Douglas Aircraft Co., Inc.

In the Matter of DOUGLAS AIRCRAFT Co., INC., NORTHROP DIvISIoN and INTERNATIONAL UNION UNITED AUTOMOIIILE WORKERS OF AMERICA, LOCAL 229 Case No. C-557.-Decided December 1,1939 Aircraft and Parts Manufacturing Industry-Interference, Restraint, and Coercion: requiring as conditions of employment or reinstatement agreement by employees and prospective employees that they would not go on strike, that they would forfeit $15.00 to be deducted from wages for violation of such agree- ment, and that violation of such agreement should be cause for discharge-- Discrimination: refusal to reinstate an employee because of his refusal to sub- scribe to above conditions of employment-Reinstatement Ordered-Back Pay: awarded. Mr. William R. Walsh, Mr. David Persinger, and Mr. David Sokol, for the Board. Gibson, Dunn & Crutcher, by Mr. J. Stuart Neary, of Los Angeles, Calif., and Mr. Harry W. Elliott, of Los Angeles, Calif., for the re- spondent. Mr. Daniel J. Harrington, of counsel to the Board. 'DECISION AND ORDER STATEMEMT OF THE CASE Upon amended charges duly filed by International Union United Automobile Workers of America, Local 229, herein called the Union, the National Labor Relations Board, herein called the Board, by Towne Nylander, Regional Director for the Twenty-first Region (Los Angeles, California), issued its complaint, .dated February 2, 1938,. against Douglas Aircraft Co., Inc.,' El Segundo, California, herein called the respondent, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1) and (3) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the complaint and of a notice of hearing to be held on February 9, 1938, were duly served upon the respondent and the Union. The complaint alleged in substance that on or about October 20, 1937, and thereafter, the respondent interfered with, restrained, and 1 Designated In the pleadings as Douglas Aircraft Co., Inc., Northrop Division. 18 N. L. R. B;, No. 9. 43 44 DECISIONS OF NATIONAL LABOR RELATIONS BOARD coerced its employees in the exercise of the rights guaranteed in Sec- tion 7 of the Act by requiring persons seeking employment or rein- statement to their regular positions of employment following a strike at the respondent's plant to sign a certain instrument entitled "Con- ditions of Employment'"I 2 and discouraged membership in the Union by discriminatorily refusing to reinstate Al Riess, a striking em- ployee, to his regular position. of employment because he refused to sign the instrument. On February 24, 1938, the respondent filed an answer, admitting that it required persons seeking employment or reinstatement to sign the instrument referred to in the complaint, and admitting that it refused to reinstate Al Riess, but denying that the actions complained of constitute unfair labor practices, or affect commerce, within the meaning of the Act; and challenging the constitutionality of the Act and of its application to the above actions of the respondent. Pursuant to notice, a hearing was held on February 9, 21, 24, and 25, 1938, at Los Angeles, California, before Thomas H. Kennedy, the Trial Examiner duly designated by the Board. The Board and the 3 The "Conditions of Employment" read as follows : (1) I agree that I will not go on strike, or seize Company property or occupy Company property without authority of the Company, and will perform my duties in an efficient manner and not indulge, singly or jointly, with others in "slow down" or "pace-making" and will not interfere with any other employees of the Company in the performance of their work, and that if I do, the commission of any of these acts will be an agreed cause of discharge. (2) I will not molest in any manner, or use intimidation or coercion upon any em- ployees of the Company in order to force them to join or refrain from joining or becoming members of any union, association or organization. (3) I will neither advocate nor participate in any coercion or any threats of bodily harm or damage to any employee, the property of any employee, or the Company, or in any violence or unlawful act to enforce the settlement of any differences that may arise between this Company and me, or my fellow workmen. (4) I agree not to commit sabotage on the property of the Company, its equipment, airplanes and airplane parts, and will report to the Company any act of sabotage or any known threat of sabotage. I agree that in the event that I shall commit any of the acts enumerated in paragraphs (1), (2), (3), and ( 4) that the commission of said acts will be good and sufficient cause for discharge, and I further agree that in the event any of the said acts are committed by me, to forfeit the sum of Fifteen Dollars ($15.00) which is to be deducted from my wage check at the termination of my employment, and I hereby authorize the Company to make such deduction from the wage check in the event of my discharge as the result of the breach of any of the said conditions of employment. It is understood that the $15.00 so forfeited by me will be placed in the employees' welfare fund to be distributed under the rules of said welfare fund for the benefit of employees of the Northrop Division of Douglas Aircraft Corporation. It is further understood that the Company is not limited to the above reasons to termi- nate my employment and that I agree to abide by the regulations set forth in the Com- pany's Rule.Book as it may be changed from time to time and that willful infraction of any of the Company's rules is just cause for discharge or other disciplinary action as the Company may deem fitting, but it is expressly understood that I agree to forfeit $15.00 only in the event I violate any of the conditions set forth in paragraphs (1), .(2), (3), and (4) above. It is understood and agreed that the terms of this agreement are to correspond with all of the laws and statutes of the State of California and the United States of America. I hereby voluntarily accept these and all other conditions of employment and agree to sincerely abide by them. DOUGLAS AIRCRAFT COMPANY, INC., NORTHROP DIVISION 45 respondent were represented by counsel and participated in the hear- ing. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing upon the issues was afforded all parties. At the commencement of the hearing, on February 9, 1938, the re- spondent filed a motion for continuance and additional time in which to file pleadings. The Trial Examiner denied the motion. On Febru- ary 24, 1938, however, the respondent filed an answer which the Trial Examiner received in evidence. During the hearing, the respondent renewed its motion for continuance. The Trial Examiner again de- nied the motion. In the course of the hearing the respondent moved to dismiss the proceeding upon various grounds. The Trial Examiner denied the motion in so far as it was grounded upon alleged lack of jurisdiction in the Board. The motion is hereby denied upon all the other grounds advanced. At the conclusion of the hearing the re- spondent moved that the allegations of the complaint relative to the refusal to reinstate Al Riess and the effect on commerce of the re- spondent's actions be dismissed and that the complaint. be dismissed on the ground that the Board lacked jurisdiction and on constitutional grounds. 'The motions were denied. The Trial Examiner ruled upon a number of other motions and on a number of objections to the ad- mission of evidence made at the hearing. The Board has reviewed the rulings of the Trial Examiner and finds that no prejudicial errors were committed. The rulings are hereby affirmed. Thereafter the Trial Examiner filed his Intermediate Report dated April 4, 1938, copies of which were served upon the respondent and the Union, finding that the respondent had engaged in and was en- gaging in unfair labor practices, within the meaning of Section 8 (1) and (3) and Section 2 (6) and (7) of the Act, and recommending that the respondent cease and desist therefrom and, affirmatively, offer Riess full reinstatement. with back pay, and personally inform in writing every employee who signed the instrument referred to in the complaint, or any other agreement not to strike that such agreement is entirely void, will be discontinued, and will in no manner be en- forced by the respondent. Exceptions to the Intermediate Report and to the Trial Examiner's rulings. on. motions and objections made by the respondent during the course of the hearing were filed by the respondent on April 28, 1938. The respondent also filed a brief on May 27, 1938. Upon request of the respondent a hearing was scheduled before the Board in Washington, D. C., on February 2, 1939, for the purpose of oral argument. Although both the respondent and the Union had been served with notice of the hearing, neither appeared. 46 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Board has fully considered the exceptions filed. by the respond- ent and the arguments made in its brief and, save as consistent with the findings, conclusions, and order hereinafter set forth, finds them to be without merit. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Douglas Aircraft Company, Inc., is a Delaware corporation engaged at manufacturing plants in Santa Monica and El Segundo, California, in the manufacture and sale of aircraft and aircraft parts. Aircraft manufactured by the respondent are sold to departments of the United States Government, to commercial air lines both in the United States and elsewhere, and to foreign governments. The scene of the unfair labor practices alleged in the complaint is the respondent's El Segundo plant. Prior to August 31, 1937, that plant was operated by Northrop Corporation, a California corpora- tion all of whose stock the respondent owned. On that date the respondent acquired the assets and caused the dissolution of Northrop Corporation. The El Segundo plant has since been operated by the respondent, and is known as "Douglas Aircraft Company, Inc., Northrop Division." At its El Segundo plant the respondent manufactures aircraft and aircraft parts for the United States and foreign governments. In 1937 the plant produced approximately 125 planes. On February 4, 1938, it employed about 1,400 persons. More than 50 per cent of the raw materials and fabricated parts used by the respondent in manufacture are purchased by it outside California, and more than 75 per cent of the aircraft and aircraft parts manufactured by it are sold outside California. Its net sales for 1937 totaled $20,950,361. H. THE ORGANIZATION INVOLVED International Union United Automobile Workers of America, Local 229, is a labor organization affiliated with the Committee for Industrial Organization. It admits to membership employees of the respondent. III. THE UNFAIR LABOR PRACTICES A. Interference, restraint, and coercion On September 2, 1937, following unsuccessful negotiations with the respondent, the Union called a strike among the employees of DOUGLAS AIRCRAFT COMPANY, INC., NORTHROP DIVISION 47 the El Segundo plant.3 Thereupon, as the result of the strike, the plant was closed. On October 20, 1937, the respondent notified by telegram all persons who had been employed at the plant on August 27, 1937, that the plant would reopen on the following day and that such persons would receive preference in employment. On October 21, 1937, the plant reopened and the strike ceased. The respondent required all persons seeking employment or rein- statement after the strike to agree in writing to conditions of em- ployment embodied in a printed application blank.4 Among the conditions thus required is an agreement not to go on strike, an agreement to forfeit $15.00 to be deducted from wages for violation of any of the conditions of employment, and an agreement that viola- tion of any of such conditions should be cause for discharge. Most of the strikers signed the conditions of employment and resumed work. At the hearing, the respondent contended that the imposition of the conditions of employment was requested by certain of its former employees who desired to return to work. The record, however, discloses that the conditions of employment imposed by the respond- ent did not result from collective bargaining between the respondent and the representative of its employees. On the contrary, the re- spondent refused to negotiate with the Union until work was resumed. We have stated that while a limitation upon the right to strike may be unobjectionable when reached as a result of collective bar- gaining with the representatives of the employees in an appropriate unit, the imposition of such a limitation upon individual employees so interferes with their right to engage in concerted activities as to render futile the exercise of the right to organize and to bargain.' At the hearing the respondent offered evidence of its motives in imposing the conditions of employment. However, since the imposi- tion of the agreement not to strike contained in these conditions constituted a violation of the Act, the respondent's motives are immaterial .6 3 On August 19, 1937, the Board conducted an election among the employees of the respondent at the El Segundo plant. The Union won the election and was certified by the Board on October 6, 1937, as exclusive bargaining representative of the employees within the appropriate unit. Matter of Northrop Corporation and United Automobile Workers, Local No. 229, 3 N. L. R . B. 228. 4 Set forth in full in footnote 2 supra. 5Matter of Arcade-Sunshine Company, Inc . and Laundry Workers Cleaners and Dyers Union, 12 N. L. R. B. 259. See National Labor Relations Board v. Star Publishing Co., 97 F. ( 2d) 465 (C. C. A. 9th), where the Court rejected the Company's contention that it had been justified in discriminating against certain of its employees because a failure to do so would have disrupted its business . The Court stated : "The act prohibits unfair labor practices In all cases. It . permits no immunity because the employer may think that the exigencies of the moment require Infraction of the statute. In fact, nothing in the statute permits or justifies its violation by the employer." 48 . DECISIONS OF NATIONAL LABOR RELATIONS BOARD We find that the respondent, by requiring as conditions of em- ployment or reinstatement agreement by employees and prospective employees that they would not go on strike, that they would forfeit $15.00 to be deducted from wages for violation of such agreement, and that violation of such agreement should be cause for discharge, has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. B. The refusal to reinstate Al Riess Al Riess worked for Northrop Corporation as an aircraft mechanic from April 26, 1934, to January 8, 1935, and from May 3, 1935, to the date of its dissolution, at which time he became an employee of the respondent. A member of the Union, Riess participated in its strike. He received one of the telegrams sent by the respondent to its employees, and, on or about October 28, 1937, applied for work.7 At the personnel office Riess was informed that in order to be re- instated he must sign the conditions of employment above set forth. He refused, and was denied reinstatement. Riess testified that he desires reinstatement but wishes to secure it without being required to sign any contract of the kind embodied in the conditions of employment put into effect by the respondent. The respondent did not deny that Riess was refused employment because of his failure to subscribe to the conditions of employment. It contented itself with challenging the good faith of Riess' applica- tion, asserting that Riess had applied solely for the purpose of fab- ricating a case in order that the Union might file charges with the Board. To this end, the respondent offered evidence that when Riess applied for reinstatement he arranged to have his refusal to sign the conditions of employment witnessed by others. The respondent asserted further, in support of its contention that Riess had no intention of accepting reemployment, that he had, prior to applying therefor, definitely determined to engage in the automo- bile repair business. It appears that Riess was engaged in that busi- ness during the strike and for a short time thereafter. William T. Gage, the respondent's personnel manager, testified without contradic- tion that between the end of the strike and the day on which Riess applied for work, Riess, in response to a question from Gage, stated that he was going to "try" the automobile repair business and was not going to return to work for the respondent at that time. ' Riess testified that on October 20, 1937, the last day of the strike, he was served with a temporary restraining order issued by the Superior Court of the State of California in and for the County of Los Angeles , which he interpreted as prohibiting him from entering the plant, and that he therefore refrained from making application until advised by an attorney that he might properly do so. DOUGLAS AIRCRAFT COMPANY, INC., NORTHROP DIVISION 49 We believe the respondent's contention to be without merit. Riess testified, and we find, that he desired reinstatement but refused to sign the conditions of employment because he thought them violative of his rights under the Act. That Riess arranged to have his refusal witnessed would not, per se, impugn the genuineness of his applica- tion, nor did his statement to Gage preclude application for reinstate- ment in good faith thereafter. The fact. remains that Riess made application pursuant to the respondent's telegraphic offer and that the respondent refused to employ him solely because he would not submit to conditions the imposition .of which we have found to con- stitute an unfair labor practice. Nor do we believe that by his statement to Gage, Riess resigned, thus terminating his status as a striking employee. Gage was unable to specify in what part of the plant the conversation in question occurred. He made no record of the matter and did not report the conversation to anyone until after Riess had applied for and had been refused rein- statement. The. respondent in no way changed its position with re- gard to Riess until after Riess had refused to sign the conditions of employment.' We find that the respondent denied reinstatement to Al Riess be- cause he refused to subscribe to conditions of employment by the im- position . of which the respondent interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Sec- tion 7 of the Act, that it thereby discriminated in regard to his hire and tenure of employment, thus discouraging membership in the Union, and further interfered with, restrained, and coerced its em- ployees in the exercise of such rights. When the strike began on September 2, 1937, Riess was earning 821/2 cents an hour and was working 8 hours a day, 5 days a week. He has earned about $60 repairing automobiles at his home since he was refused reinstatement by the respondent on or about October 28, 1937. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondent set forth in Section III above, occurring in connection with the operations of the respondent de- scribed in Section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and with foreign countries, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. S The respondent's action in refusing Riess employment would be no less an unfair labor practice under the view that at the time of his application Riess was no longer an employee. The Act seeks to eliminate discrimination in regard to hire as well as in regard to tenure of employment. 50 DECISIONS OF NATIONAL LABOR RELATIONS BOARD THE REMEDY Having found that the respondent has committed certain unfair labor practices, we shall order it to cease and desist therefrom. In so far as the conditions of employment required by the respondent im- pose limitations upon the right of its employees to strike, we shall order the respondent to cease and desist from giving effect to them. We shall order it also, to refrain from imposing as a condition of future employment any similar limitations upon the right of its em- ployees to strike. Since the respondent discriminatorily refused to reinstate Al Riess, we shall order it to offer him reinstatement. We shall further order the respondent to make him whole for any loss of pay he has suffered by reason of its discrimination by payment to him of a sum of money equal to the amount which he normally would have earned as wages from the date of the respondent's refusal to rein- state him to the date of its offer of reinstatement pursuant to our order, less his net earnings s during said period. Upon the basis of the foregoing findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. International Union United Automobile Workers of America, Local 229, is a labor organization, within the meaning of Section 2 (5) of the Act. 2. The respondent, by discriminating in regard to the hire and tenure of employment of Al Riess, and thereby discouraging member- ship in a labor organization, has engaged in and is engaging in un- fair labor practices, within the meaning of Section 8 (3) of the Act. 3. The respondent, by interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (1) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. 9 By "net earnings" is meant earnings less expenses , such as for transportation, room, and board, incurred by an employee in. connection with obtaining work and working else- where than for the respondent, which would not have been incurred but for his unlawful discharge and the consequent necessity of his seeking employment elsewhere . See Matter of Crossett Lumber Company and United Brotherhood of Carpenters and Joiners of America, Lumber and Sawmill Workers Union, Local 2590, 8 N. L. R . B. 440. Monies received for work performed upon Federal, State , county, municipal , or other work-relief projects are not considered as earnings, but, as provided below in the Order , shall be deducted from the sum due the employee, and the amount thereof shall be paid over to the appropriate fiscal agency of the Federal , State, county , municipal, or other government or governments which supplied the funds for said work -relief projects. DOUGLAS AIRCRAFT COMPANY, INC., NORTHROP DIVISION 51 ORDER Upon the basis of the above findings of fact and conclusions of law and pursuant to Section 10 (c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the re- spondent, Douglas Aircraft Co., Inc., El Segundo, California, its officers, agents, successors, and assigns shall: 1. Cease and desist from : (a) Discouraging membership in International Union United Auto- mobile Workers of America, Local 229, or any other labor organization of its employees, by discriminating in regard to hire or tenure of employment or any term or condition of employment; (b) Giving effect to any existing agreement with any of its em- ployees in so far as it obligates the employee to refrain from strik- ing and to forfeit $15.00, to be deducted from his wages, for viola- tion of the agreement to refrain from striking and provides that violation of the agreement not to strike shall be cause for discharge; (c) Requiring as a condition of employment that employees or prospective employees shall agree that they will not" strike, that they will forfeit a sum if they strike, or that striking shall be an agreed cause for discharge; (d) In any other manner interfering with, restraining, and coercing its employees in the exercise of the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection, as guaranteed in Section 7 of the National Labor Relations Act. 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act : (a) Immediately offer Al Riess reinstatement to his former or a substantially equivalent position, without prejudice to his seniority or other rights and privileges previously enjoyed by him; (b) Make whole Al Riess for any loss of pay he has suffered by reason of the respondent's discrimination in regard to his hire and tenure of employment by payment to him of a sum of money equal to that which he would normally have earned as wages during the period from the date of the respondent's discrimination against him to the date of its offer of reinstatement, less his net earnings during said period ; deducting, however, from the amount otherwise due him monies received by him during said period for work performed upon Federal, State, county, municipal, or other work-relief projects, and pay over the amount, so deducted, to the appropriate fiscal agency of the Federal, State, county, municipal, or other government or govern- ments which supplj^cj the funds for said work-relief projects; 52 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (c) Personally inform in writing each of its employees who has signed the instrument entitled "Conditions of Employment" that, in so far as such instrument involves agreement by employees that they will not strike, that they will forfeit $15.00, to be deducted from wages, if they strike, and that violation of the agreement not to strike shall be cause for discharge, the respondent is obliged to discontinue it as a term or condition of employment and to cease and desist from enforcing or attempting to enforce it; (d) Post immediately in conspicuous places throughout its plant, and maintain for a period of at least sixty (60) consecutive days from the date of posting, notices to its employees, stating that the respondent will cease and desist in the manner set forth in paragraphs 1 (a), (b), (c), and (d), and that it will take the affirmative action set forth in paragraphs 2 (a), (b), and (c) of this Order; (e) Notify the Regional Director for the Twenty-first Region in .writing within ten (10) days from the date of this Order what steps the respondent has taken to comply herewith. MR. WILLIAM M. LEISERSON took no part in the consideration of the above Decision and Order.