P. Lorillard Co.

In the Matter of P. LORILLARD COMPANY, LOUISVILLE, KENTUCKY and LOCAL UNION No. 201, TOBACCO WORKERS' INTERNATIONAL UNION Case No. C-851.-Decided October 27, 1939 Tobacco Industry-Interference, Restraint, and Coercion: threatening state- ments by supervisors to union committee-Unit Appropriate for Collective Bargaining : production employees excluding employees with authority to hire and discharge, timekeepers , engineers, journeymen machinists, machinists' helpers, and machinists apprentices-Represeintatives: proof of choice : elec- tion held under Board auspices-Collective Bargaining : company's delaying tactics, failure to be open to persuasion and refusal to make available in Louisville representatives authorized to bargain, insisting that negotiations be carried on in New York City ; company ordered to bargain in Louisville, Kentucky. Mrs. Mary Tellter Iliff and Mr. William S. Gordon, for the Board. Mr. Charles W. Milner, of Louisville, Ky., for the respondent. Miss Carol Agger, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges and supplemental charges duly filed by Local Union No. 201, Tobacco Workers' International Union, herein called the Union, the National Labor Relations Board, herein called the Board, by the Regional Director for the Ninth Region (Cincinnati, Ohio), issued its complaint dated April 11, 1938, against P. Lorillard Com- pany, herein called the respondent, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1) and (5) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the complaint, accompanied by notice of hearing, were duly served upon the respondent and the Union. The complaint, as amended at the hearing by a motion to conform the pleadings to the proof in respect to minor details, alleged in substance, so far as here material , that since April 1, 1937, the 16 N. L. R. B., No. 70. 703 704 DECISIONS OF NATIONAL LABOR RELATIONS BOARD respondent had discouraged membership in the Union by discharg- ing, laying off, and otherwise discriminating against the members of the Union, by making derogatory remarks concerning the Union, by threatening to move the Louisville plant if its employees continued their membership in the Union, and by other means well known to the respondent; that the production 1 employees, exclusive of those who have authority to hire and discharge, employed in the respond- ent's Louisville plant constituted an appropriate bargaining unit; that the Union represented a majority of the employees in this unit on July 14, 1937, and at all times thereafter, such representation having been duly proved at an election conducted by the Regional Director on that day ; that the respondent, although requested to. do so, has refused to meet with representatives of the Union in Louis- ville, Kentucky, for the purpose of bargaining collectively with the Union, and has insisted that any meetings should take place in New York City; that on or about August 2, 1937, a union committee went to New York and conferred with the respondent's executives; that at that time the respondent refused to bargain with the Union; and that since the conference held in New York the respondent has in- sisted that any further negotiations be carried on in New York City, knowing that the Union could not and would not bargain in New York City because of the expense, delay, inconvenience, and inappropriateness of such procedure and did thereby refuse to bargain collectively. The respondent filed an answer to the complaint, dated April 15, 1938, denying the allegations with regard to the unfair labor prac- tices, stating affirmatively that the respondent had negotiated in good faith with the Union for the purpose of reaching an agreement which was mutually satisfactory, and setting forth the events occur- ring during the negotiations between the respondent and the Union, more fully described, below. Pursuant to notice, a hearing was held at Louisville, Kentucky, on April 21, 1938, before James L. Fort, the Trial Examiner duly designated by the Board. The Board and the respondent were repre- sented by counsel and participated in the hearing. Full opportunity to be heard, to examine and cross-examine witnesses, and to intro- duce evidence bearing upon the issues was afforded all parties. Dur- ing the hearing, the Trial Examiner made several rulings on motions and on objections to the admission of evidence. At the close of the case the Trial Examiner granted the Board's motion to conform the pleadings to the proof without objection. The Board has reviewed 1 The complaint speaks of "production employees." However, it appears that mainte- nance employees were also intended to be included since Samuel Evans, the union repre- sentative, testified that the appropriate unit included all workers in the plant and that he knew of no other union which claimed to have members in the plant. P. LORILLARD COMPANY 705 the rulings of the Trial Examiner and finds that no prejudicial errors were committed. The rulings are hereby affirmed. On May 23, 1938, the respondent filed a brief which included a motion to dismiss the complaint. On August 9, 1938, the Trial Ex- aminer filed his Intermediate Report in which he found that the respondent. had interfered with, restrained, and coerced its employees in the free choice of their representatives for the purposes of collec- tive bargaining; that the production workers exclusive of those with authority to hire and discharge constituted an appropriate unit for the purposes of collective bargaining; that'the Union had been desig- nated as the bargaining representative by a majority of the employees in the appropriate unit; and that the respondent had refused to bargain collectively with the Union. The Trial Examiner recom- mended in his Intermediate Report that the respondent cease and desist from interfering with, restraining, and coercing its employees in the free choice of their representatives; and that the respondent, upon request, bargain collectively with the Union in Louisville, Ken- tucky. The Trial Examiner further stated in the Intermediate Report that oral argument before the Board upon exceptions to the Report or upon other issues should be requested of the Board within 10 days. No requests for oral argument have been received. On August 29, 1938, the respondent filed its exceptions to the Inter- mediate Report. The Board has considered these exceptions and, except in so far as they are consistent with the findings, conclusions, and order set forth below, finds that they are without merit. On May 16, 1938, after the close of the hearing, the International Association of Machinists, affiliated with the American Federation of Labor, moved to intervene in the proceedings, claiming jurisdic- tion over the employees engaged in machine-repair work and alleging that some of the employees were members of Lodge 681 of that organization. On June 21, 1938, the Board denied the motion. On August 17, 1938, the International Association of Machinists peti- tioned for leave to file exceptions to the Intermediate Report. On September 2, 1938, the Board denied the petition. On June 16, 1939, the Union, in a letter to the Regional Director waived all rights to represent the journeymen machinists, the machinists' helpers, and machinists' apprentices for the purposes of collective bargaining. On September 8, 1939, the respondent consented to the inclusion of this communication in the record of the case and agreed that the Board might consider the Union's letter in its determination of the appro- priate unit without further hearing and waived any objection to the Board's so considering the letter. The Union's letter and the respondent's waiver and consent are hereby incorporated in and made a part of the record in this case. Since the Union has waived its jurisdictional claim over those employees claimed by the Interna- 706 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tional Association of Machinists, no question of prejudice to the Inter- national Association of Machinists arises by reason of the denials of leave to intervene at the various stages of the proceedings. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT The respondent is a corporation organized under the laws of the State of New Jersey in 1911, having its principal office and place of business in New York City. It operates plants in Connecticut, New Jersey, Pennsylvania, Virginia, Kentucky, Ohio, and Wiscon- sin, and is engaged in the processing, manufacture, and sale of tobacco. The plant in Louisville, Kentucky, which is the only one here involved, is a redrying and stemming plant for the handling of leaf tobacco. During the year 1937, the respondent caused 12,- 112,210 pounds of leaf tobacco, over 60 per cent of the total leaf tobacco used in the plant and representing a value of $2,422,422, to be shipped to the Louisville plant from points outside the State of Kentucky. The respondent ships from the Louisville plant leaf tobacco which has been stemmed, tobacco stems, and tobacco dust. During the year 1937, the respondent shipped 22,783,961 pounds of its finished products from the Louisville plant, of which 18,629,140 pounds, rep- resenting. a value of approximately $3,725,828, were shipped to points outside the State of Kentucky. A large proportion of the finished products of the plant is shipped by the respondent to the States of Ohio and New, Jersey, 60 per cent of the total being sent to the respondent's plant in Middletown, Ohio. II. THE ORGANIZATION INVOLVED Local Union No. 201, Tobacco Workers' International Union, is a labor organization affiliated with the American Federation of Labor, admitting to its membership all production employees in the respondent's Louisville plant except those with authority to hire and discharge. III. THE UNFAIR LABOR PRACTICES A. Interference, restraint, and coercion On March 23,'1937, the Union's grievance committee, composed of employees, spoke to Logsdon, the foreman of the "hot department," concerning the grievances of some women employees who contended that they were being required to work continuously in a section. of the plant in which' the temperature was very high, rather than being P. LORILLARD COMPANY 707 rotated in and out of the section in accordance with the customary practice theretofore followed. About 3 weeks later, when the situa- tion had not been improved, the grievance committee again met with Logsdon. Peek, the assistant manager of the plant, was also present and told the members of the committee that, "If you fellows care anything about your jobs, you'd better get back out there and not come in here anymore." One of the members of the committee pointed out that they were there in behalf of the women employees. -A member of the grievance committee testified that Logsdon replied, -"I can answer that-if those girls don't like anywhere I put them, they can get out. And furthermore, if any more complaints come in here, I'll put them out and put colored women in their places." Peek then added, "And you men also," and said that the meeting was over. Neither Logsdon nor Peek testified. We find that Logsdon and Peek made the coercive and intimidatory statements attributed to them. At the hearing the respondent made no objection to the introduc- tion of the testimony concerning the above incident. In its excep- tions to the Intermediate Report, however, the respondent excepts to the Trial Examiner's findings based upon this testimony. The respondent contends that the statements do not relate to joining or not joining the Union, but were entirely concerned with the rotation of women employees; that no basis for the introduction of the evi- dence. ;was laid in the complaint; that the respondent was not ap- prised in any way that such an incident would be brought forward; and that the incident was abandoned as the foundation of a finding of a violation of the Act by a letter to it from one of the Board's counsel. The complaint alleged, inter cilia, that the respondent, since April 1937, by making derogatory remarks about the Union, by threatening to move the Louisville plant, and by "sundry and diverse [sic] other means well known to respondent" had discour- aged its employees from becoming members of the Union and,. had intimidated and coerced its employees in the exercise of their rights to choose the Union as their representative for purposes of collective bargaining. Throughout A he incident in. question,. the members of the grievance committee were acting as union members on union business. Whether or not the women employees were union mem- bers does not appear, nor do we consider their affiliation important, since the Union properly may be interested ' in 'the working condi- tions of all the employees in the plant. The threats to discharge both the women employees and the union committee if le itimiite union activity continued, constituted an attempt to discourage mem- bership in and activity in behalf of the Union and to interfere with, intimidate, and coerce the respondent's employees. The complaint alleges that such practices were engaged. in since April 1937, and 708 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the incident in question took place 3 weeks after March 23, 1937. If the respondent felt that the allegation did not give it sufficient notice of the particular incident, it could have moved for a bill of particulars before the hearing began; it could have made an ob- jection to the introduction of the testimony; it could have requested an adjournment in order that it might meet the testimony if an adjournment were necessary. The respondent did none of these things. The letter 2 from the Board's counsel will not bear the interpre- tation that the respondent seeks to place upon it, since it merely states that the principal issue in the case is whether or not the respondent bargained in good faith. We find that by intimidating and threatening its employees with discharge for engaging in union activities 3 the respondent has in- terfered with, restrained, and coerced its employees in the exercise of their right to self-organization, to form, join, or assist labor. organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities, for the purposes of collective bargaining or other mutual aid or protection. B. The refusal to bargain collectively (1) The appropriate unit The -complaint. alleged that the production employees, exclusive of those who have authority to hire and discharge, who are employed in the Louisville plant, constitute an appropriate bargaining unit. At the hearing Samuel Evans, a representative of the Tobacco Workers' International, testified that the appropriate unit consisted of all the workers in the plant and that he knew of no other union which had members in the plant. The term "-production employees" was 'clearly intended to mean "factory employees," as opposed to clerical employees, and to include maintenance employees.4 2 Exhibit attached to the respondent 's Exceptions to the Intermediate Report. 8 The respondent further contends that It did not at that time have notice of a Union in the plant. The record is not clear that the supervisory officials In question knew that the committee was a committee of the Union . However, it is clear that a committee repre- senting employees which met twice with management representatives was engaging in concerted activities within the meaning of the Act and that the respondent 's threats were directed against these activities in violation of the Act. It is immaterial whether or not the respondent knew that the grievance committee was representing a particular labor organization. 4 The', respondent's proposed contract ,, discussed below , excluded from the group of em- ployees subject to a union contract , "Superintendent , Plant Manager, Assistant Managers, Foremen , Assistant Foremen, Timekeepers , Engineers, Clerical Force and salaried employees in a supervisory position." The Union agreed to this proposal . This indicates that main- tenance workers were intended to be included in the bargaining unit. Evans also testified that : "In the American Federation of Labor set -up, organizations may take in all members in a plant unless a requisition by the International Union is received, designating another organization, and In this case no requisition has been re- ceived on our part, so I would say It [all the workers in the plant ] Is an appropriate unit." P. LORILLARD COMPANY 709 During the negotiations with the respondent, the Union, upon the respondent's insistence, relinquished its claim to bargain in behalf of timekeepers and engineers. No evidence was introduced to show the, duties and working conditions of the timekeepers and engineers and it is not clear from the record whether the Union desires their inclusion or exclusion from the bargaining unit. Since, from their titles, these employees would appear to be engaged in clerical and technical work rather than in manual work in the factory, we shall exclude them from the unit. We find that on August 2, 1937, and at all times thereafter through the time of the hearing herein, all the production employees, exclud- ing employees with authority to hire and discharge, timekeepers, and engineers, constituted a unit appropriate for the purposes of col- lective bargaining, and that said unit would have insured to em- ployees of the respondent the full benefit of their right to self-organ- ization and collective bargaining and otherwise effectuated the policies of the Act. We have stated above that the Union now waives its claim to represent the journeymen machinists, machinists' helpers, and ma- chinists' apprentices for the purposes of collective bargaining, and that the respondent has consented to the inclusion of the Union's waiver in -the record and has agreed that the Board may consider the waiver in its determination of the appropriate unit. Since the Union no longer desires to represent these classes of employees, we find that in the future all the production employees of the respondent at the Louisville plant, excluding employees with authority to hire and discharge, timekeepers, engineers, journeymen machinists, ma- chinists' helpers, and machinists' apprentices, will constitute a unit appropriate for the purpose of collective bargaining and that said unit' w`ill.`insure to employees of the respondent the full benefit of their right to self-organization and collective bargaining and other- wise effectuate the policies of the Act.5 (2) Representation by the Union of the majority in the appropriate unit On July 14, 1937, an election was held among the respondent's employees under the auspices of the Regional Director. Of the 722 employees eligible to vote in the election, 693 voted and of these, 660 indicated their desire to be represented by the Union. We find that on July 14, 1937, and at all times thereafter, the Union was the duly designated representative of the majority of the 6 The Union's waiver of its right to represent these employees does not affect our finding below that the Union represents a majority of the employees in an appropriate unit since according to the motion for leave to intervene filed by International Association of Machin- ists, only 15 or 20 men are engaged in work over which it claims jurisdiction. 710 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees in an appropriate unit, and, pursuant to Section 9 (a) of the Act, was the exclusive representative of all the employees in such a 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 1. Chronology On July 23, 1937, after the respondent had been notified by the Regional Director as to the results of the election mentioned above, the Union wrote to the respondent at its New York City office request- ing a meeting with representatives of the respondent who would have authority to negotiate an agreement. On July 26, 1937, the respond- ent's vice president, who was stationed at its New York City office, re-. plied that respondent would meet with representatives of the Union in the respondent's New York office on August 2, 1937. A union com- mittee traveled to New York, a distance of over 900 miles, and on August 2 presented a proposed contract to the respondent's two executives e who had been designated by it to deal with the Union. These executives told the committee that they would require some time in which to examine the proposed contract and a meeting was arranged for the following afternoon. When the union committee returned at that time, the respondent's executives stated that the pro-. posed contract was too cumbersome and contained provisions which the respondent could not countenance; that the respondent felt that it would be better not to enter into any contract while the Wages and Hours Bill was pending in the Congress; and that in the mean- time the respondent would like to see copies of the contracts entered into between the Tobacco Workers' International Union and the re- spondent's competitors in Louisville, the Axton-Fisher Company and the Brown and Williamson Company.. The union committee asked for a counterproposal, but the respondent refused to make a counter- proposal, purportedly because of the pending Wages and Hours Bill. The respondent's executives also stated that a proposed tax increase made them hesitate to tender a counterproposal. The committee informed the respondent that they had no copies of the competitors' contracts with them. On August 4, 1937, a third conference was held. The union com- mittee pointed out that the passage of the Wages and Hours Bill should not affect the question of entering into a contract, since the provisions of the Bill, if passed, would be effective irrespective of the provisions of the contract. At this meeting, the union committee o The executives were G. D. Whitefeld and Todd wool, the respondent' s vice president and secretary, respectively.. P. LORILLARD CONIPANY 711 a..gain asked for a counterproposal and the respondent's executives replied that they "did not have to submit a counter-proposal" and would not submit one until final action was taken upon the Wages and Hours Bill and until copies of the competitors' contracts were submitted to them. Since the respondent's executives had indicated that they would go no further in the matter, and since its own ex- penses were mounting, the union committee decided to return to Louisville. The cost of the trip to the Union amounted to between $160 and $180. Before leaving New York, it requested that the respond- ent send to Louisville officials authorized to negotiate with the Union,' and on September 20, 1937, it renewed the request by letter and, alternatively, suggested that the Louisville plant manager, A. H. Shinkle, be authorized to carry on bargaining since the Union could not bear the expense of sending a committee to New York City again. In its letter the Union also suggested that since the Wages and Hours legislation was no longer of "immediate concern," negotia-, tions be resumed. The respondent's executives replied, to the oral request, that they could not establish the precedent of sending execu- tives to the various plants for this purpose and suggested that negotiations be carried on by correspondence. To the Union's writ- ten renewal of its request, the respondent, on September 21, 1937, re- plied by letter that Shinkle could not be authorized to bargain with. the Union; since "labor arrangements ," because of their effect upon the business as a whole, had to be handled by the respondent's execu- tives; that if the respondent sent its executives to its several plants to bargain, the executives would have no time in which to do any- thing else; that the vice president of Tobacco Workers' International Union was often in New York and that he could, therefore, negotiate. with the respondent, there; and that the respondent was working on a counterproposal and that possibly, if the Union gave the respond- ent the information it desired concerning competitors' contracts, a. contract might be negotiated by mail. On September 27, 1937, the Union wrote to the respondent stating that negotiation by mail was. not collective bargaining within the meaning of the Act but that the Union would consider the counterproposal when it was forthcoming and stating that, "Inasmuch as our committee visited your New York offices in a vain effort (which from our point of view should have been wholly successful) to negotiate an agreement with your company, and our subsequent attempts to bring about another meet- ing through the good offices of the National Labor Relations Board, 7 On August 6, 1937, the Regional Director wrote the respondent that one of the union officials had called at his office for the purpose of filing charges because of the respondent's insistence on postponing bargaining until the disposition of the Wages and Hours legisla- tion. However, it does not appear that charges were filed at that time nor was any formal action taken by the Board. 247383-40-vol. 16--46 712 DECISIONS OF NATIONAL LABOR RELATIONS BOARD as well as correspondence with you, we cannot but believe that we have done everything in our power to promote bargaining between us. At the same time, however, we must point out the fact that at no time has our Local Union received an unsolicited communication from your company, which does not demonstrate a like desire upon its part to promote collective bargaining." The Union further stated that the International vice president was not familiar with local problems and could not serve as a substitute for a local committee and that if the Union gave the respondent copies of its competitors' contracts it would be taking an unprecedented action and would be acting in bad faith toward the competitors in disclosing such information. On September 30, 1937, the respondent submitted to the Union a counterproposal in the form of a proposed contract and wrote a letter expressing regret that the Union would.not give it the required information regarding its competitors and asking, "Can the reason of your refusal be that you are asking of us rates higher than those which obtain in your contracts with our competitors?" Upon re- ceiving the counterproposal, the Union wrote to the respondent stating that the respondent's proposed contract was so "unilateral" as to be incompatible with a spirit of "cooperativeness." On October 15, 1937, the Union again wrote to the respondent, saying that it was aware of the danger of creating a disparity between wage levels in the respondent's plant and in -those, of its competitors. and ! ad- vising the respondent that minimum rates of 40 cents and 50 cents an hour for women and men, respectively, were paid by the Axton- Fisher and Brown and Williamson companies. The Union at this time also submitted its second proposed contract, which contained several suggestions which had been made by the respondent including a provision that the respondent was free to move its, plant, away,froin, Louisville if it so desired. On October 19, 1937, the Union, in an attempt to comply with the respondent's request for copies of com- petitors' contracts, sent the respondent a copy of the contract which Philip Morris & Company Ltd. had entered into with another local of the International Union and pointed out that the agreement was quite similar to the first proposed union contract and that the wage rates provided therein would not place the respondent at a competi- tive disadvantage. On October 22, 1937, the respondent returned a second counter- proposal,which, among other. things,. provided for no union,,partici-. pation in the adjustment of grievances, in the limited field in which it was allowed, until the aggrieved employee had successively taken up the matter with the foreman, the superintendent, and the plant P. LORILLARD COMPANY 713 manager. The respondent explained to the Union the reasons for some of the provisions incorporated therein. In its letter the respondent stated : We-are retaining-our. provisions as to adjustment of disputes. ... Your provisions provide for adjustment through a shop steward or his representative, and bring into such adjustment all cases where an employee deems he has been "unjustly dealt with" or laid off or discharged "without good cause." Where there is a claim that the terms of the contract are not being prop- erly construed or applied, or that an employee has been dis- charged, laid off or discriminated against because of union membership or activities, there arise questions for such adjust- ment; but beyond that it is a matter for the discretion of the management of the Company. In this letter the respondent also informed the Union that the re- spondent had inserted in its second counterproposal the union's "provision as to scales and as to preparing and cleaning machines, which conforms to the practice we employ in the plant." On October 29, 1937, the Union replied to the respondent's second counterproposal. The Union urged that since the application of the provisions of the agreement would affect all members of the Union equally, such questions should, therefore, be cared for by the Union through its elected representatives. The Union also gave the respondent certain wage data which had been requested by it, on stemming operations in the plants of the Axton-Fisher Company and Brown and Williamson Company. The Union also forwarded its third proposal which adopted a number of the terms found in the respondent's second counterproposal. Section 8 of the Union's third proposal provided, inter alia, that : . The' right of the Company in its sole discretion-for economic reasons-to diminish operations, in whole or in part, or to re- move the plant or any part thereof, to another location, as the circumstances may require, is expressly recognized. In its reply to this of November 8, 1937, the respondent observed the addition of the words "for economic reasons" and stated that the addition "limits our rights" to diminish operations or move, and that it was an "ambiguous phrase which undoubtedly qualified the powers of the management....." , With respect to the Union's argu- ment.concerning'its-interest in any application of the agreement, the respondent commented, "we see no necessity of the Grievance Com- mittee coming into the matter in the initial stages because in our opinion this only tends to magnify complaints as to matters which 714 DECISIONS OF NATIONAL LABOR RELATIONS BOARD can usually be readily adjusted between the employees and the man- agement." The respondent also wrote that : Your Section 19 again provides for a Shop Steward. Our draft provides for a Grievance Committee to represent em- ployees under the conditions therein set forth and that would seem ample and as far as we can go. The respondent in commenting on the wage data on the stemming operations in the Axton-Fisher and Brown and Williamson factories, which had been supplied by the Union at the respondent's request, said that those plants were "cigarette factories and not comparable to our plant in Louisville which is simply a leaf department." On November 12, 1937, the Union complained to the respondent that it was negotiating without bargaining and informed the re- spondent that the employees were discontented. On November 18, 1937, the respondent denied that it was negotiating without bargain- ing and contended that the difficulty was over wages and the, re- spondent's unwillingness "to afford the union control to an important extent of what seems to us are properly our duties and responsi- bilities." On November 26, 1937, the Union wrote the respondent, inter alia, as follows: . .. after careful study of the various steps that have been taken in negotiation , we have been forced to conclude that you view the process of negotiation as the rigid maintenance of the position of one negotiator until the wishes and beliefs of the other negotiator have been dissipated through unilateral sacri- fice . . . with agreement reached at the first extreme. Obvi- ously this method cannot lead to agreement . . . The Union then went on to state that the respondent had conceded only two minor points, both of which were in conformity with cur- rent practice in the plant, whereas the Union had conceded many points . The Union also argued that the respondent's "offer to in- exorably maintain existing conditions of employment, regardless of the distaste which the Union has for them, cannot be considered bargaining upon the part of the employer." On December 8, 1937, the respondent answered the Union's letter and urged that the full terms of the Union's agreements with the respondent's competitors be disclosed to the respondent , the dis- closures on wages having already been made. The respondent also emphasized the necessity of the "Company in any agreement made retaining control of the factory operations." On December 15, 1937, the Union replied that the respondent was denying recognition to the Union and reminded the respondent that copies of the agree- P. LORILLARD COMPANY 715 ments with some of its competitors had been furnished and that the provisions in the contract with the Philip Morris Company were more restrictive to the employer than those incorporated in the union proposal to the respondent. The respondent did not reply to this letter. On January 10, 1938, the respondent wrote : As we have previously stated, we have in Louisville only a leaf departiiient 'and 'there' conduct merely a stemming opera- tion, some by hand and some by machine. This operation is altogether different and can in no way be compared with work done and the pay received by employees in cigarette factories such as you refer to. On January 13, 1938, the Union commented that it was at a "loss to distinguish between the process of stemming tobacco in a depart- ment of a plant in which cigarettes are manufactured, and stemming tobaccos in a plant where no cigarettes are manufactured." The record does not disclose any point of difference. The Union also stated that working conditions in the plant had become worse. The respondent replied on January 25, 1938, saying that it could not believe that the Union was correct in its statement that the working conditions in the plant had become worse and asking in what re- spects this was true. The respondent also explained that the Philip Morris agreement did not meet with its approval, for a "number of reasons-among them being : Par. 4, covering the arbitration clause, is too broad, as it covers any question where an employee thinks he has been unjustly dealt with, and such a clause should be limited to where an employee has been discriminated against by reason of union activities. Par. 5, requires the company to show cause when- ever it discharges an employee . . . and thus invades or interferes with the right of the management to conduct the operations in ac- cordance with what it believes to be efficient. It seems to confine discharges to those which you approve." On January 28, 1938, the Union answered the respondent's letter informing it of some of the working conditions in the plant and stating that the respondent's "dislike for the democratic principles of Par. 4, of the Philip Morris agreement" was an example of the re- spondent's lack of good faith in the bargaining process; that a will- ingness to incorporate in an agreement "only that part of the neces- sary machinery of grievance adjustment pertaining to charges of discrimination because of union activities-a function much more efficiently handled by the established agency of the Federal Govern- ment-cannot be described as good faith" ; and that the only interpre- tation which could be put upon the respondent's refusal to allow grievances to be handled, on other than an individual basis was that it was unwilling "to recognize the union, or its interest or responsi- 716 DECISIONS OF NATIONAL LABOR RELATIONS BOARD bility in such matters to its individual members." The Union then requested the respondent's executives in charge of collective bargain- ing to go to Louisville and attempt to reach an understanding with the Union. On February 16, 1938, the respondent wrote the Union in part as follows : You speak of the dressing rooms as frigid, of the water as ice, of the pace of the machines as heart-breaking, of the atmos- phere as penal, you wonder if we expect employees "to emulate the fortuitous and inarticulate performance of machines" with their silence and impassivity, which you would have us infer are in inferior condition and reduce our employees to "an animal of the lower order." Do you really think this method of correspondence is further- ing the negotiations? We always have-and always will, h4ndle'our 'employeees as in- dividuals, on an individual basis. What you wish is, not that we thus handle them, but that we recognize the Union as their representative in such handling-no matter what the question in- volved . . . the agreement we have tendered recognizes that the Union is their representative in all cases where we are charged with the violation of the terms of the agreement or of having discriminated for or against any employee by reason of his being, or not being, a member of the Union. Beyond that the employees' time and service are ours, and we must retain con- trol, or else we will abandon control of the business for which we are responsible. [Italics supplied.] In speaking of the Union's claim of the right to question the propriety of discharges for alleged inefficiency, the respondent con- tinues : If we agree to that, how long would we have any real control over our employees? They would always feel that they were beholden primarily to the Union, not to us, and so would be at their mercy, except as the Union might see fit to rule otherwise. [Italics supplied.] The Union, on February 21, 1938, suggested that the respondent reconsider its intention of bargaining with the members of the Union only upon an individual basis: The -respondent wrote to inquire where the Union had received that impression of the respondent's intention. On March 7, 1938, the Union explained its impression thus: We have pointed out from time to time , that the process of handling complaints is part and parcel of Collective Bargaining. P. LORILLARD COMPANY 717 Why? What is a complaint? It is dissatisfaction upon the part of one or more employees with certain working conditions ... [Such matters are handled under the Act] by a process of col- lective bargaining, which does not signify individual action, but collective action. How, therefore, do you justify your statement of individual action only, with the principle of Collective Bar- gaining? The Union then indicated that the matter would be laid before the Board. On March 10, 1938, the respondent protested that it had been bar- gaining in good faith and denying that its, position on grievances constituted a refusal to bargain. On April 1, 1938, the Union wrote its final letter pointing out that the Union had accepted some pro- visions which were distasteful to it but that the respondent had made no concessions and expressing regret that the respondent was unwill- ing to bargain. Thereafter, the matter was referred to the Board. 2. Conclusions The trip of the union committee to New York City in August 1937 was the first attempt made by the Union to bargain after the Union's majority had been established by means of an election. As we have stated above, the respondent, at the New York meetings, informed the union committee that it preferred not to enter into any contract while the Wages and Hours Bill was pending, refused to make a counterproposal because of the fact that the Wages and Hours Bill was then pending, requested copies of competitors' agreements, and refused to make available at Louisville agents authorized to conduct bargaining. We are of the opinion that the respondent was not justified in refusing to enter into any contract or make a counter- proposal because of the pending legislation.9 Clearly, any contract would have been governed by legislation which was passed and any counterproposal could have been made subject to any changes later required by such legislation. The objections raised by the respondent to the continuation of negotiations, after it allowed the committee to travel to New York City, are subject to only one inference, that they were raised for the purpose of delaying negotiations, and we so find. Had the respondent felt that it was genuinely in a position of such 9 The fulfillment of the respondent 's request for copies of competitors ' contracts does not appear to have been considered of primary importance by the respondent, its major objec- tion to going forward with negotiations at the time having been pending legislation. Todd Wool, one of the executives in charge of carrying on negotiations , testified : We said in view of the immenent [sic] fact of the wage and hours law we suggested that the making of the contract be deferred , and in the meantime we asked them that they kindly furnish us with copies of the contracts with the Brown-Williamson and Axton- Fisher Companies. 718 DECISIONS OF NATIONAL LABOR RELATIONS BOARD uncertainty that it desired to delay matters for a brief period, it would have requested the Union for such a delay and would not have allowed it to send a committee to New York City on a futile errand. As appears above, the respondent, on September 21, 1937, almost 2 months after the New York City conferences, suggested that a con- tract might be negotiated by mail and the Union replied that such negotiation did not constitute collective bargaining but that it would consider any counterproposal the respondent might make. For the reasons discussed below, we are of the opinion that negotiation by mail unless consented to by both parties is a form of negotiation not conducive to that meeting of minds so essential to the establish- ment of industrial peace and thus the effectuation of the policies of the Act. The Union, however, by considering the counterproposals submitted by the respondent by mail and by entering into a corre- spondence concerning them and concerning the Union's own pro- posals in an attempt to reach an understanding, did not thereby waive its right to personal conferences. The Union entered into the corre- spondence under protest and only after it had been met by the respondent's dilatory tactics in New York City and the respondent's refusal to make negotiators available in Louisville. In the course of the correspondence the respondent submitted two counterproposals, the first in response to the Union's first proposal, the second in response to the Union's second proposal. It submitted no counterproposal to the Union's third proposal. The respondent's two counterproposals varied very little from each other in any material respect 10 The respondent's executives testified that its second counterproposal, which differed materially from the original counterproposal only in that it gave less scope than did the first to union grievance activity, was "as far as" the respondent "'could go" and that personal conferences, no matter how numerous, would not have resulted in the respondent's altering its position in any im- portant respect. We have frequently held that the obligation to bargain collectively imposed by the Act upon an employer requires him to bargain in good faith in a genuine attempt to reach an agreement, and does not contemplate a series of empty discassions.11 If the attempt to reach an agreement is to be a genuine attempt, the employer must be open 10 The first counterproposal was somewhat broader than the second with regard to the scope of union grievance activity . The second contained two provisions suggested by the Union concerning the preparing and cleaning of machines and the testing of scales, which provisions were not contained in the respondent 's first counterproposal, and which were in accordance with the existing practice in the Louisville plant. 11 See Matter of Atlas Mills, Inc . and Textile House Workers Union , No. 2269, United Tex- tile Workers of America, 3 N. L. R . B. 10; Matter of S. L. Allen h Company, Inc., a corpo- ration and Federal Labor Union Local No. 18526, 1 N. L. It . B. 714 . See also Globe Cotton Mills v . National Labor Relations Board, 103 F. ( 2d) 91 ( C. C. A. 5th). P. LORILLARD COMPANY 719 to persuasions and not foreclose proposals in advance. In this case, however, it is plain that the respondent did not approach the Union's proposals with the open mind that is essential to genuine collective bargaining. - As the respondent's executives admitted, the respond- ent, throughout the negotiations, took the position that its second counterproposal, which was for all practical purposes its first counterproposal, submitted to the Union by mail, without any con- ferences relating to either counterproposal, represented its final word with respect to hatters of any importance, so that no amount of subsequent negotiations or oral conferences would induce the respondent to alter its position. Clearly, the respondent thereby substituted, for the bargaining required by the Act, the procedure of unilateral formulation of the terms of agreement and its presenta- tion to the Union as the ultimate statement of the respondent's posi- tion,.. and., thereby. rendered further. negotiations, whether in person. or by mail, futile, by reducing them to a series of empty discussions. As stated above, on September 20, 1937, the Union requested that the local plant manager be authorized to bargain with it and on January 28, 1938, after 4 months of fruitless correspondence, the Union again requested that the respondent's executives in charge of collective bargaining go to Louisville and attempt to reach an under- standing. The respondent refused the first request" and ignored the second. As we have also stated above, the respondent operates at least seven plants located in Connecticut, New Jersey, Pennsyl- vania, Virginia, Ohio, Kentucky, and Wisconsin. The respondent's main office is in New York City, at which place its executives perform their duties. Each plant is supervised and managed by a local plant manager. Under rules adopted by the respondent after collective bargaining was first requested by its employees, the general manager at each plant is not authorized to carry on collective bargaining for the respondent with the representatives designated by the employees at that plant, but in other respects he represents the respondent to the employees. The only persons authorized to bargain collectively for the respondent are its vice president and secretary, whose head- quarters are in New York City, and whose duties require their presence there. Beginning in the spring and early summer of 1937, the employees at several of the respondent's plants, sought to bargain collectively with the respondent. The employees of the Louisville plant are rep- 12 The respondent gave as its grounds for its refusal the necessity of having "labor arrangements" handled by its national executives and said that if these executives had to go from plant to plant to negotiate labor contracts they would not have time for their other work. 720 DECISIONS OF NATIONAL LABOR RELATIONS BOARD resented by the Union, an American Federation of Labor affiliate; the employees of the Middletown, Ohio, plant, are represented by a C. I. O. affiliate; and the employees of the Richmond, Virginia, plant are represented by an American Federation of Labor affiliate. Each of these unions, at different times, requested the respondent to bar- gain with it for only the employees of the particular plant which it represented. The union representing the employees in the Middle- town, Ohio, plant, requested that the respondent authorize represent- atives to deal with it in that town. To it the respondent gave the same reply that it did to the Louisville Union, namely, that it would hold bargaining conferences in New York City only. The respond- ent also required the union representing its Richmond, Virginia, employees, to conduct bargaining negotiations in New York City. The result of the respondent's stand has been that no agreement, has been reached with any of the unions representing the employees of these three plants and the respondent was enabled to maintain the policy of dealing with its employees "as individuals on an individual basis" which it stated in its letter to the Union on February 16, c1938. That this was the respondent's aim is shown not only by the letter referred to above. It is also demonstrated by the respondent's un- willingness to allow union participation in the settlement of griev- ances beyond the unusually narrow limits set forth in the respond- ent's second counterproposal. The Union contends that under the facts of this case, the Act requires that bargaining conferences be held in Louisville and that by refusing to send or authorize representatives to deal with the Union in Louisville, the respondent has refused to bargain with the Union. This contention requires an analysis of the employer's obli- gation to bargain collectively as set forth in Section 8 (5) of the Act. As we stated in Matter of Inland Steel Corpany,13 the employer's obligation under Section 8 (5) is the obligation .to accept in good faith the procedure of collective bargaining as historically practiced. Normally, the procedure of collective bargaining involves personal conferences and negotiations between representatives of the employer and of the employees. We pointed out in Matter of S. L. Allen & Company '14 that "Interchange of ideas, communication of facts pecul- iarly within the knowledge of either party, personal persuasion and the opportunity to modify demands in accordance with the total 13 Matter of Inland Steel Company and Steel Workers Organizing Committee and Amal- gamated Association of Iron, Steel, and Tin Workers of North America , Lodge Nos. 64, 1010, and 1101, 9 N. L. R . B. 783. 14 Matter of S. L. Allen c6 Company , Inc., a corporation and Federal Labor Union Local No. 18526, 1 N. L. R. B . 714, 728. P. LORILLARD COMPANY 721 situation thus revealed at the conference is of the essence of the bar- gaining process." Bargaining in the field of labor relations is cus- tomarily carried on over the conference table at which the represen- tatives of both parties confront each other and exercise that personal and oral persuasion of which they are capable. While it may be that negotiations through the mails or by other indirect methods fulfill the statutory . requirement when. both.parties accept that procedure, we think it clear that the Act contemplates that, under ordinary circumstances, personal conferences should be held if requested by either party. We believe further that the procedure of collective bargaining requires that the employer make his representatives avail- able for conferences at reasonable times and places and in such a manner that personal negotiations are practicable. Obviously an em- ployer whose single plant was located in San Francisco could not set up a branch office in New York and require that his employees or their representatives journey to New York in order to conduct bargaining negotiations. The question of whether the employer has furnished reasonable facilities for collective bargaining is a question of fact in each case. We conclude, however, that in this case the employer has plainly not furnished such facilities. The difficulties, and indeed the impracticability, of conducting bargaining negotiations in New York seem clear from the record. In the first place, the distance is great and the time and expense involved in reaching New York substantial. Secondly, even if the Union has sufficient funds to send a bargaining committee to New York, for a second time, which it denies, there is grave doubt that it has sufficient funds to maintain the committee there for the length of time necessary to conclude negotiations. To the Union, a contract is a necessity for the protection of itself and its members; to the respondent, however, it is frequently a matter of much less impor- tance. Therefore, if the respondent can require the negotiations to take place in New York City, it has a great advantage in that it can, without much cost to itself, delay any settlement until the union committee is forced to return to the plant. Thirdly, to require the Union to conduct negotiations at a point so far distant from the scene of operations, where the negotiations involve matters affecting a single plant, is to deprive the Union of the many advantages that accrue from conducting negotiations at the actual scene of operations where necessary information and the support of the union member- ship may be obtained. As a result, the insistence of the respondent on bargaining in New York imposes grave burdens upon the Union, and in practical effect, permits the respondent to avoid bargaining. The actual effect of the respondent's insistence upon negotiating in New York City is well illustrated by the conferences of August 722 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2, 3, and 4, 1937, which were held there. As we have found above, the respondent allowed the committee to travel from Louisville to New York, on what the respondent knew, in advance, to be a futile errand. After spending 3 days there, the committee returned to Louisville because its funds were exhausted. It also should be noted in this connection, that none of the three unions which were com- pelled by the respondent to bargain in New York succeeded in reach- ing an agreement with the respondent. Furthermore, in contrast to the respondent's insistence upon con- ducting negotiations in New York,-it is important to note that all employment relations between its Louisville employees and the re- spondent, other than collective bargaining, are administered at the Louisville plant. Employees are hired at the Louisville plant, work there under the supervision of the local plant manager, receive their pay.there, ,and are laid off and discharged by the plant manager. We see no reason why collective bargaining should not also be car- ried on there, at least so long as it relates only to the employees of that plant. Respondent urges that an International vice president is fre- quently in New York and that the Union could avail itself of his services to carry on negotiations. It must be recognized, however, that the use of the International vice president to carry on negotia- tions in behalf of the Louisville Union would impose serious burdens upon the Union. In order to bargain efficiently with the respondent, with the support and confidence of its membership, the Union is entitled to bring into the bargaining conferences local union mem- bers and employees of the respondent who know the conditions in the plant and who are known by the employees. As pointed out above, the effect of requiring negotiations to be carried on in New York City is seriously to handicap, if not make impossible, partici- pation by such representatives in the negotiations. The respondent states that "because labor agreements under present-day circumstances are such an important item of business, the Company must reserve such negotiations to its executives." The respondent may designate, whomever it desires: to represent it for purposes of collective bargaining, whether it be certain of its ex- ecutives, its plant manager, or other persons, but such representa- tives must be available for collective bargaining. The respondent must have contemplated that its representatives would spend a considerable portion of their time upon a matter of such importance as collective bargaining. The fact that they have other important duties to perform in New York City can not justify the encum- brances with which the respondent seeks to fetter the collective- bargaining procedure. The respondent is a large enterprise, with P. LORILLARD COMPANY 723 plants in various sections of the country. As a consequence it may encounter great.erl difficulty in working out ways and means of carrying on collective bargaining at each of its plants than a smaller, more compact business organization might experience. It doubtless encounters such difficulties iii'matters other than collective bargain- ing. But as long as the respondent is under a duty to bargain with the representatives of the employees of each plant it cannot shackle the collective bargaining procedure with difficulties arising out of its own organizational set-up and thereby render ineffectual the collective-bargaining provisions of the Act. Finally, the record establishes that it is customary in the tobacco industry for bargaining negotiations to be carried on in the town in which the plant is located when such bargaining relates only to the employees of that plant. In none of the cases which have come be- fore us, other than the two cases against the respondent, the present case and that involving the respondent's Middletown, Ohio, plant,15 have we encountered the contention that bargaining should be car- ried on elsewhere than at the place at which the plant is situated, when the bargaining relates only to that plant. We are persuaded by the evidence that the respondent failed to agree to negotiations in Louisville with a deliberate intention of avoiding collective bargaining. This conclusion is supported by our finding earlier in the instant decision that the respondent's very conception of collective bargaining is the negation of the bargaining contemplated by the Act and is predicated upon, the notion that personal conferences, wherever held, are unnecessary and merely futile and empty discussions and that the respondent's policy was to restrict collective action with a view to maintaining its practice of dealing individually with its employees. We find that by its re- fusal to enter into an agreement or even make a counterproposal pending definitive congressional action upon the Wages and Hours legislation, which we have found to have been a pretext for delay; by its failure to approach the union proposals with an open mind and substituting therefor a unilateral formulation of terms of the agreement and their presentation to the Union as the ultimate state- ment of its position ; by its refusal to permit union participation in the settlement of grievances except within comparatively narrow limits and its insistence upon dealing with its employees as individ- uals upon an individual basis; and by its refusal to send or authorize representatives to deal with the Union in Louisville, the respondent has failed and refused to bargain collectively with the Union as exclusive representative of the respondent's employees in an appro- ^ Matter of P. Lorillard Company, Middletown, Ohio and Pioneer Tobacco Workers' Local Industrial Union No . 55, 16 N . L. R. B. 684, decided this day. 724 DECISIONS OF NATIONAL LABOR RELATIONS BOARD priate unit, and has thereby engaged in unfair labor practices within the meaning of Section 8 (5) of the Act. By such refusal the re- spondent has also interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act, and engaged in unfair labor practices within the meaning of Section 8 (1) of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondent set forth in Section III, above, occurring in connection with the operations of the respondent de- scribed in Section I above, have a close, intimate, and substantial 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. V. THE REMEDY We have found that the respondent has engaged in certain unfair labor practices and, accordingly, we shall follow our usual practice and order the respondent to cease and desist from engaging in such unfair labor practices. Section 10 (c) of the Act authorizes the Board, upon finding that a person "has engaged in or is engaging in" an unfair labor practice, to order such person "to take such affirmative action . . . as will effectuate the policies of this Act." This section is designed to enable the Board to restore, as nearly as possible, the status quo had the wrongs not been committed. We have found that the respond- ent has refused to bargain collectively with the Union and we shall, therefore, order it to bargain collectively with the Union in the future. Furthermore, since one of the principal issues in this case was the respondent's refusal to accord the Union an opportunity for personal conferences in Louisville, Kentucky, which city we have found to be the appropriate and reasonable place for collective bar- gaining negotiations, and since we have found that this constituted a refusal to bargain collectively, we shall address our order spe- cifically. to the wrong sought to be remedied, and order the respondent to bargain collectively, upon request, with the Union in Louisville, Kentucky. Upon the basis of the foregoing findings of fact and upon the entire record in the proceeding, the Board makes the following : CONCLUSIONS OF LAW 1. Local Union No. 201, Tobacco Workers' International Union, is a labor organization, within the meaning of Section 2 (5) of the Act. P. LORILLARD COMPANY 725 2. The production employees of the respondent at its Louisville plant, excluding employees with authority to hire and discharge. timekeepers, engineers, journeymen machinists, machinists' helpers, and machinists' apprentices, constitute a unit appropriate for the purposes of collective bargaining, within the meaning of Section 8 (5) of the Act. 3.'Local Union No. 201, Tobacco Workers' International Union,. Was, on July 14, 1937, and at all tines thereafter has been the exclu- sive representative of all employees in such unit for the purposes of collective bargaining, within the meaning of Section 9 (a) of the Act. 4. By refusing to bargain collectively with Local Union No. 201, Tobacco Workers' International Union, as the exclusive representa- tive of the employees in an appropriate unit, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (1) and (5) of the Act. . 5.- The- re'sp'ondent, by' interfering with, restraining, and coercing its employees in the exercise of rights guaranteed in Section 7 of the Act, has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (1) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. I 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 Relations Board hereby orders that the respondent, P. Lorillard Company, New York City, New York, and its officers, agents, successors, and assigns, shall: 1. Cease and desist : (a) From refusing to bargain collectively with Local Union No. 201, Tobacco Workers' International Union, as the exclusive repre- sentative of the production workers employed by the respondent at its Louisville plant, excluding employees with authority to hire and 'discharge, timekeepers, engineers, journeymen machinists, machinists' helpers, and machinists' apprentices; (b) From in any other manner interfering with, restraining, or coercing its employees in the exercise of the right to self-organiza- tion, to form, join, or assist labor organizations, to bargain collec- tively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, as guaranteed by Section 7 of the Act. 726 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Upon request, bargain collectively in Louisville , Kentucky, with Local Union No. 201, Tobacco Workers' International Union, as the 'exclusiverepreseiltative ' of • thc-prodiic'tiori workers ` 44h p`16yed by the respondent at its Louisville plant, excluding employees-with authority to hire and discharge , timekeepers , engineers, journeymen machinists, machinists' helpers, and machinists' apprentices, in re- spect to rates of pay, wages , hours of employment, and other con- ditions of employment; (b) Post immediately , and maintain for a period of at least sixty (60) consecutive days from the date of posting, notices to its em- ployees in conspicuous places throughout its Louisville plant, stating that the respondent will cease and desist in the manner set forth in paragraphs 1 (a) and (b) and that it will take the affirmative action set forth in paragraph 2 (a) of this Order; (c) Notify the Regional Director for the Ninth Region in writing within ten (10) days from the date of this Order , what steps the respondent has taken to comply herewith.