Hood Rubber Company, Inc.

In the Matter of HooD RUBBER COMPANY, INC. and HOOD RUBBER WORKERS ASSOCIATION, INC. In the Matter Of HOOD RUBBER COMPANY, INC. and UNITED RUBBER WORKERS OF AMERICA, AFFILIATED WITH THE C. 1. 0., LOCAL No. 122 Cases Nos. R-352 and C-705, respectively.Decided August 1, 1939 Rubber Manufacturing Industry-Interference, Restraint, and Coercion- Company-Dominated Union: employee representation plan, continuation of, cre- ated by employee representatives under plan with use of plan facilities ; domi- nation of and interference with administration ; financial and other support ; statement of respondent favoring plan and expressing hostility to labor organi- zation ; disestablished, as agency for collective bargaining-Investigation of Representatives : petition for, of one labor organization dismissed because of finding that such organization was company dominated ; other labor organization not contending that it represented a majority of employees in unit alleged to be appropriate for purposes of collective bargaining. Mr. Edward Schneider, Mr. Norman Edmonds, and Mr. Bernard J. Donoghue, for the Board. Warner, Stackpole & Bradlee, by Mr. Richard J. Cotter, Mr. Rich- ard J. Walsh, and Mr. Roger F. Hooper, of Boston, Mass., for the respondent. Roewer do Reel, by Mr. A. Frank Reel, of Boston, Mass., for the United. Mr. Frederic A. Crafts, of Boston, Mass., and Mr. Victor C. Harnish, of Waltham, Mass., for the Association. Mr. A. Bruce Hunt, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE On June 8, 1937, Hood Rubber Workers Association, Inc., herein called the Association, filed with the Regional Director for the First Region (Boston, Massachusetts) a petition alleging that a question affecting commerce had arisen concerning the representation of em- ployees of Hood Rubber Company, Inc., Watertown, Massachusetts, herein called the respondent, and requesting an investigation and 14 N. L. R. B., No. 2. 16 HOOD RUBBER COMPANY, INCORPORATED 17 certification of representatives pursuant to Section 9 (c) of the ,National Labor Relations Act, 49 Stat. 449, herein called the Act. On October 2, 19371 the National Labor Relations Board, herein called the Board, acting pursuant to Section 9 (c) of the Act and Article III, Section 3, of *National Labor Relations Board Rules and,Regu- lations-Series 1, as amended, ordered an investigation and. author- ized the Regional Director to conduct it and to provide for an appro- priate hearing upon due notice. On October 13, 1937, the Regional Director issued a notice of hear- ing, copies of which were duly served upon the respondent and the Association, and upon United Rubber Workers of America, affiliated with the C. I. 0., Local No. 122, herein called the United, and Arrow Protective Association, the latter two being named in the petition as labor organizations claiming to represent employees directly af- fected by the investigation.' Pursuant to the notice, a hearing was held on October 25 and 26, 1937, at Boston, Massachusetts, before Earl S. Bellman, the Trial Examiner duly designated by ' the Board. The Board, the Association, and the United were represented by counsel and participated in the hearing. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evi- dence bearing on the. issues was afforded all parties. During the course of the hearing, the Trial Examiner made several rulings on motions and on objections to the admission of evidence. The Board has reviewed the rulings of the Trial Examiner and finds that. no prejudicial errors were committed. The rulings are hereby affirmed. On October 25, 1937, the United filed with the Regional Director charges that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of the Act. Upon these charges, the Board, by the Regional Director, issued its complaint, dated April' 1, 1938, against the respondent, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1) and (2) and Section 2 (6) and (7) of the Act. Copies of the complaint and notice of hearing were duly served upon the respondent, the Association, and the United. With respect to the unfair labor practices, the complaint alleged in substance (a) that the respondent dominated and interfered with the formation and administration of, and contributed financial and other support to, the Association which had been formerly known as Employees' Representation Plan, herein called the Plan; and (b) that by the aforesaid acts and by coercing, threatening, and intimi- dating its employees to discourage membership -in the. United, the 1 Although the record is not explicit that notices of hearing in the representation matter were served upon all parties, it appears that all parties had knowledge ' of the proceeding. 18 DECISIONS.OF NATIONAL. LABOR: RELATIONS BOARD respondent interfered with, restrained, and coerced. its employees in the' exercise of the rights guaranteed in Section 7 of the Act. On April 8, 1938, the respondent filed its answer in which it ad- mitted the allegations of the complaint as to the character of its business and its interstate nature.but denied that it had engaged in or was, engaging' in the unfair labor practices. In addition, the answer asserted that the charge did not contain "a clear and concise statement of the facts constituting the alleged unfair labor practice affecting commerce, particularly stating the names of the individuals involved and the time and place of the occurrence," as required by the Rules and Regulations of the Board. On April 13, 1938, the re- spondent filed with the Regional Director a motion for specifications with regard to the allegations of the complaint. On the same day, the Regional Director denied the motion. The Board hereby affirms the ruling of the Regional Director. Pursuant to the notice,.a hearing was held in Boston, Massachusetts, on April 14, 15, 18, 19, 20, and 21, 1938, before Herbert A. Lien, the Trial Examiner duly designated by the Board. The Board and the respondent were represented by counsel and participated in the hear- ing. Full opportunity to be heard, to examine and cross-examine wit- nesses, and to introduce evidence bearing upon the issues was afforded all parties. At the opening of the hearing, the parties stipulated that all exhibits and testimony taken at the hearing on October 25 and 26, 1937, be made part of the official record of proceedings in the instant hearing. The respondent moved that there be excluded from this stipulation the testimony of a witness named Joseph Daley. The Trial Examiner allowed this motion over objection by counsel for the Board. His ruling is hereby affirmed. At the close of the hearing, the respondent moved that the complaint be dismissed. The Trial Ex- aminer reserved ruling on this motion and it is hereby denied. During the course of the hearing, the Trial Examiner made several rulings on other motions and on objections to the admission of evidence. The Board has reviewed these rulings and finds that no prejudicial errors were committed. The rulings are hereby affirmed. On June 13, 1938, the Trial Examiner filed his Intermediate Report, a copy of which was duly served upon the respondent, in which he found that the respondent had dominated and interfered with the formation and administration of, and contributed financial and other support to, the Association. He accordingly recommended that the respondent cease and desist therefrom and, affirmatively, that it with- draw recognition from and completely disestablish the Association as a. collective bargaining representative of its employees. In addition, the Trial Examiner found that the respondent had not committed un- fair labor practices within the meaning of Section 8 (1) of the Act HOOD RUBBER COMPANY, INCORPORATED 19 by coercing, threatening, or intimidating its employees. Thereafter the respondent filed its exceptions to the record and to the Intermediate Report. Pursuant to notice duly served upon the respondent and the United, a hearing was held before the. Board in Washington, D. C., on July 21, 1938, for the purposes of oral argument. The respondent and the United were represented by counsel and participated in the argument. The Board has considered the respondent's exceptions to the record and to the Intermediate Report and, so far as they are inconsistent with the findings, conclusions, and order below, finds no merit in them. During the course of the oral argument, the respondent offered in evi- dence as exhibits certain documents constituting amendments of reports, of The B. F. Goodrich Company to the Securities and Exchange Com- mission. The United objected to the admission of these documents and was granted the right to file a brief in support of its objection. No brief was filed by the United. The documents are hereby admitted and made a part of the record, and marked as the respondent's exhibit No. C-2. On March 16, 1939, acting pursuant to Article II, Section 37 (b), and Article III, Section 10 (c) (2), of National Labor Relations Board Rules and Regulations-Series 1, as amended, the Board ordered that the cases involving the petition and the complaint be consolidated for the purpose of all further proceedings. Upon the entire record in the cases, the Board makes the following : FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT The respondent, a Delaware corporation having its general offices and factory in Watertown,. Massachusetts, 'is a wholly owned sub- sidiary of The B. F. Goodrich Company. The respondent is engaged in the manufacture, sale, and distribution of rubber and canvas foot- wear, rubberized textile products, and miscellaneous rubber products. It employs over 4,000 workers and produces one-fifth of all the rubber and canvas footwear manufactured in the United States. The principal raw materials used by the respondent are rubber, cotton fabrics, mineral compounds, and chemicals. During 1937 the respondent purchased raw materials valued at approximately $5,000,000, about three-quarters of which represented shipments re- ceived from points outside the Commonwealth of Massachusetts. During the same year the respondent's sales of its manufactured prod- ucts amounted to approximately $16,000,000, about 90 per cent of which were shipped outside Massachusetts. The respondent main- 20 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tains wholesale warehouses in 16 States for the distribution of its products.. II. THE ORGANIZATIONS INVOLVED United Rubber Workers of America, Local No. 122, is a labor organization affiliated with the Committee for Industrial Organiza- tion, admitting to membership employees of the respondent. The precise limits of its jurisdiction do not appear in the record. Hood Rubber Workers Association, Inc., is an unaffiliated labor organization admitting to membership all the employees of the re- spondent, except those having the right to hire and discharge. M. THE UNFAIR LABOR PRACTICES A.. The Plan Prior to 1933 there was no labor organization among the employees in the respondent's plant. In the latter part, of that year the re- spondent instituted the Plan of which all employees were members by virtue of their employment. Under the Plan, the respondent's employees were divided into 20 "districts," corresponding to the functional units of the plant. The Plan provided for one meeting of the employees each year for the election of district representatives. Provision was also made for the appointment by the respondent of 20 supervisory employees as its representatives. The 20 employee representatives and 20 employer representatives constituted the gen- eral. assembly. The general assembly functioned through three com- mittees : "No. 1" on rules and appeals, "No. 2" on wages, hours, and working conditions, and "No. 3" on safety, health, and welfare, each committee being composed of an equal number of representatives of both employer and employees. Under the Plan the general assembly met once a month. Its function was to investigate wages, hours, conditions of work, and related matters, and to make recommendations thereon to the man- agement. After each meeting the management representatives would retire and the employee representatives, known as the general council, would conduct their meeting. These meetings were held during work- ing hours on the respondent's property in a conference room provided for that purpose by the respondent. All matters affecting employees originated in the general council and were referred to the proper committee for action. The recommendation of any committee thereon was subject to approval by the council. The Plan provided for appeals by either party to a controversy, with arbitration as a final resort. 2 The record also contains statistics of purchases and sales of the respondent for the year 1936. HOOD RUBBER COMPANY, INCORPORATED 21 No provision was made for the payment of dues and, the cost of maintaining the Plan, approximating $4,000 to $5,000 per year, was borne entirely by the respondent. A large part of this 'expenditure was devoted to the payment to employee representatives of their nor- mal earnings for the time spent by them in conducting business under the Plan. A record of the number of hours spent by each-of those representatives on such business was kept by the foremen on. "the regular time sheet." Another expense was the publication of a monthly "bulletin" which was 'distributed among the employees and in which matters of interest to them were announced. After ap- proval by the respondent, these bulletins were printed in its. printing establishment. It is not contended by the respondent that the Plan was operated in conformity with the Act.3 During the early part of 1937, the United started an intensive drive to organize the respondent's employees. Pamphlets 'were distributed outside the respondent's property and the' employees were urged ' to join the United. As a result of this activity, and desiring to offset it, certain employee representatives decided to have printed a notice which would set forth the "accomplishments" of the Plan. The testimony of various employee representatives concerning that notice is conflicting. It appears, however, from the testimony of Roy Elder Balcom, the respondent's supervisor of printing, which we accept as true, that on March 18, 1937, during working hours, he was called to the office of J. Leverone, an employer representative, where he met Leverone and several employee representatives. At that time Lev- erone prepared and gave to Balcom an order for 5,000 copies of -a notice, telling Balcom that it was a "rush job" for the employee repre- sentatives. Although the expense of printing Plan bulletins had always been borne by the respondent, Leverone explained to Balcom that the employee representatives were to pay for the order, and this understanding was confirmed by William C. Murphy, one of those representatives who was chairman of the general council. At that time all orders for printing had to be approved by Leverone, since the respondent's printing establishment did not accept "outside jobs." The order was promptly filled and the notices were delivered within about 3 days to the employee representatives. Later, on behalf of those representatives, Murphy paid the respondent for the printing. The notice, signed by the employee representatives and titled "A Sincere Message To You From Your Elected Representatives," com- mences with the statement, "Please read every word of this An- 8 Although acts of the respondent occurring before the effective date of the Act do not constitute unfair labor practices, they are important as explanatory of the respondent's acts and the situation after that date. Matter of Servel, Inc. and United Electrical, Radio and Machine Workers of America, Local No. 1002, 11 N. L. R. B. 1295; National -Labor Relations Board v. Pennsylvania Greyhound Lines, Inc. at al., 303 U. S. 261. 22 DECISIONS OF NATIONAL LABOR RELATIONS BOARD nouncement. It is published and paid for by your Elected Repre- sentatives with the thought of protecting your best interests and your pocketbook." After setting. forth a summary of "accomplishments" of the Plan, the. notice concludes : The above list gives you a good picture of what your ' Elected Representatives have secured for you without "Sit-Downs"- "Walk-Outs"-Riots-Property Damage or Loss of Pay. Disregard any threats by Union Organizers who are visiting your homes. These threats are bluffs to get your signature and money. We know Employee Representation as we have it in this plant is the finest kind of collective bargaining. It's for you and not for what it can get out of you. The employee representatives, without loss of pay, distributed these notices during working hours to the employees throughout the plant. So far as appears no foreman interfered with this activity. B. The formation of the Association The distribution of these notices did not long precede the decisions of the Supreme Court of the United States upholding the constitu- tionality of the Act. Subsequent to April 12, 1937, the general assembly discussed the legality of the Plan, and the employee repre- sentatives `felt they needed information" regarding the matter. Accordingly, the latter requested the respondent to obtain an attor- ney to address them "regarding the plan and regarding the Wagner Act." On April 21, 1937, pursuant to this request, Arthur B. New- hall, president of the respondent, called upon Attorney Edgar Rich, an adviser to the Associated Industries of Massachusetts, of which the respondent was a member. Newhall testified : I told him [Rich] that I had been requested to have someone come out and talk to'these representatives concerning the Wag- ner Act, and I wondered if he would be willing to do it. He said he would, and he asked us about the plan, who these people were that had requested it. And that brought up the question of the Employees Representation Plan, and he said, "I wish you would get me a copy of the plan and let me, study it a little bit. Undoubtedly they will ask me questions and_ I would like to know what plan you are operating under." Newhall furnished Rich with the requested "information and (they) had a general discussion of that." On April 22, Rich went to the respondent's plant, pursuant to Newhall's request, for a conference with Newhall, Blanchard, Harold B. Leland, the respondent's industrial relations manager, and Mur- HOOD RUBBER COMPANY, INCORPORATED 23 phy, the chairman of the general council. The record does not dis- close the details of this conference. According to Newhall, Rich "asked us questions concerning that plan, as I recall it," and Newhall may have "told him that we were well satisfied with its operations." Although that meeting lasted about 20 minutes, according to Mur- phy, he could recall little of the conversation. other than that he was introduced to Rich and that Rich was given "a copy of the by-laws (of the Plan)." On April 26, Rich returned to the plant and addressed a group composed of the members of the general assembly, Leland, and Leverone. The address, having been recorded in shorthand by one or more stenographers employed by the respondent, was transcribed on a typewriter and submitted to Rich for "corrections." A perusal of the corrected copy shows that the address concerned a means of legalizing the Plan. After stating that the committee on wages, hours, and working conditions, "as now set up with employer repre- sentation is unlawful," Rich continued : Now, there are going to arise some important questions as to how to bring your organization into conforming with the law. I am not going to decide that question now for you because I do not think I can, but I am going to indicate two ways in which that can be done. I was shown a form of organization which had been drawn up by employee representatives. It was a very carefully drawn up form of organization. It seemed to to [sic] me it complied with the law, but it scrapped everything else with your organization. That form which was shown to me, I read over rather hastily, but I saw it had' been, prepared carefully and I couldn't find anything illegal in it. I have a suggestion to make which is worthy of consideration because it leaves your organization about as it is, performing most of the functions of your organization, and that is to keep these committees as they are, but to remove from the Wages & Employment Committee, all company representatives so that the committee will. report directly to the General Council, on which there are no employee [sic] representatives. Now, I think that can be clone. At any rate I think it is very worthy of your consideration. I judge from .some things that I have heard that there is a fear among some of you that you cannot have any contact with the management in working out a form of union or oper- ating a form of union. That is true to a considerable extent when you are working it out, but the management has a perfect .190935-40-vol. 14---3 24 DECISIONS OF NATIONAL LABOR RELATIONS BOARD right, if it wants to, to advise for instance that you have a Plant Union, as against an outside trade union. ... Leaving out for a moment your second standing com- mittee mittee on wages, etc . the rest of your Plan is absolutely lawful and the employer may contribute in any way he sees fit to that, organization. Now, here is a question that others have asked me and it is somewhat a difficult question. How far can the management contribute towards the support of the plant union, . . . It is for the management to determine within the law how far they can go in assisting the employee organization .. . Immediately after concluding his speech , questions were addressed to Rich by his listeners. Although those questions and Rich's replies were recorded by the stenographers , the identities of the ques- tioners were omitted. Certain of the pertinent questions and the responses thereto are quoted below : Q. Would you advise that we re-vamp our present plan imme diately, A. No. I advise you to think it over carefully. No harm can come to you. The only harm that can come will be to the management. I think the management is willing to await [sic]' a while .. . Q. In view of the present unsettled situation ,,would it be ad- visable to defer our election in June to a later month despite the fact that our by-laws call for annual elections at that time, A. I do not think that is necessary . I think you will even- tually form an organization which will be lawful. There is so, much good in this organization as I look at it .. . * * * * * * * Q. If we follow your recommended changes and made the representation plan legal, is it then advisable to secure a list of members of the representative plan within the plant-or sig- natures, A. You mean the names, Chairman [MURPHY]. Yes. A. Yes, I think for your own protection so that there would be no question about it .. . Although the employees were addressed by Rich during working hours, they suffered no loss of pay and were compensated by the re- spondent at their usual rate of earnings for the time so spent. More- over, Rich was paid for his services by the respondent. As its reasons for having secured R;ch, paid him, and compensated the employees r HOOD RUBBER COMPANY, INCORPORATED 25 for time lost from their regular work while listening to him, the respondent asserts that these were its obligations under the Plan. No meetings of the general assembly were held thereafter. During May the general council decided to remove the employer representa- tives from all committees by amending the bylaws of the Plan, in which action it was supported by a finding of the committee on rules and appeals that it had such authority. Moreover, it appears that within "possibly a week" after Rich made his address, the general council directed the chairman, Murphy, to request the respondent to withdraw its representatives. Meanwhile the general council had taken steps to form a new labor organization. During May 1937, the committee on rules and appeals, which had affirmed the right of the council to remove representatives of the management from all committees, also "recommended further action towards revision or towards a new set-up." Within a few days after the employer representatives had been so removed, another meeting of the council was held at which a special committee, com- posed of five members of the council, was selected to effectuate the recommendation of the committee on rules and appeals. The first meeting of the committee on revision was held either dur- ing the same day or the day following its selection. At this meeting, which lasted about 2 hours, the committee decided to "recommend dis- carding the representation plan and begin to set up a new plan . . . " Accordingly, the committee immediately commenced the organization of the Association as a "self-supporting" organization. As its initial step, the committee drafted a set of bylaws which followed closely those of the Plan. As explained by one of the committee members, Ambrose P. Valley, "we took the old by-laws of the Representation Plan and we salvaged what we could of them and drew up a tentative form of by-laws." In part, the committee decided that no management repre- sentatives should participate in the affairs of the Association and that meetings of the new 'organization should be held outside the respond- ent's property. The committee also discussed the advisability of incorporating the new organization and of obtaining legal guidance and decided to seek advice from one Charles F. Horan.4 Horan maintains an office in one of the respondent's buildings, near the office of Leland, the respondent's industrial relations manager. Horan testified that the respondent did not then know of his conver- sations with the committee, and that : I think one of them (the employee-representatives) told me that they were glad that I was around, because of the fact that nobody 4 Horan is general manager of Arrow Mutual Liability Insurance Corporation, a Massa- chusetts corporation which insures employees of the respondent and other employers under the provisions of workmen's compensation laws. D 26 DECISIONS OF NATIONAL LABOR RELATIONS BOARD directly connected with Hood would talk with them, and as I remember it, they likewise told me that the officials of Hood had been specifically forbidden to talk to ine. Following the advice of Horan the committee retained Frederic A. Crafts, an attorney and a judge of an unidentified court of the Com- monwealth of Massachusetts, as its attorney. Shortly after the first meeting of the committee on revision, Judge Crafts came to the respondent's plant for a conference with the com- mittee. It does not appear that this conference took place during working hours. At this time the situation was outlined to Judge Crafts by the committee and he was shown the draft of the proposed bylaws. He made various suggestions and advised that the new organization be incorporated. Within a day or two after the meeting' with Judge Crafts, the committee made its report to the general council, advocating the formation of a new organization. At this latter meeting the council voted to accept the report, suggested cer- tain additions to the proposed bylaws, and selected the full name of the Association. Thereafter, the proposed bylaws were presented to Judge Crafts to be placed "in correct legal form, anticipating an application for incorporation," and the council decided to hold an organizational meeting. All the above-described activities of the general council and the committee on revision were conducted in the conference room and, with the exception of the meeting with Judge Crafts, during working hours. The members of the council, including the members of the revision committee, were compensated by the respondent at their usual rates of pay for the time so spent; in fact, Leland conceded that, "they were paid whether they were working on the plan or on the proposed amendment . . ." On the day of the initial meet- ing of the committee "or later," according to Vahey, "we served notice on Mr. Leland that we were going to operate our own independent union." Prior to May'25, but apparently subsequent to the events discussed above, the employee representatives met in the conference room during working hours and prepared a group of notices directed to the em- ployees. The notices are substantially alike and each bears the siglia-- ture of one or more employee representative. One notice reads as follows : Your representatives are working on plans for an independent, internally controlled local union. The plan will be presented to you Monday or Tuesday. Do not join any other organization-if you have, FORGET ABOUT IT. HOOD RUBBER COMPANY, INCORPORATED 27 Stick with the people who have Your interest at heart. We Do NOT approve the ARRow 5 or C. I. O. These notices were posted throughout the plant by the employee representatives, aid it does not appear that any supervisory em- ployee interfered in this activity . Moreover, the employee repre- sentatives were compensated at their usual rates of pay by the respondent for the time spent in preparing and posting the notices. On May 25, 1937, an organizational meeting of the Association was held at the Windsor Club , a "neighborhood club" .in Watertown. Murphy, the chairman of the general council , had directed the mem- bers of the council to be present at the meeting and to bring three employees from each district. About 80 employees attended . Di..r- ing the course of the meeting, over which Judge Crafts presided, the proposed bylaws of the Association were offered for adoption and, with certain amendments , were approved . Judge Crafts was directed to proceed with incorporation . As adopted, the bylaws provide in part that : (a) all employees of the respondent , other than officials and supervisory employees with authority to recominend the hiring or discharging of employees, shall be eligible for membership; (b) a 'governing board" composed of "delegates" shall be elected to con- duct its affairs ; (c) the delegates shall be elected annually in June, and shall hold monthly meetings; (d) the delegates shall elect from among their number the officers of the Association , who shall hold office for terms of 1 year; and (e) the initiation fee of members shall be 50 cents and the weekly dues shall be 10 cents. Pursuant to the bylaws, it was. decided that the Association should retain the election procedure of the Plan, as well as the identical districts which existed under the Plan, and that one delegate should be elected by the em- ployees in each district. No provision was made for regular meet- ings of all the members of the Association other than an annual meeting for election of delegates. At this meeting, temporary dele- gates were elected, and the employee representatives under the- Plan duly became the Association's temporary delegates . In addition, temporary officers were elected, Murphy being chosen the temporary president. Following this meeting, the Association was incorpo- rated. The certificate of incorporation names 14 employee repre- sentatives as the incorporators of the Association . The fee for incor- poration was paid by Murphy and he was reimbursed by the Association. Subsequent to May 25, the delegates , acting in their dual capacity of employee representatives , conducted a successful membership cam- s The Arrow Protective Association was named in the petition as a labor organization claiming to represent employees of the respondent . It did not appear nor was it repre- sented at the hearing on the petition. 28 DECISIONS OF NATIONAL LABOR RELATIONS BOARD paign. Membership cards were printed outside the respondent's plant and delivered to the delegates who actively solicited members and collected initiation fees and dues. This activity extended over a period from the latter part of May until August 1937.. It appears, however, that the task of recruiting members was engaged in principally during working hours before June 4, the day on which the Plan was dissolved. The employee representatives were compensated by the respondent at their usual rates of pay for such activity. In addition to their solicitation of members prior to June 4, the employee repre- sentatives delivered a series of addresses within the plant. Unlike much of the solicitation of members, however, it appears that these addresses were delivered during lunch periods. One of these ad- dresses was attended by `. `a good 600 to 700" employees and another by 200 to 300. The employees were told of the labor organization then in process of formation, that an "inside organization" was pref- erable to an "outside organization," and that the employees should "resent any outside influence coming in and telling us how to run our factory . . ." In fact, one employee representative, Martin J. Boyle, testified that, "In my speeches, I strongly condemned the C. I. O...." By June 4, due to the efforts of the employee representatives, about 2,200 membership cards had been signed by the employees. During May the respondent learned that the Association had been organized and that active solicitation of members in its behalf was taking place within the plant. On June 4, 1937, by vote of the general council the Plan was dis- solved. On the same day the respondent posted a notice of dissolu- tion. That notice after quoting Section 7 of the Act and stating that, "It is the intention of this Company . . to assume an attitude of neutrality and non-interference in the rights of employees as set forth," is in part as follows : Also in order that there can be no misunderstanding of its neutral attitude, the Company gives notice that it must withdraw from any further participation in the so-called Employees' Representation Plan. This concluded a period of intense activity on the part of the em- ployee representatives for it is clear that, during the period from April to June 4, 1937, they devoted considerably more time to their "representation plan work" than they had devoted to the Plan during any similar length of time prior thereto. Within an hour after the meeting of the council during which the Plan was dissolved and apparently after working hours, the board of delegates of 'the Association conducted a meeting outside the re- spondent's plant. At this meeting the 2,200 employees who had signed membership cards and paid initiation fees were "accepted as HOOD RUBBER COMPANY, INCORPORATED 29 members," and the temporary officers were directed to obtain the re- spondent's recognition of the Association "as the sole collective bar- gaining agency within its Plant . . ." The meeting adjourned upon a decision of the delegates to call an open meeting of the members. Since the Plan had been dissolved, the delegates could no longer be paid by the respondent for the time spent by them during working hours on business of the Association. At approximately the time of this meeting, however, it was decided that the delegates should be compen- sated by the Association at their usual rates of pay for such time. On several occasions the Association endeavored to bargain collec- tively with the respondent, its first effort having been made before June 4, 1937. During the latter part of May, at which time the Asso- ciation did not have a majority of the employees as members, it ap- proached the management in an unsuccessful effort to obtain recog- nition as a bargaining agency for the employees. The next conference between the parties took place on June 5, when several delegates met with Leland. According to one of the delegates, Howard T. Parker, Leland at this time was informed,of the majority representation and he "seemed.to be very embarrassed with that report." Leland, how- ever, according to Parker, stated to the delegates that, "on the face of it, it looked as though we had a majority in the plant," and that, "He was willing to begin activities with our grievance board (the dele- gates) and enter. into a contract on labor." It is not clear, however, whether Leland was willing to grant recognition to the Association as the exclusive collective bargaining representative of all employees eligible to its membership, or as the representative of its members only. On the next day, June 6, another conference was held between the same persons. At this conference the delegates were "more than surprised" by a sudden turn of events, concerning which Parker testified : A. There was some "black magic" happened between the 5th and the 6th. Now I cannot explain just what that magic was, but it made a "right-about face" on the supposed recognition. that we had received on the- 5th. Q. How did that express itself? A. Expressed itself in a "right-about face" on the part of Mr. Leland, inasmuch as he withdrew from any further co-operation toward a conference with the grievance board toward a working agreement. The conference terminated after Leland informed the temporary offi- cers that he had been advised by the Board's regional agents "to hold off any move toward recognition." According to Parker, "Because of that-advice ... Mr. Leland felt that we should suspend any further negotiations toward a working agreement and he withdrew the tenta- 30 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tive recognition to our association." Two days thereafter, on June 8, the Association filed a petition with the Board requesting an investiga- tion and certification of representatives. Concerning his refusal to bargain collectively with the Association, either as an exclusive repre- sentative or as the representative of its members only; Leland testified that, "My instructions from Mr. Blanchard, as a consequence of his meeting with . . . (the Regional Director), was I was not to recognize anyone until we had a ruling from the National Labor Relations Board." Subsequent to June 6, the delegates held several meetings, including one to which the rank and file membership of the Association was invited. On June 9, a membership meeting attended by some 350 employees was held at a high school in Watertown. As shown by the minutes of that meeting, no material matters were discussed other than that Murphy "gave a clear-cut review of recent changes in our status, indicating some of the problems confronting our new organization in its struggle for recognition" by the respondent. On June 19, the tem- porary board of delegates held another meeting at the Windsor Club. At this meeting 689 additional employees who had signed member- ship cards and paid initiation fees were accepted as members, and plans were made for holding the Association's annual election of delegates. On June 29, 1937, outside the respondent's plant, the Association's annual election of delegates was held. Those persons eligible to vote were the employees who had signed membership cards and paid initia- tion fees. The permanent board of delegates, selected at this election, contained 18 of the individuals who had been temporary delegates. On the following day, the newly elected delegates held a meeting at the Windsor Club at which permanent officers were elected, Murphy being elected president. The minutes of this meeting state that 4,030 em- ployees of the respondent were eligible for membership in the Asso- ciation, that of this number 3,600 had signed membership application cards, 3,355 had been eligible to vote in the election, and 2,267 had voted therein. During this meeting new members were accepted, bringing the total membership to 3,500, according to the minutes. Between June 6 and about September 1, 1937, the Association, offering to prove its majority, made several other efforts to obtain recognition as the exclusive representative of all the employees eligi- ble to its membership, but the respondent, acting on advice of the Regional Director, stated that it would recognize only a representa- tive certified by the Board. Consequently, no attempts to obtain exclusive recognition were made by the Association thereafter. Sub- sequent to November 1937, the delegates held informal meetings pending the determination of the issues. raised by this proceeding. HOOD RUBBER COMPANY, INCORPORATED 31 Following a meeting of delegates in February 1938, Murphy decided that the Association would not intervene in the proceeding before the Board. C. Conclusions with, respect to the Plan and the Association The Plan was initiated and organized by the respondent, and through the medium of employer representatives, the respondent exercised complete control over Plan activities. The employees, all of whom were members by virtue of their employment, met only once each year, and then only for the purpose of electing their rep- resentatives. The employee representatives in conducting business under the Plan served on committees composed of equal numbers of representatives of the employer. The respondent bore all the ex- penses attendant upon the administration of the Plan. It does not appear that any basic agreement involving wages, hours, and work- ing conditions was ever entered into between the respondent and representatives of its employees. It is not controverted, and we find, that during a period of approximately one-half its life, from July 5, 1935, to the date of its dissolution, the Plan was operated in disregard of the provisions of the Act. Manifestly, the campaign conducted against the United during March 1937, as described above, is directly chargeable to the re- spondent. The notices entitled "A Sincere Message To You From Your Elected Representatives" which were distributed to the em- ployees during that month, urged that they "Disregard any threats by Union Organizers" and that "Employee Representation as we have it in this plant is the finest kind of collective bargaining." The respondent, through the Plan representatives who, as such, reflected the will of the respondent, made explicit to the employees that it favored the Plan and opposed the organizational efforts of the United which were then taking place outside the plant. The record establishes that the respondent, through its control over and operation of the -illegal Plan,. set in motion a series of events which caused the formation of the Association. Doubts as to the legality of the Plan had arisen in the general assembly, and it was sympto- matic of the respondent's control over the employee representatives that they sought advice from the respondent. As its first step in the formation of-the Association,-the respondent employed an attorney who addressed the employees concerning a means of legalizing the Plan and of transforming it into a "plant union," in preference to "an outside trade union." With that end in,view, Rich advised the employees "to bring your organization into conforming with the law," and "to think it over carefully" since "the management is willing to await [sic] a while." He further suggested that it would be "advis- 32 DECISIONS OF NATIONAL LABOR RELATIONS BOARD able to secure a list of members" of the new organization. The respond- ent denies that it suggested to Rich the type of address he should deliver. The denial, however, is not convincing. Indeed, Newhall admitted that he and Rich discussed the Plan before the address was delivered, and Rich stated in his address that he had advised the respondent concerning it. In the light of the respondent's selection and payment of Rich, his conference with officials of the respondent prior to April 26, and the nature of the address, it is manifest that Rich acted at the instigation; and with the knowledge and approval, of the respondent. Likewise, it is clear that the attitude of the Plan representatives who were acting as the Association's organizers, was colored by the fact that the respondent, by its continuance of the Plan after the effective date of the Act, had deliberately and flagrantly flouted the Act.e As before noted, the disintegration of the Plan commenced after Rich addressed the general assembly. That group held no further meetings, and the general council made certain efforts to remove rep- resentatives of the management from the three committees. These acts followed, in the main, suggestions made by Rich. It is highly significant, however, that the respondent as yet took no step to dis- establish the Plan and that that organization was not dissolved until the success of the Association was assured. Manifestly, the Association could not have been born with the ease and dispatch which characterized its organization, had not the Plan and its facilities been available to the organizers. As the employee representatives, without interference from foremen, went throughout the plant posting notices, soliciting members, and making addresses which "strongly condemned the C. I. 0.," it is inconceivable that the employees should not interpret these acts as expressing the desires of the respondent. The respondent had not yet spoken with respect to the dissolution of the Plan, and to all intents and purposes the employee representatives were still the puppets of the respondent in the eyes of the employees. In a surprisingly short space of time the Association had successfully solicited a majority of the employees as members. It is difficult to believe that several thousand employees would have decided to join the Association on such short notice unless they had been given to understand that the respondent was in favor of it. It is apparent that the drive had the respondent's sanction.' The record establishes that the organizers of the Association accom- plished their most important work while acting as employee repre- sentatives and that they were compensated therefor by the respondent. 6 Matter of American Radiator Company, a corporation and Local Lodge No. 1770, Amal- gamated Association of Iron, Steel and Tin Workers of North America, affiliated with the Committee for Industrial Organization , 7 N. L. R. B. 1127. 1136. '+ Matter of Beloit Iron Works and Pattern Makers League of North America, et al., 7 N. L. R . B. 216, 222. HOOD RUBBER COMPANY, INCORPORATED 33 The respondent's defense that it did not contribute to the Association and that it did not knowingly permit solicitation of members on company time or property by the employee representatives is without merit. During May the respondent knew from several sources of the Association's existence. Vahey had told Leland that "we are going to operate our own independent union"; certain delegates had approached Leland, by his own admission, during May in an effort to bargain collectively; and, according to a letter of July 3, 1937, from Newhall to the Board's Regional Office, the respondent learned of the "Articles of Organization" when "they appeared in printed form distributed to our employees outside the main gate on May 28, 1937." It is inconceivable, under all the circumstances, that the re- spondent could have had its admitted early knowledge of the Asso- ciation's existence and yet not have known that it was compensating the employee representatives for their efforts in behalf of that organi- zation. The respondent knew who were representing that organiza- tion in its efforts to bargain collectively during May. The foremen were maintaining on "the regular time sheet" an accurate account of the number of hours spent by employee representatives in "repre- sentation plan work" and consequently knew that those hours greatly exceeded in number the time previously required of those rep- resentatives for their business under the Plan. Furthermore, the respondent was aware of the notices concerning the "independent, in- ternally controlled local union" which. were posted by those repre- sentatives and of the speeches made by them during May. We con- clude that the respondent knowingly permitted the formation of the Association and the solicitation of members in its behalf on company time and property, and knowingly contributed support, financial and otherwise, to that organization. Even if we could accept the respondent's protestations of ignorance about the matters above set forth, nevertheless the respondent would be responsible for the direct results of its maintenance of the illegal Plan and its compensation of the organizers of the Association. We are satisfied that the influence it exerted with respect to the Plan persisted in such fashion as to accomplish directly the organization of the Association.8 The selection of the Association as a collective bargaining agency by the respondent's employees was not the result of a free and unhindered choice of representatives. Rather, the con- elusion is inescapable that the employees, in joining the Association, acted because of the respondent's known preference for that organ- ization. As described above, the respondent had urged "a form of 8 See Matter of Serves, Inc., cit. supra, footnote 3, and cf. Matter of Wisconsin Tele- phone Company and Telephone Operators Union, Local 175-A, International Brotherhood of Electrical Workers, at al., 12 N. L. R. B. 375. 34 DECISIONS OF NATIONAL LABOR RELATIONS BOARD organization," and it was adopted by the employee representatives in their dual role of organizers for the Association. It is clear that the Association was foisted upon the employees by the respondent's utilization of puppet officers of an illegal organization, and that the employees had no alternative but to accept and support the Associa- tion. As described below, however, the respondent points out that it posted notices prohibiting organizational activities and the use of bulletin boards by either organization. This argument is without merit. The mere withdrawal of financial support and the posting of such notices, after the establishment of the Association, could not operate to liberate it from the respondent's domination and support. We conclude that the respondent's preference for a labor organ- ization was followed by the Association's organizers, acting as em- ployee representatives. Although several of the delegates made addresses and otherwise engaged in organizational activity within the plant subsequent to the dissolution of the Plan, our findings herein are not based upon such activities. The United had engaged in organizational activities out- side the respondent's plant prior to March 18; 1937, the date on which the respondent's supervisor of printing was given the order for copies of the notice before described. About the middle of May the United started to conduct some of its activities inside the plant and members were solicited, speeches were made to employees, and notices were posted therein on behalf of the United. Few activities of the United, however, were conducted on company time. Although it is not shown that the respondent interfered with the activity of the United other than by the printing and distribution of the notices before described, the respondent took certain steps on and after June 30, 1937, which were intended to prevent organizational activity within its plant by an organization. On June 30, the day after the Associa- tion's annual election was held, the respondent ordered that notices be posted only on bulletin boards and that permission to use such boards first be obtained. On September 1, 1937, pursuant to an . arrangement with the Board's Regional Office and the organizations involved,, the respondent prohibited organizational activities "on com- pany time and property." There is no evidence of discrimination by the respondent in its treatment of the United and the Association with respect to activity within the plant after June 4. Consequently our findings in this case are not based upon activity of the Associa- tion within the plant subsequent to that date. We find that the respondent has dominated and interfered with the formation and administration of the Association,9 has contributed 'For similar findings based upon somewhat analogous situations, see : Matter of American Radiator Company, a corporation and Local Lodge No. 1770, Amalgamhted Association of Iron, Steel and Tin Workers of North America, affiliated with the Com- HOOD RUBBER COMPANY, INCORPORATED 35 financial and other 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. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondent set forth in Section III, above, occurring in connection with the operations of the respondent de- scribed in Section I above, have a close, intimate, and substantial rela- tion to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that the respondent has dominated and interfered. with the formation and administration of the Association and has con- tributed support to it, and that the Association is incapable of serving the respondent's employees as their genuine representative for the purposes of collective bargaining, we will order the respondent to disestablish it as such representative. VI. WHETHER A QUESTION CONCERNING REPRESENTATION HAS ARISEN The petition for investigation and certification of representatives was filed by the Association. Although the United intervened in the proceeding based upon the petition, it did not assert that it repre- sented a majority of the respondent 's employees in an appropriate unit nor did it request that an election be directed by the Board to determine such representation. Since we have found that the Asso- ciation is incapable of representing the respondent 's employees and must. be disestablished, we shall dismiss its petition for an investiga- tion and certification of representatives. mittcc for Industrial Organization, supra, footnote 6; Matter of Beloit Iron Works and Pattern Makers League of North America, et at., supra, footnote 7; Matter of The Falk Corporation and Amalgamated Association of Iron, Steel and Tin Workers of North America, Lodge 1523, 6. N. L. R. B. 654; Matter of The Hoover Company and United Elec- trical and Radio Workers of America, Local No. 709, 6 N . L. R. B. 688 ; Matter of Swift & Company, a Corporation and Amalgamated Meat Cutters and Butcher Workmen of North America, Local No. 641, and United Packing House Workers Local Industrial Union No. 300, 7 N. L. R . B. 269, modified and enforced as modified in Swift & Company , a Corporation v. National Labor Relations Board , 10 Cir. (June 7, 1939 ) ; Matter of Swift & Company and United Automobile Workers of America, Local No. 265, at at., 7 N. L. R. B. 287 ; Matter of The Electric Auto-Lite Company, Bay Manufacturing Division and International Union, United Automobile Workers of America, Local No. 526, 7 N. L. R. B. 1179. 36 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Upon the basis of the above findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. United Rubber Workers of America, Local No. 122, and Hood Rubber Workers Association, Inc., are labor organizations and Em- ployees' Representation Plan was a labor organization within the meaning of Section 2 (5) of the Act. 2. By dominating and interfering with the formation and admin- istration of Hood Rubber Workers Association, Inc., and by con- tributing financial and other support to it, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (2) of the Act. 3. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (1) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. - 5. No question concerning representation of the respondent's em- ployees has arisen, within the meaning of Section 9 (c) of the Act. ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and pursuant to Section 10 (c) of the National Labor Rela- tions Act, the National Labor Relations Board he orders that the respondent, Hood Rubber Company, Inc., and its officers, agents, successors, and assigns, shall: 1. Cease and desist from : (a) Dominating or interfering with the administration of Hood Rubber Workers Association, Inc., or with the formation or admin- istration of any other labor organization of its employees, and contributing financial and other support to Hood Rubber Workers Association, Inc., or any other labor organization of its employees; (b) In any other manner interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purposes of 'collective bargaining or other mutual aid and protection, as guaranteed in Section 7 of the Act. HOOD RUBBER COMPANY, INCORPORATED 37 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Withdraw all recognition from Hood Rubber Workers Asso- ciation, Inc., as the representative of any of its employees for the purpose of dealing with the respondent concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work, and completely disestablish Hood Rubber Workers Association, Inc., as such representative; (b) Immediately post notices to all its employees in conspicuous places throughout its plant, and maintain such notices for a period of at least sixty (60) consecutive days, stating that the respondent will cease and desist in the manner set forth in paragraphs 1 (a) .and 1 (b), and that it will take the affirmative action set forth in -paragraph 2 (a) of this Order; (c) Notify the Regional Director for the First Region in writing within ten (10) days from the `date of this Order what steps the respondent has taken to comply herewith. AND IT IS FURTHER ORDERED that the petition for investigation and certification of representatives, filed by Hood Rubber Workers Association, Inc., be, and it hereby is, dismissed. MR. WILLIAM ' M. " LEISEBSON " took no part in the consideration of the above Decision and Order. v