National Supply Co.

In the Matter of NATIONAL SUPPLY COMPANY and STEEL WORKERS ORGANIZING COMMITTEE Case No. C-862-Decided October W,1939 Oil Production Machinery Industry-Company-Dominated Union: charges of, dismissed ; neutral position on part of company toward rival inside and out- side unions ; both unions given equal opportunity and facility to organize on company time and property ; notices posted by company during organization advising employees of Company's neutrality and of the employees' freedom to exercise rights under the Act-Discrimination : charges of, dismissed as to three employees-Procedure: function of charge : not essential to describe alleged unfair labor practices with the same particularity as the complaint ; Board reviews evidence bearing upon the discharges of two employees and sustains findings of Trial Examiner who recommended complaint be dismissed as to them, although no exceptions were filed thereto-Employer: responsibility of corporate successor for unfair labor practices committed by predecessor where successor corporation was subject to substantially the same stock owner- ship and control as predecessor and continued the business of the predecessor- Complaint : dismissed. Mr. Charles Brooks, for the Board. Latham, Watkins, & Bouchard, by Mr. Paul R. Watkins, of Los Angeles, Calif., and Mr. Robert W. Eiler, of Pittsburgh, Pa., for the respondent. Mr. Ken Hunter, of Los Angeles, Calif., for the S. W. O. C. Mr. Roman Beck, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly filed by Steel Workers Organizing Committee, herein called the S. W. O. C.,1 the National Labor Relations Board, herein called the Board, by the Regional Director for the Twenty-first Region (Los Angeles, California), is- 1 The record shows that the S. W. O. C. acts as an organizing agency on behalf of Amal- gamated Association of Iron, Steel and Tin Workers of North America. 16 N. L. It. B., No. 35 304 NATIONAL SUPPLY COMPANY 305 sued its complaint dated March 17, 1938, against The National Supply Company,2 Torrance, California, herein called the respondent, alleg- ing that.the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1), (2), and (3) and Section 2 (6) and (7) of the National Labor Relations Act, herein called the Act. Copies of the complaint and of the accompanying notice of hearing were duly served upon the re- spondent, upon the S. W. O. C., and upon Employees Association of Workers of The National Supply Company, herein called the Associ- ation. At the hearing, the complaint was amended on motion of the Board in certain respects. The complaint, as amended, alleged in substance that the respond- ent : (1) discharged three named persons employed at its Torrance plant for the reason that they joined Amalgamated Association of Iron, Steel and Tin Workers of North America, herein called the Amalgamated, through the S. W. O. C., and assisted said labor organ- izations, thereby discriminating in regard to the hire and tenure of said employees and discouraging membership in the Amalgamated; s (2) urged and persuaded its employees during January, March, April, May, July, August, and September 1937, and at other times, to refrain from joining the S. W. O. C., and threatened its employees with discharge if they became or remained members thereof; (3) organized and assisted in organizing the Association, subsequent to January 1, 1937, and since then has controlled the Association and its activities, given it advice, permitted its organizational activities on company time and property, assisted it in the collection of dues, and permitted it the use of company facilities denied to other labor organ- izations, thereby dominating and interfering with the formation and administration of and contributing financial and other support to the Association; and (4) by the foregoing acts interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. On April 6, 1938, the respondent filed a motion with the Regional Director to dismiss the complaint for failure of the charges to set forth with sufficient particularity the alleged unfair labor practices upon which the complaint was based. The Regional Director denied this motion, and we hereby affirm his ruling. On April 11, 1938, the respondent filed its answer to the complaint, admitting the interstate character of its business, but denying that it 2 The respondent is a Pennsylvania corporation and is the successor to a Delaware cor- poration of similar name. The relationship of the respondent and its predecessor is described in Sections I and III A of this Decision. 8 The names of these employees are Joseph Cox, Norman Tatro , and Joseph Vaughn. 306 DECISIONS OF NATIONAL LABOR RELATIONS BOARD had engaged in any of the unfair labor practices therein alleged. The answer averred "that at all times respondent and its officers and agents have intentionally remained wholly neutral with. respect to all Labor Organizations; that it has at all times specifically and carefully avoided any action or deed on its part and that of its officers and agents which could be indicated as warning its employees from be- coming members of any Union or fostering or assisting its employees in organizing any Labor Organization or belonging to any particular Labor Organization." Pursuant to notice a hearing was held at Los Angeles, California,. on April 14, 15, 18, 19, 20, 21, 22, 25, and 26, 1938, before Alvin J. Rockwell, the Trial Examiner duly designated by the Board. The Board and the respondent were represented by counsel and partici- pated in the hearing; the S. W. O. C. was also represented during the greater part of the hearing by its representative. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues was afforded the parties. Various mo- tions and objections to the admission of evidence were made during the hearing and ruled upon by the Trial Examiner. The Board has. reviewed these rulings and finds that no prejudicial errors were com- mitted. The rulings are hereby affirmed. Thereafter, the Trial Examiner filed his Intermediate Report, dated August 10, 1938, copies of which were duly served upon the respond- ent and upon the S. W. O. C., in which he found that the respondent had engaged in unfair labor practices affecting commerce within the meaning of Section 8 (1) and (2) and Section 2 (6) and (7) of the Act, but that it had not engaged in -unfair labor practices within the meaning of Section 8 (3) of the Act. The Trial Examiner recom- mended that the respondent cease and desist from the unfair labor practices which he found and that it take certain action to remedy the situation brought about by these unfair labor practices. On September 6, 1938, the respondent filed its exceptions to the Intermediate Report, and on September 3, 1938, the S. W. O. C. and the Amalgamated did likewise. In their exceptions, the S. W. O. C.. and the Amalgamated objected solely to the Trial Examiner's finding that the respondent had not discriminatorily discharged Vaughn. Al- though no exceptions were filed respecting the Trial Examiner's find- ings in regard to Cox and Tatro, we, nevertheless, have reviewed the evidence bearing upon their discharges and concur in his findings: concerning them.' Pursuant to notice a hearing was had for the purpose of oral argu- ment before the Board in Washington, D. C., on June 16, 1939. The respondent appeared by counsel, presented its argument, and sub- Cf. Matter of Godchaux Sugars, Inc. and Sugar Mill Workers' Union, Locals No. 21- 177, and No. 2188 affiliated with the American Federation of Labor, 12 N. L. R. B. 568. NATIONAL SUPPLY COMPANY 307 mitted a brief in support of its position. The Amalgamated did not appear. . The Board has considered the exceptions to the Intermediate Report filed by the respondent and, in so far as they are consistent with the findings, conclusion, and order set forth below, finds them to be meri- torious. The exceptions of the S. W. 0. C. and the Amalgamated are not sustained. Upon the entire record in the case, the Board makes the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The National Supply Company, the respondent, is a Pennsylvania corporation engaged in the manufacture and sale of heavy machinery used in the oil-production industry. It owns and operates a large manufacturing plant at Torrance, California, and operates approxi- mately 80 selling agencies or stores distributed throughout 18 States of the United States. The respondent, together with eight subsidiary corporations, is among the four largest enterprises of its kind in the United States. This proceeding is concerned only with employees of the Torrance plant. During 1937 the respondent purchased for use in production ap- proximately 6,000 tons of steel and steel scrap and approximately 50 tons of brass and copper. Between 20 and 25 per cent of these raw .materials were purchased outside of California. During that period the respondent manufactured at the Torrance plant approximately 7,000 tons of oil-drilling and production machinery, of which approxi- mately 70 per cent was transported from the plant to domestic oil fields outside of California and to oil fields in foreign countries. The respondent orally agreed at the hearing for the purposes of this pro- ceeding that the Board has jurisdiction of the subject matter. At the time of the occurrence of the unfair labor practices alleged in the complaint, as amended, the respondent was not in existence, and the Torrance plant was owned and operated by The National Supply Company, a Delaware corporation. Subsequently, as a re- sult of a statutory consolidation, the Delaware corporation ceased to exist and the respondent acquired all of its assets, including the Torrance plant.5 The respondent is subject to the same stock owner- 5 At the oral argument before the Board, counsel for the respondent described the con- solidation as follows : "This was a statutory consolidation . There were two companies , the National Supply Company of Delaware, which owned the Torrance plant , and some of the other plants, and Chalfont Company, and those two companies consolidated to form one company, the National Supply Company , which is a Pennsylvania corporation , and that company assumed all of the assets and liabilities of the constituent corporations , and there was no change whatsoever in management." 308 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ship and control as was the Delaware company, and has continued the business enterprise of the Delaware company. Since.the con- solidation there has been no substantial change in the interstate character of the business done at the plaint. H. THE ORGANIZATIONS • INVOLVED Amalgamated Association of Iron, Steel and Tin Workers of North America and Steel Workers Organizing Committee are labor organi- zations affiliated with the Committee for Industrial Organization.r, The Amalgamated admits to its membership employees of the respondent. Employees Association of Workers of The National Supply Com- pany is an unaffiliated labor organization admitting to its member- ship employees of the respondent.7 III. THE ALLEGED UNFAIR LABOR PRACTICES A. The responsibility of the respondent for acts of the predecessor Delaware corporation As above stated, the respondent was not in existence when the alleged unfair labor practices at the Torrance plant occurred. At that time the plant was owned and operated by the Delaware company of similar name. We already have found that the respondent is subject to substantially the same stock ownership and control as . was the Delaware company and,that the respondent has continued the busi- ness of the Delaware company. Under these circumstances, we find that any of the alleged unfair labor practices in which the Delaware corporation may have engaged with respect to employees of the Torrance plant are unfair labor practices for which the respondent is responsible s At the oral argument counsel for the respondent stated,in reply to a question asked him by the Board as to whether the respondent was responsible for any unfair labor practices engaged in by the Delaware company : "Oh, yes, I don't think there is any question about it." Now the Congress of Industrial Organizations. ' The Association was originally formed as an unincorporated association . In August 1937 it was chartered by the State of California as a non-profit corporation . Its certifi- cate of incorporation contains the following provision : "all members of the hitherto unincorporated association which this Corporation supplants , as set forth hereinabove, shall automatically become members of this Corporation." s See National Labor Relations Board v. Arthur J. Colten and Abe J. Colman , co-part- ners doing business as Kiddie Kover Manufacturing Company, 105 F. (2d) 179 (C. C. A. Gib). Cf. Federal Trade Commission v. Standard Education Society, et al., 302 U . S. 112. NATIONAL SUPPLY COMPANI 309 B. The alleged domination, interference, and support concerning the Plan and the Association During February 1937 employees at the Torrance plant prepared and circulated among themselves for signature certain petitions ad- dressed to the respondent requesting an increase in wages. At that time no labor organization existed at the plant. More than 300 of the 700 employees signed the petitions. The movement was entirely spon- taneous and manifested the desire of these workers for some means of collective action to advance their employee interests . In consequence, under the leadership of those employees who had been most active in the matter of the petitions , a simple plan of employee representation, herein called the Plan, was set up by the employees . Employees in each of the plant departments selected two "representatives," who in turn chose from their number an "executive committee" empowered to represent the employees in collective bargaining with the respondent, in the adjustment of employee grievances with it, and in other matters of employee concern. About March 1, 1937, the representatives adopted formal bylaws for the organization, and about the same time the plan executive committee successfully negotiated a wage increase for the hourly rated employees . Thereafter and continuing through April and May the Plan solicited members among the plant employees. Conferences were regularly held by the executive committee with the respondent at which employee grievances and other matters were con- sidered. Previously, in the latter part of March 1937, the Amalgamated be- gan a membership campaign among the respondent 's workers. Dur- ing the following months it enrolled a substantial number of these em- ployees. On June .12 the Amalgamated requested the respondent to recognize it as the representative of these persons for the presentation of grievances. The respondent acceded to this request. This was the first meeting of the Amalgamated with the respondent. Theretofore, on March 17, 1937, the respondent posted on its plant bulletin boards the following notice addressed to its employees : Under present circumstances we believe that our position must .be strictly neutral, and that the decision as to what group, if any, to join must be made by each individual employee , or group of employees, with the understanding that the company is willing to meet with such representative committees as any of our em- ployees may choose to have represent them. 310 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In April 1937, after the Supreme Court sustained the constitu- tionality of the Act," the respondent again posted notices, setting forth : You may remain in, join or refuse to join, any organization you desire, which rights of yours will be fully respected and pro- tected by the Company to the best of its ability. In June 1937 two members of the executive committee, of the Plan resigned. The third member, one Lloyd Babcock, and several other employees thereupon decided that the Plan should be abandoned and that in its place a strong unaffiliated union should be organized. These individuals were opposed to representation by the Amalga- mated which then had embarked upon a vigorous membership drive. No formal steps were taken to dissolve the Plan. Instead, Babcock and his associates proceeded to form their union. An organizational meeting for the respondent's employees was held on July 2, 1931: in a local American Legion hall. The Association thus had its genesis. Thereafter, an organizational committee, assisted by counsel, pre- pared bylaws for the Association, and these were adopted at subse- quent general membership meeting of the organization. All expenses incurred in the formation of the Association were borne by Babcock and his associates. The bylaws of the Association provide for a form of labor organ- ization in certain respects similar to the Plan : General authority over the affairs of the Association is vested in a "Board of Directors" com- posed of employee representatives elected annually by members of the Association from each of the plant departments. Membership is re-, stricted to the respondent's employees. There are, however, two im- portant differences between the organization of the Plan and that of the Association. The bylaws of the Association provide for monthly meetings of the general membership and for dues. Thus, administra- tion of the Association is subject to direct control by popular vote of the members, and financial resources are supplied by the member- shi p. io Following the organizational meeting of July 2, Babcock and the other persons interested in the Association conducted an aggressive membership campaign. Members of the old Plan who wished to join were required to sign membership cards of the Association. A board of directors was elected by the Association, and the board in turn elected the officers. Babcock was chosen president. On July 9, 1937, to set at rest rumors at the plant that the respond- ent had accorded, exclusive recognition to the Association, the re- 'National Labor Relations Board v. Jones eC Laughlin Steel Corporation, 301 U. S. 1, and companion cases. 10 Cf. Matter of Servel, Inc., and United Electrical Radio and Machine Workers of America, Local No. 1002, 11 N. L. R. B. 1295, 1313, 1314. NATIONAL SUPPLY COMPANY: 311 spondent posted notices further proclaiming its neutrality and stating : The'. management has met with committees selected by two organized groups within the plant, which committees have been recognized by the management as representing only the members of their own group. As previously ... the position of the company with respect to its employees either as groups or individuals, will continue to be strictly neutral. In the early part of July the Amalgamated filed with the Board a petition requesting the Board to investigate and certify the repre- sentative selected by the respondent's employees for the purposes of collective bargaining. On July 9 the Regional Director wrote to the respondent informing it of that fact. On July 15 the respondent, the Amalgamated, and the Association entered into an agreement for a consent election to be held among the plant employees to determine the employees' choice of a collective bargaining representative. The agreement provided that the Regional Director should conduct the election pursuant to the Act and the election procedure of the Board, that both the Association and the Amalgamated should appear on the ballot, that eligibility to vote should be limited to the employees paid on an hourly basis in certain enumerated departments who, in sub- stance, comprised the respondent's production and maintenance force, and that the respondent should recognize as the exclusive bargaining representative of such employees for a period of at least one year the labor organization receiving a majority of the votes cast in the elec- tion.11 Pursuant to the agreement an election was held on July 22, 1937. Of the 708 votes cast, the Association received 366. After the votes were counted a certificate was signed by the respondent, the Amalgamated, the Association, and the Board attesting to the fair conduct of the election. Following the election the Association was incorporated as a non-profit corporation under the laws of the State of California, and thereafter the Association entered into a contract with the respondent covering wages, hours of service, and other work- ing conditions of the plant employees. The contract accorded express recognition to the Association as the exclusive bargaining repre- sentative of all the respondent's hourly paid workmen. Upon the record before us we do not find that the respondent domi- nated or interfered with the formation or administration of either the Plan or the Association, or that it contributed support to either of these 11 At the time of the execution of the consent-election agreement, the Board had not been apprised of the unfair labor practice charges involved in this proceeding. Cf. Matter of Godchaux Sugars, Inc. and Sugar Mill T-Vorker.s' Union, Locals No. 21177, and No. 2188 affiliated with the American Federation of Labor. 12 N. L. R. B. 568. 247383-40-vol. 16-21 312• DECISIONS OF NATIONAL LABOR' RELATIONS BOARD organizations. As stated above, the origin of the Plan was dissociated from any action of the respondent, and there is no substantial evidence that employees active in its affairs were identified with the manage- ment.12 Certain witnesses for the Amalgamated testified that super- visory employees at the plant made statements to employees favoring an "inside" organization and opposing the Amalgamated. The making of these statements was specifically denied by other witnesses. We are not convinced that such statements were made. As we have found, the respondent repeatedly took steps to declare its neutrality. The record also shows that in consonance with this policy the respondent's foremen were instructed to keep strictly aloof from the union rivalry. The president of the Amalgamated in testifying regarding a conference had with the respondent's vice president vaguely referred to reports that had reached him of favoritism expressed by foremen toward the Asso- ciation. He admitted, however, that the respondent's vice president, when told of this alleged favoritism, invited the Amalgamated to report any specific instance of such conduct by the foremen. There is no evidence that the Amalgamated thereafter made such a report. In Matter of Wisconsin Telephone Company and Telephone Oper- ators Union, Local 175-A, International Brotherhood of Electrical Workers, 12 N. L. R. B. 375, the Board considered whether the forma- tion of an independent union in that case was in violation of the Act. In concluding that the union was free of company domination, the Board used language which is apposite to the formation of the Asso- ciation., A substantial number of the respondent's employees proceeded with the organization of the Independent at a mass meeting free from the respondent's participation and without restriction in the exercise of their freedom of choice. In addition, the respondent refrained from interfering in the membership campaign of the Independent and affirmatively proclaimed its neutrality. The record shows that various employee adherents of the Plan, of the Association, and of the Amalgamated were permitted by the respondent to and did engage freely in organizational activities at 12 In making this finding we have not overlooked the role of Lloyd Babcock in the affairs of the Plan and of the Association . Babcock is a draftsman and engineer . His desk is in the office of the maintenance superintendent . He is among five employees receiving the highest hourly wage rates paid by the respondent. Babcock significantly refused to sign the petition for a wage increase . However, he early became very active in the affairs of the Plan . He was a member of the executive committee and drafted the Plan bylaws. Thereafter, as stated above, be was the leading spirit in the formation and affairs of the Association . While Babcock is not a supervisory employee , his interests and problems as an employee differ substantially from those of the ordinary production and maintenance) workmen at the plant . All these circumstances tend to cast doubt upon the singleness of Babcock 's devotion to the interests of the persons be has represented, and upon his freedom from employer suggestion and control . However, we cannot say that these circumstances, in the absence of other proof, show that Babcock's activities in connection with the Plan and the Association were at the instance of the respondent. NATIONAL SUPPLY COMPANY 313 the plant during working hours. We do not have before us the situ- ation where a single labor organization is granted or permitted em- ployer facilities,'3 nor does this case present a situation where an employer unequally grants such facilities to several competing labor organizations.''' In Matter of Aeolian-American Corporation and Amalgamated Piano Workers of America,', the respondent permitted rival labor organizations to organize on its time and property, but the Board held that under the circumstances there present the respondent did not engage in unfair labor practices, within the meaning of Section 8 (2) of the Act.. The Decision in that case stated : The fact that the respondent permitted solicitation of member- ship by the Independent on company time would of course be strong proof of domination and interference with that organi- zation, if t:he Amalgamated had been denied similar privileges. However, since members and adherents of the Amalgamated were treated equally and afforded full opportunities in this regard, we cannot say that sponsorship and support of the Independent are shown, within the meaning of the Act. In Matter of Godchaux Sugars, Inc. and Sugar Mill Workers' Union, Locals 2.11%'7 and No. 2188, of liated with the American Federation, of Labor," the applicable principle was stated thus : We have held that a grant by an employer under certain cir- cumstances of its time and property to a labor organization for organizational purposes constituted a violation of the Act. The question in all cases, however, is whether by such grant the em- ployer has interfered with self-organization or collective bar- gaining. We find that the respondent has not dominated or interfered with the formation or administration of the Plan or of the Association. or contributed financial or other support to either of said organiza- tions. C. The allegedly discriminatory discharge of Vaughn Joseph Vaughn was employed in the respondent's foundry at a machine called the "sand mill."" On September 3, 1937, Vaughn 1..Matter of Servel, Inc. and United Electrical, Radio and. Machine Workers of America, Local No. 1002, 11 N. L . R. B. 1295, 1316. 14 Cf. Matter of Swift <C Company, a Corporation and Amalgamated. Heat Cutters and Butcher Workmen of North America, Local No . 641, and United Packing House Workers Local Industrial Union No. 300, 7 N. L. It. B, 269; the order of the Board was enforced. as modified, in Swift 1C Company v. National Labor Relations Board, 106 F. (2d) 87 reheariug denied August 4. 1939. 11 8 N. L. R. B. 1043. ie 12 N. L. R. B. 568. "An electrically driven machine which mixes sand with other substances. The ro$ultin: mixture is used by the core-makers in the fonnu1rv. 314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD was laid off, allegedly. for lack of work. Another employee, Hor- lacher, a core-maker, replaced Vaughn at the sand mill. The record shows that August and September 1937 were months of declining employment in the foundry. Vaughn was the eleventh man laid off in that department after July 1, 1937. The foreman of the foundry testified that the choice for lay-off was between Hor- lacher and Vaughn and that he retained Horlacher in preference to Vaughn because he did not want to risk losing a core-maker. Ap- parently workers of Vaughn's qualifications could be procured without difficulty. Although a member of the Amalgamated, Vaughn was never active in its, affairs. The record shows that in the early part of 1937 the same foreman discharged another employee in order to make work available for Vaughn. We are satisfied, and find, that the respondent did not lay off Vaughn because of his union membership or activities. Accord- ingly, we find that the respondent engaged in no unfair labor prac- 'ices with respect to Vaughn, as alleged in the complaint, as amended. On 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. The operation of the business of the respondent constitutes a continuous flow of trade, traffic, and commerce among the several States and between the several States and foreign countries, within the meaning of Section 2 (6) of the Act. 2. Amalgamated Association of Iron, Steel and Tin Workers of North America, Steel Workers Organizing Committee, and Em- ployees Association of Workers of The National Supply Company are labor organizations, within the meaning of Section 2 (5) of the Act. 3. The respondent and The National Supply Company, a Dela- ware corporation,1s have not dominated or interfered with the for- mation or administration of, or contributed financial or other support. to, the Plan or to Employees Association of Workers of The National Supply Company, within the meaning of Section 8 (2) of the Act, as alleged in the complaint, as amended. 4. The respondent and The National Supply Company, a Delaware corporation, have not discriminated in regard to the hire or tenure of employment, or any term or condition of employment, of Joseph Vaughn, Joseph Cox, or Norman Tatro, within the meaning of Sec- tion 8 (3) of the Act, as alleged in the complaint, as amended. 18 See discussion in Section III A, supra. NATIONAL SUPPLY COMPANY 315 5. The respondent and The National Supply Company, a Delaware corporation, have not engaged in unfair labor practices, within the meaning of Section 8 (1) of the Act, as alleged in the complaint, as amended. 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 complaint, as amended, against the respondent, The National Supply Company, Los Angeles, California, be, and it hereby is, dismissed.