Western Union Telegraph Co.

In the Matter of THE WESTERN UNION TELEGRAPH COMPANY, A CORPORATION and AMERICAN COMMUNICATIONS ASSOCIATION Case No. C-344.-Decided November 1, 1939 Telegraphic Comunications Inditstry-Interference, Restraint, and Coercion- Company-dominated Union: initiated by the employer in 1918 for purpose of preventing encroachment of outside labor organizations and in defiance of the then current public policy of according employees freedom of organization ; from initiation to July 5, 1935, in furtherance of original purpose of thwarting organ- izational efforts of rival labor unions, accorded various forms of financial and promotional support, good will and prestige deliberately enhanced, utterly dom- inated by employer in dealing with it as to terms and conditions of employment and as to internal orperatidns, actively utilized by employer to engage in espion- age against rival organizations and to combat enrollment of employees in such organizations ; on and after July 5, 1935, no attempts to disestablish, all prior forms of support continued, and earlier role of cooperating with employer in preventing advance of outside organizations emphasized ; some forms of support discontinued on August 17, 1937, not as sincere purge but merely for purpose of concealing obvious vulnerability to charges of company domination, other valuable forms of support, important promotional techniques, and established course of dealings unaffected by action of August 17, 1937, enjoyment of favored status continued ; remained as symbol of interference with rights guaranteed by Act ; employer ordered to withdraw recognition from, as collective bargain- ing agency, to disestablish completely as such agency, to cease and desist from enforcing contracts with, and to refund to members amounts checked off from wages as dues since July 5, 1935, on ground check-off coercive-Discrimination: practical application of outstanding agreements and arrangements with com- pany-dominated union for preferential hiring of applicants indicating willingness to join contracting organization and for preferred treatment of members as to terms and conditions of employment, constitutes discrimination in favor of company-domiinated union and against other labor organizations ; employer or- dered to post notices of cancelation of agreements and arrangements. Mr. Will Maslow and Mr. Morris Weinfeld, for the Board. Mr. R. H. Kimball, Mr. Francis R. Starrlc, and Mr. John H. Waters, of New York City, for the respondent. Boudin, Cohn, and Glickstein, by Mr. Sidney Elliott Cohn, of New York City, for the A. C. A. Mr. James F. Dulligan and Mr. J. Daniel Dougherty, of New York City, for the Association. Miss Ida Klaus, of counsel to the Board. 17 N. L. R. B., No. 5. 34 THE WESTERN UNION TELEGRAPH COMPANY DECISION AND ORDER 35 STATEMENT OF THE CASE Upon charges and amended charges duly filed by American Radio Telegraphists' Association, subsequently known as American Commu- nications Association and herein called the A. C. A.," the National Labor Relations Board at Washington, D. C., herein called the Board, issued its complaint, dated April 8, 1938, against The Western Union Telegraph Company, New York City, herein called the respondent, alleging that since July 5, 1935, 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, 49 Stat. 449, herein called the Act. The charges, the complaint, and the accompanying notice of hearing were duly served upon the respondent, the A. C. A., and the Association of Western Union Employees, herein called- the Association, a labor organization alleged in the complaint to be dominated by the respond- ent. The complaint charged, in substance, (1) that the respondent had, since July 5, 1935, dominated, controlled, and interfered with the administration of the Association and contributed financial and other support to it by permitting the Association, initiated by the respondent in 1918 and thereafter aided, maintained, and assisted by the respondent, to continue to function on and after July 5, 1935, and by continuing to accord the Association earlier forms of support and to engage in other aspects of domination over it; (2) that the re- spondent had discriminated against its employees generally and against six named individuals specifically with regard to hire and tenure of employment and other terms and conditions of employment for the purpose -of encouraging membership in the Association and discouraging membership in other labor organizations; and (3) that the respondent had, through persuasion, warnings, threats, espionage, and other acts of coercion, encouraged membership in the Association and attempted to prevent affiliation of its employees with other labor organizations, particularly the A. C. A. On April 23, 1938, the respondent filed its answer, admitting the accuracy of the allegations of the complaint as to the nature of its 1 At the hearing, upon earlier stipulation of all parties , the complaint was amended to insert in the caption thereof the word "The" before the name of the respondent ;' to insert after the name American Radio Telegraphists' Association the phrase "now known as the American Communications Association" wherever the former appears in the complaint and to add thereto the following paragraph : "On April 15 , 1938, by referendum , a vote of its members, the American Radio Telegraphers Association changed its name to American Communications Association." 36 DECISIONS OF NATIONAL LABOR RELATIONS BOARD business, admitting the truth of certain allegations of the complaint as to the respondent's participation.in the initiation of the Association but denying that it had dominated the formation of the Association, admitting that for some time after July 5, 1935, it continued to grant certain privileges to the Association but averring that such privileges have been discontinued, admitting the possible truth of the allegation of espionage, and denying . all other material averments of the complaint. On. April 16'and•,May 2', 1938, the Association petitioned the Board for permission to intervene in the proceeding "as an interested party," and on May 6, 1938, the Board granted the Association leave to inter- vene "to such extent and upon such terms as the Trial Examiner to be designated by the Board shall, from time to time during the course of the hearing, deem just." 2 Thereafter on June 1, 1938, the Association filed ,its answer to, the complaint, admitting the truth of allegations as to the, respondent's business, denying that it has` any knowledge or,information sufficient to form a belief as to certain alle- gations, and denying 'other material allegations as to unfair labor practices involving the Association. - Pursuant to notice, a hearing on the complaint was held from June 1, up to and including July 25, 1938, at New York City, before Alvin J. Rockwell, the Trial Examiner duly designated by the Board. The Board, the respondent, the A. C. A., and the Association were repre- sented by counsel and participated in the hearing. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing 'on the.iss'ues was afforded all parties. During the course of the hearing counsel for the Board moved to amend the com- plaint by striking therefrom.all allegations of discrimination with regard to hire ' and tenure of employment as to six named individuals. The motion was granted by the Trial Examiner and his ruling is hereby affirmed. ,The complaint will, in thisrespect, hereinafter be dismissed without prejudice.. Various rulings'were made by the Trial Examiner during the course of the hearing on other motions and on objections to the admission,of evidence and further rulings were made in 'his Intermediate Report 'upon motions as to which he had reserved, de- cision during the hearing. The Board has reviewed these rulings and finds that no prejudicial errors 'were committed. The rulings are hereby affirmed. On May 11, 1938, the Association filed with the U. S. Circuit Court of Appeals for the Second Circuit a petition to review the Board's order of intervention, seeking to have said order modified so as to permit the Association to intervene in the proceeding before the Board "in equal status 'with the other parties thereto," and requesting a stay of the Board's proceeding pending determination of the petition to review . On May 20, 1938, under authority of Section 10 (f) of the Act, the Court dismissed the Association's peti- tion and denied its application for a stay. THE WESTERN UNION TELEGRAPH COMPANY 37 Upon the conclusion of the hearing counsel for the Board and counsel for the respondent-argued orally before the Trial Examiner on the evidence, opportunity to present argument having been given to all parties. Subsequently, counsel for the Board, the respondent, and the Association submitted briefs for the consideration of the Trial Examiner. On October 12, 1938, the Trial Examiner, after having been directed by the Board on July 25, 1938, to prepare an Intermediate Report, filed such Intermediate Report, finding that the respondent had engaged in unfair labor practices affecting commerce within the meaning of Section 8 (1), (2), and (3) and Section 2 (6) and (7) of the Act, and recon-unending that the respondent cease and desist therefrom and take certain specified affirmative action deemed neces- sary to effectuate the policies of the Act. Thereafter the respondent, the Association, and the A. C. A. filed exceptions to the Intermediate Report and argued thereon orally before the Board on January 20, 1939. The Board has considered, the exceptions to the Intermediate Report and, in so far as they are inconsistent with the findings, con- clusions, and order set forth below, finds' no merit in them. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT 1. TILE BUSINESS OF THE RESPONDENT It was stipulated between counsel for the respondent and counsel for the Board for the purpose of this proceeding only, and we find, that : The Western Union Telegraph Company is a corporation organized and existing pursuant to the laws of the State of New York. Its principal office is located. at New,York City.. It is engaged through- out-the United States and in various,foieign countries in the receiving and transmission by. telegraph and cable of intrastate, interstate, and international communications. In the United States, it maintains a vast system of wire network, connecting with virtually every city, town, and hamlet, for the, purpose of receiving and transmitting com- munications. In addition to its communications system in the United States, the respondent owns or leases cables connecting directly or indirectly certain points in foreign countries and in the United States. In operating its national and international communications system the respondent owned or operated as of December 31, 1937, 214,220 miles of pole lines, 4,160 miles of land cable, 1,876,993 miles of wire, 30,444 nautical miles of ocean cable, and 20,445 telegraph offices, not including about 17,000 telegraph-agency stations. 38 DECISIONS OF NATIONAL LABOR RELATIONS BOARD At the close of 1937 the respondent employed 48,375 persons, of which number 1,484 worked outside the United States , 813 were emergency messengers , and approximately 300 were connected with the cable service in the United States. The stipulation entered into by counsel for the respondent and counsel for the Board stated that the respondent is engaged in com- merce within the meaning of Sectioii'2 (6) and (7) of the Act and is subject to the jurisdiction of the Board. This case is concerned with the land -line system of the respondent in the United States and not with its cable operations . The respond- ent's operating structure in the United States is set out in Appendix A, attached hereto and made a part hereof. IT. THE ORGANIZATIONS INVOLVED American Communications Association , affiliated with the Com- ln;ttee for Industrial Organization,3 is a labor organization. It admits to membership all classes of employees engaged in communi- cations work, except those having the right to hire or discharge. Association of Western Union Employees is an unaffiliated organ- ization. It admits to active membership' all land-line employees of the respondent except certain classes of employees who actually em- ploy and discharge , the latter " classes being admitted to associate membership . It maintains locals in the United States , Mexico, Cuba, and Canada. III. THE UNFAIR LABOR PRACTICES A. Domination and slnpport of the Association 1. Outline of events leading up to formation of the Association It is necessary to review the history of the Association and the course of the respondent's dealings with it prior to the effective date of the Act in order to determine the propriety of the, respondent's conduct since the effective date of the Act.4 For some time prior to 1915 the respondent's subordinate officers throughout the country, upon direction of the respondent's presi- dent, executed a policy of hostility to all outside labor organizations, and particularly to the Commercial Telegraphers' Union of America, a labor organization affiliated with the American Federation of 3 Now the Congress of Industrial Organizations. 4 See Matter of Pennsylvania Greyhound Lines, Tue .' Greyhound Management Company, Corporations and Local Division 1%'o. 1063 of The Amalgamated Association of Street, Elec- tric Railway and Motor Coach Employees of America, 1 N. L. R. B. 1, 303 U. S. 261; and Matter of Bethlehem- Steel Corporation, a Delaware Corporation, Bethlehem Steel Com- pany, a Pennsylvania Corporation and Steel Workers Organizing Committee, 14 N. L. R. 13. 539. THE WESTERN UNION TELEGRAPH COMPANY 39 Labor, admitting to membership telegraphers and r other classes of the respondent's employees and herein called the C. T. U. As an important adjunct of this policy, the respondent had developed a system of espionage against the C. T. U. which was carried out by special agents and by some of its own employees. The latter group executed the respondent's mission in this respect through the "medium of membership in the C. T. U. Both groups reported to the respondent on C. T. U. membership and operations, and their findings were relied upon by the respondent's officials in selecting applicants for employment and in determining the fitness for fur- ther employment of those already hired. Hence no persons whose membership in the C. T. U. was known to the respondent's employ- ing officials could successfully seek employment with the respondent and no employee with similar affiliation could remain on the pay roll after the respondent's awareness of such affiliation. Employees discharged for C. T. U. membership were expressly informed of the reason for the termination of their employment, and the respondent thereafter retained a record of such membership. In a statement issued to stockholders in 1918, the respondent epitomized as follows its -attitude in this -respect during the period under consideration and in 1918: "The company says in effect to its employees : If you desire to join the C. T. U. A., then we must part." The respondent's answer admits that prior to 1918 the policy of its president was to discourage employees from joining, or otherwise associating them- selves with any labor organization controlled by persons having no connection with the telegraph business and employing the strike weapon. Newcomb Carlton, president of the respondent from 1914 to 1933, stated at the hearing that discharges had occurred prior to 1918 in furtherance of such policy. There was during the period under consideration no labor organization for the respondent's em- ployees which carried the respondent's imprimatur and in which membership did not endanger tenure of employment. In April 1915 Carlton appointed a committee of minor executives to consider and report on the advisability of forming a national association of the respondent's employees. The committee reported on July 30, 1915, that, after having given serious thought to its assignment and earnest consideration to the problem of the extent of the respondent's probable control over such an organization, it would be inadvisable at that time to form a national association. Among the reasons assigned by the committee for the position as- sumed in its report were that formation of such an association would give the employees "an exaggerated idea of their importance and their power, with the result that the employees would demand greater concessions and changes than the Telegraph Company could 247384-40-vol. 17-4 40 DECISIONS OF NATIONAL LABOR RELATIONS BOARD afford to make"; that no national organization of employees could be. formed which would prevent the personnel from leaving the re- spondent's service in a body in the event of a refusal to grant con- cessions which might be demanded; and that such an organization would facilitate and actually bring about membership in the C. T. U. The committee proposed instead that the respondent take certain preliminary steps: at that. time, ."which will gradually lead, up: to the formation of such an association at a later date," if results and con- ditions should later justify such action. The preliminary steps rec- ommended by the committee were concerned with methods of pro- viding greater opportunity to employees of bringing to the attention of the management situations "which they consider not entirely satisfactory." No further explorations into the subject appear, to have been made by the respondent until the latter part of May 1918. Carlton testified that his inaction in this regard during those 3 years did not indicate abandonment of the idea of forming an employees' association but was rather due to his preoccupation with other matters. All 'manifestations of hostility toward outside,.labor organizations, and particularly to the C. T. U., persisted during the period between the date of the committee's report and the 3 years which followed. On April 8, 1918, while this country was at war, Woodrow Wilson, then President of the United States, issued a proclamation estab- lishing the National War Labor Board; herein called .the War Labor Board, enunciating the principles and policies by which industry and labor should be governed, investing the War Labor Board with power +,o deal with labor relations in accordance with those principles and policies, and appealing to employers and employees to cooperate with the War Labor Board by utilizing its services in dealing with labor disputes. Among the principles and policies thus formulated by Woodrow Wilson -for* the 'government of labor relations' during' the period of the war were the following: (1) Strikes and lock-outs were prohibited; (2) "the right of workers to organize in trade-unions and to bargain collectively, through chosen representatives," was recog- nized and affirmed, and interference with such right was enjoined; and (3) the discharge of workers for membership in trade-unions or for legitimate trade-union activities was prohibited. The powers and functions 'vested in the War Labor Board were limited to settlement by 'mediation and conciliation of controversies arising between em- ployers and workers "in fields of production necessary for the effec- tive conduct of the war," and in other related fields of national activity. The War Labor Board was empowered to render a binding decision only if the parties to a controversy agreed -in advance to submit their case to the War Labor Board and to abide by its decision. THE WESTERN UNION TELEGRAPH COMPANY 41 In cases where both parties did not so agree, the War Labor Board was powerless to compel action and could merely consider the controversy ex parte and issue a recommendation The President's proclamation left the respondent's policy of op- position to the C. T. U. unchanged. At. least' 140 employees who attended organization meetings of the C. T. U. after appointment of the War Labor Board were discharged, upon orders of the respond ent's president. Virtually the entire personnel of the Seattle, Wash- ington, office of the' respondent, numbering from 350 to 400 persons, was discharged at that time for joining the C. T. U. Carlton testified at the hearing that Woodrow Wilson had labor theories "which I did not share." Carlton had, after creation of the War Labor Board, toured the Pacific Coast and warned the respondent's employees at meetings in that section of the country that those who proposed to engage in a strike against' the respondent would be discharged and that those who joined any organization employing the strike weapon in settlement of labor disputes gave the respondent notice of their intention to resort to strikes. The respondent had learned through its,spy system of the C. T. U. affiliation of the employees discharged during this period. The C. T. U. complained to the War Labor Board on behalf of the employees thus discharged, charging the respondent with violation of the principles enunciated in the Presi- dent's proclamation of April 8, 1918. Upon refusal of the respondent to submit the controversy to the War Labor Board and to agree to abide by its decision, the War Labor Board recommended to the parties as a means of settling the dispute that the respondent re- instate all the discharged employees pursuant to the following con- ditions : (1) The respondent was to receive and bargain with a com- mittee of its employees, and, in the event no agreement could thus be reached, the matter was to be referred to the War Labor Board for disposition. (2) The respondent was not to be required to recog- nize or deal with the C. T. U. (3) The C. T. U. was to guarantee to the War Labor Board that it would not initiate, and would not per- mit its members to engage in, any .strike. (4) Failure of C. T. U. employees to abide' by their union's guarantee would be punishable by discharge. The War Labor Board's recommendation was accepted by the C. T. U. Carlton, however, on behalf of the respondent, rejected the recommendation and submitted a counterproposal by letter. - • Carlton's communication .to the War Labor Board stated that the respondent's. primary' obligation was to, the United States Govern- ment and that "this end can' not be achieved if its telegraph operators are members of the C. T. U. A." The counterproposal suggested 42 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that a referendum be conducted among employees of the respondent having a "reasonable length of service" on whether they desired the C. T. U. or an "independent organization" not employing the strike weapon. If the referendum resulted in favor of the C. T. U., the re- spondent would not discharge its members but would not recognize it or deal with it. If the vote was in accordance with the second alternative, the respondent's policy as to membership in the C. T. U. would be continued and machinery for the initiation of such an "independent organization" would be set up by joint agreement between the War Labor Board and the respondent. The War Labor Board, through William Howard Taft, refused to accept Carlton's counterproposal on the ground that it denied employees the right to join unions of their choice and asked Carlton to reconsider the War Labor Board's original proposal. On May 27, 1918, the re- spondent again rejected the War Labor Board's recommendation and on June 2, 1918, the War Labor Board made public its report in the matter, stating : "In view of the correspondence it does not seem useful to further prolong the mediation. The construction of our principles, as set forth in Mr. Taft's telegram to Mr. Carlton, leads to the conclusion that The Western Union Telegraph Company should accept this compromise as therein stated." No further action was recommended by the War Labor Board. It merely published its report and apprised the President of the United States of the respondent's attitude. On June 11, 1918, Woodrow Wilson wrote to Carlton asking him to cooperate with the War Labor Board. On June 17, 1918, Carlton replied as follows : We have for years maintained the position that our essential employees, those working the wires, should not affiliate with organizations employing the strike either for their own benefit or sympathetically for the benefit of others. This policy has been long known to our employees and we have considered ab- stention from such affiliation a condition of their service, and to-day there are no members of such organization in our employ. Under the plan of Mr. Walsh, concurred in by Mr. Taft, an outside union which has for many years been frankly hostile to the Company would . . . carry on a propaganda for the purpose of enlisting sufficient of the Company's employees for no possible result that it would attain during the war, but only that it might furnish the nucleus for the disorganization of our service through demoralized discipline and the use of the strike immediately after the exigencies of the war had ceased and released it from its promises. THE WESTERN UNION TELEGRAPH COMPANY 43 Carlton and J. C. Willever, a vice president of the respondent since 1914, testified at the hearing that the reason for the refusal to accede to the War Labor Board's request to recognize the C. T. U. in exchange for the latter's promise not to strike was that such promise was unreliable. Willever testified further that an additional reason for rejecting the recommendations for settlement of the controversy was that the C. T. U. would become entrenched in the company dur- ing a period of possible governmental control of the respondent's business. Carlton's refusal to abide by Woodrow Wilson's request to cooperate with the War Labor Board exhausted all possible and appropriate sanctions then available to the executive branch of the government for settling the dispute between the respondent and the C. T. U. over the discharges which had occurred after April 8, 1918, and both sides were consequently left to their own devices. The C. T. U. thereupon announced that its membership had voted to strike against the re- spondent in support of Woodrow Wilson's proclamation of April 8, 1918, and for the purpose of compelling compliance with the recom- mendations of the War Labor Board. The decision to strike was subsequently withdrawn. News of the strike vote and of its with- drawal appeared in the public press.5 On July 22, 1918, pursuant to authority granted to him by the Con- gress on July 16, 1918, Woodrow Wilson issued a proclamation and order taking possesssion and assuming control and supervision of all telegraph and telephone systems within the jurisdiction of the United States and directing that supervison, possession, control, and opera- tion of such communications systems should be exercised by and through Albert S. Burleson, then Postmaster General. The order be- came effective on August 1, 1918. In his annual report for the year 1918, the Secretary of Labor of the United States reviewed the history of the conflict between the respondent and the War Labor Board and said of the conduct of the former that it represented the "first-resist= ante" to a decision of the War Labor Board. The annual report stated further that after Carlton had refused to accept the War Labor Board's recommendations and to comply with Woodrow Wilson's appeal, the latter applied to the Congress for authority to take over the telegraph and telephone lines. Carlton had, meanwhile, during the period between his final re- jection of the War Labor Board's recommendations and the date on which the Postmaster General assumed possession and control of the respondent's telegraph system, concerned himself with a plan of or- The New York Times for July 8, 1918, reported that on July 7, 1918, S. J. Iionenkamp, international president of the C. T. U., had called off a strike against the western Union Telegraph Company, scheduled for July 8, 1918. 44 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ganization for the respondent's employees. On May 31, 1918, he had appointed a committee consisting of minor executives to study forms of organization and to draft a plan to be used in uniting the re- spondent's employees in a Nation-wide 'association. On the same day, he addressed the committee and outlined to them the following general principles on which their plan of organization of the projected associ- ation-was to be based : (1) membership was to be confined to Western Union employees; (2) employees who were members of any A. F. of L. affiliate were to be ineligible for membership in the association; (3) the association was to pledge itself not to engage in or support strikes or other coercive measures; and (4) in consideration of the associ- ,ition's pledge, the company would accord the association representa- tion on the then existing pension-fund committee and would deal with it in collective bargaining and in the adjustment of grievances. Ac- cordingly, on June 7, 1918, the committee submitted its plan to Carlton and 4 days later, pursuant to his instructions, presented him with a draft of a call to all employees announcing the plan of organization and outlining the procedure to be followed in setting up the associ- ation. According to Carlton's testimony at the hearing, the reason for his appointment of a committee at this time, in spite of an earlier committee's report of the inadvisability of forming an employees' association, was that "Labor was boiling and it was desirable, highly desirable, that if the employees were to be denied the joining of labor unions that employed the strike . .., it was necessary in all fairness and in cultivating the value of family spirit, which means the cooperation of officers and employees, that the employees have an opportunity to. express their dissatisfaction or their satisfaction." On June 13, 1918, Carlton issued a bulletin to all employees stating that the respondent's board of directors had 2 days earlier given careful consideration to an employees' petition for an association ; that the respondent was prepared to help in any way it could; and that Carlton had been asked by the board of directors to communi- cate the suggestion to all the respondent's employees that they choose representatives for a convention to perfect an industrial constitution, such convention to be held at Chicago on July 10, 1918, and the necessary costs 'thereof, including the salaries and expenses of dele- gates, to be borne by the respondent. The bulletin announced fur- ther that the essential features of the proposed industrial constitution should be those of an association completely controlled by the employees and representative of them, and that the employees pro- ceed to the election of delegates in accordance with a designated election method. The petition to which Carlton had referred in his bulletin was dated June 11, 1918, and bore the signatures of a group of the respondent's Chicago employees. Addressed to Carlton, it THE WESTERN UNION TELEGRAPH COMPANY 45 declared that the signers had been informed through the public press that Carlton favored the formation of an association for the respondent's employees. The signers then apprised Carlton that they desired to form an association confined to Western Union employees "upon the plan' generally outlined by you and firmly estab- lished upon the principle that the strike shall not be employed, nor shall the Association thus formed affiliate with any other Association or Organization which would resort to the strike either for itself or others." " Carlton, in his testimony at the hearing, stated that the petition had probably reached him through the mails and explained that, although it had apparently been composed on the same day on which the respondent's board of directors had considered it in New York, he had obtained some intimation of its contents before it was actually received. On June 17, 1918, Willever issued and sent by wire to- all the respondent's managers throughout the country instructions to conduct an election for electors among employees under their jurisdiction, the electors in turn to select delegates to the constitutional convention to be held at Chicago on July 10. Supervisory employees were declared ineligible for selection as electors or delegates. Willever's message outlined the election procedure to be followed and directed the man- agers to have the instructions printed and posted on the respondent's bulletin boards not later than June 19. Need for extreme urgency in carrying out the instructions was emphasized. At the hearing Carlton and Willever testified that the extreme urgency was caused by the imminence of Government control. Carlton explained his desire to perfect organization of the association before the Govern- ment took over the respondent's property by saying, "Well I suppose I thought that [we] might find some insurgency in Government ranks." Various other communications on the conduct of the elec- tions, on the need for arousing enthusiasm among the employees for the, projected association, and on the procedure to be followed by electors in exchanging information with each other were sent by the respondent's vice presidents to the respondent's officials throughout the country. Among these communications was a message from Willever to general managers, stating: "* * * I am sure that you and your associates can so manage the initial steps in the formation of the Association that they will be properly taken and be adequately supported by the keen interest of the employees without giving the proceedings an unnecessary official tinge." Willever stated at the hearing that his instructions to refrain from investing the inchoate association with an "official tinge" were motivated by a desire to avoid the erroneous impression that the respondent intended to dominate that organization. 46 DECISIONS OF NATIONAL LABOR RELATIONS BOARD During the period between the call for the constitutional conven- tion and the opening of the convention communications were also addressed to the employees to arouse their interest in and zeal for the respondent's plan of organization . These communications appear to have been induced by the threat of the C. T. U.'s outstanding vote to strike against the respondent and by the latter's fear that its plans for establishing an association as an alternative to the C. T. U. might be seriously -hampered by the materialization of that threat.. Thus on July 1, 1918 , there appeared in the Western Union News, a house organ published by the respondent for distribution among its employ- ees and dealing with employer -employee relations, an article on the forthcoming convention and on the value to the respondent and its employees of the projected organization . The article read in part as follows : Eventually the machinery of the organization will be working so smoothly that all of us will wonder how we ever got along without it . . . It, too, will grow bigger and stronger and more effective in helping every worker in the company secure for himself what he needs for his happiness . . . Needless to say, this organization of Western Union employees will receive the heartiest support of the management. Without this support, the organization would be valueless , just as the management would have little of value if it were not backed up by the loyalty and efficiency of the workers in the ranks. Again on July 4, 1918, 6 days before the scheduled convention and while the C. T. U. was preparing to execute its strike vote, Carlton addressed a 'bulletin by wire to 7,000 offices of the respondent an- nouncing that the respondent would enter into an exclusive contract with the association when formed , under which the respondent would deal with that association with respect to conditions of employment, sick benefits , pensions, life insurance, and other matters affecting the interests of the employees. The bulletin warned employees - against being "urged to do something foolish by self-seeking individuals," who planned "to call you-loyal men and women of the Western Union-from your work in order to defeat the Association which you are about to form." Carlton concluded his statement with an expression of confidence that the employees would answer the attempt to defeat the association "by an additional demonstration of your loyalty to your Government by continuing at your post of duty without fear of criticism by right-minded people." Carlton testified at the hearing that he was aware at the time he dispatched the bulle- tin of an effort on the part of the C . T. U. to call a strike. He stated also that, although he had no knowledge at the time of the kind of HE WESTERN UNION TELEGRAPH CODIPANY 47 constitution the association would adopt or of the nature of the de- mands it might make upon him , he had nevertheless determined to enter into a contract with it upon its formation. "We had confi- dence," he explained concerning his intimations as to the probable achievements of the constitutional convention, "that our employees having resisted the overtures of the labor union would see the wis- dom, as the country was at war, of adopting a plan and procedure which would conserve the property and its essential function with the country then at war." Carlton had in fact, however, been con- cerned with a constitution and bylaws for the association after he had issued his call for the convention and before he had sent out the bulletin of July 4. On June 20 , pursuant to his earlier directions, Carlton's committee of minor executives had submitted to him a draft of a proposed constitution and bylaws . On July 8, 1918, in execution of its further assignment , the committee had prepared and handed to Carlton a proposed agreement to be entered into between the respondent and the association. On the eve of the constitutional convention , the respondent clar- ified as follows for its stockholders , in a pamphlet entitled "The Western Union and the War Labor Board," the motives underlying its plans for an association : The alternative to the foregoing plan would be for the com- pany to waive its objections to its employees joining an outside union and, against its better judgment and experience, open its doors and subject its service to the disturbance incident to a propaganda for membership by an outside organization, which for many years has been frankly hostile to the company and has now no interest in its service to the public. After the election machinery and its supplemental instructions had been executed , 16 delegates , 2 from each of the respondent's 8 terri- torial operating divisions, met at a hotel in Chicago on July 10 for the :purpose of perfecting a, form of organization for a Nation- wide association of the respondent's employees . Although the re- spondent had issued instructions against the selection of supervisory employees as delegates , most of the 16 delegates were considered by Carlton as having held supervisory positions at the time of their election.,' No minutes of the convention proceedings during the first 5 days of the session appear to have been taken or preserved. 9 According to the record of an earlier hearing before the Board in a proceeding against the respondent , parts of which were incorporated in the record in the instant proceeding, Carlton testified that all the delegates held positions of importance with the respondent, most of them having been supervisors at the time of their election , but that they were elected by democratic process. Matter of Western Union Telegraph Company and Mes- sengers Local No. 40 of the Commercial Telegraphers Union, 3 N . L. R. B. 375. 48 DECISIONS OF NATIONAL LABOR RELATIONS BOARD According to the testimony of two delegates, this time was spent in getting acquainted, in considering telegrams which had arrived from employees throughout the country, and in exchanging suggestions. W. A. League, one of the delegates from the respondent's Southern division, testified that the delegates were uncertain as to how to proceed, as they were without experience in drafting a constitution. On one of the first 3 days of the session, Carlton appeared at the convention for a few minutes and addressed the delegates informally, leaving with them a copy of a proposed constitution and of a proposed agreement to be entered into between the respondent and the new organization which was to emerge from the convention. Carlton testified that he had given the delegates a rough draft of the con- stitution to "hack at"; that they were not bound by his proposals ; and that he had cautioned the delegates in the following manner with respect to any constitution they might draw up : "This must be an employees' document and the hammer marks must be on it." Although he could not recall at the hearing whether he had expressly informed the delegates that the respondent would not deal with an organization employing the strike weapon, he stated with assurance that, if there appeared to him during his visit to have been any reason for impressing that fact upon the delegates, he had certainly done so. He testified, further that any failure on his part to inform the delegates that one of the conditions of recognition of the asso- ciation was the renunciation of the right to strike and the acceptance of arbitration as a substitute was due to a mere oversight. No further visits to the convention were made by any of the respondent's officers. The minutes of the convention, recording only the proceedings of the regular sessions and- not of the various committees or of the ses- sions during which the delegates met as a committee of the whole, show that from July 15 to 22 the delegates concerned themselves with drafting a constitution. In exercising this function they were guided by Carlton's draft and the constitutions of the C. T. U. and the Order of Railroad Telegraphers. A final draft, the composite of three separate documents compiled independently by. each of three groups of delegates, was presented to the entire body for discussion and approval. Each section was read, discussed, and submitted to a vote. There was little serious disagreement or heated debate on any question except that of including a strike clause in the constitution. Ray Miller, a "delegate from the Metropolitan division, moved to substitute for a proposed section in the tentative draft, which followed precisely a provision in Carlton's draft for the amicable settlement of disputes, a section investing the board of directors of the. asso- ciation with the power to call a strike upon the failure of attempts at amicable adjustment, such substitute provision to be inoperative THE WESTERN UNION TELEGRAPH COMPANY 49 during the period of Government control. Miller made a very vig- orous stand in favor of his motion, pointing out that the organization would be wholly ineffective if it disabled itself from striking. He talked also on behalf of his constituents who had informed him of their strong desire to be empowered to strike. Only one other dele- gate spoke in favor of Miller's motion, saying that many of the employees whom he represented had instructed him earlier not to forget "the strike clause, to protect all of us." The prevailing tenor of the debate against Miller's motion was that Carlton had made it quite clear to the delegates that inclusion of a strike clause in their constitution would preclude the respondent from recognizing the association and from entering into an agreement with it, one delegate arguing in that connection that they had all come to the convention in acquiescence to Carlton's plan of organization and could not, therefore, disregard his admonition against arming the association with the strike weapon. Although Miller countered by attacking his associates for abiding by the dictates of the respondent, his motion was tabled and was not thereafter reconsidered by the convention. The original section providing for settlement of dis- putes by arbitration was formally voted upon and adopted. When Miller later offered an amendment to the proposed section dealing with arbitration procedure, this motion was also defeated after some debate during which one of the delegates stated that he was uncertain as to whether the' amendment would be acceptable to Carlton, as it meant a departure from Carlton's proposal on the subject.? At least one other amendment was defeated for the same reason. After the delegates had agreed upon a constitution, but before its final adoption, a committee was appointed to confer with Cronkhite, general manager at' Chicago, on Carlton's reaction to the document. The committee reported to the convention on July 20 that it had pre- sented the proposed constitution to Cronkhite, who advised them that he would confer with Carlton on the matter. After communicating with Willever, Cronkhite received from him a teleg'rani dated July IS stating that Carlton "would not care to pass on the constitution as he feels this -is entirely an employees matter" but adding that he, Willever, thought "the company will be satisfied with a fair document that submits real differences to impartial arbitration. The company would not other than oppose an association that proposes to deal by strike. What are the facts as to arbitration and strike." On July 22 there was read to the delegates and incorporated in the minutes a telegram from Willever to Cronkhite, dated July 21, stating that 'Although the respondent had thus insisted upon the adoption of arbitration procedure as a substitute for the strike clause in the constitution of the association , as noted below, such procedure was never invoked to settle any of the disputes which arose between the respondent and the association. 50 DECISIONS OF NATIONAL LABOR RELATIONS BOARD "the company assumes a fair document and that being true is pre- pared to enter into contract with association. Company should not be placed in position of accepting constitution which is a prerogative of association members." At the hearing Willever clarified the term "fair document" by stating that he had in mind a constitution and bylaws substituting arbitration for the strike. He also explained the .apparent freedom of draftsmanship accorded the delegates by stating that he had considered the constitution tentatively agreed upon by the delegates satisfactory to the respondent after he had been apprised of its contents. The convention adjourned on July 22, after electing permanent officers and designating a committee to meet with Carlton at Omaha, Nebraska, on July 25 to negotiate a contract. One of the closing speeches of the convention was made by its acting chairman, who commented as follows upon the work of the delegates : "I believe we have kept the faith and have produced a document which' will be satisfactory to the employer and the employee . . ." On the after- noon of that day the delegates met as a general assembly and formally adopted the constitution as formulated by the convention. Thus there came into being the Association of Western Union Employees. After adopting the constitution, the general assembly discussed the terms of a proposed agreement with the respondent and, guided by the draft submitted by Carlton during his brief visit to the conven- tion, agreed upon a proposed document. The general assembly ad- journed on July 23, and, with the exception of the bargaining committee which was to meet with Carlton at Omaha, all delegates returned to their posts with the respondent. The respondent had paid all expenses of the delegates incident to their attendance at the convention and general assembly and to their travel to and from Chicago. No deduction from their salaries was made for the period of their absence from work. The constitution as finally drafted by the delegates and adopted by the general assembly provided- for a Nation-wide organization composed of local membership assemblies, governed by local officers and empowered to deal in the first instance with membership griev- ances and other matters. Membership local assemblies were in turn to be grouped into eight territorial divisions, for the most part coterminous with the respondent's operating divisions, and were to be immediately subject to the jurisdiction of ,a divisional vice presi- dent,s authorized to appoint a division committee to handle griev- ances on appeal from local assemblies and directed to devote his s By subsequent amendment to the constitution, the title of these officers was changed to division president. THE WESTERN UNION TELEGRAPH COMPANY 51 "entire time to the interests of the Association." The "Supreme Body" of the Association was to be the general assembly. Composed of two national officers, the eight divisional vice presidents, and two delegates from each division, it was to meet annually and to consti- tute the final source of power with regard to all matters of policy and operation.9 A .general president, directed "to devote his entire time ,to the work of the Association,'.'. and., a general . secretary-treas-:.. urer were to be the national officers of the Association, their salaries and those of the divisional vice presidents to be established and regulated by a board of directors during the first year and, there- after, by each general assembly. During the recess of the general assembly, the Association was to be governed by a board of directors, composed of the general president and the eight divisional vice presidents, its action to be subject to the disapproval of the general assembly. The board of directors was authorized to handle all matters concerned with the proper functioning of the Association, to adjust in conference with the respondent all cases referred to it by the divisions, "to arrange- methods to effect amicable and satisfac- tory adjustment," and to render a report of its acts-to the, general,... assembly. Provision was made for the payment of dues by the members of the local assemblies, part of which was to be retained by the local assembly and part to be sent to the general offices of the Association. A board of arbitration, composed of one Associa- tion representative, one company representative, and a third mem- ber chosen by the first two was provided for, and a procedure for handling grievances was outlined. A comparison of the Association constitution and the draft sub- mitted by Carlton shows that the two documents are dissimilar as to structural set-up, Carlton's draft having merely provided for suc- cessive committees of original, intermediate, and final jurisdiction to handle grievances and to act as governing bodies. They are almost exactly alike in the statement of aims and objects, in the eligibility provision and other membership requirements, and in the provision for a board of arbitration. In a number of respects the Association constitution shows evidence of having been modeled on the constitu- tions of the Order of Railroad Telegraphers and the C. T. U. It is, however, strikingly unlike the basic documents of each of these organizations in its utter silence as to the power to call a strike in the event of an inability amicably to adjust disputes. That the effect of the omission of a strike clause and the insertion of Carlton's arbitration provision was to disable the Association under all condi- tions from exerting economic pressure by means of the strike weapon 0 By subsequent amendment of the constitution the general assembly met biennially after 1921. 52 DECISIONS' OF NATIONAL LABOR RELATIONS BOARD and to compel it instead to accept as a last resort the decision'of a board of arbitration , is evident from the debate of the delegates during 'the convention . Moreover , two of the delegates 'testified at the hearing that it was their' understanding at the convention that the Association 'had renounced the right to strike ' by adopting the arbitration provision . Carlton's testimony was to the same effect. Miller' stated at the hearing in' this connection that' he -left Chicago greatly disappointed at his lack ' of success in urging the insertion of a strike clause and in establishing it labor 'organization "with some teeth init." In accordance with prior arrangements , Carlton and three Associ- ation representatives 'met at Omaha on July 25 and on the same day executed an agreement, herein called the Omaha Agreement . On that day a telegram bearing the names of the 16 delegates was addressed to all employees announcing the adoption of a constitution and urging the'addre'ssees to stand squarely behind the Association and to defend it against outside influences . The three Association representatives who met at Omaha were subsequently paid by the respondent for the time spent between the conclusion of the general assembly session and their return to work, and all expenses incurred by them during this period were also borne by the respondent . In its introductory clauses the Omaha Agreement states that the Association hopes "to secure as members practically all of the employees occupying permanent positions in the company " and that the respondent is desirous of es- tablishing "on a permanent basis" its relations with its employees as represented in the Association. By means of the substantive pro- visions of the Omaha Agreement the respondent assumed toward the Association the obligation to accord preference of employment to those applicants who would indicate a willingness to join the Association, to bargain with members of the Association as to terms and conditions of employment, to limit the discharge of Association members to situ- ations constituting "adequate cause," to grant to any employee having a grievance the' privilege of dealing with local company officials in the first instance, with an ultimate right of appeal through the general assembly, to limit the causes for which an Association committee member' might be discharged , to furlough full-time and part-time officers of the Association during periods of 'non-employment oc- casioned by the execution of their duties .as such officers, and to accord the Association representation, through its division committees, in the administration of the sickness and accident aspects of the then existing company benefit -payment plan . In addition , both parties bound themselves to refer to a board of arbitration , in accordance with the Association's constitution, any dispute between them con- cerning the interpretation of the Omaha Agreement or concerning THE WESTERN UNION TELEGRAPH COMPANY 53 terms • and conditions of employment. The Omaha Agreement was to remain. in effect indefinitely, except that it might be terminated upon 6 months' notice by either party.10 By supplemental agreement, also :signed at Omaha on July 25, the parties•.zagreed further (1) that. all employees who had been released from the service of the respondent after January 1, 1918, "because of undesirable affiliations," would be reemployed upon application and: submission of evidence that they had joined the Association 10 The text of the agreement reads as follows : 1. The Company agrees to hereafter prefer for . employment those applicants for posi- tions who indicate their willingness to become members of the Association. 2. The Company undertakes to treat individually or "collectively with members of the Association through their duly constituted committees and officers of the Association with respect to grievances , wages and the broad questions involved in working conditions. 3. Individual matters may be adjusted locally , but no general schedule of working hours or wages shall be put into effect until it. has received the approval of the General Officers of the Company and such Association officers or committees authorized to represent the Association in such natters. 4. Memorandum agreements may be executed between the Association and the Company embodying undersfandings reached with respect of general conditions of employment, wage schedules and other matters of joint interest . Such agreements shall be in as full force and effect as if they were incorporated in this agreement at the time of its execution. 5. This agreement shall continue in force for an indefinite period except that it may be terminated by either 'party, upon giving ' six months' notice to the other party of its intention so to do. 6. It is recognized that members of the Association and the Company are engaged in performing a continuous public service and that such continuity of service is necessary at all times as well as during the present war emergency. It is agreed that the Company shall not discharge ' any member of the Association from its employment without adequate cause, except that in view of the fluctuating nature of the Company's business, the Coin- pany reserves the right to reduce its working forces as the fluctuations of traffic may require. Employees laid off for lack of work shall be selected from those most recently employed, and shall be furloughed so that their service record shall not be broken. 7. Any employee having a grievance is privileged to take the same up without prejudice with the local employing official either individually or through the local committees, and failing a satisfactory adjustment shall have the right of appeal up to the General Assembly through the committees representing the employees and the Company. 8. The Company agrees that no employee while serving as a member of any committee of the Association shall be subject to discharge except for grave infraction of the Com- pany ' s rules and regulations or other serious cause and then only by resolution of the Executive Committee of the Board of Directors . In all cases of discharge by the Executive Committee a statement of the grounds of such action shall be lodged with the Board of Directors of the Association. 9. If any dispute between the Association and the Company shall rise concerning the interpretation of this agreement or respecting the hours of employment, working condi- tions, or wages, which cannot be settled satisfactorily to both parties by negotiation, then it is agreed that such disputes shall be referred to a Board of Arbitration as now provided for in the Constitution of the Association. 1.0. It is further agreed that nothing herein contained shall affect in any particular the plan for employees' pensions, disability benefits and death benefits created by the Company and, now being administered by a Committee of employees appointed to carry out said plan, except that the-Association through its Division Committees shall be represented in the administration of the plan in so far as sickness and accident benefits are concerned. 11. It is further agreed that members who while serving as officers of the Association find it necessary to devote their time wholly or in part to the affairs of the Association shall be furloughed by the Company during such periods of non-employment by the Company, so that their service record will remain unbroken. 12. It is agreed between the parties that except as herein expressed, the Company sus- tains no obligation to or control over the Association or the provisions of the Constitution governing the Association. 54 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and relinquished "the undesirable outside affiliation," provided that no such employee had "sought to damage the company's property, to produce confusion in its plant, or to interfere with other employes in the discharge of their duty"; (2) that employees reinstated in accordance with the first provision of the supplemental agreement would be entitled to a continuous service record; (3) that on and after August 4, overtime ancl','Sunday time ,.Would be 'eomplite&,'ae time and one-half; and (4) that the respondent would at a later date consider and make effective, if agreed upon, wage schedules and collateral items. According to Carlton's testimony, one of the reasons for meeting at Omaha almost immediately after the close of the constitutional convention was his eagerness "to close the matter, if possible, before the Postmaster General or the Government took over the wire" so that the Postmaster General might be presented with "an accom- plished fact." The purpose of the meeting, he explained at the hear- ing, was to agree on a constitution and to sign an agreement. "We must have accepted their constitution . as. satisfactory," he testified-;-, "otherwise, we would not have signed an agreement." More specifi- cally with respect to the failure of the delegates to insert a strike clause in the constitution, he admitted that that circumstance was an important factor in his decision to sign the Omaha Agreement and that he would not have approved any agreement unless the con- stitution had, in accordance with his earlier pronouncements to the employees and to the public, provided for arbitration as a means of settling disputes. Carlton explained further that he was careful to see to it that the Omaha Agreement also contained a provision that the men would not strike. As no minutes appear to have been taken of the discussion of the delegates on the Carlton draft of an agreement and on other possible terms favored by them, it cannot.be..determined directly whether, the Omaha Agreement and the supplemental agreement represent the results of an interchange of ideas or a voluntary unilateral ex- pansion by Carlton of the scope of his original draft. At the hear- ing Carlton claimed fatherhood of the idea of according preference of employment to applicants indicating a willingness to join the Association. He also' acknowledged authorship of the sense of the last clause of the Omaha Agreement whereby the company expressly disclaimed control over the Association, stating as his reason therefor a desire to avoid "a very natural suspicion" that the Association night be considered as company controlled. Comparison of the Omaha Agreement and the draft of the pro- posed contract submitted by Carlton to the convention delegates reveals that both documents are essentially alike. Their differences THE WESTERN UNION TELEGRAPH COMPANY 55 .are, for the most part, occasioned by the variance as to the structure of the Association between the Association constitution and the draft of a proposed constitution left by Carlton with the convention dele- gates. Thus, since the Association constitution deviated from the Carlton suggestions as to grievance machinery, the Omaha Agree- ment, in so far as it was adapted to the alternative machinery out- lined in the Association constitution, differed from the Carlton draft .of an agreement. Although Carlton had announced in his bulletin of July 4 an intention to accord the Association representation on the committee administering the company benefit-payment plan, this point was not expressly incorporated in his draft of an agreement. The Omaha Agreement designates the manner of representation. Two differences are, however, discernible in the two documents: The Omaha Agreement limited'the 'situations under which Associa- tion committee members could be discharged, while the Carlton pro- posals were silent on that subject. Furthermore, the Omaha Agree- ment provided for the furloughing of full-time or part-time Association officers, while Carlton suggested that the respondent pay the salaries of employees absent from work because of attendance at Association meetings. On August 1, 1918, the Postmaster General of the United States assumed control of the respondent's telegraph system, and in 1919 the lines were returned to the respondent. 2. Conclusions as to formation of the Association There is no dispute in the evidence as to the respondent's labor rela- tions policy or as to the events which preceded the formation of the Association, as hereinbefore outlined. Indeed, the policy and many of the events are admitted in the respondent's answer. The respond- ent denies, however, that the undisputed facts are reasonably sus- ceptible of the inference that it interfered with, dominated, or con- trolled its employees in the formation of the Association and avers affirmatively in its answer that it impressed upon its employees and upon the delegates to the constitutional convention that the sole pur- pose of forming an employees' association was to create machinery for collective bargaining which would be "absolutely independent" of the respondent. Carlton stated at the hearing, in support of the respondent's answer to the complaint, that the respondent had co- operated with its employees in materializing their desire to form a labor organization by according to them, in their initial efforts, various forms of guidance,. aid, and support merely for the purpose of helping them "to get started" on the path of independence. "We 247384-40-vor,. 17-5 56 DECISIONS OF NATIONAL LABOR RELATIONS BOARD did all we could by encouragement," he said of the respondent, "to make the Association ... virile and independent." We believe that the facts as hereinbefore related successfully chal- lenge the respondent's contention and validly support a contrary conclusion. Admittedly hostile to the C. T. U. and to other outside labor organizations, the respondent began in 1915 to consider .'lie wisdom of introducing among its employees a plan of organization which it hoped might at once divert their interest from the C. T. U. or any other organization employing the strike weapon and satisfy, a recognized desire on their part for some, kind of collective action. Study of the problem at that time revealed, however, that there were two pitfalls to be avoided in setting up such an organization: (1). the right of employees to strike and (2) the freedom of the employees to Join a union of their own choosing. To overlook either of these hazards would be to imperil the very purposes for which such an organization was being considered. Apparently unwilling or unpre- pared to deal with the problem further, the respondent permitted its idea of promoting the organization of a Nation-wide association for its employees to lie fallow. for 3 years. After., April 8; 1918, however, a public policy as to labor relations was sanctioned by Woodrow Wilson which tended to encourage promotional efforts by the C. T. U. Although the respondent, nevertheless, chose to con- tinue to be governed by its own labor policy and to invoke the penalty of discharge against those who disobeyed its injunction against join- ing the C. T. U., the need for a concrete, positive plan 'to reinforce its position became evident, if it were to emerge victorious in its campaign against the C. T. U. and its intransigence with respect to. the War Labor Board's recommendations. Time was of the essence in the battle, as there loomed the probability of governmental control with the concomitant danger of superimposition upon the respond- ent's employees of the prevailing public policy as to labor relations. Thus Carlton resumed consideration of the plan he had abandoned in 1915 and set about, on behalf of the respondent, to confront the C. T. U. and the Postmaster General by August 1, 1918, with "an accomplished fact"-the Association. The pitfalls of which the respondent had been made aware in 1915 were now carefully to be avoided and Carlton was to be assured in advance of organization that the Association would renounce the right to strike and accept, instead, the principle of arbitration as a' means of settling disputes and that the Association would serve as an effective bulwark against any C. T. U. encroachment. By means of statements to the press and bulletins issued directly to the em- ployees, Carlton laid down the terms upon which recognition of the THE WESTERN UNION TELEGRAPH COMPANY 57 Association would be based. The Chicago employees responded al- most at once, indicating their adherence to Carlton's principles.,' Where obstacles in the form of employee indifference or C. T. U. opposition were perceived, the respondent attempted to overcome them by appeals to loyalty, heartening words, and promises of com- pany cooperation. The machinery for bringing the Association into being was also devised by the respondent and all promotional ex- penses incurred were borne by it. The delegates thus arrived at the convention committed to Carlton's mandate, repeated in the draft of a constitution which he handed them, to renounce the strike as a means of settling disputes. Satisfied that they had executed that mandate in their constitution, Carlton negotiated the Omaha Agree- ment, obligating the respondent to prefer for employment applicants for positions indicating a willingness to join the Association and to accord various forms of preferential treatment to its members and officers, and thereby achieved his second objective of minimizing the opportunity for further encroachment by the C. T. U. We find that the respondent initiated the Association for the ac- complishment of the foregoing purposes and that such purposes are inconsistent with independence of the Association and freedom from domination thereof by the respondent. Whether, in spite of the plans of its parent, the Association suc- ceeded during its infancy or in later years in emancipating itself from the respondent's control and in emerging as the freely chosen representative of its members is to be determined from the history of its dealings with the respondent. 3. Dealings with the Association from its initiation to July 5, 1935 a. Contribution of forms of financial support In his first annual report delivered before the Association's general assembly at Denver, Colorado, in 1919, Joseph P. Hayes, then general president of the Association, reviewed the growth of the Association since its initiation "a little more than a year ago in response to the Company's invitation to hold a Constitutional Convention," reported upon its financial progress, and summarized the results of its dealings with the respondent. He stated that, upon their return home. from the organizing convention in 1918, the divisional. vice presidents and all but three of the delegates undertook the task of permanent organi- 1 The development of events up to June 11, the date of the Chicago' petition , negatives entirely the contention that the idea of forming an association originated with the signers of the petition and that the respondent's role was merely that of cooperator and guide. The facts show that, had the sense of the petition not been made known to Carlton, his plans would, nevertheless, have proceeded in accordance with the pattern he had already laid out. 58 DECISIONS OF NATIONAL LABOR RELATIONS BOARD zation of the Association in their respective divisions and that their efforts had resulted in the establishment of 161 locals with a total membership of 20,000. Of the three delegates who had not joined in the promotional endeavors of their associates, he reported that they had deserted the Association "because of adverse influences that were brought to bear upon them," one having thus become a rene- gade immediately upon his return to New York City. This reference appears to have been made to Ray Miller. With respect to the finan- cial position of the Association, his report declared that the Associa- tion had embarked upon its career without any funds and that its officers had rejected a suggestion advanced by some of the members that the respondent be asked to extend a. loan to the Association "inasmuch as the Company took the initial step." Instead, the officers proceeded to set up the Association by establishing "proper credit relations" and without asking "the loan of a cent." The record shows that, in the years that followed, the Association grew in membership and local assemblies, attaining its peak in 1930 when it had enrolled as members 37,683 persons out of a total number of 49,824 land-line employees. Annual collective bargaining confer- ences were held with the respondent and numerous agreements were reached. The Association also became the recipient of special treat- ment, sometimes as a result of negotiations with the respondent and at other times without demand or agreement. An intimate relation- ship between the respondent's officials and the Association's officers, in which the former's counsel was extended to the latter with and without solicitation, was established during the infant years of the Association and became noticeably cemented during later years. Evidencing<-this relationship are, among other things, the° substance and tone of correspondence between the Association's officers and Carlton and Willever. Thus on August 3, 1919, Hayes wrote to Carlton asking to be advised whether in Carlton's opinion certain employees of another company of which Carlton was also the presi- dept were eligible for membership in the Association. Carlton, in reply, counseled Hayes that such employees were ineligible for mem- bership, as their wages were not derived from the respondent, and suggested that they might, "of course," form their own association. As to a similar problem, the respondent agreed on April 7, 1920, not to object to membership in the Association on the part of joint rail- road employees receiving regular compensation, at least in part, from the respondent. On the occasion of the Association's establishment of a local assembly at Havana, Cuba, early in 1920, Hayes promptly informed Carlton by letter of that aspect of the Association's growth and of the report that the Havana employees "are enrolled 100% strong under our banner." Attached to Hayes' note was a letter THE WESTERN UNION TELEGRAPH COMPANY 59 from the Association's representative in Havana, and Hayes com- mented upon it as follows to Carlton : "The interesting portion of his letter is wherein he advises that they have the strike disease down there and having turned their minds in the proper channels, they now think of something else." Carlton's reply congratulated Hayes on the success of the Association's organizational efforts in Havana. Typical of the state of this relationship 10 years after the Associa- tion's birth is an exchange of correspondence between Willever and Burton, president of the Association since 1927, on the formation of credit unions among the respondent's employees. Burton advised Willever that such a project had been conducted through the efforts of the Credit Union National Extension Bureau 'of Massachusetts and requested an expression of the respondent's attitude toward credit unions. Willever, in reply, endorsed the credit union idea but expressed personal regret "to see outsiders leading the movement." "I should not expect," he continued, "the formation of these local credit organizations to work adversely in themselves to the Associa- tion, but having in mind the desirability of having the Association function as actively and continuously as possible in the interests of its membership, and considering that this cannot always take the form of concessions from the company because they would serve to milk the animal quite dry, it seems too bad that the Association itself did not undertake to operate along similar lines. Of course there is another side to it and that is the difficulty of guarding against the possibility of breach of trust, when money is involved, and the unfavorable reaction upon the members if they should find that their accumulated funds had been dissipated." As already stated herein, from the date of its organization the Association became the recipient of various forms of special treat- ment accorded to it by the respondent. (1) Payment of salaries of general assembly delegates and free transportation What Hayes had failed to report to the general assembly of 1919 in connection with the financial position of the Association was the undisputed fact that Carlton had arranged to have the respondent pay the salaries of the delegates to that general assembly and to fur- nish them with free railroad transportation facilities. The follow- ing year the Association again received the same support from the respondent. In 1921 and 1923, by arrangement between the Associa- tion and the respondent, the latter paid the salaries of delegates to the conventions held during those years and was thereafter reim- bursed by the Association. On May 6, 1925, Willever wrote to Hayes 60 DECISIONS OF NATIONAL LABOR RELATIONS BOARD stating that he assumed the Association wished to follow the usual custom of having the respondent advance the salaries of delegates to the forthcoming general assembly and that he would be pleased to receive a list of the delegates-elect. Five days later Hays replied that the Association would not request the advancement of salaries that year because of its improved financial condition and commented as to past favors as follows : "The aid extended at Detroit and St. Louis proved to be a life saver." Thereafter the respondent made deductions from the salaries of delegates for absence from work occasioned by their attendance at general assembly sessions. The respondent had thus for several years extended valuable aid to the Association during its formative period and had, in return, received the gratitude of the Association. After Association officers and delegates to. the general assemblies had enjoyed for a while the benefits of free railroad transportation spontaneously tendered to them by the respondent, the extent of that privilege was limited by an agreement between Carlton and Hayes on December 14, 1920, whereby the respondent undertook to issue or request the issuance of free railroad passes only for officers or con- ferees of the Association for the following purposes: (1) to attend annual or special meetings of the Association board of directors, (2) to attend meetings with officers of the respondent for discussion and adjustment of wages, working conditions, and other matters, and (3) to comply with a request of any officer of the respondent for attend- ance at his office or elsewhere. Written application was to be made in each instance by the Association's president to the general manager of the respondent's division in which the person on whose behalf application was being made desired to travel. Transportation to and from general assembly conventions was specifically excluded. The agreement was to remain in effect for a trial term of 1 year but the respondent,was expressly privileged to cancel it at any time by written notice to the Association's president. A copy of the agree- ment was sent to all vice presidents of the respondent. The scope of this arrangement was subsequently clarified by Carlton on January 8, 1921, in a letter to Hayes explaining that 11 named railroads billed the respondent for transportation costs incurred by the latter's em- ployees and that, in the case of these railroads, the respondent settled bills rendered to it by cash payments. The letter closed with the advice that, "in order to avoid criticism," Carlton would thereafter furnish to Hayes statements of all cash disbursements made by the respondent for transportation provided for Association members in order that the Association might reimburse the respondent for such expenditures. THE WESTERN UNION TELEGRAPH COMPANY 61 The record shows that the Association availed itself of the benefits of the free-transportation agreement continuously during the period under '.consideration in this aspect of the case . In addition, free transportation was furnished by the respondent to delegates to Asso- ciation division assemblies . Travel passes issued to Association officers, conferees , and delegates at times carried the designation "in- spector" as the traveler's occupation with the respondent. They also bore the notice : "Good only when travelling on business in connection with Western Union Telegraph Lines upon the Railroad Company's right of way." It was explained at the hearing by some of the respondent's officials that this arrangement with the Association re- ouired no actual cash expenditure by the respondent as the latter had agreements with some of the railroads whereby they undertook to furnish the respondent with free transportation . Willever indi- cated that this undertaking by the railroadsiwas limited to transpor- tation in connection with company business . The notice appearing on the railroad passes indicates the same limitation . In justification of the agreement and of the respondent 's practice thereunder, Will- ever testified at the bearing that the respondent considered trips of Association officers to be "company business " and, therefore, within the scope of the respondent's contract with the railroads . "We con- sidered it," he explained, "to be the business of the Company because it had to do with the details of our business on which the Association had an appeal, or being on behalf of an employee, some matter of that sort came up , under the purview of the Association who had under- taken to protect its members against injustice , discrimination, and arbitrary treatment." He justified the extension of the transporta- tion privilege to delegates to division assemblies on the ground that such delegates were concerned in part with questions arising out of contracts between the respondent and the Association and that it was, therefore, "logical and reasonable to consider those local meetings had a sufficiently company complexion to warrant us in making this transportation available." Willever contended at the hearing that the Association was not enjoying a unique privilege under the free transportation agreement, as the railroads had accorded similar treatment to railroad unions. The Association joined in this contention and called as a witness Wilbur C. Pitman, supervisor of the Pennsylvania Railroad Com- pany Wage Bureau , in charge of labor relations for the New York Zona of that railroad . Pitman testified that the Pennsylvania Rail- road Company accorded the perquisite of free transportation on its roads in the form .of annual card passes to certain classes of em- ployees and , through collective bargaining , to union representatives. 62 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The respondent cannot successfully defend its support of the Asso- ciation in this respect by pointing to a similar practice among the railroads where union representatives by collective bargaining enjoy a privilege extended by the railroads to their employees. The record- in this proceeding shows that the respondent had of its own accord' assumed payment of transportation expenses incurred by the Associa- tion for the travel of its delegates and officers from the date of its. inception to December 14, 1920, thereby relieving the Association during its formative stages of a financial burden which might have- retarded its growth and prevented its immediate execution of the role of a Nation-wide organization. Free transportation was thus. one of the forms of company aid extended to the Association for the. purpose of helping the latter, in the language of Carlton's testimony with regard to the respondent's assumption of expenses of the consti- tutional convention, "to get started." The agreement with the Asso- ciation for free transportation, by which the respondent voluntarily- extended the term "company business" to include Association opera- tions, was hence clearly not the result of genuine bargaining between the parties for a condition sought by the Association. It was rather in the nature of a declaration by the respondent that it would con- tinue at its pleasure to dispense forms of largesse already enjoyed' by the Association. That the respondent realized it was granting aid to the Association- by sparing it the expense of railroad transportation and that the- Association considered itself the recipient of a valuable gratuity is evident from correspondence between the Association's president and_ Willever. On April 26, 1934, while the present Act was being con- sidered by the Congress, Willever wired all general managers that-. the "Wagner Bill" recognized "unaided company unions" and sug- gested that the respondent, "to be on the safe side;" discontinue cer- tain forms of beneficence, including free railroad transportation. On April 28, 1934, Burton replied to Willever objecting to the pro-- posed cancellation of privileges, particularly that of railroad trans- portation. "The question of transportation," he wrote, "is of course. vital to both the Company and, through the Association, the eni-- ployees, and while this concession may, under the terms of the pro-- posed labor bill if and when such bill becomes law, constitute aid to. the Association, we should much dislike its cancellation, unless and'. until such cancellation was absolutely necessary as a matter of corn-- plying with the law." We' find that the grant of the free-transportation privilege to the Association constituted a contribution to its support, regardless of whether or not the respondent thereby incurred any out-of-pocket THE WESTERN UNION TELEGRAPH COMPANY 63 expenses, and that the Association's officers were aware of the value of such aid and of the power of the respondent to withdraw it at any time. (2) Grant of free use of bulletin board space On October 7, 1925, after the Association had operated for about 7 ,years, Willever sent to all general managers a communication stating that, at a recent conference with the Association, it was proposed by the Association that the respondent permit the former to install bul- letin boards in the respondent's offices for exclusive Association use, the location of such boards to be determined jointly by local company officials and the Association. The communication continued with the report that the respondent had not agreed to this proposal "as a firm understanding" but that Willever had informed the Association con- ferees that, as far as the commercial department was concerned, there would be no objection to the installation of bulletin boards if a suitable place was available and "if the matter posted thereon is submitted to the City Superintendent or the Manager as to its satisfactory and proper character, before it is posted. The idea is, of course, that nothing which is subversive of authority or calculated to be injurious to the Company shall be permitted to be posted in Company premises." On the following day J. J. Welch, vice president in charge of the traffic department, sent a memorandum on the same subject to all di- vision traffic superintendents, stating that the Association had re- quested the privilege as to certain traffic department offices and that "no change, however, was made in the existing regulations." He then advised the addressees that bulletin boards used for company notices would suffice for Association notices except that the respondent would furnish any additional boards which might be needed in the larger offices. The memorandum continued with the instructions that the boards in the operating rooms "must belong to the Company and nothing should be placed on any bulletin board in the operating TOOMS without the Chief Operator's inspection and approval," the :second injunction to apply to company and Association bulletins. It is clear that the respondent again readily extended to the Associ- ation the additional favor of furnishing it on company property and without cost facilities for circularizing its members as to all matters to be brought to their attention. The respondent at the same time retained the ultimate power of censorship over the use of facilities which it thus made available to the Association. Since the arrange- ment was admittedly not considered by the respondent to constitute an agreement with the Association, submission to the power of censor- ship was the price paid by the Association for the continued enjoy- ment of this privilege. 64 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Willever admitted at the hearing that this privilege constituted financial aid to the Association. Both the respondent and the As- sociation contended at the hearing and in their briefs that the Asso- ciation was not the sole labor organization enjoying the benefit of free use of company bulletin boards. In this connection, Pitman of the Pennsylvania Railroad Company testified as an Association witness to an arrangement between that railroad and railway labor organizations for the free use of bulletin boards by the employees' majority representative. His testimony as to the extension of the privilege to minority groups is not clear. Counsel for the Board introduced in evidence copies of . collective bargaining agreements which the A. C. A. had executed in 1937 with the Postal Telegraph Company and the R. C. A. Communications, Inc. Each of these agreements permits the A. C. A. to maintain bulletin boards in places designated by the employer. Neither of them empowers the em- ployer to pass upon the propriety of union notices. Mervyn Rath- borne, president of the A. C. A., testified that each of these contracts had been obtained as a result of collective bargaining, the contract with the Postal Telegraph Company having been entered into in settlement of a strike. The distinction between the respondent's dealings with the Association and those of the other employers men- tioned is that the latter yielded to the persuasive bargaining powers of the representatives of their employees and incorporated the re- sults of such bargaining in a definite agreement without reserving to themselves the power to supervise the use of the privilege agreed upon. We find that the grant of bulletin board space to the Association constituted a further form of support to be enjoyed by the Associa- tion at the discretion of the respondent. (3) Other forms of financial support According to the testimony of Willever and others, the respondent of its own motion permitted local assemblies to meet on company property without charge; extended its mimeographing and other mechanical facilities to Association officers; sanctioned the conduct of Association elections on company time and property; provided free space for a cooperative grocery which one of the local assem- blies had engaged in at one time; and, according to Willever, granted it "possibly one or two small things which constituted financial aid." In addition, on May 1, 1926, Carlton announced to all employees the authorization by the respondent's stockholders of a stock sub- scription plan "for the twofold purpose of encouraging systematic saving and assisting employees to acquire a financial interest in the THE WESTERN UNION TELEGRAPH COMPANY 65 Company." Fifty thousand shares of common stock of the Western Union Telegraph Company were thus offered for sale at less than market -value to the respondent's employees. The offer was made at $120 a share, payable in installments, no more than 50 shares to be sold to any one subscriber. The general officers of the Association, who might otherwise have been ineligible to participate because of their indefinite furlough from the respondent's employ, were ex- pressly qualified to subscribe for stock under the plan on their own account and trustees of local assemblies were permitted to subscribe on behalf of local assemblies. In 1928 a similar offer was made at $130 per share, and the privilege of participation was extended to the general assembly for the Association. The Association and its general officers and several local assemblies took advantage of these offers. By stipulation between counsel for the Board and counsel for the respondent, it was agreed that participation was as follows : 12 local assemblies purchased a total of 161 shares ; the general as- sembly bought for the Association 50 shares ; and the general officers, including division presidents, subscribed for a total of 89 shares. Payment was in most cases made on the installment plan by monthly payments. The amount invested in the name of the Association in the respondent's common stock was $6,500. The respondent had thus made available to the Association and its officers, as well as to its employees, an opportunity for financial gain and the Association and its general officers, in availing themselves of that opportunity, acquired a financial stake of considerable signifi- cance to them in the very corporation with which they purported to deal at arm's length as the representatives of that corporation's employees. b. Contribution of forms of promotional support (1) Grant of check-off privilege On November 14, 1919, Willever sent instructions to all general managers setting out a procedure to be followed by the respondent's local cashiers in making periodic deductions from the salaries of Association members for dues owed to the Association. The deduc- tions were to be made in cases where the local assembly secretary had submitted to the respondent's local cashier an authorization bearing the member's signature. Similar instructions were sent out to divi- sion superintendents by the respondent's vice presidents in charge of the traffic and plant departments. This arrangement was thereafter referred to as the check-off. In each case, a covering letter accom panied the instructions. - In his covering letter, Willever stated that the procedure had been the subject of an agreement between the '66 DECISIONS OF NATIONAL LABOR RELATIONS BOARD respondent and the Association's president and commented : "The Association is anxious to make the arrangement effective as' soon as possible." A few months later Willever issued further instructions prohibiting the respondent's cashiers and others making the deduc- tions from retaining any part thereof as remuneration for their serv- ices and directing that the entire amount be remitted to the local assembly secretaries. The usual practice of memorializing the results ,of collective bargaining by a formal written document signed by both parties and called a "memorandum of understandings" was not fol- lowed as to the check-off arrangement. According to the testimony of some of the Association's division presidents and local secretaries; the check-off became a prevalent method of paying dues, some local assemblies adopting the practice of paying local company cashiers a small gratuity for' their services. At the hearing Willever testified that, although he could not recall whether the Association and the respondent had ever executed a specific agreement as to the check-off, he was sure that the subject had come up, "every now and then" at annual conferences, and that "the Association, like all other labor unions, [was] finding difficulty in collecting dues from members that were scattered thinly over con- siderable territory." He could not state with certainty that- the privilege had been granted outside of a regular conference with the respondent but thought that the question had probably been raised at a conference and that the respondent had assented to it at a later date by an exchange of letters. No' such exchange of letters was produced at the hearing. Upon' examining his covering letter and instructions on the subject at the hearing, Willever commented that this correspondence gave no indication of reluctance on the part of the respondent to grant the privilege of the check-off to the Associa- tion. He explained that his purpose in entering into the arrange- ment was to make the Association "really effective"; that he was thereby pursuing the intent and policy of the management of making available to its employees the advantages of "a militant organization that was engaged in the process of collective bargaining for their benefit"; and that he had not thought that the employees themselves would appreciate the value of a militant organization and would -voluntarily finance the Association. He recognized that the effect of this privilege had undoubtedly been to facilitate the collection of dues and thereby to stabilize the Association's finances to the extent that it could definitely rely on a fixed income. The value of the check-off to the Association and the latter's under- standing of the respondent's interest in that practice are further revealed in a letter dated July 7, 1933, from the president of the Association's Southern division to the general manager of that divi- THE WESTERN UNION TELEGRAPH COMPANY 67 sion. The division president asserted in his letter that the inability of the Association to collect dues in some of the respondent's units where the check-off had been discontinued, coupled with the failure of Association members in those units to participate in wage increases, had created "a fertile field for outside organizations." Stating. that "neither we nor the company want any outside influence now," the division president urged that, in view of the "mutual interest" of the respondent and the Association in the matter, "anything you may suggest as a means of keeping them in our organization will be appreciated by us and I am sure, be mutually beneficial to all." Thereafter, on December 21, 1933, Willever issued instructions to general managers to institute the check-off, upon advice from the Association that authorization therefor had been obtained from each member, in those units of the respondent where no local assembly existed. We find that the respondent readily accorded the Association the privilege of the check-off without charge for the two-fold purpose of facilitating the incidents of membership, thereby overcoming the reluctance of employees to join and assuring the adherence of those who had joined, acid 'of stabilizin the A"ssociatiofi' s income, a factor essential to its growth and strength. We find also that the Associa- tion officers were cognizant of the reasons underlying the respondent's conduct in this regard. (2) Distribution of Association literature and other forms of solicitation As part of its own' campaign to augment its membership rolls, the Association had prepared for distribution among the respondent's employees leaflets describing the benefits and advantages to be ob- tained from signing up with the Association. an March 22, 1921, Welch addressed a memorandum to all division traffic superintendents referring to an earlier ruling by Carlton that the respondent's obli- gation under the Omaha Agreement to prefer for employment appli- cants indicating a willingness to join the Association did not require employing officials to distribute. Association leaflets to applicants for positions. By October 1922 Carlton had become concerned about the apparent inability of the Association to attract the respondent's em- ployees and to sustain the interest of those who had joined. He consequently conducted a personal investigation among the respond- ent's regional officials to determine the underlying causes of the difficulty and thereafter attempted-to institute such remedial devices as he deemed necessary. On October 24, 1922, Carlton wrote to Hayes as follows concerning the results of his personal inquiry: 68 DECISIONS OF NATIONAL LABOR RELATIONS BOARD During the recent Division Conference, it was reported that the Pacific Division membership percentage in the A. W. U. E. was below normal. The Association has undoubtedly suffered from. weak leader- ship and a disposition on the part of the Vice-President to direct affairs from his desk rather than from the field. It will be gratifying to you to know that the Division Superintendents are more vigorously than ever concerning themselves with the Asso- ciation and doing everything possible to bolster up the meetings. In Los Angeles, it seems that the Association has been par- ticularly unfortunate in the matter of leadership, but with the new President it is hoped that more interest will be shown. San Diego has been granted a charter independent of Los Angeles and is now 100% strong. It seems that the Pacific Division has had discouraging expe- riences in Association politics, and there have been many with- drawals because the employees at non-functional offices felt them- selves entirely out of touch with headquarters except on re- mittance dates. This became more acute when the new reg- ulations:cutting their overtime went into effect and will have to be overcome. Mr. Cook is' awaiting the roster of employees which you promised him and which will help him materially. Hayes replied to Carlton about a week later in a nine-page letter thanking Carlton for his note "respecting Association membership conditions, especially on the Pacific Coast," defending the Associa- tion's Pacific division from Carlton's attack of "weak leadership," casting some of the blame upon local officials of the respondent for their failure to make inquiry "as, to whether all was well at home" in the face of a paucity of grievances, explaining organizational difficulties at Los Angeles on the basis of an uncooperative attitude on the part of local officials of the respondent, and indicating what plans the Association had under consideration to quicken member- ship interest,- improve membership morale, and augment Association affiliation in non-functional offices. Hayes also referred as follows to the effect of Carlton's personal interview with the respondent's regional officials : I did not give any of our boys an advance tip of your talk to the division heads. Modestly I simply awaited results. Within two weeks, it was quite evident from some of the letters from our boys: that reached me, that out of Heaven a nugget of gold had been, dropped. The whole atmosphere seemed to change over THE WESTERN UNION TELEGRAPH COMPANY 69 night. Needless to say, we are delighted, delighted beyond. measure. When our membership reached a point of saturation, and we couldn't seem to push ahead, notwithstanding our urge, there was only one conviction that I could reach, and that conviction was, that there was an undertow, intangible in character, that was holding us down to a level, above which it seemed impossible to rise. The open sesame was, I truly believed, to be found in a kindly word from you to your directors of affairs in the Com- pany's various- divisions. In closing, Hayes again thanked Carlton for the latter's kindness and commented as follows : "The unbounded faith which the em- ployees have in you is the real and indisputable answer to why the organization still lives." Carlton's investigation appears also to have brought about a change in the respondent's earlier policy of refraining from cooperating with the Association in the distribution of Association literature to new employees. On August 2, 1923, Willever in-formed all general managers of the respondent's agreement to hand to new employees any pamphlets which the Association might prepare "describing the functions and objects of -the Association and calculated to sell the Association to our employees." He further directed general man- agers to arrange for the distribution of such pamphlets, "to the end that the new employee may be early acquainted with the existence of the Association, its purposes, etc." Two days later, in counter- mand of his earlier instructions that the Omaha Agreement did not require company distribution of Association literature, Welch ad- vised all division traffic superintendents that the Association had had printed a small folder "designed as a welcome to new em- ployees and an invitation to join the Association"; that he had informed Association officials that he would not object to "our em- ployment supervisors handing a copy to each new employee, the Association, of course, to supply the folders"; and that a specified procedure should be followed for the distribution of the folder to employees not hired through an employment bureau. Several months later, similar advice went out to all division plant superin- tendents. The record shows that employing officials throughout the country complied with these instructions. Willever testified at the hearing that justification for his instruc- tions lay in the preferential hiring provision of the Omaha Agree- ment. . Welch explained at the hearing that "pressure from the Association" had led him to relax his earlier prohibition against distribution of Association literature by employing officials. He con- sidered himself unqualified to declare whether similar pressure had 70 DECISIONS OF NATIONAL LABOR RELATIONS BOARD been exerted by the Association at the time of his earlier instructions. With regard to the effect upon new employees of his later instruc- tions, Welch stated at the hearing that he could not estimate with certainty whether the execution of those instructions tended to coerce membership in the Association, as such a judgment would necessarily have to be based on the personal characteristics of each recipient of Association literature. With the onset of the general business depression in 1931 and the concomitant 'drop in the respondent's pay roll, the problem of enlist- ing new employees for the Association diminished considerably, and the respondent turned its efforts toward attracting as recruits those who had withstood earlier forms of solicitation and those who had succumbed to such solicitation only temporarily. These efforts took the form of furnishing to local assembly officers, upon request, a list of employees within the assembly's jurisdiction, containing the name, the date of employment, and current assignment of each employee. Lists thus furnished were used by the local assembly. as a basis for canvassing members. The respondent did not rely on this device alone but implemented it by a more direct method of company solicitation. On October 16, 1931, Cronkhite, acting vice president in. charge of the commercial department, wrote to all general man- agers suggesting that the'latter instruct their subordinates "to help in the upbuilding of the Association by explaining to non-member employees the theory of the fifty-fifty relationship and emphasizing the fact that membership in the Association is more or less an obliga- tion on employees accepting benefits that the Association has been instrumental in securing." The term "fifty-fifty relationship" was used in the letter to characterize the spirit of mutual cooperation which had been established between the respondent and the Association. Continued imperviousness of some employees to all forms of com- pany"pressure and the threat of encroachment by competing labor organizations, occasioned by the public policy as to labor relations enunciated in the National. Industrial Recovery Act of 1933, com- pelled. the Association to conduct an active drive for members in 1934. Again the respondent felt called upon to cooperate but real- ized that it was restricted to less overt means than it had employed in the past. On March 6, 1934, Willever addressed a memorandum marked "confidential" to all general managers, informing them of possible Association requests for employee lists, "the information being wanted in a membership drive." The' memorandum continued a.s follows : Since we are interested in having an organization which has functioned as efficiently and as fairly as the Association has, THE WESTERN UNION TELEGRAPH COMPANY 71 represent as many of our employees as possible I see no reason why under existing conditions the information should not be- supplied. In view, however, of the current attacks on "com- pany unions" which as a class are distinctly different in many- respects from the Association of Western Union Employees, and- because of the undesirability in the circumstances of doing any- thing which could possibly be distorted into the influencing, not to say the coercion, of employees in favor of any particular labor- orgariization, I" suggest that the matter be handled discreetly and. as quietly as possible. Willever testified as follows with regard to this memorandum : The membership drive to which he had referred represented the.. Association's initial effort at that form of solicitation and was.. launched at a time when an outside organization had been attempting- to enroll the respondent's messengers. In stating that the Associa- tion had functioned "efficiently" he had had in mind its "marvelous.. record" of accomplishments for its members and for other employees ; and in characterizing its method of operations as "fair" he had bad. reference to its attitude toward the respondent, particularly as shown in its literature, which he considered to be quite different from the. literature distributed by the A. C. A. His reference to attacks on. "company unions" had been based on the, tenor of discussions evoked. by proposed codes of fair competition; however, his own belief at the"" time, shared by other officials of the respondent, was that the Associa- tion did not fall within that designation. As ordinary employees of the respondent do not deal directly with the chief officer in charge of the territorial division in which such employees work, instructions issued during. this period by the re- spondent's vice presidents to general managers, division traffic super-- intendents, and division plant superintendents as to the policy to be. followed with regard to individual employees required further dis- semination among all subordinate officials within the jurisdiction of" these divisional officers. There is evidence in the record of the dis- semination and execution of instructions issued by the respondent's: vice presidents to support the Association in its promotional efforts. Employees in charge of hiring and those empowered to recommend, discipline and, under certain circumstances, to suspend employees, under them summarily did in fact execute the mandates of the re- spondent's vice presidents in this regard.'2 Mary Elizabeth Bean,. "By agreement between the respondent . and the Association , executed on December 19. 1919 , an employee could be dismissed summarily or suspended "by his immediate superior" or by the head of the department in which he was employed for certain designated offenses. As to other offenses not listed In the agreement , prior warning was required before a dis-. missal or suspension . The immediate superior of an offending employee could administer, the warning and only "managers, supervisors, assistant chief operators , and foremen" were, empowered to dismiss or suspend after warning. 247384-40-vol. 17-6 X72 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employed at Washington, D. C., in the traffic department of the Eastern division, testified that for about 3 years, starting in 1926, she had been in charge of interviewing and hiring applicants for positions and, particularly , students for the operators' training school maintained by the respondent at Washington , D. C. After an appli- cant was employed by her, she followed the practice established by her predecessors in the employment office of informing such person of the existence of the Association and of the fact that every new employee was expected to join. She would thereupon , her testimony continued , hand the new employee an application for membership in the Association together with Association literature . Where the new employee failed to accede to her request after the lapse of a short time, she renewed her earlier efforts and almost invariably succeeded in obtaining a signed application for membership in each case. She could recall no instance in which her efforts in this respect had failed to yield favorable results. Bean testified also with respect to the practice of her superior, Miss McDuffey, who was similarly engaged in hiring new employees, and stated that McDuffey informed suc- cessful applicants for positions with the respondent that they had been , employed with 'the understanding that( ' they would join the Association . Richard D: Hallett, - trained in the operators' training school in Washington , D. C., in 1929 , testified that he had been inter- viewed by Bean when he applied for employment and that, after his training was completed, she had handed him a note asking him to join the Association . He complied with her request . That this practice was not confined to the Eastern division is evident from the testimony ,of an employee in the respondent's Metropolitan division who stated that she joined the Association in 1928 at the request of her instructor at the respondent's training school in New York City. Other employees testified that they had been asked by their super- visors to become members of the Association and that they had ac- ceded to such requests . These supervisors were empowered to recom- mend discipline and to inflict the penalty of summary dismissal in .some instances. An employee working for the respondent in New York City testified in this connection , that she had joined the Associ- ation in 1928 under the following circumstances : A day or two after -she had been hired, her supervisor, whose job designation was that of "force chief," sent for her and said, "We have an Association here and .everybody belongs to it." Whereupon he handed her "'a paper to, sign," and she complied with his direction , thereby achieving- the status of membership in the Association . She stated at the hearing -that the paper appeared to her at the time she signed it to be an appli- cation for membership in the Association . Upon cross-examination by counsel for the respondent, she stated as her reason for signing the THE WESTERN UNION TELEGRAPH COMPANY 73 application, "Well, I felt that since my superior told me to sign it, and I was so new in the company, I felt that it was necessary in order that I work, and continue to work." The testimony of another employee, working in one of the respondent's offices at Washington, D. C., is that the joined the Association because her immediate supervisor had said to her of the Association, "Eileen, I think it would be better for you to join it, because you will get more benefits by joining." A third employee, working for the respondent in New York City, testified that he. rejoined the Association in 1929 or 1930 because the "force chief" in one of the units had said to him, "We just noticed that you are not a member of the Association, and you have such a swell job. If you want to keep it, you really ought to join the Association again, because you know how things are." The testimony of another em- ployee who worked in the traffic department at New York City is that one of the "force chiefs" had advised her that joining the Association would help her keep her job and "get all the breaks" possible. She thereupon joined. A messenger stated at the hearing that he had joined the Association in 1930 when one Bodeck, whom the witness considered a supervisor, handed him an application for membership and told him-to sign it. . Other messengers, according to this witness, were recruited as members under, similar circumstances. The testi- mony of these witnesses was uncontroverted, and we find their state- ments to be credible. Under the Association's constitution all employees, except those "who actually employ and discharge," are eligible for active member- ship. The record shows that some employees who interviewed and hired applicants for positions were, nevertheless, active members of the Association during the period under consideration. Similarly, employees with supervisory titles who were empowered to recommend discipline for `their subordinates and to dismiss such subordinates summarily under certain circumstances were, in practice, not regarded as falling within the class of employees ineligible for active member- ship in the Association. We find, on the basis of the testimony of their subordinates and the job descriptions and job designations pre- pared by the respondent, that these employees perform supervisory functions and represent the respondent in their dealings with subor- ^clinates. A large number of such supervisory employees were officers of local assemblies and were otherwise active in Association affairs. While it might therefore be argued that such supervisory employees solicited members among those whose work they directed in pursuance of the functions incident to their offices in the Association, the record shows that they were also acting on behalf of the respondent. In view of the respondent's policy of supporting the Association in its efforts to '74 DECISIONS OF NATIONAL LABOR RELATIONS BOARD? enroll members, as evidenced by the instructions of its officers to, general managers, division traffic superintendents, and division plant superintendents, we find that the respondent sanctioned and encour- aged the promotional endeavors of supervisory employees who irb some measure exercised personnel functions and' who at the same time were members and officers of local assemblies. (3) Preferential treatment of Association members The respondent's policy of discharging empl'oye'es` who joined the- `C. T. U. or any other outside labor organization remained generally unchanged during the period under consideration in this section of the case. Espionage activities continued as in the past and were supplemented by an exchange of intelligence between the Association and the respondent on the extent of outside union operations la There is some evidence that for a short time in 1933', after the re- spondent had signed in modified form the President's Reemployment Agreement in pursuance of the spirit of the National Industrial Re- covery Act, a vague attempt was made to relax temporarily the rule proli"ibitiii membership in outside" labor Organizations1 The problem of encouraging membership in the Association on the part of those employees who refrained from joining other labor 'organizations because of fear of discharge but who', nevertheless, remained aloof from the Association was met by the' respondent through devices which were less direct but more effective than actual solicitation or the sanctioning of solicitation. Among these devices was the endowment of Association members with preferred status as to terms and conditions of employment. The earliest manifestations of the respondent's efforts in this connection are to be found in the 13 In this connection the record contains a letter from W. C: Titley, in ' charge of the plant department, to Hayes dated April 18, 1927, replying to Hayes' inquiry as to the scope of the activities of the International Brotherhood of Electrical Workers in Dallas, Texas. Titley informed the Association president that the division plant superintendent in that area had reported that the International Brotherhood of Electrical workers planned first to organize power companies in Texas and thereafter to extend their organizational efforts to the respondent and other communications companies . Titley also stated that this information was being forwarded to all division plant superintendents for the purpose of ascertaining whether parallel programs of organization were being undertaken in their com- pany divisions . The letter closed with the statement that Titley was returning Hayes' file on the matter. 14 On September 1, 1933 , the respondent sent to all vice presidents and general managers and to Barton an announcement that it had executed on the previous day a "modified form" of the President 's Reemployment Agreement . The announcement explained quite fully all wage and hour provisions of,the Agreement and contained specific instructions on these points. It merely stated categorically , without explanation or accompanying instructions , that Section 7A of the National Industrial Recovery Act was' included in the respondent's undertakings by stating that "the right of employees to organize and bargain collectively through representatives of their own choosing without interference from employers , etc., as prescribed in Sub -section ( a) of Section (7) of the N. I. R. A. is established." THE WESTERN UNION TELEGRAPH COMPANY 75 Omaha Agreement, constituting the record of its initial dealings with the Association. In the first section of that document the respondent undertook "to hereafter prefer for employment those applicants for positions who indicate their willingness to become members of the Association." It had also at the same time agreed not to discharge "any member of the Association from its employment without ade- quate cause." As the Association had not, at the time of the meeting in Omaha, advanced beyond the embryonic stage of a general struc- tural outline formulated by the constitution and implemented by a group of officers, the three representatives who negotiated on behalf ,of the Association obviously exerted no bargaining power in dealing -with Carlton but merely acquiesced in the grant of such perquisites to future Association members as Carlton had previously stated he would bestow upon the supporters of any association which might :be formed in pursuance of his principles. Carlton's purpose in cloth= ng his former promises in legal language and in reducing them to the 'forni of an agreement was clearly to place an official stamp of company approval on the newly formed Association and to encourage the growth of that organization in at least two ways: All prospec- tive applicants for employment were put on notice that successful consideration of their applications would be conditioned upon their willingness to join the Association. Those already employed were apprised that the respondent would qualify its prerogative of dis- ,cliarge if they became members of the Association but would continue the absolute exercise of that prerogative if they joined any other labor organization. A section of the Omaha Agreement provided that memorandum' agreements might thereafter be executed between the Association and the respondent embodying understandings which might be reached as to general conditions of employment, wage scales, uncl other matters of joint interest, such memorandum agreements to have the same force and effect as if incorporated in the Omaha Agreement at the time of its execution. The first memorandum agreement was executed on the same day as the Omaha Agreement. The respondent further clarified its intention to strengthen the Asso- ciation and to close its doors to other labor organizations when it undertook in that memorandum agreement to reinstate all employees who had been released from its service since January 1, 1918, "be- 'cause of undesirable affiliations" upon submission of evidence that they had joined the Association and relinquished "the undesirable outside affiliation." In its subsequent enunciation of company policy and in its later -dealings with the Association the respondent sought to perpetuate the underlying aim of the Omaha Agreement and the first supple- mental agreement by discriminating in favor of Association members 76 DECISIONS OF NATIONAL LABOR RELATIONS BOARD as to conditions of employment and by expressly informing non- members that they did not merit the same treatment as their more fortunate fellow employees because, unlike the latter, they had not indicated their support of the Association. The traffic department appears to have inaugurated the principle of preferred treatment of Association members on July 18, 1921, by a letter from the vice presi- dent in charge of that department to all division traffic superintend- ents, which contained instructions that, "where force reduction is iii progress and the duties of a particular job can be as expertly and satisfactorily handled by an available Association member as by ai non-member, the Association member should be given the work, pro- vided there is no great difference in their length of service." Three months later, at a conference with Association representatives, the respondent generalized its policy by executing a formal "memoran- dum of understandings", whereby it agreed ..that "as between member- and non-member of the Association, the member shall receive pref- erence at all times where the Company's interest will not be impaired, by so doing." All division heads were thereupon instructed accord- ingly. In a subsequent memorandum to general managers, Willever declared that the agreement of 1921 had been induced by the Asso- ciation's undertaking "to assist in the maintenance of an efficient,. willing, and stable force, and to cooperate with the management in an economical and efficient administration of the service." Since the- 1921 agreement is silent as to the obligations assumed by the Associa- tion in exchange for the respondent's undertaking, it must be inferred that the quid pro quo upon which the respondent relied was implied in that agreement by mutual understanding. This appears to have been the only formal agreement as to preferences entered into be- tween the respondent and the Association, all other instructions on the subject having been issued upon the initiative of the respondent's vice presidents. About a year after the execution of the 1921 agree- ment, thei respondent's vice president in charge of the plant depart- ment clarified for the division plant superintendent of the Central division the practical implications of that agreement by quoting as: follows from a communication issued by the traffic department oil the same subject : ... The provision is to be interpreted in a fair and common- sense manner. The Company has said that it will prefer for employment those expressing a willingness to become a member of the Association and it naturally follows that it will favor them in its employment, but it is not to be inferred therefrom that a non-member has no service or seniority rights as contrasted with the rights of a member. Each case must be considered oii THE WESTERN UNION TELEGRAPH COMPANY .77 its individual merits and no arbitrary rule can be made that will fit all cases at all times. Where reduction of force is in progress and the duties of a, particular job can be as expertly and satisfactorily handled by an available Association member as by a non-member, the Asso- ciation member-should be, given the work provided there is no great difference in their length of service. By the end of 1923, the respondent had recognized that the success of its preference policy required a practical application of outstand- ing instructions on the subject which would unequivocally indicate to members and non-members that the disparity of privilege as to working conditions between the two groups was attributable solely to a difference in their attitude toward the Association. Thus on December 21, 1923, Willever wrote to all general managers reminding them of the. 1921 preference.agreement and reporting that complaints had been made by the Association of the non-observance of that agreement or of its application "at any rate not in a form which can be identified" and directing them to correct "the situation complained of." The manner in which the 1921 agreement was to be given a more effective practical application was formulated as follows : if in weighing the merits of candidates for particular jobs, promotional or otherwise, the choice in a case where the qualifications, experience, especial fitness, length of service, etc. are substantially identical,-turns upon the question of Associa- tion membership. If in such cases the Association member is given the preference which the, understanding clearly contem- plates, as against a non-member no better qualified, and if the appointee understands. that a preference based upon membership actually was given in his case while the non-member who might otherwise have got the place is frankly told that his or her failure to participate in the work and obligations of the Asso- ciation indicated a reluctance to participate for the common purposes of the Association and the company, and that this fact militated against his or her selection for the position,-both the letter and the spirit of the undertaking will be kept. The memorandum closed with directions to general managers to see that "the above is fully understood by all employing commercial officials in your territory" and to exercise "some pains to check up its practical observance in appointments made." A similar memo- randum was addressed about a week later by Titley, in charge of the plant department, to all division plant superintendents. In 1925 all division traffic superintendents received instructions of the same '78 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tenor as those sent by Willever and Titley, and Willever again sent copies of those instructions to all general managers. At the hearing counsel for the Board questioned Willever concern- ing the objective underlying his memorandum of December 21, 1923. We quote from his testimony : Q. The purpose of that was to get the non-member into the Association; was it not? A. That was very active in the early part of the Association and we were rather active in trying to help the Association to get going so far as membership was concerned, because for the reason that Mr. Carlton had taken the initial step in the first ,place. We were very much concerned that our employees should have 'the benefit of collective bargaining by an organization, by an organization which used arbitration instead of the strike weapon for enforcing its demands. Q: But this Was five years after the Association was organ- ized. Were you still interested in building up a membership for it? A. They started from scratch, and it takes time, you know. I think I would like to add to that statement, also there is the fact that came to our knowledge quite early, that in our or- ganization certainly there was a certain number of employees who were very glad to have the benefits of the collective bar- gaining transacted on their behalf by the Association, but who would accept those benefits without helping to defray the cost 'by taking on its membership.- When force reductions became necessary during the early part yof the general business depression, the respondent refused to accede to the Association's request that its members receive favored treat- ment as to lay-offs at that time. The respondent's refusal was based upon the ground that such an undertaking would be dangerous and 'impracticable. In 1931 and in 1933 the respondent's vice presidents 'apprised their subordinates in the field of the respondent's position on the matter but reminded them that the relationship of mutual -cooperation between the respondent and the Association remained unchanged, "unless it be," as Titley stated to division plant super- intendents, "that they are more strongly cemented together." Field .officers were advised that the relationship was to continue through Favored treatment of Association members in matters other than force reduction. Thus Willever suggested to general managers that, in view of the Association's cooperation with the respondent as to THE WESTERN UNION TELEGRAPH COMPANY 179, wage deductions and other measures necessitated by shrunken traffic and earnings, members "must be preferred in employment" and that the Omaha Agreement should be made "more of a living thing than it has-perhaps been in the past." It is apparent from the testimony of Willever and Titley and from a letter from Willever to the Association's general president that the respondent's failure in 1933' and early in 1934 to extend the scope of its preferential treatment of Association members to staff curtailments was occasioned by the- fact that it had signed the President's Reemployment Agreement as well as by the fear that the Association might otherwise be char= acterized as a company-dominated union. That the respondent had,, nevertheless, continued to accord favored treatment in other respects to Association members is evidenced by the advice of its vice presi- dents in 1933 to their regional subordinates and also by Willever'sz instructions to general managers on November 22, 1934, to extend preferential treatment "in numerous little ways" to messenger- members. We find. that, by favoring Association members as to terms an& conditions of employment, the respondent attempted to compel mem- bership in the Association, thereby fostering the growth of an organ- ization which it had initiated for its employees as a means of pre- venting their affiliation with labor unions of which it disapproved- (4) Enhancement of Association prestige Contrasting markedly with the respondent's disapproval of the- C. T. U. and its concomitant outlawing of membership in that organ- ization, was its program dedicated to enhancement of the Associa- tion's prestige in the eyes of all employees and aimed at inculcating in the minds of employees the belief that the Association was an. indispensable factor in their welfare as workers. In executing this., program the respondent assumed the role of guardian of the dignity of Association officials and sought, through various devices, to create- the impression among its employees that the Association performed vital and important functions on their behalf. Typical of the- respondent's efforts to shield Association officials from the indifference- and possible antagonism of minor local company officials is Willever's. reply to the charge of such conduct made by Association representa- tives in the course of a conference on January 8, 1921. "I'll deal' with those kind of people in my department," he warned, "and I will say right here that anyone who is antagonistic to the Association or their officers or committees better change his tack to save his job. I would like to get a line on officials of that sort. You folks should bring such cases to our attention without delay and we will remedy." 80, DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Association apparently found no reason for further complaint until November of 1934, when it was faced with the threat of organ- izational efforts by outside unions and with the charges of members that their grievances were being prosecuted unsatisfactorily. Asso- ciation officers complained to Willever of the lack of concern and unfriendliness of local company officials during this critical period and pointed to the fact that Association officials were being trans- ferred and reassigned "quite openly" because of activities on behalf of the Association and that the conduct of Association work was being prohibited during working hours. Willever thereupon dis- patched two letters to all general managers apprising them of the Association's complaint and of his immediate answer to the com- plainants that he could not believe that "any Commercial official would jeopardize his status" by violating the respondent's announced policy as to treatment of Association officials. He pointed out to the general managers that these complaints confirmed the respondent's impression that, as the result of prevailing discussions on proposed codes of fair competition and the attempts of "would-be rival organ- izations" to discredit the Association as a "so=called company unit," the membership of the Association had shown an increasingly captious disposition and a tendency to criticize Association officials for alleged ineffectiveness in the handling of grievances. He called to the attention of the general managers the fact that the respondent's inability to deal successfully with employee grievances during the economic depression imposed upon local company officials a duty to be "scrupulously impartial" toward Association representatives so that "instead of discrediting Association officials with employees every proper opportunity shall be availed of to strengthen such Association officials in the esteem of their members. Any discerning company official can find ways to do this without interference with manage- ment and without sacrificing the company's interest." Titley of the plant department sent a letter to all division plant superintendents expressing somewhat similar ideas. Willever testified in this con- nection that a feeling of gratitude toward the Association for its history of achievements on behalf of the respondent and its employees had impelled him to write these letters. He stated also that he had found no further need for sending letters of a similar vein after the two already referred to had been received. A further device to which the respondent resorted for the purpose of strengthening the good will of the Association among its em- ployees was the "tying-in" practice, a procedure whereby Association representatives were afforded an opportunity to make recommenda- tions as to the grant of special privileges to employees and whereby the recipients of such privileges were made to understand that the THE WESTERN UNION TELEGRAPH COMPANY 81 Association had participated in the determination to make the grant. Since in practically all instances the benefits in question had been available to employees as an incident of the respondent's established personnel program long before the initiation of the Association, the "tying-in" practice merely required a modification of existing pro- cedure in each case to include Association representation. The earliest evidence of this practice is to be found in a section of the Omaha Agreement providing that "nothing herein contained shall affect in any particular the plan for employees' pensions, dis- ability benefits, and death benefits created by the Company and now being administered by a Committee of employees appointed to carry out said plan, except that the Association through its Division Com- mittees shall be represented in the Administration of the plan in so far as sickness and accident benefits are concerned." The effect of this provision was not only to place the Association in a position of importance in the granting of sickness and accident benefits but also to produce the impression among employees that successful consid- eration of their applications for, such valuable incidents of the re- spondent's personnel program was to depend in the future upon their -membership in the Association. The respondent's undertaking in this respect, against the background of its determined attempt to utilize the Association for the purpose of conferring prestige upon the Association, could clearly not be regarded as a measure of the Association's bargaining power on July 25, 1918, but rather repre- sented a materialization of Carlton's earlier promise in his bulletin of July 4, 1918, that the respondent would enter into an exclusive contract with the Association upon its formation whereby the re- spondent would deal with that organization concerning conditions of employment, sick benefits, pensions, life insurance, and other matters affecting the interests of the employees. This provision of the Omaha Agreement subsequently became the pattern for further deal- ings with the Association and the practice thus instituted with re- spect to the sickness and accident, aspects of the respondent's employee-insurance plan was extended by the respondent, upon its own initiative or upon the request of the Association, to other phases of the respondent's personnel program. Thus in 1923 and 1924 advisory boards, composed of company officials and Association rep- resentatives, were instituted by the respondent for each department in each of its operating divisions to consider and advise upon indi- vidual salary increases and to recommend methods for improving the service generally. Individual increases had been granted by the re- spondent before this period without the advice of Association repre- sentatives, and thus the new procedure did not alter the past practice except that the Association was permitted to recommend the names 82 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of persons among whom the amount which the respondent made available for increases was to be distributed. The Association did not, however, enjoy the privilege of complete freedom of choice of its representatives on advisory- boards in the plant ^ department since the Association was counseled by Titley as to the kind of persons to select for these positions. The vice president in charge of the traffic department had independently conceived the idea of establishing ad- visory' boards for his department and had instructed regional traffic officials in 1922 "to definitely tie the Association in with all salary ratings and increases in non-supervisory positions" and to make Asso- ciation representatives feel that they were important members of the boards and active participants in their work. At the same time these regional officials were told by Welch, vice president of the traffic de- partment, that provision for the participation of Association repre- sentatives in salary ratings and salary increases "does not mean that both the initiative and the final decision in both cases do not rest with the responsible local official, because obviously his responsibility and authority cannot be diluted." Welch instructed them further that "when increases which have been made the subject of conferences (and all except supervisory should be so made) are approved or recommended, as the case may be, the Association representative should be at once advised, since it is only in this way that the Associa- tion can be identified with increases in the minds of the employees concerned." Willever further revealed the respondent's purpose in arranging for consultation as to salary ratings and increases with Association representatives, known in the commercial department as "rating conferees," when he wrote as follows to general managers on February 6, 1924, concerning the practical operation of the "tying-in" device : . .. when the employing official comes to advise the employee, he will, while making it clear that the increase was arranged on the basis of merit or whatever other factor may have governed, be at some pains to have the fact appear that the in- crease was duly arranged on consultation with the local rating conferee, so as not to cut the ground from under the latter's feet.. At a conference with the Association in 1926, the respondent under- took, in spite of the Association's demand for a general wage in- crease, to allot a specified sum for merit increases in 1927 and to tie the Association in with such merit increases through representation on special advisory committees or through the advisory boards. The respondent's desire to identify the Association in the minds of employees with the enjoyment of merit increases is again apparent from the "tying-in" of the Association and from instructions issued THE. WESTERN UNION TELEGRAPH COMPANY 83 by the comptroller in October 1927 to the effect that, "where a- Divi- sion Auditor finds it expedient to grant merit increases in the inter- vals between meetings of Advisory Boards, it is unnecessary for him to consult the Association member of the Advisory Board before exercising his authority. The Association, nevertheless, should be identified with such interim cases; that object can be obtained by -verbal advice to the Association's representative on the Advisory Board, at the time such action is taken." Thereafter, until the ad- vent of the general economic depression, the Association continued to be tied in with salary increases, either by advance consultation of its representatives or by subsequent advice to such representatives of the respondent's decision to grant an increase. Employees were thus made to feel, by. means of the extension of the "tying-in" device to salary increases, that membership in the Association enhanced con- siderably their chances of obtaining coveted increases and favorable salary ratings. The Association was also placed in a position of apparent im- portance when, during the period from 1925 to 1929, the respondent amplified its earlier procedure with respect to applications for more favorable working hours, for furloughs, and. for premature retire- ment pensions to include Association representation. . With regard to "tying-in" the-Association with the consideration of furlough appli- cations, Willever informed general managers that the respondent had not agreed -to that practice by means of a "firm understanding" but that it had, at the request of the Association, undertaken to write a letter suggesting to regional officials that Association representatives be consulted wherever practicable, before -furloughs were granted or service records were bridged, '"the idea being,", he told, general..man- ngers, "that the Association representative sometimes will be in a position to be helpful to us in determining the reasonableness of re- guests for furloughs or record-bridging-and that it will be of value to the Association to be tied in with our functioning in such matters." Titley sent a similar communication to division plant superintend- ents. Employees were thus further led to believe that membership in the Association was.also an indispensable prerequisite to favorable consideration of their applications for better working hours, for fur- loughs, and for premature pensions. With the advent of the business depression the respondent was no longer in a position to increase its operating costs by granting further salary increases. At the same time, outside labor organizations were attempting to enlist as members the. respondent's , employees and, particularly, its messengers. The respondent was consequently faced .with the problem of retaining in the minds of its employees the impression, previously created through the participation of advisory 84 DECISIONS OF NATIONAL LABOR RELATIONS BOARD boards in recommending salary increases, that the Association was- still a vital factor in their enjoyment of 'valuable incidents of em- ployment. Titley attempted to deal with this situation by instruct- ing division plant superintendents on January 26, 1933, that the. Association was to be tied in with "spreading the work" projects- Willever's concern about the problem and his attempts to deal with it are reflected in the following communication, which he sent to general managers on November 19, 1934: In considering how we can best proceed to enhance in a proper, and legitimate manner the Association of Western Union Em- ployees in the estimation of the supporting membership and of other employees, I suggest that you give some thought to tying in more closely with Association conferees in matters which con- cern the personal fortunes of their associates. The enforced' discontinuance of deserved increment in pay has, I presume,, in some territories resulted in the virtual elimination of all functioning on the part of these. conferees, and I am not sure that this is wise if we are concerned, as we should be, to ad- vance the interests of the Association as a recognized instrumen- tality for promoting the welfare of our employees and their just satisfaction in the conditions of their employment. It should be possible without opening a way for busybodies to make a. nuisance of themselves under cover of their Association repre- sentation to get considerable value from the suggestions which the familiarity of the conferees with the personal equations in- volved will prompt them to make when force adjustments are in. order. By November 22, 1934, Willever had conceived a specific solution for- the respondent's problem in this respect in so far as messengers': were concerned and he advised the general managers as follows "... it was agreed of the current conference that the Association will-, be tied in on all messenger uniform cancellations whether or not can- cellation is arranged as a result of • their proposal,-so that the an- nouncement to messengers in all cases may be made by the Associa- tion." It is clear that in this instance the "tying-in" device was for- the purpose of misrepresenting to employees that benefits granted to. them solely upon the initiative of the respondent had been achieved through the efforts of the Association. Willever and Burton testified at the hearing that the purpose of- the "tying-in" practice as far as the Association was concerned was: to prevent discrimination and the exercise of undue preference on, the part of the respondent's officials against the employees. By providing for Association consultation and advice in advance of a.:. THE WESTERN UNION TELEGRAPH COMPANY 85 determination by the respondent's officials as to particular terms and conditions of employment, they contended, the fair treatment of em- ployees concerned was assured. We cannot accept this testimony as an accurate statement of the Association's position, as the record shows that the Association officials at various times unequivocally and clearly contended before the respondent's officials that they were interested in protecting members only and were not concerned with the welfare of those who had chosen not to join the Association. Willever admitted at the hearing that benefits with which the Asso- ciation had been tied in had not generally been agreed upon by col- lective bargaining between the Association and the respondent and that the respondent had, by means of the "tying-in" practice, merely afforded the Association an opportunity to offer recommendations as to the circumstances under which such benefits were to be dispensed. In reply to a question of counsel for the Board as to whether the respondent was not in fact attempting to raise the Association in the esteem of its members by the tying-in practice, he stated, "Un- doubtedly. That was our policy from the beginning." With respect to_;his instructions to tie the Association in with the cancellation of inessenge.r uniform rentals, Willever admitted further that his pur- pose was to enhance the prestige of the Association in the eyes of the respondent's messengers so that they might not succumb to the efforts of outside labor organizations. Welch and Titley denied categori- cally that they had tied the Association in with incidents of employ- ment in an effort to build up its good will with the employees and asserted affirmatively that they were primarily interested in trying to do what "was good for the service." Welch stated in this connection, however, that his primary aim of benefiting the service required him to strengthen the Association through the tying-in practice. Titley interpreted at the hearing a statement he had issued to all division plant superintendents in November 1926, that tying the Association in with the granting of furloughs would be of value to the Associa- tion, to mean that such practice would afford the Association an opportunity to aid in building up the respondent's service. We re- gard Titley's interpretation as an attempt to distort the clear meaning of his statement of November 1926 and therefore reject as implausible his testimony on this aspect of the respondent's dealings with the Association. We find that, by means of the "tying-in" practice, the respondent attempted to clothe the Association with powers of importance for the purpose of leading employees to believe that favorable conditions of employment could be achieved only through membership in the Association. t 86 DECISIONS OF NATIONAL LABOR RELATIONS BOARD c. Domination of the Asspciation and its officers (1) The respondent's control over bargaining for conditions of employment It is apparent thus far that the Association made no attempt during its infancy or in later years to overthrow the control which the respondent had assumed over it during its formation. Instead, it gratefully accepted the various forms of support tendered to it by 'the respondent and passively undertook performance of the role which the respondent had created for it in 1918. That the Associa- tion's officers were constantly mindful of the help extended to the Association by the respondent and extremely anxious to retain all benefits received, is evident from the manner in which they purported to bargain for terms and conditions of employment. Under the Omaha Agreement the respondent undertook "to treat. individually or collectively with members of the Association through their duly constituted committees and officers of the Association with respect to grievances, wages and the broad questions involved in working conditions." The Association constitution invested the board of directors of the Association with "administrative and ap- pellate jurisdiction during the recess of the General Assembly" and provided that decisions thus made by the board of directors "shall stand as the judgment of the General Assembly until reversed by that body." In accordance with these two basic documents a pro- cedure was worked out by the respondent and the Association for periodic bargaining conferences between the parties. From the date of the Omaha Agreement until October 1935, 26 conferences were held between representatives of the respondent and representatives of the Association, consuming a total of 200 days and participated in by. an average of 11 Association conferees per conference. All conferences were held at the respondent's offices in New York City. The respondent was represented in negotiations by its vice presidents, and the Association conferees consisted of the 9 members of its board of directors and, such additional persons as the general assembly designated from time to time. Association representatives were known as the conference committee. Most conferences were initiated by submission to the respondent of agenda prepared by the Associa- tion conferees in accordance with the resolutions of the general assembly, accompanied by the general president's request for the fixing of a conference date. Agenda thus submitted were examined by the respondent's vice presidents and turned over by the latter to the respondent's president, who approved or disapproved the items listed in advance of the scheduled conference. His decision THE'WESTERN UNION TELEGRAPH COMPANY 87 was binding upon the vice presidents when they met with the 'con-' ference committee. New matter, not listed on the Association's agenda, could also be brought up for negotiation at conferences and in such instances approval of the respondent's president was neces- sary to bind the respondent. Association conferees met before each scheduled bargaining conference and reached a binding accord as to each item on the agenda; The Association's general president usually presided at conferences and opened negotiations by announc- ing at times the withdrawal of certain items from, the agenda and by presenting the hatters not withdrawn. Vice presidents answered on behalf of the. respondent and, where wage increases or other expenditures. were involved, presented 'financial statements 'through the respondent's statistician in support of their position., The stat- istician answered all questions raised-by the Association conferees concerning the validity of . his, conclusions as to the respondent's financial 'condition. On occasion the Association conferees called upon one of their members in the.accounting department for guid- ance in analyzing financial statements. At times, the respondent furnished, in confidence, financial data to Association representatives upon their request. When an accord on any item was reached by the parties, it was reduced to a document known as a memorandum of understandings, if the respondent's vice presidents agreed with the Association's contention that such memorandum was necessary. Where.. no :memorandum .of understandings was entered into to me- morialize a particular agreement, instructions were sent by the re- spondent's vice presidents to _ their immediate regional subordinates announcing the final accord of the parties, and a copy was forwarded to the Association.. Upon the conclusion of a conference the Associa- tion conferees proceeded to report the results to the membership at local assembly meetings and through the medium of the Telegraph World, the official Association publication. The general assembly was empowered under the constitution, to reject the decisions made by Association conferees at bargaining conferences. Not all matters proposed by the Association were successfully con- sidered at bargaining conferences.. Although the establishment of minimum wage rates for certain classes of employees was proposed by the Association conference committee in 1927 and 1928, the respondent failed to grant the request, and thereafter that item was.dropped from the Association agenda. A prominent item on the Association's agenda from 1922 to 1926 was the.matter of a general wage increase, which was regularly rejected by. the respondent's representatives. In 1926 the respondent again refused to.yield to the Association's request in this regard and insisted successfully in continuing ,its ,practice, of granting individual increases on the basis of merit but agreed to allot 247384-40-vol. 17-7 88 DECISIONS OF NATIONAL LABOR RELATIONS BOARD in advance a' definite sum of money for such merit increases.. When the Association agenda as received by the respondent in 1927 repeated the demands of earlier years for a general wage increase, the assistant to the respondent's president wrote to the Association's general presi- dent as follows': Among the various items included in the Association's agenda for the coming general conference is one requesting that a 10% general increase in salaries, effective January 1, 1928, be granted all employees. Inasmuch as Mr. Carlton has repeatedly declined to entertain any proposition involving a horizontal wage increase, he thinks there must be some misunderstanding in presenting it again and requests that it be stricken from the agenda, as it will not be discussed. The Association's president replied that he could not give a definite answer on the request to strike the general increase- from the agenda but that he would immediately submit the matter to the members of the last general assembly. He thanked Carlton's assistant for stating Carlton's attitude on the proposal and expressed assurance that a definite statement of the Association's position would be forwarded at the earliest possible date. The bargaining conference which followed resulted in the continuance of merit increases, and the following year the Association's agenda omitted any reference to a general wage increase but merely contained a proposal to continue the granting of merit increases. The latter affected less than half of the respondent's employees. It is thus manifest that the respondent controlled the subjects of collective bargaining and that the Association yielded to that control without attempting to invoke the arbitration machinery provided for in its, constitution and in the Omaha Agreement. Memoranda of understandings were executed on a great many sub- jects dealing with terms and conditions of employment and with the participation of the Association in the application of incidents of employment made available by the respondent to its employees on its own initiative without prior consultation with the Association. Among the concessions which the Association obtained from the re- spondent at bargaining conferences were the expansion and protection of seniority rights, overtime compensation, relief periods, vacations with pay, periodic review of salaries, and posting of notices of vacancies. Not all terms and conditions of employment enjoyed by the re- spondent's employees after formation of the Association were, however, agreed upon at bargaining conferences. The respondent on its own initiative decided to institute both favorable and unfavor- THE WESTERN UNION TELEGRAPH COMPANY 89 able changes in working conditions without prior consultation with the Association.' Thus in 1919 the respondent's board of directors authorized the institution of a'profit-sharing plan and directed that the details be worked out in consultation with an Association com- mittee. The following year the features of the plan, which was to operate only when the respondent's surplus attained a specified minimum, were announced by Carlton to all employees. At subse- quent' conferences with the respondent, the Association merely re- quested continuance of the plan, and the respondent complied with that request only during those years when it considered that its profits were available for such purposes. Among the classes of employees benefited by the plan'were those who were ineligible for membership in the Association. There is no evidence of any resist- ance on the part of the Association to the respondent's decision not to distribute 'profits during certain periods. Among the unfavorable conditions 'imposed by the respondent upon 'its employees without prior advice to or bargaining with the Association was the cancellation of premium payments in certain offices for overtime and for work performed on Sundays and holidays. This change in working conditions was achieved by telegraphic in- structions dated September 24, 1921, from three of the respondent's vice presidents and its - comptroller to general managers, division plant 'superintendents,' division traffic superintendents, and division auditors, announcing cancellation of the existing overtime premium and stating that the respondent's financial condition had compelled the action. The change was to become' effective on October 1, 1921. Although bargaining conferences were usually held in October of each year, the respondent did not defer its plans in this regard pending the outcome of the next bargaining conference.' While the record does not show what the agenda for that year's conference were, it is evident that the matter was discussed at the conference of Octo ber 1921 and that the respondent agreed to modify its earlier instruc- tions to a limited extent. ' Before acquiescing in the plan as modified, the Association conferees submitted the proposal to a referendum vote of the membership and issued an accompanying statement to the effect that, while the Association representatives did not agree with the respondent's views and were not convinced of the economic justi- fication for the proposal, they were of the firm conviction that members' interests would best be served by yielding to the respondent rather than by submission of the question to arbitration. The refer- endum appears to have resulted in favor of the respondent 's position and the Association representatives acceded to the respondent 's wishes in this -regard. In October 1924, the' respondent agreed to restore premium payments for work performed on Sundays. Another in- 90 DECISIONS OF NATIONAL LABOR RELATIONS BOARD stance of the respondent's imposition of changes in working condi tions without prior conference with the Association is to be found in the institution of the system of tour rotation in traffic-department offices. Although the 'Association subsequently objected to this innovation, it was nevertheless continued after several attempts on the part of the respondent to convince Association officials of the merits of tour rotation. Execution of a memorandum of understandings as to a particular matter did not necessarily indicate that Association members were satisfied with, or convinced of the need for, the terms of the agreement in which the conference committee had acquiesced. Already demon- strated by the agreement of 1921 with respect to the cancellation of premium payments for overtime, Sundays, and holidays, this fact is further borne 'out by the tenor and* general plan of negotiations in- voked by the respondent in 1931 for effecting "a decrease in' the salary of its employees. After preliminary correspondence between the re- spondent's officials and the Association's general president on the re- spondent's proposal to shorten hours of work and thereby to effect a decrease in wages, the general assembly of June 1931 instructed the conference committee to resist any move to lower wages and, in the event such resistance was unsuccessful, to conduct a referendum among the membership on the question of a wage decrease prior to the execution of any agreement. The following September the re- spondent's president and Willever conferred with Burton, the Associ- ation general president, at Chicago and informed the latter that the respondent's depressed 'financial condition left it with the alternative of bankruptcy if the pay roll were not reduced. Subsequently, at a regular conference in October of that year Carlton described the re- spondent's financial condition as verging on bankruptcy and placed the respondent's proposal before the conferees. After some dis- cussion, the Association representatives offered several counterpro- posals which were'rejected on behalf of the respondent and the parties finally agreed on October 13 to a 10-per cent deduction in wages, which meant that basic wage rates were not disturbed but that salaries were nevertheless reduced. Reduced salaries were to remain in effect "until in the opinion of the Board of Directors of the Company conditions warrant restoration of earnings wholly or in part." On October 13, Burton sent a telegram to his secretary informing her of the terms of the agreement and of the understanding of the conference committee that the respondent's board of directors had reduced dividends for the last quarter of that year, and instructing her to disseminate the message among local assemblies at Chicago. No prior referendum had been conducted on the subject and no request for arbitration was made by the conference committee. THE WESTERN UNION TELEGRAPH COMPANY 91 Notes taken of the conference by the Association's general secre- tary-treasurer show that Burton commented, in discussing the question of a referendum, that, since the proposal involved the reduction of a stipulated percentage from earnings without disturbing basic rates, there was no need for a referendum. These notes indicate further that, when the Association conferees considered among themselves whether a referendum vote should be taken, Burton declared, "I think talk of a referendum is inopportune at this time." They show also that Association representatives alluded to possible withdrawals from the Association as a result of the agreement and asked for further 'membership preferences to avert that contingency. Burton remarked in that connection, "We are going to be in a difficult situation and will need help." Whereupon the respondent's vice presidents offered to draft instructions to their regional subordinates and turned to Burton for suggestions. In reply to questions of the conference committee as to the practical application of such instructions by chief operators in the traffic department, Welch explained to them, "I would not want him to say I am going to fire you unless you belong to'the Association. If you have a lot of Traffic members resigning from the Association I would like the names of those fellows in order to see whether they are batting the ball. I want to find out who they are" Cronkhite of the commercial department endorsed Welch's statement with the re- mark, "That goes for me too." In a section of these notes entitled "Excerpts of remarks made by President Newcomb Carlton at the conclusion of the conference held in New York on October 5th to 15th, 1931, inclusive," the following comments by Carlton were recorded : I am interested in the names of the Association people who think so little of the organization as to want to pack their baggage and leave. The present situation was an opportunity to help the Company. We have never coerced the members to join or leave the Association. But I don't mind having a dashed well understanding that people who leave the Association now are attracting lightning. I don't feel quite as pleasant to lean on people who run in times of stress. It does not show a mental character of a long pull. The contemplated withdrawals of membership in the Association may all dissolve in anticipation. If they do not dissolve, I want to know it. . . . If there are any employees who make trouble, I am interested. ... If there is any such movement I certainly will take part in the support of the Association. . . . This is an ag- gressive.time of the Association. When business becomes better and stronger the Association and Company will be more cohesive than ever before. 92 DECISIONS OF NATIONAL LABOR RELATIONS BOARD I am interested in the preservation of the spirit of cohesion of the Telegraph Company.... You fellows have done a great job and can go home with your chin in the air conscious that you have done the only thing you could. There was not an ounce of give and take. It could not have been any less. We dealt frankly with you and you with us. Failure of the conference committee to submit the question to the membership seems quite clearly to have precipitated considerable criticism of the action of the Association representatives by the membership, which in turn led to various attempts at justification by the representatives. In the Telegraph World of November 1931' there appeared an article by one of the Association conferees entitled "The Recent Conference-The Results alfd Their Effect." It stated in part: Your conference committee has just completed its annual Fall Conference with 'the Company, and it is no secret that the con= ference did not end in a scoreless tie-it wasn't, even a tie. But I absolutely refuse to believe that the seemingly ill results of those deliberations will see any serious loss of support or mem- bership to the Association. If all our would-be critics knew or cared to learn the truth, they would soon and gladly soft-pedal their lamentable wailings ! ... The first few words of our universally respected Presi- dent Carlton's farewell talk to the Conference Committee,just be- fore its departure from New York were "Hello Heroes !" How endearing were those words, spoken by the great man that'he is and the great friend that he has always been to all of us, to the ears of your conference group who were forced by their better judgments to accept the famous 10°Jo ultimatum in spite of their concerted and somewhat heroic efforts to stave off the inevitable and who despite a most honorable and notable exhaustion of wit and brains were immediately showered with a comparative deluge of critical and in some cases abusive telegraphic 'expres- sions from certain members who most probably had never given them too'-great credit for their many glorious victories of pre- vious years. The article closed' with a plea not to withdraw from the ranks of the Association and with the statement that the.Association conferees "have nothing to become apologetic about ! If it had not been abso- lutely necessary to accept the wage abatement, they certainly would not have done so!" In an editorial in the same issue of the Tele- graph World its editor described the conference as "one of the most strenuous conferences ever experienced in the history of the Associa- THE WESTERN UNION TELEGRAPH COMPANY 93 tion," defended the action taken, and appealed to the membership to remain loyal to the Association. The Telegraph World for January 1932 ' contained an article by Burton which , although entitled "Annual Review," was devoted al- most entirely to the October conference . The article explained that, from the opening . moments of the conference , "the Association con- ferees were confronted with a series of difficult problems, but never were problems attacked with more courage , and never was forlorn hope pursued with greater valor." It went on to state that every possible way of avoiding the 10-per cent wage deduction had been considered but that the Association conferees had become convinced .of the respondent's need for direct and immediate relief after long hours of discussion had satisfied them that the financial statement presented by the respondent , "although estimated," was substantially correct. In justification of their ready acquiescence to the respond- .ent's demands, he asserted : We thought of arbitration , we thought of referendum ; we thought of the Seattle General Assembly resolution, and we thought of the many concessions the Company had given us in past years, but here was a situation not technically a reduction of basic wages-not technically a compromise offered by the Company, nevertheless, a situation vitally affecting the lives of our members . A referendum meant serious , vital, perhaps fatal delay. The article ended with a plea not to turn criticism of the Associa- tion's officers into disloyalty against the Association, particularly during a period of adversity. The Association constitution provided as follows for the submission of questions to a referendum vote of the, membership : In the event the Company wishes to compromise with the As- sociation Board of Directors or any conference committee on general matters of vital importance, such as salaries, income participations, classification or differentials, such changes shall first be submitted to the Local Assemblies for ratification by them and if rejected without qualification shall be referred to the Board of Arbitration for final adjustment, such final adjust- ment to be absolute. In addition to this provision by which the conference committee should have been bound in any event, the general assembly had di- rected them to conduct a referendum among the membership in ad- vance of any agreement if immediate resistance to the respondent's proposal proved unsuccessful. At the hearing, several Association officers testified on the procedure of the. conference committee in 1931. 94 DECISIONS OF NATIONAL LABOR RELATIONS BOARD R. W. Farren, Association Lake division president and a member of the conference committee, admitted that the period during which the wage cut was to remain in effect was unquestionably indefinite and also that a referendum vote afforded the sole opportunity for the membership to pass directly upon acts of the conferees. Burton de- nied that the conference committee had regarded the respondent's proposals as an ultimatum to the Association representatives to accept its terms or to see the Association dissolved, although pertinent ex- cerpts from the articles appearing in the Telegraph World of Novem- ber 1931 and January 1932 were read to him at the hearing. He justified the failure to conduct a referendum on the ground that the board of directors, who, he claimed, had exclusive power ta.interpret the constitution, had decided that the situation did not come within the language of the constitution, as no compromise by the Association was involved, but that the procedure rather required a concession by the Association to the respondent on a matter proposed by the latter. He explained in a similar manner the committee's non-conformance with the directions of the general assembly. Although the wage cuts agreed upon on October 13 were not to become effective until Novem- ber 1, he stated as a further reason for not holding the referendum that the delay occasioned by the conduct of such a vote might have been fatal to the respondent. Farren was unable to explain why the proposal had not been submitted to arbitration, or to recall whether arbitration had ever been mentioned at the ;conference. Burton of- fered no „explanation for the committee's silence as to arbitration ex- cept the reasons he had already given for the failure to conduct a referendum. The dissatisfaction of the membership with the terms of the agreement was analyzed by Burton as stemming from lack of acquaintance with the significant financial data. We find that the failure to hold a referendum clearly evidenced the respondent's control over the Association's officers and overrode the will of the membership as expressed in the constitution and in the mandate of the general assembly. In January 1932 the respondent again summoned the Association representatives to a conference and placed before them on January 4 a second proposal for curtailing expenditures by reducing hours of work in many offices with a concomitant reduction in pay of 81/3 per cent, by suspending the salary differential between day and night work, by eliminating holiday premium payments and certain bonus payments for plant-department employees, and by other means. On January 6, the Association conferees sent a telegraphic message to all local assemblies setting out the respondent's proposals,: stating that the respondent desired to make them effective on January 9, that Carlton had convinced the Association conferees of the urgent need THE WESTERN UNION TELEGRAPH COMPANY 95 for the proposed economies, and that the Association conferees were strongly of the opinion that the concessions should be agreed to im= mediately, and asking that a special meeting of each local assembly be called that evening to consider the matter so that a telegraphic reply could be received no later than the following day on the vote taken by the local assemblies. The referendum as conducted resulted in a favorable vote for the respondent's proposals and a memorandum of understandings was executed accordingly. Carlton's parting remarks to the Association conferees at the close of this con- ference were : "When we emerge from this thick weather we want to find the Association here stronger than ever. The Association must be kept intact. It has a splendid work in the future and you are in the present situation as deeply as we are." As a full account of the proceedings of this conference was not recorded in the Telegraph World, the membership was unable to de- termine the actual need for the agreement as well as the exact results of the referendum. At the general assembly of 1933 one of the dele- gates commented as follows on the inability of some local assemblies to participate effectively in the referendum : "... we were in such a big hurry for a decision, it cost us $3,400 to get telegraphic replies from Local Assembly messages, and then we did not get our vote in until after it was decided." In reply to that comment, Ross, Associa- tion Eastern division president, stated, "I submit that will never happen again." Whereupon the 'first delegate retorted, "We' never thought it would happen before." Burton testified that the only information made available to the local assemblies on the proposals submitted to referendum vote was the statement of the conference committee in the telegram announc- ing the referendum. He stated further that the sole reason for de- manding a reply within 24 hours was the urgent financial condition of the respondent. With regard to the decision to conduct a refer- endum in January 1932 and the failure to follow a similar procedure in October 1931, Farren admitted that, although the conference com -mite was governed by the same constitutional provision in each instance, it did not consider that the emergency confronting the re- spondent on the second occasion was so great as to warrant depriving the membership of an opportunity to pass upon the proposal. We find-that the Association officers did not properly or fairly sub- mit the second proposal to a vote of the membership and that their failure in this respect indicates clearly the powerful control of the Association's officers by the respondent. We find also that such con- duct is inconsistent with genuine representation and collective bargaining. 96 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The conference committee was again summoned to New York City by the respondent in July 1932 and was confronted with a third proposal for a further 10-per cent deduction from: salaries. On July 23 the conference committee sent a letter to all local assemblies describing the respondent's proposal, summarizing the financial data presented to the conferees in support of the respondent's position, and stating that Carlton and his vice presidents had convinced the Association representatives of the need for the proposed economies in balancing the budget in the event of a future decline in revenue. The conference committee stated further that its members did not believe revenue would in fact decline. For that reason, the letter stated, the respondent had agreed to attach a condition -to -the pro- posal that it would, starting on December 31 and continuing through successive 6-month periods, pay back to those affected by the decrease any net ' income which the additional wage deduction might yield after fixed charges had been provided for. Local assemblies were requested to send the results of the vote to Chicago not later than August 5. Notes of this conference taken by the Association's general secretary-treasurer. show that the respondent's officials suggested that the referendum be conducted by telegraph .and that one of the Asso- ciation conferees replied that a telegraphic referendum' disabled the Association from reaching 30 per cent of its membership. Burton wired Carlton on August 6 informing him that the pro- posal had been approved by ' a. majority of the- local assemblies and by the Association's board of directors and asking whether, in view of the apparent improvement in business conditions generally, the proposed deduction could not possibly be deferred or cancelled. Carl- ton replied that conditions had not yet improved, that the wage de- ductions were still needed to balance the budget, and that when an improvement occurred the terms of the refund provision would be made effective. On August 16 the respondent sent to Burton for signature a memorandum of understandings embodying the terms and conditions agreed upon. The Telegraph World for September 1932 does not indicate how the locals voted in the referendum of August 1932 but merely reports the vote by geographic divisions. At the general assembly conven- tion in 1933 one of the delegates intimated that the results of the referendum had been against acceptance of the respondent's pro- posal and complained as follows on the report in the Telegraph World : "On ratification of the ten per cent decrease, all we said in the Tele- graph World was a little section. We wanted a list of. just. how every local voted so in case there was a mistake, some local could contest the mistake in the publication. We,did not believe honestly that the THE WESTERN UNION TELEGRAPH COMPANY 97 peaple voted in the ten per cent cut. We still feel that most locals said no." 15 At a conference held at the instance of the respondent in January 1933 it was further agreed to cancel vacations with pay, to compel certain classes of employees to take 1 month's .vacation without pay and certain other classes to take 2 weeks without pay, and to cut in half some of the sickness and accident benefit payments made under the respondent's benefit-fund plan. No referendum was held on these proposals. Notes taken of this conference record the fol- lowing question by one of the respondent's vice presidents : "You will not submit the proposals to the field for a referendum?" Fur- ther according to these notes, Burton replied in the negative. At the hearing, Burton advanced.as the reason for not holding a ref- erendum in January 1933 the. argument that he had formerly made for not having conducted a referendum in October 1931. Elsden, Association Metropolitan division president, explained the, failure to submit the 1933 proposals to a vote of the membership by stating that the Association conferees had decided that the matter was not of sufficient importance to warrant such a procedure. We find. that the Association conferees again acted as agents of the respondent, rather than as the true representatives of the mem- bership, in deliberately depriving the Association members of an opportunity to. decide whether to accept unfavorable working con- ditions which the respondent was determined to force upon them. That the membership was displeased with the manner in which the Association representatives had yielded to the respondent's de- mands at the four conferences hereinbefore discussed and with their failure to invoke the arbitration provision of the Omaha Agree- ment and to threaten to abrogate that agreement on 6 months' notice, is evident from the introduction of an amendment to the referendum provision of the constitution at the 1933 general assembly and from the discussion on that proposed amendment. The amendment as adopted provided as follows : In the event the Company negotiates. with the Association Board of Directors or any Conference Committee on general matters of vital importance adversely affecting the membership, such as salaries, classification or differentials, such changes shall first be submitted to the local assemblies for ratification by them before being accepted or rejected, and if rejected without quali- fication shall be referred to the Board of Arbitration for final 35 A later issue of the Telegraph world, published In February 1937, contained a report by locals on a referendum 'conducted on the question of whether the general assembly con- vention of 1937 should not be held. Burton stated.at.the hearing that he was unable to explain why a.different procedure had been followed in reporting the August 1932 vote. 98 DECISIONS OF NATIONAL LABOR RELATIONS BOARD adjustment, such final adjustment to be absolute. -The decisions of Local Assemblies by a two-thirds vote of only the Company Department Group affected shall' be determined by their mem- bership votes cast by numerical strength. During the discussion on the proposed amendment, Pickett, Pacific division president, spoke in favor of its adoption and summarized as follows the general reaction evoked by the four conferences and by the failure on the part of the Association to invoke the arbitra- tion provision for settlement of the questions before those confer- ences and of other questions : Now, on the six months' notice : It has been my experience that through the life of the Association, our six months' notice meant nothing. Our arbitration clauses meant nothing. There have been no. such things in the life of the organization, for the simple reason that every time any one has suggested arbitration; every time anyone has suggested six months' notice, a reply always is, "You are jeopardizing the life of the organiza- tion when you resort to that, when you invite disaster." Now, I have no great quarrel with that argument. I am more or less in agreement. When we do those things, it invites dis- aster, but it proves to you our organization is, fundamentally weak when we must follow the dictates of. the company, and therefore we must follow their dictates and if we don't do it, it is the destruction that minute,. and the only question you gen- tlemen have got to decide-and you. have got to decide it some- time-is whether you are going to have an organization that is able to do some of the things you think should be done or whether you are going to continue to follow the leadership of the company. Now leave that in there. If our organization is not worth a damn, let's kill it and get another organization.. We find, on the basis of the evidence hereinbefore discussed, that the Association was powerless to represent its members in' dealing with the respondent ; that the respondent compelled Association con- ferees to act as- its agent and did not permit them to serve as the independent representative of its employees; -and. that agreements reached as a result of conferences on both sides did not represent the fruits of genuine collective bargaining between parties independent of one another but rather represented spontaneous action. on the part of the respondent in according favorable working conditions to its employees and ready submission by the Association to demands made by the respondent which adversely affected personnel. We find further that these . characteristics of the relationship between the respondent and the Association unquestionably establish utter dom- THE WESTERN UNION TELEGRAPH COMPANY 99 ination of the Association by the respondent and that such domina- tion was directly attributable to the persistence of the respondent's original purpose in initiating the Association and to the various forms of support which it had accorded the Association in execution of that original purpose. (2) Use of the Association to thwart the organization of messengers The basic purpose for which the respondent had initiated the Association was, as we have already found, to prevent outside labor organizations from enrolling the respondent 's employees as members. Until 1934 the respondent was able to achieve its aim merely by fostering the growth of the Association and by continuing its espio- nage activities with the aid of the Association. Although it became aware in 1933 of attempts on the part of the C. T. U. to organize its employees, the respondent manifested no great concern over the consequences of such action, as it relied upon the effectiveness of ex- isting means for combatting C. T. U. efforts . In this connection, Willever wrote Burton on July 10, 1933, stating that Willever was taking it for granted that Burton was doing everything possible to "buck up" Association members and to "keep them from being stampeded" by efforts of the . C. T. U. to gain a foothold among the respondent's employees . Existing methods had apparently worked`satisftctorily with those classes of employees whom the Asso- ciation took in as members . They proved inadequate, however, with respect to messengers , who were ineligible for membership in the Association unless they were at least 18 years of age and had been in the respondent's employ no less than 1 year. The Association had also been unenthusiastic about enrolling those messengers who were qualified under the constitution to become members . It had per- mitted messengers who joined its ranks to form sublocals without authority to operate as active units. It had in fact not bargained for-any of the messengers and regarded them as a negligible factor arnorig - the' "re 'spondent's `employees. In 1921 Willever had written Hayes, then general president of the Association , that the respondent had never considered that messengers were covered by, collective agreements and that a contrary notion would be regarded "as unde- sirable from the standpoint of the Company and the Association alike." The respondent's attitude as thus expressed persisted until 1934. In the spring of 1934, while the National Industrial Recovery Act enunciating the principle of freedom of organization was still in effect, the respondent began to detect signs of unrest among its messengers and evidences of imminent inroads by outside organiza- 100 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tions upon that class of its employees. It accordingly called upon the Association to undertake organization of messengers only .in those areas where such conditions had been detected and to promise new messenger members only such minimum improvements in work- ing conditions as were necessary to keep them away from. rival or- ganizations. In accordance with the respondent's instructions, the Association exerted its earliest efforts in the Pacific northwest. In August of 1934 it undertook the organization of messengers at Fresno and Long Beach, California, and on August 14, f934, Burton wrote to Willever announcing the practically perfect success of its endeavors at these two cities. He wrote also that the messenger members at Fresno and Long Beach had requested cancellation of uniform rentals and that an early favorable decision on that point would be appreciated.- Willever replied on' August 16 stating that the respondent had -acceded to the demand of the messengers:in those., two cities merely because it appeared that they had joined the Asso- ciation on the representation that they would be relieved of rental payments and that the respondent consequently had no alternative but to. agree to the cancellation of such payments. Willever then called Burton's attention to the fact that the Association's activities in Fresno and Long Beach had been conducted without regard to the understanding between the respondent and the Association that promotional efforts among messengers would be confined to divisional cities "which were thought to be most susceptible to labor agitation" and would not be extended to smaller cities where there was little to be gained by organizing "except perhaps to stimulate expectation on the part of the messengers." The letter declared further that recent "labor trouble" on the Pacific coast might have made it de- sirable to extend organizational operations to Fresno and Long Beach. The Association found that it could not carry out the respondent's mandate unless it offered messengers a tangible, improvement in working conditions. It therefore urged the respondent to extend to messengers the benefits of outstanding agreements as to working conditions. The respondent, however, could not be persuaded to accept the suggestion. On September 5, 1934, Farren, Lake division president, wrote to Burton explaining the difficulties which con- fronted him in organizing messengers in his division and said of the respondent's refusal to accede to the Association's suggestion : If they are going to call on us to.help them keep messengers free from outside labor agitators they must concede their protec- tion under our agreements until such time as something different is agreed. to through the usual methods,of negotiation; THE WESTERN UNION TELEGRAPH COMPANY ' 101 Farren, nevertheless, continued to execute the respondent' s instruc- tions within 'the limits imposed. By November 22, 1934, the Associa- tion had at least succeeded in persuading Willever to instruct general managers to extend preferential treatment "in numerous little :ways" to messenger members in those areas where the Association "is active in enrolling our messengers." On November 23, 1934, Willever clari- fied the respondent's objectives in a letter to general managers. He wrote that, when the Association had undertaken in the spring of 1934 to organize messengers "in order to head off sporadic attempts of out- side influences to foment dissatisfaction in the ranks,"" it had been understood that such efforts would be limited to those offices where "disturbing influences" might arise and that, when it had seemed de- sirable to, organize messengers , the respondent had agreed to cancel uniform rentals' in order to defer salary increases. He explained further that it was his personal feeling that shortness of messenger tenure did not warrant their enrollment 'in the Association "where there is little or no likelihood of unrest." "To organize," he explained, "is to stimulate expectation and discontent and the Association for its part recognizes that its prime interest must-be in-individuals who as a class are likely to remain identified with the service." The letter closed with the statement that Association officials "have our encour- agement" in the matter of active organization among messengers in the larger cities. That the Association was merely acting as the agent of the re- spondent in organizing messengers and that it felt itself handicapped in this connection-by the narrowness of Willever's directions and by Willever's reluctance to grant attractive concessions to messengers whose activities it was to control, is clearly indicated by a resolution on the subject introduced at the Lake division assembly in 1935. The resolution was accompanied by a statement declaring that "in the past the Company has never been interested in messengers belonging to the Association which would give them a voice in the determination of working conditions, wages, etc., but due to a change in conditions the Company requested Association officers in certain cities to organize the messengers to keep them from joining other Unions." The statement explained further that the Association had assumed the task assigned to it by Willever after the latter had agreed verbally to extend to messengers the same rights and privileges enjoyed by ordinary com- merical-department. employees who were members of the Association. A complaint was then made. that the respondent had failed to execute its verbal undertaking and had indicated, that Association activities in this regard should be limited to those cities where, there was a'like- lihood of "labor trouble." The resolution as introduced 'and'ado'pted placed the'Lake division on record in favor either of or'ganizing' all' 102 DECISIONS OF NATIONAL LABOR RELATIONS BOARD messengers and treating them on equal terms with other members or, in the event this contingency was impossible of achievement, of abandoning the entire project . The resolution was in fact not trans- mitted to the respondent. At the hearing, Willever, in whose department messengers were employed, admitted that he had instructed the Association to organize messengers and stated that his reason for these instructions was that the Association had been the sole bargaining agency for the respond- ent's employees and that the respondent had been unwilling to com- plicate the situation by concerning itself with other bargaining rep- resentatives . We regard Willever's testimony as an admission that the respondent had directed the organizational operations of the Association. Farren, who had been very active in conforming with the respondent's directions in this regard , testified that the real reason for those directions was the respondent 's desire to protect other em- ployees and the Association against the ill effects of fomented dis- satisfaction among messengers . We do not regard Farren's testi- mony as a full explanation of the respondent's purposes. It is clear from the evidence , and we find, that the respondent utilized the Association to thwart the efforts of outside organizations to enlist messengers as members ; that concessions made to messen- gers were confined to the minimum requirements necessary to satisfy this purpose ; and that neither the respondent nor the Association recognized the right of all messengers to organize. 4. Conclusions as to dealings with the Association before July 5, 1935 Although Carlton contended at the hearing that the respondent had endeavored to make the Association "virile and independent," from the date of its inception , the evidence points decidedly to a contrary underlying objective . Having created the Association in conformity with a pattern designed by the respondent , as a means of diverting the attention of its employees from the attractions of outside labor organizations , the respondent sought at all times during the period under consideration in this aspect of the case to control the activities of the Association and to direct its operations in a man- ner consonant with the purpose for which it had been created. Accordingly, at the outset, the respondent undertook through various means the task of nurturing the growth and development of the organ- ization it had selected for its employees . It made available to the Association various forms of financial assistance which lightened con- siderably for the Association the burden of, economic maintenance under which independent labor- organizations struggle during the early years of their existence. Promotional programs , which inde- THE WESTERN UNION TELEGRAPH COMPANY 103 pendent organizations must conduct through their own devices and on their own resources, were assumed for the most part by the re- spondent on behalf of the Association through direct solicitation and through. other valuable forms of cooperation. Good will and pres- tige, which independent organizations seek to establish for them- selves on their own merit by astutely protecting the interests of their members and others in bargaining collectively with the employer, were consciously built up for the Association by the respondent through various means designed to enhance the apparent importance. of the Association and to create the impression that membership therein was an indispensable factor in the enjoyment of favorable working conditions. The aid thus extended to the Association was further relied upon by the respondent as a means of controlling the Association and its officers in dealing with them concerning terms and conditions of employment. It had from the start deprived the Association of the power to enforce demands through the strike weapon and had subsequently exacted so high a degree of gratitude for favors volun- tarily and designedly heaped upon the Association after its forma- tion that other possible means of enforcing demands had been rele- gated to an academic status through utter disuse. In dealings* be- tween the respondent and the Association both parties were con- stantly. aware of the fact that the formation and, growth of the As- sociation, as well as its future existence, depended upon the gen- erosity and inclinations of the respondent. This realization was not particularly controlling when a proposal which the Association advanced for the respondent's consideration was consonant with the respondent's general policy of personnel management. In such cir- cumstances, the respondent had only to determine the advisability of extending its personnel program. However, when the respondent expressed disapproval of any request made by the Association or itself presented demands to the latter, Association representatives were plainly aware of the serious consequences of persistence or opposition. To incur the respondent's disfavor was to jeopardize the life of the Association. Hence Association representatives yielded readily to the respondent's demands notwithstanding the fact that such ready acquiescence contravened the Association con- stitution and provoked dissatisfaction and censure among the mem- bership. Although arbitration purported to serve as a substitute for the strike weapon which the Association had renounced at the behest of the respondent, that substitute was in fact never invoked by the Association. The, arbitration provision was, thus imposed upon the Association by the respondent as a subterfuge for depriv- ing its employees of any freedom of action with respect to working 247384-40-vol. 17-8 104 DECISIONS OF NATIONAL LABOR RELATIONS BOARD conditions. Even the referendum provision of the Association's con- stitution was disregarded when the respondent indicated its dis- approval of that method of ascertaining the wishes of Association members. By achieving such control over the ' Association, the re- spondent succeeded in presenting its employees with a carefully selected substitute for an effective labor organization and in pre- venting the encroachment of all outside organizations. In fact, the Association played not only a passive role in achieving the respond- ent's purpose but, under express directions of the respondent, actively served as a medium for absorbing into its ranks those classes of employees whom rival organizations were attempting to attract as members. Thus subjugated to the will and designs of the respondent, the Association.-did not, and in fact could not, function as a bargaining agency in any realistic sense. At most, it served as a medium for execution of a personnel policy unilaterally formulated by the respondent. We find that, until July 5, 1935, the effective date of the Act, the Association' was a labor organization clearly controlled and dom- inated by the respondent through interference with its administra- tion and contribution to its support. Whether the Association could, or did in fact, on or after July 5, 1935, emerge as the freely chosen representative of the respondent's employees, is to be determined by the character of its further activi- ties ands dealings with the respondent. 5.. Dealings with the Association from July 5, 1935, to August 17, 1937 The effective date of the Act, July 5, 1935, and the declaration of its validity by the Supreme Court of the United States on April 12, 1937, brought no immediate changes in the operations of the Associa- tion and in the established course of dealings between the respondent and the Association. The latter made no attempt to divest itself of the respondent's control and the respondent did not undertake in any way to emancipate the Association from its long years of. subjugation. All prior forms of support, both financial and promotional, continued. Thus the agreement for free transportation remained in effect and Association officers and representatives enjoyed without interruption the privilege of free railroad transportation in accordance with that agreement. In 1935 and 1936 the respondent rendered no bills to the Association for railroad transportation, as the total transportation cost incurred by the Association and the respondent during those years did not exceed the maximum contract allowance accorded the THE WESTERN UNION TELEGRAPH COMPANY 105 respondent .by the railroads. Free use of bulletin boards an& of the respondent's mechanical and clerical facilities continued unabated. As in the past, local assembly meetings were held on the respondent's premises and Association elections were conducted on company time and property. The check-off system of collecting dues remained unaltered. Local company officials continued to furnish local Asso- ciation officials with lists of employees and cooperated with the Asso- ciation in soliciting those listed as non-members. Supervisory employees remained active in the Association and the general as- sembly and made no effort to curb their promotional endeavors on behalf of the Association among their subordinates. Preferential treatment of Association members, particularly with respect to the assignment of working hours, proceeded without restriction. The "tying-in" practice described above was also not abolished. The respondent's opposition to outside unions and its established system of espionage persisted. R. B. White, who succeeded Carlton in 1933 as president of the respondent, testified in 1937 at an earlier hearing before the Board 1" that the respondent's policy of opposi- tion to unions employing the strike weapon remained unchanged at that time and that the respondent's officials were cognizant of the persistence of this policy. A report submitted by the respondent to the subcommittee of the Committee on Education and Labor of the United States Senate and introduced in evidence at the hearing in the instant: proceeding showed that the respondent had employed special:.operatives in 1935 and 1936 through the Railway Audit and Inspection Company to report generally on union activities among utility-company employees, including the respondent's employees, and specifically on the work of the Office Workers' Union and the . Tele- graph Messengers' Union and on attacks made by such organizations against the Association. Willever testified that general managers were permitted to hire special agents pursuant to their general authority to adopt appropriate means of ascertaining facts with regard to personnel. Surveillance of the activities of messengers, whom outside organi- zations were militantly attempting to enroll, was accompanied in at least one of the respondent's offices by a notice of July 30, 1935, addressed to "all messengers" warning those employees that they would be dismissed for visiting any labor organization office, except that of the Association, or for conferring with any person on the streets or elsewhere while on duty and in uniform. Espionage as to "'The hearing was held at Seattle, Washington , from August 9 through 14, 1937, in Matter of Western Union Telegraph Company and Messengers Local No. 40 of the Commer. cial Telegraphers Union, 3 N. L. R. B. 375. 106 DECISIONS OF NATIONAL LABOR RELATIONS BOARD messengers was further implemented by an increasingly vigorous pro- gram of utilizing the Association to divert the interest of messengers from rival organizations. In some of the respondent's offices mes- senger strikes were being threatened or called in 1936 and 1937, and the respondent attempted, with the aid of the Association, to avert the materialization of strike threats and to curtail the duration of strikes which had already become effective. Where the respondent's local officials learned in advance of an intention to strike, they im- mediately notified the appropriate Association officers and directed the latter to investigate and determine the source of the prevailing discontent which was impelling messengers to join outside labor unions and to consider striking against the. respondent. In addi- tion, Association officers were instructed to bargain with the respond- ent for the granting to messengers of only such concessions as were necessary for pacification and for the prevention of an impending labor dispute. Where strikes had already been called, the Associa- tion was notified immediately by local company officials and, clothed with sole authority to negotiate on behalf of complaining messen- gers, it thereupon proceeded toward a settlement of the particular controversy. The Association was also expected to ascertain through its own devices, wherever possible, the nature of collective action con- templated or commenced by messengers. The right of all messengers to organize was still disregarded and enrollment of messengers in the Association was still limited to those areas where trouble or, danger was foreseen or had actually become manifest. The Associa- tion's reward for its successful efforts lay at first in its tie-in with all improvements in working conditions accorded messengers under these circumstances. At a conference held from March 15 to 23, 1937, the Association was further requited with a written exclusive-recogni- tion agreement although it had enlisted as members only a small proportion of the respondent's messengers. The respondent's campaign in this connection required local com- pany officials to report to their divisional superiors on the detection _ of signs of messenger unrest and on steps taken in cooperation with the Association to dissipate the underlying causes. Thus on Janu- ary 28, 1937, the respondent's city superintendent at Detroit advised the general manager of the Lake division that some messengers were on the verge of revolting against the Association ; that the latter was doing its utmost to retain and placate its members; and that, at the suggestion of the Association, the superintendent was segregating and closely watching certain classes of messengers in order to insulate them against the influences of discharged or disgruntled messengers. This. letter. was forwarded by the general manager to the Associa- THE WESTERN UNION TELEGRAPH COMPANY 107 tion's Lake division president and also became the subject of a con- ference between Burton, general president of the Association, and the general manager. On February 2, 1937, the Detroit superintendent reported to his divisional superior that a petition signed by about 30 messengers and expressing an intention. to strike in protest against prevailing wages and working conditions had been placed upon the desk of one of the local company officials at Detroit The letter informed the gen- eral manager further that after Association officials had been apprised by local company officials of the discovery of the petition, the Associa- tion called a special meeting of the local assembly in that 'area and invited the signers of the petition to attend: As a result of that meet- ing, the report continued, the Association, with the authorization of the messengers, bargained with the Detroit superintendent for an adjustment of the grievances enumerated in the petition and succeeded at least temporarily in allaying the prevailing discontent. The super- intendent also advised his - superior that the special meeting, had yielded the names of four boys who had been responsible for the general "agitation" among messengers in that area. Concerning the activities of these boys and the action he had taken to suppress their activities, he reported in part as follows : Meanwhile the ringleader, whose name is Donald Cudney, had been active in spreading agitation among all the boys he could contact and it became obvious that he was bent upon overthrow of the Association. He and another boy named Wilkinson were very active and various rumors reached us of their activities. The two other boys involved had been dismissed some time pre- viously and Cudney was trying to have them reinstated. Yesterday Wilkinson was dismissed for making a disturbance in the room where the reserve messengers were quartered. Shortly afterward Cudney turned in his 'uniform with the remark that he was going to find out why we had dismissed Wilkinson and the two other boys. He failed to report at two assignments and was timed off as resigned. Last night when he returned and found that he was out of the service he became enraged and denied that he had resigned. For obvious reasons he was not reinstated. ... It is quite possible that he may have had some outside influence although we are unable to locate such a source. - . . . There was no mistake. in his purpose to. gain control of the messengers and overthrow the association. . . . Although he threatened to call .out a strike last night nothing had developed. Obviously, as we found, most of. the boys who 108 DECISIONS OF NATIONAL LABOR RELATIONS BOARD signed the petition did so without any such contemplated action and he'lost support when we dismissed him. . . . We have taken suitable precaution should he or any of the others make any attempt at sabotage. When messenger dissatisfaction was discovered in one division; Willever apprised the general managers of other divisions to that effect and instructed them on methods for avoiding similar occurrences elsewhere. Thus on March 5, 1937, he addressed a memorandum marked "confidential" to the general managers in all divisions except the Lake division, informing them that efforts were being made "by outsiders". to stir up ' discontent ' and strikes among messengers in the Lake division and instructing them as follows : It is. quite, possible. that similar attempts will be made in other territories, and I suggest that you keep your ear close to the ground and arrange to get the Association in promptly on any sign of dissatisfaction or unrest. Meanwhile you will wish to consider carefully at each place of importance whether there is anything in our set-up, including average or minimum earnings, which is likely to constitute a sore spot and might serve as a rally-' ing point for starting something. In the correction of such con- ditions, if found, the Association should be tipped off so that there will be a' clean-cut tie-in of 'the Association with the ameliora- tion of the condition,-and no adjustment of wages or other con- ditions: should. at any time be made independently of the Associa- tion while our agreement with it lasts. You will, of course, not overlook, in connection with any trouble which may develop through outside agitation, that under our agreement with the Association that organization 'is the recognized and sole inter- mediary between employees and the company. Quite gen- erally, I think, the Association should be encouraged to enroll messengers before the latter become the prey of outside agitators. A copy of this memorandum was also sent to Burton. On the same day, Willever outlined his ideas more specifically by setting forth several concrete suggestions .to all general managers on the kind of improvements in working conditions of messengers, other than increased wage schedules, which might be introduced "in order to remove recognized causes of dissatisfaction." After discussing each of the suggestions,' Willever commented as follows on their probable effectiveness : While any of these proposals would save the boys money, it is, I suppose, doubtful if the boys would collectively appraise the advantage to them at anything like the cost to the company, and the granting of this concession might therefore have little or no THE WESTERN UNION TELEGRAPH COMPANY 109 effect upon their aspirations towards a larger pay-check. The question is whether the conditions call for schedule revisions first, where found necessary or advisable, to be perhaps followed later with some of the other suggested arrangements as a matter of allaying dissatisfaction, or whether as the cheaper method we should allay these causes first and trust to their effect to postpone or eliminate necessity for direct pay increases. The letter closed with a request for comments on the question posed. Association officials were also concerned with the problem of pre- venting local sporadic attempts at collective action from developing into a widespread movement. Inspired by the respondent's general directions, these officials sought to parallel Willever's instructions to general managers with suggestions to subordinate Association officers on the kind of preventive action to be undertaken by Association local assemblies.. On March 8, 1937, Welch, Association Gulf division president, wrote to the presidents of seven local assemblies in that division informing them that at a few places in the North, the messenger boys had been stirred, up by "outside organizations" and that the difficulties in each case might have been averted "if precautionary measures had been taken." The letter continued with the following advice and directions : ... the precaution which we can take is to have at least some of the messenger boys belong to the Association, and keep a sharp look-out for possible outbreaks of trouble. The epidemic of trouble threatens to spread into our section of the country. Larger centers are usually most vulnerable, but the messengers can be incited to some foolish but serious move by an individual anywhere. One very serious case came up in the East a couple of years ago where a professional agitator affiliated with no organization induced the boys to strike-and none of the boys belonged to the Association. I wish you would set out at once to do this : take into your your local membership about six or twelve, messengers of the most intelligent and representative type and keep them in the organization as a nucleus for further organization if it becomes necessary. You personally meet with these boys and keep your- self informed as to the temper of the whole group of messengers. Go to the superintendent with working conditions which seem to warrant improvement. While you must necessarily be respon- sible for this task, you may of course take counsel with such adults as you select, such as delivery manager or delivery clerk. This may be particularly helpful to you if your Company duties do not throw you into contact with the delivery department. 110 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The* Constitution requires per capita dues of 300 where you do not have a messenger sublocal but you may, if your Local's By-Laws permit, not charge any local dues-just 300. If you take in more than 20 boys you then must form a sub-local for the boys. Please let me know right away what is being done. Having received no response from the seven local assembly presi- dents by March 30, Division President Welch again wrote to them on that day, emphasizing the importance of the program he had dealt with in his earlier communication, and directing that the action therein outlined be undertaken at once. The general instructions issued to the seven presidents on March 8 were made more specific this time by orders to call upon the respondent's city superintendents for help in executing the following directions : Select from six to twelve boys of the highest type; High school graduates, clean cut, intelligent, good personality; parents known to be not of communistic, rabid labor-unionist type. Sell these boys on the fact that the A. W. U. E. is the parent organization that deals for all employees in all matters pertaining to the wel- fare of Western Union employees, and is the only organization with which the Company deals; that you do not want the boys to go in for all the expense of the serious business of old employees of the Company, but that you do want these few outstanding-boys to be the leaders, set the example for all the messengers for pur- poses of recreation, social life, and to advise with you on matters pertaining to the welfare of the boys in connection with their em- ployment when they see something that needs attention. Division President Welch cautioned the local assembly presidents that the boys selected as leaders .were not to engage in an immediate membership drive among the other messengers "because having all the boys in sub-locals. may defeat, the purpose." He urged also against holding. mass ,meetings of all the messegers, "as only demands and more demands may-be made upon you," and advised that the messen- ger leaders to be selected proceed gradually by adding one or two new members at a time. He stressed the fact that organization should assume a predominant social character of a kind to be determined by the good.judgment and ingenuity of the local assembly presidents and the respondent's city superintendents. "On occasion," he suggested, "it may be well to invite all of the messenger force to a picnic.. You should invite the few members of the sub-local to whatever social ac- tivities your Local may have." In concluding his letter, Welch re- stated as follows the objective, underlying his program and the general manner of its execution : THE WESTERN UNION TELEGRAPH COMPANY 111 Your purpose and policy in this matter is to keep the messen- gers out of rather than get them into serious labor union business and to reverse the order of your own adult organization and make of the boys' organization a recreational, social and fraternal one, with the serious business of a labor union of secondary importance. The vigil assumed by the respondent and the Association over messenger activities required frequent consultation between them for the purpose of evaluating the effectiveness of measures already adopted and of devising additional methods to conform to the chang- ing or increasingly strong organizational tactics of adversary labor organizations. Thus on March 23, 1937, Willever advised all general managers that a discussion with Association representatives of the latter's experiences in attempting to settle "unrest and discontent" among messengers had revealed the prevalence of a complaint among these employees that the respondent had failed to perform its promise of promoting messengers to better positions. Informing general managers that the respondent's vice presidents had agreed to correct at once the situation complained of and to fill all suitable vacancies for certain clerical jobs from among messengers possessing the neces- sary qualifications, he directed them to execute this policy and to accord preference to messengers even where the latter were not so well qualified as other possible candidates. On March 26, Willever reported once more to the general managers the substance of discus- sions with Association officials and the action determined upon as a result of such discussions. He stated that an Association official, who had achieved considerable success in dealing generally with mes- sengers, had found motor messengers helpful in handling trouble- some situations and had observed that this particular class of em- ployees was in a position "to be aggressive in breaking up a develop- ing situation that seems likely to get out of control." 17 Reporting further that the motor messengers were found by the Association to be unhappy about the disparity of prerogatives between them and regular employees, Willever suggested that equality might be achieved by according motor messengers the same privileges, particularly with regard to vacations, as the respondent had granted to regular em- ployees. General managers had previously been instructed in general terms to reward all employees who had aided in pacifying messengers and to tie the Association in with such rewards. The manner in which the Association complied with the respond- ent's,instructions in strike situations is clearly indicated in,the.record. 17 Motor messengers , unlike bicycle and foot messengers , perform the delivery of messages and other messenger tasks through the medium of motor vehicles. They are as a rule older than the other two classes of messengers. 112 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Messenger strikes had occurred in 1936 at Reading, Pennsylvania, and, in 1937, at Toledo, Cleveland, Chicago, Gary and other mid- western cities, and in the Pacific northwest. The respondent's dis- trict superintendent for the Reading area had succeeded in handling the 1936 strike without the aid of the Association but had subse- quently reported the matter to the Association Eastern division presi- dent. The latter explained to local assembly officers in the Reading area that the Association was under a duty to prevent the occurrence of similar outbreaks and directed those officers to investigate the general situation and report thereon to him. Most of the other .strikes were settled by intervention of the Association and by. negotia- tions conducted by it with local company officials. The Toledo strike occurred in March 1937 and involved about 45 messengers. Farren, Association Lake division president, was called .upon by local company officials to comply with the respondent's gen- eral instructions by adjusting the Toledo dispute. One of the methods utilized .by Farren in executing his assignment was an appeal by telegram to the parents of each of the strikers. Farren obtained the addresses of the parents from the respondent's local officials. The telegram in each instance advised the parents that their son had, gone .out on strike through the instigation of a person falsely claiming to organize on behalf of the C. T. U.; that the strikers were not allied .with any organization authorized to adjust their demands; that the Association was the sole agency in a position to negotiate as to the current difficulties; and that membership in the Association was avail- able to the strikers. Farren informed the strikers' parents further of his assurance that, if the boys were removed from the influence of the imposter organizer, he could negotiate a satisfactory adjust- ment of their wages and working conditions and effect an immediate .return to work for these boys, just as he had done for the striking .messengers in Chicago. Each message contained a request for the parents' cooperation in detaching their son from the control of the impotent outside organizer, in dispelling any fear which may have been instilled in him that free and open discussion of his troubles with Farren would be harmful to his interests, and in agreeing to authorize Farren as Association representative to negotiate a settlement of their son's "troubles." The telegram closed with the statement that Farren would be pleased to discuss personally with the parents "any phases of the situation" at any time of the day or night "until the boys troubles are adjusted." The message was signed by Farren as Asso- ciation division president. Messenger strikes occurred in several mid-western cities in June of 1937 while the general assembly was in session at Portland, Oregon, and Farren received notice to that effect at Portland from the re- THE WESTERN UNION TELEGRAPH COMPANY 113 spondent's Lake division officials, who asked for his assistance in ad- justing "the trouble." He wired Jack Darnell, president of the Chicago commercial local assembly, to act on his behalf and to enlist the aid of the president of the Chicago messenger sub-local. Darnell informed .Farren on June 23, 1937, that the strikers had returned to work after having been "quite obstinate and strong for C. I. 0." until that day, when Darnell and his associate were "able to break them down." On July 1, 1937, Farren reported to Burton that Darnell and his asso- ciate had done very effective work in dealing with these strikes and that satisfactory settlements had been effected by the Association in all instances. The expenditures incurred by the Lake division in handling those disputes, including payment to Darnell for time spent away from work, amounted to $276.50, according to Farren's report to Burton. On July 7, 1937, Cronkhite, general manager of the Lake division, thanked Farren by letter for the services and assistance ren- dered the. respondent by the Association "in the adjustment of mes- senger difficulties." Although the Association had up to this time, as hereinbefore demonstrated, complied strictly with the respondent's instructions to avert messenger unrest and to negotiate on behalf of those who had gone out on strike, Willever stressed the Association's continuing obligation with respect to future situations in a letter to Burton dated June 14, 1937. The letter advised Burton that the respondent had suspended operations at Seattle, Washington, as a result of its refusal to deal with another labor organization on the ground that the Association' had been recognized as the sole bargaining agency for the respondent's employees. It called to his attention the fact that the seriousness and importance of the respondent's action in- vested the Association "with responsibility for seeing that a similar situation does not develop elsewhere," since suspension of operations at vital points could 'not be continued indefinitely as a means of pro- tecting the Association's rights under the exclusive representation agreement, with the respondent. "This is particularly important," the letter concluded, "on the Pacific coast at this time, in view of the threat which has been made that our messengers will be called out elsewhere in that section with' a view to precipitating similar situations elsewhere." A copy of this letter was sent to all division presidents. There is no evidence that the Association failed to com- ply with Willever's directions not to relax its watchfulness over the activities of messengers throughout the country, and particularly, on the Pacific coast. The evidence as to the respondent's program to prevent messengers from joining outside organizations and the Association's actual co- operation with that program was not contradicted at the hearing. 114 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Willever testified, in purported justification of the respondent's activi- ties in this regard, that the Association had been called upon to deal with dissatisfied or striking messengers pursuant to an established arrangement with the respondent whereby the Association had under- taken to preserve peace among the respondent's employees in exchange, for the respondent's recognition of the Association as exclusive bar- gaining representative. There was no need to call upon the Associa- tion, he testified further, to perform its part of the arrangement with the respondent while the tenure of messengers continued generally to be of short duration and while no signs of dissatisfaction were detected among them. "We felt that a boy who was in today and out tomorrow," he said of the respondent, "as actually happens in many cases, was not very good material to get wound up in a whole lot of understandings about agreements, because they were not here, long enough to make the performance worth while. In those cir- cumstances, frankly, as the head of the department, responsible for the messenger end of the business," his testimony continued, "I had not encouraged the Association to interest themselves particularly in the boys until the conditions changed with the length and tenure of service, .due to lack .of employment in other lines, and also which developed unrest among our boys. When that happened, I felt it was time for me to suggest to the Association that they had better alter their course in that respect." - He explained that his instruc- tions to general managers to have local company officials acquaint Association:officials -with "sore spots" in,messenger working conditions and to tie the Association in with their elimination were issued pursuant to the respondent's general policy of seeking to identify the Association with the amelioration of working conditions. Farren undertook at the hearing to defend the Association's record of assistance in handling messenger disputes by explaining that the Association was under a duty as sole bargaining representative to, deal with all questions concerning conditions of employment and that it was also obligated to protect the interests of other classes of employees who might suffer as a result of strikes called by mes- sengers. Asked by counsel for the Board whether the respondent's officials had not requested the Association to organize messengers. he replied : . Because the Company recognized us as their sole bargaining agent and they wanted this discontent among messengers stopped they asked us to include the messengers among our organizing program. We do not regard the testimony of Willever or Farren as a valid defense of the respondent's control over the Association's operations THE WESTERN UNION TELEGRAPH COMPANY 115 and of the respondent's attempts to thwart free organization among messengers. We find that the respondent continued after the effective date of the Act to utilize the Association as its agent in preventing freedom of organization among its messenger employees. We find also that the Association's compliance with the respondent's instructions, re- sulting in a half-hearted, limited organization of messengers into social rather than bona fide membership groups, plainly points to the respondent's powerful domination of the Association's operations. The respondent's efforts were directed during this period not only against the attempts of outside organizations to enlist messengers but also against the simultaneous campaigns of these organizations to solicit regular employees. In the past the respondent's hostility to all; organizations other than the Association had been directed al= most solely against the C. T. U., as the latter was the only organi- zation that had attempted, from time to time, to make inroads among the respondent's employees. After the Association had been formed and before the Act enunciated anew the right of employees to self- organization, the respondent's support of the Association served adequately to ward off any serious efforts on the part of other labor organizations to gain a foothold among the respondent's regular employees. The effective date of the Act, however, marked the beginning of a more persistent program of promotional effort on the part of rival organizations to enlist those classes of the respondent's employees'who were also eligible for membership in the Association. In the spring of 1936, the A. C. A., a new organization, embarked upon a campaign to organize the respondent's employees and, by the early part of 1937, its efforts had resulted in the formation of Local 36P for the respondent's employees in New York City. The A. C. A.'s promotional endeavors in New York City extended to regular em- ployees and messengers. The respondent undertook to win these classes of employees away from the A. C. A. by devices different from those used against, messengers in other parts of the country. Both these classes of employees at New York City had abandoned the As- sociation in a desire to affiliate with a labor organization which, unlike the Association, would serve as a real collective bargaining agency. Whereas the respondent was able in other areas to appease messengers and lure them away from outside organizations by offering them lim- ited membership in the Association and by negotiating with the Association for the improvement, of working conditions, it could not, because of the difference in the nature of the basic discontent 'of the A. C. A. members and of messengers in other areas,, apply the same tactics against employees in New York City who had gone over to the A. C. A. In the Metropolitan area, continued preferred treatment 116 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of Association - members, derogatory and hostile statements against, the A. C. A., surveillance of A. C. A. activities, and discrimination against A..'C. A. members were 'among the tactics 'employed by the respondent to preserve' the Association and destroy its growing rival. Thus, according to the uncontradicted testimony of one of the re- spondent's employees, a supervisor in the New York City traffic- department office warned several of his subordinates in the fall of 1936 that unless they joined the Association their favorable working hours. would be assigned to Association members . Daniel J . Saunders, who had been employed in that office, testified that in February 1937, almost immediately after he had 'resigned from the Association , he was noti- fied that his working hours had been changed to a less desirable shift. His immediate supervisor and all other supervisory officials to whom he complained stated that he was the victim of a policy to grant pre- ferred working hours to Association members. Two months later, after he had threatened to prefer charges of discrimination with the Board against the respondent and after he had rejoined the Associa- tion, Saunders was restored to his former shift. Harry Burch, another employee in the New York City traffic office , testified that he' had been warned by his immediate superior in February or March of 1937 that unless he rejoined the Association his schedule of hours would be changed to a less desirable ' one. The threat was executed and Burch did not <return to his former schedule until after he had rejoined'the' Association . John Havard, also employed in that traffic -department office, testified that, upon. a warning from his immediate supervisor. that he would be transferred. from the day shift to the night shift unless he joined the Association, he became a member of the Associa- tion and attained security of working hours. Castelli, the immediate superior-of each of the four witnesses at the time of the threats and discrimination, did not deny the truth of their testimony . Max Weiss, another -employee at one of the respondent's New York City offices, testified that in May of 1937, after he had joined the A. C. A., Sanan- gelo, his immediate superior , informed him that he had not been recommended to the advisory board for a salary increase because of his non-affiliation with the Association. Sanangelo's testimony did not contradict Weiss' statement and in fact corroborted it. Sanan- gelo testified that he was a member of the advisory board in May 1937 and that he had stated to Weiss, in reply to the latter's question of why he had' not been recommended for a salary increase , "I was only con- cerned with Association members." We find that the testimony of these witnesses clearly establishes the fact that preferred treatment of Association members continued after the effective date of the, Act. The: uncontradicted testimony of several New York City-messengers who had joined the A. C. A. and solicited in its behalf is that the THE WESTERN UNION TELEGRAPH COMPANY 117 respondent knew of their A. C. A. affiliation through surveillance of their activities; that some of them were demoted to less desirable assignments because of that affiliation; and that supervisors dis- couraged membership in the A. C. A. and attendance at its meetings and openly solicited membership in the Association. We find the testimony of these messengers to be true. In addition to the specific efforts against. the A. C. A. at New York City, the respondent attempted by other means to preserve the good will bf' the Association in the face of vigorous competition presented by the A. C. A. and other labor organizations throughout the country. By January 1937, wages had been almost entirely restored to the 1930 level. On March 26, 1937, Vice-President Welch, in charge of the traffic department, wrote to several of his regional subordinates that lack of appreciation on the part of some Association members for the achievements of the Association in bringing about a restora- tion of wage deductions had led to attacks against the respondent and the Association. "Obviously it is unthinkable that our people, who have about the oldest industrial union in existence, should be left an easy prey to outside agitators who work primarily for their own selfish interest," he wrote. His letter continued with'the fol- lowing suggestions for combatting outside organizations and pre- serving the Association's prestige : Close conference and cooperation with Association Local and division officials with respect of trouble elements in our organ- ization as they are uncovered, and how.they may best be dealt with. Care taken to give the Association credit in the case of every successful appeal or representation on behalf of any individual employe or group of employes,-instead of striving to have it appear that the action was taken on the obvious merits of the case and without reference to an intervention by the Association.. Prompt and alert consultation with suitable A.ssociation officials whenever there are indications of trouble brewing in any direction. Careful observation of our supervisory forces with a view to the elimination of or-the correction of the practices of indi- viduals who through arbitrariness, unreason, discrimination or prejudices or just lack of tact tend to develop discontent and unhappiness among those under them. Suppression of wire gossip, which tends to spread unrest and inflammatory speculations and suggestions. The prompt adjustment of all grievances instead of allowing the cases to be strung out through inaction or purely routine and desultory handlings. 118 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In the case of Illinois and any other States where" there are six-day laws, to carefully consider, how compliance with the law may be effected with the least disturbance or loss to indi- vidual employes but within operating conditions and costs which the management can contemplate. Finally, .know the facts about the agreements and administer them in all good faith. A copy of this letter was sent to all Association division presidents. Whenever necessary, regional officials of the respondent contributed their part in retaining the Association's -members and in discouraging outside organizations from encroaching upon the Association. Thus, on April 16, 1937, the respondent's traffic manager at Denver, Colo- rado, wrote to seven of his subordinates that he had been reliably informed of the arrival at Denver of an organizer for the Committee for Industrial Organization, who was attempting to work among the linemen of the local telephone company. Stating that the organizer would undoubtedly soon extend his activities to telegraph employees, he advised his subordinates as follows : ... As our people, particularly the younger employees may not be well versed in labor matters, and some may be guided by remarks, you, as Company representatives might drop inad- vertently or. otherwise, I will briefly review. the situation as it stands today. The review of the situation referred to the fact that, under the Act, employees are free to join any labor organization of their choice, and that if the C. I. O. obtained a majority it would be entitled to recog- nition with the resultant abrogation of outstanding agreements be- tween the respondent and the Association. It stated that the, im- portant question from the employee's viewpoint, and one which he must decide for himself, "is this-'What does the C. I. O. offer me that the A. W. U. E. does not?' " As an answer to this hypothetical ques- tion, he suggested that, while both organizations were alike in their structure, they were different in that the Association settled its disputes by arbitration and the C. I. O. resorted to the strike. - "This differ- ence,?' he emphasized, "is highly important when one considers that our employees who may join, the C: I. O. might be. called out on strike in sympathy with the radio operators on the West Coast, Postal em- ployees in Chicago, etc. Because of frequent necessity for strikes in such an organization, their dues must be far higher than those of the A. W. U. E., and there are. frequent calls for special assessments for a `war chest,' whenever the union official.in power feels he needs more cash." A further answer to the hypothetical question was. that, on the whole, the respondent's employees had. fared well, through the THE WESTERN UNION TELEGRAPH COMPANY 119 :Association and were satisfied with their working conditions. The letter concluded with the following admonition : You, as a representative of the Company closest to the em- ployees should answer questions from a Company standpoint, .otherwise you will give the appearance of favoring an outside organization, which I am sure you do not, or you would not remain a member of the A. W. U. E. As the organizational campaigns of competitors progressed, a grow- ing insurgence within the ranks of the Association became apparent to the Association's officers, and members openly criticized and at- tacked the Association and its leadership. Concern over the possible .consequences of such conduct to the respondent and the Association compelled the latter's officers, as well as the respondent, to take action calculated to stem the insurgence and defend the Association. On January 7, 1937, Elsden, Association Metropolitan division president, reported to one of the Association officials in New Jersey as follows concerning the counterattack made upon rebels within the Associa- tion's ranks by that division president : I've pitched into the radical groups and Association critics with both hands flying and put the professional Bellyachers to rout and the silence of these Gentry is now so profound you could cut it with a knife... . The manner in which I took command of the situation appar- ently made quite an impression on some of the high Company blokes too, so I hear. Discovery of the distribution of a circular attacking the Association was reported to Elsden on January 8, 1937, by the president of the Metropolitan division accounting local assembly. "This is outra- geous," he commented to Elsden, "and transcends even common de- cency and am firmly of the opinion that A. W. U. E., through its Constitutional officers, should take immediate steps, in conjunction with Company officials, to put a stop to this sort of malicious propa- ganda." He suggested that such circulars were in contravention of the Association's constitutional method of dealing with the respond- ent on subjects affecting employee relations and were consequently subject to legal injunction. "This sort of `literature,"' he continued, "thrown all over our streets is doing neither the Association nor the Company any good notwithstanding the libelous character thereof. It should be stopped and stopped effectively and for all time." Elsden reported to the local assembly president on January 12, 1937, that he had conferred with the management on the matter of anonymous indi- viduals who were writing "poison-pen stuff" and that. "this last rotten outburst" seemed to have "jarred 'em and perhaps we'll see some 244384-40-vol. 17 9 120 DECISIONS OF NATIONAL LABOR RELATIONS BOARD action." Elsden explained that as long as the respondent employed! the individuals who were anonymously poisoning the Association and as long as local assemblies accepted their applications for member- ship, no action could be taken against them without positive proof of their simultaneous membership in another organization antagonistic to the principles of the Association. Explaining that the difficulty lay in the initial employment policy of the respondent which led it to hire such persons and keep them in -its employ, he predicted, "I wouldn't be surprised if this isn't the blow-off and we shall see things happen from now on." Accusations that the Association was company dominated led its officials to adopt a varied, policy of disclaimer rather than an affirmative program of assuring employees that they were now free to organize. On February 19, 1937, Elsden wrote to Burton ands other members of the Association's board of directors advising that the Association refrain from taking any steps in opposition to a bill pending before the Congress on the restriction of the privilege of free telegraph service. "Because of our particular position in the labor picture," he suggested, "seems to me we ought to be supers ,: cautious about sticking our neck out on the thing. Can easily draw attention to what may be our most vulnerable spot and furnish our enemies ammunition." On March 10, 1937, the Association's general secretary-treasurer announced to all local assembly presidents a scheduled meeting of the Association's board of directors and re- quested that "wide publicity" be given to the membership of, the fact that "the Association is an independent industrial union, and one, of the oldest of such unions in existence. It is not in any manner controlled or supported by the Company, its officers, selected by secret ballot, are paid by the Association which obtains its reve- nue through the form of per capita tax on its members." Stating that the Association 'conference committee had, through. periodic negotiations with the respondent since July 1918, secured for its members improved working conditions and salary increases amount- ing to about 60 million dollars, the general secretary-treasurer as- serted that the Association would continue its policy of "truly repre- senting its members, and one should realize that the potential value of the organization is as great today as it has been during the past nineteen years." After the United States Supreme Court's declaration of the con- stitutional validity of the Act, the Association reinforced its earlier attempts to defend itself as an independent labor organization and again took no steps to purge itself of its apparent illegality. On April 16, 1937, the Association's general secretary-treasurer sent a memorandum to all local assembly secretaries stating that the United THE WESTERN UNION TELEGRAPH COMPANY 121 States Suprenie Court's action "does not in any,,manner. jeopardize the continued smooth operation of the Association," and that the, Association, by agreement with the respondent in March 1937, had been recognized as the exclusive bargaining representative for all land-line employees. The communication closed with the statement that "many of our Association officers feel that the Law definitely strengthens the position of your Association, and members are re- spectfully urged to continue their fine, loyal, moral and financial support and non-members everywhere should be invited to enroll." On April 30, 1937, Elsden addressed the following mimeographed notice to local assembly presidents, secretaries, and chairmen, and to all employees in the Metropolitan division for posting on bulletin boards assigned to the Association by the respondent.: Over the past few days many of our Employes have asked me the question : Does the Wagner Labor Act make it compulsory for Employes to join a labor Union (any Union). Of course the answer is "No"-The Act .specifically guarantees the freedom of Employes to join or not to join any labor Union as they may see fit. This has, as everyone knows, been the fundamental of A. W. U. E. membership policy among Western Union Em- ployes,for 20 years. However, it. would seem that some outside Unions are trying to frighten some of our Employes by some, insidious propaganda,, that they must join up with them or else:`- Such activity merely illustrates the unscrupulous methods such organizations will adopt when their other efforts to enroll our' members have failed them. There is no evidence that the October 1925 instructions of the re- spondent's vice presidents, requiring the submission of Association bulletins to local company officials for their approval prior to post- ing, were not followed with respect to Elsden's notice. In the April 1937 issue of the Telegraph World, official Association publication, there appeared under the caption, "Company Unions Held Unaffected by Decisions. Formation of Employe Representa- tion Groups Legitimate Manufacturers Association Declares," a re- print from an article previously published in the Wall Street Journal of April 19, 1937. The article stated that business men had been assured in the weekly news letter of the National Association of Manufacturers that "freely chosen employe representation plans or legitimate worker organizations confined to the plant" had not been 122 DECISIONS OF NATIONAL LABOR RELATIONS BOARD outlawed by the United States Supreme Court's decision on the Act. The reprint continued as follows : The Act as interpreted does not compel contract or agreement with anyone, individually or collectively, the analysis said. The obligation` created is that of reasonable negotiations with the true representatives of the majority of employes, whether such representatives be from within or without the employers work- ing force. No legitimate organization confined to the plant or any freely chosen employee representation plan is outlawed. If the em- ployes prefer an organization confined to the plant for the pur- pose of collective bargaining it is their right to form one, and deal with their 'empl'oyer through it and it is the business of the law to recognize and protect. The Association had thus followed for the respondent a pattern of employer anti`-'union behavior, with which we have becon-ie quite familiar, of pointing out to employees that the Act as validated did not require. membership in any labor organization. Action of the respondent following the United States Supreme Court's decision took the form of two memoranda from Vice-Presi- dent Welch to division traffic superintendents. The first was written on April 16, 1937, to six division traffic superintendents. Marked "confidential,".it stated that Welch was attaching a copy of the Act and suggested that each of the six officers familiarize himself with its provisions and discuss them, as occasion permitted, with members of his office and field staffs. The second was a.-telegram to=all division traffic,-superintendents, dated * June,. 3, 1937. - It„ read as 4ollows : In order that no claim may be made that we are guilty unfair labor practice quietly discontinue use of all bulletin boards except those needed for Company's routine instructions. After Welch's telegram had been sent out, the Association Pacific division president directed presidents and secretaries of local assem- blies in his ;division to refrain from using the respondent's bulletin boards for. posting Association notices. Upon learning of the direc- tions to Pacific division local assembly officers, Willever inquired of Burton whether that action was the result of a voluntary decision on the part of the division president or whether it had been necessitated by a ruling of the respondent's officials in that particular area. Will- ever's comment on that action was that "to change under fire an old established custom implies that custom was wrong which seems un- fortunate , at this time." Elsden, Association Metropolitan division president, wrote to Burton and other members of the Association's THE WESTERN UNION TELEGRAPH COMPANY 123 board of directors on July 9, 1937, that he was in agreement with Willever's comment; that bulletin boards in his division had proved to be immensely valuable in getting information and news quickly to all employees, and that. it would, be regrettable to destroy "this one sure avenue of getting facts before the employees." To discontinue a practice which had been in effect for many years, he concluded, would be to "admit error." The apparently doubtful validity of the free transportation priv- ilege had caused Burton some concern and he informed the Associa- tion Pacific division president on April 28, 1937, that mention of the matter on several occasions to the respondent's officials had evoked the reply that the practice was legal and did not constitute financial support' of the Association. On June 9, 1937, Messengers Local No. 40 of the C. T. U. filed with the Board a petition for investigation and certification of representa- tives for the respondent's Seattle, Washington, office and alleged therein that the local assembly of the Association in that area was company dominated. On July 16, 1937, charges were filed with the Board by Messengers Local No. 40 of the C. T. U. Subsequently, on July 26, 1937, the Board issued its complaint against the respondent, alleging that the respondent, in the operation of its Seattle office at Seattle, Washington, had refused to bargain collectively with the C. T. U. on behalf of certain classes of employees at the Seattle office; that the respondent had, particularly since July 5, 1935, dominated and interfered with the administration of the Association and had contributed financial and other support thereto; that the respondent had given preference to members of the Association and discriminated against members of the C. T. U. in regard to hire and tenure of em- ployment, promotions, and other terms and conditions of employ- ment ; and that, as a result of these practices, a strike was called by the C. T. U. on June 9, 1937, which continued to June 18, 1937. Bur- ton addressed a memorandum marked "confidential" to all Associa- tion division presidents on July. 12, 1937, reporting on what he had learned "about the Seattle situation." The report stated in de- tail what the respondent's position at the hearing would be with re- spect to the issue of the Association's legality and what evidence would probably be presented by the Board on that issue. Burton informed the division presidents that he was gathering "as much historical and other data as possible" and that he proposed to produce "at least some files to show that we have, from the very beginning, resisted Company efforts along various lines." The Association was permitted to intervene in the 'proceeding at Seattle. Burton testified at the hearing in the instant proceeding that he would not deny the fact that he had discussed with the respondent's officials the question 124 DECISIONS OF NATIONAL LABOR RELATIONS BOARD bf how the charge of domination of the Association should be met at Seattle or subsequently. On August 13, 1937, during the hearing in the Seattle proceeding, all parties, including the Association, agreed upon a stipulation in settlement of the issues. By means of the stipulation the respondent agreed, inter alia, to cease and desist from discouraging membership in Messengers Local No. 40 of the C. T. U. or encouraging membership in Messengers Sub-Local No. 31, from dominating or interfering with the administration of Sub-Local No. 31 and from contributing finan- cial or other support to it, from granting privileges and preferences to members of Messengers Sub-Local No. 31 of the Association, and from refusing to bargain collectively with the messengers of Local No. 40 of the C. T. U. as the exclusive representative of all 'its mes- sengers employed at Seattle, Washington. The respondent also agreed, by way of affirmative action, to bargain collectively, upon re- quest, with Messengers Local No. 40 as the exclusive representative ^f all its messengers employed at Seattle, Washington, in respect to rates of pay, wages, hours of employment, and other conditions of employment, unless and. until another appropriate unit should have been decided under the Act. On August 25, 1937, the Board issued Decision and Order in the case based upon the stipulation and following the language of its provisions 18 6. The respondent's instructions on and after August 17, 1937 Following the hearing in the Seattle proceeding, White, the re- spondent's president, addressed a memorandum on August 17, 1937, to the respondent's five vice presidents and to its comptroller on compliance with the Act. The memorandum stated that, in view of remarks made at the Seattle hearing, each of the six officers,was being asked to conduct a most thorough investigation into his entire department to satisfy himself that each supervisor had a copy of the Act in his possession and that there was no one in a supervisory capacity who was not fully informed of the requirements, of that piece of legislation. Asserting that the respondent had always desired to comply with the Act and that instructions to' supervisors of this desire should have been unnecessary, the memorandum stated further that recent experiences required that supervisors be instructed to observe the Act and to ask questions on any of its aspects which might not seem clear to them. White asked his six subordinates to take particular care to explain to supervisors that the prohibition of the Act against furnishing financial or other support to a labor organiza- 18M.atter of Weetern Union. Telegraph Company and Messengers Local No . 40 of the Cmnmercial Telegraphers Union, 3 N. L. R. B. 375. THE WESTERN UNION TELEGRAPH COMPANY 125 Lion was being construed by the Board to cover such matters as use of the respondent's premises for Association meetings, extension to the Association of the respondent's typewriter or mimeographing facilities for Association correspondence, availability of the respond- ent's bulletin boards for Association notices, solicitation of members by the Association on company time, and the granting of preferences to Association members not only as to discharges but also as to as- signment of working hours and other conditions of employment. The memorandum concluded with directions to acknowledge receipt thereof and to advise White "when this work has been completed." The record shows that the vice presidents in charge of the com- mercial, traffic, plant, and engineering departments and the comp- troller had, before the end of September, advised all their immediate regional subordinates in conformity with White's memorandum and sent copies of the Act to such subordinates for distribution to super- visory employees. By the end of September, White had been in- formed by each of the four vice presidents in charge of regional ,'operations and by the comptroller of their compliance with his in- structions of August 17. There is also evidence that questions were asked by field officials about the legality of certain practices with respect to the Association and that those questions were promptly answered. Among the practices about which inquiry was made was the check-off. The answer declared that it was not illegal. In addi- tion, Vice-President Welch issued instructions to all appropriate officers of the respondent prohibiting the rental of space, including meeting rooms, to the Association for any purpose. The board of directors of the Association sent mimeographed notices on September 3, 1937, to all local assembly secretaries and division committee chairmen calling attention to the fact that the Board had indicated at the Seattle hearing that the following practices tended to show company domination of the Association and constituted contributions of financial support to it: (1) holding Association meet- ings and elections on company property, (2) using company equip- ment in preparing Association bulletins and letters, (3) preparing Association bulletins and letters on company time, (4) posting As- sociation notices on bulletin boards occupying company space, (5) distributing Association communications by means of company media, and (6) granting preferences to Association members as to conditions of employment. The notice stated that the enumerated practices seemed to be contrary to the letter and spirit of the Act and directed all addressees to examine the practices in their local assemblies and to discontinue immediately those designated as illegal. On advice of the respondent's general solicitor, Welch informed all division traffic superintendents on October 5 that it was undesir- able for employees occupying supervisory positions to hold office 126 DECISIONS OF NATIONAL LABOR RELATIONS BOARD in the Association if their duties with the respondent, empowered them to hire, dismiss, discipline, grant preference in the assignment of hours and vacations, or approve excused absences. Stating that he had no authority to dictate the action to be taken by supervisory employees who also held office in the Association, Welch suggested, that those employees could best serve the interests of the respondent and the Association by relinquishing one of their posts. Employees were to understand, he said, that in the future they would be expected to resign from supervisory positions if elected to office in the Associa- tion. On October 14, 1937, Titley advised all division plant superin- tendents of the general solicitor's opinion and asked them to take whatever action might be necessary to comply with that opinion. After the respondent's officers had issued instructions as to super- visors, the Association undertook to investigate the nature of the duties performed by its members in the course of their employment with the respondent and to enforce the provision of the Association's constitution restricting active membership to employees not having the power actually to employ and discharge. On September 14, 1937, Elsden wrote to four of the respondent's vice presidents and to its comptroller stating that it was necessary, in order to conform with constitutional requirements, for the Association to check the working status and delegated powers of supervisory employees and asking to - be advised concerning all employees in the Metropolitan division who had specific authority to hire and discharge. Eldsen received a reply from Willever listing the names of persons in the commercial depart- ment of the Metropolitan division who had authority to hire and discharge. The respondent's vice president in charge of the engineer- ing department sent a similar reply, setting forth the names of 20 employees who were ineligible for active membership in the Associa- tion and stating that it was his understanding that active members of the Association whose names appeared on that list had already withdrawn from the Association or were planning to do so. He also listed the names of 30 employees who had the power to recommend hiring or recommend discharge. At the hearing, Eldsen testified that all the five officers to whom he had written on, September 14, 1937, had replied to the inquiry contained in that letter and that subsequently all local assemblies in the Metropolitan division had been notified to check their membership lists against the names submitted by the respondent and to transfer to the associate membership rolls all active members reported by the respondent as having the power to employ and discharge. On September 15, 1937, the Association's general secretary-treas- urer informed all local assembly secretaries that the Association was considering the issuance of associate membership cards to employees who, "because of their position do not desire or should not have full- THE WESTERN UNION TELEGRAPH COMPANY 127 fledged membership rights." Several witnesses testified at the hearing that associate membership did not carry the privileges of voting on questions before the local assembly, of selecting officers, and of being nominated for or elected to office. By October 12, 1937, the Associa- tion had not satisfied itelf that all supervisory employees who might be in a position to influence their subordinates to join the Associa- tion had withdrawn from active membership. Farren suggested to Burton by a letter of that date that the Association could defend itself against attacks of company domination if it cleared its "official ranks" of employees "who hold positions with the Company who may be in position to dominate and influence employes to join ..." There is no showing in the record that employees authorized to im- pose the penalty of summary dismissal upon their subordinates and to recommend discharge withdrew from active membership or that employees empowered to hire or discharge messengers followed the same procedure. On the contrary, the evidence shows affirmatively that., as of February 1938, 162 supervisory employees held office in local assemblies and constituted approximately 24 per cent of the total number of local assembly officers; and that 15 supervisory em- ployees held divisional offices in the Association and constituted approximately 47 per cent of the total number of divisional officers."' There thus remained in policy-making positions in the Association supervisors who represented the respondent and were able to coerce their subordinates to follow the respondent's policy with respect to the Association. The uncontroverted testimony at the hearing was that, after pro- -lnulgation of the instructions hereinbefore discussed, Association members ceased using the respondent's mechanical facilities in con- nection with Association work and discontinued the practice of per- forming Association clerical tasks on company time. Meetings of local assemblies and other Association groups were no longer held on company property, although various local assemblies had considered the question of renting space from the respondent for that purpose. In this connection, Foster, Association Southern division president, addressed a memorandum, marked "confidential," to all local as- sembly officers in his division on October 15, 1937, which read as -follows : The following from Burton dated October 11th: Your memo October 1st, and returning attachments in respects to having the Company rent us space for meetings, elections, etc. 19 The source of these figures is a list of job designations and job descriptions prepared by the respondent for all persons who it claimed had been listed as Association officers in the Telegraph World of February 1938. Our determination of whether an employee thus listed performed supervisory functions is based upon the respondent 's admissions and the -character of the job designations or job descriptions. 128 DECISIONS OF NATIONAL LABOR RELATIONS BOARD During my visit in New York this entire question was receiving the attention of Company officials, particularly because the New York Local assemblies wanted to rent meeting and election space in the Company's 60 Hudson Street Building. Company people were definitely against renting space to the Association, although I understand the building manager had worked out the exact rental charge per hour. Company folks generally felt that they would rather not have the questions raised at all, because they did not want to definitely and finally deny the Association's request. They were afraid, however, to grant such a request because the moment space was rented to the Association, other organizations would apply for the same renting privilege and if the Company refused to treat the other, organizations the same as it had treated the A. W. U. E. the charge of discrimination could not be avoided and probably not successfully defended. This, I feel, is a reasonable attitude and I suggest that we avoid even asking the Company to rent us space. The respondent's desire to avoid equal treatment of the Association and its rivals is hence clearly-apparent and the Association's acqui- escence in that desire is established. Free use of company bulletin boards and company bulletin-board space by the Association was discontinued soon after August 17, 1937. Thereafter the Association negotiated with the respondent for the rental of bulletin-hoard facilities and on February 24, 1938, both parties signed a contract whereby the respondent granted the Asso- ciation that privilege in return for a monthly rental payment of $45. On March 7, 1938, a supplemental agreement was signed providing for the enjoyment of the privilege, at the rate fixed on February 24, as long as the Association continued to represent a majority of the respondent's land-line employees. The record shows that the Asso- ciation paid the contract rate through April 24, 1938: After this arrangement had been consummated, the secretary of the A. C. A. local at San Francisco wrote to White on March 30, 1938, stating that he understood the Association had leased bulletin-board space from the respondent and requesting the same privilege for the A. C. A. local at San Francisco. White replied on April 4, 1938, that it was not the respondent's policy "to make a general practice of leasing space such as you mention to other persons or organiza- tions." Informing the A. C. A. local secretary that the Association had for 20 years been the bargaining representative of a majority of the respondent's employees, White stated further : "Our arrange- ment with them with respect to bulletin boards is the outgrowth of the collective bargaining process, and is a part of our general group THE WESTERN UNION TELEGRAPH COMPANY 129 of understandings with the Association covering all working condi- tions. The privilege in their case represents a concession by the company in lieu of other concessions. It would not be our policy to extend a similar rate or a similar privilege to any organization with whom we have no general labor agreement." The Association thus continued to enjoy a favored status whereby it assumed an ad- vantage over its competitors in methods of disseminating infor- mation. Although the -respondent's instructions ' and those of the Associa- tion did not prohibit the continued use of the free transportation privilege accorded to the Association in a memorandum of under- standings executed on December 14, 1920, the record contains no evi- dence of any applications for railroad passes by the Association after September 1937. Willever stated at the hearing that, while the agree- ment of 1920 had not been cancelled by the parties, the Association made no requests for railroad passes after December 1937. If any application had been made, he explained, the respondent would have refused to honor it on the ground that the transportation privilege constituted a form of financial assistance. Burton testified that the Association had taken no definite action with regard to discontinuing the privilege of free transportation but that a voluntary understand- ing had been reached among its officers to refrain from invoking the machinery necessary for the enjoyment of that-privilege. His fur- ther testimony was that the last time the Association had received free railroad passes had probably been in the spring of 1937. While White's information to his immediate subordinates on August 17 was that preferential treatment of Association members constituted support of the Association and while there is no evidence that preferences were in fact accorded Association members after August 1937, the preferential hiring provision of the Omaha. Agree- went and subsequent arrangements for favored treatment of Asso- ciation members were not formally abrogated or superseded by -a contrary agreement during the bargaining conference of October 1937 or at any later date. Willever explained at the hearing that he saw no need for abrogating the Omaha Agreement and supplemental understandings on this subject in view of his opinion that "an agree- ment which is opposed to a fundamental law, is cancelled by the ap- plication of that law." Only the preference provisions of the Omaha Agreement and of supplemental understandings, he testified, had thus been considered nugatory. Moreover, his instructions to general managers after August 17, he stated, were intended. to abrogate all preference agreements and preference practices which had been out- standing at that time. -Titley of .the plant department testified that he had issued no instructions and had taken no steps to inform the 130 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employees in his department that the Omaha Agreement was no longer in effect. Burton corroborated Willever's. testimony that no formal' understanding had been entered into after August 1937 termi- nating the preference provision of the Omaha Agreement or cancel- ling that 'document in its entirety. While Burton testified further that the Association was not contending that the Omaha Agreement was still in full force and effect, he stated as follows with respect to the status of that contract : The situation is we don't know yet whether it is legal or not under the Wagner Labor Act, and therefore it is in a state of suspended animation. The Association did not at any time advise its members that the preference agreements had been canceled. On November 29, 1937, Farren informed the Detroit messengers that the Association had at that time a preferential hiring agreement with the respondent. Fur- ther inquiry made of Farren on February 8, 1938, by the secretary' treasurer of the Association messenger assembly at Detroit concern- ing the status of preference agreements brought the following reply : On the question of membership preference, we have such an agreement, but as yet we have not obtained recognition from the N. L. R. B., as a legitimate labor organization, as have the C. T. U. A., and A. R. T. A., therefore, if the Company shows any preference for members as against non-members, and gives as its reason, non-membership in the Association they would be cited for unfair labor practice and supporting a Company Union, etc. The Company therefore is very careful not to do anything which will give the Labor Board any cause for such charges. It is clear that the respondent's conduct was not reasonably calculated to impress the Association with the fact that one of the most valu- able techniques for soliciting members had been permanently discon- tinued. There is no evidence of any, attempt on the • part of the respondent or the Association to construe in practice the silence of White's in- structions of August 17 on the "tying-in" technique as an abolition of that device. Titley testified that he had not rescinded his earlier letters to district plant superintendents that the Association be tied in with the granting of furloughs and the practice of "spreading the work." His further testimony was that the, policy expressed in his memorandum of November 24, 1933, remained unaltered and con- tinued to the date of the hearing "within proper bounds." That memo- randum stated in part: "The relationship between the Association and the Company has not changed, unless it be that they are more strongly cemented together, and it is therefore most desirable that we THE WESTERN UNION TELEGRAPH COMPANY 131 contribute our full fifty per cent of cooperation and effort to operate and carry on." There is no showing of the countermand of any of the respondent's instructions as to tying the Association in with vari- ous improvements in working conditions and with the consideration of applications incidental to the respondent's established personnel program. It is also clear from the record that as late as February 28, 1938, the Association officers considered the "tying-in" practice an effective means of attracting new employees to the Association. On that day, Farren wrote to Ross, Association Eastern division presi- dent, in reply to the latter's questions concerning the Association's position with respect to salary schedules for messengers. Farren ad- vised Ross that all agreements for guaranteed earnings negotiated in the Lake division "to settle messenger difficulties" applied only to the messengers in the service at the time the contracts were consummated and did not extend to messengers to be hired in the future. He ex- plained the value of his arrangement as follows to the Eastern, division president : This gives the local and division officers an opportunity to do something for the new employes as they did for the older ones .. . Unless that policy is followed, all new boys receive the same as the older boys, and there is nothing the Association can do to assist them in so far as wages are concerned, but negotiate general increases for all messengers, regardless of length of service or experience. The new boys coming in at the same pay as the older boys, do not know the Association was responsible for the wage sched- ule and give the Association no credit. The older boys like to see the new ones come in for less and have to work their way up, as they did. He further advised Ross that it would be foolish "to try and force the Company to pay the old schedule to all new boys, and I do not believe you would be successful in so doing unless trouble was in prospect." Neither White nor any of his immediate subordinates undertook at any time after August 1937 to rescind instructions previously issued requiring employing officials to hand Association literature to new employees. Welch testified that he had issued no orders to discontinue that practice in the traffic department. Titley's testi- mony was to the same effect with regard to the plant' department, The record also shows that a further device which the respondent had instituted before July 5, 1935, to aid the Association in soliciting members, had not been abolished by April 8, 1938. On the latter date, Farren informed the secretary-treasurer of a Chicago local 132 DECISIONS OF NATIONAL LABOR RELATIONS BOARD assembly that, in accordance with Titley's letter of October 14, 1931, employee lists could be obtained from local company officers. The exclusive recognition agreement entered into in March 1937 for the obvious purpose of encouraging messengers to join the Asso- ciation and discouraging affiliation with rival organizations remained fully effective as "of the date of the hearing. Nor was the Associa- tion's custom of informing the respondent's officials of the extent of organizational progress made by other labor organizations discour- aged. In the latter connection the Association's Southern division president wrote to one of the respondent's general managers on No- vember 2, 1937, informing him that a named organizer for the American Federation of Labor, who had $40,000 at his disposal for organizational work, was attempting to enlist employees at some of the respondent's offices. The 1919 arrangement for the check-off of Association members' clues remained-in. effect after August 1937. On September 25, 1937, Burton wrote to Elsden that the C. I. O. was demanding the check- off, , privilege for those of its members who were employed by the respondent at Denver, Colorado, and that the respondent would be charged with discriminatory treatment of the C., I. O. unless it extended that privilege to the C. I. O. or withdrew it from the Association. - Burton's letter dealt also with other aspects of the respondent's dealings with the Association and it appears to have been written after consultation with the respondent's officials. The respondent did not thereafter discontinue the check-off for the Asso- ciation; and there is no evidence that the C. I. O. requested the check-off privilege or that its request was granted. White's prohibition against solicitation by the Association on company t_ime.- appears to have been observed generally as to all classes of employees except messengers. One of the respondent's messengers, employed in New York City, had, in November of 1937 and again 2 months later, been handed an application for member- ship in the Association by one, Matthews, a fellow messenger em- ployed in the same office as the messenger in question. Matthews had informed the messenger in question on the first occasion that a messenger sergeant, charged with inspecting messenger uniforms and kits and reporting irregularities in connection therewith to the dis- trict superintendent, had visited the office and had left applications for membership with Matthews, instructing him to hand them to all messengers who, were not members of the Association. On the latter occasion Matthews stated that two Association organizers had visited the office, had. checked upon the extent of non-membership in the Association, and had instructed Matthews to distribute applications to those who had not' joined the Association. Another messenger, employed in "one of the respondent's offices in New York City, joined THEE WESTERN UNION TELEGRAPH COMPANY 133 the Association in September 1937 under the following circumstances : Upon returning to his office after completing an assignment, but before finishing his work for the day, he was informed by the night clerk that the latter had been instructed to keep him in the office, until the arrival of the president of one of the local assemblies. When the latter arrived, he handed the messenger an application for membership in the Association and asked him to sign it. The fol- lowing day, after having asked the advice of the office manager and after having been told by the latter that it would be advisable for him to join, the messenger signed the application blank. We find that solicitation- of messengers on company time by the Association did not cease after August 17, 1937. The record fails to establish the fact that the respondent's labor policy with respect to messengers changed after August 1937. The evidence indicates clearly that the respondent did not relax its efforts to prevent messengers from joining labor organizations other than the Association. The device of informing messengers that the Asso- ciation .was the exclusive bargaining representative for the respond- ent's employees was still used whenever the need arose. Thus on October 7, 1937, the respondent's city superintendent at Detroit in- formed his superior, the general manager of the Lake division, that a vote had been taken by the messenger sublocal at Detroit to with- draw from the Association and to form an independent unaffiliated organization; that the messengers had taken the position that the Association was not supporting them in their negotiations with the respondent; and that the failure of the last general assembly to rec- ognize the messengers as regular members had aroused resentment on their part against paying dues to the Association. The city super- intendent reported further to his superior that local company officials had pointed out to the messengers, in informal discussions, that the respondent recognized the Association as the exclusive bargaining representative of its employees. Cronkhite, Lake division general manager, discussed the situation outlined in his subordinate's com- munication with Burton and thereafter forwarded that letter to Far- ren, Association take division president. The latter, in a letter to Cronkhite, expressed his regrets as to the action taken by the Detroit messengers and stated that he would endeavor to dissuade them from executing their plans. In the event his efforts proved unsuccessful, he advised Cronkhite, the Association would insist that the respond- ent observe its exclusive recognition agreement and refuse to recog- nize or negotiate with any messenger committee at Detroit or else- where which was not affiliated with or approved by the Association. After having conducted a personal investigation into the Detroit situation, Farren advised Burton that it would be unwise for the Association to take any action against the contemplated withdrawal 134 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of the messengers "until our position has been definitely established with the Labor Board...." Should the Association undertake to oppose their withdrawal, he stated, they would appeal to the Board and place the Association in a position of being unable validly to support its claim to represent messengers. The Detroit messen- gers withdrew from the Association and returned to it after 2 months, when their group was chartered as an independent Associa- tion local. The respondent's officials continued their practice of informing Association officials of the imminence of "messenger trouble," and, the Association promptly responded by negotiating on behalf of the messengers in the trouble area. Thus in November 1937 Farren was informed by the respondent's local officials that the C. I. O. was attempting to organize messengers in the vicinity of Flint, Michigan. An Association representative thereupon proceeded to the area in question and negotiated an adjustment of wages and working condi- tions for the messengers. According to Farren's testimony, the mes- sengers nevertheless joined the C. I. O. after the Association had disposed of their complaints against the respondent. None of them had been affiliated with the Association when the latter negotiated on their behalf. Thereafter, at a joint conference between the Asso- ciation and the respondent held from November 15 to 26, 193 7 , the respondent agreed to pay premium wages to messengers working on Christmas Day and to put into effect a vacation schedule for messen- gers. On December 23, 1937, the respondent issued a printed com- pilation of all agreements with the Association which were appli- cable to messengers. Also, as of December 15, 1937, the Association's constitution was amended to accord full membership rights to mes- sengers. Thus the August 17 instructions and the respondent's subse- quent conduct were not seriously intended to, and did not in fact, lead the Association to believe that the respondent's policy with regard to the organization of messengers had been altered. We find that the respondent intended, by means of the instruc- tions of August 17, to assure the continued existence of the Associa- tion and to divest it of only such characteristics as made it obviously vulnerable to charges of company domination without impairing the favored status which it had unceasingly enjoyed for 19 years. We are unable to find that the instructions of August 17 were intended in good faith to purge the Association of the respondent's domina- tion and to release the respondent's employees from the company- inspired compulsion to join the Association as a necessary incident of their employment. The respondent's continued refusal to deal with any labor organ- ization other than the Association led to the filing of charges against it with the Regional Director for the Eighteenth Region of the THE WESTERN UNION TELEGRAPH: COMPANY 135. Board by General Drivers, Local No. 116, A. F. of L. A complaint. was thereafter issued by the Board on March 11, 1938, alleging that the respondent, in the operation of its office at Fargo, North Dakota,, had engaged in an unfair labor practice, within the meaning of Sec- tion 8 (5) of the Act, by refusing to bargain with the representa- tives of the A. F. of L. local. Although the Association had filed with the Regional Director a notice of its intention to enter a motion, for leave to intervene in the proceeding; no such action was taken. Counsel for the Association was present at the hearing but did not enter his appearance of record. On March ' 28, 1938, during the. course of the hearing, the respondent, the A. F. of L. local, and the. Board entered into a stipulation which effected a settlement of the case. Counsel for the respondent and counsel for the other parties. agreed in the stipulation that the A. F. of L. local represented a majority of the messengers employed by the respondent at Fargo,, North Dakota, and that the respondent would consider those messen- gers as constituting an appropriate unit until such time as the Board designated a different unit as appropriate. The respondent agreed. also to bargain collectively. with the A. F. of L. local, upon request, as the sole representative of all its messengers at Fargo,, North, Dakota. The Board subsequently disposed of the case on June 8,, 1938, by issuing an order in conformity with the stipulation.20 The Association regarded the conduct of the respondent's counsel in entering into the stipulation which settled the Fargo proceeding- as a, betrayal of the Association and as a mark of utter ingratitude, toward that organization for its past efforts in keeping messengers. out of other labor organizations. On April 4, 1938, Burton issued a report, to all division presidents on the Fargo proceeding and its, background, which is summarized as follows: . The. Association . had,... "for numerous reasons which you all know and understand," made. no effort to organize the Fargo messengers. The A.Y. of L. had conducted its promotional work in so unobtrusive a manner "that it, did not come to the attention of the Association, and consequently,, no opportunity to offset it was afforded." Before the hearing, Burton was led to believe by statements of the respondent's law department that the respondent would oppose the A. F. of L.'s. claim of the, appropriate unit. Consequently, in reliance on that belief, the Asso- ciation prepared no evidence on the unit question. At the hear- ing, hoavever, counsel for the respondent informed Burton and coun- sel for the tAssociation that he would not contest the A. F: of L.'s appropriate unit claim and that he would introduce no evidence to. support the respondent's answer to the complaint. Hence, the Asso- 20 Matter of The Western Union: Telegraph Company and General 1)riteo:s, Local No. 116,_ A. F. of L., 7 N. L. R. B. 974. 247384-40-vol. 17--10 136 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ciation was compelled to refrain from, intervening in the proceeding and participating in the hearing and was forced to acquiesce in the stipulation which settled the case. Burton's report elicited bitter and disillusioned replies from the `Southern and Gulf division presidents. The report emphasized for the Southern division president the fact "that we are not getting as much cooperation from the Company as we have given them in the messenger situation." Complaining that the Association was spending money to help the respondent in its battle against outside labor organizations and that it had been repaid with ingratitude, he suggested that the Association drop all messengers from its member- ship "and let the Company have their own battles with them and the outside labor organization and we remain just an observer in such battles." In his opinion, the Association's plight was due to the fact that the respondent's law department had disregarded all in- structions which Willever had issued to the Association on messenger organization. "Mr. Willever sicks us on," he protested, "and the Legal Department chops us off on the limb every time for they seem to be against messenger organization in the Association." To the Gulf division president, the Fargo hearing seemed a "fiasco." He likened the Association's predicament to "that of a prize fighter who found himself iii the position of having his sponsor step into the ring before the first round and raise the hand of the opponent to signify admitted defeat and yourself and your seconds could only stand agast at the spectacle." His suggestions for future action were -to organize all messengers and to reach an understanding with White ,on the position to be taken by the Association at subsequent proceed- ings before the Board involving a defense of the Association. We find that the Fargo hearing establishes the fact that, where the .Association was left to its own devices after August 17, it showed -litter helplessness in dealing with situations for which independent labor organizations can be and usually are well prepared. 7. Conclusions as to the present status of the Association The Association stands today, precisely as it has stood since 1918, :as the servant of the respondent, alert to perform both actively and passively the role of an obstacle to freedom of organization enun- ciated by Woodrow Wilson in 1918 and reaffirmed in the Act on July 5, 1935. In 1918, after defying the recommendations of the War Board that discharged employees who were C. T. U. members be reinstated and after resisting the appeal of Woodrow Wilson that the then .,current public policy as to labor relations be observed, the respondent summarized as follows for its stockholders its position with regard to THE WESTERN UNION TELEGRAPH COMPANY 137 the C. T. U.: "The Company says in effect to its employees : If you desire to join the C: T. U. A., then we must part." In contravention of the principles of the United States Government as enunciated by Woodrow Wilson for the period of the war and in furtherance of its own policy of prohibiting its employees from joining labor organi- zations of their choice, the. respondent formulated a program of organization for its employees; supervised and supported financially the initiation of the Association in accordance with that program; and confronted its employees with a sole -substitute for all other labor organizations. After 1918 the respondent continued its vigorous opposition to the C. T. U. and simultaneously heaped numerous forms of largesse upon the organization of its choice in order to assure its growth. and progress. Until 1925, it relieved the Association of the financial responsibilities attendant upon the convocation of general assembly conventions,' a favor which the Association evaluated as a "life saver." It voluntarily expanded the concept of "company business" to in- clude the Association's operations and extended to the Association the valuable perquisite of free railroad transportation, a concession which the Association's general president considered "vital to both the Company and, through the Association, the employees." It made available to the Association without financial charge but at the cost of censorship the "one sure avenue," as the Metropolitan division president had recognized it, "of getting facts before the employees" by permitting the Association to use bulletin boards and°bulletin- board space. It afforded the Association the free use of mechanical and meeting-room facilities and, according to Willever's testimony, "possibly one or two small things which constituted financial aid.'' When offers of stock at less than market value were made to its employees, the, respondent expressly permitted the Association and its officers to participate in the opportunity for financial gain. During the years which followed the formation of the Association, the respondent also undertook, according to the instructions of its officers, "to sell the Association" to its unenthusiastic employees and assumed for the .Association, as Willever, stated at 'the hearing, the burden of. "trying to get going so far as membership was concerned, because for- the reason that Mr. Carlton had taken the initial step in the first place." Thus it instituted the check-off system for collecting dues, a privilege 'which Willever admitted at the hearing had facili- tated the collection of, dues and had stabilized the Association's finances. It instructed employing officials to distribute to new em- ployees literature "describing the functions and objects of the Asso- ciation and calculated to sell the Association to our employees" and to furnish Association officials with employee lists, "the' information 138 DECISIONS OF NATIONAL LABOR RELATIONS BOARD being wanted in a membership drive." It sanctioned and encour- aged the endeavors of supervisory employees n enlisting their sub- ordinates as members of the Association. It extended to Association members various preferences as to conditions of employment and unequivocally pointed out to non-members that the disparity of priv- ileges between them and their fellow employees was due only to a difference in attitude toward the Association. It attempted by means of the "tying-in" technique to enhance the prestige and good will of the Association and to inculcate in the minds of employees the belief that membership in the Association was an indispensable factor in the enjoyment of highly prized incidents of employment. The respondent's reward for all these bounties lay in the fact that .it had trained the Association to act as its compliant agent in dealing with its employees and that it had fashioned the Association into a weapon for warding off the advance of outside labor organizations upon the domain restricted to the Association. During the critical years of 1931 through 1933 the respondent utilized the Association as a medium for forcing wage deductions on its employees and effec- tively prevented the submission to arbitration of the serious question of reducing earnings. When "messenger trouble" broke out in 1934, the respondent wielded its well-designed weapon in successful com= bat against labor organizations to which messengers were being attracted. The contention is made in the respondent's brief that the privileges which it-had accorded the Association represented the fruits of col- lective bargaining between the parties and could not, therefore, be regarded as outright gifts. We do not agree with this contention. A number of these perquisites were clearly not even the results of a purported exchange of promises mutually induced but were origi- nally spontaneously tendered by the respondent without the solicita: tion of the Association. In this connection, the "tying-in" practice is an outstanding example. Where privileges were in part obtained after a conference on both sides, the nature of the dealings between the parties which resulted in the grant of the privileges could not. as we have hereinbefore demonstrated, realistically.be termed collec- tive bargaining, as the respondent had designedly, through its various forms of support, deprived the Association of any power to bargain. as the independent representative of the respondent's employees. Had the respondent, after the effective-date of the Act, initiated or supported the Association in- the manner described, its activities. would unquestionably have been in violation of Section 8 (2) of the Act, as they constituted domination and interference with the forma- tion and administration of a labor organization and the contribution of support thereto. THE WESTERN UNION TELEGRAPH COMPANY 139 On July 5, 1935 , the activities of the respondent and its dealings with the . Association came within. the purview of the Act. No new independent organization thereafter came into being as the successor to the illegal Association and the latter continued to function with the same officers, the same constitution , and in accordance with methods established before July 5 , 1935. The respondent did not 'comply with the prohibitions of the Act by withdrawing recogni- tion from the Association as the collective bargaining representative 'of its employees and by announcing to them that they were free to join any labor organization of their choice. Instead, the respondent 4efied the Congress of the United States , which had reaffirmed the right of employees freely to organize and choose bargaining repre- sentatives, as it had disregarded in 1918 the War Labor Board's recommendation and Woodrow Wilson 's plea. On July 5, 1935, and for 2 years thereafter, while the respondent retained its vigil over the promotional efforts of outside labor organizations , the Association continued to enjoy all benefits previously tendered to it, although the respondent and the Association realized the patent illegality of their activities . The Association's role of aiding the respondent in its battle against outside labor organizations became more pronounced during this period than it had been previously. While the respondent went through the motions on August 17; 1937, of reluctantly divesting the Association of some forms of sup- port, it. did not seriously attempt to place the Association in a posi- tion of equality with all other labor organizations which had endeav- .ored to enroll its employees. Although a few illegal practices with respect to the Association had been modified, the respondent per- mitted that organization , which it had dominated in the past and which it was certain could be dominated in the future , to continue in existence . The Association still retained the benefits of free railroad transportation , of the use at nominal cost of the respondent's bulletin boards, of the arrangement to hand new employees promo- tional literature, of the agreements for preferred treatment of its members as to hire, tenure, and conditions of employment, of the valuable "tying-in" device, and of the exclusive recognition agree- ment. The action of August 17, 1937, designed only to detract atten- tion from the Association's vulnerability under the Act, failed to emancipate the Association and the respondent 's employees from their 19 years of subjugation to the will-of the respondent. We find, on the basis of the foregoing evidence , that the respond- ent has, since July 5, 1935, dominated and interfered with the admin- istration of the Association and contributed support to it. We find .also that the respondent has thereby interfered with, restrained, and ,coerced its employees in the exercise of the rights guaranteed to them by Section 7 of the Act. 140 DECISIONS OF NATIONAL LABOR RELATIONS BOARD B. Discrimination with regard to hire and tenure of employment The Omaha Agreement as executed and enforced required the re- spondent "to .hereafter prefer for employment those . applicants for positions who indicate their willingness to become members of the Association." By means of the memorandum of understandings signed in October 1921 the respondent agreed that "as between member and non-member of the Association , the member shall receive preference at all times where the Company 's interest will not be impaired by so, doing." Both agreements were in operation after July 5, 1935, and have not at any time since then been expressly cancelled. Section 8 (3) of the Act declares that it is an unfair labor practice for an employer to encourage or discourage membership in any labor organization by discrimination in regard to hire and tenure of employ- ment. By express proviso, the making of an agreement "with a labor organization (not established, maintained, or assisted by any action defined in this Act as an unfair labor practice)" requiring as a condi- tion of employment membership in the bona fide contracting organi- zation is not prohibited . Since we have found that the Association has been maintained and assisted by the respondent in violation of the Act, any contracts made with it and thereafter enforced by the re- spondent are not expressly or impliedly sanctioned by the proviso. We find that, in enforcing and failing formally to nullify the prefer- ence agreements hereinbefore mentioned , the respondent has, since July 5, 1935, discriminated against its employees in regard to hire and tenure of employment , thereby discouraging membership in other labor organizations and encouraging membership in the Association. We find also that, by such action, the respondent has interfered with, re- strained, and coerced its employees in the exercise of the rights guar- anteed in Section 7 of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondent set forth in Section III A , subsec- tions 5, 6, and 7 , and in Section III B, above, occurring in connection with the operations of the respondent described in Section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and 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, since July 5, 1935, domi- nated and interfered with the administration of the Association and contributed financial and other support to it in execution of the pur- pose for which it was originally created by the respondent. Such THE WESTERN UNION TELEGRAPH COMPANY 141 purpose, we have found, was the thwarting of free organization among the respondent's employees. We have also found that the respondent's. instructions of August 17, 1937, were not intended to and did not in fact emancipate the Association from its dependence upon the, respond- ent. We shall, therefore, order the respondent to cease and desist from further domination of and interference with the Association. In the brief submitted by the respondent for the consideration of the. Trial Examiner it is argued that the Act does not require the imposi- tion of the "death sentence" upon the Association. To do so, it is contended, would be to interfere with the right of the respondent's- employees freely to choose their bargaining representative. We can, not agree with the respondent's contention in this respect. The pur-- pose for which, as we have found, the Association was organized and to which it was thereafter continuously devoted was the coercion of the respondent's employees in the exercise of their right to self -organi- za.tion and to bargain collectively through representatives of their own choosing. That purpose has been outlawed by the Act, and asp long as the Association remains in existence among the respondent's employees, even though partially shorn of some of its illegal charac- teristics, it will constitute an impediment to the exercise of the rights, guaranteed by the Act. Nothing short of disestablishment can effec- tively eradicate the effects of 20 years of interference and domination.. If the respondent's employees are to be released from the coercive restraints to which they have long been subjected, the symbol of that, coercion must be completely removed. The contracts entered into with the Association, having been originally executed and subsequently performed for a purpose now illegal, must cease to be enforced. We therefore deem it necessary, in order to effectuate the policies of the Act, to require the respondent to withdraw all recognition from the Association as the representative of any of its employees for the pur- pose of dealing with the respondent concerning grievances, rates of pay, hours of employment, or other conditions of employment and completely to disestablish the Association as such representative. Since we have found that the preferential hiring aspects of the Omaha Agreement and subsequent arrangements for the favored treat- ment of Association members are in violation of Section 8 (3) of the Act, we shall order the respondent to cease giving any force or effect to such understandings. All other agreements with the Association are also to be made null and void, as they are part and parcel of the respondent's general conduct which we have found to be violative of Section 8 (2) of the Act. We have further found that the check-off of dues from members' wages was accorded the Association for the purpose of facilitating the securing of membership therein and of stabilizing the Association's. 142 DECISIONS OF NATIONAL LABOR RELATIONS BOARD finances. It is apparent that an authorization for the check-off of dues owed to an organization. dominated and supported by the re- spondent was not a voluntary act of the employee signing such authori- zation but represented a further aspect of the employee's compulsion to abandon his rights under the Act and to support the organization which the respondent had fostered for a purpose proscribed by the Act. Under these circumstances we will restore the status quo by ordering the respondent to reimburse its employees for all amounts deducted from their wages as dues for the Association since July 5, 1935.21 At the hearing, it was agreed by all parties that, in the event of an order by the Board requiring reimbursement of such monies, a supplemental hearing would be held to determine the exact amount checked off dur- ing the period covered by the order. Payments to the respondent's -death-benefit fund are not to be included in the amount thus to be restored to employees. Upon the basis of the above findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. American Communications Association and Association of West- ern Union Employees are labor organizations, within the meaning of Section 2 (5) of the Act. 2. By dominating and interfering with the administration of the Association and by contributing financial and other support to it, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (2) of the Act. . 3. By preferring for employment applicants indicating a willingness to join the Association of Western Union Employees and by according various forms of favored treatment to members of the Association, thereby discriminating against its employees in regard to their hire and terms and conditions of employment, thereby discouraging mem- bership in the American Communications Association and other labor organizations and encouraging membership in the Association of Western Union Employees, the respondent has engaged in and is en- gaging in unfair labor practices, within the meaning of Section 8 (3) of the Act. 4. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, the re- spondent has engaged in unfair labor practices, within the meaning of Section 8 (1) of the Act. 21 Matter of The Heller Brothers Company of Newconrerstoicn and International Brother- hood of Blacksmiths, Drop Forgers, and Helpers, 7 N. L. R. B. 646; Matter of West Ken- tucky Coal Company and United Mine Workers of America, District No. 2.4, 10 N. L. B. B. 88. THE WESTERN UNION TELEGRAPH COMPANY 143: . 5. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. ORDER Upon the basis of the above findings of fact and conclusions of law and pursuant to Section 10 (c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the respond- ent, The Western Union Telegraph Company of New York, New York, and its-officers, agents, successors, and assigns shall: 1. Cease and desist from : (a) Dominating or interfering with the administration of Asso- ciation of Western Union Employees, or with the formation or ad- ministration of any other labor organization of its employees, and from contributing financial or other support to Association of West- ern Union Employees or any other labor organization of its employees ; (b) Recognizing Association of Western Union Employees as the representative of any of its employees for the purpose of dealing with the respondent concerning grievances, labor disputes, rates of pay, wages, hours of employment, and other conditions of employment; (c) Enforcing or attempting to enforce any agreements, under- standings, or arrangements entered into with Association of Western Union Employees; (d) In any other manner interfering with, restraining, or coercing its employees in the exercise of their rights to self-organization, to form, join, or assist labor organizations, to. bargain collectively through representatives of their own choosing, and to engage in con- certed activities for the purpose of collective bargaining or other mutual aid or protection, as guaranteed in Section 7 of the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Withdraw all recognition from Association of Western Union Employees as the representative of any of its employees for the pur- poses of dealing with the respondent concerning grievances, labor dis- putes, rates of pay, wages, hours of employment, or other conditions of employment, and completely disestablish Association of Western Union Employees as such representative; (b) Reimburse each of its employees whose dues were checked off for the amounts thus deducted from their wages since July 5, 1935, excluding any amounts deducted for the death-benefit fund; (c) Immediately post notices in conspicuous places in all its offices throughout the country, and maintain such notices for a period of sixty (60) consecutive days, stating (1) that the respondent will cease 144 DECISION'S OF N'ATION'AL LABOR RELATIONS BOARD and desist as aforesaid , (2) that the respondent withdraws, and will refrain from , all recognition of Association of Western Union Em- ployees as the representative of any of its employees for the purposes of collective bargaining and completely disestablishes it as such repre- sentative, and (3 ) that all contracts, agreements, understandings, and arrangements entered into between the respondent and Association of Western Union Employees , including the Omaha Agreement, are cancelled and will not be given effect. AND IT IS FURTHER ORDERED that the complaint . be, and it hereby is, dismissed without prejudice in so far as it alleges discrimination against six named individuals in regard to their hire and tenure of employment and their conditions of employment. APPENDIX A THE RESPONDENT ' S OPERATING STRUCTURE IN THE UNITED STATES BOARD OF DIRECTORS ACCOUNTING DEPARTMENT Headed by: Comptroller. Functions: Accounting prob- lems. Structure: 8 territorial divi- sions! TRAFFIC DEPARTMENT Headed by : Vice ppresident. Functions : Actual transmission of messages at offices not designated as "nonfunctional" offices: Wire handling of telegrams, assignment and regulation of the wires, and employment and assignment of operators of circuits going to "nonfunctional" offices and railroad points. Structure : 8 territorial divisions.' Number of employees (1938): 13,000. STRTJCTURE OF EACH OF THE EIGHT TERRITORIAL TRAFFIC DIVISIONS Traffic manager: In charge of traffic functions of a city with a large volume of business. Staff Headed by: Division traffic superintendent, directly re- sponsible to vice president in charge of Traffic Department. Chief operator: In charge of traffic functions of a city with a smaller volume of business. t s aff i The eight territorial divisions of the Accounting, Commercial, and Traffic Departments are cuter- ruinous, and are designated as follows: Eastern, Metropolitan, Southern, Lake, Central, Gulf, Mountain, I COMMERCIAL DEPARTMENT Headed by: Vice president. Functions : Terminal handling of all messages accepted from the public, transmission of messages in "nonfunctional" offices, delivery of telegrams , public relations, and promo- tion of the respondent's business. Structure: 8 territorial divisions.' Number of employees (1938): 25,000 (over 50 percent of total employees in the United States). STRUCTUREOF EACH OF THE EIGHT TERRI- TORIAL COMMERCIAL DIVISIONS r Headed by: General manager, directly responsible to vice president in charge of Com- meroial Department. District superintendent: In charge of a district, with Juris- diction over commercial offices in small cities within such district. Manager: In charge of commer- cial functions of a small city within a district. Branch manager: In charge of a branch office or store where messages are filed by the public. and Pacific, The Plant Department has only seven territorial divisions . The Eastern Division of the P Plant Department covers the same territory as the Metropolitan and Eastern Divisions of the other Departments. The other six Divisions of the Plant Department are coterminous with those of the Accounting, Commercial, and Traffic Departments. Source: This presentation is based upon the testimony of three of the respondent's vice presidents and upon charts prepared by the respondent and incorporated in the record. It does not include all executive functions and does not show the territorial structure of the Accounting Department, as these are not necessary for an understanding of the evidence. I Staff I PRESIDENT City superintendent: In charge of commercial offices in a large city. Branch manager: In charge of a branch office or store where messages are filed by the public. aff st Division supervisor of lines: In charge of a group of small cities. City foreman: In charge of a small city. Staff Division supervisor of maintenance: In charge of a group of small cities. City , foreman: In charge of a small city. StI ff PLANT DEPARTMENT Headbd by: Vice president. Functions : Construction and maintenance of opetating property. Structure : 7 territorial divisions., Number of employees (1938): 4,000. STRUCTURE OF EACH OF THE SEVEN TERRI- TORIAL PLANT DIVISIONS Headed by: Division plant superintendent, directly respon- sible to vice president in charge of Plant Department. Division supervisor of equipment: In charge of a group of small cities. City foreman: In charge of a small city. I I Staff I I I Division supervisor of plant: In charge of a group of small cities. City foreman: In charge of a small city. Division chief clerk: In charge of a group of small cities. City foreman: In charge of a small city. Division account- Metropolitan plant superintend- ant: In charge of a ent: Each metropolitan plant group of small superintendent is in charge of cities. plant functions of a large city and combines generally the functions of division supervisors of lines, maintenance, equip- ment, plant, chief clerk, and probably of the division ac- City foreman: In countant. Staff Staff Staff Functions similar to thoseper- formed by the six city foremen in nonmetropoiltan areas are also performed byy parallel subordinate officials in this area. 247384--40 charge of a small city. (Face p. 144)