Independent Pneumatic Tool Co.

In the Matter Of INDEPENDENT PNEUMATIC TOOL CO., A CORPORATION, and CoCHIsE ROCK DRILL MANUFACTURING CO., A CORPORATION and STEEL WORKERS ORGANIZING COMMITTEE and AMALGAMATED Asso- CIATION OF IRON, STEEL & TIN WORKERS OF NORTH AMERICA, LOCAL No. 1716 Case No. C-752.-Decided September 6, 1939 Tool Manufacturing Industry-Interference, Restraint, and Coercion: posting misleading statements inferring Union demanded closed shop and contemplated increase in dues without members' consent ; discrediting Union-Unit Appro- priate for Collective Bargaining: production employees, exclusive of clerical and salaried employees and supervisors and foremen with authority to hire, lay off, or discharge; no controversy as to-Representatives: proof of choice: majority received by Union in consent election presumed to continue in absence of proof to contrary-Collective Bargaining: refusal to recognize Union as a contracting party, despite willingness to negotiate with Union ; refusal to enter into normal form of collective agreement, I. e., a written contract between the employer and representatives of employees, naming parties and signed by each, irrespective of terms proposed or understanding had with the Union ; bad faith in other respects ; employer ordered to embody understanding, if reached, in written signed agreement if requested to do so by Union-Discrimination: as to tenure of employment : discharge for union membership and activity ; charges of, dismissed as to one employee-Reinstatement Ordered: employee discharged for union activity-Back Pay: awarded employee discharged for union activity ; monies received by employee for work performed upon Federal, State, county, municipal, or other work-relief projects to be deducted and paid over to agency which supplied funds for said projects-Complaint: dismissed against parent of wholly owned subsidiary corporation. Mr. David Persinger, for the Board. Latham, Watkins c6 Bouchard, by Mr. Paul R. Watkins, of Los Angeles, Calif., for the respondents. Mr. Eugene R. Thorrens, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly filed by the Steel Work- ers Organizing Committee, herein called the S. W. O. C., the National Labor Relations Board, herein called the Board, by Towne Nylander, 15 N. L. R. B., No. 16. 106 INDEPENDENT PNEUMATIC TOOL Co. 107 Regional Director for the Twenty-first Region (Los Angeles, Cali- fornia), issued a complaint, dated May 4, 1938, against the respond- ents, Independent Pneumatic Tool Co., Aurora, Illinois, herein called Independent, and Cochise Rock Drill Manufacturing Co., Los An- geles, California, herein sometimes called Cochise, a wholly owned subsidiary of Independent, alleging that the respondents had engaged in and were engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. The complaint alleged in substance that the respondents discharged John Payne on or about October 8, 1937, and Robert Knoles on or about October 22, 1937, and thereafter refused to reinstate them, for the reason that they joined and assisted the Amalgamated Associa- tion of Iron, Steel & Tin Workers, Local No. 1716, affiliated with the Steel Workers Organizing Committee, herein called the Union, and engaged in union activities with other employees; that on or about December 13, 1937, and at all times thereafter, the S. W. O. C. repre- sented a majority of the respondent Cochise's employees in an appro- priate unit; that on or about January 7, 1938, and at all times there- after, the respondents refused to bargain in good faith with the S. W. O. C.; that on or about January 14, 1938, and on various dates there- after, the respondents met with a committee of the S. W. O. C. and reached an agreement on certain matters' respecting rates of pay, wages, hours of employment, and other conditions of employment, but refused to embody said agreement in a written contract or to enter into any agreement with the S. W. O. C.; that on or about January 15, 1938, and on many and various dates tlereafter, the respondents directly informed employees who had designated the S. W. O. C. as bargaining representative of the progress of the negotiations carried on between the respondents and the S. W. O. C. and, by the informa- tion given the employees, misled them and disparaged the S. W. O. C.; and that by the aforesaid acts, and by other acts, the respondents inter- fered with, restrained, and coerced their employees in the exercise of the rights guaranteed in Section 7 of the Act. Copies of the complaint, accompanied by notices of hearing thereon, were duly served upon the respondents, the S. W. O. C., and the Union. On May 10, 1938, the respondents filed a joint answer, denying the jurisdiction of the Board and that the respondents had engaged in any unfair labor practices. The answer further alleged that the Inde- pendent had nothing to do with the matters on the basis of which the unfair labor practices are charged. Pursuant to notice, a hearing was held in Los Angeles, California, on May 12 and 13, 1938,. before Jesse E. Jacobson, the Trial Examiner 108 DECISIONS OF NATIONAL LABOR RELATIONS BOARD duly designated by the Board. The Board and the respondents were represented by counsel and participated in the hearing. Full oppor- tunity to be heard, to examine and cross-examine witnesses, and to 'introduce evidence bearing on the issues was afforded all parties. Dur- ing the course of the hearing the Trial Examiner made several rul- 'ings on 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. At the close of the hearing the Trial Examiner granted the re- spondents' request for permission to file a brief and after the termina- tion of the hearing the respondents submitted a brief to the Trial Examiner. Thereafter the Trial Examiner filed his Intermediate Report, dated .June 25, 1938, finding that the respondent Cochise had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the Act and that the respondent Independent had not engaged in such unfair labor practices. He recommended that the respondent Cochise be ordered to cease and desist from its unfair laborpractices; to offer Robert Knoles reinstatement with back pay; upon request, to bargain collectively with the S. W. O. C. and, if any understanding was reached, to embody such understanding in a written signed agree- ment for a definite term, to be agreed upon, if requested to do so by the S. W. O. C. He further recommended that the complaint be dis- missed in so far as.it alleged that the respondent Cochise had dis- ^criminated with respect to John Payne and in so far as it alleged that the respondent Independent had engaged in unfair labor practices. On July 16, 1938, the respondent Cochise filed exceptions to the Intermediate Report and requested oral argument before the Board. Neither the S. W. O. C. nor the Union filed exceptions. After oral argument was scheduled, the Board was advised by the respondent -Cochise that it desired to waive the privilege of orally arguing the case before the Board. Upon notice to all parties, the Board thereupon canceled the hearing previously set for the purpose of oral .argument. The Board has considered the exceptions to the Intermediate Re- port and in so far as the exceptions are inconsistent with the find- ings, conclusions, and order set forth below, finds them to be with- out merit. As noted above, the Trial Examiner recommended that the coin- plaint be dismissed in so far as it alleged that the respondent Inde- pendent had engaged in unfair labor practices. No exceptions were filed with respect to this recommendation. Nor was any evidence introduced at the hearing showing that the respondent Independent INDEPENDENT PNEUMATIC TOOL CO. 109 exercised any control over or participated in the matters covered by the complaint. We shall dismiss the complaint in so. far as it per- tains to the respondent Independent and shall hereinafter refer to Cochise as the respondent. After the filing of the Intermediate Report all parties entered into, a stipulation with respect to the business of the respondents: The, Board hereby orders that such stipulation be made part of the record as Board Exhibit No. 9. Upon the entire record in the case, the Board makes the following FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The respondent, Cochise Rock Drill Manufacturing Co., is a Cali- fornia corporation engaged at its plant in Los Angeles, California,. in the manufacture of rock drills, paving breakers, and other products. During 1937, it purchased almost all its raw materials in the State- of California, but shipped approximately 74• per cent of its finished products outside California. The total value of the finished products; sold by the respondent during 1937 amounted to approximately $285,- 000. Since January 1, 1938, the respondent has sold all its finished products, amounting to $55,697.32 for the first approximately 41/2.: months of the year, in California to Independent Pneumatic Tool Co., a Delaware corporation • which owns all capital stock of the- respondent and which operates a plant at Aurora, Illinois. The In- dependent Pneumatic Tool Company in turn shipped approximately 50 per cent of such products outside the State of California during the period from January 1 to May 12, 1938. H. THE ORGANIZATIONS INVOLVED Steel Workers Organizing Committee consists of a group of per- sons designated by the Committee for Industrial Organization for- the purpose of organizing workers in the steel industry along indus- trial lines. A copy of a "Memorandum of Agreement" between the- S. W. O. C. and the Amalgamated Association of Iron, Steel & Tin Workers was introduced into evidence. It provides for the estab- lishment of the S. W. O. C., which has "power to handle all matters relative to the organizing campaign, other than the issuance of charters." It further provides that "The Committee and the officers. of the Amalgamated Association shall have the exclusive power to, deal with steel companies in order to reach agreements ..." Amalgamated Association of Iron, Steel &. Tin Workers, Local No. 1716, admits to membership all the production employees of the re- spondent at its Los Angeles, California, plant, exclusive of clerical 110 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees and supervisory employees who have the authority to hire and discharge. Employees who join either Local No. 1716 or the S. W. 0. C. are, for all practical purposes , members of both Local No. 1716 and the S . W. 0. C. We find that Amalgamated Association of Iron, Steel & Tin Work- ers, Local No. 1716, and the S. W. 0. C. are labor organizations. III. THE UNFAIR LABOR PRACTICES A. The refusal to bargain collectively and other acts of interference, restraint, and coercion 1. The appropriate unit The complaint alleges that all the production employees of the respondent at its Los Angeles plant, exclusive of clerical employees, salaried employees, and supervisors and foremen with authority to hire, lay off, or discharge, constitute a unit appropriate for the pur- poses of collective bargaining. All the employees in such unit are eligible to membership in the Union. No evidence , was offered at the hearing to show that such unit is inappropriate. We find that all the production employees of the respondent at its Los Angeles plant, exclusive of clerical employees , salaried employees, and supervisors and foremen with the authority to hire, lay off, or -discharge, constitute a unit appropriate for the purposes of collective bargaining with respect to rates of pay, wages, hours of employment, and other conditions of employment, and that said unit insures to -employees of the respondent the full benefit of their right to self- organization and to collective bargaining and otherwise effectuates the policies of the Act. 2. Representation by the S. W. 0. C. of a majority in the appropriate unit Pursuant to an agreement reached by the S. W. 0. C. and the respondent, the Regional Director of the Board for the Twenty-first Region conducted on December 7, 1937, an election among the em- ployees of the respondent in the unit which we have found to be appropriate to determine whether or not such employees desired the S. W. 0. C. as their respresentative for the purposes of collective bargaining. Sixty-three employees voted in the election and thirty- nine cast their ballots in favor of the S. W. O. C. as bargaining repre- sentative. There was no showing at the hearing of any change in the desires of the employees respecting representation subsequent to the election of December 7. We find that on December 7, 1937, and at all times thereafter, the S. W. 0. C. was the duly, designated representative of a majority of INDEPENDENT PNEUMATIC TOOL CO. 111. the employees in the appropriate unit, and, pursuant to Section 9 (a) of the Act, was the exclusive representative of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, and other conditions of employment. 3. The refusal to bargain and other acts of interference, coercion, and restraint During the latter part of April 1937, organizational activities were begun among the employees of the respondent and the Union was or- ganized about May 30, 1937. At a meeting of the Union held about May 30, 1937, officers were elected and a committee was designated to meet with the management. About 10 days thereafter, the commit- tee was asked by Bart Rudolph, the respondent's superintendent, to meet with A. H. Skaer, the respondent's president. In response to this request, the committee met with Skaer and Rudolph at the former's office. J. O. O'Rourke, a member of the committee, testified that "When we went in he (Skaer) just asked us what the idea was of joining-getting the union in there instead of just forming a griev- ance committee in the shop and then coming in to see him if there was any complaint" and that Skaer stated that "he didn't think that we needed a union around the place, that all we would have to do would just simply, when we had a complaint, come in and see him." Skaer's version of the remarks which he made to the committee dif- fers in substance but little from O'Rourke's account. Skaer testified that he stated to the committee "if you men or any of our employees have any differences or feel that you haven't been properly taken care of in an agreeable way, come and tell me. . . I don't understand why you want some outside force representing you. You are intelli- gent men and can tell me what you have in your minds... You men can belong to any union you want to but as intelligent men can't you tell me or tell Mr. Rudolph and he can tell me what you have in .mind, what it is you want, what it is you feel needs correcting and if it is correctable we will do so within the power of our ability." The -committee replied that "they thought they would be better represented having a union than having a committee appointed and then waiting ,on the committee that way." In August 1937, the S. W. O. C. presented to. the respondent a pro- posed contract which Skaer agreed to take under advisement. The record does not show the course of negotiations during the next 3 months other than that the respondent did not accept the proposed contract but agreed to the holding of the consent election in December 1937. .+ 112 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Following the consent election, the S. W. O. C. requested the respondent to enter into negotiations and conferences were held on January 25, February 2, and February 11, 1938. At the conferences, the S. W. O. C. was represented by a committee of employees and Ken Hunter, a S. W. O. C. representative, and the respondent was repre- sented by Skaer and Paul Watkins, an*attorney. During the confer- ences,l the discussion involved primarily a consideration of the various provisions of the proposed contract which the S. W. O. C. submitted to the respondent in August 1937. The respondent indicated its approval of certain provisions, rejected others, and promised to give further consideration to demands with respect to wages, rates, hours of em- ployment, and the establishment of a system for the handling of griev- ances. At the conference on February 11 the respondent's, representatives stated, however, that any agreement which might be reached would be between the respondent and its employees rather than between the respondent and the S. W. O. C. They stated that the respondent would insist upon that form of agreement because "the Act ... does not compel any agreement" and because collective bar- gaining contracts, like other types of contracts, should be signed by the principals. Hunter advised Watkins and Skaer that an agreement such as proposed by the respondent was not satisfactory, but agreed to Watkins' suggestion that the respondent prepare and submit counter- proposals to the proposals which the S. W. O. C. had previously sub- mitted to the respondent. At the close of the conference on February 11 the conferees decided not to fix any definite date for a further con- ference but to fix such date after Hunter had considered the respond- ent's counterproposals. On Monday, February 14, 1938, Watkins sent to Hunter a document .captioned "Agreement of Cochise Rock Drill Manufacturing Com- pany with its employees." Although termed an "agreement" the document bore a place for the signature only of the respondent. It. set forth specified terms and conditions of employment "effective im- mediately and to continue in effect until such time as general economic or other conditions beyond our control make changes necessary, unless- the covenants hereof are theretofore violated by the employees." It further provided that "until the company is notified to the contrary by the employees or until it is determined whether or not the National Labor Relations Act (Wagner Act) has jurisdiction over the company,. the company will recognize the Steel Workers Organizing Committee on behalf of Lodge No. 1716 of the Amalgamated Association of Iron, Steel and Tin Workers of North America as the sole collective bargain- ing agency for its employees ..." 'A transcript of the three conferences was made by a stenographer employed by the respondent. By stipulation of the parties , the transcript was introduced in evidence at the hearing. INDEPENDENT PNEUMATIC TOOL CO. 113 On February 14, 1938, Watkins also sent to Hunter a letter, stating that "If I don't hear from you one way or- the other during the week, Mr. Skaer will put the agreement in effect the early part of next week." On the following Friday, February 18, the respondent posted on the plant bulletin boards a notice addressed "To The Employees of Cochise Rock Drill Manufacturing Company" and copies of the "agreement" which had been sent to Hunter on February 14. The notice referred to the posting of "an agreement between the company and the employees" and stated that such "agreement sets forth the policy of the company and the agreement with the employees." The notice then further stated, among other things, that the respondent had met with Hunter as representative of the S. W. O. C. and certain named employees; that a complete record of the negotiations had been made and was available for examination; that the respondent had carefully considered the requests made by Hunter and had made as many concessions as were possible and practical; and that Hunter had made certain requests which would not be granted. The notice then discussed in detail what were declared to be the more important requests of Hunter which were rejected. The notice stated in this regard that Hunter had asked the respondent to adopt a check-off and that "it was developed in our meeting with Mr. Hunter that dues may be increased without your consent" ; z that Hunter had requested an agreement with the S. W. O. C., whereas "the management is not required to enter into any agreement whatsoever" and feels "that an agreement should be made with its employees embodying the con- cessions it has made in bargaining" ; that "at innumerable times in the meetings with Mr. Hunter he suggested that the Company enter into a `closed shop' agreement with the Union" and that "this the management will not do." 3 By letter dated February 19, 1938, Hunter advised Watkins that the "counter proposal offered as an agreement is fundamentally unsatis- factory to the Steel Workers Organizing Committee ... if you feel the Cochise management is adamant on the point of not signing an agreement. with the S. W. O. C. (rather than "the employees") we will be obliged to lay the problem before the National Labor Relations Board ..." 2 At the conference on February 2, 1938, Hunter stated, in response to an inquiry by Watkins, that the dues could be changed by a majority vote of the Union or by majority vote of delegates representing local unions assembled at a S . W. 0. C. national convention for an increase in dues of all the Amalgamated locals. 3 The contract proposed by the S . W. 0. C. contained no provision for a closed shop. Although Hunter mentioned the possibility of a closed shop as an answer to the re- spondent's insistence that a procedure for the presentation of grievances be established for non -unf on employees as well as for union members, the statement that at innumerable times in the meetings. Hunter suggested a "closed shop " was without foundation in fact. 114 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Collective bargaining, as contemplated by the Act, is a' procedure looking toward the making-of a collective agreement by the employer with the accredited representatives of its employees touching wages, hours of service, and other working conditions of its employees 4 The duty to bargain collectively which the Act imposes upon employers has as its objective the establishment of such contractual relationship.° We have held that this duty is not limited to a meeting or discussion of terms with the employees' representatives. The duty encompasses an obligation to enter into discussion and negotiation with an open and fair mind and with a sincere purpose to find a basis of agreement concerning the issues presented,° to make contractually binding the understanding upon the terms reached,7 and, under ordinary circum- stances,,to reduce that obligation to the form of a signed written agree- ment if requested to do so by the employees' representatives.8 Manifestly, the respondent has not fulfilled its duty to bargain collectively with representatives of its employees. The attitude and position which the respondent's representatives assumed at the Feb- ruary 11 conference, and at all times thereafter, clearly show that the respondent did not at any time negotiate, nor did it intend to nego- 4 Matter of H. J. Heinz Company and Canning and Pickle Workers, Local Union No. 325, affiliated with Amalgamated Meat Cutters and Butcher Workmen of North America, American Federation of Labor, 10 N. L. R. B . 963; Matter of Inland Steel Company and Steel Workers Organizing Committee and Amalgamated Association of Iron , Steel, and Tin Workers of North America, Lodge Nos . 64, 1010, and 1101, 9 N . L. R. B.' 783 ; Matter of St. Joseph Stock Yards Company and Amalgamated Meat Cutters and Butcher Work- men of North America, Local Union No. 159, 2 N . L. R. B. 39. In Consolidated Edison Company of New York, Inc., et at. v. National Labor Relations Board, et at., 305 U. S. 197 , 236, the Supreme Court of the United States said : The Act contemplates the making of contracts with labor organizations. That is the manifest objective in providing for collective bargaining. In National Labor Relations Board v. The Sands Manufacturing Company, 306 U. S. 332, 59 S. Ct . 508, 513-14, that Court said : The legislative history of the Act goes far to indicate that the purpose of the statute was to compel employers to bargain collectively with their employees to the end that employment contracts binding on both parties should be made. 5 See cases cited In footnote 4. Matter of Globe Cotton Mills and Textile Workers Organizing Committee, 6 N. L. R. B. 461, order enforced in Globe Cotton Mills v. National Labor Relations Board, 103 F. (2d) 91 (C. C. A. 5th) ; Matter of S. L. Allen d Company, Inc., a Corporation and Federal Labor Union Local No. 18526, 1 N. L. R. B. 714, order enforced (C. C, A. 3d) C. C. H. Labor Law Service, par . 18989; Matter of Knoxville Publishing Company and American Newspaper Guild, the Knoxville Newspaper Guild, 12 N. L. R. B. 1209. ''Matter of St. Joseph Stock Yards Company and Amalgamated Meat Cutters and Butcher Workmen of North America, Local Union No. 159 , 2 N. L. R. B. 29; Matter of Sigmund Freisinger, doing business under the name and style of North River Yarn Dyers and Textile Workers Organizing Committee, 10 N. L. R. B. 1043 ; Matter of Harry Schwartz Yarn Co. Inc. and Textile Workers Organizing Committee. 12 N. L. R. B. 1139. See also Matter of Inland Steel Company and Steel Workers Organizing Committee and Amalgamated Association of Iron, Steel, and Tin Workers of North America, Lodge Nos. 64, 1010, and 1101, 9 N. L. R. B. 783. s Matter of H. J. Heinz Company and Canning and Pickle Workers, Local Union No. 325, affiliated with Amalgamated Meat Cutters and Butcher Workmen of North America, American Federation of Labor, 10 N. L. R. B . 963; Matter of Inland Steel Company and Steel Workers Organizing Committee and Amalgamated Association of Iron, fiteel, and Tin Workers of North America, Lodge Nos. 64, 1010, and 1101, 9 N . L. R. B. 783. INDEPENDENT PNEUMATIC TOOL CO. 115 tiate, with the representatives of its employees as required by the Act. Although the Act requires that the respondent, in entering into the conferences, accept fully the procedure of collective bargaining the respondent was not ready to do so. From the outset its intention and purpose were to make no binding agreement with the S. W. 0. C., irre- spective of what terms were proposed or understanding reached.,, The respondent has advanced no persuasive reason, nor do we see any, for its unwillingness to enter into an agreement with the S. W. 0. C. We have already noted that at the February 11 conference the respondent's representatives stated that, although the respondent was, unwilling to enter into any agreement with the S. W. 0. C. as the representative of its employees, it was willing to sign an agreement with its em- ployees on the basis of any understanding reached in the conferences with the S. W. 0. C. It is clear, however, that the respondent did not thereby fulfill its duty to bargain collectively 10 The notice which the respondent posted on February 18 left no doubt that the respond- ent intended to adhere strictly to its refusal to enter into a binding agreement with the S. W. 0. C. and thus not to bargain collectively. We think it clear that the respondent has not only refused to bar- gain collectively within the meaning of the Act and thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed by the Act, but that it has by other acts set forth above so interfered with, restrained, and coerced its employees. The state- ments which Skaer made to the committee of the Union shortly after May 30, 1937, were clearly designed to discourage membership in any "outside" organization. The posting of the notice to employees on February 14, 1938, can likewise be considered only as an act tending to discredit the S. W. 0. C.. and interfere with the self-organization of the respondent's employees. It was posted at a time when the S. W. 0. C. was attempting to bargain collectively as the duly designated 9 In Matter of Globe Cotton Mills and Textile Workers Organizing Committee, 6 N. L. R. B. 461, we said : If the employer adheres to a preconceived determination not to enter into any agreement with the representatives of his employees . . . then his meeting and discussing the issues with them, however frequently , does not fulfill his obligations under the Act. 10 In Matter of Louisville Refining Company and International Association, Oil Field, Gas and Refinery Workers of North America, 4 N. L. R . B. 844, we said : An employer cannot under the Act refuse to recognize duly designated repre- sentatives of his employees for the purposes of contracting any more than for the purposes of negotiating. He must accept his employees' representatives as such throughout the entire process of collective bargaining. In Matter of American Numbering Machine Company and International Association of Machinists, District #15, 10 N. L. R. B. 536, we held similarly, saying: The refusal to enter into an agreement , oral or written, with a labor organiza- tion, although the labor organization may have negotiated the agreement , and the insistence that individual employees only sign the agreement , inevitably weakens the labor organization by depriving it of the credit for its achievements. 116 DECISIONS OF NATIONAL LABOR RELATIONS BOARD representative of the respondent's employees and constituted a clear manifestation that the respondent intended to deal directly with the employees rather than the employees' chosen representatives. More- over, the statements in the notice were not only such as to indicate clearly the respondent's opposition to the S. W. O. C., but were in a number of instances of a definitely misleading character.- We find that the respondent by refusing on February 11, 1938, and at all times thereafter , to enter into any agreement with the S . W. O. C., irrespective of what terms might be proposed by or understanding had with the S . W. O. C., did on February 11, 1938, and at all times there- after, refuse to bargain collectively with the S. W. O. C. as the repre- sentative of its employees in the appropriate unit in respect to rates of pay, wages, hours of employment, and other conditions of employ- ment. We also find that by such refusal and by the other acts set forth above, the respondent has interfered with, restrained , and coerced its employees in the exercise of the rights guaranteed by Section 7 of the Act. B. The alleged discriminatory discharges John R. Payne was employed by the respondent on November 30, 1936, as a lathe operator in the production department . He was admit- tedly an efficient workman, but somewhat slow . After 2 or 3 months in the production department, he was transferred to experimental -work and later to 'salvage work. This work involved use of the lathe but speed was not as essential as in the production department. Payne joined the Union when it was organized on May 30, 1937, ,and wore a C. I. O. button in the plant . He was not, however, active in union affairs. - About the first part of October 1937, the respondent found it neces- sary to reduce its force because of lack of work resulting from business -conditions . About 25 employees were laid off, including Payne and ,one other lathe operator . The respondent retained in its employ -three lathe operators , all of whom had less seniority than Payne and one of whom had been employed only a short period of time. The record does not disclose whether or not the lathe operators retained by the respondent were members of the Union. Various supervisory employees testified on behalf of the respondent that the three lathe operators who were retained could operate ma- chines in addition to the lathe and that Payne was not able to do so. Bart Rudolph, the respondent's superintendent, testified that it was felt necessary in reducing the force to retain only those lathe operators who could likewise operate other machines . He further testified that he was influenced in his decision to lay off Payne by the slowness with which he performed his work. Payne did not deny that he had on u See Matter of Yale & Towne Mantufactivring Company and United Electrical and Radio "Workcrs of America, Local No. 2:27, 10 N. L. R. B. 1321. INDEPENDENT PNEUMATIC TOOL CO. , 117 various occasions been warned about his slowness , but testified that he was able to operate other machines and that he had worked on a hand- milling and a drill press for short intervals while employed in the salvage department. The record shows in this connection that shortly prior to Payne's lay-off Rudolph had asked him concerning his ex- perience in handling a milling machine and that Payne replied that he preferred to operate the lathe inasmuch as he had not worked on a milling machine for a long time. During the period from October 1931 to the time of the hearing, the respondent laid off 24 additional employees , 4 of whom were there- after recalled to employment, and 6 employees quit. There is ^no showing that any new employees were hired during this period. Shortly after the lay-off in October, the respondent discontinued its separate salvage department , where Payne had worked, and made salvaging an additional duty of the production employees. Under all the circumstances , and particularly in view of the fact that Payne was not active in the Union , we think it has not been estab- lished that the respondent discriminated against him because of his union affiliation or activity . We find that the respondent has not dis- criminated against Payne in regard to his hire and tenure of employ- ment, thereby discouraging membership in a labor organization. Robert Knoles was employed by the respondent on November 1, 1935, and worked as a welder from that date until October 22, 1937. He was not assigned to any foreman but worked directly under Rudolph, the plant superintendent . ^ He joined the S. W. O. C. at the first meeting of the Union on May 30, 1937 , and was on that date. elected financial secretary of the Union 12 During a visit at Knoles' home on the day , a Sunday, following May 30 ,13 Rudolph discussed the Union with Knoles and asked whether the Union intended to call a strike. On the next day at the shop, Rudolph asked Knoles whether the Union had elected officers and stated "The only reason I asked you that is because I know you are on our side." Knoles informed Rudolph that the Union had elected officers but gave no indication that he held any office. On October 21, 1937, Knoles, who had prior thereto been chosen to fill a vacancy on the union committee, went with the committee to confer with Skaer. It was the first occasion on which Knoles had conferred with the respondent's officials as a member of the union committee. He was notified of his discharge on the following day. The respondent contends that Knoles ' discharge was the result of his inattention to work, misconduct, and insubordination . Supervisory "As noted in Section II above, membership in the S. W . O. C: was tantamount to membership in the Union. "Knoles and Rudolph , friends of long standing, had worked together in Denver, Colo- rado, prior to their employment with the respondent , and prior to a disagreement in the spring of 1937 frequently visited each other at their homes. 199549-39-vol. 15-9 118 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees described Knoles in their testimony as a welder of excellent ability'14 but claimed that in the spring of 1937, after Rudolph ordered Knoles to reduce the amount of overtime he worked, Knoles assumed an attitude of indifference toward his work, on occasions bore an expression of displeasure on his face, and often walked in a leisurely manner. However, there is no convincing evidence that such conduct interfered with his work or that Knoles was warned concerning his alleged shortcomings, except on one undated occasion when Rudolph made a passing inquiry as to why Knoles appeared "surly." The respondent further claims that Knoles was guilty of insub- ordination in refusing to surrender certain plant keys in his possession and in calling the superintendent an indecent name when the keys were demanded. At the hearing Knoles specifically denied these charges. For at least 6 months prior to Knoles' dismissal, he kept all welding . equipment in his charge under lock in accordance with specific in- structions which Rudolph personally issued to him. Knoles kept the welding-equipment keys in his desk drawer at the plant and the key to the drawer on his person. In June 1937 Rudolph instructed Fore- man Wiley, who was in charge of raw materials and maintenance work, to obtain duplicates of all keys for placement on a keyboard which Rudolph planned to maintain in his office. There is conflict in the evidence as to whether in August 1937, Wiley requested Knoles to deliver the keys and whether Knoles used insult- ing language about Rudolph and refused to comply with Wiley's request. Wiley testified that in August he asked Knoles for whatever duplicate keys he had, explaining that Rudolph had ordered the erec- tion of a keyboard in his office for emergency use; that Knoles replied that he would retain his keys since he was in full charge of the welding department; and when Wiley reminded Knoles that Rudolph issued the instructions, Knoles said : "That dirty son-of-a-bitch doesn't need a key." On the other hand, Knoles testified that some months prior to his discharge Wiley mentioned the fact that Rudolph wanted duplicate keys for a keyboard; that at that time Wiley gave Knoles one or two keys to a newly built cabinet and retained one of the cabinet keys, but Wiley made no request for the welding-equipment keys. Knoles denied that he called Rudolph any name or made any reference to him whatever. Wiley did not speak again to Knoles about the keys until Thursday, October 21. That week or the prior week, the respondent instituted a 3-day workweek and Knoles was not scheduled to work that day. In addition to its use by Knoles, the welding equipment was occasionally U The respondent paid Knoles 05 cents an hour when he began work. During his ap- proximately 2 years of employment he received two personal increases at unstated times, and one blanket raise in May 1937, which advanced his pay rate to 90 cents an hour. INDEPENDENT PNEUMATIC TOOL CO. 119 used by Harvey Bunting who was in charge of experimental work. Customarily, whenever Bunting had welding work, he made arrange- ments with Knoles to use the equipment after Knoles completed his workday. Apparently Bunting's first need for the keys in Knoles' absence from the plant during the period of curtailed operations oc- curred on October 21. In his absence, Bunting applied to Rudolph for the keys, but without success, since Knoles had on his person the key to the plant drawer where he kept the welding-equipment keys. Knoles appeared at the plant about 9:00 a. in. that day, however, for the meeting of the union bargaining committee with the respondent. Bunting met Knoles as he drove his automobile into the yard outside the plant and informed him that Rudolph wanted the keys. There is some conflict in the evidence as to what occurred inside the plant. In substance, Kuoles testified that he entered the plant,.un- locked the desk drawer, and delivered the keys to Bunting who returned them to Knoles within a few moments; that when Rudolph, who stood by, announced that he planned to make duplicate keys, Kuoles simply replied : "That is O. K. with me" ; that Rudolph said something to Wiley, which Knoles could not hear, and departed; that Wiley then walked up to Knoles' desk, picked. the keys out of the drawer, and stated : "lire are going to have duplicate keys made"; that when Knoles replied: "Why can't you have them done Monday," Wiley dropped the keys into the drawer and walked away ; and, that Knoles locked the drawer. Wiley testified that Knoles placed the bunch of welding- equipment keys in the drawer, after lie explained the individual keys to Wiley, and snapped the padlock; otherwise, Wiley agreed with the substance of Knoles' testimony. On the afternoon of October 21, Bunting again desired to use certain welding equipment. According. to the testimony of Rudolph, Bunting at that time informed him that the equipment was still locked up; that he (Rudolph) asked, "Well, where in the devil is all the keys"; that Bunting replied that Knoles "put it in the drawer and locked it up and won't let me have it." Rudolph further testified that he then instructed Bunting to "take a hammer down there and knock the lock off and get in that drawer" and that his instructions were carried out. Bunting did not in his testimony refer to the matter covered by the above testimony of Rudolph. Although Wiley testified that on the afternoon of October 21 "Mr. Bunting and I went out and broke that lock on the drawer with a hammer," he did not refer to any instruc- tions being received from Rudolph that they do so. According to Rudolph's testimony, he went to the office of Skaer following his talk with Bunting and stated to Skaer, "By golly I sure am getting sick and tired of messing around with Bob (Knoles) like I am doing. I understand he locks up this equipment and won't let us have the keys and I want to know what to do," and that Skaer 120 DECISIONS OF NATIONAL LABOR RELATIONS BOARD replied that he "would get the advice of an attorney on what to do." Skaer testified that Rudolph "told me about the difficulty with the keys and he told me how Mr. Wiley had talked with Bob and others about getting the duplicate keys and how he had been refused the keys that were in Bob's possession and on that afternoon of the same day the equipment was found to be locked up again and they had to break the lock to get in." After consulting an attorney, Skaer instructed Rudolph to discharge Knoles. Skaer testified that he consulted an attorney prior to taking any final action inasmuch as he- had previously learned that Knoles was connected with the C. I. O. and "felt that it was possible that claims might be made on the part of the C. I. O. that we had discharged him because of his belonging to that organization.". When Knoles called for his regular, pay check on October 22, 1937, Rudolph advised him of his discharge. In response to Knoles' demand for an explanation of such action, Rudolph stated that lie was being discharged because of his refusal to surrender the keys to Wiley on Thursday morning. Knoles denied that he had refused to turn over the keys and asked, "Why .don't you tell the truth about it, you know that it is not the reason." Rudolph replied, "Yes, it is. I am not going to argue with you about it." He then instructed Knoles to get his check and belongings. Although Skaer's testimony indicates that Knoles' discharge was based on his alleged refusal to turn the keys over to Wiley on the morning of October 21 and although Rudolph referred to such alleged refusal at the time of Knoles' discharge, Wiley testified that it was not until the morning of October 22 that he reported on this incident to Rudolph. Furthermore, it was apparently not until October 22 that Rudolph became aware of Wiley's accusation that Knoles had denied Wiley the keys in August and had used certain epithets with respect to Rudolph. It would appear, therefore, that Knoles' dis- charge could not have been based on the reasons assigned. However, even if Rudolph and Skaer knew of the accusations made by Wiley at the time. Knoles' discharge was decided upon, we think it clear that Knoles was discharged because of his union affiliation and activities rather than because of the reasons assigned by the re- spondent. We have noted above that Rudolph questioned Knoles concerning the Union and its plans immediately after the Union was organized on. May 30, 1937. Rudolph indicated at that time that he expected Knoles to cast his lot with the respondent in its dealings with the Union. About this same time, Skaer indicated to the union com- mittee his disapproval of the Union and that such disapproval con- tinued is shown clearly by the subsequent acts of interference, re- straint, and coercion on the part of Skaer. Although Knoles joined INDEPENDENT PNEUMATIC TOOL CO. 121 the Union and became an officer thereof in May 1937, his selection as a member of the union committee did not take place until a day or two before his discharge. The record does not establish that at the time of Knoles' discharge the respondent knew that he held office as financial secretary of the Union. His post as a union com- mitteeman did not bring him into direct contact with the manage- ment until October 21, 1937. It was on this date that his discharge was decided upon. Knoles worked directly under Rudolph and Skaer and was not subject to supervision by Wiley. Nevertheless, Knoles was at no time given any opportunity to defend himself against any charge made by Wiley that he had refused to, surrender the keys to Wiley and that he had made derogatory remarks with respect to Rudolph. There was no investigation made by Rudolph or Skaer with respect to the truth of any such charges. The respond- ent flatly refused at the time Knoles was informed of his discharge to consider Knoles' denial that he had refused to surrender the keys to Wiley. Accordingly, we find that the respondent by discharging Robert Knoles on October 22, 1937, discriminated against him in regard to his hire and tenure of employment, thereby discouraging mem- bership in a labor organization. We also find that by such dis- crimination the respondent has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Sec- tion 't of the Act. Following his discharge by the respondent, Knoles worked ap- proximately 1 month at the Berkeley Steel Construction Company. Thereafter, he was unemployed until about a week prior to the hear- ing at which time he secured a temporary welding job which af- forded him part-time work. 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 its operations described in Section I above, have a close, intimate, and substantial relation 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. THE REMEDY We have found that the respondent has engaged in certain unfair labor practices. We shall order it to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act and to restore, as .nearly as possible, the situation that existed prior to the commission of the unfair labor practices. Having found that the respondent engaged in an unfair labor prac- tice by discharging Robert Knoles, we shall order the respondent to 122 DECISIONS OF NATIONAL LABOR RELATIONS BOARD offer to. Klioles reinstatement to his former or substantially equivalent position without prejudice to his seniority and other rights and privileges and to make him whole for any loss of pay he may have differed by reason of his discharge by payment to him of a sum equal to the amount which he normally would have earned as wages from the date of his discharge to the date of the offer of re- instatement; less his net earnings 15 during said period. . Having found that the respondent has refused to bargain collec- tively' with the S. W. O. C., we shall order it, upon request, to bar- gain collectively with the S. W. O. C. in respect to rates of pay, wages, hours ' of employment, and other conditions of employment, and if an understanding is reached on any of such matters, to embody said understanding in a signed agreement with the S. W. O. C., if requested to do so by the S. W. O. C. Upon the basis of the foregoing findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF L,:,w 1. Steel Workers Organizing Committee and Amalgamated Asso- ciation of Iron, Steel & Tin Workers of North America, Local No. 1716, are labor organizations within the meaning of Section 2 (5) of the Act. 2. By discriminating in regard to the hire and tenure of employ- ment of Robert Knoles, thereby discouraging membership in the Steel Workers Organizing Committee and the Amalgamated Asso- ciation of Iron, Steel & Tin Workers of North. America, Local .No. 1716, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (3) of the Act.. 3. All the respondent's production employees at its Los Angeles, California, plant, exclusive of clerical employees, salaried employees, and supervisors and foremen with authority to hire, lay off, or dis- charge, constitute a unit appropriate for the purposes of collective bargaining, within the meaning of Section 9 (b) of the Act. . 4. Steel Workers Organizing Committee was on December 13, 1937, and at all times thereafter has been, the exclusive representa- tive of all employees in such unit for the purposes of collective bar gaining, within the meaning of Section 9 (a) of the Act. •16 By "net earnings" Is meant earnings less expenses , such as for transportation, room, and board , incurred by an employee in connection with obtaining work and working 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 Amer- ica, Lumber and Sawmill Workers Union, Local 9590, 8 N . L. R. B. 440. Monies received for work . performed upon Federal, State,. county, municipal , or other work-relief - projects are not deductible as "net earnings " but, as provided in the Order below, shall be deducted and 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. INDEPENDENT PNE'UAIATIC TOOL CO . 123 5. By refusing on February ,11, 1938, and at all times thereafter, to bargain collectively with Steel Workers Organizing Committee as the exclusive , representative of the employees in said appropriate unit, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (5) of the Act. 6. By interfering with, restraining , or coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, the respondent has engaged in and is engaged in unfair labor practices within the meaning of Section 8 ( 1) of the Act. .. 7. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. 8.. The respondent has not discriminated with respect to the hire and tenure of employment of John R. Payne, within the meaning of Section 8 (3) of ,the Act. ORDER Upon the basis of ' the above findings of fact and conclusions of law, and pursuant to Section 10 (c) of the National. Labor Relations Act, the National Labor Relations Board hereby orders that the re- spondent, Cochise Rock Drill Manufacturing Co., and its officers, agents, successors, and assigns shall: 1. Cease and desist from : (a) Discouraging membership in the Steel Workers Organizing Committee, Amalgamated Association of Iron, Steel & Tin Workers of North America, Local No. 1716, or any other .labor organization of its employees, by discriminating in regard to hire and tenure of employment or any term or condition of employment; (b) Refusing to bargain collectively with the Steel Workers Or- ganizing Committee as the exclusive representative of all production employees at its Los Angeles, California, plant, excluding clerical employees, salaried employees, and supervisors and foremen with authority to hire, lay off, or discharge; (c) In any other manner interfering with, restraining, or coercing its employees in the exercise of their rights to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in con- certed activities, 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 Robert Knoles immediate and full reinstatement to his former position, without prejudice to his seniority and other rights or privileges previously enjoyed by him; 124 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (b) Make whole Robert Knoles for any loss of pay he has suffered by reason of his discharge by payment to him of a sum equal to the amount which he normally would have earned as wages during the period from the date of discharge, October 22, 1937, to the date of such offer of reinstatement, less his net earnings 15 during said period, deducting, however, from the amount otherwise due to said employee, monies received by him during said period for work performed 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 government or govern- ments which supplied. the funds for said work-relief projects; (c) Upon request, bargain collectively with the Steel Workers Or- ganizing Committee as the exclusive representative of all production employees at its Los Angeles, California, plant, excluding clerical and salaried employees, supervisors and foremen with authority to hire, lay off, or discharge, in respect to rates of pay, wages, hours of employment, and other conditions of employment, and, if an under- standing is reached on any such matters, embody said understanding in a signed agreement with the Steel Workers Organizing Committee, if requested to do so by said Steel Workers Organizing Committee; (d) Immediately post notices to its employees in conspicuous places throughout its plant' stating that the respondent will cease and desist as set forth in -1 (a), (b), and (c), and that it will take the affirma- tive action set forth in 2 (a), (b), and (c) of thi.s Order; (e) Maintain such notices for a period of at least sixty (60) con- secutive days from the date of posting; (f) 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. IT IS FURTHER ORDERED that the complaint be, and-it hereby is, dis- missed in so' far as it alleges that the respondent has engaged in unfair labor practices within the meaning of Section 8 (3) of the Act by discharging John R. Payne. AND IT IS FURTHER ORDERED that the complaint be, and it hereby is, dismissed in so far as it alleges that the Independent Pneumatic Tool Co. has engaged in unfair labor practices within the meaning of the Act. MR. WILLIAM M. LEISERSON took no part in the consideration of the above Decision and Order. 11 See footnote 15, supra.