Highland Shoe, Inc.

In the Matter of HIGHLAND SHOE, INC. and UNITED SHOE WORKERS OF AMERICA Case No. C-965.-Decided April 26, 1940 Shoe' Manufacturing Industry-Interference, Restraint , and Coercion : discred- iting union : seeking to reduce wages by dealing with employees directly rather than through their duly designated union , also thereby contravening clause of existing contract with union , where no impasse in negotiations had been reached with union-Discrimination : charges of, as to two employees, not sustained- Unit Appropriate for Collective Bargaining : all employees exclusive of foremen, assistant foremen, office help, and salesmen ; no controversy as to-Representa- tives: proof of choice : consent election ; other proof-Collective Bargaining: employer-planned and instigated walk-out of employees calculated to terminate closed-shop contract containing clause providing for such termination "in the event of a strike or labor trouble" in order to terminate relations with union and avoid bargaining with it ; refusal thereafter to confer with union : deceiving union as to intentions regarding course of action following walk-out; advertis- ing, following instigated walk-out, that plant would be run as "open-shop"; defections in union by reason of employer 's refusal to ; ordered to bargain, upon request. Mr. Norman F. Edmonds, for the Board. Mr. David V. Berman, of Lewiston, Maine, for the respondent. Mr. A. Raymond Rogers, of Waterville, Maine, 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 United Shoe Workers of America, herein called the Union, the National Labor Relations Board, herein called the Board, by the Regional Director for the First Region (Boston, Massachusetts), issued its complaint dated March 22, 1938, and its amended complaint dated March 25, 1938, against Highland Shoe, Inc., Lewiston, Maine, herein called the respondent, alleging that the respondent had engaged in and was en- gaging in unfair labor practices affecting commerce, within the mean- ing of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the 23 N. L. R. B., No. 23. 259 260 DECISIONS OF NATIONAL LABOR RELATIONS BOARD National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the complaint, amended complaint, and notice of hearing thereon were duly served upon the respondent and upon the Union. With respect to the unfair labor practices, the complaint, as amended; alleged-in substance:. (1) that at all times since May 15, 1937, the Union has been the representative for the purposes of col- lective bargaining of a majority of the employees of the respondent with the exception of foremen, assistant foremen, office help, and sales- men, and, by virtue of Section 9 .(a) of the Act, has been the exclusive representative of all the employees of the respondent with the excep- tion of foremen, assistant foremen, office help, and salesmen; (2) that, on or about June 12, 1937, the respondent entered into a closed-shop contract with the Union in regard to rates of pay, hours of labor, and other conditions of employment of all its employees, exclusive of fore- men, assistant foremen, office help, and salesmen, for a term expiring on June 16, 1938, providing, however, that it could be terminated sooner by the respondent in "the event of a strike or labor trouble" by the respondent's employees or by the Union; (3) that, on or about November 29, 1937, the respondent bargained with its employees in- dividually regarding a reduction in rates of pay at said time; (4) that, on or about December 28, 1937, the respondent, in an attempt to evade the obligations imposed on it by the contract of June 12; 1937, and to avoid bargaining collectively with the Union in regard to rates of pay, wages, hours of employment, and other conditions of employ- ment, induced certain of its employees to cease work and walk out of the plant; (5) that, on or about December 28, 1937, and thereafter, the respondent refused and is refusing to bargain collectively with the Union in regard to rates of pay, wages, hours of employment, and other conditions of employment, although requested to do so by the Union; (6) that the respondent has coerced, intimidated, and threat- ened its employees, and by such threats, coercion, and intimidation, has interfered with and is interfering with its employees in the ex- ercise of the rights guaranteed in Section 7 of the Act; (7) that the respondent discriminated with respect to the hire and tenure of em- ployment of Elmer Bowen and George Cote, Jr., by discharging them on or about December 28, 1937, and by refusing to reinstate them at all times since said date, and thereby discouraged membership in the Union. The respondent filed its answer, dated March 25, 1938, to the complaint, and, at the hearing, filed an amended answer to the amended complaint, denying the alleged unfair labor practices and interposing several affirmative defenses to the allegations of unfair labor practices. Pursuant to notice, a hearing was held at Auburn, Maine, from April 4 to 9, 1938, before Samuel H. Jaffee, the Trial Examiner duly designated by the Board. The Board, the respondent, and the Union HIGHLAND SHOE, INC. 261 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 on the issues was afforded all parties. At the hearing, the respondent offered in evidence, for the purpose of showing that the-closed-shop contract was illegal in Maine, the judi- cial record of certain contempt proceedings upon an injunction granted by the Supreme Judicial Court of Maine against certain officials of the Union in conjunction with a strike in Lewiston and Auburn, Maine, in March and April 1937. The Trial Examiner re- jected the offered exhibit. The Board affirms his ruling. During the course of the hearing, the Trial Examiner made numerous rulings on motions and on objections to the admission of evidence. The Board has reviewed the rulings of the Trial Examiner and finds that no prejudicial errors were committed. The rulings are hereby affirmed. On September 15, 1938, the Trial Examiner issued his Interme- diate Report, copies of which were duly served upon the respondent and upon the Union. The Trial Examiner found that the respondent had engaged in unfair labor practices affecting commerce within the meaning of Section 8 (1) and (5) and Section 2 (6) and (7) of the Act, and recommended that the respondent bargain collectively with the Union upon request ' and take certain other action designed to effectuate the policies of the Act. The Trial Examiner recommended dismissal of the allegations in' the complaint that the respondent had engaged in unfair labor practices within the meaning of Section 8 (3) of the Act. On October 14, 1938, the respondent filed its exceptions to the In- termediate Report and requested oral argument before the Board in support thereof. Pursuant to notice duly served upon all parties, a hearing was held before the Board in Washington, D. C., on Feb- ruary 2, 1939, for the purpose of oral argument. The respondent and the Union were represented by counsel and participated in the argument. Thereafter, pursuant to leave granted by the Board to all parties, the respondent filed a brief. The Board has considered the exceptions to the Intermediate Report and, except in so far as they are consistent with the findings, conclusions, and order set forth below, finds no merit in them. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Highland Shoe, Inc., is a Maine corporation having its main office and factory in Lewiston, Maine, where it is engaged in the manu- facture. sale. and distribution of women's novelty shoes. Approxi- 283034-41-vol 23-18 262 DECISIONS OF NATIONAL LABOR RELATIONS BOARD mately 80 per cent of the raw material used by the respondent, con- sisting of shanks, box toes, buckles, findings, counters, innersoles, strippings, upper leather, and sole leather, are shipped to the re- spondent from the State of Massachusetts. The cost of the raw material used by the respondent from January 1, 1937, through March 31, 1938, was approximately $160,516. All the shoes manufactured by the respondent are shipped to points outside the State of Maine. The sales of the respondent from January 1, 1937, through March 31, 1938, amounted to approximately $352,059. The respondent, main- tains a sales office in Boston, Massachusetts. At the hearing, the respondent admitted that it is engaged in interstate commerce. At the time of the hearing herein, the respondent had in its employ approximately 180 persons. II. THE ORGANIZATION INVOLVED United Shoe Workers of America is a labor organization affiliated with the Congress of Industrial Organizations, admitting to its mem- bership employees of the respondent. Local 114 of the United Shoe Workers of America, whose jurisdiction includes employees in Lewis- ton and Auburn, Maine, was formed in June 1937. III. THE UNFAIR LABOR PRACTICES A. The refusal to bargain collectively; interference, restraint, and coercion 1. The appropriate unit The complaint alleges that the employees of the respondent at its Lewiston factory, exclusive of foremen, assistant foremen, office help, and salesmen, constitute a unit appropriate for the purposes of col- lective bargaining. In its answer and at the hearing the respondent admitted that such unit is appropriate for the purposes of collective bargaining. A contract entered into by the respondent and the Union on June 12, 1937, covered the employees in such a unit. We find that the employees of the respondent at its Lewiston factory, exclusive of foremen, assistant foremen, office help, and salesmen, constitute a unit appropriate for the purposes of collec- tive bargaining and that such unit insures to employees of the re- spondent the full benefit of their right to self-organization and to collective bargaining and otherwise effectuates the policies of the Act. HIGHLAND SHOE, INC. 263 2. Representation by the Union of the majority in the appropriate unit On May 15, 1937, a consent election was held under the super- vision of the Regional Director and a conciliator of the United States Department of Labor for the purpose of determining the bargaining representative of the respondent's employees.' Of the 216 employees eligible to vote in the election, 187 voted and, of these, 160 indicated their desire to be represented Eby the Union. On June 12, 1937, the respondent and the Union entered into a closed-shop contract effective until June 16, 1938. At no time prior to the date of the complaint herein did the respondent question the representation by the Union of the majority of the respondent's employees within the appropriate unit. The respondent contends that, despite the results of the election of May 15, 1937, the Union did not represent a majority of the respondent's employees within the appropriate unit at the time of the alleged refusal to bargain, December 28, 1937. With respect to this contention, the respondent adduced some evidence to show that numerous employees failed to maintain their memberships in good standing in the Union by failing to make dues payments during the fall of 1937, when the plant was shut down. The respondent claims that such members, not being in good standing, should be excluded in the counting of union membership. However, the evidence as a whole demonstrates that all the union members were considered to be in good standing and that the Union had not required dues payments of its members while they were out of work. The evi- dence further shows that all members, whether they had maintained their dues payments or not, had the right to participate in union meetings, to vote, and to hold office, and that no difference in treat- ment was accorded them by the Union because of the fact that they had not paid dues. The record shows affirmatively that at least 61 of the 77 em- ployees who were working for the respondent on or about December 28, 1937, the date of the alleged refusal to bargain, were members of the Union. At no time between the consent election of May 15, 1937, and the alleged refusal to bargain on or about December 28, 1937, did the Union represent less than a majority in the appropri- ate unit. I Salesmen were eligible to vote in the consent election but are excluded from the unit herein found to be appropriate . Since the respondent employs only one salesman at its Lewiston factory, and in view of the large majority accorded the Union at the election, the difference does not affect our finding below that the Union represents a majority of the employees in the appropriate unit 264' DECISIONS OF NATIONAL LABOR RELATIONS BOARD We find that on May 15, 1937, and at all times thereafter, the Union was and that it is the duly designated representative of the majority of the employees of the respondent in an appropriate unit for the purposes of collective bargaining and that, pursuant to Section 9 (a) of the Act, it was and is the exclusive representative of all the employees in such unit for the purposes of collective bar- gaining with respect to rates of pay, wages, hours of employment, and other conditions of employment. 3. The refusal to bargain collectively On March 24, 1937, the Union called a strike in the shoe factories of Lewiston and Auburn,. Maine, including the respondent's fac- tory among others. On March 26, 1937, the Lewiston and Auburn Shoe Manufacturers' Association, a voluntary association of shoe manufacturers in the Lewistown-Auburn area, of which the respond- ent was a dues-paying member, inserted an advertisement in the Lewiston Evening Journal. The advertisement was headed "Notice to Shoeworkers" and was signed at the bottom "Shoe Manufacturers of Lewiston and Auburn." In the Notice, the then current strike was referred to as having been brought about by "outside agitators" and "paid disturbers" who were using "strong-arm tactics" and a "gangster manner," and giving "radical advice" in their attempts "to coerce" both employees and employers while carrying out "the wishes and the orders of higher-up outsiders." It indicated that only a minority of the employees had been "misled" and had left their jobs, asserted that the workers need not pay "weekly tribute to any outside source for their right to work," nor "accept the dic- tates of outside influences as to when they should work and when they should strike," and "again" put the manufacturers "on record as positively opposed to outside interference in our local affairs." It concluded by stating that the manufacturers "definitely have no intention either now or in the future of doing business with the trouble making type of professional labor agitators that are at present doing all within their power to wreck our local shoe in- dustry," and that the manufacturers appreciated "the loyalty of the great majority who have faithfully stood by their jobs" and assured the employees that the manufacturers were "going to stand solidly behind them." The respondent paid its proportionate share of the cost of said advertisement, continued paying dues to the Association after the insertion of the advertisement, and never complained to the Asso- ciation about the insertion thereof. The respondent offered no testimony about the advertisement. The inference that the respond- HIGHLAND SHOE, INC.._ , 265 ent approved its insertion and subscribed to its sentiments' is fully justified and we so find. Following the settlement of the strike and the consent election of May 15, 1937, the respondent and the Union entered into a contract on June 12, 1937, for a term expiring on June 16, 1938.2 The con- tract provided, inter alia, for a closed shop, a 10-per cent increase over the March 24, 1937, wage scale, which was put into effect im- mediately; and an additional 5-per cent wage increase to take effect on November 1, 1937. Paragraph 7 thereof stated that "the parties hereto also agree that no worker or group of workers shall have the right to modify or waive any of the provisions of this Agreement." The contract further provided that "There shall be no lockout, strike or stoppage of work pending the determination of any complaint or grievance. The Union agrees to take adequate steps in any or every violation of this provision to procure its enforcement." The contract concluded with the agreement that "This contract shall remain in force until June 16, 1938 but in the event of a strike or labor trouble by the Firm's Employees or the Union, then this contract shall terminate forthwith." Shortly after the contract was signed by the parties, the factory, which had been closed since the beginning of the strike, was reopened, and the employees returned to work. The shoe business is generally slack in the months of October and November, and in the fall of 1937 was more so than usual. The respondent's salesmen reported difficulty in obtaining orders, due mainly to the respondent's alleged inability to meet competition on "price." On September 21, 1937, George Arissian, office manager, clerk, and director of the respondent, and in charge of its labor rela- tions, requested of Paul Salvaggio, a union organizer in the Lewis- ton-Auburn area, that the Union allow the respondent to reduce wages 5 per cent. Salvaggio replied that he had no authority to grant a reduction and suggested that the respondent write to the Union's general office in Boston. On the following day Arissian wrote a letter to the Union, requesting a 5-per cent reduction in wages because of the competition in the form of "lower wages" which the 2 The respondent contends that this contract was illegal and not binding on the respond- ent because Bernard McGovern , who signed said contract on behalf of the Union, had no authority to do so, and that said contract , in providing for a closed shop, was illegal under the laws of the State of Maine with respect to the first contention , the record shows clearly that McGovern had the requisite authority to sign the contract on behalf of the Union. At the time he signed the contract , McGovern was an organizer for the Union. McGovern attended the conferences with the respondent prior to the signing of the con- tract and negotiated it on behalf of the Union , pursuant to instructions from the union leaders. When the contract had been drafted in final form, McGovern submitted it to the union leaders for approval and then signed it. - With respect to the contention that a closed -shop contract is illegal in the State of Maine, we do not find that such is the case. See Keith Theatre v . Vachon, 134 Me. 392 (1936 ). Furthermore, the respondent operated under said contract after entering into it and never raised any question of illegality until the answer in these proceedings was filed. 266 DECISIONS OF NATIONAL LABOR RELATIONS BOARD respondent was finding it "impossible" to meet. On September 27, 1937, the Union replied, stating that it realized "the depressed state of the shoe industry," but refusing to grant the request for a reduc- tion because "any concession . . . made to one manufacturer would necessitate the same concessions to all of the other manufacturers" and "the competitive difficulties of the Union shoe manufacturers would, therefore, be just as great as under present conditions." Shortly after September 27, Arissian again spoke to'Salvaggio with reference to a reduction in wages, and Salvaggio reiterated that he had no authority in the matter. The respondent's shoe business became worse and, on or about October 12, it closed down its factory completely. The factory remained closed until early December when, in preparation for spring business, a few workers were called in by the respondent, as was usual in the industry, to work on samples. The November 1 additional 5-per cent wage increase, called for by the June 12 contract, was never put into effect. On or about November 26, 1937, the respondent mailed postcards to each of the 167 employees who had actually worked for it during the week ending September 25, requesting them to be at the factory at 2 p. m. on November 29. The Union, apparently suspecting that the respondent was about to discuss wages with the employees inde- pendently of the Union, advertised a meeting of the respondent's employees to be held at 1 p. m. on November 29. At that time ap- proximately 125 of the respondent's employees met at the union meet- ing hall, which was located close to the respondent's factory. They authorized William Mackesy, an organizer, to inform the respondent that all matters relating to wage rates, hours of work, and other conditions of employment should be discussed by the respondent with the Union, and that any bargaining with the employees in disregard of the Union was in contravention of the existing contract. At 2 p. m. on the same day approximately 70 of the respondent's employees met at the factory. They were addressed by Arissian, who told them that the respondent had been unable to reopen the plant because of competitive conditions in the shoe industry; that other manufacturers had reduced wages as much as 121/2 per cent; that it was impossible for the respondent to stay in business under the wage scale provided in the contract with the Union; but that if the employees accepted a 10-per cent wage reduction they could have steady work. It was suggested by one of the employees that the employees present vote on the question of returning to work with a 10-per cent wage reduction. Arissian left the meeting room and returned with a block of paper which was used for balloting purposes. The employees present voted, 65 to 3, to accept a 10-per cent reduction in wages. HIGHLAND SHOE, INC. 267 While the meeting was in progress, Mackesy arrived at the factory and waited in the office to see Arissian. Arissian told Mackesy sub- stantially the same story he had just previously told the employees in the meeting, and stated that the respondent had to reduce wages by 15 per cent. Mackesy replied that Arissian knew that he had no right to deal with the employees individually as to matters covered by the contract; that there was no justification for the requested re- duction in wages, since no manufacturer was able to obtain business at that time of the year because it was an "in-between season"; that business during the summer of 1937 had been unusually poor throughout the shoe industry ; and, further, that the respondent had in fact obtained an advantage over its competitors in that the Union had, from most of the shoe'manufacturers, obtained single 15-per cent wage increases at one time, rather than the split increase obtained from the respondent, part of which was never put into effect. The meeting between Arissian and Mackesy ended with no solution of the differences between the parties. On November 30, 1937, the re- spondent wrote a letter to the Union making a "last appeal" for a 15-per cent reduction in wages. As stated above, early in December 1937 the factory was reopened for the purpose of manufacturing samples for the spring business. At about this time, wage reductions in the shoe industry, which had been sporadic, became quite general. The Union therefore de- cided to consent to wage reductions by all shoe manufacturers with whom it had contracts. In accordance with this decision, on Decem- ber 22, A. Raymond Rogers, the Union's attorney, and Mackesy told Arissian and one or two others of the respondent's officers that in order to allow the respondent to meet competition, the Union had decided to consent to a 10-per cent reduction in wages, half of the reduction to be effected by the Union's waiver of the 5-per cent increase which, by the terms of the contract, was to have gone into effect on November 1. This left the respondent's wage scale in- creased by 5 per cent over the pre-contract wage scale. The re- spondent's officers replied that the offered reduction was insufficient. At the close of the conference, however, Arissian informed Rogers that the respondent's officers would consider the Union's proposal and inform him of their decision. Rogers returned to the factory on the following day, December 23, and spoke to Sarkis Morian, president, a director, and a foreman of the respondent. Morian told Rogers that the respondent would not accept the Union's offer and that the respondent wanted an answer to its letter of November 30. While Arissian testified that the re- spondent had neither accepted nor rejected the Union's offer up to the time of the hearing herein, in the light of the uncontradicted 268 DECISIONS OF NATIONAL LABOR RELATIONS BOARD •evidence as to Morian's statement 3 and- subsequent developments, noted below, we do not credit Arissian's testimony in- this regard. Rogers informed Morian that he had authority, to discuss and close the matter with the respondent and that he was present in answer to the respondent's letter, of November 30. Morian said that "it doesn't make any difference we don't want anything more to do with you. On December 28 approximately 43 employees reported to work, having been called by the respondent, which was beginning to operate on its normal production schedule. Shortly after 8 a. m. various groups of employees were talking to one another, especially in the stitching room, where both Lillian Arissian, wife of George Aris- sian, and Nouvart Eretzian, daughter of another official and fore- man of the respondent, worked. Lillian Arissian told the employees that the Union had consented to a 10-per cent wage reduction; that union members would be required to pay all back dues out of their first week's pay checks; that additional assessments in the form of reinstatement fees would be made by the Union; 4and that if the employees would walk out "it would break the C. I. O. contract so that they would not have a cut from the C. I. 0." The statements concerning payment of back dues and reinstatement fees were com- pletely without basis in fact. Mrs. Arissian added, "Come on girls, follow me. This is my shop. And I will give you your jobs back again." Other employees, including Nouvart Eretzian and Mary Ricard, denounced the Union for "granting" the wage cut, stated that the employees would be better off to quit the Union, and told them that a walk-out would "break the C. I. O. contract" and that the employees could then return without a wage cut. Nouvart Eretzian `falsely said that she knew that the Union had "given the employees a wage cut" because she had seen a "paper" in the office to that effect "that came in from the C. I. 0." In fact, the Union never had put its offer to consent to a wage reduction in writing. Finally, from' 30 to' 35 employees, mostly stitching-room employees, went to ,the basement and held a meeting to discuss the matter. One em- ployee, Romeo Ricard, the husband of Mary Ricard, made a speech, saying that he "had overheard the conversation in the office [on December 22] of a ten per cent reduction in our wages," and that "if we were obliged to pay back dues or reinstatements or assess- ments . . . we were far better to go back to the prices of the spring before the strike" and "not to have the Union." The employees voted to proceed to union headquarters and present their grievances. At'the hearing, both Lillian Arissian and Nouvart Eretzian denied that they had instigated the walk-out of December 28. .Both claimed Morian was not called by the respondent to testify at the hearing. HIGHLAND SHOE, INC. 269 that other employees had done so and that they had merely followed the rest. One of such instigators named by them was Mary Ricard. The Trial Examiner found that, "considering . . . the attitude and demeanor" of Lillian Arissian and Nouvart Eretzian, and also the probabilities of the situation, they "were instrumental in inciting the walk-out. Nouvart Eretzian was an unwilling union member. She had joined the Union because she "had to join" under the closed- shop contract. In the March 1937 strike, she had been one of the last employees to quit work. While her memory concerning the events of December 28 was extremely vague, she claimed to remember well that at no time, either during or after the strike of March and April, or before, during, or after the walk-out of December 28, had she ever discussed factory affairs with her father, a director and fore- man of the respondent, in whose home she lived. Lillian Arissian, wife of George Arissian, was also an unwilling union member. She went on strike in March 1937 because she "had to go out." She also testified that she had never discussed factory affairs with her husband, an officer of the respondent. Lillian Aris- sian testified that on December 28 she walked out in protest against the Union's agreeing to a 10-per cent wage reduction. Yet, as we find below, the following week, when she received her pay check minus the 10 per cent, which reduction the respondent had put into effect on December 29, she made no complaint whatsoever. Mary Ricard, a witness for the respondent, testified that she heard Lillian Arissian state to the other employees that "if you walk out it will break the C. I. O. contract." Throughout her testimony, Lillian Arissian was vague, contradictory, and evasive. As stated above, both Lillian Arissian and Nouvart Eretzian testified that they had never discussed these factory affairs with their close relatives who were officers of the respondent. We do not credit their testimony in this respect. We find that Lillian Arissian and Nouvart Eretzian were instru- mental in instigating the walk-out of December 28. Two other employees, Romeo Ricard and Mary Ricard, were also active in inciting the employees to walk out. Mary Ricard admitted at the hearing that she had denounced the Union for consenting to a reduction, and had warned the employees that assessments for back dues and reinstatement fees would be levied. Romeo Ricard also advocated a walk-out and denounced the Union, making statements concerning back dues and assessments which had no basis in fact. The Ricards had been employed by the respondent for approximately 9 years. They had joined the Union unwillingly and were among the last to go on strike in March 1937. They were on intimate terms with Arissian. Romeo Ricard testified that he knew, before the walk- out, that if the factory were operated as an open shop, he would bene- 270 DECISIONS OF NATIONAL LABOR RELATIONS BOARD fit personally. He was correct in this belief, for while the respondent put the wage reduction into effect after the walk-out, the Ricards' earnings thereafter. increased markedly and remained considerably above their earnings under the union contract from that time until the time of the hearing herein.4 In the meantime, news of what was happening at the respondent's plant was received at union headquarters, and at about 9 a. m. on December 28 Philip Estes, secretary of Local 114, went to the factory. He met the employees as they were leaving the basement meeting and told them that anyone who left the plant would be replaced by the Union, in accordance with the contract. When Estes sought to persuade the employees not leave the plant, Lillian Arissian, in the presence of George Arissian, told them to pay no attention to Estes and to walk out with her, promising to see to it that they got their jobs back. When Estes told her to return to her work bench, she said that her husband owned the factory and that she could act as she pleased in it. George Arissian heard this statement and veri- fied it to Estes. When asked by one of the employees whether a 10-per cent wage reduction had been consented to by the Union, George Arissian replied affirmatively. As indicated above, however, on December 23 the respondent had rejected the Union's offer to agree to a 10-per cent wage reduction but Arissian did not mention this to the employees. Estes was unsuccessful in his attempt to re- strain the employees and most of them walked out. After they left the plant Estes asked Arissian for a list of the jobs affected in order to secure replacements for the respondent, pursuant to the terms of the contract, but received no reply from Arissian. From Arissian's actions as above set forth we infer and find that he sought to aid rather than hinder the December 28 walk-out. About 10 a. m. on December 28, shortly after the walk-out, Rogers and Mackesy visited the plant and asked the respondent's officers what the trouble was. Arissian replied that about 30 of the em- ployees had walked out. Mackesy said that if the respondent would furnish a list of the operations affected by the walk-out, he would see to it that the respondent received replacements within 24 hours. Morian replied that replacements were needed that day. Mackesy said that if the list were furnished immediately the replacements would be supplied by the Union that afternoon. Arissian claimed that he could not furnish such a list immediately since the foreman of the stitching room 5 was "not around." The foreman had been in the factory that morning. Arissian told Mackesy, however, that if Mackesy would call later in the day he would have the list for him. 4 Romeo Ricard testified that in October 1937 he was earning $27 or $28 per week, and his wife, $8 and $9 per week. At the time of the hearing herein, he was earning $42 per week, and his wife, $17 per week. 5 The department in which most of the employees who had walked out worked. HIGHLAND SHOE, INC. 271, About 12:15 p. m. Mackesy returned. Arissian told him that the stitching-room foreman was still "not around," that the girl in the office was too busy to prepare a list, but that if Mackesy would return later, he would try to get the list for him. At this time Arissian, according to his own testimony, had "remem- bered" about the clause in the closed-shop contract to the effect that a strike or a labor dispute would terminate it immediately. He tes- tified, in fact, that sometime that morning he had read the contract and that before Mackesy's visit at 12: 15 p. m. the respondent's offi- cials had decided that the contract was terminated, that they would thereafter operate the factory as an open shop, and that an advertise- ment to that effect would be placed that day in the Lewiston Evening Journal. Arissian admitted at the hearing that his reiteration to Mackesy that the list was not ready but that it would be ready later was contrary to his intentions. We find that Arissian's statements to Mackesy were deliberate falsehoods intended to mislead the Union. When Estes returned later in the afternoon Arissian told him that the plant was being operated as an open shop and that the respondent would have nothing further to discuss with the Union.. Shortly after noon of December 28 the respondent placed an adver- tisement in the Lewiston Evening Journal reading as follows : ANNOUNCEMENT BY HIGHLAND SHOE COMPANY, INC. Due to labor trouble on the part of our employees the contract heretofore existing between Highland Shoe Company, Inc., and the United Shoe Workers of America of the Committee for Industrial Organization has been terminated. This shop will be conducted henceforth as an Open Shop. We demand efficient help in our various departments. Apply at the office of the company, 45 Hammond Street, Lewiston, Maine. (Signed ) SARKIS MORIAN, Pres. This advertisement was not seen by any of the employees or any of the union officials until the paper came out on the streets sometime about 4 p. m. that day. Not knowing what action the respondent had taken, the Union placed an advertisement in the Lewiston Evening Journal on the same day (Tuesday), reading as follows: HIGHLAND SHOE WORKERS Go To Your Jobs Wednesday Morning. All unemployed stitchers, treers, stock fitters and edge makers report to U. S. W. A.-C. I. O. Headquarters, K. of P. Hall, Wed. 7:30 P. M. (Signed) PHIL ESTES, Sec. 272 DECISIONS OF NATIONAL LABOR RELATIONS BOARD At about 4 p. m., when Rogers and Mackesy saw the respondent's advertisement, they went to the factory and found it locked. Before the respondent's officials had left the plant that afternoon, however, they had sent a letter to Local 114 informing it that the closed'-shop contract had been terminated because of the walk-out. On the following day, December 29, Arissian told Mackesy that from that time on he did not desire to confer or deal with the Union in any way. That same day Mackesy sent a letter to the respondent in reply to the respondent's letter of December 28. In this letter Mackesy reviewed his version of the differences between the parties and stated that Before the Union takes legal action in this matter to protect the rights of its members under the contract, we ask that you, within 24 hours, contact by letter or by representative the rep- resentatives of the Union so that this matter may be satisfac- torily straightened out. Clearly what has happened since No- vember 26 is a violation of the contract and an unfair labor practice under the National Labor Relations Act. Unless some word is received from your company by Friday of this week [December 31] the union shall take such action in the courts and before the National Labor Relations Board as it deems proper to protect the rights of its members in your factory and to enforce the contract as it does not recognize yesterday's occurrence as the free action of the employees in your factory. The respondent did not reply to Mackesy's letter. Nor did any union representative thereafter return to the plant to discuss these matters. To have done so would have been futile, since Arissian testified that had the union officials come to his office thereafter to discuss these matters with him, he would have "listened to them" but "that is all." The employees who participated in the walk-out of December 28 returned to work on December 29 in the course of the next few days. Romeo Ricard testified that after "walking out" on the morn- ing of December 28, he told the other employees who also left the plant, assertedly to "go to Union headquarters," to "go home and stay there until we hear or see in the paper what will happen. That is the only way we will know." He further testified that when he saw the "Open Shop" notice he returned to work, testifying that that was the notice he had been "waiting for." On December 29 the respondent reduced the wages of its employees 10 per cent as of December 27, the first day of the weekly pay period. This reduction restored the wage scale which had existed prior to the making of the contract with the Union. Although, at the behest of Mrs. Arissian, Miss Eretzian, and the Ricards, the employees had become angry and walked out when told of the Union's consenting HIGHLAND SHOE, INC. 273 to what amounted to a 5-per cent wage reduction, they returned to work immediately after the walk-out and exhibited no anger at the respondent's effecting a 10-per cent reduction in their pay. Nor did Mrs. Arissian, Miss Eretzian, or the Ricards seek to induce the employees to walk out in protest against the pay reduction that was actually put into effect by the respondent. From all the evidence, we conclude that the respondent's officials planned and instigated the walk-out of December 28 in order to terminate its relations with the Union and avoid bargaining with it. Aside from the events which form the immediate setting of the walk-out, a review of the relationship between the respondent and the Union leads to this conclusion. After functioning under the contract for but a few months, the respondent sought to obtain the Union's consent to a wage reduction, which the Union refused. Nearly 2 months later, without first consulting the Union, the re- spondent called its employees to a meeting for the purpose of request- ing them to accept a reduction greater than that which had been proposed to the Union. The act of the respondent in calling the meeting for that purpose was in direct contravention of paragraph 7 of the contract which stated that "The parties hereto also agree that no worker or group of workers shall have the right to modify or waive any of the provisions of this Agreement." The respondent contends that it was justified in seeking the sentiment of its em- ployees independently of the Union because an "impasse" had been reached in negotiations with the Union. On the evidence we find no merit in that contention. Subsequently, the respondent rejected an offer by the Union to con- sent to' the wage reduction which the respondent had earlier requested, stating that "it didn't want to have anything to do with" the Union. To carry out its purpose, the respondent, through Lillian Arissian and Nouvart Eretzian, close relatives of its officials, and Romeo and Mary Ricard, instigated a walk-out of the employees for the express purpose of permitting the respondent to terminate its contract with the Union. Thereafter, the respondent, by its actions as well as the statements of its officials, again refused to "have anything to do with" the Union and failed to reply to a letter from the Union re- questing a meeting of the parties to settle their differences. Throughout this period the respondent was under an obligation to deal with the Union as the exclusive representative of its employees for the purposes of collective bargaining not only because of its contractual relationship with the Union but also because of the re- quirements imposed by the Act. Recognizing only its obligations under the contract, the respondent sought to evade them by effecting a termination of the contract through fomenting "labor trouble" '274 DECISIONS OF NATIONAL LABOR RELATIONS BOARD among its employees, since "a strike or labor trouble by the Firm's Employees or the Union" would terminate the contract forthwith. The walk-out of December 28 cannot, however, be ascribed to the Union or to the respondent's employees. The respondent itself, by its agents and servants, organized the walk-out. We ,believe that the respondent could not by thus creating labor trouble avoid its obliga- tions under the contract. Be that as it may, however, the respondent's obligation to deal with the Union as the exclusive representative of its employees for the purposes of collective bargaining continued whether or not the contract was still in effect. It did not discharge that obligation by falsely telling the union officials that it would furnish the Union with a list of necessary replacements, by telling ' Mackesy that it no longer desired to confer or deal with the Union, or by failing to reply to Mackesy's letter of December 29. We find that the respondent, by the foregoing acts, refused to bargain collectively with the Union as the representative of its em- ployees in an appropriate unit in the respect to rates of pay, wages, hours of employment, and conditions of employment. The actions of the respondent throughout the period in question were such as to indicate to its employees its distaste for dealing with the Union and thus to discourage membership therein and interfere with the employees' rights of self-organization. By seeking to re- duce wages in November 1937 by dealing with the employees directly rather than through the Union, the respondent discredited the Union as the bargaining agency for its employees. We find that by this and other acts related above the respondent interfered with, re- strained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act.e B. The alleged discriminatory discharges The complaint, as amended, alleged that the respondent discrimi- nated with respect to the hire and tenure of employment of Elmer Bowen and George Cote, Jr., by discharging them on or about Decem- ber 28, 1937, and refusing to reinstate them at all times thereafter, and thereby discouraged membership in the Union. In his Inter- mediate Report, the Trial Examiner found that the evidence failed to establish, the discrimination or to sustain the complaint with re- spect thereto and recommended dismissal of the allegations in the complaint that the respondent had engaged in unfair labor practices within the meaning of Section 8 (3) of the Act. No exceptions were C Cf Matter of The Stolle Corporation and Metal Polishers, Buffers, Platers and Helpers International Union , 13 N L . R B 370; Matter of Charles Bank Stout, et al. and Federal Labor Union No. 20028, affiliated with the. American Federation of Labor, 15 N. L. R. B. 541. HIGHLAND SHOE, INC. 275 filed to the findings of the Trial Examiner in this respect. We have reviewed the evidence and agree with the findings of the Trial Ex. aminer. Since no exceptions were filed to the Intermediate Report in this respect, however, we shall not state the evidence in detail. We find that the respondent did not discriminate in regard to the hire or tenure of employment of Elmer Bowen and George Cote, Jr., to discourage membership in the Union. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE We find that the activities of the respondent set forth in Section III, A, above, occurring in connection with the operations of the respondent described in Section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that the respondent has engaged, in certain unfair labor practices, we will order it to cease and desist therefrom and to take certain affirmative action which we find necessary to effectuate the policies of the Act. We have found that the respondent has refused to bargain collec- tively with the Union as the exclusive representative of its employees in an appropriate unit. This finding is based, in part, upon the fact that on May 15, 1937, and thereafter, the Union represented a ma- jority of the employees in the appropriate unit. While by April 1938, the'time of the hearing, some of the employees had ceased to be members of the Union, "it is reasonable to assume . . . that any decline in union membership has been due in large measure to refusal of the respondent to bargain with the union ..." 7 The respond- ent's unfair labor practices cannot operate to change or nullify the bargaining representative previously selected by the untrammeled will of the majority. In order to effectuate the policies of the Act, we must restore, as nearly as possible, the status quo before the unfair labor practices were engaged in and secure to the employees their right to bargain collectively through the representatives they se- lected freely. We will, therefore, require the respondent to bargain with the Union as the representative of the employees in the appropriate unit. 'N. L. R. B. v. Highland Park Manufacturing Co., 110 F. (2d) 632 (C. C. A. 4), enf'g Matter of Highland Park Manufacturing Co and Textile Workers Organizing Com- mittee, 12 N L. R B. 1238. 276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD We have found that the respondent has not discriminated against Elmer Bowen and George Cote, Jr., within the meaning of Section 8 (3) of the Act. We shall, therefore, dismiss the complaint in so far as it alleges that the respondent has engaged in unfair labor practices within the meaning of Section 8 (3) of the Act. Upon the basis of the foregoing findings of fact and upon the entire record in this proceeding, the Board makes the following : CONCLusIONS OF LAW 1. United Shoe Workers of America is a labor organization, within the meaning of Section 2 (5) of the Act. 2. The respondent's employees at its Lewiston, Maine, factory, ex- clusive of foremen, assistant foremen, office help, and salesmen, con- stitute a unit appropriate for the purposes of collective bargaining, within the meaning of Section 9 (b) of the Act. 3. United Shoe Workers of America was, on May 15, 1937, and at all times thereafter has been, the exclusive representative of all the employees in the appropriate unit for the purposes of collective bargaining, within the meaning of Section 9 (a) of the Act. 4. By refusing to bargain collectively with United Shoe Workers of America as the exclusive representative of its employees in the appropriate unit, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (5) of the Act. 5. 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. 6. The • aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. 7. The respondent has not engaged in unfair labor practices within the meaning of Section 8 (3) 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 the respondent, Highland Shoe, Inc., Lewiston, Maine, and its officers, agents, successors, and assigns, shall: 1. Cease and desist from : (a) Refusing to bargain collectively with United Shoe Workers of America as the exclusive representative of its employees at its HIGHLAND SHOE, INC. 277 Lewiston, Maine, factory , exclusive of foremen, assistant foremen, office help, and salesmen ; (b) 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 or 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 United Shoe Workers of America as the exclusive representative of its employees at its Lewiston, Maine, factory , exclusive of foremen, assistant foremen, office help , and salesmen, in respect to rates of pay, wages, hours of employment, and other conditions of employment; (b) Post immediately in conspicuous places at its Lewiston, Maine, factory and maintain for a period of at least sixty ( 60) consecutive days from the date of posting , notices to its employees, stating (1) that the respondent will not engage in the conduct from which it is ordered to cease and desist in paragraphs 1 (a) and (b) of this Order; and (2 ) that the respondent will take the affirmative action set forth in paragraph 2 (a) of this Order; (c) Notify the Regional Director for the 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 complaint be, and it hereby is, dismissed in so far as it alleges that the respondent has engaged in unfair labor practices within the meaning of Section 8 (3) of the Act. MR. WILLIAM M. LEISERSON took no part in the consideration of the above Decision and Order. 1b8O.;I-4 1-N ul 3 ,---i9