Essex Wire Corp.

J In the Matter of ESSEx WIRE CORPORATION and UNITED ELECTRICAL, RADIO AND MACHINE WORKERS OF AMERICA, LOCAL No. 737 Case No. C-10930.=Decided January 5, 1940 ' Electric Wire Maufacturing Industry-Collective Bargaining : Charges of refusal to bargain collectively dismissed ; divergent views of Board members ; (1) (Madden ) where an impasse has been reached in the negotiations between an employer and a union concerning the status of a contract , the employer is not compelled by the Act to discuss substantive terms with the union; (2) (Leiserson ) where an impasse which arose in negotiations between an em- ployer and a union involved a difference of opinion as to the interpretation or application of a contract, there was no refusal to bargain ; (3) (Smith, dissent- ing) whether or not an employer is under contract with the representatives of his employees he is obligated to bargain collectively with such representatives concerning substantive terms. Mr. Earl R. Cross and Mr. Harold A. Crane fiield, for the Board. Cook, Smith, Jacobs d Beake, by Mr. Sydney A. Jacobs, Mr. Walter. F. Probst, and Mr. Grant L. Cook, of Detroit, Mich., for the re- spondent. Mr. I. W. Ruskin, of Detroit, Mich., and Mr. Julius Emspak, of New York City, for the Union. Mr. Langdon West, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly filed by United Electrical,. Radio and Machine Workers of America, Local No. 737, herein called the Union, the National Labor Relations Board, herein called the Board, by the Regional Director for the Seventh Region (Detroit,, Michigan), issued its complaint dated September 27, 1938, against Essex Wire Corporation, Highland Park, Michigan, herein called the respondent, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting commerce within the meaning of Section 8 (1) and (5) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. 19 N. L. R. B., No. 12. 51 52 DECISIONS OF NATIONAL LABOR RELATIONS BOARD A copy of the complaint accompanied by notice of hearing was duly served upon the respondent and the Union. Concerning the unfair labor practices , the complaint alleged, in substance, ( 1) that all employees engaged in production , maintenance, shipping, and receiving at the respondent's plant in Highland Park, Michigan , herein called the Highland Park plant, exclusive of office and clerical employees, watchmen, timekeepers , and those engaged in a supervisory capacity , constitute a unit appropriate for the pur- poses of collective bargaining within the meaning of the Act; that on or about June 30, 1938 , a majority of the employees in the afore- said unit had designated the Union as their collective bargaining representative ; that although the Union on or about April 28, 1938, had requested the respondent to bargain collectively with respect to a proposal to modify an agreement entered into by the Union and the respondent on November 3, 1937 , or, in the alternative , to formu- late a new agreement concerning conditions of employment, the re- spondent, on or about June 30, 1938 , and thereafter, refused to bargain collectively with the Union concerning modifications of the aforesaid agreement or formulation of a new agreement ; and (2) that the respondent , by the aforesaid refusal to bargain collectively, and by warnings, threats, dissemination of false reports about activ- ities of the Union, and by other acts , interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. On October 3, 1938, the respondent filed its answer to the com- plaint, in which it admitted the allegations concerning the nature and scope of its business but denied the allegations of unfair labor practices . On September 29, 1938, the said Regional Director duly notified the respondent and the Union that the hearing had been postponed from October 3 to October 4, 1938. Pursuant to notice, a hearing was held from October 4 to 28, 1938, inclusive, before J. J. Fitzpatrick , the Trial Examiner duly desig- nated by the Board. The Board, the respondent, and the Union were represented by counsel and participated in the hearing. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing upon the issues was afforded all parties. During the course of the hearing on October 4, 1938, the respondent served upon counsel for the Board and filed its written motion to ' dismiss certain portions of the complaint. The Trial Examiner reserved his ruling on the motion . Since the respondent has entered into the stipulation hereinafter set forth, it is not neces- sary for the Board to rule on this motion. During the course of the hearing on October 28, 1938, over the objection of the Union, the Trial Examiner granted the motion made ESSEX WIRE CORPORATION 53 by counsel for the Board to strike from the complaint the allega- tions contained in paragraphs 5 and 6 1 and all references to para- graph 5 contained in paragraphs 11, 12, and 13. His ruling is hereby affirmed. Thereupon counsel for the respondent read into the record without objection the following stipulation with counsel for the Board: Mr. Examiner, the Respondent's attorney stipulates upon the record that the Essex Wire Corporation of Highland Park, Michigan, is a Michigan corporation engaged in the manu- facture and sale of bare and insulated wire and automotive harnesses or assembles; that the principal raw materials used in the production of its. wire products are copper, rubber, wire, and tin; that the value of the raw materials used during the year ending August 31, 1938, was in excess of $500,000.00; that approximately sixty per cent of the raw materials used came from outside the State of Michigan; that the total sales in terms of dollars and cents of the Highland Park plant during the year ending August 31, 1938, was in excess of $1,000,000.00, and approximately eighty per cent of the finished products were sold within the state. of Michigan and that the remaining twenty per cent of such products were sold and shipped to purchasers situated outside the State of Michigan; that the Essex Wire Corporation has warehouses in Chicago, St. Louis, Atlanta, Philadelphia, and Los Angeles. Respondent further stipulates that the Essex Wire Corpora- tion of Highland Park Michigan, is engaged in interstate commerce. Respondent further stipulates that United Electrical, Radio and Machine Workers of America, Local 737, the organization referred to in the Complaint in this proceeding is a labor organ- ization within the meaning of Section 2, Subsection 5, of the National Labor Relations Act, as alleged in the Complaint. The Respondent further stipulates that for the purpose of permitting a determination by the National Labor Relations Board and any court having jurisdiction of this proceeding, that on June 30th, 1938, a majority of the employees within an appro- priate unit in the Highland Park plant of the Essex Wire Cor- poration, referred to.in the complaint herein, had designated the aforementioned United Electrical, Radio, and Machine Workers of America, Local 737, as their representative for the purpose of collective bargaining. These paragraphs alleged violations of Section 8 (1) of the Act. 283030-41-vol. 19-5 54 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Respondent further stipulates that the said appropriate unit consisted of the following employees : All production and maintenance employees engaged in the Highland Park plant of the Respondent, also including factory checkers and working supervisors, and specifically excluding office and clerical employees, watchmen, timekeepers, -outside truck drivers,. time study employees, plant protection men, sal- aried employees, foremen, and assistant foremen. Respondent limits the above stipulation, however, in that noth- ing contained in the foregoing stipulation shall be taken as a consent to the making of any finding by the Board that the Re- spondent has engaged in or is engaging in any unfair labor prac- tice as defined in the National Labor Relations- Act or to the entry or making of any order by the National Labor Relations Board against this Respondent. Respondent further reserves its right to be heard in argument upon this. agreed record, to file briefs, and generally to have the benefit of all proceedings now or hereafter usually provided for the determination of any questions which may arise under this agreed record and to raise and present before the National Labor Relations Board or any court having jurisdiction of this case any and all arguments and contentions against the authority of the Board to make any order upon this agreed record and as to the scope and provisions of any order which the Board may make, including the contention that the National Labor Relations Board may not lawfully upon this agreed record require the Respondent to bargain with Local 737 without a new deter- mination by the Board of the representation of. Respondent's employees. Thereafter the Trial Examiner granted, over the objection of the Union, the motion made by counsel for the Board to strike from the record all testimony theretofore taken in the proceeding and all exhibits received in evidence with the exception of the Board's Ex- hibits Nos. 1, 2, 3, 4, 5, 6, 17, 17a to 17m, inclusive, and 28.2 His ruling is hereby affirmed. The Board's Exhibit No. 17 provides as follows : By mutual agreement and with the suggestion and consent of the Trial Examiner in order to save time in the presenting 2 Exhibit No. 1 Is the complaint, Exhibit No . 2 is the affidavit of service of the com- plaint, Exhibit No. 3 is the notice of postponement of the hearing, Exhibit No. 4 is the affidavit of service of notice of postponement, Exhibit No. 5 is a copy of the Board's Rules and Regulations , Exhibit No. 6 is the respondent 's answer, Exhibit No. 17 is the stipulation of facts, Exhibits Nos. 17a to 17m, inclusive , consist of correspondence between the parties and a copy of the agreement entered into by the parties on Novem- ber 3, 1937, and of the contract proposed by the Union , and Exhibit No. 28 is the Board's order designating the Trial Examiner in this proceeding. ESSEX WIRE CORPORATION 55 of the issues involved in this case on the main point at issue in the case, the UNITED ELECTRICAL, RADIO AND MA- CHINE WORKERS OF AMERICA and LOCAL 737 (herein- after sometimes referred to as the "Union"), ESSEX WIRE CORPORATION (hereinafter sometimes referred to as the "Company"), and EARL R. CROSS, attorney for the NA- TIONAL LABOR RELATIONS BOARD, hereby stipulate and agree upon the following facts and consent that they may be made a part of the record in this case with like effect as if the facts herein stipulated were offered in evidence by any of the parties to this stipulation : That following conferences and negotiations between the Com- pany and the Union, beginning on October 25, 1937, and con- tinuing thereafter from time to time up to and concluding No- vember 3, 1937, an agreement was executed and delivered between the Company and the Union on November 3, 1937; the agreement being also executed by an Employes Committee of Local 737 of said Union, the Employes Committee consisting of twenty- one (21) employes of the Company, members of said Union. The agreement was about the, date of its execution and delivery between the Company and the Union ratified and approved by the employes of the Company who were members of the Union (an original copy of said agreement being identified and offered in evidence in this case under this stipulation and hereinafter sometimes referred to as the "agreement"). Article VII, Section 15, of said agreement provides as follows : "SECTION' 15. This agreement shall remain in full force and effect until July 1, 1938, and shall continue thereafter for a period of one year thereafter unless written notice be given either by the Union or the Company to the other not less than 60 days prior to the expiration of the present period or. the renewal period of its desire to cancel this agreement. If any, such notice is given by either party, negotiations shall begin not less than 30 days after the receipt of such notice by the party to whom, it is given." Under date of April 28, 1938, a letter addressed to Mr. A. E. Holton, Essex Wire Corporation, on the letterhead of United Electrical, 'Radio & Machine Workers of America, Local 737, signed by James Neuman,. Business Agent, was sent to the Com- pany, which letter in full stated as follows : "In compliance with Article VII, Section 15, in the contract we have with your Company, the negotiating committee, com- posed of employes of your company, and their Union repre- sentative, do hereby request a date mutually agreed upon, at the 56 DECISIONS OF NATIONAL LABOR RELATIONS BOARD earliest possible time to negotiate a new contract between your Company and the Union." Under date of May 12, 1938 , a letter was sent by the Company to the Union replying to the letter of April 28th (a copy of`which letter is being offered in evidence in this case under this stipu- lation). After the sending of the letter of May 12, 1938, a conference concerning the subject matter of the letters of April 28th and May 12th was arranged between the Company and the Union representatives, which conference was held under date of May 31, 1938, at the office of Mr. Grant L. Cook, attorney for the Company. On June 10, 1938, Mr. Canavan , the Personnel Director, held a meeting with Mr. Neuman and the Union Committee at which time the Union Committee advised Mr. Canavan in substance of the provisions and conditions that they desired to have in a new agreement. Mr. Canavan asked Mr. Neuman to present the provisions that he suggested in writing, which Mr. Neuman within a few days presented in the form of a proposed contract, which contract is being offered in evidence under this stipula- tion. At the time of the meeting between Mr . Canavan and the Committee and Mr. Neuman and the presentation of the pro- posed contract , the question later referred to in this stipulation as to whether or not the agreement of November 3, 1937, was to be cancelled was not discussed and the question had not been raised before except the reference made to it in the letter to the Union dated May 12, 1938. At the meeting held on May 31 , 1938, and by subsequent ar- rangements, a meeting was arranged which was held at the offices of the Company on June 30 , 1938, at which Executives of the Company, Mr. Cook, Mr. Neuman and the Shop Committee were present. At this meeting the Executives of the Company and Mr. Cook inquired of Mr. Neuman and the Shop Committee as to whether or not they had intended a cancellation of the agreement by their letter of April 28th. Mr. Neuman and the Shop Committee advised the Company that they did not intend to cancel the agreement by the letter of April 28, 1938. Mr. Neu- man and the Committee stated that they desired to have a meet- ing of their members to determine whether or not their member- ship desired to cancel the agreement of November 3, 1937. Mr. Neuman and the Committee stated that such a meeting would be held. and that Mr. Neuman and the Committee would report back to the Company the results of said meeting after it had been held. ESSEX WIRE CORPORATION 57 Under date of July 8, 1938, Mr. Neuman wrote a letter to Mr. Canavan of the Company and under date of July 13, 1938, the Company wrote a letter to Mr. Neuman replying to Mr. Neu- man's letter of July 8th. Under date of July 15, 1938, Mr. Neuman replied to the Com- pany's letter of July 13, 1938. Subsequent to the letter of July 15th conferences were held by telephone and otherwise between Mr. Canavan and Mr. Neuman and under date of July 26th the Company wrote Mr. Neuman arranging a conference between Mr. Neuman and his Committee and the Company and Mr. Cook for August 2, 1938. The -meeting was held on August 2, 1938. At this time Mr. Neuman and the Committee definitely stated that the letter of April 28, 1938, was not intended as a cancellation and that they did not desire to cancel the agreement, but that they did desire to make an agreement on the basis of the proposals furnished to Mr. Canavan a few days after June 10, 1938, and hereinbefore in this stipulation referred to, and if a new agreement could be arrived at that was in the opinion of Mr. Neuman and the Union a better agreement for the Union that they would at that time cancel the agreement of November 3, 1937, but if not the agreement of November 3rd would not be cancelled. The Com- pany's Executives and Mr. Cook advised Mr. Neuman and his Committee at that time that it was their opinion that the letter of April 28, 1938, was a notice of a cancellation of the agree- ment of November 3, 1937, and if it was agreed that the agree- ment of November 3rd was cancelled that they would proceed at once to negotiate for the making of a. new agreement with the Union. The Committee and Mr. Neuman stated that they definitely did not desire to cancel the agreement and the Com- pany's Executives and Mr. Cook then advised the Committee and Mr. Neuman that notwithstanding the fact that it was their opinion that the letter of April 28, 1938, did cancel the agreement they were willing as a matter of compromise to agree that it did not if that was the desire of the Union and if the letter of April 28, 1938, did not cancel the agreement of No- vember 3rd, then under the provisions of Section 15 of the agreement above referred to, the agreement of November 3, 1937,,'continued in effect until July 1, 1939, and that the Com- pany did not feel that it should be required with that agree- ment in existence to negotiate a new agreement as requested by the Union. Subsequent to August 2, 1938, and between that date and August 11, 1938, a conference was held at the office of Mr. Cook 58 DECISIONS OF NATIONAL LABOR RELATIONS BOARD between Mr. Neuman, Mr. Ruskin, attorney for the Union, and members of the Committee. Mr. Cook on behalf of the Com- pany continued to take the position that he and the Company had taken at the meeting of August 2nd and the Union reiterated the position that it had taken at the meeting of August 2nd. At the termination of the meeting, Mr. Ruskin, attorney for the Union, and the Committee advised Mr. Cook that they would give further consideration to the respective contentions of the Union and the Company on this subject and communicate with Mr. Cook. Under date of August 11th, Mr. Neuman wrote Mr. Cook a letter and sent a copy of this letter to the Company. The letter stated as follows : "The Employees of the Essex Wire Company, Highland Park, Michigan, through its representatives, the United Electri- cal, Radio and Machine Workers of America, Local #737, here- by make an unequivocal demand upon the Essex Wire Company to negotiate a new contract covering wages, hours, working con- ditions, etc, etc., between the Company and its employes. We further demand that a date suitable to both sides be arranged within five days. "A refusal on your part to accede to this demand will be con- sidered by us to be a violation of Section 8, Subsection 5 of the National Labor Relations Act." At the time of the conference on August 2nd the opinion of an attorney for the National Labor Relations Board at Detroit was asked concerning the subject matter in dispute and after the receipt of the letter of August 11th, Mr. Cook communicated again with the National Labor Relations Board at Detroit and a number of discussions were had between Mr. Cook and the National Labor Relations Board with reference to the dispute, which resulted in a letter being written by Mr. Cook to Mr. Neuman under date of September 2, 1938, and the sending of a copy to Mr. Cross, attor- ney for the National Labor Relations Board in Detroit. In this letter, the Company, through Mr. Cook, stated its position with reference to the dispute. Under date of September 3, 1938, Mr. Morris of the Local Union wrote a letter to Mr. Cook replying to Mr. Cook's letter of September 2nd. Conferences followed between Mr. Cross and Mr. Cook concern- ing the matter and under date of September 8th Mr. Cross sent a letter to Mr. Cook advising him of the Union's position. Under date of September 14th Mr. Cook replied to Mr. Cross' letter of September 8th; conferences having been held between Mr. Cross and Mr. Cook and the National Labor Relations Board at Detroit between September 8th and September 14th and the letter of Sep- ESSEX WIRE- CORPORATION 59 tember 14th confirming understandings that had been had between Mr. Cook and Mr. Cross. It is stipulated and agreed that- all the letters and documents in this stipulation referred to may under this stipulation be re- ceived and accepted in evidence without objection by any of the parties joining in this stipulation. This stipulation shall not prevent any of the parties to it from offering additional evidence on the subject matter of the stipula- tion not inconsistent with the facts stated in the stipulation. Thereafter, the Trial Examiner denied the Union's motion to re- instate paragraphs 5 and 6 of the complaint and the testimony and exhibits which had been stricken from the record. His ruling is hereby affirmed. At the close of the hearing the Trial Examiner stated for the record that by agreement of the parties the case would be transferred to the Board without the filing of an Intermediate Report by the Trial Examiner acid- that the parties would be granted an op- portunity to file briefs and present oral argument before the Board. On November 4, 1938, the Board issued and served upon the parties its order transferring the proceeding to the Board, directing that no Trial . Examiner's Intermediate Report be issued, directing the issu- ance of Proposed Findings of Fact, Proposed Conclusions of Law, and a Proposed Order, and granting the parties permission to file exceptions, to request oral argument before. the Board, and to request permission to file briefs with the Board. On March 7, 1939, the Union filed with the Board a document in which it withdrew its objections to the Trial Examiner's rulings strik- ing the a-fore-mentioned paragraphs from the complaint and the afore- mentioned testimony and exhibits from the record and denying the Union's motions to reinstate the aforesaid paragraphs of the complaint and the aforesaid testimony and exhibits. On July 8, 1939, the Board issued its Proposed Findings, Proposed Conclusions of Law, and Proposed Order in the case, in which it found that the respondent had refused to bargain collectively with the Union on August 2, 1938, and thereafter, and ordered the respondent to cease and desist from such practice and, affirmatively, to bargain collectively with the Union upon request. The Proposed Findings, Proposed Conclusions of Law and Proposed Order were served on the parties who were afforded an opportunity for the filing of exceptions and briefs and for oral argument. On July 18, 1939, the respondent filed its exceptions to the Proposed Findings, Proposed Conclusions of Law, and Proposed Order, and also a written motion to reopen the record in the case to take additional evidence in order to determine the proper bargaining representatives of the respondent's employees. On August 7, 1939, the Union filed an answer to the respondent's motion 60 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to reopen the record. The motion is hereby denied. On August 22, 1939, National Electrical & Wire Workers of America, a labor organi- zation claiming to represent a majority of the respondent's employees, filed a written motion to intervene in the case. The motion is hereby denied. On the same date oral argument was had before the Board. The respondent and the Union participated, the respondent appearing by counsel, the Union by an officer of its parent body. The Board has considered the exceptions to the Proposed Findings, Proposed Con- clusions of Law, and Proposed Order, and the briefs and oral argu- ment in support thereof, and save 'as they are inconsistent with the findings, conclusions, and order set forth below, hereby sustains them. Upon the record agreed to by the parties, the Board makes the following : FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT The respondent, a Michigan corporation with its plant at Highland Park, Michigan, is engaged in the manufacture and sale of bare and insulated wire and automotive harnesses and assemblies. The prin- cipal raw materials used by the respondent in the manufacture of its products are copper, rubber, wire, and tin. During the year ended August 31, 1938, the value of raw materials used was in excess of $500,000, 60 per cent of which came from points outside the State of Michigan. During the same year the respondent sold finished prod- ucts having a total value in excess of $1,000,000, 20 per cent of which were sold and shipped to purchasers located outside the State of Michigan. H. THE ORGANIZATION INVOLVED United Electrical, Radio and Machine Workers of America, Local No. 737, is a labor organization affiliated with the Congress of Indus- trial Organizations, admitting to membership, employees of the respondent at its Highland Park plant. III. THE UNFAIR LABOR PRACTICES A. The alleged refusal to bargain collectively 1. The appropriate unit In accordance with the terms of the stipulation, we find that all pro- duction and maintenance employees engaged in the respondent's High- land Park plant, including factory checkers and working supervisors, but specifically excluding office, clerical, time-study, and salaried em- ployees, watchmen, timekeepers, outside truck drivers, plant protection ESSEX WIRE CORPORATION 61 men, foremen, and assistant foremen, constitute a unit appropriate for the purposes of collective bargaining, and that such 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. 2. Representation by the Union of a majority in the appropriate unit We find that on June 30, 1938, a majority of the employees at the respondent's Highland Park plant in the aforesaid unit designated the Union as their representative for the purposes of collective bargaining. By virtue of Section 9 (a) of the Act, therefore, the Union was the exclusive representative of all employees in the said unit for the pur- poses of collective bargaining with respect to rates of pay, wages, hours of employment, and other conditions of employment. 3. The alleged refusal to bargain The complaint alleges that on or about June 30, 1938, and at all times since, the respondent refused to bargain collectively with the Union concerning either the modification of a written contract, which had been entered into by the respondent and the Union, or formula- tion of a new contract. The pertinent facts contained in the record agreed upon by the parties are set forth below. On November 3, 1937, the respondent entered into a written contract, herein called the Agreement, with the Union for its members concern- ing certain conditions of employment at the respondent's plant .3 On April 28, 1939, the Union sent the respondent the following letter % In compliance with Article VII, Section 15, in the contract we have with your Company, the negotiating committee,' composed of employes of your company, and their Union representative, do hereby request a date mutually agreed upon, at the earliest possible time to negotiate a new contract between your Company and the Union. On May 12, 1938, the respondent replied by a letter, stating in part as follows : ... Your notice, in our opinion, is not in conformity with the requirement of Section 15 and no other notice having been. given 8 Article VII, Section 15, of the Agreement provides as follows : This agreement shall remain in full force and effect until July 1, 1938, and shall continue thereafter for a period of one year thereafter unless written notice be given either by the Union or the Company to the other not less than 80 days prior to the expiration of the present period or the renewal period of its desire to cancel this agreement. If any such notice is given by either party, negotiations shall begin not less than 30 days after the receipt of such notice by the party to whom it Is given. 62 DECISIONS OF NATIONAL LABOR RELATIONS BOARD by either of us, it is our opinion, without advice of counsel, that the notice is not effective. However, without waiving the con- tention set out in this letter, we shall be pleased to meet with you and the, Committee sometime before the end of this month ., . . On May 31 and on June 10, 1938, representatives of the Union met with the respondent's representatives and its attorney, Grant L. Cook, for the purpose of discussing the Union's proposals, and a few days after the second conference, in compliance with the request of the respondent, the Union presented its proposals in the form of 'a written contract. At a conference held on June 30, 1938, the respondent asked the Union's representatives whether or not the Union's letter of April 28, was intended as a notice of cancellation of the Agreement. The Union's representatives replied that the letter of April 28 was not intended as such, but that the Union would call a meeting of its mem- bers to determine whether or not they wished to cancel the Agreement. On July_ 8, 1939, the Union informed the respondent by letter, that its members had voted not to cancel the Agreement. On July 13, 1938, the respondent, in a letter to the Union, stated that the Union's letter of July 8 did not indicate clearly the action taken at the union meeting; that if the. Union's letter of April 28 did not cancel the Agreement, it automatically continued in force until July 1, 1939; and that, there- fore, there was no reason for negotiating another contract between the respondent and the Union. The Union in a letter to the respondent on July 15, 1938, reiterated its contention that its letter of April 28 was not intended to cancel the Agreement, and stated further that it desired to meet with the respondent to consider amending the Agree- ment or drafting a new contract. On August 2, 1938, representatives of the respondent and-of the Union held a conference at which the Union's representatives again stated that the Agreement was not canceled by the letter of April 28, but that the Union desired to make a new agreement, and that if a new agreement could be arrived at that was in the opinion of the Union a better agreement for the Union, the Union would at that time cancel the Agreement, but if not the Agreement would not be canceled. The respondent maintained that the Agreement had been canceled by the letter of April 28 and offered to negotiate a new contract at once if the Union would concede that the Agreement had been canceled. The respondent stated also that, as a compromise, it would consider that the Agreement had not been canceled, but added that under these circumstances it would not be required to negotiate a new contract. On August 11, 1938, the Union in a letter to Cook, demanded that the respondent set a date on which it would meet with the Union for the purpose of negotiating a new contract. In a letter to the Union, O 63 ESSEX WIRE CORPORATION dated September 2, 1938, Cook again outlined the respondent's posi- tion and offered in behalf of the respondent to allow the Union to decide the status of the Agreement. The next day the Union in another letter to Cook stated again that its letter of April 28, notwith- standing the reference contained therein to Section 15 of the Agree- ment,' was not a notice of cancellation but a request for modification of the Agreement; and that the respondent was required under the Act to negotiate with the Union concerning a new contract. . Early in August 1938, Cook, the respondent's attorney, began a series of conferences with Earl R. Cross, an attorney employed in the Board's Seventh Regional Office. The Union's representatives also conferred with Cross. On September 8, 1938, Cross, in a letter to Cook, summarized the Union's position as outlined above. Cook, in replying to Cross by letter on September 14, 1938, again set forth the respondent's-position and added that-if the Union would state in writ- ing that the Agreement had been cancelled by its letter of April 28, the respondent would negotiate a new contract. In essence, the respondent's position is that the Agreement was canceled by the Union's letter of April 28; that the respondent was willing to negotiate a new contract with the Union provided the Union would state in writing that the Agreement had been canceled; that although the respondent thought that the Agreement had been can- celed, it had indicated its willingness to consider the Agreement as being in force, but that if the Agreement was in force, by virtue of Section 15 of the Agreement, it would not be required under the Act to discuss with the Union modifications in the Agreement or the sub- stitution therefor of a new contract. The Union maintains that the Agreement was not canceled by its letter of April 28 but that under the Act the respondent is required to discuss with it proposed amend- ments to the Agreement. Assuming without deciding that, contrary to the respondent's con- tention, the existence of a valid contract does not relieve an employer from his obligation to bargain collectively under the Act with respect to proposed modifications of the contract, the facts here presented do not establish a refusal to bargain. The respondent in this case took the position that the Agreement was no longer in force. In taking this position, the respondent acted in good faith and without intention to evade its obligations under the Act. The Union took the position that the contract was still in effect. The respondent was tinder a duty to bargain collectively with the Union on the issue of whether or not the Agreement remained in effect. The record discloses that respond- ent did, over the course of some months, bargain with the Union in 4 See footnote 3, supra. P 64 DECISIONS OF NATIONAL LABOR RELATIONS BOARD good faith upon this issue and that an impasse was eventually reached. The issue before the Board now is the narrow one of whether or not the respondent was compelled to go further and discuss substantive terms with the Union despite the disagreement as to the status of the contract. Since there was no agreeement as to whether the parties were bar- gaining for a new contract or whether they were bargaining for modification of the existing contract , there was no common ground upon which further bargaining could continue . Quite different fac- tors would be involved, and entirely different considerations would govern, in the different situations . Since the respondent's position with respect to the contract was reasonable and was taken in good faith, we are unable to hold that its refusal to proceed with further bargaining until the fundamental legal issue was resolved consti- tuted a refusal to bargain within the meaning of Section 8 (5) of the Act. We, therefore, find that the respondent has not refused to bargain collectively with the Union, within the meaning of the Act, and shall dismiss the complaint. Upon the basis of the foregoing findings of fact and upon the entire record in the proceeding, the Board makes the following : CONCLUSIONS OF LAW 1. The operations of the respondent , Essex Wire Corporation, Highland Park, Michigan, occur in commerce , within the meaning of Section 2 (6) of the Act. 2. United Electrical, Radio and Machine Workers of America, Local No. 737, is a labor organization within the meaning of Sec- tion 2 (5) of the Act. 3. The respondent has not refused to bargain collectively with the representatives of its employees , thereby engaging in an unfair labor practice, within the meaning of Section 8 ( 5) of the Act. 4. The respondent has not, by a refusal to bargain collectively, interfered with, restrained , or coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act, within the meaning of Section 8 (1) of the Act. ORDER Upon the basis of the above findings of fact and conclusions of law, and pursuant to Section 10 (c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that tho complaint against Essex Wire Corporation , Highland Park, Mich- igan, be, and it hereby is, dismissed. ESSEX WIRE CORPORATION 65 MR. WILLIAM M. LEISERSON, concurring : We have here no question of a refusal to bargain collectively but a simple and typical dispute as to the meaning or application of a provision in an existing collective bargaining agreement. The dis- puted provision is Section 15 of Article VII, reading as follows : This agreement shall remain in full force and effect until July 1, 1938, and shall continue thereafter for a period of one year thereafter unless written notice be given either by the Union or the Company to the other not less than 60 days prior to the expiration of the present period or the renewal period of its desire to cancel this agreement. If any such notice is given by either party, negotiations shall begin not less than 30 days after the receipt of such notice by the party to whom it is given. In compliance with this provision the Union addressed a letter to the respondent requesting a conference "to negotiate a new contract; between your Company and the Union." The respondent replied as follows : Article VII, Section 15, of our contract referred to in your letter provides that the agreement shall remain in full force and effect for one year after July 1, 1938, unless written notice be given either by the Union or the Company to the other not less than sixty (60) days prior to the expiration of the present period or the renewal period, of its desire to cancel this agree- ment. Your notice, in our opinion, is not in conformity with the re- quirement of Section 15 and no other notice having been given by either of us, it is our opinion, without advice of counsel, that the notice is not effective. However, without waiving the con- tention set out in this letter, we shall be pleased to meet with you and the Committee sometime before the end of this month . . . Several conferences were held, and the dispute as to the meaning; of Section 15 was made plain by written communications between the parties. The Union wrote to the respondent : The letter of April 28, 1938, requesting a meeting for the pur- pose of negotiating a new agreement did not imply or intend in any manner whatsoever the cancellation of the old contract. Only in the event that a new contract, more suitable in its terms had been arrived at, would the. old contract be subject to can- cellation. Mr. Cook, your legal advisor, at a meeting of June 30, 1938, held on the premises of your plant, stated unequivocally 66 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that in his opinion the letter of April 28, 1938, '.was not a notice of cancellation. The respondent replied : As we have previously advised you, and, as we advised Mr. Cross this morning, we are willing, notwithstanding the fact that we think your letter of April 28th amounted to a cancellation, to have you determine at this time whether or not it did amount to a cancellation. If you state that it was your intention that the notice was a cancellation, then we will begin negotiations for a new contract within thirty (30) days, as provided by Section 15 of the contract. If you claim it was not a cancella- tion notice, then, of course, the present contract continues until July 1, 1939.. . Clearly this dispute involves a difference of opinion as to the meaning of Section 15 of the agreement. which had been duly nego- tiated by collective bargaining, was agreed upon, and signed by both parties. With respect to this difference there was no refusal to bar- gain; the parties met and discussed the matter at a number of con- ferences. They disagreed because the union wanted to negotiate a new contract without cancelling the old one, while the employer claimed that the old one automatically renewed itself by agreement of the parties if no notice of desire to cancel is given. Controversies of this kind, arising out of the interpretation or application of agreements, are more numerous than any other class of labor disputes, and to avoid them most agreements provide for adjustment of arbitration machinery. 'Congress has set up the Na- tional Railroad Adjustment Board for the determination of just such issues in the railroad industry. (Section 3, Railway Labor Act.) Any attempt to handle such disputes about the meaning of agree- ments by.charges and complaints of unfair labor practices can only result in breaking down collective bargaining and the administration of agreements between employers and unions. It was clearly not the intention of Congress that differences as to the interpretation or application of agreements should be treated as unfair labor practices under Section 8 of the Act. I am of the opinion, therefore, that the complaint should be dismissed. MR. EDWIN S. SniiTH, dissenting : I am of the opinion that under the facts here disclosed the respond- ent refused to bargain collectively with the Union within the mean- ing of Section 8 (5) of the Act. If the Agreement was cancelled it is obvious that the respondent was under an obligation to bargain collectively with respect to, a new agreement. On the other hand, if ESSEX WIRE CORPORATION 67 the Agreement remained in effect, the respondent was under an obli- gation to bargain collectively with respect to proposed modifications of the existing contract.6 The respondent contends here that a legal barrier to further bar- gaining existed by reason of the disagreement as to the status of the existing contract; and that until this legal issue was resolved there was no common ground upon which further bargaining could pro- ceed. The effect of the respondent's position is to condition the Union's right of collective bargaining upon the relinquishment of its legal rights with respect to the contract. Further, the respondent's position means that no collective bargaining can take place between the company and the Union until settlement of the legal issue, appar- ently through what might be long and costly litigation. Such a result is hardly consistent with the purposes of the Act that industrial disputes be settled through collective bargaining. Finally, no prat, tical obstacle to further bargaining existed. There was nothing to prevent the respondent and the Union from attempting to agree upon terms and conditions of employment. If in fact, agreement resulted, then the matters in dispute were solved and the purposes of the Act effectuated. If, on the other hand, no agreement could be reached the parties were still free to pursue whatever legal rem- edies existed under the contract. In view of all these considerations I am of the opinion that the respondent's conduct in refusing to discuss terms and conditions of employment with the Union constituted a refusal to bargain within the meaning of Section 8 (5) of the Act. 6 This interpretation of the statute finds specific sanction in the language of the Su- preme Court of the United States in National Labor Relations Board v. The Sands Manu- facturing Company, 306 U. S. 332, aff'g 96 F. (2d) 721 (C. C. A. 6), setting aside on other grounds Matter of The Sands Manufacturing Company and Mechanics Educational Society of America, 1 N. L. R. B. 546, where Mr. Justice Roberts, speaking for the Court, said : "The legislative history of the Act goes far to indicate that the purpose of the statute was to compel employers to bargain collectively with their employes to the end that employment contracts binding on both parties should be made. But we assume that the Act imposes upon the employer the further obligation to meet and bargain with his employes ' representatives respecting proposed changes of an existing contract and also to discuss with them its interpretation, if there is any doubt as to its meaning."