Hartsell Mills Co.

In the Matter of HARTSELL MILLS COMPANY and TEXTILE WORKERS' ORGANIZING COMMITTEE Cases Nos. C-943 and R-970.-Decided December 12, 1939 Upholstery and Drapery Fabrics Manufacturing Industry-Interference, Re- straint, and Coercion : coercive statements made by the respondent's supervisory employees-Discrimination : charges of, sustained as to one employee ; not sus- tained as to one employee-Unit Appropriate for Collective Bargaining: pro- duction and maintenance employees excluding clerical and supervisory em- ployees and watchmen-Representatives : proof of choice : membership cards ; testimony of union official-Collective Bargaining : employer refused to recog- nize the union as the representative of all employees in the appropriate unit, although a majority of the employees had designated the union as their bar- gaining representative ; employer refused to reduce such terms as might be agreed upon to a signed , written contract ; employer refused to continue bargaining negotiations unless the union should request the withdrawal of certain charges which it had filed with the Regional Director ; employer ordered to notify the union in writing that it is prepared to enter into bargaining negotiations , upon request bargain collectively with the union , and to embody understanding, if reached, in a signed , written contract ; order based on majority at date of refusal to bargain-Reinstatement Ordered: discharged employee- Back Pay: awarded-Complaint : dismissed as to one employee-Investigation of Representatives : petition for, dismissed , in view of order to bargain. Mr. Charles Y. Latimer, for the Board. Drinker, Biddle & Reath, by Mr. Edwin A. Lucas, of Philadelphia, Pa., for the respondent. Mr. S. P. Brewer, of Charlotte, N. C., for the T. W. O. C. Mr. Roscoe L. Barrow, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE On October 1, 1937, Textile Workers' Organizing Committee, herein called the T. W. O. C., duly filed charges alleging that Hartsell Mills Company, Concord, North Carolina, herein called the respond- ent, had engaged in and was engaging in unfair labor practices 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. On February 19, 1938, the T. W. O. C. duly filed charges alleg- ing that the respondent had engaged in and was engaging in unfair 18 N. L. R. B., No. 43. 268 HART SELL MILLS C'0MPANTY 269 labor practices within the meaning of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the Act. Thereafter, the National Labor Relations Board, herein called the Board, by the Regional Director for the Fifth Region (Baltimore, Maryland), issued its complaint, dated May 14, 1938, against 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), (3), and (5) and Section 2 (6) and (7) of the Act. Copies of the complaint, accompanied by notice of hearing, were duly served upon the respondent and the T. W. O. C. With respect to the unfair labor practices, the complaint alleged in substance: (1) that the respondent on or about August 13, 1936, discharged Lloyd S. Love because of his membership in and activities in behalf of Local Union No. 2483, United Tapestry Workers (A. F. L.),' and on or about April 5, 1938, discharged J. O. Scott 2 because of his membership in and activities in behalf of the T. W. O. C., and has refused to employ them for the same reasons; (2) that on or about December 4, 1937, and at all times thereafter the respondent refused to bargain collectively with the T. W. O. C. as the representative of its employees in the appropriate unit, although the T. W. O. C. was the designated representative of a majority of such employees; and (3) that by the above-mentioned acts, by-mak- ing speeches at various times since July 1, 1936, which were hostile to the membership of its employees in any labor organization, and by other acts, the respondent has discouraged the exercise of the rights guaranteed to its employees by Section 7 of the Act. On June 1, 1938, the respondent, by its attorney, entered a special appearance for the purpose of moving to dismiss the complaint. The respondent filed its answer on June 3, 1938. The complaint having been orally amended during the course of the hearing, the respondent at the same time orally amended its answer to meet the matter added to the complaint. The respondent's answer, as amended during the course of the hearing, denied that it had engaged in or was engaging in the alleged unfair labor practices, and concluded with 1 The complaint originally alleged that Love was discharged because of his membership in and activities in behalf of Local Union No. 1902, United Textile Workers of America (A. F. L.). The evidence adduced at the hearing showed that Love was active in Local Union No . 1902 during 1934, but that during 1935 , he secured a charter from the United Tapestry Workers Union (A. F. L.) and established Local Union No. 2483. It was while he was a member of Local Union No. 2483 that he was discharged . At the close of the hearing counsel for the Board moved to amend the complaint to conform to the proof. The motion was allowed. This motion cured the defect in the complaint. After Love's discharge Local Union No. 2483 became dormant , and when the T. W. 0. C. began its organizational activity in 1937 many of the employees who had been members of Local Union No. 2483 , including Love, joined the T. W. 0. C. The T. W. 0. C. filed the charge in Love's behalf. The complaint was amended during the course of the hearing by adding thereto an alle- gation that J. 0. Scott was discriminatorily discharged. Counsel for the respondent waived objections thereto. 270 DECISIONS OF NATIONAL LABOR RELATIONS BOARD a prayer to dismiss the complaint. The answer was accompanied by a motion to dismiss the complaint on the ground that the respond= ent is not engaged in interstate commerce, that the complaint contra- venes the respondent's constitutional rights, and that the respondent has not engaged in and is not engaging in the alleged unfair labor practices. On November 27, 1937, the T. W. O. C. filed with the Regional Director a petition alleging that a question affecting commerce had arisen concerning the representation of employees of the respondent, and requesting an investigation and certification of representatives pursuant to Section 9 (c) of the Act. On April 27, 1938, the Board, acting pursuant to Section 9 (c).of the Act and Article III, Section 3, of National Labor Relations Board Rules and Regulations-Series 1, as amended,- ordered an investigation and authorized the Regional Director to conduct it and to provide for an appropriate hearing upon due notice, and acting pursuant to Article III, Section 10, of said Rules and Regulations, further ordered on May 10, 1938, that, for purposes of hearing, the cases be consolidated and that one record of the hearing be made. Pursuant to an amended notice duly served on the parties, a hear- ing was held on July 21, 22, and 23, 1938, in Concord, North Carolina, before Albert H. Lohm, the Trial Examiner duly designated by the Board. The Board and the respondent were represented by counsel and the T. W. O. C. was represented by one of its representatives. 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 opening of the hearing, the respondent moved to dismiss the complaint, and at the close of the Board's case, the respondent renewed its motion. The Trial Examiner denied the motion on both occasions. At the close of the hearing, the respondent again renewed its motion to dismiss. The Trial Examiner withheld ruling on the motion. In his Intermediate Report, issued thereafter, he denied the motion. During the course of the hearing the Trial Examiner made several rulings on motions and on objections to the admission of evidence. The Board has reviewed the Trial Examiner's rulings and finds that no prejudicial errors were committed. The rulings are hereby affirmed. On September 19, 1938, the Trial Examiner issued his Intermediate Report, copies of which were duly served on the parties, finding that the respondent had engaged in and was engaging in unfair labor practices within the meaning of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the Act. He recommended that the respondent cease and desist from its unfair labor practices; offer to Lloyd S. Love and J. O. Scott immediate and full reinstatement to their former positions; HARTSL'LL MILLS COMPANY 271 make whole Lloyd S. Love and J. O. Scott for any losses of pay sus- tained by reason of their discriminatory discharges; upon request, bar- gain collectively with the T. W. O. C.; post notices in its plant stating that it will cease and desist from its unfair labor practices and will, upon request, bargain with the T. W. O. C. with respect to conditions of employment; and file with the Regional Director within 10 days a report setting forth the manner and form of compliance therewith. The respondent and the T. W. O. C. were notified by the Trial Ex- aminer that they were entitled to request the privilege of filing briefs with, or presenting oral argument before, the Board within 10 days of the receipt of the Report. The respondent filed exceptions to the Intermediate Report and to other parts of the record on September 30, 1938, and a brief on No- vember 14, 1938. On September 7, 1939, a hearing for the purpose of oral argument was duly held before the Board in Washington, D. C., in which the respondent participated by counsel. The Board has re- viewed the respondent's exceptions to the Intermediate Report and to other parts of the record and, except in so far as they are consistent with the findings, conclusions, and order set forth below, finds them to be without merit. On October 1, 1938, and on October 29, 1938, respectively, the re- spondent filed motions to reopen the record and to receive further evi- dence, alleging as grounds therefor: (1) that the signatures on two of the T. W. O. C.'s membership cards, which were received in evidence to establish the T. W. O. C.'s majority status, were forged; (2) that 12 or 15 members of the T. W. O. C. on September 24, 1938, served notice on the T. W. O. C. of their intent to withdraw their memberships there- in; and (3) that about 23 members of the T. W. O. C. on or about October 20, 1938, resigned from the T. W. O. C. On October 21, 1938, and on November 12, 1938, the Board denied the respective motions. These motions are discussed further in the section below entitled "The remedy." Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Hartsell Mills Company is a North Carolina corporation engaged in the manufacture of upholstery and drapery fabrics at Concord, North Carolina. Its capital structure consists of $125,000 common stock and $200,000 preferred stock. Approximately 62 per cent of the common stock and approximately 97 per cent of the preferred stock is owned by Stead & Miller Company, Philadelphia, Pennsylvania. The principal officers of Stead & Miller Company are also the principal officers of the 272 DECISIONS OF NATIONAL LABOR RELATIONS BOARD respondent, and the respondent's board of directors is composed of certain members of the board of directors of Stead & Miller Company. The two firms operate as separate corporations. The principal raw materials used in the respondent's operations are yarn, rayon, salt, chemicals, dyestuffs, coal, and electricity. During 1937 the respondent purchased 501,547 pounds of yarn costing $191,- 310; 21,487 pounds of rayon costing $11,213; salt costing $1,936; chem- icals costing $616; dyestuffs costing $16,428; coal costing $10,032; and electricity costing $7,450. The respondent purchased these materials delivered at Concord, North Carolina. However, approximately 31 per cent, by value, of them were shipped to Concord from points out- side North Carolina. All of the respondent's finished goods, excluding "seconds" and remnants, are sold to Stead & Miller Company, Philadelphia, Pennsyl- vania. During 1937 the respondent sold 468,821 yards of cloth to Stead & Miller Company, for which it received $473,543. During the same period it sold 6,587 yards of cloth "seconds," grossing $3,293, to a North Carolina concern and miscellaneous remnants, grossing $1,500, most of which were shipped to firms outside North Carolina. The goods sold to Stead & Miller Company, constituting approximately 99 per cent of the respondent's output, are sold f. o. b. Concord, North Carolina. A contract hauler then transports the goods by automobile truck from Concord, North Carolina, to Philadelphia, Pennsylvania.. The respondent in its motion to dismiss and in its brief contends that its business is intrastate, since most of its raw materials originate in North Carolina, since such raw materials as are obtained from outside North Carolina are purchased delivered at Concord, North Carolina, and since its finished products are sold f. o. b. Concord, North Carolina. This position is plainly foreclosed by the decision of the Supreme Court of the United States in the Santa Cruz case.3 In that case the Court said : There is no question that petitioner was engaged in interstate and foreign commerce. We have often decided that sales to pur- chasers in another state are not withdrawn from federal control because the goods are delivered f. o. b. at stated points within the state of origin for transportation . . . A large part of the inter- state commerce of the country is conducted upon that basis and the arrangements that are made between seller and purchaser with respect to the place of taking title to the commodity, or as to payment of freight, where the actual movement is interstate, do not affect either the power of Congress or the jurisdiction of the agencies which Congress has established.4 3 Santa Cruz Fruit Packing Company v . National Labor Relations Board, 303 U. S. 453. 4 Id., at page 463. HARTSELL MILLS COMPANY 273 It is clear that about one-third of the respondent's raw materials and substantially all of its finished products are transported in interstate commerce. If industrial strife should cause a cessation of the respond- ent's operations, the transportation in interstate commerce of these raw materials and finished goods would be substantially interrupted. It is plain that the respondent's operations bring it within the jurisdiction of the Act. II. THE ORGANIZATION INVOLVED Textile Workers' Organizing Committee is a labor organization affiliated with the Congress of Industrial Organizations. It admits to membership all production and maintenance employees of the re- spondent, excluding clerical and supervisory employees and watchmen. III. THE UNFAIR LABOR PRACTICES A. The refusal to bargain collectively The complaint alleges that on or about December 4, 1937, and at all times thereafter, the respondent refused to bargain collectively with the T. W. O. C., although a majority of the respondent's employees in an appropriate unit had designated it as their bargaining agent. The respondent's answer denies the allegations. 1. The appropriate unit The complaint alleges that all production and maintenance employ- ees excluding clerical and supervisory employees and watchmen, con- stitute a unit appropriate for the purposes of collective bargaining. The respondent, in its answer, denies that such a 'unit is appropriate, but except as to one employee, C. A. Honeycutt, it introduced no evi- dence at the hearing to support its denial. The respondent contends that C. A. Honeycutt is not a supervisory employee. After Honeycutt has ascertained from H. H. Whittle, comanager of the respondent, the types of cloth which are to be woven, he determines which weavers are capable of doing the work and then tells the smash-hands and leash-out men to place the warps in the looms of the weavers selected. After the warps are in the looms, he inspects the looms to see that the cloth is started correctly and inspects the cloth from time to time as it is woven. There are approximately 75 employees in this depart- ment. We find that Honeycutt's duties are supervisory in character. We shall exclude him from the unit. The T. W. O. C. excludes from its membership clerical and super- visory employees and watchmen, and the exclusion of such employees from an industrial unit is proper and common. We find that the pro- duction and maintenance employees of the respondent, excluding cler- 274 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ical and supervisory employees and watchmen, constitute a unit appropriate for the purposes of collective bargaining and that such unit insures to employees of the respondent the full benefit of their right to self-organization and collective bargaining and otherwise effectuates the policies of the Act. 2. Representation by the T. W. 0. C. of a majority in the appropriate unit During the hearing the respondent produced its pay roll for the period ending December 4, 1937. No earlier pay roll was requested or produced. The pay roll lists the names of 217 employees. T. M. Schramm, comanager of the respondent, testified that this number was reduced by approximately 1 per cent each month up to May 14, 1938, when the complaint, issued. Seventeen of the employees are plant officials, supervisory employees, clerical employees, and watch- men, whom we have excluded from the unit. Thus there were 200 employees in the appropriate unit on December 4, 1937. The T. W. 0. C. introduced in evidence 137 membership cards. At the hearing, the names on the membership cards were checked against the names on the pay roll. It was found that 58 of the names on the cards corresponded exactly with names on the pay roll. There were minor discrepancies between 52 of the names as they appeared on the cards and the pay roll. The discrepancies on 49 of the cards were cured by the testimony of James Seahorn, an active member of the T. W. 0. C., who had witnessed the signing of 12 of the cards, and who knew personally the 49 signatories who signed the cards about which he testified. He .testified that the discrepancies are explained by poor spelling and poor writing and that the names on the cards are in each instance the names of persons whose names are on the Decem- ber 4, 1937, pay roll. The respondent contends that Seahorn was not qualified to authen- ticate these cards. Under the circumstances, we see no merit in this contention. In any event, the discrepancies referred to are for the most part an initial for the given name on the one and the name spelled out on the other, or a slight difference in the spelling of the surnames. Discrepancies of this type are self-explanatory. The re- spondent produced no specific evidence to discredit the cards. We find that these 49 cards were signed by employees whose names appear on the December 4, 1937, pay roll. Three other cards which bore similar discrepancies were found by the Trial Examiner to have been signed by persons whose names appear on the December 4 pay roll. We have examined these 3 cards and agree with the Trial Examiner's finding. The remaining 27 cards were not signed by employees whose names are on the December HARTSELL MILLS COMPANY 275 4 pay roll. We find that 110 of the 200 employees in the appropriate unit on December 4, 1937, were members of the T. W. O. C. In view of the foregoing facts, we find that on December 4, 1937, and thereafter,5 the T. W. O. C. was the duly designated representa- tive of a majority of the employees in an appropriate unit, and pur- suant to Section 9 (a) of the Act, was the exclusive representative of all the employees in such unit for the purposes of collective bargain- ing with the respondent in respect to rates of pay, wages, hours of employment, and other conditions of employment. 3. The refusal to bargain In 1934 Local Union No. 1902, United Textile Workers of America (A. F. L.), herein called Local Union No. 1902, was active in the plant. It initiated a strike which was unsuccessful, and thereafter its membership dropped. Lloyd S. Love, who was employed by the respondent following the 1934 strike, succeeded in signing up other members, but they, too, became inactive. 'A number of employees having expressed a preference for a local union admitting to mem- bership employees of the respondent only, in ,the fall of 1935 Love obtained a charter for Local Union No. 2483, United Tapestry Work- ers (A. F. L.), herein called Local No. 2483. This union restricted its membership to employees of the respondent. Love was discharged on September 14, 1936, and thereafter the union became dormant. In 1937 the T. W. O. C. initiated a membership drive. Most of those who had belonged to Local Union No. 2483 became affiliated with the T. W. 0. C. In September 1937 S. P. Brewer, T. W. O. C. representative, noti- fied the respondent that the T. W. O. C. had attained a majority sta- tus in the plant and asked the respondent to meet with the T. W. O. C. for the purposes of collective bargaining. Thereafter representatives of the respondent and the T. W. O. C. met on October 14, 16, 23, November 20, December 4, 1937, and January 19, 1938. The respond- ent was represented in these negotiations by T. M. Schramm and H. H. Whittle, comanagers of the respondent. The T. W. O. C. was represented by Brewer and a shop committee. The T. W. O. C. charges that the respondent refused to recognize it as representative of all the employees in a unit composed of pro- duction and maintenance employees and excluding clerical and super- visory employees and watchmen, although a majority of the employ- ees in such unit had designated it as their bargaining representative. On October 14 the representatives of the T. W. O. C. and the respond- 5 The respondent 's motions alleging a subsequent loss of majority are discussed below in the section entitled "The remedy." 276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ent met briefly and arranged to continue bargaining negotiations on October 16. According to Brewer, during the October 16 meeting, he stated that the T. W. O. C. had attained a majority status in the plant; he asked Schramm whether,or not the respondent questioned that; and Schramm answered that he did not question it, and that he would accept Brewer's statement as being authentic. Schramm, on the other hand, testified that he never conceded that the T. W. O. C. had,a majority status; that he merely told Brewer that for the pur- poses of the bargaining negotiations he would assume that Brewer was telling the truth. The T. W. O. C., at this meeting, tendered a proposed contract to the respondent. The provisions of the contract were discussed for about 3 hours. Arrangements were then made for a further meeting on October 23. At the meeting on October 23, Schramm took the position that the respondent would recognize the T. W. O. C. as bargaining agent for its own members and for no others. Schramm's testimony indicates that this position was taken regardless of whether or not the T. W. O. C. represented a majority of the employees. Q. Did Mr. Brewer indicate any particular opposition to the extent to which you were willing to recognize the T. W. O. C.... ? A. Absolutely. . . . He said that if the T. W. O. C. represented a majority of the employees, it would be necessary for them to represent all of the employees. Q. What was the position of yourself and Mr. Whittle all the way through the conference in respect to any concession or any agreement that they had a majority of your employees among their members? A. We felt that it was reasonable for the T. W. O. C. to represent those employees who were members of their organi- zation... . Q. What about any other employees that were not members of their organizations? A. We didn't see where they should represent a man that didn't belong to their outfit. It does not appear whether or not this issue received discussion at the other meetings, but it is clear that the respondent never receded from its position. The Trial Examiner found that the respondent refused to recognize the T. W. O. C. as representative of all the employees in the unit. It is clear that the respondent at the outset of the negotiations agreed that it would not question the majority status of the T. W. O. C. for the purposes of the collective bargaining negotiations. Having this H-AnT'SPLL MILLS COMPANY 277 assurance, the T. W. O. C. did not attempt to prove its majority. Had it been called upon to produce proof, in all probability it could have done so, for all its membership cards were signed from April through October 1937.8 We find that the respondent accepted the T. W. O. C.'s statement that it had attained a majority status. When the re- spondent later refused to recognize the T. W. O. C. as representative of any employees except its own members, it did not request proof of the T. W. O. C.'s majority status and did not question such majority status. Rather, it was taking a position that as a matter of law a union is not entitled to represent any employees in the unit who are not its own members, although a majority of the employees have designated the union as their representative. Since the meetings of December 4, 1937, the date on which the T. W. O. C.'s majority was established, and January 19, 1938, were taken up with the issue of whether or not the T. W. O. C. would with- draw its charge as a condition to further bargaining, the refusal to recognize the T. W. O. C. as representative of all the employees in the unit received little discussion. However, this position taken in one of the series of conferences, and never retracted, persisted as the position of the respondent on December 4, 1937, and thereafter. We find that on and after December 4, 1937, as well as before that date, the respondent refused to recognize the T. W. O. C. as the repre- sentative of all the employees in the appropriate unit, although a majority of such employees had designated the T. W. O. C. as their bargaining representative and although the respondent did not ques- tion that fact. In so doing, it failed to comply with the requirements set out in Section 8 (5) and Section 9 (a) of the Act, which provide that the employer shall bargain with the agency selected by a majority of the employees, as exclusive representative of all the employees in the unit.7 The T. W. O. C. further maintains that the respondent refused to reduce such terms as should be agreed upon to a signed, written con- tract. Brewer testified that Schramm took this position at the first meeting and that he reiterated his position at all the meetings through December 4. Schramm testified that during the meeting on November 20, he told Brewer that he would ask a lawyer whether or not the Act required the employer to sign a contract with the employees. Around Thanks- " While it would appear that the T. W. O. C.'s majority dates from the latter part of October 1937, we have not found that it attained a majority status as of that date because no pay roll earlier than the December 4, 1937, pay roll is available. 7 See Matter of Biles-Coleman Lumber Company and Puget Sound District Council of Lumber and Sawmill Workers, 4 N. L. R. B. 679, order enforced in National Labor Relations Board v. Bites-Coleman Lumber Company, 96 P. (2d) 197 (C. C. A. 9) ; Matter of Burnside Steel Foundry Company and Amalgamated Association of Iron, Steel and Tin Workers of North America, Lodge No. 1719, 7 N. L. R. B. 714. 278 DECISIONS OF NATIONAL LABOR RELATIONS BOARD giving Day, 1937, he consulted counsel who advised him that the Act did not require the respondent to sign a written agreement. Schramm further testified that Brewer, at the meeting on November 20, insisted on knowing whether the respondent would sign a contract at any time, and that he told Brewer that he saw no need of discussing that ques- tion until they had agreed upon terms. The respondent contends that it has never refused to enter into a signed, written contract. At the hearing, Schramm stated that he did not see the necessity of reducing a labor contract to writing; that an oral agreement was sufficient. The Trial Examiner, who observed the demeanor of the witnesses at the hearing, found Schramm to be "a consistently evasive witness." He found that from the outset the respondent took the position that even if terms were agreed upon it would not enter into a written con- tract. We find that the respondent refused, both before and after December 4, 1937, to enter into a signed, written contract with the T. W. O. C., regardless of the terms agreed upon. The record is replete with evidence, and we find, that this refusal was a subject of bitter discussion in all the meetings through December 4, and was a factor in the final breakdown of negotiations. In Matter o l Inland Steel Company," we held that under normal circumstances, an essential element of collective bargaining in good faith by an employer is a willingness to embody the results of negotia- tions in a signed agreement. We pointed out in that case that Section 8 (5) of the Act requires the employer to accept the procedure of collective bargaining in good faith, that the nature of this procedure is determined in the light of the prevailing practice of collective bar- gaining, and that the prevailing practice in collective bargaining is, under normal circumstances, to embody understandings reached in signed agreements. In Globe Cotton Mills v. National Labor Relations Board e the Cir- cuit Court of Appeals for the Fifth Circuit said : We believe there is a duty on both sides, though difficult of legal enforcement, to enter into discussion with an open and fair mind, and a sincere purpose to find a basis of agreement touching wages and hours and conditions of labor, and if found to embody it in a contract as specific as possible, which shall stand as a mutual guaranty of conduct, and as a guide for the adjustment of grievances. The respondent's attitude, in refusing to recognize the T. W. 0. C.'s status as an equal party in normal business relationships, does not 8 Matter of Inland Steel Company and Steel Workers' Organizing Committee and Amal- gamated Association of Iron, Steel, and Tin Workers of North America, Lodge Nos . 64, 1010, and 1101, 9 N. L. R. B. 783. 9 103 F. (2d) 91 (1939). H•ARTSELL MILLS COMPANY 279 lend itself to the dignified and stable collective bargaining process contemplated by the Act as an aid to industrial peace.10 We find that the respondent refused to reduce to a signed, written contract such terms as should be agreed upon. Such refusal constitutes a violation of Section 8 (5) of the Act. The T. W. O. C. further contends that the respondent made with- drawal of certain charges, alleging that Lloyd S. Love was discrimi- natorily discharged by the respondent, a condition precedent to further negotiations. Brewer testified that on October 23, 1937, and Novem- ber 20,1937, Schramm insisted that the charges be withdrawn. Brewer told Schramm on each occasion that it was not his purpose to discuss the merits of Love's case. At the conference on December 4, 1937, according to Brewer, the management strongly objected to discussing the terms of the T. W. O. C.'s proposal unless the T. W. O. C. would agree to withdraw its charges. He testified that Schramm, on January 19, 1938, again argued that the T. W. O. C. should withdraw its charges before the parties should undertake to negotiate further on the bargaining agreement, because the respondent would not be able to come to terms until the Love controversy was resolved. Brewer then told Schramm that if the respondent was refusing to negotiate further, the meeting would adjourn. No further conference for the purposes of collective bargaining was requested. Schramm testified that on November 20, 1937, Brewer told him that as soon as a contract was signed the charges relating to Love would be dropped. Brewer denied making any such statement. This tes- timony of Schramm's substantially corroborates Brewer's testimony as to the respondent's position relative to the dropping of the charges. Schramm admitted that on December 4, he told Brewer that the charge would be conducive to a certain amount of ill feeling and lack of cooperation in the negotiations and that it would serve the best in- terests of all to dispose of the case as quickly as possible, but he maintains that Brewer asked him if this was a condition precedent to further bargaining and he said it was not. On December 8, 1937, the Regional Director for the Fifth Region wrote a letter to Schramm in which he stated, "Mr. Brewer informs. me in his letter that you have made the withdrawal of this charge [alleging discrimination in the discharge of Lloyd S. Love] a con- dition of any further negotiations. If this is an accurate statement of your attitude regarding this, you are of course in an untenable posi- tion, which might lead to a charge of refusal to bargain." It is sig- 10 See Matter of St. Joseph Stockyards Company and Amalgamated Meat Cutters and Butcher Workmen of North America, Local Union No. 159, 2 N. L. R. B. 39; Matter of H. J. Heinz Company and Canning and Pickle Workers, Local No. 325, a ffiliated with Amal- gamated Meat Cutters and Butcher Workmen of North America , American Federation of Labor, 10 N. L. R. B. 963; Holston Manufacturing Company and American Federation of Hosiery Wcrker., 13 N. L. R. B. 783. 283029-11-vol. 18-19 280 DECISIONS OF NATIONAL LABOR RELATIONS BOARD nificant that the respondent did not reply to this letter. The Trial Examiner found that the respondent made withdrawal of the charge a prerequisite to further bargaining. We agree with the Trial Examiner's finding. The Act establishes a duty on the part of an employer to bargain with the representative of a majority of its employees concerning wages, hours, and other conditions of employment. The Act does not at the same time permit the employer to hedge about this duty by imposing unreasonable conditions precedent to bargaining collectively. A condition of the type here imposed, combining a restraint on the right to bargain collectively with an inducement to the labor organiza- tion to forego its redress for the employer's wrongful conduct in dis- criminatorily discharging its employees, is particularly repugnant to the spirit of the Act. We find that the imposition by the respondent of the aforesaid condition precedent to bargaining collectively consti- tutes a refusal to bargain within the meaning of Section 8 (5) of the Act. B. Interference, restraint, and coercion J. 0. Scott, a former employee, testified that on April 16, 1937, William S. Buff, a foreman, asked him how the T. W. 0. C. was progressing in the weave shop. Buff admitted having made this inquiry, and added that he asked "quite a few of them once in a while" about their union affiliation. F. L. Stallings, an employee, tes- tified that he asked Honeycutt, a supervisory employee, for a job as smash-hand and that Honeycutt told him that if he were given the job he would influence the employees with whom he worked to join the T. W. 0. C. According to Stallings, Honeycutt advised him as follows : "The best thing for you to do is to stay out of it. It never will amount to anything. You can't expect the company to do any- thing for you if you get into such a mess." Honeycutt took the stand and did not deny having made this statement. James Seahorn, an employee, testified that during June 1936 Honeycutt advised him that his union activity was holding him down and that if he would quit the union he could get more work. Honeycutt admitted that he told Seahorn that if he would take up more time on his own job and let the union alone, he would be better off ; and that the union was no good for anyone. We find that the respondent, by the above-described activities of its supervisory employees, has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed by Section 7 of the Act. Another question is raised by the record which warrants a brief discussion. Certain Social Security cards used by the respondent pro- vided space for designating the employee's union affiliation. The HART SELL NI'ILLS COMPANY 281 employees were not forced to supply this information. Schramm testified that its Social Security card system was purchased upon the advice of an accounting firm. He stated that it was not purchased because the respondent desired to obtain information concerning the union affiliation of its employees. While the union affiliation of its employees is clearly not a proper concern of the respondent, and such information should not be called for on its Social Security cards or any other cards which the employees are required to fill out, we do not feel that the respondent selected this card system with a view to obtaining information concerning the union affiliation of its employees or of applicants for employment. We do not find that the respondent has thereby engaged in unfair labor practices within the meaning of Section 8 (1) of the Act. C. The discharges The complaint alleges that the respondent discharged Lloyd S. Love and J. 0. Scott and refused to employ them because of their membership in and activities in behalf of Local Union No. 2483 11 and the T. W. 0. C., respectively. The respondent's answer denies the allegations. Lloyd S. Love was first employed by the respondent as a loom fixer in 1934. He was active in Local Union No. 1902 until it became dor- mant. In 1935 Love obtained a charter for Local Union No. 2483. Love was the moving spirit of Local Union No. 2483. About August 1, 1936, he became its president. He was discharged on September 14, 1936. After the discharge of Love, Local Union No. 2483 ceased to function. The respondent contends that Love was discharged because he dis- paraged the management, spoiled some cloth, and disobeyed a company rule. The respondent's storekeeper and four employees testified that in the spring of 1935, Love stated in the respondent's store that the re- spondent's mill was going bankrupt, that it was going to sell out to Cannon Mills, and that anyone desiring continuous employment had better apply for work with Cannon Mills. Pharr, the superintendent of the mill, testified that he called in Love, who admitted making some such statement, explained to him the seriousness of such a statement and suggested that he be more careful in the future. Pharr admitted that Love "had some mistaken ground for this statement because of the fact that Cannon Mills trucks were coming in and out of our plant at the time delivering yarn." Love claims that his statement was, "I wonder if the Cannon Mills Company is still the selling agent of 11 See footnote 1, supra. 282 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Hartsell." He testified that he told those in the store that he was going to Belmont to attend a union rally on Saturday and that on the following Monday Pharr called him in and after questioning him about the rally asked him about the alleged remarks cited above. Pharr did not deny that he had questioned Love concerning the union rally. We give credence to the respondent's several witnesses and find that Love made statements substantially as attributed to him above. Such a statement made a year and a half prior to Love's discharge, however, does not appear to us to have been a potent factor in the discharge. The evidence is open to interpretation that another reason for calling Love to Pharr's office at that time was his attend- ance at the union rally. During July or August 1935 Love circulated in the plant a petition indicating opposition to a proposed consolidation of two schools in that district. The respondent claims that it has a rule against the circulation in the plant of petitions, whatever their purpose may be. Love testified that Buff, a foreman, gave him permission to circulate the petition. Buff testified, and he told Pharr upon inquiry, that he did not give Love permission to circulate the petition, but that Love might have inferred from his statement that he did have permission to circulate the petition. We find that Love obtained permission from his foreman to circulate the petition. During the summer of 1936 some defective cloth was produced. Whittle and Honeycutt contended that the defect was caused by a defective jack-head in the loom. As loom fixer,.it was Love's job to keep the looms in good condition. Love testified that the defect was caused by the use of an improper card. Failure to repair the loom was not considered an offense justifying discharge, and no discipline was meted out to Love. The respondent does not question Love's general skill and efficiency, and this incident evidently played no part in motivating the respondent to discharge him. W. B. Kennedy, an oversee, testified that about December 25, 1935, Love said to him, concerning the management, "Them damn wops ain't got sense enough to run the mill." Kennedy testified that he was "pretty sure" that he mentioned this to Honeycutt, an overseer. A. M. Gaskey, clerk in a store operated by the respondent, testified that he once heard Love say, "that Mr. Whittle didn't know anything about mill work and he would be going back north again." Floyd Tucker, an employee, testified that he heard Love say at one time that, "[the employees] ought to go out to the office and get Mr. Whittle and run him back to Philadelphia." James Hensley, a former employee, testi- fied that he once heard Love say that "Hartsell Mills Company didn't have any houses fit for niggers to live in." This testimony was given LIARTSELL MILLS COMPANY 283 after Love had been placed on the stand, and he was not recalled to deny it. Only one of the above statements is dated, and that occurred eight and one-half months prior to Love's discharge. Hensley left the respondent's employ February 11, 1936, so the statement which he attributes to Love was made before that date, if at all. Except for Kennedy's testimony, mentioned above, there is no evidence that these statements came to the attention of the management so as to become a factor in the discharge. During July 1936 the respondent discharged the gatekeeper, one Lisenby. Lisenby was a disabled man of 85 years of age. He was clearly unable to perform his duties. Pharr testified that Love said to the employees that the management had been "cold blooded" and ruthless in their dealing with Lisenby. Pharr further testified that the respondent had been very considerate of Lisenby, first seeing to it that Lisenby would be able to live with his son, and then giving him a month's notice before discharging him. According to Pharr, Love's remarks about the discharge of Lisenby were the last of a series of incidents which persuaded him that Love should be discharged. While Love criticized the respondent for discharging Lisenby, as president of Local Union No. 2483, it was natural that he should protest the dis- placement of an old employee and union member. The evidence indi- cates that the extent of Love's statement concerning the discharge was that "Lisenby had worked for the mill for years and years, and after he became so old that he was of no value to the mill, they discharged him and threw him out." We do not feel that the reasons advanced by the respondent for dis- charging Love were, in fact, the true reasons for his discharge. The statement concerning the financial condition of the respondent is too remote in time. Love had permission to circulate the petition, and in any event we see no reason why the circulation of a petition con- cerning the consolidation of two schools, a year or more prior to Love's dismissal, should have motivated the respondent to discharge Love. Love's skill as a workman is unquestioned. The evidence does not show that the statements made by Love, excepting the statements con- cerning Lisenby, came to the attention of the company officials who discharged him. On the other hand Love was the moving spirit of Local Union No. 2483, and in discharging Love, shortly after he became president, the respondent played a large part in the destruction of Local Union No. 2483. We conclude that Love was discharged because of his membership in and activities in behalf of Local Union No. 2483. We find that by the discharge of Lloyd S. Love the respondent has discriminated in regard to his hire and tenure of employment, thereby discouraging membership in a labor organization and interfering with, 284 DECISIONS OF NATIONAL LABOR RELATIONS BOARD restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act. Love has received almost continuous employment since his discharge. At the time of the hearing, he was employed about 100 miles from his home. This necessitates his living away from home most of the time, and he desires to be reinstated in his former position. We shall order the respondent to reinstate Love to his former position with back pay. J. O. Scott was arrested for intoxication on the evening of April 2, 1938. He spent the night in jail, and was released the following morn- ing upon payment of a fine. On April 5 his foreman, Buff, told him that he was being laid off, but that he would in all probability be recalled. A week later, Scott talked to Whittle, who told him that he was discharged for intoxication . Scott had solicited memberships for the T. W. O. C. in the plant, but he had not held an office in the T. W. O. C. The respondent knew that Scott was a member of the T. W. O. C. On September 16, 1937, Buff questioned Scott about the progress of the T. W. O. C., asking him to name some of the members. Scott said that he was a member as were about 85 per cent of the employees in the weave shop. The respondent contends that it has a rule that any' employee who becomes intoxicated on or off duty is subject to discharge , and that Scott was discharged for violating this rule . It was established that some employees have been laid off and some discharged for intoxi- cation. Five employees, all respondent 's witnesses, testified that they had been intoxicated on one or more occasions . None of them had been dis- charged therefor, although one had been laid off twice because of intoxication. It is clear that the management had knowledge of a number of these cases. Honeycutt testified that at one time Whittle knew he was intoxicated and that Whittle warned him about it. Buff, who had authority to hire and discharge , testified that he once knew of a case of an employee getting drunk , but that he did not report it. It appears that the respondent enforced its rule at times and did not at others. Buff admitted that shortly after W. L. Stogner, another employee, was arrested for being intoxicated in January 1938, he asked Scott if it were he and Stogner who had become intoxicated , and Scott answered that it was Stogner and not he. The Trial Examiner found that this episode established that the respondent was seeking a pretext to justify its discharge of Scott. We are unable to agree with the Trial Exam- iner's finding. Stogner was a member of the T. W. O. C. as was Scott. Scott's union activity was not so prominent as to make it likely that the respondent would single him out as one to be discharged to cripple the T. W. O. C. There was no acute episode in Scott's relationship with HART SELL MILLS COMPANY 285 the respondent immediately preceding his discharge, so far as union activity is concerned. The charge that Scott was discriminatorily dis- charged was not filed until the hearing was in progress. Although the case is not free of doubt, we conclude from all the circumstances that J. 0. Scott was discharged for reasons other than his union membership or activity. We shall, therefore, dismiss the allegations of the complaint as to him. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondent set forth in Section III A and 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 Having found that the respondent has engaged in certain unfair labor practices, we will order it to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act and to remove, in so far as possible, the effects of such practices. We have found that the respondent refused to bargain collectively with the T. W. 0. C. although a majority of the employees in the appro- priate unit had designated the T. W. 0. C. as their agent for the pur- poses of collective bargaining. As noted above, the respondent filed motions to reopen the record and to receive further evidence on the ground that the T. W. 0. C. has, since the unfair labor practices took place, lost its majority status in the plant. The Board denied the motions. The implication from the respondent's motions is that the Board cannot order it to bargain with the T. W. 0. C. since the T. W. 0. C. no longer represents a majority of the employees in the appropriate unit. While we have not ascertained whether this is, in fact, the current situation in the plant, it is clear that the loss of a majority status by the T. W. 0. C., after the refusal to bargain took place, cannot affect the respondent's unfair labor practices engaged in prior to such alleged loss of majority. In this regard we said in Matter of Inland Steel Company: 12 The necessary delays incident to the adjudication of a dispute have postponed the Board's order until a time considerably subse- quent to the original wrongful refusal to bargain. The refusal to bargain collectively disrupts the morale of the men, has a deterring effect upon the organizational activity of the union and a discour- " See footnote 8, supra. 286 DECISIONS OF NATIONAL LABOR RELATIONS BOARD aging influence on members already gained which tends to induce them to drop from the ranks. . . . If an order to bargain col- lectively cannot be deemed an appropriate remedy for the refusal to bargain collectively unless the S. W. O. C.'s majority is kept intact until the Board can issue a decision, the plain policy and intent of the Act will be defeated. The respondent would be per- mitted further to evade the obligation of Section 8 (5) by profiting from the discouraging effects of its already accomplished violation of that very obligation. We cannot concede the validity of such a doctrine of futility, and we hold that to effectuate the policies of the Act, the respondent's refusal to bargain must be remedied by an order to bargain, based on the majority obtaining on the date of the refusal to bargain. We apply the same principle here. The further ground for the respondent's motions to reopen the record and to receive further evidence is that the signatures on two of the T. W. O. C.'s membership cards, which were received in evidence to establish the T. W. O. C.'s majority status, were forged. Even if the cards-referred to were forged, the T. W. O. C. had a majority status as of date the refusal to bargain took place without counting these cards. In the absence of any proof in the record or offered at the time of the motions, we cannot assume that other cards similarly authenticated were forged also. Our Order will provide that the respondent, upon request, bargain collectively with the T. W. O. C. as the exclusive representative of all the employees in the appropriate unit, in respect to rates of pay, wages, hours of employment, and other conditions of employment, and, if an understanding is reached on such matters, to embody said understand- ing in a signed, written contract. We have found that the respondent engaged in unfair labor practices in discharging Lloyd S. Love. We shall order the respondent to offer reinstatement to Love and to make him whole for any loss of pay he has suffered by reason of his discharge by payment to him of a sum equal to the amount which he normally would have earned as wages from the date of his discharge to the date of the offer of reinstatement, less his net earnings 13 during that period. 13 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 the unlawful refusal of his application for reinstatement 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 such work- relief projects. HARTSE'LL MILLS COMPANY THE PETITION 287 We have determined the appropriate bargaining unit and have found that a majority of the respondent's employees within that unit desig- nated the T. W. O. C. as their representative for the purposes of col- lective bargaining . Since our Order will provide that the respondent, upon request, bargain collectively with the T. W. O. C. as the exclusive representative of all the employees in the appropriate unit, we will dis- miss the petition for investigation and certification of representatives. 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. Textile Workers' Organizing Committee is a labor organization within the meaning of Section 2 (5) of the Act. 2. The production and maintenance employees of the respondent, excluding clerical and supervisory employees and watchmen, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9 (b) of the Act. 3. Textile Workers' Organizing Committee was on December 4, 1937, and at all times since has been, the exclusive representative of all the employees in such unit for the purposes of collective bargaining, within the meaning of Section 9 (a) of the Act. 4. By discriminating in regard to the hire and tenure of employ- ment of Lloyd S. Love and thereby discouraging membership in Textile Workers' Organizing Committee, the respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (3) of the Act. 5. By refusing to bargain collectively with Textile Workers' Organizing Committee, as the exclusive representative of its em- ployees in the appropriate unit, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (5) of the Act. 6. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed by Section 7 of the Act, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (1) of the Act. 7. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. 8. The respondent has not engaged in unfair labor practices within the meaning of Section 8 (3) of the Act by discharging J. O. Scott. 288 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ORDER Upon the basis of the foregoing 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 respondent, Hartsell Mills Company, and its officers, agents, succes- sors, and assigns, shall: 1. Cease and desist from : (a) Discouraging membership in Textile Workers' Organizing Committee or any other labor organization of its employees, by dis- charging or refusing to reinstate any of its employees, or in any other manner discriminating in regard to their hire or tenure of employ- ment or any term or condition of their employment because of mem- bership in or activity in connection with any such labor organization; (b) Refusing to bargain collectively with Textile Workers' Organ- izing Committee as the exclusive representative of the respondent's production and maintenance employees, excluding clerical and super- visory employees and watchmen; (c) In any other manner interfering with, restraining, or coerc- ing 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 Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Offer Lloyd S. Love immediate and full reinstatement to his former position without prejudice to his seniority and other rights and privileges; (b) Make whole Lloyd S. Love for any loss of pay he has suffered by reason of his discharge by payment to him of a sum of money equal to that which he would normally have earned as wages from the date of his discharge to the date reinstatement is offered, less his net earnings during such period ; deducting, however, from the amount otherwise due to him, monies received during said period for work per- formed 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 gov- ernment or governments which supply the funds for said work-relief projects; (c) Notify the Textile Workers' Organizing Committee in writing that it is prepared to renew negotiations looking toward a collective bargaining agreement and to embody such terms as may be finally arrived at in a signed, written contract; HA'RTSELL MILLS COMPANY 289 (d) Upon request bargain collectively with Textile Workers' Organizing Committee , as the exclusive representative of its produc- tion and maintenance employees , excluding clerical and supervisory employees and watchmen , in respect to rates of pay, wages, hours of employment, and other conditions of employment, and, if an under- standing is reached on such matters, embody said understanding in a signed, written contract; (e) Immediately post notices to all its employees in conspicuous places in and about its plant, and maintain said notices for a period of at least sixty (60) consecutive days, stating that the respondent will cease and desist in the manner set forth in paragraphs 1 (a), (b), and (c) of this Order, that the respondent's employees are free to become or remain members of Textile Workers' Organizing Com- mittee, and that the respondent will take the affirmative action set forth in paragraphs 2 (a), (b), (c ), and (d ) of this Order; (f) Notify the Regional Director for the Fifth Region in writing within ten (10) days from the date of this Order what steps the respondent has taken to comply herewith. AND IT IS FURTHER ORDERED that the complaint be, and it hereby is, dismissed in so far as it alleges that the respondent has engaged in unfair labor practices within the meaning of Section 8 (3) of the Act by discharging J. O. Scott. AND IT IS FURTHER ORDERED that the petition for investigation and certification of representatives filed by Textile Workers' Organizing Committee, be, and it hereby is, dismissed. MR. WILLIAM M. LEISERSON took no part in the consideration of the above Decision and Order.