- ings that the employee knew or suspected such sympathy or support, maintained an animus against it, and refused to hire the applicant because of such animus. For the reasons expressed above, I find that the Union and the General Counsel have established a prima facie case that Respondent unlawfully failed to consider for employment applicants whom the employer suspected 15 See Madison South Convalescent Center, 260 NLRB 816, 831 (1982). 811 possessed union sympathies or union affiliation , even if such sympathy or affiliation was only established by past employment with a unionized employer . Alexander's Res- taurant & Lounge, 228 NLRB 165 (1977). Once the prima facie case has been found, an unfair labor practice is es- tablished unless the employer is able to demonstrate, as an affirmative defense, that the same conduct would have taken place absent the discriminatory motive. NLRB x Transportation Management Corp., 462 U.S. 393, 399-403 (1983). In response, Respondent offered its main defense that Hansen was neither a supervisor nor agent but simply a low-level employee who only performed a ministerial function in the hiring process. To this end, Hansen testi- fied that she was not personnel manager but simply em- ployed in the personnel office. However, during her em- ployment with Respondent, she utilized business cards furnished by Respondent which described Hansen as a personnel manager. Although the testimony regarding Hansen's hiring is vague, no higher official of Respond- ent having offered any testimony regarding Hansen's duties or authority, it appears that Hansen was hired to screen applicants for the supervisors such as McConnell and Stewart. According to McConnell, Hansen did not understand the type of experience that Respondent re- quired. In this regard, McConnell testified that applicants with some welding experience were considered good prospects by Hansen but, in fact, this welding experience was not the highly skilled experience McConnell re- quired for his pipewelders. Although this evidence con- vinces me that many of the applicants may not have been qualified for the pipewelding positions, it does not counter the evidence indicating that a qualified applicant, with previous employment with union contractors, would not get past Hansen in the hiring process and, therefore, would not be hired. In fact, Gerald Smith in Houston made sure that qualified applicants did not get past Hansen or McConnell, by hiring out-of-state non- union applicants and sending them to the job without any input by McConnell or other supervisors. Hansen's comments concerning an employee's past em- ployers and his or her reaction to Hansen's open-shop speech appear to be her major job function . If the super- visors were not concerned with Hansen's comments or recommendations, what purpose did she serve?. Why have Hansen interview job applicants if her comments were ignored and she did not know what type of experi- ence Respondent required? Respondent's attorney was aware as early as Novem- ber of Hansen's activities in designating applicants' past employers as union or open-shop businesses. The attor- ney took no steps calculated to stop Hansen from indi- cating an employee's union sympathies. Thus, she was told it was unlawful to write on an application that a past employer was a union firm . She was not discour- aged, apparently, from making such notations elsewhere or from soliciting employees' views toward unions by utilizing her open-shop speech and open-ended ques- tions.1 e I find Respondent was fully aware of Hansen's 10 As indicated earlier, only Hansen testified regarding these instruc- tions. The attorney, while present, did not testify. 812 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD attempts to learn of an employee's past employment with union firms and the employee's union sympathies and that Respondent took no action to stop it. Rather, Re- spondent desired such action for that was a major reason why Ballard hired Hansen in the first place. With respect to hiring, Hansen apparently hired her own secretary. From this record, it cannot be found that Hansen made any other effective recommendation for hiring. However, as mentioned earlier Hansen effectively screened employees, such as Claassen, Clemens, Sandine, and Nash, from any opportunity for hire. Hansen had an office that was designated as the personnel office and Respondent's personnel records were maintained in Han- sen's office. Therefore, in the circumstances presented in the in- stant case, I find no merit in Respondent's argument that Hansen was simply a low-level employee whose com- ments did not affect its hiring process. I find irrelevant the question of whether Hansen was a supervisor within the meaning of the Act. Rather, I see the issue to be whether under common law agency principles, Hansen was an agent for whose conduct Respondent can be held liable. Hansen was employed by Respondent to perform services in its personnel office and her performance was under Respondent's control. Respondent either directed Hansen to take the unlawful action or, at the very least, took no steps, after learning of her conduct, to prohibit her from engaging in that conduct. Thus, I find that Hansen's conduct was authorized or ratified by Respond- ent. Moreover, the conduct was performed in further- ance of Respondent's objective to remain an open shop. Thus, I find no basis for Respondent to avoid liability for its agent's misconduct, supervisors or not, performed in the furtherance of Respondent's policy to remain open shop, particularly where Respondent authorized or rati- fied such conduct. I am not persuaded by Respondent's argument that Su- pervisors McConnell and Stewart did not share Ballard's and Hansen's animus toward unions. Where, as here, a hiring decision adopts the tainted recommendation of a subordinate official who harbors antiunion animus, her supervisors will not be heard to argue that their decision was free of discriminatory intent. "To rule otherwise would provide a simple means for evading the Act by a division of corporate personnel functions." Allegheny Pepsi-Cola Bottling Co. v. NLRB, 312 F.2d 529, 531 (3d Cir. 1962). Accord: JMC Transport v. NLRB, 776 F.2d 612, 619 fn. 6 (6th Cir. 1985); Boston Mutual Life Ins. Co. v. NLRB, 692 F.2d 169, 171 (1st Cir. 1982). Moreover, unfair labor practices here were not the rogue actions of Hansen as argued by Respondent. Rather, Hansen was acting pursuant to the open-shop policy of Respondent with the aid and acquiescence of Ballard, Smith, and Re- spondent's attorney. Moreover, Superintendents McCon- nell, Stewart, and Lutes were well aware of Respond- ent's open-shop policy and Hansen's highlighting of em- ployees' union affiliation. To believe that these supervi- sors ignored such matters when reviewing job applica- tions requires a degree of naivete, which I cannot reach. McConnell's affirmations of good faith are insufficient to dispel the strong case of systematic discrimination. Respondent correctly asserts that there were many more applicants than there were available jobs. Hansen was instructed to do a great deal of interviewing in an- ticipation that Respondent would acquire work in addi- tion to that of ARCO-Alaska at the Coos Bay facility. Unfortunately, most, if not all, of its anticipated work did not come to fruition. According to Respondent, as a result of the mass of applicants and applications, it is pos- sible that a qualified applicant like Claassen or Clemens would "fall through the cracks" without any malevo- lence on the part of Respondent. Although Respondent's argument is logical, the evidence establishes that Re- spondent intentionally sought to exclude applicants on the basis of prior employment with union businesses and that Respondent particularly sought to discriminate with respect to jobs in the pipefitting and pipewelding catego- ries. Although vacancies did not exist for all the employees excluded on the basis of suspected union sympathies, I find that to be no defense to a violation. See Alexander's Restaurant & Lounge, supra; Madison South Convalescent Hospital, supra. As the Board stated in Shawnee Indus- tries, 140 NLRB 1451 1452-1453 (1963), enf. denied on other grounds 333 F.2d 221 (10th Cir. 1969): Under the Act an employer must consider a request for employment in a lawful, nondiscriminatory manner, and the question whether an application has been given such consideration does not depend on the availability of a job at the time an applica- tion for employment is made. Consequently, the Act is violated when an employer fails to consider an application for employment for reasons pro- scribed by the Act and the question of job availabil- ity is relevant only with respect to the employer's backpay obligation. Therefore, "final determination of job availability and possible backpay liability will be properly left to compli- ance." Apex Ventilating Co., 186 NLRB 534 fn. 1 (1970). Next, Respondent contends that statistically its hiring records show that employees with a past history of em- ployment with union firms had just as good a chance, if not a better chance, of employment than applicants with a history of nonunion employment. The fact that Re- spondent did not discriminate against all applicants does not bar a finding of a violation. Nachman Corp. v. NLRB, 337 F.2d. 421, 424 (7th Cir. 1964); NLRB v. W. C. Nabors Co., 196 F.2d 272, 276 (5th Cir. 1952), cert. denied 344 U.S. 865 (1952). Statistics are competent in proving employment dis- crimination, Teamsters v. U.S., 431 U.S. 324, 339-340 (1977). However, statistics are not irrefutable; they come in infinite variety and, like any other kind of evidence, they may be rebutted. In short, the usefulness depends on all the surrounding facts and circumstances. Id. at 340; see, e.g., Hester v. Southern Railway Co., 497 F.2d 1374, 1379-1381 (5th Cir. 1974). The statistics utilized by Respondent list as applicants with union background per- sons who posed no threat to Respondent's open-shop op- eration. For example, persons listed included supervisors for union companies, employees for a company that later KRI CONSTRUCTORS 813 went nonunion, employees who worked only a short time for a union employer, nonbargaining unit employ- ees, employees who worked for a company that is now union but was nonunion at the time of the employment, employees of a union company that closed, and employ- ees who were members of industrial unions rather than a craft or construction union. Moreover, Respondent's sta- tistics made no distinction between employers likely to be sympathetic to the Charging Party and those that would not. However, in hiring after the petition was filed, Respondent hired no employees in the pipefitter and pipewelding job categories who revealed a union background of any kind . Prior to the filing of its petition and Hansen's screening procedures, 12 of the 13 employ- ees hired in these categories had a union background. In any event, Respondent's argument does not rebut the main indicia of the discrimination, the highlighting of an employee's past association with an employer that had a union agreement. Respondent's conduct with respect to the pipefitters and pipewelders, after the filing of the petition, clearly establishes a pattern of discrimination. Respondent un- lawfully laid off employees, unlawfully discharged em- ployees, unlawfully refused to consider qualified appli- cants with union backgrounds for employment, and un- lawfully paid higher wages to nonunion out-of-state ap- plicants. The impact of that conduct was to change the complement of union employees in the unit petitioned for by the Charging Party to a nonunion complement. In the event the Union's position on the smaller bargaining unit was successful in the representation case, it would have been left without its support in the election. When the Employer's position was successful in the representation hearing, the Union had little or no chance to prevail in the election. The difficulty is whether Respondent's unlawful hiring policy with respect to pipefitters and pipewelders was so widespread as to include all job applicants regardless of positions. Such a determination cannot be made with any degree of certainty from this record . But that ambiguity was caused by Respondent's unlawful hiring practices and, therefore, that ambiguity will not be resolved in Re- spondent's favor. Based on the record before me, I can do nothing other than to defer the difficult remedial questions of the identity of the discriminatees and the backpay due them to the compliance stage of the pro- ceeding. Reinstatement is not an issue as there was no fa- cility in operation at the time of the instant trial. It ap- pears the discriminatees would have been laid off, in any event, at the completion of Respondent's project for ARCO-Alaska. In sum, I conclude that Respondent has failed to rebut the Union's and the General Counsel's prima facie case that Respondent discriminated against suspected union sympathizers by attempting to identify union sympathiz- ers and by failing to consider for employment suspected union sympathizers. Respondent has failed to establish that the same hiring would have taken place even in the absence of such unlawful motive. I leave to the compli- ance stage the establishment of the identity of the par- ticular discriminatees and the related questions of back- pay. 2. The hiring of the out-of-state, nonunion employees and the payment of higher wages As discussed earlier, concurrent with the unlawful practice of not considering for employment pipefitters and pipewelders with a past history of employment with union businesses, Respondent hired out-of-state employ- ees, with a history of working for nonunion businesses, at a wage rate of $1.90 per hour higher than its established wage rate. A wage schedule was backdated in November or De- cember in an apparent attempt to justify the higher wage rate. I give no credence to McConnell's testimony that the higher wage rate was based on merit because em- ployees performing well were not given the wage rate while new hires were given the merit increase before they could prove themselves meritorious. Gerald Smith, apparently the agent of Respondent who could supply the justification, if any , of the out-of- state hiring and the higher wage scale, did not testify. This is particularly significant as such hiring was suspi- ciously timed and was contrary to Respondent's self-in- terest. Moreover, the failure of Smith to testify can lead to an inference that his testimony would be adverse to Respondent. See Madison South Convalescent Hospital, supra, 260 NLRB at 828 fn . 4; Martin Luther King Sr. Nursing Center, 231 NLRB 15 fn. 1 (1977). Here, I draw the inference that Smith did not testify because there was no legitimate business justification for the hiring of the out-of-state workers at a premium rate. The only conclu- sion to be drawn is that Respondent 's desire not to hire union sympathizers in the pipefitting and pipewelding categories was so strong that it was willing to pay an ad- ditional $1.90 per hour to avoid such hiring.17 I further find that Respondent unlawfully discriminat- ed against pipewelders Emerson, Thomas, and Babcock in paying the $1 .90 per hour less than the nonunion welders from the time of the hire of the first welders at the higher wage rate until the date of their termination of employment. However, as discussed in more detail, infra, I do not find Emerson, Babcock, and Thomas to have been constructively discharged as alleged in the complaint. 3. The alleged constructive discharges The Board has held that a constructive discharge is es- tablished when it is shown that (1) the employer estab- lished burdensome working conditions sufficient to cause the employee to resign and (2) the burden was imposed on the employee because of his union activities. Crystal Princeton Refining Ca, 222 NLRB 1068, 1069 (1976); Al- greco Sportswear Ca, 271 NLRB 499, 500 (1984). In Aigreco Sportswear, an employee quit because she was discriminatorily receiving the lowest of three wage rates.' s Although the Board found that the wage rate IT In addition, Respondent paid travel costs to the nonunion out-of- state workers. 'a The employee was not receiving a reduction in wages but receiving less than she was entitled to under a newly implemented system. 814 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD paid to the employee was discriminatory, it refused to find that the burden imposed by Algreco was so intoler- able as to force her resignation. "The test is of necessity, an objective one, taking into account the circumstances of each case. The mere existence of discrimination is in- sufficient to warrant consideration of abandonment of employment as constructive discharge." 271 NLRB at 500. See also Van Pelt Fire Trucks, 238 NLRB 794 (1978). Based on the Board's holding in Algreco Sportswear, there can be no finding of a constructive discharge here. The employees, although discriminatorily receiving a lower wage than the new out-of-state hires, were offered the new higher wage rate retroactive to the beginning of that week. Thus, the only burden here was the failure to give the retroactive pay to the time of the hiring of the first out-of-state welder. Thus, as in Algreco Sportswear there is discriminatory intent but the burden imposed by the Respondent was not so "difficult and unpleasant" as to force the three welders to resign. Respondent's offer to raise the welders' wages to the level of the out-of- state workers precludes a finding of a constructive dis- charge. Rather, I am required to find that the three em- ployees voluntarily quit their employment and are not entitled to reinstatement or backpay as a result of their quitting. That, of course, does not preclude a remedy for the period of time when the three welders were discri- minatorily receiving $1.90 per hour less than the rate paid to the nonunion out-of-state welders. 4. The alleged unlawful layoffs A difficult question is presented by the allegation of unlawful offs in October and November 1984. The Gen- eral Counsel and the Union have established a prima facie case. After the filing of the petition, Respondent laid off employees because of an alleged shortage of ma- terials. The record demonstrates Respondent' s animus against union sympathizers and its strong desire to remain nonunion. Further, if Respondent was willing to discriminate in regard to hire and wages against union sympathizers, there is no reason to believe it would not discriminate with regard to laying off or firing employ- ees because of union sympathies. Finally, the testimony of Lelong established that Respondent could continue to operate in the absence of some materials and in the ab- sence of certification of materials. The testimony of the welders revealed that there was still welding that could be done. Most importantly, Lelong testified that Ballard, at the time Respondent's highest ranking official, admit- ted that a material shortage was not the real reason for the layoffs. Based on these facts and the other concur- rent unfair labor practices, I find that a prima facie case has been established and that the burden shifts to Re- spondent to establish that the same action would have taken place in the absence of protected conduct. In response, Respondent contends that the layoffs were necessitated by material shortages, lack of certifica- tions, and lack of isometric drawings. Respondent of- fered documentary evidence indicating late shipment of materials. Further, Respondent's records revealed that materials had been received without the proper certifica- tion and that the certifications had been delayed. The testimony of Willie Tow, a laborer, and Thomas Walters, a material handler and Lelong's assistant, both of whom I credit, established that there was in fact a shortage of materials and delay in receipt of the material certifications. However, I find that the testimony of Tow and Walters insufficient to rebut Lelong's testimony that Respondent could have reassigned employees and contin- ued operations with the materials on hand. The testimo- ny of the welders that they still had assignments to per- form was not rebutted by either Tow or Walters. Fur- ther, Lelong's testimony that Respondent could perform work while awaiting the certifications was not rebutted. Walters testified that Respondent encountered a problem with such a procedure. However, the events to which Walters referred did not occur until sometime after the layoffs in question and could not have entered into Re- spondent's thinking. Although McConnell testified that Respondent had a material shortage at the time of the layoffs, he did not credibly rebut Lelong's testimony. McConnell apparently overreached himself in testifying regarding the handling of materials. In one important respect, McConnell's testi- mony gave credence to that of Lelong. McConnell ad- mitted that he had no advance knowledge of the layoffs and that he was not involved in the decision to lay off employees. Certainly, in a legitimate layoff McConnell would have been given notice and would have deter- mined which employees to lay off and which to retain. In my view, that buttresses a finding that the layoffs were not in the ordinary course of business but, rather as Lelong testified, for another reason known only to Bal- lard. All the circumstantial evidence indicates that the reason was Respondent's desire to remain a nonunion shop. Respondent must show by a preponderance of the evi- dence that it would have engaged in this same conduct even in the absence of its unlawful motive. I conclude that Respondent has not met its burden. Respondent has shown that reasons for layoffs may have existed, but Re- spondent has not established that it would not have at- tempted to operate by reassigning employees and by using materials conditioned on receipt of certification had Respondent not been consumed with a course of conduct designed to remain open shop. 5. The alleged unlawful terminations During the layoffs, Respondent terminated and did not recall from layoff nine pipewelders allegedly because their rate of rejection on welds was too high. The termi- nations took place after Respondent learned, during the representation proceeding, that its welders were union members or at least union sympathizers. Based on the timing of the terminations, Respondent's knowledge of the pipewelders' union affiliation, the concurrent unfair labor practices, Respondent 's animus toward the Union, and its desire to remain open shop, I find that the Union and the General Counsel have established a prima facie case of discrimination. The record reveals that pursuant to its agreement with ARCO-Alaska Respondent was obligated to have the welds tested by X-Ray, Inc. As indicated earlier, I find KRI CONSTRUCTORS 815 that the testing and the procedures of X-Ray, Inc. were nondiscriminatory . Further, I fmd that there was no dis- crimination in the documents generated by X-Ray that were later used by McConnell and Stewart in terminat- ing employees because of a high rate of rejection. Thus, I believe that Respondent can establish that a welder would have been discharged, absent his union sympathy, if his rate of rejection was in excess of 20 percent. How- ever, I fmd Respondent has not satisfied that burden with respect to employee Dennis Carney . Carney was as- signed, after only three or four welds, to repair the welds of other employees. He was so chosen because he had demonstrated superior skill. McConnell admitted that Carney was a good welder and that Respondent de- viated from its own procedure in not allowing Carney further opportunity to weld before terminating him. Thus, with respect to Dennis Carney, I find Respondent has not rebutted the prima facie case but rather has shown that absent his union sympathies Carney would not have been terminated . I conclude, therefore, that Re- spondent terminated Carney because of his suspected union membership in violation of Section 8(aX3) and (1) of the Act. As mentioned earlier, I find no unlawful motivation in McConnell's and Stewart's use of the documents pre- pared by X-Ray, Inc., nor is the fact that two employees were charged for the same error . I do not find that Mc- Connell was aware of such an error but rather that he legitimately relied on X-Ray's document . However, I do not draw the same conclusion regarding the utilization of the first 18 welds in calculating an employee's rate of re- jection. From the face of X-Ray's document, it is clear that the first 18 welds should not be counted . Thus, for each of the eight welders at issue , I calculated the proper rejection rate based on X-Ray's documents. Using a proper calculation, I found that two other alleged discri- minatees would have had a rejection rate of less than 20 percent. I fmd that these two welders, Jorge Elizalde and Leonard Paloma, would not have been disqualified from further pipewelding assignments absent union con- siderations. However, there are six pipewelders that be- cause of their rate of rejections, I find would have been discharged even absent union considerations. 6. The representation case The unfair labor practices • found above, occurring during the pendency of the representation petition, are more than sufficient to set aside the election . Therefore, I shall recommend that the Board set aside the election and remand the case to the Regional Director for further proceedings. As Respondent had no Coos Bay facility and no employees in Oregon, at the time of the instant hearing, I do not recommend a second election. In any event, on remand, the Regional Director can take what- ever further action is proper. CONCLUSIONS OF LAW 1. Respondent, KRI Constructors, Inc., is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, Local No. 51 is a labor organization within the meaning of Section 2(5) of the Act. 3. By engaging in a pattern or practice of screening job applicants to determine suspected union sympathizers and refusing to consider applicants for employment based on previous employment with union businesses or for other suspected union sympathies , Respondent dis- criminated in regard to hire in order to discourage union membership in violation of Section 8(a)(3) and (1) of the Act. 4. By hiring out-of-state, nonunion employees in order to avoid hiring union sympathizers, Respondent violated Section 8(a)(3) and (1) of the Act. 5. By paying out-of-state, nonunion employees higher wage rates and discriminating against suspected union sympathizers regarding wages, Respondent violated Sec- tion 8(a)(3) and (1) of the Act. 6. By laying off employees in October and November 1984 in order to discourage union membership or sup- port, Respondent violated Section 8(a)(3) and (1) of the Act. 7. By terminating employees Dennis Carney , Leonard Paloma, and Jorge Elizalde in November 1984 because of union membership or activities , Respondent violated Section 8(a)(3) and (1) of the Act. 8. The evidence does not establish that Respondent constructively discharged employees Terry Emerson, Thomas Babcock, and Eugene Thomas in violation of the Act. 9. The unfair labor practices found above are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. 10. Respondent did not otherwise engage in the unfair labor practices alleged in the complaint. THE REMEDY Having found that Respondent engaged in certain unfair labor practices, I shall recommend that it be or- dered to cease and desist therefrom and that it take cer- tain affirmative action set forth below to effectuate the policies of the Act. It having been found that Respondent unlawfully dis- criminated against job applicants based on their suspect- ed union sympathies, it will be recommended that Re- spondent make such employees whole for any loss of earnings they may have suffered by reason of the failure to give them nondiscriminatory consideration for em- ployment, less net earning during the period of such backpay accrual. Employees Dennis Carney , Jorge Eli- zalde, and Leonard Paloma will also be entitled to be made whole by reason of the discrimination against them. Backpay in all cases is to be computed on a quar- terly basis making deductions for interim earnings, F W. Woolworth Ca, 90 NLRB 289 (1950), and with interest to be provided in the manner prescribed in Florida Steel Corp., 231 NLRB 651 (1977); see generally Isis Plumbing Ca, 138 NLRB 716 (1962). Terry Emerson, Thomas Babcock, and Eugene Thomas shall be made whole for the failure to pay them 816 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD the higher wage rates paid to nonunion welders from the date of the hire of the first welders at the higher rate until the date when the three employees quit their em- ployment, with interest. I shall further include a visitatorial provision permit- ting General Counsel to obtain discovery in the United States court of appeals regarding compliance with this recommended Order. I find that such a visitatorial clause is necessitated by the numerous difficult compliance problems involved herein. See Hilton Inn North, 279 NLRB 45 fn. 3 (1986). [Recommended Order omitted from publication.]