P. Ballantine & Sons

In the Matter of P. BALLANTINE & SONS, A CORPORATION and WHOLE- SALE LICENSED ALCOHOLIC BEVERAGE SALESMEN'S UNION, #20376-B, BEER DIVISION, A. F. OF L. Cases Nos. C-1322 and R-1379.-Decided December 09, 1939 Brewing Industry-Interference, Restraint, and Coercion: anti-union state- ments by supervisors ; espionage-Discrimination : charges of, sustained as to one employee, dismissed as to others-Reinstatement Ordered: for one employee found to have been discriminatorily discharged-Back Pall: awarded-Investi- gation of Representatives: controversy concerning representation of employees; employer refuses to recognize union ; controversy as to appropriate unit-Unit Appropriate for Collective Bargaining: draught and bottle-beer salesmen, ex- cluding sales managers , assistant sales managers , supervisors, and clerical em- ployees; functional coherence ; geographical and management considerations raised by the respondent insufficient to preclude a finding that unit sought by Union is appropriate-Election Ordered: time for and eligibility date to be fixed after effects of unfair labor practices dissipated. Mr. Martin Rose, for the Board. White & Case, by Mr. Chester Bordeau, Mr. W. J. Killoran, Mr. William St. John Tozer, and Mr. John E. Farrell, of New York City, for the respondent. Mr. Gene Sampson, of New York City, and Mr. Herbert S. Thatcher, of Washington, D. C., for the Union. Mr. Richard H. Meigs, of counsel to the Board. DECISION ORDER AND DIRECTION OF ELECTION STATEMENT OF THE CASE On January 14, 1939, Wholesale Licensed Alcoholic Beverage Sales- men's Union, #20376-B, Beer Division, herein called the Union, filed a charge with the Regional Director for the Second Region (New York City), and on March 20 and April 18, 1939, respectively, filed amended charges, alleging that P. Ballantine & Sons, Newark, New Jersey, herein called the respondent, had engaged in and was engag- ing in unfair labor practices affecting commerce, within the meaning 18 N. L. R. B., No. 107. 1007 1008 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 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 17, 1939, the Union filed with the Regional Director a petition, and on April 5, 1939, an amended 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 March 28, 1939, the National Labor Relations Board, herein called the Board, acting pursuant to Section 9 (c) of the Act, and Article III, Section 3, and Section 10 (c) (2), and Article II, Section 37 (b), 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 further ordered that for the purpose of hearing the two cases be consolidated and one record of the hearing be made. A notice of a hearing to be held upon the petition, accompanied by a copy of the petition, was duly served upon the respondent and the Union. Thereafter, upon the charges and amended charges, the Board, by the Regional Director, issued its complaint, dated April 5, 1939, and on April 14 and 18, 1939, respectively, issued an amended complaint and amendments to the amended complaint. Copies of these docu- ments, accompanied by notice of hearing, were duly served upon the respondent and the Union. With respect to the unfair labor practices the complaint, as amended, alleged in substance that the respondent, at its New York City office (1) urged, persuaded, and warned its employees to refrain from becoming or remaining members of the Union; (2) threatened said employees with discharge and other reprisals if they became or re- mained members thereof; (3) kept under surveillance the meetings and meeting places of members of the Union; (4) discharged James Ken- nedy, John Kilcullen, Kurt Knaust, Vincent McGuire, Lewis Swiller, Herbert Schach, Edward Happel, Thomas Maguire, and John Sten- dara, because they joined and assisted the Union; and (5) by the foregoing acts and in other ways interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. On April 14, 1939, the respondent filed its answer to the complaint, and, thereafter, on April 20, 1939, filed an answer to the amended complaint, in substance denying that it had committed the unfair labor practices alleged in the complaint, as amended. Pursuant to notice, a consolidated hearing on the complaint and the petition was held on. April 24 and May 1, 2, 3, 4, 5, 6, 9, 10, and 11, 1939, at New York City, before Berdon M. Bell, the Trial Examiner P. BALLANTINE & SON'S 1009 duly designated by the Board. The Board and the respondent were represented by counsel and participated in the hearing. The Union was represented by its president, Gene Sampson. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues was afforded all parties. At the hear- ing it was stipulated between counsel for the Board and counsel for the respondent that the respondent's answer to the amended com- plaint be deemed to be amended so as to apply to the Board's amend- ments to the amended complaint. 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 rulings of the Trial Examiner and finds that no prejudicial errors were com- mitted. The rulings are hereby affirmed. On July 8, 1939, the Trial Examiner filed and duly served upon the respondent and the Union his Intermediate Report, finding that the respondent had committed unfair labor practices affecting commerce within the meaning of Section 8 (1) and (3) and Section 2 (6) and (7) of the Act. He recommended that the respondent cease and desist from such practices, and that it offer reinstatement and award back pay to Kennedy, Kilcullen, Schach, Happel, and Stendara. He further recommended that the complaint, as amended, in so far as it relates to Swiller, Knaust, Maguire, and McGuire, be dismissed. On July 12 and 19, 1939, respectively, the respondent and the Union filed exceptions to the Intermediate Report and on September 15, 1939, the respondent filed with the Board a memorandum in support of its position. On November 7, 1939, pursuant to notice, a hearing was held before the Board in Washington, D. C., for the purpose of oral argument. The Union and the respondent were represented by counsel and participated in the oral argument. . The Board has reviewed the respondent's memorandum and the exceptions to the Intermediate Report filed by the respondent and by the Union, and so far as they are inconsistent with the findings, con- clusions, 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 I. THE BUSINESS OF THE RESPONDENT The respondent, P. Ballantine & Sons, is a corporation duly organ- ized and existing by virtue of the laws of the State of New Jersey, having its executive offices and sole plant in Newark, New Jersey. The respondent also maintains and operates a sales office at 24-16 Bridge Plaza, County of Queens, New York City, hereinafter referred to as 1010 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Plaza office. In addition, the respondent maintains and operates warehouses at Hicksville, Long Island; Buffalo, New York; Hampton, Connecticut; Wethersfield, Connecticut; Sanford, Florida; Chicago, Illinois; Red Bank, New Jersey; Providence, Rhode Island; and Jacksonville, Florida. The respondent is engaged in the manufacture, sale, and distribution of ale and beer. The principal raw materials used by the respondent in the course of its business are malt, hops, corn grits, and corn sugar. During the fiscal year ending September 30, 1938, the respondent purchased and used in manufacturing operations conducted at its Newark plant raw materials amounting in value to $2,119,315.68. During the period from January 1, 1938, to March 31, 1939, the re- spondent purchased and used at this plant raw materials amounting in value to $398,695.30. Approximately 90 per cent of raw materials were shipped to the respondent from points outside the State of New Jersey. During the fiscal year ending September 30, 1938, the respondent at its Newark plant manufactured approximately 1,100,095 barrels of beer and ale. Gross sales of said products during the same period amounted in value to $19,469,324.26. During the period from Octo- ber 1, 1938, to March 31, 1939, the respondent manufactured and pro- duced at its Newark plant approximately 252,695 barrels of its fin- ished products. Gross sales during this period amounted to $4,174,- 685.11. During the above periods, approximately 50 per cent of the manufactured products were shipped by the respondent to points outside the State of New Jersey. This proceeding is concerned with the respondent's Plaza office, where salesmen-collectors are employed to sell the respondent's prod- ucts in certain sections of New York City. Such products of the respondent as are sold through the Plaza office are manufactured at the Newark plant and shipped in trucks owned by the respondent to its customers in New York City. During the period from January 1, 1939, to March 31, 1939, the respondent sold through the Plaza office approximately 12,242 barrels of draught beer and ale, for which it received $201,730.89, and 21,955 barrels of bottled and canned beer and ale, for which it received $454,925.20. The respondent admits that it is engaged in interstate commerce. II. THE ORGANIZATION INVOLVED Wholesale Licensed Alcoholic Beverage Salesmen's Union, x$20376-B, Beer Division, is a labor organization affiliated with the American Federation of Labor, herein called the A. F. of L., admitting to its membership beer salesmen in the State of New York, including the draught and bottle beer and ale salesmen employed at the re- P. BALLANITINE & SONS 1011 spondent's Plaza office, exclusive of sales managers, assistant sales managers, supervisors, and clerical employees. III. THE UNFAIR LABOR PRACTICES A. Interference, restraint, and coercion About November 1, 1938, James F. Kennedy became interested in organizing his fellow draught beer and ale salesmen employed at the Plaza office. Assisted by John L. Kilcullen, another draught sales- man, he composed and mailed a letter, dated November 2, 1938, to the A. F. of L., in which he requested information pertinent to his plans for organization. About November 16, 1938, acting pursuant to di- rections received from this source, Kennedy and one George LaGuerre, a recently employed salesman who at that time was accompanying Kennedy on his route for training purposes, conferred with Gene Sampson, president of the Union. On this occasion Kennedy joined the Union and at his request was given a number of membership application blanks for distribution among the other salesmen. On Friday morning, November 18, 1938, at a customary assemblage of draught salesmen at the Plaza office, Kennedy distributed slips of paper, each bearing a notice of a meeting to be held at 12: 00 o'clock noon of that day. The meeting was conducted, as scheduled, at a restaurant in New York City, and was attended by approximately 11 of the Plaza office draught salesmen. Kennedy presided, and he and Kilcullen addressed the men, pointing out the benefits to be derived from organization. Union membership application blanks were then distributed and were signed by all persons present. Edward Happel, a draught beer salesman, testified that he did not attend the meeting because on that day he was accompanied on his route by Andrew Sheridan, a supervisor. Happel further testified that while so accompanied, Sheridan expressed to him an awareness of the meeting and Kennedy's leading role in connection therewith, and prophesied wholesale discharges "if Ballantine 'finds out." Kit- cullen testified that on the day following the meeting Sheridan asked him if he had attended, and upon receiving an affirmative answer, criticized his discretion for doing so; that Sheridan stated that the respondent would not stand for any union activity; and that there would be "fireworks" at the office that day. Sheridan admitted hav- ing accompanied Happel on his route on the day of the meeting, but denied having voiced the statements attributed to him by Happel and Kilcullen. However, the Trial Examiner, who had opportunity to observe the witnesses, found that the testimony of Happel and Kil- cullen was more credible. Their testimony is mutually consistent and, in the light of all the circumstances, we find that Sheridan made the statements which were attributed to him. 1012 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On November 19, 1938, the day following the above-described meet- ing, Kennedy was notified by Douglas Gordon, assistant general sales manager, that his services were no longer desired by the respondent. Thereafter, on Monday, November 21, 1938, Gordon assembled all the draught salesmen at the Plaza office and, according to the testimony of seven witnesses for the Board, announced that he was aware of the union activities at the Plaza office and the identity of each and every member of the Union. It was further testified that he stated : "If it lifts its head again, we will immediately take action and dis- charge each and every one of you." Gordon denied that he made reference to union membership or activity on this occasion. He testi- fied that although he was advised by Andrew Dempsey, a draught sales manager, that the Plaza salesmen had attended a meeting on November 18, he was not informed and remained unaware of the nature of the meeting. According to his further testimony, his ad- dress to the men consisted of a threat of dismissal in the event that they persisted in leaving their routes to attend meetings, in violation of a company rule. As a warning he cited to the men the recent dis- charges of Kennedy and one Madeo for failure "to conform to the standard of the company." Gordon's testimony was confirmed by a number of witnesses. The testimony of these witnesses, however, is unpersuasive when weighed against that of those witnesses who testi- fied that Gordon made the statements admitted by him and in addition the anti-union statements which he denied having made. Although the testimony of the former witnesses is specific with respect to denials of anti-union statements alleged to have been made by Gordon, it is vague and indefinite with respect to the circumstances of the speech itself. We find that Gordon in his speech on November 21, 1938, voiced the anti-union statements attributed to him. About November 25, 1938, subsequent to the speech by Gordon, and after Kennedy's discharge, Gordon engaged the services of three men, namely, Thomas J. Maguire, Kurt Knaust, and Vincent McGuire, allegedly for the purpose of securing new business. Early in their employment and for a short space of time they were individually as- signed to accompany as many as 10 regular salesmen on their routes. These three "specialty salesmen" were unanimous in their testimony that they were instructed by Gordon to accompany various regular salesmen on their routes for the purpose of surveillance and reporting to him any union activity which they might observe. Quoting from the testimony of Knaust, concerning instructions given by Gordon to the three men on Monday morning, November 28, 1938: Mr. Gordon started to speak to us again in the sense of: Now fellows you've got to do a good job here if you want to do what is right. I told some of you men how I feel about this union ac- P. BALLANTINE & SONS 1013 tivity among the men in Ballantine's and I surely want you to keep your eyes open; get in touch with the men and find out who the union agitators are and report it back to, me. He [Gordon] also told us that he believed that all the men were going to be fired. There might be four, he said,.which he would keep. He said he knew the men, he had gotten the names, but he is especially interested in finding out who the agitators are and that would be our job. Gordon testified that the three specialty salesmen were employed solely for the purpose of securing new business for the respondent and denied that he had instructed them to engage in any form of espionage against the Union. However, the testimony of Knaust, as quoted in the paragraph above, was confirmed in all respects by Vin- cent McGuire and Thomas Maguire. Moreover, subsequent events tend strongly to corroborate Knaust's testimony concerning the' pur- poses for which the three men were hired. The role of specialty salesmen required them to accompany the numerous and various regular salesmen on their routes, thus greatly expediting their espio- nage activities. In the course of their employment Gordon solicited from them reports relative to their observations of union activities among the salesmen with whom they associated. We have already noted Gordon's hostility toward the Union. The employment of the specialty salesmen was consistent with his anti-union' bias. The Trial Examiner found that the testimony of Knaust, Vincent McGuire, and Thomas Maguire, was credible. We are in agreement with this finding. We find that the 'three specialty salesmen- were in, fact hired by the respondent, primarily, if not solely, for the purposes of obtaining information which would enable the respondent to crush the union movement in the Plaza office.' On February 23, 1939, according to the testimony of Happel, Supervisor Sheridan again accompanied Happel on his route, and on this occasion Sheridan remarked, "It seems to me you have a new ring leader . . . Kilcullen seems to be the leader of your bunch now" Happel testified that he admitted to Sheridan that' there had been a meeting of all the men and that Kilcullen had been elected to ' Prior to the employment of the three specialty salesmen , the respondent was advised that Kennedy had complained to the New York State Labor Relations Board . The re- spondent in its brief argues that in view of the circumstances, it would be "ridiculous" for an employer already the subject of charges of unfair labor practices as was the respond- ent in this case, to take steps to violate the law and especially to entrust such activities constituting the unfair labor practices to new and untried employees. We find no merit in this contention . The filing of charges of unfair labor practices does not always deter an employer who would flout the Act from pursuing a course of conduct which amounts to a further unfair labor practice ." Cf. Matter of American Potash & ' Chemical Corporation and Borax & Potash Workers' Union No. 20181, 3 N. L. R. B. 140, enf'd National Labor Relations Board v. American Potash and Chemical Corporation, 98 F. (2d ) 488 (C. C. A. 9), cert. denied , 306 U. ' S. 643; Matter of Arcade-Sunshine Company, 'Inc. and Laundry Workers Cleaners & Dyers Union, 12 N. L. R. B. 259. 1014 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the office of shop steward and spokesman, whereupon Sheridan stated, "Well, Ed, they know about it and it is going to come to a show- down . . . Well, my opinion is that they are going to be fired." Rap- pel further testified that Sheridan informed him that the respondent was aware that the men were organized and belonged to a union and that such activities would not be countenanced by the respondent. Sheridan further intimated that Kilcullen was going to be let out. Sheridan admitted that he acompanied Happel on this occasion, but denied the statements attributed to him by the latter. However, the Trial Examiner, who had the opportunity to observe the witnesses, found that Sheridan's denial in this respect was not convincing. We have found above that Sheridan made similar hostile remarks to both Happel and Kilcullen in November. In view of all the cir- cumstances, we find that Sheridan made the statements ascribed to him above. We find that the respondent, by means of espionage and the anti- ,union statements made by Gordon and Sheridan, has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed by Section 7 of the Act. B. The discriminatory discharges The complaint, as amended, alleges that the respondent discharged James Kennedy, Kurt Knaust, Vincent McGuire, Lewis Swiller, John Kilcullen, Herbert Schach, Edward Happel, John Stendara, and Thomas Maguire, and thereafter refused to reinstate said employees, because of their membership in and activities in connection with the Union. The respondent, in its answer, as amended at the hearing, alleges, in substance, that the above-named employees were dismissed for good and sufficient cause, and with no knowledge on the part of the respondent of their union affiliation or activities. James Kennedy had long experience as a beer salesman. In the early part of September 1935 he was sought out and prevailed upon by the respondent to relinquish his position with the Krueger Brew- ing Company and to accept employment as a draught-beer salesman at the respondent's Plaza office. Kennedy continued his employment in this capacity until November 19, 1938, when he was discharged by Gordon. In the middle of 1937, Kennedy received a raise in salary which was granted to only a small number of other salesmen. In addition, during the course of his employment, he won several monthly cash-prize contests for securing the most new business. As has been previously related herein, Kennedy was the instigator and leader of the Union's organizational movement among the draught salesmen at the Plaza office. On November 18, 1938, he was observed by Supervisor Sheridan as he distributed notices of the P. BALLANTINE & SON'S 1015 organizational meeting which was held on that day. Kennedy pre- sided and spoke at the union meeting. On Saturday morning, November 19, 1938, the day following the union meeting, which was described in Subsection A above and in which Kennedy took a prominent part, he was instructed by one Stoecker,- a supervisor, to remain in the office instead of going out on his route as was customary. Kennedy waited until approximately 4 o'clock that afternoon and was finally summoned to the office of Assistant General Sales Manager Gordon. Quoting from the testi- mony of Kennedy, which was not denied and which we accept as true : He [Gordon] called me into the office and he stated, "Mr. Kennedy, your services are no longer required by P. Ballantine and Sons," and so I said, "For what reason?" and he said, "You know." I said, No, I don't know. If I did I wouldn't ask you." He said, "You know." Well, I said again, "I say I don't know." I said, "Well, is there anything wrong with my col- lections?" He said, "No." I said, "I would like to get a refer- ence. It seems strange that I have sold Ballantine products for close to 5 years, and that I should be notified like this that my services were no longer required." I said, "I would like to get a reference." He looked at me and he said, "You can have anybody write in here and I will tell them all about you." I said, "What do you mean you will tell them all about me?" and with that I walked out of the office. The respondent contends that it discharged Kennedy because (1) he padded his automobile mileage report, (2) failed to "kick back" the full 2 per cent of collections allotted by the respondent for good- will expenditures at customers' stores, and (3) was always "dis- gruntled." Gordon testified that during the week of November 7, 1938, he observed that the sales cost of the respondent's products was unreasonably high. Accordingly, he and Andrew Dempsey, draught sales manager of the Plaza office, investigated the causes of the situa- tion, and determined that unreasonably high mileage expenses of the Plaza salesmen was a contributing factor. He thereupon decided to establish a 10-dollar flat rate to cover the mileage expenses of the salesmen who served territories in the counties of Bronx, Brooklyn, and Queens, and North of 59th Street in' the county of Manhattan. Summoning the salesmen who were to be affected by the proposed change, he informed them of his decision and the reasons thereof. On this occasion arguments against the proposed change were ad- vanced by several of the salesmen including Kennedy, whereupon Gordon remarked that Kennedy's mileage expense account under the 283029-41-vol. 18-65 1016 DECISIONS OF NATIONAL LABOR RELATIONS BOARD existing system had been higher during the period of the preceding 12 weeks than any of the other salesmen . This was the first and only occasion on which Kennedy was criticized by any of the respond- ent's officials for having an unreasonably high mileage expense. The record shows that other salesmen as well as Kennedy had high mileage expenses and, at the hearing, Gordon admitted that he reproached others besides Kennedy on this account. Moreover, the record shows that in any event, the flat rate of 10 dollars to cover salesmen's mileage expenses was thereafter put into effect. We may assume that this new system effectively put an end to the filing of unreasonably high mileage expenses by Kennedy and the other salesmen. It appears that it was the respondent's practice to allot 2 per cent of all collections made by the salesmen for expenditures at customers' stores for the purpose of engendering good will and increasing busi- ness among its customers. The record shows that Gordon's source of information relative to Kennedy's alleged failure to "kick back" was the complaint of a bottle-beer salesman who covered the same route as Kennedy and who reciprocated Kennedy's feeling of intense personal animosity. In view of the circumstances, we consider Gor- don's source of information highly unreliable. In any event, the respondent does not contend that Kennedy's sales suffered by reason of his alleged failure to "kick back," and we believe that such factor, if it existed, was unimportant. Kennedy's disgruntled attitude was principally a personal dislike for Gordon and a dissatisfaction with working conditions under a new system which had been put into effect. The record shows that Gordon was strongly disliked by a majority of the men, who also shared Kennedy's dissatisfaction under the new system. These factors are not disputed by the respondent; accordingly, we do not believe that Kennedy's attitude was an important factor considered by the respondent in selecting him for discharge. In the light of Kennedy's considerable experience as a beer sales- man, his years of service with the respondent and his capabilities, and the respondent's recognition thereof, we do not believe that his dis- charge on November 19, 1938, was motivated by the reasons advanced by the respondent .2 Nor was he told of these alleged reasons at the time of his discharge. The respondent contends that on November 7, 1938, it determined to discharge Kennedy after having discovered that he had padded his mileage expense account and prior to the advent of union activities 2 See Montgomery Ward & Co., Inc. v. N. L. R. B. 107 F. (2d) 555 (C. C. A. 7 ), enf'g Matter of Montgomery Ward & Company and Reuben Litzenberger at al., 9 N. L. R. B. 538, wherein the Court stated, "although long service does not necessarily indicate effi- ciency, it does indicate that the employee's work is not considered so unsatisfactory as to merit discharge." P. BALLANTINE & SONS 1017 at the Plaza office. It further contends that Kennedy, having been made aware of the imminence of his discharge by Gordon's criticism of his mileage expenses, joined the Union in order to be able to raise the defense of discrimination against such action by the respondent. However, the record shows that the first step in the union movement at the Plaza office was a letter to the A. F. of L. by Kennedy and Kilcullen, requesting information relative to organizing the Plaza salesmen. This letter was dated November 2, 1938, antedating by several days the occasion on which Gordon criticized Kennedy and the respondent's decision to discharge Kennedy. Moreover, the record clearly shows that the union movement grew primarily from the general unrest occasioned by Gordon's innovations and personality. We therefore find that Kennedy did not join the Union for the reason asserted by the respondent. In view of all the circumstances, we find that it was no mere coin- cidence that Kennedy was discharged only a short time after the inception of the Union's organizational movement at the Plaza office and only a day after the Union's first meeting of the Plaza office salesmen, at which, to the respondent's knowledge, Kennedy played a conspicuous role. We find that the respondent, by discharging and thereafter refus- ing to reinstate Kennedy, has discriminated in regard to his hire and tenure of employment, thereby discouraging membership in a labor organization, and interfering with, restraining, and coercing its em- ployees in the exercise of the rights guaranteed in Section 7 of the Act. Kurt Knaust and Vincent McGuire were two of the three specialty salesmen whose employment by Gordon on November 28, 1938, was described in Subsection A above. These two, men were discharged on February 10, 1939, by Harry Newman, who succeeded Gordon in the capacity of sales manager of the draught-beer division at the Plaza office after the latter's recall to the Newark office in January 1939. Newman testified that he recommended to Personnel Director Alley that two men be dismissed because "my experience has taught me that contact men do, not work out, and we cannot get as productive results from contact men as we do from routemen." Knaust and McGuire testified that when Gordon left the Plaza office they considered themselves relieved of the duty to make reports on union activity among the salesmen and that thereafter no further reports were rendered by them. About January 10, 1939, they be- came sympathetic with the cause of the Union and joined that organ- ization. Neither, however, took a prominent part in union activities, and there is no indication that Newman, who recommended their dismissal, was aware of the espionage phase of their employment which admittedly ceased after Gordon's recall to the home office. 1018 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The evidence fails to support the Union's contention that Knaust and McGuire were discharged because of union membership or activ- ity. We find that the respondent, by discharging Knaust and Mc- Guire, did not discriminate in regard to their hire and tenure of employment to discourage membership in a labor organization. Lewis Swiller was employed as a bottle-beer salesman at the respond- ent's Plaza office on October 5, 1936, and continued in such capacity until his discharge on February 17, 1939. Swiller was exceedingly active in instigating and participating in union organization, which commenced sometime in December 1938 among the Plaza office bottle- beer salesmen. The respondent admits that it had no complaint against Swiller's sales work, but contends that his discharge was prompted by his chronic violation of a company rule which required salesmen to report for work not later than 8: 15 a. in. The respondent further contends that Swiller's derelictions in this respect persisted in spite of numerous warnings and disciplinary measures by which the respondent at- tempted to compel Swiller to comply with its rule. In support of its contention that Swiller was discharged because of his tardiness, the respondent introduced a memorandum, dated March 2, 1938, prepared by a Mr. Wynn, who was then sales manager of the bottle division in the Plaza office, and addressed to Mr. Von Busse, assistant sales manager. In this memorandum Wynn set forth Swiller's record of lateness during the months of January and February 1938 and stated that if Swiller continued to violate the company rule against lateness he would be obliged to recommend the discontinuance of his employ- ment, since such infractions adversely affected discipline among the other salesmen. Swiller's record, as set forth in the aforesaid memo- randum, shows that during the month of January 1938, Swiller re- ported to work from 20 minutes to 1 hour late on 13 occasions. In February 1938 he was late 12 times, such lateness ranging from 18 to 45 minutes, and, in addition, he was absent an entire day. General Sales Manager Alley concurred in Mr. Wynn's attitude toward Swiller's tardiness. The record shows that punctuality was frequently emphasized by the respondent's officials and was on occasion made the subject of specific instructions to the salesmen. Previous to Swiller's discharge, the respondent had discharged for a similar reason other employees. At the hearing Swiller admitted that he was frequently late and that on several occasions he had been reprimanded and disciplined for this cause. On February 17, the day of his discharge, he had reported for work an hour late. We conclude that the evidence does not support the Union's con- tention that Swiller was discharged because of union membership or P. BALLAN'TINB & SONS 1019 activity. We find that the respondent, by discharging Swiller, did not discriminate in regard to his hire or tenure of employment to discourage membership in a labor organization. Herbert Schach, Johan Kilcullen, Edward Happel, John Stendara, and Thomas Maguire, draught salesmen, were employed on June 18, June 20, July 11, September 26, and November 28, 1938, respectively. All were discharged on February 25, 1939. These five men were all active members of the Union, attending its meetings and soliciting memberships on its behalf. Kilcullen par- ticularly was conspicuous in this respect and, as we have previously observed in Subsection A above, the respondent was aware that he had succeeded Kennedy in the role of leader of the union movement at the Plaza office after Kennedy's discharge. Before discussing the discharges of this group of men, it will be necessary to consider briefly certain circumstances which preceded and culminated in the discharges. Prior to July 6, 1938, the respond- ent had in effect a system whereby its draught salesmen made col- lections and solicited new business on a straight salary basis, and its Newark truck drivers filled standing orders with all customers for draught beer and ale. Early in June 1938 the respondent commenced consideration of a new system whereby its salesmen would take orders' for the respondent's products in addition to their usual duties, and receive pay on a salary plus commission basis. This new system was put into effect on July 6, 1938. On February 25, 1939, the respondent reverted to the old system described above and discharged the persons listed in the group under consideration. In connect ion with the five discharges, the respondent contends and the record shows that (1) the new system which was instituted by the respondent on July 6, 1938, necessitated the employment of additional salesmen; (2) the new system was experimental in nature; (3) the new system proved unsatisfactory both to the respondent and to a majority of the salesmen; (4) its abandonment and the return to the old system necessitated a reduction in force; and (5) no new em- ployees were hired to replace the discharged salesmen. Thus, the pertinent inquiry is whether or not the selection of the salesmen to be discharged was under the circumstances free from anti-union design. The respondent contends that in selecting the persons to be dis- charged it considered the factors of their relative seniority and sales ability. An examination of the employment dates of Schach, Kil- cullen, Happel, and Stendara reveals that these employees were hired after the institution of the new system, or only shortly prior thereto, indicating that they were employed to meet the requirements for addi- tional personnel under this system. As we have previously observed, Maguire was also hired. after the institution of the new system, but 1020 DECISIONS OF NATIONAL LABOR RELATIONS BOARD initially in part for the purpose of espionage. He was not discharged along with Knaust and Vincent McGuire on February 10, 1939, be- cause, according to testimony of Newman, an extra salesman was re- quired and Maguire was considered more capable than Knaust and Vincent McGuire. At the time these five men were discharged, the respondent retained in its employ or discharged and shortly there- after reemployed two persons having slightly less seniority. One, Hanrahan, who was employed on July 25, 1938, was retained; and one, LaGuerre, who was hired on November 14, 1938, was discharged on February 25, 1939, but was rehired approximately 10 days later. In explanation of these circumstances the respondent contends, and the record supports the respondent's contention, that Hanrahan had a better sales record during the 3 months immediately preceding Feb- ruary 25, 1939. The evidence further shows that the sales record of LaGuerre during the same period was also considerably superior to that of the other men who were discharged on that date. We have hereinbefore found that the respondent committed certain unfair labor practices and evidenced an attitude of hostility toward the Union prior to the discharges on February 25, 1939. It appears that the respondent's policy in this respect was asserted principally -by Gordon. It further appears that, subsequent to Gordon's recall to the Newark office in January 1939, overt acts of hostility toward the Union abated. As we have observed, Knaust, Vincent McGuire, and Thomas Maguire considered themselves relieved of the duty to observe and report union activity among the salesmen and so discon- tinued making such reports. The record contains no evidence that Harry Newman, who succeeded Gordon for the respondent in the capacity of sales manager of the draught division at the Plaza office, in any way interfered with, restrained, or coerced the salesmen under him in the exercise of their right to self-organization. The record shows that the reversion to the old system was prompted by expediency. It had the approval of the respondent's officials and a majority of the salesmen. The respondent's selection of persons to be discharged in the process of reducing its sales force to meet the requirements of this change in system was not influenced by union membership or activity on the part of the persons selected. We find that the respondent, by discharging Schaoh, Kilcullen, Happel, Stendara, and Maguire, did not discriminate in regard to the hire and tenure of their employment to discourage membership in a labor organization. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE We find that the activity of the respondent set forth in Section III A and B, above, occurring in connection with, the operations of the P. BALLANTINE & SONS 1021 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 engaged in certain unfair labor practices. We shall, therefore, order it to cease and desist there- from and to take certain affirmative action designed to effectuate the policies of the Act. We have found that the respondent discriminated in regard to the hire and tenure of employment of James Kennedy, thereby discourag- ing membership in a labor organization and interfering with, restrain- ing, and coercing its employees in the exercise of rights guaranteed in Section 7 of the Act. We shall therefore order the respondent to offer Kennedy immediate reinstatement to his former or a substantially equivalent position. We shall further order the respondent to make Kennedy whole for any loss of pay he has suffered by reason of his dis- charge by payment to him of a sum equal to the amount which he would normally have earned as wages from the date of his discharge to the date of the offer of reinstatement, less his net earnings 8 during said period. We have found that the respondent did not discriminate in regard to the hire and tenure of employment of Kurt Knaust, Vincent McGuire, Lewis Swiller, Herbert Schach, John Kilcullen, Edward Happel, John Stendara, and Thomas Maguire. We shall therefore order that the allegations of the complaint relating to these employees be dismissed. VI. THE QUESTION CONCERNING REPRESENTATION In December 1938 the Union conferred with representatives of the Brewers Board of Trade, Inc., an organization composed of various brewers, including the respondent, operating in the metropolitan New York area, for the purpose of negotiating a collective bargaining agree- ment with the respondent through that intermediary. About January 8 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 re- ceived 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 govern- ment or governments which supplied the funds for said work -relief projects. 1022 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 3, 1939, acting pursuant to the request of the Brewers Board of Trade, Inc., the Union submitted to that organization several copies of con- tracts similar to ones which it had negotiated with various other brewers associated with the Brewers Board of Trade, Inc. On March 2, 1939, the Union sent a letter to G. W. Badenhousen, president of the respondent, stating that it had organized over 51 per cent of the Plaza office salesmen, and requesting a conference for the purpose of ne- gotiating a collective bargaining agreement. This letter went un- answered. Thereafter, the Brewers Board of Trade, Inc., returned the contracts which had been submitted to it by the Union, and by a letter dated March 20, 1939, advised the Union that its labor committee had no authority to negotiate any bargaining agreement with We Union. Meanwhile, through the officers of the Central Trades and Labor Coun- cil of New York City, a meeting was arranged between representatives of the Union and the respondent and took place at the respondent's Newark office. At this meeting Badenhousen refused to recognize Gene Sampson, union president and representative at the meeting, as the representative of the Plaza office salesmen unless all the salesmen personally presented themselves at the respondent's Newark office and individually or collectively stated that they desired Sampson to rep- resent them. Badenhousen further stated that the respondent would not recognize any but the men themselves. Sampson offered to submit membership application cards for a check against the respondent's pay rolls. Badenhousen rejected the offer. We find that a question has arisen concerning the representation of employees of the respondent. VII. THE EFFECT OF THE QUESTION CONCERNING REPRESENTATION UPON COMMERCE We find that the question concerning representation which has arisen, occurring in connection with the operations of the respondent described in Section I above, has a close, intimate, and substantial re- lation to trade, traffic, and commerce among the several States, and tends to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. VIII. THE APPROPRIATE UNIT The Union seeks a unit composed of all the draught and bottle-beer salesmen at the respondent's Plaza office, exclusive of sales managers, assistant sales managers, supervisors, and clerical employees. It is not disputed that the qualifications, experience, duties, wages, hours, and other working conditions of the Plaza office draught and bottle salesmen are similar. The respondent, however, contends that geographically and from a management standpoint the unit sought P. BALLANTINE & SONS 1023 by the Union is inappropriate. In support of its contention, the respondent asserts that it considers the Plaza office merely a division of its principal office at Newark, New Jersey, rather than a separate entitity; that expenses and salaries of the former office are treated as part of the administration expenses of the latter; and that ac- tivities of the former office are ultimately controlled and coordinated from the Newark office. The respondent further asserts that in ad- dition to its Plaza and Newark offices, it maintains an office at Hicks- ville, Long Island; that hours, pay, and method of operation are similar in all three offices, and that employees are occasionally trans- ferred from one office to another. Salesmen working out of the Newark and Hicksville offices cover parts of New York City not covered by the Plaza office salesmen. Orders received at all three offices are forwarded to and filled from the respondent's plant at New- ark. On the basis of the foregoing facts, the respondent maintains that an appropriate unit should consist of employees of all three of the aforesaid offices. While the geographical arrangement of an employer's business is entitled to considerable weight in the determination of the appro- priate unit, it is not conclusive and the determination of a unit based upon such consideration will normally be made only when the state of the employees' self-organization indicates its propriety. Thus, in Matter of American Radiator Company ,4 the company operated two plants in one city which were 21/2 miles apart. In holding that the employees in each plant constituted a separate unit, the Board said : Conceivably, employees of the two plants could be in- cluded within the same bargaining unit. However, none of the Buffalo plants have ever joined together for the purpose of col- lective bargaining and the parties to these present proceedings expressly repudiate any such desire. All the unions here in- volved have organized on a single plant basis.6 In the instant case the record shows that employees at the respond- ent's Newark office are eligible for membership in various locals of the A. F. of L. There is no evidence, however, that the Plaza office salesmen are eligible or desire, membership in such locals. The juris- diction of the Union extends only to the State of New York, and it is obvious that the Union does not desire a unit which would in- clude the respondent's Newark employees. According to the re- spondent's own brief, the Plaza office was established for the con- 'Matter of American Radiator Company (Bond Plant and Terminal Plant ) and Amal- gamated Association of Iron, Steel d Tin Workers, Lodges 1199 and 1629, 7 N. L. It . B. 452. 6 See also Matter of Associated Press and The American Newspaper Guild, 5 N. L. R. B. 43; Matter of Postal Telegraph-Cable Company of Massachusetts and American Radio Telegraphists Association, 7 N. L. It. B. 444. 1024 DECISIONS OF NATIONAL LABOR RELATIONS BOARD venience of its salesmen, i. e., to obviate the inconvenience which the salesmen would be compelled to undergo if they were required to cover their territories from the relatively remote office at Newark. We may infer that a similar explanation applies for the separation of the Plaza office salesmen from the Hicksville office salesmen. We see no reason why the convenience of the Plaza salesmen should not be considered in the conduct of their union as well as their business activities. Moreover, we are not persuaded by the respondent's contention that the operations conducted at the Plaza office do not characterize it as a separate enterprise. Even if we accept the respondent's con- tention that the; activities of said office are in fact dependent for final control and coordination upon the general sales manager at the Newark office, the record shows that the Plaza office has its own man- agement hierarchy, including two sales managers of the draught and bottle divisions, respectively, and its salesmen have little or no direct contact in the ordinary course of their employment with the salesmen or management officers of the other offices. In view of all the circumstances, we find that the geographical and management considerations raised by the respondent are not suf- ficient to preclude a finding that the unit sought by the Union is appropriate. At the hearing the respondent, while contending that the unit sought by the Union was inappropriate, urged that, in the event such a unit should be found appropriate, supervisors, having no final power to hire and discharge and who are engaged in selling, should be included in the unit. These employees supervise the work of the salesmen and have the power to recommend discharges. We shall therefore exclude them from the approprite unit. We find that the draught and bottle-beer salesmen in the respond- ent's Plaza office, exclusive of sales managers , assistant sales man- agers, supervisors, and clerical employees, constitute a unit appro- priate for purposes of collective bargaining, and that said unit will insure to employees of the respondent the full benefit of their right to self-organization and to collective bargaining and otherwise effectuate the policies of the Act. IX. THE DETERMINATION OF REPRESENTATIVES In its amended petition, the Union claims to represent 1,8 out of a total of 32 draught and bottle- beer salesmen at the respondent's Plaza office. However, the record does not contain sufficient evidence to form the basis for a certification of the Union as representative of such employees. We therefore find that the question concerning P. BALLANTINE & SONS' 1025 representation of employees at the respondent's Plaza office can- best be resolved by means of an election by secret ballot. Since the respondent has, by engaging in various unfair labor practices, interfered with the exercise by its employees of the rights guaranteed them by the Act, we shall not now set the date of the election. We shall hold the election, however, upon receipt of information from the Regional Director that the circumstances per- mit a free choice of representatives, unaffected by the respondent's unlawful acts. At the time the date of the election is set we shall determine the pay-roll date as of which eligibility to vote shall be calculated. 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. Wholesale Licensed Alcoholic Beverage Salesmen's Union #20376-B, Beer Division, A. F. of L., is a labor organization, within the meaning of Section 2 (5) of the Act. 2. By discriminating in regard to the hire and tenure of employ- ment of James Kennedy, thereby discouraging membership in a labor organization, the respondent has engaged in and is engaging in un- fair labor practices, within the meaning of Section 8 (3) of the Act. 3. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in 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. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. 5. The respondent has not discriminated in regard to the hire and tenure of employment of "Kurt Knaust, Vincent McGuire, Lewis Swiller, Herbert Schach, John Kilcullen, Edward Happel, John Stendara, and Thomas Maguire within the meaning of Section 8 (3) of the Act. 6. A question affecting commerce has arisen concerning the repre- sentation of employees of the respondent, within the meaning of Section 9 (c) and Section 2 (6) and (7) of the Act. 7. The draught and bottle-beer salesmen at the respondent's Plaza office, exclusive of sales managers, assistant sales managers, super- visors, and clerical employees, constitute a unit appropriate for the purposes of collective bargaining, within the meaning of Section 9 (b) of the Act, 1026 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 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 respondent, P. Ballantine & Sons, Newark, New Jersey, and its officers, agents, successors, and assigns shall: 1. Cease and desist from : (a) In any manner discouraging membership in Wholesale Li- censed Alcoholic Beverage Salesmen's Union #20376-B, Beer Divi- sion, A. F. of L., or any other labor organization of its employees, by discriminating in regard to hire and tenure of employment or any term or condition of employment; (b) In any other manner interfering with, restraining, or 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 con- certed 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 to James Kennedy immediate and full reinstatement to his former or a substantially equivalent position without prejudice to his seniority or other rights and privileges; (b) Make whole said James Kennedy for any loss of pay he may have suffered by reason of the respondent's discrimination, by pay- ment to him of a sum equal to that which he would normally have earned as wages from the date of his discharge to the date of the offer of reinstatement, less his net earnings 6 during said period; provided that the respondent shall deduct from the back pay due said Kennedy a sum equal to that received by him for work done in Federal, State, county, municipal, or other work-relief projects dur- ing the period for which back pay is due him under this Order, and shall pay any such amount deducted to the appropriate fiscal agency of the Federal, State, county, municipal, or other government financ- ing such work-relief project; (c) Immediately post in conspicuous places throughout its office at 24-16 Ridge Plaza, County of Queens, New York City, herein- above referred to as the Plaza office, and maintain for a period of sixty (60) consecutive days, notices to its employees stating that the respondent will cease and desist in the manner set forth in para- graphs 1 (a) and (b), and will take the affirmative action described in paragraphs 2 (a) and (b) of this Order, that the respondent's em- 6 See footnote 3, supra. P. BALLANITIN1 & SONS' 1027 ployees are free to become or remain members of Wholesale Licensed Alcoholic Beverage Salesmen's Union #20376-B, Beer Division, A. F. of L., and that the respondent will not discriminate against any employee because of membership or activity in that organization; (d) Notify the Regional Director for the Second 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, as amended, in so far as it alleges that the respondent discriminated in regard to the hire and tenure of employment of Kurt Knaust, Vincent McGuire, Lewis Swiller, Herbert Schach, John Kilcullen, Edward Happel, John Stendara, and Thomas Maguire, within the meaning of Section 8 (3) of the Act, be, and the same hereby is, dismissed. DIRECTION OF ELECTION By virtue of and pursuant to the power vested in the National Labor Relations Board by Section 9 (c) of the National Labor Rela- tions Act, 49 Stat. 449, and pursuant to Article III, Section 8, of National Labor Relations Board Rules and Regulations-Series 2, it is hereby DIRECTED that, as part of the investigation ordered by the Board to ascertain representatives for collective bargaining with P. Ballan- tine & Sons, Newark, New Jersey, an election by secret ballot shall be conducted under the direction and supervision of the Regional Director for the Second Region, acting in this matter as agent for the National Labor Relations Board and subject to Article III, Sec- tion 9, of said Rules and Regulations, at such time as the Board shall in the future direct, among all the draught and bottle-beer salesmen employed by the respondent, P. Ballantine & Sons, at its office at 24-16 Ridge Plaza, County of Queens, New York City, ex- cluding sales managers, assistant sales managers, supervisors, and clerical employees, to determine whether or not they desire to be represented by Wholesale Licensed Alcoholic Beverage Salesmen's Union #20376-B, Beer Division, A. F. of L., for the purposes of collective bargaining.