Oil Well Manufacturing Corporation

IN THE MATTER OF OIL WELL MANUFACTURING CORPORATION and EMPLOYEES MUTUAL BENEFIT ASSOCIATION Case No. C-568.-Decided August 24, 1939 Oil Well Equipment Manufacturing Industry-Motion to Reopen, Record for Second Time: denied as to the alleged disability of the discharged employee on the, ground that this matter can be considered in connection with the respond- ent's compliance with the Board's Order; denied as to the amount of grind- stock necessary to be left on certain pins on the ground that the proof in question was known and available to the respondent prior to and during earlier hearings in the case, explanation of failure to offer the evidence heretofore is not impressive, and a determination is unnecessary to the ascertainment of the true cause of the employee's discharge-Interference, Restraint, and Coercion: anti-union statements of respondent's official and discriminatory discharge of employee-Discrimination: discharge, for membership and activity in a labor organization and for engaging in concerted activities with other employees for purposes of collective bargaining and other mutual aid and protection; charges of, dismissed at the hearing as to one person, on motion of counsel for the Board-Reinstatement Ordered: discharged employee; disabilities not materially worse at the time of the hearings than when employee worked for the respond- ent ; respondent acquiesced over a long period of time in the absences from work which the disabilities occasioned-Back Pay: awarded to employee discrimina- torily discharged ; direct-relief or home-relief payments and monies received as disability compensation from the Veterans' Administration of the United States Government . not to be considered as "earnings," and not deductible ; monies received for work performed upon Federal, State, county, municipal, or'other work-relief projects to be deducted and paid over to the agency which supplied funds for said projects. Mr. David Peringer, for the Board. Gibson, Dunn, f Crutcher, by Mr. Hem-,y B. Ely and Mr. J. Stuart Neary, of Los Angeles, Calif., for the respondent. Mr. John Queen, of Los Angeles, Calif., for the I. A. M. Mr. A. G. Koplow, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon a charge duly filed by Employees Mutual Benefit Associ- ation, herein called the E. M. B. A., and an amended charge duly filed by International Association of Machinists, herein called the I. A. M., 14 N. L. R. B., No. 84. 1114 .OIL WELL MANUFACTURING CORPORATION 1115 the National Labor Relations Board, herein called the. Board, by, Towne J. Nylander, Regional Director for the Twenty-first Region (Los Angeles, California), issued its complaint dated October 26, 1937, against Oil Well Manufacturing Corporation, Huntington Park, California, herein called the respondent, alleging that the, respondent had engaged in and was engaging in unfair labor prac tices affecting commerce, within the meaning of Section 8 (1) and. (3) and Section 2 (6) and (7) of the National Labor Relations Act,. 49 Stat. 449, herein called the Act. A copy of the complaint, ac-, companied by notice of hearing, was duly served upon the respondent. With respect to the unfair labor practices the complaint alleged,. in substance : (a) that the respondent discharged two of its em- ployees, Ethan Harris on July 13, 1937, and George Falardeau' on.. October 4, 1937, and at all times thereafter refused to reinstate them, for the reason that said employees and each of them joined and as- sisted a labor organization 2 and engaged in concerted activities with other employees for the purposes of collective bargaining and other mutual aid and protection, thereby discriminating in regard to the hire and tenure of employment of these persons and discouraging membership in said labor organization; and (b) that the respondent on June 25, 1937,3 and thereafter, urged, persuaded, and warned its employees to refrain from becoming members of said labor organiza- tion and threatened them with discharge, lay-off, or transfer to In. inferior position if they became or remained members thereof. On November 2, 1937, the respondent filed its answer, which it amended at the hearing. The answer, as amended, denied the ma- terial allegations of the complaint, including those with respect to the relationship of the respondent's business to, and its effect upon, interstate commerce. It averred affirmatively that the respondent discharged Harris and Falardeau for cause, to wit : "inefficiency,: neglect of duty, and other infractions of company rules," and raised as a defense the alleged unconstitutionality of the Act as applied to' the respondent and its business. Pursuant to the notice a hearing was held in Los Angeles, Cali- fornia, on November 8, 9, 10, and 12, 1937, before Clifford D. O'Brien, the Trial Examiner duly designated by the Board. At the beginning of the hearing the respondent moved to strike for want of a suf-. i George Falardeau was incorrectly named as George Falardean in the complaint. Cor- rection was made by motion at the hearing. 2 The complaint set forth that the name of this labor organization was International Association of Machinists. At the bearing it appeared that its name was Employees Mutual Benefit Association , an unaffiliated labor organization which had filed the original charge herein . The respondent at no time raised any objection because of this variance, and the record discloses that it was not prejudiced thereby in its trial of the case. 8 The date of this occurrence as set forth in the complaint was changed by amendment to-June 25, 1937. 1116 DECISIONS OF NATIONAL 'LABOR RELATIONS . BOARD ficient charge that portion of the complaint' which alleged that the respondent on June 25, 1937, and thereafter, urged, persuaded, and warned its employees to refrain from becoming members of a_labor organization, and had so threatened them. After a second amended charge was filed on November 9 averring, inter alia, that "on the 25th day of June, 1937, the employer advised his men publicly to stay away from all labor organizations, and that individually they would be better off," the Trial Examiner denied this motion. There- upon, the respondent renewed-in part its motion and requested that there be stricken that portion of the complaint which alleged that after June 25 the respondent engaged in the aforementioned acts. This motion was denied. At the close of the Board's case the re- spondent renewed its original motion to strike the above allegations, on the ground of lack of evidence in support thereof, which motion was denied. At the close of the Board's case, and again at the close of the hearing, the respondent moved to dismiss the complaint as to Harris, for various reasons, and also moved to dismiss the entire com- plaint, for want of jurisdiction of the subject matter. At the close of the hearing the respondent, also moved to dismiss the complaint because of lack of proof. These motions were denied. On motion of counsel for the Board the Trial Examiner dismissed the complaint in so far as it alleged the discriminatory discharge of Falardeau, and struck from the record the testimony of Falardeau. During the course of the hearing the Trial Examiner made various other rulings on motions and on objections to the admission of evidence. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial errors were committed. The rulings are hereby affirmed. On November 24, 1937, after the hearing was closed, the respond- ent filed a motion, supported by the affidavit of its counsel, to reopen the record for the purpose of receiving further evidence. This mo- tion was granted by the Board, and on February 24, 1938, pursuant to due notice, a second hearing was held in Los Angeles, California, before Clifford D. O'Brien, the Trial Examiner duly designated by the Board. During this hearing the Trial Examiner made numerous other rulings on motions and on objections to the admission of evi- dence. The Board finds that in making these rulings the Trial Ex- aminer committed no prejudicial error, and affirms the said rulings. . On" April 22, 1938, the Trial Examiner filed his Intermediate Report, copies of which were duly served on all parties, in which he , found that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1) and (3) and Section 2 (6) and (7) of the Act, and recommended that the respondent cease and desist therefrom OIL; WELL MANUFACTURING CORPORATION 1117 and that it 'take certain affirmative action, including the reinstate- Inent of Harris with back pay, to remedy the situation brought about by the unfair labor practices found. On May 2, 1938, the respond- ent filed its Exceptions to the Intermediate Report and to the record. On May 16, 1938, after issuance of the Intermediate Report and the filing by the respondent of its Exceptions , as aforesaid, the re- spondent lodged with the Board its written motion to reopen the record to admit further evidence , together with certain affidavits and; other annexed exhibits. In its motion the respondent requested leave to adduce further proof showing ( a) that Harris, the employee mentioned in the complaint , is physically unable at the present to perform the work in which he was employed at the respondent 's plant .at the time of his discharge , and (b ) that the. amount of "grind- stock" or "tolerance" allowed Harris in his instructions by the shop superintendent , allegedly 15 to 20 thousandths of an inch , was suf- ficient to have permitted proper heat-treating - and grinding of cer- tain "F. O. X. 180 tapered, cross -head" pins, referred to in the record 4 On July 1, 1938, the Attorney for the Twenty-first Region of the Board lodged with the Board an Answer to the aforesaid motion of the respondent, together with an affidavit and certain other exhibits attached thereto. Said Answer prayed that the respondent's motion to'reopen be denied on the ground that the 'subject thereof raised no defense to the allegations of the complaint and was without merit, that said motion was untimely and without good cause shown. On August 10, 1938, the respondent lodged with the Board a written motion to strike certain portions of the above Answer and of the affidavit and other exhibits attached thereto. On said August 10 the respondent further lodged with the Board a Reply and on August 15, 1938, a Supplemental Reply to the above Answer, together with certain affidavits and other exhibits annexed thereto . On November 25, 1938, the Regional Attorney for the Twenty-first Region moved to file certain affidavits and an exhibit in further support of the above Answer. On December 5, 1938, the respondent lodged with the Board a motion to strike said affidavits and parts thereof. There- after, on January 6, 1939, the Board issued an order directing that all of the, afore-mentioned documents and annexed affidavits and other exhibits so lodged with the Board,' together with proof of service thereof , be filed as part of the record herein. The order, among other things, denied the respondent's above motions to strike of August 10 and December 5, and directed that a hearing be held before the Board for the purpose of oral argument upon the matter of the ' respondent's application to reopen the record to introduce ' The respondent contends that a finding by the Trial Examiner in the Intermediate Report concerning this matter is erroneous. 1118. DECISIONS OF NATIONAL LABOR RELATIONS BOARD further evidence, upon its Exceptions to the Intermediate Report, and upon the record. I On February 17, 1939, the respondent filed with the Board certain exceptions to the order of January 6. It also submitted briefs in support of its motion to reopen and of its position generally. Pur- suant to notice duly issued and served upon the parties a hearing for the purpose of oral argument was held before the Board on February 23, 1939, at Washington, D. C. The respondent appeared by counsel and presented argument in support of its motion and its case on the merits. We hereby deny that part of the respondent's motion to reopen the record relating to the introduction of proof of the alleged present disability of Harris. This matter may be considered in connection with the respondent's compliance with the order below.' We also are of the opinion that the respondent's motion to reopen the record for the purpose of adducing proof as to whether 15 to 20 thousandths of an inch grindstock was sufficient to permit the heat- treating and grinding of the pins referred to in the evidence, should be denied. At the hearing the respondent sought to show that it discharged Harris for failure to leave an amount of grindstock necessary to the subsequent heat-treating and grinding of the said pins, in consequence whereof the pins were spoiled and a loss to the respondent accrued ; that Harris had been instructed by the respond- ent's shop superintendent prior to machining the pins to leave 20 to 25 thousandths of an inch grindstock, and that these instructions were adequate to have enabled him to leave the necessary amount. On the other hand, the Board assumed the position at the hearing, in so far as the spoilage of the pins was relevant to the issues, and Harris testified, that he was directed to leave 15 to 20 thousandths of an inch tolerance, but that this direction proved erroneous, and as a result thereof insufficient grindstock was left to permit the subsequent man- ufacturing processes. The Trial Examiner found on this issue in accordance with Harris' testimony. It is apparent that the respondent by its motion to reopen is not merely seeking to have corrected what it claims to be the Trial Ex- aminer's erroneous finding concerning the adequacy of the amount of tolerance allowed Harris in the instructions of the shop superintend- ent, but to change the theory of its case as presented at the first and second hearings." To meet the testimony of Harris, above- ' See the discussion with respect to the illness of Harris set forth in the section, entitled "The Remedy." O The affidavits filed in connection with the motion to reopen and the Answer thereto contain statements of opinion on what constitutes sufficient tolerance . The affidavit of the respondent's president sets forth that "in the majority of cases in grinding,pins and shafts 5 one-thousandths of an inch grindstock is sufficient for the purpose of grinding" ; that 15 to 20 thousandths of an inch "would have been more than sufficient" ; OIL WELL • MANUFACTURING CORPORATION 1.119 inelitioned, the respondent sought to show that Harris' instructions were to leave 20 to 25 thousandths of an inch grindstock, not 15 to 20 thousandths of an inch, and that had he followed those instruc- tions enough tolerance would have been left to permit the subse- quent' processes. The respondent now seeks to assume the position that in any event 15 to 20 thousandths of an inch grindstock, if left on the pins, would have permitted the subsequent processes to be accomplished.7 The pins, after Harris machined them, were not heat- treated.,or ground by the respondent brit by other companies. In effedt, the respondent's motion would 'have the record reopened for the purpose of permitting it to attempt to establish, presumably by way of opinion evidence, that had 15 to 20 thousandths of an inch tolerance been left the companies to which the' pins were sent could have heat- treated and ground them satisfactorily, and, further, that the spoil- age which occurred was not the result of any intervening incapacity of incompetence of these companies. The respondent makes no satisfactory showing. as to why the record-should be reopened at this time to admit such proof. The rec- ord was reopened once before, on the respondent's request, to admit and that at times the respondent does instruct its employees "to leave 20 to 25 thou- sandths of an inch grindstock , depending on the exactness of the work which we think advisable to be required ." The affidavit of the respondent 's shop superintendent states that if his instructions to Harris were to leave 15 to 20 thousandths of an inch grind- stock on the pins involved that "would have been more than sufficient." An affidavit by an official of another company to which the pins in question were transmitted for grinding after they had been sent to a third company for heat-treating, states that the standard practice "after heat-treating" is to leave 15 thousandths of an inch grindstock, that "in the majority of cases" his company would be able to grind pins with an allow- ance •.of, only 5 thousandths of an inch , and that it `•'generally instructs" the customer to leave 15 to 20 thousandths of an Inch. The affidavit of an official of another com- pany is to the effect that the "custom." of his company is to advise leaving 10 to 15 thousandths of an inch grindstock , and that this is sufficient. A second affidavit by the respondent's president states that "the judgment of those in charge of the grinding companies as to the amount to be left as grindstock would vary depending on their own estimate of the accuracy of their own operations and their equipment for grinding." An affidavit by the Superintendent of Shops of the United States Bureau of Standards states that "under carefully controlled conditions of carburizing [beat-treating] and grinding, 10 to 15 thousandths of an inch tolerance , or `grindstock', should be allowed for the hardening and grinding of a pin" such as that here involved and "that if the process of carburizing , which process precedes the grinding process, were not done skillfully, even 15 thousandths of an inch grindstock may not be sufficient allowance in the case of a pin" such as that here involved. The affidavit of another official of said bureau deals further with the process of carburizing or heat-treating in relation to grinding. An affidavit by Harris is to the effect that the "normal " oversize allowance for grinding Is 10 thousandths of an inch, but that this is allowed only when the composition of the steel is known and only after the steel has been subjected to the degree of heat desired and its warpage noted ; and that the "most popular allowance is .0156 of an inch." 7 Th'e respondent evidently assumes that an instruction by its shop superintendent to Harris to leave 15 to 20 thousandths of an inch grindstock would have been a proper instruction , although it appears from the affidavits Sled that in precision work of this character the amount of tolerance an employee is directed to leave rests in the judgment of the person giving the instruction and varies in different situations dependent upon the skill of the employee , the efficiency of his machine , and the character of the job. 1120 DECISIONS OF NATIONAL LABOR RELATIONS BOARD evidence. The proof in question was known and available to the respondent prior to and during the hearing. Three of its affidavits setting forth the alleged facts were made by its president and shop superintendent, both of whom were witnesses at the original hear- ing and testified after Harris had given his testimony. Tlie: re- spondent's explanation of its failure to offer heretofore its evidence is not impressive. In sum, the respondent pleads a misunderstand- ing between the respondent's counsel and itself concerning requisite tolerance, and the ignorance of its counsel. Under all these cir- cumstances, and in view of our finding below that it is unnecessary to ascertain the amount of grindstock which Harris was instructed to leave or which was necessary to be left, in order to determine the true cause of the discharge_ of Harris, the respondent's motion to reopen the record to adduce the afore-mentioned. proof is denied., During the oral argument the respondent moved to admit to the record a certain letter written by the Emsco Derrick & Equipment Co. on August 2, 1938, and addressed to the respondent. No satis- factory showing has been made for reopening the record to admit such proof. We hereby deny this motion. The Board has considered the Exceptions to the Intermediate Report and, in so far as they are inconsistent with the findings, con- clusions, and order set forth below, finds them to be without merit. FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The respondent, Oil Well Manufacturing Corporation, is, a Cali- fornia corporation, having its office and plant in Huntington Park, California. It is engaged in the manufacture, sale, and distribu- tion of oil-well equipment, consisting of spare parts for various makes of machinery used in oil fields, such as slush pumps, drilling engines, and sibels. The raw materials used by the respondent in the course of manufacture, viz, steel, brass, and iron, are purchased from jobbers or foundries located in California. In 1936 the finished products of the respondent aggregated in value $162,407.27, of which 42.5 per cent, or $62,020.87, were shipped from its plant to foreign countries, including Roumania, England, Trinidad, Venezuela, Argentina, Arabia, and the Dutch East Indies. In the first 10 months of 1937 the respondent's gross business and the percentage of its pro- duction which was shipped to foreign countries showed an increase over the figures for the corresponding period in 1936. At the time of thee hearing the respondent employed 28 persons, 19 of whom were non-supervisory shop employees. OIL WELL MANUFACTURING CORPORATION 1121 H. THE ORGANIZATIONS INVOLVED Employees Mutual Benefit Association was an unaffiliated labor organization , admitting to membership employees of the re- spondent. International Association of Machinists is a labor organization affiliated with American Federation of Labor, admitting to mem- bership employees of the respondent. III. THE DISCRIMINATORY DISCHARGE OF HARRIS; INTERFERENCE, RESTRAINT, AND COERCION The production employees of the respondent never were organized for purposes of collective bargaining prior to June 1937, although some of them were members of various labor organizations. Be- cause of discontent' with the respondent's wage policy of individual bargaining as well as with the amount of wages paid them and their hours of service, a number of the employees on June 24 decided to submit . to the respondent a collective request for an increase in wages and for a standard workweek. For this purpose they or- ganized themselves into an association known as the Employees Mutual Benefit Association, herein called the E. M. B. A. An in- strument drafted by one of them, Ethan Harris, setting forth that "the undersigned employees of the Oil Well Mfg. Corp. have joined together in an agreement to form an organization hereafter to be known as the Employees Mutual Benefit Association," was signed by 12 employees. Harris was elected temporary chairman of the organization and was instructed to communicate with the I. A. M. about possible affiliation with and membership in that labor organ- ization. This Harris later did. On the morning of the following day, June 25, Harris placed on the desk of the respondent's president, one White, the following written notification, signed by himself as chairman of the E. M. B. A.: This is to notify you that the employees of the Oil Well Manufacturing Corporation have joined together in an organ- ization hereafter to be known as the Employee's Mutual Benefit Association. As I have been elected temporary chairman of this associa- tion it is my duty to inform you that the Association desires your attendance at a meeting to be held in the shop on June. 25th, 1937, at twelve noon and terminating at twelve-thi rt,S- PM. The purpose of this meeting is to discuss wages, hours and overtime pay. 1122 DECISIONS OF NATIOI\TAL, LABOR 'RELATIONS,- 90ARD Will you please notify this writer if it will be possible for you to attend this meeting and if not when will be the earliest time for your attendance. This Association does not announce its formation with any intention, of belligerence nor a desire to be intimidating. ' Its formation is the result of long and careful thought and free discussion among its members. The association desires at all times to cooperate with the plant management. Harris also posted a copy of the foregoing, bearing his name, 'upon the plant bulletin board. Thereafter, White informed Harris that he would meet with the employees in his office at 5 p. in., after the close of the' working day. At the appointed, time 10 members of the. Association met with White in his office. Harris acted as spokesman. He presented re- quests for a base wage rate of 85 cents per hour with periodic in- creases thereafter, for a standard workweek of 40, hours, 8 hours per day, and for time and one-half for all overtime work. White replied that the respondent was unable to pay the requested wage rate, and that it could adopt the suggested standard workweek provided there would be no overtime work. He refused to make any counterproposals on behalf of the respondent and in conse- quence the meeting, adjourned abruptly. Thereafter these employees assembled outside and near the plant to discuss what steps should be taken in view of the respondent's reply, to their requests. As the employees were discussing the situation White came out of the plant to talk with them. He offered to increase the wage rate by 5 cents an hour but would not recede from his position with respect to a standard workweek with compensation at the rate of time and one-half for overtime. He contended that the men were well, paid and that the respondent was losing money. After some further talk, including threats by White to employ an addi- tional superintendent to supervise the employees, to institute an addi- tional shift which would prevent overtime work being available, and to install an efficiency system if the standard workweek were adopted, White told the employees, according to the testimony of Harris, "If I were you men I would be ashamed to gang up on me like that . . . It is shameful; it is mob rule." This testimony was corroborated by that of four other employees who were present. One of these stated that White "turned to Harris and said `I would be ashamed of myself to gang up on me . . . to use mob tactics.'" Another stated that White had used the expression 1'mob rule," telling the employees, "The shop is too small to be run by a mob . . . This is nothing but mob rule which ' you are creating here; it is nothing different." Two others stated that White used OIL WELL MANUFACTURING CORPORATION 1123 the words "mob tactics" and "mob spirit" and, that he expressed a preference to bargain with the men individually. On the other hand, White denied making such statements, and three other employees called by the respondent testified that he had not done so or that they had not heard him do so. We are of the opinion, and find, that White did in fact berate his employees for. forming a labor, organization for the purposes of collective action and that the words which he used evinced animosity by the respondent toward self- organization of its employees. The testimony of Harris and the four corroborating witnesses is direct and positive and was accorded full credence by the Trial Examiner. By expressing hostility, through its president, to the employees' forming a labor. organization for the purpose of collective bargaining and other mutual aid and protection, the respondent interfered with, restrained, and coerced its employees in the exercise of rights guaranteed them by Section 7 of the Act. During the course of the conversation White turned to Harris and accused him of being an inefficient workman, of being absent from work, and of engaging in misconduct in the plant. One of the employees expressed the hope that Harris' job would not be jeopardized because he had acted as their spokesman, to which White replied that it would not. Ethan Harris was discharged by the respondent about 21/2 weeks later, on July 13, 1937. He first began working in the plant some 10 months previously, and in that period obtained several increases in pay. In connection with the general rise in shop wages on May 1, 1937, of 2 cents an hour, Harris' wages were increased by 3 cents an hour, and White then spoke with him of the possibility of elevating him to the position of working foreman on a night shift if such a shift were instituted. He was an important workman, the "only" man in the plant, according to White's own testimony, "that was really an experienced operator to operate that machine." On July 5, 1937, Harris was asked by the shop superintendent, Walker, to machine 24 "F. O: X. 180 tapered cross-head" pins. Harris testified that he was instructed to leave 15 to 20 thousandths of an inch "tolerance" or "grindstock" on the pins, whereas Walker testified that Harris' instructions were to leave 20 to 25 thousandths of an inch grindstock. A proper amount of tolerance was necessary in order to permit subsequent processes of heat-treating and grinding. Harris machined the pins, checking one out of every four with a micrometer. They then were sent from the plant to another company for heat- treating, and upon their return within a day or two were sent out to a third company to be ground to final size. The pins were returned by, the grinding company to the respondent on July 9 with 12 of the 24 spoiled, allegedly because insufficient grindstock had been left on them to allow proper grinding. The value of the 12 pins was ap- 1124 DECISIONS OF NATIONAL LABOR RELATIONS BOARD proximately $190, and their spoilage delayed for 2 weeks the shipment to the customer. On July 13, 1937, at the close of the working day, White summoned Harris into his office and in the presence of the shop superintendent, Walker, discharged him. He told Harris that the reason therefor was the alleged improper machining of the 12 pins. At the hearing White stated that the reason which he then gave Harris was threefold : Harris' spoilage of work in general, his-absenting himself from work "a great deal," and his undependability. However, this version of what was said differs from that of the respondent's own. witness, Walker, who agreed in his testimony with that of Harris that the only reason then assigned for the discharge was Harris' alleged im- proper machining of the pins. We find that no other reason than this was stated to Harris on July 13. Upon thus being notified of his discharge Harris challenged the reason given, saying that the actual reason therefor was his activities as the leader of the E. M. B. A. in representing the employees at the June 25 meetings with White. There is conflict as to what reply White gave. Harris testified that White admitted that his, Harris', leadership of the employees was the true ground of the discharge; White testified that he simply answered, "I told you the reason." Since, as hereinafter set forth, the motivation of the discharge is clearly shown by other facts and circumstances of the case, we find it unnecessary to determine whether White adn-iitted on July 13 that the discharge was occasioned by discriminatory causes, or whether he impliedly denied it. At the hearing the respondent contended that Harris was discharged not only because of the spoilage of the pins but because he spoiled other work, laid off from work many times, was undependable, made noises, and ate lunch during working hours, and finally, because on one occasion he sought a job with another company on the respondent's time. With respect to the reasons thus advanced other than the spoil- age of the pins, it is plain that they are mere afterthoughts and were not operative factors in the discharge. As set forth above, none of these alleged faults and acts of Harris was stated to him as a reason on July 13. Although White testified that Harris spoiled "several other jobs" he specified only two such instances, one involving some pieces which required no discarding but could be reworked, and the other a damaged piece or pieces, the amount of the damage or possi- bility of salvage not appearing in the record. Harris testified that during his employment at the plant he spoiled only one job prior to July 5. The evidence establishes that virtually every machinist spoils jobs from time to time in the ordinary course of work, and that this was true of the respondent's shop employees. There is no showing that Harris was ever reproved for loss occasioned by spoilage prior OIL WELL MANUFACTURING CORPORATION 1125. to his discharge, or that as a result of spoilage he was assigned to tasks requiring less skill. As stated above, Harris received successive wage. increases during the course of his employment, and on May 1 had his conversation with White about promotion to foremanship. It is true that because of physical disabilities Harris was compelled to absent himself from work. Injuries.which he received in the World War and in an industrial accident at the respondent's plant necessitated his staying away from work on.many occasions. How- ever, -save for a remark by White to Harris one month after Harris obtained his employment with the respondent, to the effect that had he, Harris, worked steadily he would not need to borrow money, nothing in the nature of a reprimand concerning these absences was given him prior to the June 25 meeting when Harris acted as spokes- man for the E. M. B. A. Before May 1, 1937, Harris was absent some 25 full days of work, yet on or about May 1 he received a wage increase and White discussed Harris' promotion. On the other hand, from May I to the date of his discharge Harris missed only 31/2 full days of work, and during that period worked 15 hours on each of 8 days. Harris was paid by the hour. The remaining alleged reasons for the discharge, apart from the spoilage of the pins in question, relate to matters hardly to be con- sidered, under the circumstances presented, as occasioning the dis- missal. The noises made by Harris consisted of a hacking cough which was a result of his war injuries and which he at times exagger- ated to escape the bantering remarks of the other employees concerning the same. White testified that he spoke to Harris about this noise late in April 1937, because it disturbed employees in the office. Harris did not recall at the hearing that such a complaint had been made to him. In any event, it is plain that White did not deem the matter, nor was it in fact, of moment. The record shows that the shop where the men worked was noisy because of the operation of the machines, that the shop employees were permitted to talk quite freely with one another, and that they usually had to shout in their conversations in order to be heard over the sound of the machines. . Nor do we believe that because Harris ate his lunch in the plant during working hours was he discharged. There is no showing in the record that Harris' eating resulted in any loss to the' respondent. It appears that the employees have short periods when their attention at their machines is not required.. Moreover, the record establishes that Harris had been following this practice from the time he first began work for the respondent, and that nothing was ever said to him about it. It seems inconceivable that if this practice resulted in any loss or was not permitted by the respondent that some admonition would not have been given Harris in that period of time. Finally, as to whether .1:126: DECISIONS OF NATIONAL LABOR RELATIONS BOARD Harris looked for another position on the respondent's time, Harris testified that he did not do so, that his seeking another job occurred before working hours. The proof to the contrary is vague, and not entitled to weight. There is no showing that White ever spoke to. Harris about the. incident. We are also convinced that Harris was not discharged for spoilage of the pins involved. We are satisfied from the afore-mentioned facts, considered in the light of the entire record, that the respondent, seized upon the occurrence of the spoilage as an excuse for ridding itself of the employee whose activities. in forming the E. M. B. A., and whose acts as the leader of that organization, had successfully demonstrated to the shop employees the advantages of collective action. As stated above in connection with our discussion of the respondent's second motion to reopen the record, Harris testified that he was instructed by the shop superintendent, Walker, to leave 15 to 20 thousandths of an,inch tolerance on the pins, but that these instructions were errone- ous in that they did not allow sufficient grindstock to permit heat- treating and grinding. Harris also testified that he followed • his instructions and, consequently, that the spoilage was not attributable to his error. On the other hand, the respondent contended that Harris' instructions were to leave 20 to 25 thousandths of an inch grindstock, and that had he followed these instructions sufficient tolerance would have been left to permit the subsequent processes and the spoilage would not have resulted. The issue of Harris' re- sponsibility was rested by the respondent upon a determination of the issue as to what Harris' instructions were.8 It is unnecessary, however, for us to fix culpability for the spoilage of the pins either on the basis upon which the respondent tried and submitted its case, as af ore-mentioned, or on the facts presented, for we are convinced, as already set forth, that regardless of whether or not Harris was at fault, it was not his alleged mistake on these pins, but his activities in relation to the E. M. B. A. that constituted the s The affidavit of one of the respondent 's attorneys filed In support of the second motion to reopen , states, in part : That as a result of these conferences [between said attorney , another attorney of the respondent, and White ] your affiant formed the opinion that in connection with the work of Ethan E. Harris the question at issue was whether or not Ethan E. Harris had been instructed by his foreman , Mr. Walker, to leave fifteen to twenty thousandths of an inch grindstock on said crosshead pins. . . . That your affiant continued the defense of the above entitled matter at the hearing thereof on the basis that the question at issue was whether Ethan E. Harris had been instructed to leave fifteen to twenty thousandths of an inch grindstock or twenty to twenty-five thousandths of an inch grindstock. The affidavit of another of the respondent 's attorneys in connection with said motion states, -in part : . I assumed , after the testimony of Ethan E . Harris that he had been . instructed to leave fifteen to twenty thousandths of an inch grindstock, that the issue was whether'ornot that had been his instruction. OIL WELL MANUFACTURING CORPORATION 1127 operative cause of his discharge. It does not appear from the record that the respondent conducted any sort of investigation as to the reasons for the failure to leave sufficient grindstock on the 12 pins, although. the interim between the. discovery on July 9, and the dis- charge on July 13 afforded ample opportunity to make such investi- gation. If White had been confronted with the question of whether or not to discipline an ordinary employee who had not been an active union protagonist, we are confident he would have acted in a different manner. The job of machining tapered pins of this type admittedly had never been done in the shop before. It was a rush job, and since a truck was waiting to take them to be heat-treated, the respondent did not have them inspected when they left Harris' machine, although work is usually inspected before it leaves the shop. Harris testified that he measured approximately one out of every four pins he turned out, and that they met the specifications given him by Walker. It would seem, that the fault lay 'elsewhere than with Harris if the respondent trusted his skill and judgment sufficiently to rely on his ex- amination of the pins without subjecting them to the usual 'inspection. Evidence also shows that 12 of the 24 pins were finally found suit- able, and that the 12 pins which could not be machined were spotted in various places on their surfaces rather than being discolored all over. This might indicate that there was a defect of some sort in the machine on which Harris worked, but there is no showing that an inspection of the machine was made after the spoilage was discovered. Again, since Harris measured one out of every four of the pins, it is also a reasonable inference that the two companies which did the heat-treating and grinding may have erred in some way, thereby causing the damage. But there is no showing in the record that measurements were taken, nor are there figures, correspondence, or other evidence indicating that an investigation was made of the pos- sibility of error in the processes performed ' by the other two com- panies. It is not our finding that the respondent's machinery was in need of repair or that the heat-treating or grinding companies blun- dered in their operations, but simply that if the respondent had been acting in good faith it would have made some sort of investigation of these other possible causes of the loss. The fact that it did not do so, but simply discharged this trusted and competent employee, indicates that it was only too willing to rid itself of Harris for other reasons. Some 2 weeks before the discharge Harris had held himself out unequivocally to the respondent as the leader in the organizational movement which developed among the employees. The notice of June 25 was placed by Harris on White's desk and was signed by Harris. The notice itself informed White of Harris' position as tem- porary chairman of the newly formed E. M. B. A. and requested that 190935-40-vol. 14-72' 1128 DECISIONS OF NATIONAL LABOR RELATIONS BOARD communication be, had with Harris. The posting on the plant bulle- tin board of a copy of the notice bearing Harris' name was done by Harris. Harris spoke for the employees at the meetings of June 25 between the E. M. B. A. and the respondent. It is clear that the forma- tion of the E. M. B. A. among its unorganized shop employees pro- voked the hostility of the respondent. The words of White on June 25 show that the respondent was opposed to what its president chose to term "mob" tactics. This opposition to organization vented itself in White's immediate attack upon the leader of the organization, Harris. In charging Harris with matters never before deemed of significance to the respondent, a step followed in this proceeding, White gave evidence of an intent already born to terminate Harris' employment for union activities. Harris' intimation to White at the time of the discharge that lie would not have been discharged had he not led the shop employees was, we are convinced, a true statement of the existent situation. The evidence shows that after Harris' dis- charge the E. M. B. A. disintegrated and that no other union was thereafter formed among the respondent's employees. We find that the respondent on July 13, 1937, discharged Ethan Harris and refused to reemploy and reinstate him because he joined and assisted the E. M. B. A. and engaged in concerted activities with other employees, for the purposes of collective bargaining and other mutual aid and protection, thereby discriminating in regard to the hire and tenure of employment of said Ethan Harris and discourag- ing membership in labor organizations; that by said discharge and the anti-union statements of its official the respondent has interfered with, restrained, and coerced its employees and is interfering with, restrain- ing, and coercing them in the exercise of the rights guaranteed by Sec- tion 7 of the Act. Between July 13 and October 13, 1937, Harris received $12.04 from a California relief agency. He worked 21 days as a clerk for this agency, but the work was done gratuitously as a means of occupying his time, and the money he received was not in payment of his services. He also received $1.75 as direct relief. Harris had no steady employ- ment in this period. He worked 7 days for the Vash Ross Company, 1 day for Vernon Tool Company, a half day for Mack Truck Company, and 2 afternoons at L. S. Bowen Company. He worked from October 13 through November 12, 1937, at Consolidated Steel Company, 40 hours a week, at 85 cents per hour, with time and a half for. Saturday night and double time for Sunday. He was not employed at the time of the second hearing in the case. We find that Harris has not secured regular and substantially equivalent employment. When his employment with the respondent terminated he was working 9 hours a day on weekdays and 71/. hours on Saturdays, at 83 cents per hour, with time and one-third after 8 hours per day. OIL WELL MANUFACTURING CORPORATION 1129 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE We find that the activities of the respondent set forth in Section III above, occurring in connection with the operations of the respondent described in Section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several. States and between the several States and foreign countries, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. THE REMEDY It is essential to an effectuation of the purposes and policy of the Act that the respondent be ordered to cease and desist from the unfair labor practices in which we found it to have engaged, and, in aid of such order and as a means of removing and avoiding the consequences of such practices, that the respondent be ordered to take certain affirma- tive action more particularly described below. We have found that the respondent has engaged in unfair labor practices by interfering with, restraining, and coercing its employees in the exercise of rights guaranteed in Section 7 of the Act, and by discriminating in regard to hire and tenure of employment to dis- courage membership in a labor organization. Accordingly, we shall order the respondent to cease and desist from engaging in such unfair labor practices. Moreover, to effectuate the purpose and policy of the Act we shall order the respondent to offer Ethan Harris immediate and full reinstatement to his former or substantially equivalent posi- tion, without prejudice to his seniority and other rights and privileges. Further, we shall order the respondent to make him whole for any loss of pay he may have suffered by reason of his discriminatory discharge, by payment to him of a sum of money equal to that which he normally would have earned as wages from thee date of said discharge, July 13, 1937, until the date of the offer of reinstatement, less the net earnings 9 (luring said period. O BY net earnings" is meant earnings less expenses , such as for transportation, room, and board incurred by Harris in connection with obtaining work and working else- where than for the respondent , which would not have been incurred but for his unlawful discharge and the consequent necessity of his seeking employment elsewhere. See Matter of Crossett Lumber Company and United Brotherhood of Carpenters and Joiners of America, Lumber and Sawmill. Workers Union, Local 2590, 8 N . L. It. B. 440. Direct- relief or home-relief payments are not to be considered as "earnings ," and, hence, are not deductible . Matter of Vegetable Oil Products Company , Inc., a Corporation and Soap and Edible Oil Workers Union, Local No. 15409, 5 N. L. Il. B. 52, amending 1 N. L. R. B. 989. See also Matter of Missouri-Arkansas Coach Lines, Inc. and The Broth- erhood of Railroad Trainmen, 7 N. L. R. B . 186. Nor are monies received as disability compensation from the Veterans ' Administration of the United States Government to be considered "earnings" and deductible. Cf. Hatter of Louis Hornick ,t Company, Inc. and Textile Trimming Workers Union, Local 9440, United Textile Workers of America, 2 N. L. R. B . 983; Matter of Anwelt Shoe Manufacturing Company and Shoe Wo•kerg' Protective Union, Local No, 80, 1 N. L. It . B. 939. Monies received for work - performed 1130 DECISIONS OF .NATION-AL LABOR . RELATIONS .BOARD At the hearings.-the. respondent made the contention that Harris was physically unable to be reemployed in the position he occupied when discharged. The evidence taken does not show that Harris' dis- abilities were materially worse at the time of the hearings than when he was employed by the respondent. We have found above that the' respondent' acquiesced over a long period of time in Harris' absences from work which these disabilities occasioned, that despite them it increased his hourly wage rate several times, and that it contemplated promoting him. Harris was paid on an hourly basis. Under these circumstances the respondent cannot now oppose reinstatement on the ground that Harris' disabilities rendered him an unfit employee. The respondent also sought to show at the second hearing that an agreement with Harris was reached for a dismissal of the complaint against the respondent. We are not satisfied that a binding agree- ment was made, or that if made was substantially performed on the respondent's part. In any event, neither the Board nor its au- thorized representative was a party to the alleged agreement. We have repeatedly held that such an agreement cannot stay the power of the Board to provide a remedy for unfair labor practices.'0 Upon the basis of the foregoing findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. Employees Mutual Benefit Association was, and International Association of Machinists is, a labor organization, within the mean- ing of Section 2 (5) of the Act. 2. By discriminating in regard to the hire and tenure of employ- ment of Ethan Harris, thereby discouraging membership in a labor organization, the respondent has engaged in and is engaging in un- fair labor practices, within the meaning of Section 8 (3) 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 re- spondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (1) of the Act. upon Federal, State, county, municipal , or other work-relief projects are not to be con- sidered as earnings , but, as provided below in the Order; shall be deducted from the sum due Harris, and the amount thereof shall be paid over to the appropriate fiscal agency of the Federal , State, county , municipal, or other government or governments which supplied the funds for said work-relief projects. " Matter of Ingram Manufacturing Company and Textile Workers Organizing Com- mittee, 5 N. L. R. B. 908; Matter of The Kelly-Springfield Tire Company and United Rubber Workers of America, Local No . 26, and James M. Reed and Minnie Rank, 6 N . L. R. B. 325; Matter of McKaig-Hatch, Inc. and Amalgamated Association of Iron, Steel and Tin Workers of North America, Local No . 1139, 10 N. L. R. B. 33 . See Section 10 (a) of the Act. . 'OIL WELL MANUFACTURING 'CORPORATION .1131 4. The aforesaid unfair labor practices are unfair labor practices .affecting commerce, within the meaning of Section 2 (6) .and. (7) of the Act. 5. The respondent has not engaged in unfair labor practices as re- g,trds George Falardeau, within the meaning of the Act. ORDER On the basis of the above findings of fact and conclusions of law, and pursuant to Section 10 (c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the respond- ent, Oil Well Manufacturing Corporation, Huntington' Park, Cali- fornia, and its officers, agents, successors, and assigns, shall : 1. Cease and desist from: (a) Discouraging membership in any labor organization of its employees, by discharging employees because of membership in or activity on behalf of a labor organization, or by discriminating in any other manner in regard to hire and tenure of employment or any term or condition of employment; (b) In any other manner interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through rep- resentatives of their own choosing, and to engage in concerted activi- ties, for the purposes of collective bargaining or other mutual aid or protection, as guaranteed in Section 7 of the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Offer to Ethan Harris immediate and full reinstatement to his former or substantially equivalent position, without prejudice to his seniority or other rights and privileges; (b) Make whole Ethan Harris for any loss of pay he may have suffered by reason of his discriminatory discharge by payment to him of a sum of money equal to that which he would normally have earned as wages during the period from July 13, 1937, until the date of the offer of reinstatement, less his net earnings," during said period; de- ducting, however, from the amount otherwise due to said Ethan Harris monies received by him during said period for work per- formed upon Federal, State, county, municipal, or other work-relief projects, and pay over the amount so deducted to the appropriate fiscal agency of the Federal, State, county, municipal, or other gov- ernment or governments which supplied the funds for said work- relief projects; "See footnote 9. 1132 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (c) Post immediately in conspicuous places throughout its plant, and maintain for a period of at least sixty (60) consecutive days, notices to its employees stating that the respondent will cease and desist in the manner set forth in 1 (a) and (b), and that it will take the affirmative action,set forth in 2 (a) and (b) of this Order; (d) Notify the Regional Director for the Twenty-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 complaint be, and it hereby is, 'dismissed in so far as it alleges that the respondent engaged in unfair labor practices with regard to George Falardeau. MR. WILLIAM M. LEISERSON took no part in the consideration of the above Decision and Order.