American Hair and Felt Co.

In the Matter of AMERICAN HAIR AND FELT COMPANY and TEXTILE WORKERS UNION OF AMERICA, LOCAL 99, AFFILIATED WITII THE CONGRESS OF INDUSTRIAL ORGANIZATIONS Case No. C-1142-Decided January 8, 1940 Felt Manufacturing Industry-Interference, Restraint, and Coercion: question- ing of employees by plant manager of respondent regarding their union affilia- tion ; raising wages of employees individually to head off organization ; disparaging union leaders ; attempting to induce union president to forego union activity-Discrimination: denial of reinstatement following unfair labor practice strike ; retention of strikebreakers ; discriminatory reductions in pay : charges of, dismissed-Reinstatement Ordered: displacement of employees hired after commencement of strike ; preferential list, to be followed in further rein- statement-Back Pay: to striking employees, from date of refusal to reinstate to date of offer of reinstatement; in case of one striker, reinstated, from date of refusal to reinstate until reinstatement-Unit Appropriate for Collective Bar- gaining: production and maintenance employees, excluding engineers, mechanics, watchmen, office, clerical and supervisory ; not contested-Representatives: proof of choice : application cards-Collective Bargaining: refusal to recognize representative as exclusive bargaining agency; refusal to enter mutually bind- ing agreement; absence of bona fide intent to reach agreement; breaking off negotiations during strike and reopening plant with strikebreakers ; remedial order : enter into a signed agreement, if understanding is reached. Mr. Frank A. Mouritser, for the Board. Mr. Elmer H. Howlett and Mr. Towson T. MacLaren, of Los Angeles, Calif., for the respondent. Mr. Carey McWilliams, of Los Angeles, Calif., and Mr. Alfred Udoff, of New York City, for the Union. Mr. Stanley D. Metzger, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly filed by Textile Workers Organizing Committee, Local 99, herein called the Union, the National Labor Relations Board, herein called the Board, by the Regional Di- rector for the Twenty-first Region (Los Angeles, California), issued its complaint dated October 28, 1938, against American Hair and Felt 19 N. L. R. B., No. 25. 202 AMERICAN HAIR AND FELT COMPANY 203 Company, Los Angeles, California, here called the respondent, alleg- ing that the respondent had engaged in and was engaging in unfair labor practices affecting commerce within the meaning of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the com- plaint and notice of hearing thereon were duly served on the respondent and the Union. . The complaint alleged in substance that on or about October 25, 1937, and at all times thereafter, the Union represented a majority of the respondent's employees in an appropriate unit; that the respond- ent had on or about October 25, 1937, and thereafter, refused to bar- gain collectively with the Union ; that the respondent had sought to discourage membership in the Union by questioning its employees about union affiliation and by making derogatory statements about the Union and its leaders; that the respondent had discriminatorily re- duced the pay of Richard B. Gatewood, Louise Geiger, Charles Geiger, H. W. Anderson, and Pernilla Yri because they joined or assisted the Union; that as a result of the foregoing, the Union, on or about July 11, 1938, instituted a strike against the respondent; that during the strike the respondent continued to refuse to bargain collectively with the Union; that on termination of the strike the respondent refused to reinstate 20 union members because of their union activity ; and that by these and other acts the respondent had interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed them by the Act. Pursuant to notice, a hearing was held in Los Angeles, California, on November 7, 8, 9, 14, and 15, 1938, before Thomas H. Kennedy, the Trial Examiner duly designated by the Board. The Board, the respondent, and the Union were represented by counsel and partici- pated in the hearing. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues was afforded all parties.. During the course of the hearing the Trial Examiner made various rulings on motions and on objections to the admission of evidence. He reserved ruling on the admissibility of union application cards. In his Intermediate Report he admitted them to.evidence. The Board has reviewed the rulings of the Trial Examiner and finds that no prejudicial errors were committed. The rulings are hereby affirmed. On January 23, 1.939, the Trial Examiner filed his Intermediate Report in which he found that the respondent had engaged in unfair labor practices substantially as alleged in the complaint. He recommended that the respondent cease and desist from engaging in such unfair labor practices and that it should, upon request, bargain collectively with the Union, offer reinstatement with back pay to the strikers who had been denied reinstatement, and make whole Richard 204 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Gatewood, Charles Geiger, Louise Geiger, H. W. Anderson, and Per- nilla Yri for loss of pay suffered by reason of a discriminatory reduction in their pay. On February 20, 1939, the respondent filed exceptions to the Intermediate Report. Oral argument before the Board was waived by all parties. We have considered the exceptions of the respondent, and except as followed herein, find them to be without merit. The Union filed a motion, dated July 17, 1939, supported by affidavit, requesting that thereafter in these proceedings it should be designated as "Textile Workers Union of America, Local 99" instead of as "Textile Workers Organizing Committee, Local 99." The motion was pursuant to formal action at a convention of the Textile Workers Organizing Committee on or about May 15, 1939. On October 16, 1939, the Board notified the parties that, unless sufficient cause to the contrary appeared by October 27, 1939, it would grant the motion. Cause not having been shown, on October 30, 1939, the Board granted the motion. Upon the entire record in the case, the Board makes the following : FINDINGS or FACT 1. TI-IF: BUSINI?SS OF THE RESPONDENT American Hair and Felt Company, a Delaware corporation, has its principal office in Chicago, Illinois, and maintains manufacturing establishments and sales offices in many cities throughout the country. Its factory involved in this proceeding, located at Los Angeles, Cali- fornia, processes animal hair and jute fiber and manufactures carpet cushion and insulating felt. About 60 per cent of all hair received by the Los Angeles plant is procured from sources outside the State of California. About 20 per cent of all shipments made by the Los Angeles plant are to destinations outside the State of California. In 1937 over 5,000,000 pounds of hair were used in production, over 2,000,00 pounds of which was imported from foreign countries. In its answer, the respondent admits that it is engaged in interstate commerce. About 30 production workers are regularly employed at the Los Angeles plant. II. THE ORGANIZATION INVOLVED Textile Workers Union of America, Local 99, affiliated with the Congress of Industrial Organizations, is a labor organization admit- ting to membership all production and maintenance employees of respondent at its Los Angeles plant, with the exception of engineers, Incchanics, watchmen, office, clerical, and supervisory employees. From January 1938 until May 1939, it was known as Textile Workers AMERICAN HAIR AND FELT COMPANY 205 Organizing Committee, Local 99. Prior thereto and at the time of its formation during the summer of 1937, the Union was known as "Warehouse Union, Local 38-134, International Longshoremen's Association." During the summer of 1937 International Longshore- men's Association in the Los Angeles area transferred its affiliation from the American Federation of Labor to the Committee for Indus- trial Organization,' and became known as International Longshore- men's and Warehousemen's Union. The I. L. W. U. then began organi- zation of textile workers in the Los Angeles vicinity in a union called "Textile Lodge of the International Longshoremen's and Warehouse- men's Union, Local 1-26," which absorbed the respondent's employees who had signed applications in "Warehouse Union, Local 38-134, In- ternational Longshoremen's Association." This Textile Lodge was a semi-autonomous group, which, it was understood by the I. L. W. U., would obtain a charter of its own when it reached sufficient strength. In January 1938 the Union obtained a charter as "Textile Workers Organizing Committee, Local 99," and continued to be known as such until on or about May 15, 1939. Although the name of the Union has changed several times, its identity has remained constant throughout. III. THE UNFAIR LABOR PRACTICES A. Interference, restraint, and coercion In July 1937 a number of employees at the Los Angeles plant became interested in joining a labor organization. Early in August several employees were instructed by Lyle Ehrhard, plant superin- tendent, to report to the office of Dwight E. Baum, the plant manager, for a meeting. Here the employees told Baum of their desire to organize, whereupon Baum stated that they either could form a committee of their own, without outside affiliation, or could join the A. F. L. or C. I. O. Baum offered them stenographic services and use of the respondent's premises for the purpose of holding an election. As it result, an election was held in which the majority of the employees voted to affiliate with the C. I. O. Thereafter, about August 1, 1937, leaflets were distributed outside the plant announcing a union meeting on August 14. The meeting subsequently was attended by 15 or 20 employees who there joined the Union. Shortly thereafter, Baum approached Richard B. Gatewood, a union member, and inquired why he had joined the Union. Gate- wood replied that he was not satisfied with his pay, and expected to get more money by joining the Union. A few days later, Baum approached each employee in the plant and asked him what he I Now Congress of Industrial Organizations. 206 DECISIONS OF NATIONAL LABOR RELATIONS BOARD thought his services were worth . The following day he called the employees into his office individually and there gave them wage increases . Baum took occasion to remind John C. Bates, a union member, that the raise did not result from any action by the Union, but was given on Baum's own initiative. About August 16 , Baum asked Fred Francis, a union member, if he was going to join a union , and the latter replied that he believed in "sticking together" with the other employees. Baum then stated that Francis "didn't have to belong to a union" to work in the plant. Baum had previously made the same observation to all of the employees at a "Safety Meeting." Baum inquired' if Francis wanted this made "any plainer," but Francis did not reply. During this period Baum interrogated other employees about their union affilia- tion. In December 1937 Baum approached William W. Johnke in the plant and inquired if Jolinke had derived any benefits from the Union. Baum stated at the time that the respondent had been get- ting along well "up to now" without a union and that there would have been no union in the plant had it not been for "a couple of fellows who were communistic ." Baum admitted at the hearing that this last remark referred to Gatewood and Anderson, leaders in the Union. During working hours on or about June 22, 1938, Baum approached Anderson , the president of the Union. According to Anderson, Baum remarked that Anderson could not serve "two bosses" and of- fered to refrain from applying a proposed general wage cut to Anderson if the latter would "forget" the Union . Baum's version of the conversation was that he offered to maintain Anderson's wage scale if he would get his production up. This offer Baum explained on the ground that Anderson actually had, admitted that he had been keeping production down for 3 years. Ehrhard, the plant super- intendent, testified that he had never received any complaints about Anderson's work, thus casting great doubt on Baum's version of the conversation . Under the circumstances , we find Baum in fact requested Anderson to "forget" the Union. From the foregoing it is clear that during the period of time cov- ered by the activities recited, Baum's conduct was designed to inter- fere with the employees' exercise of the rights guaranteed them by the Act. Baum's concern in offering the men stenographic services, and use of .the respondent's property, at the outset of their interest in self-organization provides the first indication of his desire to in- fluence the men. After his suggestion that the men might form an independent union had gone unheeded , Baum set out to attack the Union directly through the grant of individual wage increases, with the remark that the Union had no part in getting them for the men. AMERICAN HAIR AND FELT COMPANY 207 Contemporaneously, and thereafter, he inquired as to the union activity of a number of employees, and disparaged the Union and its leaders. ' His anti-union activity culminated in his attempt to induce Anderson to "forget" the Union by offering to maintain Anderson's wage scale in the face of a general wage cut. We find that by the foregoing acts and conduct the respondent has interfered with, re- strained, and coerced its employees in the exercise of their rights guaranteed in Section 7 of the Act. B. The refusal to bargain collectively 1. The appropriate unit The complaint alleges, and the Union contends, that all produc- tion and maintenance employees at the Los Angeles plant, excluding engineers, mechanics, watchmen, office, clerical, and supervisory em- ployees constitute a unit appropriate for the purposes of collective bargaining. The respondent does not contest the propriety of such unit and the Union is the only labor organization involved. Ac- cordingly, we find that the production and maintenance employees of the respondent at its Los Angeles plant, excluding engineers, me- chanics, watchmen, office, clerical, and supervisory employees con- stitute a. unit appropriate for the purposes of collective bargaining, and that such a unit insures to employees of the respondent the full benefit of their right to collective bargaining and otherwise effectu- ates the policies of the Act. 2. Representation by the Union of the majority in the appropriate unit On October 25, 1937, the respondent employed approximately 31 employees at its Los Angeles plant, while on July 11, 1938, there were 27 employees. There was introduced in evidence a number of appli- cations for membership in the Union. No question as to the au- thenticity of the cards has been raised. On the basis of these cards it appears that on October 25, 1937, the Union represented 27 of the 31 employees in the unit, while, on July 11, 1938, it represented 23 of the 27 employees in the unit. At no time from October 25, 1937, until the hearing herein, did the respondent contest the Union's claim to represent a majority of the employees. We find that on October 25, 1937, and at all times thereafter,. the Union was the duly designated representative of the majority of the employees in the appropriate unit for the purposes of collective bar- gaining and that pursuant to Section 9 (a) of the Act it was the exclusive representative of the employees in such unit for the purposes of collective bargaining with respect to rates of pay, wages, hours of employment, and other conditions of work. 208 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 3. The refusal to bargain The Union first met with Baum on September 20, 1937, and pre- sented to him a draft contract providing for recognition of the Union as the bargaining representative of its members. Baum questioned whether the Union represented a majority of the employees. When the Union offered to obtain certification by the Board, however, Baum said this would not be necessary. On his request, negotiations thereupon were suspended while he visited Chicago for several weeks. While in Chicago, Baum received from the Union a notarized list of its members, who constituted a majority of the employees. At a, second conference on October 21 Baum accepted this list as adequate proof of the Union's majority and never thereafter questioned the Union's status as representative of a majority of the employees. Negotiations between the parties took place'a.t a series of meetings on October 21, 25, 28, and November 1, 1937. At the outset of the negotiations, on October 21, the Union requested both a written con- tract and exclusive bargaining rights. Baum refused both requests. Baum asserts that he told the union representatives that the respond- ent "preferred not to sign a contract" and would prefer to embody any agreement with the Union only in a policy statement to be posted in the plant. According to Gatewood, a union representative, Baum made a flat statement that the respondent would not sign any contract with a union, and that the Union "might as well get that straight." Irrespective of the exact content of Baum's statement, it is clear that it resulted in the temporary withdrawal of the Union's request for a contract, and after October 25 negotiations proceeded on the basis of a "statement of policy" covering matters agreed to by the parties, which statement was to be posted in the plant. After October 25 the Union submitted two proposed policy state- ments. The first provided for recognition of the Union by the re- spondent "as, the collective bargaining agency for its employees." This was discussed at a meeting on October 28, during which Baum by interlineation changed the proposed statement so as to provide. for recognition of the Union as bargaining agent for its members only. Baum claims that he' did this only after discussion with the Union, and that the Union was not actually seeking exclusive recognition. Gatewood's testimony, supported by the terms of the proposed state- ment of policy, was that the Union specifically requested union recog- nition as bargaining agent for all employees. In view of the circum- stances, we are convinced that Gatewood's testimony on this matter is reliable. Gatewood further testified, and we find, that Baum re- fused to recognize the Union is exclusive bargaining agent for all the employees. Thereafter, the Union accepted "members only" recognition, as "satisfactory for the time being" and was accorded AMERICAN HAIR AND FELT COMPANY 209 such recognition in the policy statement finally agreed upon and posted in the plant on November 1, 1937. The statement of policy did not purport to be a contract but was merely a unilateral declaration by the respondent. It announced a seniority principle in lay-offs and a grievance committee of two em- ployee and two employer representatives.. It also provided that a week's notice of any lay-off should be given the employees affected, and that a union bulletin board should be maintained in the plant. The policy statement contained no provision regarding wages. Baum orally promised, however, not to change the wages then being paid. The grievance committee thus set up met but twice, in December. 1937 and January 1938, since the union representatives felt the respondent to be wanting in sincerity in the grievance negotiations. Despite his oral promise not to reduce wages, Baum, during Janu- ary, February, and March of 1938, reduced the wages of five individual union members. The reductions were made without con- sultation with the Union. Again in April 1938 a notice was posted in the plant, stating that the Company was losing money and that an adjustment of wages might be necessary if conditions failed to improve. On June 23, Baum posted a statement in the plant announc- ing a 10-per cent wage cut effective June 27, 1938. Without any notice being given pursuant to the policy statement, the plant then was shut down on June 25. In conjunction with the adoption of the wage cut, Baum approached Anderson, the union president, about June 22 and remarked that the latter could not "work for two bosses." Baum then offered to main- tain Anderson's wage rate without any reduction if Anderson would "forget" the Union. At about the same time Baum also inquired of Johnke, a prominent union member, as to how many union mem- bers there were. Johnke informed him there were "quite a few." On July 8, 1938, during the shut-down, the Union held a meeting to consider action with respect to the wage cut and to discuss once more the possibility of obtaining a collective bargaining contract with the respondent. , At the meeting dissatisfaction was expressed over the Union's past bargaining relations with the respondent since it was felt that Baum had been "stalling" throughout the negotiations, as evidenced by the refusal to grant exclusive recognition to the Union, and refusal to enter into a contract. A draft contract finally was approved by the meeting for presentation to Baum, and it was decided that a strike should be called if Baum continued "stalling." In order to discuss the wage cut and negotiate a contract, Gatewoocl thereafter arranged a conference between Baum and union repre- sentatives on the morning of July 11, the day the plant reopened. At the conference the union representatives initially requested a signed contract. Their proposed contract contained provisions for a 210 DECISIONS OF NATIONAL LABOR RELATIONS BOARD - closed shop, for an increase in wages over the scale existing prior to April 1, 1938, for continuance of the grievance procedure outlined in the November 1, 1937, policy statement, for notice-of lay-offs, and for a union bulletin board in the plant. Baum, however, stated that he would not enter into such a contract because parts of it affected "company policies," and necessitated his consulting the Chi- cago office.2 He expressed opposition to the grievance procedure on the ground that he wanted to handle grievances with the specific indi- viduals involved and not with the Union; refused to agree to give notice of lay-offs because it would "disrupt business," and refused to permit a union bulletin board in the plant. All three of these con- cessions had been granted to the Union in the November 1, 1937, policy statement. According to Gatewood, Baum also announced a determination never to recognize the Union as sole collective bargain- ing agency. Baum denied this. As noted above, he had in fact refused such recognition to the Union on October 25, 1937. In view of the circumstances, we are convinced that Gatewood's testimony is entitled to credence and that on July 11 Baum again refused to grant the Union recognition as exclusive representative of all the employees. At the close of the meeting Gatewood pointed out that the union members had decided to strike unless Baum "was willing to definitely bargain and work out some solution." Although Baum replied that he did not "give a damn" if they did strike, the union representatives decided to hold another union meeting to consider the advisability of striking. During the noon hour this -meeting was held and the men again voted to strike. The union representatives returned to Baum's office that afternoon, informed him of the vote, and again stated that unless Baum "was willing to bargain and arrive at some solution" the strike would take place immediately. Baum thereupon asked the union lead- ers to do him a personal favor and continue working for another day so that a particular order could be completed. When this was re- fused, Baum said that he would notify the Chicago office that the plant was closed due to the strike. That afternoon the strike actually commenced, and a picket line was established outside the plant. On the same evening Baum and Tannons, the respondent's office manager, called on Johiike and Francis, union members, at their homes and urged them to return to work the next day. Baum asked each man to give an "individual answer" and told Johnke that it would be assumed that he did not want to work for the respondent Gatewood testified that Baum claimed to lack authority to sign the contract. On July 14, Baum presented a letter to union representatives from the Chicago office author- izing him to bargain and sign any contracts subject to approval of the respondent's board of directors. AMERICAN HAIR AND FELT COMPANY 211 any longer if he failed to report to work. Both Johnke and Francis refused Baum's offer. On July 14, 1938, union representatives again met with Baum. The latter pointed out that it had been previously claimed by' the men that the respondent was not bargaining in good ,faith, and then pre- sented for consideration a contract dated July 12, 1938, which had been drafted at the respondent's Chicago office. This contract, while in terms granting the Union's request for exclusive representation of the employees and recognizing a seniority principle as a factor in lay-offs and rehiring, actually provided for individual settlement of grievances, and made no mention of the posting of -lay-off notices or of the maintenance of a union bulletin board in the plant. It also called for Maintenance of the wage reduction given in June. The union representatives, although pointing out that, apart from recogni- tioii of the Union, the proposed contract was considerably less favor- able to the Union than the policy statement, agreed to present it to the union members for consideration. In the discussion Bauln refused to enter into a closed-shop contract, but offered to make a small modifica- tion of the wage cut.3 At a meeting on July 16, 1938, the union members discussed the respondent's proposed contract and decided that it was unacceptable. As a result, a committee was instructed to press once more, for accept- ance by Baum, the contract submitted by the Union on July 11. On July 18, 1938, the committee met with Baum, who once more refused to consent to the system of presenting grievances which the Union had suggested, and which had been outlined in the policy statement. He again refused to post lay-off notices, on the ground that they would disrupt business, rejected an offer by the Union to accept the wage scale prevailing prior to the cut, reiterated his July 14 proposal of a partial reduction in the wage cut, and refused the request for a closed shop., Baum stated that the proposed company contract of July 1 t was the only contract he would sign. At the same meeting, according to Gatewood, one Thiers, whom Baum introduced as a former vice president of the respondent, spoke on the respondent's behalf and told the union representatives that he had been through eight strikes, that unions "always lose and al- ways will lose strikes," and that the Union had better accept Baum's proposal. Baum testified that Thiers was a stockholder who hap- pened to drop in on his way "up north," whereupon Baum asked him to sit in at the meeting. Baum did not deny Gatewood's version of 3 The wage cut announced June 23 provided for 6 cents an hour cut for employees receiving from 60-69 cents an hour, and 5 cents an hour cut for employees receiving 50-59 cents an hour. The offered modification reduced the cut to 5 cents an hour for employees receiving 60-69 cents an hour , and 3 cents an hour for employees receiving 50-59 cents an hour. 212 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Thiers' statements. The respondent, in its exceptions, denies that Thiers had authority to speak for it. We are unable to believe that Thiers' appearance at the important negotiations on July 18 was not premeditated. Baum, who introduced Thiers and was present throughout, by his conduct led the union representatives to believe reasonably that Thiers spoke with authority. Thus the respondent assumed responsibility for Thiers' statements. Following Thiers' statement, Baum announced that if the Union would accept his pro- posal the men mould return to work immediately, but that if they refused to accept it, he would no longer "fool" with them, and would reopen the plant. Baum added that it was time for his lunch, and that the union representatives had better leave. As a result the meet- ing broke up, with the understanding that the Union would recon• cider the proposals that Baum submitted.4 Without further negotiations being had, Baum on July 20, 1938, wired all strikers individually to return to work on July 21 at the reduced wages announced on June 23. When they failed to. return, Baum hired 28 strikebreakers through the Merchants' and Manufac- turers' Association in Los Angeles, and with the aid of armed guards hired for the purpose, he reopened the plant on July 22, 1938. Baum's reluctance in testifying to the circumstances surrounding the reopening of the plant on July 22, and his evasive replies to questions and faulty memory regarding said occurrences, greatly impair his credibility. About July 26, 1938, union representatives sought to resume nego• tiations but were told by Baum that he had little time to "fool" with them and had nothing further to say since the strikers' jobs had been filled. On August 2, union representatives offered to have the strikers return to work at the wage scale prevailing prior to June 27, but this suggestion was rejected by Baum on the ground that the respondent was then paying all it could afford. On August 5, 1938, the strike was terminated and the strikers sought reinstatement, which was denied. In considering whether the foregoing facts establish that the re- spondent has refused to bargain collectively with the Union, within the meaning of Section 8 (5) of the Act, it is noteworthy that very early in the negotiations the respondent refused to recognize the Union as exclusive bargaining representative for all the employees. As we have previously had occasion to state : "To meet and negotiate with a committee of employees while deliberately withholding union recognition does not satisfy the requirements of the Act. The para- mount importance of the effect of union recognition alone in securing * The modification of the wage cut and the July 14 company contract. AMERICAN HAIR AND FELT COMPANY 213 collective bargaining has been asserted repeatedly in our decisions." 5 At all times during the negotiations after October 25, 1937, the Union was the duly designated bargaining agency of the respondent's em- ployees, and it was incumbent upon the respondent's officials to recog- nize, and negotiate with, the Union as such exclusive agency. The re- spondent not only refused to recognize the Union as the exclusive bargaining agency of its employees, but, in addition, refused at the very outset of negotiations to enter into any agreement with the Union, preferring a unilateral policy statement which was revocable at any time. A refusal at the outset of negotiations to enter into an agree- ment mutually binding upon the parties is a refusal to bargain within the meaning of Section 8 (5) of the Act. Such a refusal, by denying a labor organization the normal fruits of its. endeavors, has a clear tendency to render the organization impotent and destroy it. Once having pressed the Union into renouncing temporarily its demand for a contract, moreover, the respondent ignored its own policy state- ment by closing down its plant and laying off its employees without giving them the required notice. Further, the respondent ignored its oral promise not to reduce wages by cutting the wage rates of five employees. These events, in addition to the factors above mentioned, indicate the respondent's intention not to accord the Union the stature usually accorded a bargaining agency in bona fide collective bargain- ing. We find that the respondent, by refusing on October 25, 1937, and thereafter until July 14, 1938, to recognize and bargain with the Union as the exclusive bargaining agency of its employees, refused to bargain collectively with the Union as required by the Act. Following the initial refusal to bargain with the Union, Baum made derogatory statements about union leaders, reduced the pay of five union members despite his promise not to do so, and attempted to influence the president of the Union to cease his union activity. Following these events he repeated his refusal to grant the Union exclusive recognition, on July 11, 1938. On the same day, after his refusal of exclusive recognition, among other things, had precipi- tated a strike, he solicited two union members to return to work as individuals and thus abandon the Union. At conferences on July 11 and two subsequent occasions, he flatly refused to continue any form of grievance procedure although, as noted above, the policy statement had established such a procedure. In connection with this refusal, Baum remarked that "he wasn't going to have any one take up their grievances with the Union and then bring them to him." He also refused to continue the policy of posting lay-off notices and permitting a union bulletin board in the plant. g Matter of The Griswold Manufacturing Company and Amalgamated Association of Iron, Steel and Tin Workers of North America, Lodge No. 1197, 8 N. L. R. B. 298, enf'd N. L. R. B. V. Griswold Manufacturing Co., 106 F. (2d) 713 (C. C. A. 3). 283030-41-vol. 19-15 214 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The foregoing incidents make it clear that Baum's entire course of conduct from the inception of the Union's effort to bargain collec- tively was marked by hostility toward the Union. It is apparent that at no time on or before July 11, 1938, did Baum intend to bargain collectively with the Union with the intention of reaching some agreement with it. On July 14 Baum presented a proposed contract which at last granted the Union exclusive recognition, but which in other respects was so unfavorable to the Union that Baum could not reasonably have expected the Union to agree to it without further negotiations. On July 18 the Union in fact rejected the proposed contract, whereupon Baum stated that unless his proposed contract was accepted he would no longer "fool" with the Union. Baum then dismissed the union representatives so that he could eat lunch. Two days later, without any further effort to negotiate, he proceeded to solicit the strikers to return to work individually and thus abandon the Union's position. This took place only 9 days after the Union instituted its efforts to obtain an agreement with the respondent and after but three conferences between the parties had been held. At this stage in the negotiations, Baum could not reasonably have believed that such an impasse had been reached that further consultation with the Union would be fruitless. Never- theless he proceeded to reopen the plant with strikebreakers, and thereafter refused to deal with the Union. In thus breaking off the negotiations, the respondent, through Baum, failed and refused to bargain collectively with the Union.,' Indeed from all the evidence it appears that although Baum in some ways attempted to preserve the forms of collective bargaining, he did not observe its substance. We have no doubt that at no time did Baum, as representative of the respondent, seriously intend to make all reasonable efforts to reach an agreement with the Union. We find that respondent, on October 25, 1937, and at all times thereafter, refused to bargain collectively with the Union, as the representative of its employees, in respect to rates of pay, wages, hours of employment, and other conditions of employment, and that it thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed by Section 7 of the Act. We further find that the respondent, by refusing to bargain with the Union, and by its other acts, caused the strike on July 11, 1938, and its prolongation thereafter. 6 Cf. Jeffery-DetiVitt Insulator Company v . National Labor Relations Board, 91 F. (2d) 134 (C. C. A. 4), cert. den. 302 U. S. 731. In that case the Circuit Court said: ".. . If an employer in the presence of a strike could rid himself of the obligation to negotiate by declaring further negotiations to be useless and refusing to recognize as employees those failing to return to work on his own terms, the statute enjoining collective bar- gaining would largely fail of its purpose . We do not think it can be brushed aside so, easily. " 91 F. (2d ) at p. 140. AMERICAN HAIR AND ,FELT COMPANY 215 C. The alleged discriminations with regard to hire and tenure of employment 1. The refusal to reinstate striking employees The complaint alleges, and the Trial Examiner found that the re- spondent discriminated with regard to the hire and tenure of employ- ment of Lawrence Foster, William Johnke, Pernilla Yri, William Russell, Hugh Anderson, Robert Dedrick, M. A. Mitchell, Eugene Wells, William Sherrard, Arlis Reynolds, Carl Molin, Jace Rich- ardson, Evelyn Richardson, . Richard Gatewood, Charles Geiger, Louise Geiger, Don McGee, Fred Francis, Cecil Bates and Hans Reiper, by refusing to reinstate them on application following the strike. All of these employees were among those who went on strike. The strike, substantially caused by the respondent's unfair labor practices, occurred on July 11, 1938. On July 20 the respondent wired all the strikers individually to return to work on July 21 at the wage scale prevailing on July 11. When they did not return, the respondent hired 28 strikebreakers and, with their aid, reopened the plant on July 22. About July 26, when union representatives requested bargaining in order to arrive at some solution, Baum re- plied that the strikers' jobs were filled and that he had nothing further to say. On August 5 union representatives informed Baum that they were terminating the strike, and requested Baum to rein- state the strikers. Baum at that time inquired if the men would sign new applications for employment and on being told they would do so, and that they desired to be treated "collectively," distributed the applications. At the same time, Baum informed the union repre- sentatives that the jobs had already been filled, "and that he cer- tainly wasn't going to fire any of the men that he had in the plant and replace any of those fellows that were on the picket line." The applications for employment nonetheless were filled out by the men and returned to Baum. From August 5, 1938, until the hearing herein, only one striker, Eugene Wells, was reinstated. Of the 28 strikebreakers hired by the respondent for the July 22 reopening, 24 were still employed on August 5, 1938, the date the 20 strikers applied for reinstatement. It is apparent from the foregoing that at the time the strikers applied for reinstatement on August 5 the plant was operating at a capacity at least as great as when the strike was called, and that the respondent would have been able, by dis- placing persons hired after the strike began, to have restored all strik- ing employees to their former positions at the time of their application for reinstatement. Under Section 2 (3) of the Act the strikers remained employees; of the respondent. We have frequently held that where a strike has 216 DECISIONS OF NATIONAL LABOR RELATIONS BOARD been caused or prolonged, in whole or in substantial part, by the re- spondent's unfair labor practices, the striking employees are entitled to reinstatement in their former positions upon making application therefor.7 The failure of the respondent in this case to reinstate the striking employees to the positions to which they were entitled on August 5, 1938, by displacing persons hired after the commencement of the strike, constituted discrimination in regard to the hire and tenure of employment of the strikers seeking reinstatement. We find that by the foregoing refusal to reinstate the striking employees on August 5, 1938, the respondent has discriminated in regard to the hire and tenure of employment of its employees, thereby discouraging membership in the Union, within the meaning of Section 8 (3) of the Act, and has interfered with, restrained, and coerced its em- ployees in the exercise of the rights guaranteed in Section 7 of the Act. 2. Alleged discriminatory reductions in pay The complaint alleges, and the Trial Examiner found, that on or about March 1, 1938, the respondent reduced the hourly wage rate of Richard Gatewood, Louise Geiger, Charles Geiger, Hugh Ander- son, and Pernilla Yri because they joined and assisted the Union, and thereby discriminated in regard to hire and tenure of employ- ment of its employees within the meaning of Section 8 (3) of the Act. The reductions in the hourly wage rates of the named individuals occurred in January, February, and March, 1938, after the respond- ent had promised orally, on or about November 1, 1937, not to reduce wages. With regard to three of the individuals, Louise Geiger, Pernilla Yri, and Charles Geiger, it does not appear that they were active in the Union, and the record indicates that they were only slightly reduced in pay at a time when business conditions were bad. The respondent had, a few months prior, reduced in a similar manner the wage rates of two non-union employees. In these circumstances, we do not feel that the reductions in the pay of Louise Geiger, Per- nilla Yri, and Charles Geiger, were designed to discriminate against them because of their union activity. Regarding Gatewood and An- derson, there is more doubt respecting the motives of the respondent in reducing their wage rates. Both men were leaders in the Union, and had been described by Baum as "communistic" shortly before the reductions in their pay. In view of all of the evidence, however, 7 Matter of Jeffery-DeWitt Insulator Company and Local No. 455, United Brick and Clay Workers of America, 1 N.. L. R. B. 618, enf'd, Jeffery-DeWitt Insulator Company v. National Labor Relations Board, 91 F. (2d) 134 (C. C. A. 4), cert. den. 302 U. S. 731 ; National Labor Relations Board v. Remington Rand, Inc., 94 F. (2d) 862 (C. C. A. 2), cert. den. 304 U. S. 576; Matter of Western Felt Works, a corporation and TcWtile Workers Organizing Committee, Western Felt Local. In N. L. R. B. 407. AMERICAN HAIR AND FELT COMPANY 217 we are unable to conclude that Gatewood and Anderson were sub- jected to discrimination because of their union activity. We shall therefore order that the complaint be dismissed in so far as it alleges that the respondent discriminated against Richard Gatewood, Louise Geiger, Hugh Anderson, Charles Geiger, and Per- nilla Yri by reducing their hourly wage rates. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE We find that the activities of the respondent set forth in Section III above, occurring in connection with the operations of the respond- ent 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 com- merce and the free flow of commerce. V. THE REMEDY Having found that the respondent has engaged in unfair labor practices, we will order it to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act and to restore as nearly as possible the conditions which existed prior to the commission of the unfair labor practices. We have found that the striking employees were discriminatorily denied reinstatement, on and after August 5, 1938. We shall, there- fore, order the respondent to offer to its employees who went on strike on July 11, 1938, reinstatement to their former positions, with- out prejudice to their seniority and other rights and privileges. Such reinstatement shall be effected in the following manner : All persons hired after July 11, 1938, shall be dismissed, if neces- sary to provide employment for those to be offered reinstatement. If, after this is done, the respondent determines that the services of any of its staff as then constituted, including all employees to be offered reinstatement as provided herein, are not required, it may reduce its staff, provided that it does so without discrimination against any employees because of their union affiliation or activities, follow- ing a system of seniority to such extent as has heretofore been applied in the conduct of the respondent's business, subject to any modifica- tion introduced by agreement with the Union. Those employees remaining after such distribution, for whom no employment is imme- diately available, shall be placed upon a preferential list prepared in accordance with the principles set forth above, and shall, there- after, in accordance with such list, be reemployed in their former or substantially equivalent positions as such employment becomes avail- able and before other persons are hired for such work. 218 DECISIONS OF NATIONAL LABOR RELATIONS BOARD We shall order the respondent to make whole for any loss suffered as a result of the discrimination each of the employees ordered to be offered reinstatement by payment to each of an amount equal to that which each would have earned as wages from August 5, 1938, to the date of the offer of reinstatement, or placement on the preferential list, less his or her net earnings 8 during that period. With regard to Eugene Wells, a striker who has been reinstated, the respondent shall give him such compensatory back pay for the period from August 5, 1938, until August 23, 1938, the date he was offered reinstatement. We have found that a majority of the respondent's employees within the appropriate unit have designated the Union as their repre- sentative for the purposes of collective bargaining. The respondent's unfair labor practices in refusing to bargain with the Union and denying employment to its members cannot operate to change or nullify the bargaining representatives previously selected by the un- trammeled will of the majority. The striking employees remain em -ployes of the respondent, and wil be reinstated. In order to efec- tuate the policies of the Act, we must restore, as nearly as possible, the status quo before the unfair labor practices were committed and secure to the employees their right to bargain through the represent-. atives they have selected with full freedom of choice. We will, therefore, base our order upon the majority obtaining upon the date of the refusal to bargain and require the respondent to bargain with the Union upon request." Since we have found that the re- spondent has refused to enter into a contract with the Union, we shall order the respondent, if an understanding is reached on the matters bargained about by the Union and the respondent, to embody such understanding in a signed agreement upon request by the Union. We have found that the respondent has not discriminated against Richard Gatewood, Louise Geiger, Hugh Anderson, Charles Geiger, and Pernilla Yri within the meaning of Section 8 (3) of the Act by reducing their hourly wage rates. We shall, therefore, dismiss that 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 the respond- ent's unlawful refusal to reinstate him, and the consequent necessity of his seeking employment elsewhere. See Matter of Crossett Lumber Company and United Brother- hood of Carpenters and Joiners of America, Lumber and Sawmill Workers Union, Local 3590, 8 N. L. R. B. 440. Monies received for work performed upon Federal, State, county, municipal , or other work-relief projects are not considered as earnings , but as provided below in the Order, shall be deducted from the sum due the employee , and the amount thereof shall be paid over to the appropriate fiscal agency of the Federal , State, county, municipal, or other government or governments which supplied the funds for said work- relief projects. eMatter of Inland Steel Company and Steel Workers Organizing Committee and Amal- gamated Association of Iron, Steel and Tin Workers of North America , Lodge Nos. 64, 1010, and 1101, 9 N. L. R. B. 783, and cases cited therein. AMERICAN HAIR AND FELT COMPANY 219 portion of the complaint which alleges that the respondent has dis- criminated against them by reducing their hourly wage rates. Upon the basis of the foregoing findings of fact and upon the en- tire record in the proceeding, the Board makes the following : CONCLUSIONS OF LAW 1. Textile Workers Union of America, Local 99, is a labor organi- zation within the meaning of Section 2 (5) of the Act. 2. All of the respondent's production and maintenance employees at its Los Angeles, California, plant, excluding engineers, mechanics, watchmen, office, clerical, and supervisory employees constitute a unit appropriate for the purposes of collective. bargaining within the meaning of Section 9 (b) of the Act. 3. Textile Workers Union of America, Local 99, was, on October 25, 1937, and at all times thereafter has been, the exclusive represent- ative of all employees in such unit for the purposes of collective bargaining within the meaning of Section 9 (a) of the Act. 4. By refusing to bargain collectively with Textile Workers Union of America, Local 99, as the exclusive representative of its employees in the appropriate unit, the respondent has engaged in and is engag- ing in unfair labor practices within the meaning of Section 8 (5) of the Act. 5. By discriminating against Lawrence Foster, William Johnke, Pernilla Yri, William Russell, Hugh Anderson, Robert Dedrick, M. A. Mitchell, William Sherrard, Arlis Reynolds, Carl Molin, Jace Richardson, Evelyn Richardson, Richard Gatewood, Charles Geiger, Louise Geiger, Don McGee, Fred Francis, Cecil Bates, Eugene Wells, and Hans Reiper, in regard to their hire and tenure of employment and thereby discouraging membership in Textile Workers Union of America, Local 99, the respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (3) of the Act. 6. 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. 7. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2 (6) and (7) of the Act. 8. The respondent, by reducing the hourly wage rates of Richard Gatewood, Louise Geiger, Hugh W. Anderson, Charles Geiger, and Pernilla Yri, has not engaged in unfair labor practices within the meaning of Section 8 (3) of the Act. 220 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 thl National Labor Relations Act, the National Labor Relations Board hereby orders that the respond- ent, American Hair and Felt Company, and its officers, agents, successors, and assigns shall : 1. Cease and desist from : (a) Discouraging membership in Textile Workers Union of Amer- ica, Local 99, or any other labor organization of its employees, by discharging, laying off, or refusing to reinstate any of its employees, or in any other manner discriminating in regard to their hire or tenure of employment or any terms or conditions of their employment; (b) Refusing to bargain collectively with Textile Workers Union of America, Local 99, as the exclusive representative of all produc- tion and maintenance employees at its Los Angeles, California, plant, excluding engineers, mechanics, watchmen, office, clerical, and supervisory employees; (c) In any other manner interfering with, restraining, or coercing its employees in the exercise of their rights to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing and to engage in con- certed activities for the purpose of collective bargaining or other mutual aid or protection, as guaranteed in Section 7 of the National Labor Relations Act. 2. Take the following affirmative action which the Board finds will effectuate the policies . of the Act : (a) Upon request, bargain collectively with Textile Workers Union of America, Local 99, as the exclusive representative of all production and maintenance employees at the Los Angeles, California, plant, excluding engineers, mechanics, watchmen, office, clerical, and super- visory employees, in respect to rates of pay, wages, hours of employ- ment, and other conditions of employment; and, if an understanding is reached on such matters, upon request, embody said understanding in a signed agreement;. (b) Offer to Lawrence Foster, William Johnke, Pernilla Yri, William Russell, Hugh Anderson, Robert Dedrick, M. A. Mitchell, William Sherrard, Arlis Reynolds, Carl Molin, Jace Richardson, Evelyn Richardson, Richard Gatewood, Charles Geiger, Louise Geiger, Don McGee, Fred Francis, Cecil Bates, and Hans Reiper, im- mediate and full reinstatement to their -former positions, without prejudice to their seniority and other rights and privileges, in the manner set forth in the section entitled "Remedy" above, placing those employees for whom employment is not immediately available upon a preferential list in the manner set forth in said section, and AMERICAN HAIR AND FELT COMPANY 221 thereafter, in said manner, offer them employment as it becomes available; (c) Make whole the employees named in the preceding paragraph, and Eugene Wells, for any loss of pay they may have suffered by reason of the respondent's refusal to reinstate them on August 5, 1938, and thereafter, by payment to each of them respectively of a sum of money equal to that which each would have earned as wages during the period from August 5, 1938, to the date of the-offer of reinstate- ment, or placement on the preferential list, less net earnings, if any, during said period, had the respondent reinstated each of them on August 5, 1938, in the manner provided in the preceding paragraph, deducting, however, from the amount otherwise due to each of them monies received by each of them. during said period for work per- formed upon Federal, State, county, municipal, and other work-relief projects, and pay over the amount so deducted to the appropriate fiscal agency of the Federal, State, county, municipal, or other gov- ernment or governments which supplied the funds for such work- relief projects; (d) Post immediately in conspicuous places in each department of the respondent's plant at Los Angeles, California, notices stating : (1) that the respondent will cease and desist as provided in para- graphs 1 (a), (b), and (c) of this Order; (2) that it will take the affirmative action set forth in 2 (a), (b), and (c) of this Order; and (3) that employees are free to become or remain members of Textile Workers Union of America, Local 99, and that the respondent will not discriminate against any employee because of membership or activity in that organization; (e) Maintain such notices for a period of at least sixty (60) con- secutive days from the date of posting; (f) Notify the Regional Director for the Twenty-first Region in writing, within ten (10) days from the date of this Order what steps the respondent has taken to comply herewith. AND IT IS FURTHER ORDERED that the allegations of the complaint that the respondent has engaged in an unfair labor practice within the meaning of Section 8 (3) of the Act by reducing the hourly wage rates of Richard Gatewood, Louise Geiger, Hugh Anderson, Charles Geiger, and Pernilla Yri be, and they hereby are, dismissed.