Phillips Petroleum Co.

In the Matter of PHILLIPS PETROLEUM COMPANY and OIL WORKERS INTERNATIONAL UNION, LOCAL No. 212 Case No. C-1019.-Decided May 13, 1940 Oil Refining Industry-Interference, Restraint, and Coercion: anti-union state- ments ; threatening discharge for union membership ; agreement with employees as individuals, restricting the employees in their free choice of representatives and in their right to strike-Discrimination: lay-offs and discharges for union activity ; charges sustained where union membership considered as factor in selecting employees to be laid off in course of reduction of force ; charges not sustained as to some employees ; complaint dismissed as to others who did not appear to testify-Reinstatement Ordered: of employees discriminatorily dis- charged and laid off-Back Pay: awarded-Companij-Donvnated Union: organized and sponsored by employer , wholly supported by employer , employer maintained controlling voice in governing body of organization , amendments subject to ap- proval by employer, organization disestablished by employer prior to hearing, no affirmative order as to ; new organization formed at instance of employer, with assurance of employer's support and against background of employer's hos- tility toward an affiliated labor organization and its discharge of employees active in behalf of affiliated organization ; adopted agreement which Board found, as agreement with individual employees , restricted the employees in their free choice of representatives and their right to strike ; subsequently supported by permitting meeting to be held on property and use of office and plant facilities; ordered disestablished as agency for collective bargaining ; employer ordered to cease giving effect to contract with dominated organization-Settlement Agreement: affords no reason for not considering merits of allegations in complaint where employer has not complied with agreement-Procedure : Trial Examiner's finding that labor organizations were not company -dominated , reviewed and reversed despite absence of exceptions-Remedy: failure of employee to pass physical examination subsequent to discriminatory lay-off, held no bar to reinstatement where only new employees required to undergo such examination ; institution of private suit against employer by employee discriminatorily laid off, held no bar to his reinstatement. Mr. Warren Woods, for the Board. Mr. Ed. Waite Clarke, Mr. R. B. F. Hummer, and Mr. H. P. Robin- son, of Bartlesville, Okla., for the Respondent. Mr. J. E. Crail, of Fort Worth, Tex., for Local 212. Mr. C. E. B. Cutler, of Okmulgee, Okla., for certain individuals allegedly discriminated against. Mr. D. F. Rainey, of Okmulgee, Okla., for the Employees' Fed- eration. Mr. William B. Barton and Mr. David Rein, of counsel to the Board. 2314. L. R. B., No. 74. 741 283034-41-vol. 23--48 742 DECISIONS OF NATIONAL LABOR RELATIONS BOARD D.EGISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly filed by Oil Workers Inter- national Union, Local 212,1. herein called Local 212, the National Labor Relations Board, herein called the Board, by Jay Oliver, Acting Re- gional Director for the Sixteenth Region, (Fort Worth, Texas) issued its complaint dated July 26, 1938, against Phillips Petroleum Com- pany, herein called the respondent, alleging that the respondent had engaged in -and .was engaging- in unfair labor practices within_ ,the meaning of Section 8 (1), (2), and (3) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. With respect to the unfair labor practices the complaint alleged in substance that the respondent, (1) from July 5, 1935, to January 1937, fostered, encouraged, sponsored, dominated, and interfered with the formation and administration of a labor organization among its em- ployees at its Okmulgee refinery, herein called the Plan,2 and con- tributed financial support thereto, and from on or about June 1, 1937, fostered, encouraged, sponsored, dominated, and interfered with the formation and administration of it labor organization among said employees, known as Employees' Federation of the Phillips Petroleum Company, Okmulgee Refinery, herein called the Federation, and con- tributed financial support thereto; (2) terminated the employment of and refused to reinstate 22 named employees 3 for the reason that each of them joined and assisted Local 212 and engaged in concerted activities with other employees for the purpose of collective bargain- ing and other mutual aid and protection; and (3) by these acts and by other acts interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Suction 7 of the Act. There- after, the respondent filed its answer to the complaint denying the unfair labor practices alleged therein. 1 As of the date of the filing of the original charge with the Board on May 26, 1937, this organization was known as international Association of Oil Field, Gas Well , and Refinery Workers of America , Local 212. In June 1937 the name of the international organization was changed to Oil , Workers International Union See Section II, infra 2 The full name of this organization was Phillips Plan of Employee Representation, see infra. 3 The employees named in the complaint as having been discriminated against are Horace Adams, N. J Barger, Golden Brandon , W J Cates, E E Johnson , Henry Johnson, Ralph Oakley, R L Parrish, E W Christian, Tom Davis, Guthrie Davison, M E Detherow, William L Fowler, John 0 Frederick, John M Harper, C R Peters, J M Riley, John R. yrinson, R L. Stinson, D. N Stroud, Elmer West, E R Youngblood At the healing the complaint was amended, without objection , on motion of Board counsel to change the name John M Harper to Ira M Harper In addition , the Trial Examiner granted the motion of counsel for the Board to dismiss the complaint in so far as It alleged unfair labor practices by the termination of employment and refusal to reinstate N J Barger and R L. Parrish PHILLIPS PETROLEUM COMPANY 743 Pursuant to notice, a hearing on the complaint was held,at Okrnul- gee, Oklahoma, on August 11, 12, 15, 16, 17, and 18, 1938, before I. L. Broadwin, the Trial Examiner duly designated by the Board. The Board, the respondent, and certain individuals allegedly discriminated against were represented by counsel, and Local 212 by a union official. All participated in the hearing and were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues. At the opening of the hearing, the Federation filed a motion for leave to intervene, which motion was denied by the Trial Examiner. This ruling is hereby affirmed. Also at the opening of the hearing the respondent filed several motions to dismiss the complaint both in part and in its entirety and to strike. certain portions of -the complaint. All of these motions were denied by the Trial Examiner, and his rul- ings are hereby affirmed. During the hearing the respondent offered as an exhibit a notice to its employees, which it had posted on August 5, 1938, and which stated that the respondent had disestablished the Plan and that the respondent would not interfere with, restrain, or coerce its employees in the exercise of the rights guaranteed in Section 7 of the Act. The Trial Examiner denied the offer. We believe the Trial Examiner committed error by such ruling, and we hereby reverse the Trial Examiner, admit the exhibit into evidence and incorporate said exhibit as part of the record herein. At the close of the Board's case and again at the close of the hearing, the respondent again made several motions to dismiss the complaint both in part and in its en- tirety. The Trial Examiner reserved his rulings on these motions, and ruled upon them in his Intermediate Report as set forth hereinafter. During the course of the hearing, the Trial Examiner made several other rulings on motions and on objections to the admission of evi- dence. The Board has reviewed all the rulings of the Trial Examiner and finds that no prejudicial errors were committed. These rulings are hereby affirmed. On August 19, 1938, counsel for the Board and the respondent entered into a stipulation at Bartlesville, Oklahoma,-with respect to testimony which would have been given if certain individuals had been called to testify. This stipulation is hereby incorporated into and made part of the record. On October 31, 1938, the Trial Examiner filed his Intermediate Report, in which he found that the respondent had engaged in and was, engaging in unfair labor practices within the meaning of Sec- tion 8 (1) and (3) of the Act, and accordingly, recommended that the respondent cease and desist from such unfair labor practices, rein- state with back pay to their former positions of employment twenty employees named in the complaint as having been discriminated 744 DECISIONS OF NATIONAL LABOR RELATIONS BOARD against,' and take certain other appropriate action to remedy the situation brought about by the unfair labor practices found. Although he further found that the respondent fostered and dominated the Plan, the Trial Examiner found that the respondent had not engaged in unfair labor practices within the meaning of Section 8 (2) of the Act, and granted the respondent's motion to dismiss the complaint in this regard. The Trial Examiner having found that the respond- ent fostered and dominated the Plan erred in dismissing the allega- tions of the complaint with respect to the Plan. For the reasons set forth below,5 the Trial Examiner was also in error in finding that the respondent had not engaged in and was not engaging in unfair labor practices within the meaning of Section 8 (2) of the Act with respect to the Federation. The ruling granting the motion to dismiss is, therefore, reversed. All other motions to dismiss upon which ruling had been reserved at the hearing were denied by the Trial Examiner in his Intermediate Report. These rulings of the Trial Examiner are hereby affirmed. On November 16, 1938, the respondent filed a motion to reopen the record to permit the filing of an affidavit with respect to the posting by the respondent on August 5,1938, of the notice hereinabove referred to, or, in the alternative, to permit the introduction of testimony with respect to such posting. On November 22, 1938, the Board issued an order denying said motion. Thereafter, upon further consideration, the Board, on March 20, 1940, issued a further order revoking its order of November 22, 1938, granting the respondent's motion, reopen- ing the record, and receiving the affidavit as part of the record herein. On November 16, 1938, the respondent filed exceptions to the Inter- mediate Report, and on March 8, 1939, filed a brief in support thereof, which we have considered. On May 26, 1939, the respondent agreed to the waiver of oral argument which it had previously requested, and on June 1, 1939, Local 212 also agreed to such waiver. On June 22, 1939, Local 212 filed a brief which we have considered, in which, inter alia, it urged that the Trial Examiner erred in dismissing the allegations in the complaint that the respondent had engaged in unfair labor practices within the meaning of Section 8 (2) of the Act. The Board has reviewed the exceptions filed by the respondent and, in so far as these exceptions are inconsistent with the findings, conclu- sions, and order hereinafter set forth, finds them to be without merit. 4 These included all the employees named in the complaint except N J. Barger and R. L. Parrish, With respect to whom the complaint had been dismissed at the hearing on motion of counsel for the Board. See footnote 3, supra. 5 See Section III, E. infra. PHILLIPS PETROLEUM COMPANY 745 Upon the entire record in the case, the Board makes the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The respondent, Phillips Petroleum Company , is a corporation organized in 1917 under the laws of the State of Delaware. It is en- gaged in the production , refining, and sale of petroleum and petro- leum products . Directly and through wholly owned subsidiaries,6 the respondent operates 3,483 producing oil and gas wells in the States of Oklahoma , Kansas, Texas, Arkansas , New Mexico , and Kentucky, 38 natural gasoline plants in the States of Oklahoma, Texas, and New Mexico, and 3 refineries located at Kansas City, Kansas, Okmulgee, Oklahoma, and Borger, Texas; maintains 1,321 miles of gathering and trunk lines in the States of Oklahoma , Kansas, Texas, and Ar- kansas ; and owns and operates 2,261 bulk and service stations and has 6,512 resale outlets in the States of Indiana , Illinois, Kentucky, Wis- consin, Minnesota, Iowa, Missouri, Tennessee, Arkansas, Texas, Okla- homa, Kansas, Nebraska , Colorado, and New Mexico. Through a wholly owned subsidiary T the respondent maintains distribution centers in the States of Ohio, Michigan , New York, Massachusetts, New Jersey, Indiana, Maryland , Connecticut, Wisconsin, Rhode Island, and Pennsylvania. The principal office of the respondent is located in Wilmington, Delaware, and its operating offices are located in Bartlesville, Okla- homa, and New York City. In addition, the respondent maintains approximately 30 branch offices in the States of Texas, Colorado, Iowa, Michigan , Minnesota, Illinois, Indiana, Kansas, Missouri , Wisconsin, Nebraska, Oklahoma, Pennsylvania , Louisiana, and Arkansas, and in the District of Columbia. The present proceedings involve only the respondent 's refinery at Okmulgee, Oklahoma. At this refinery , crude petroleum is processed into gasoline, kerosene, fuel oil, lubricating oil, and naphtha. These products are shipped from the refinery at Okmulgee by means of pipe lines, tank cars, and trucks. During the first 7 months of 1938, a total of 57,910,104 gallons of crude and blended oil were processed at the refinery. During the same period, 21,745,829 gallons, approximately 42 per cent of the finished products, were shipped outside the State of Oklahoma. The respondent employs approximately 200 to 250 employees at the Okmulgee refinery. e As of May 8, 1935, the respondent had 20 wholly owned subsidiaries, 0 in operation and 11 inactive. 7 The Philgas Company. 746 DECISIONS OF NATIONAL LABOR RELATIONS BOARD H. THE ORGANIZATIONS INVOLVED Oil Workers International Union, Local 212, a labor organization, is a local of Oil Workers International Union which is affiliated with the Committee for Industrial Organization." Prior to June 1937, Oil Workers International Union bore the name, International Association of Oil Field, Gas Well and Refinery Workers of America, and was affiliated with the American Federation of Labor. It assumed its present name and affiliation at a convention held in June 1937. Local 212 admits to membership petroleum workers in Okmulgee, Oklahoma, including the employees at the respondent's refinery. The Phillips Plan of Employee Representation was an unaffiliated labor organization, organized in 1933 and admitting to membership employees of the respondent. Employees' Federation of the Phillips Petroleum Company, Okmul- gee Refinery, is an unaffiliated, labor organization organized in 1937, admitting to membership employees of the respondent at its Okmulgee refinery. III. THE UNFAIR LABOR PRACTICES A. Interference with, domination, and support of the Plan Local 212 was organized at Okmulgee in 1933, and received its charter on August 5, 1933.9 Employees of the respondent as well as other petroleum workers in Okmulgee were active in its organization. At about the time of the organization of Local 212, R. D. Evans, manager of the Okmulgee refinery, spoke to W. L. Fowler, an employee at the refinery. According to Fowler, Evans asked him if he had joined Local 212, and when Fowler replied in the affirmative, Evans said, "Wouldn't it be better if you belonged to a company union than to go up there and pay those fellows $2.10 a month and never do you any good?" This testimony was not denied by Evans, and we find it to be true, and we further find that the respondent thereby disparaged Local 212 and sought to discourage membership therein. In September 1933, shortly after the organization of Local 212, the respondent announced to all its employees, including those at the Okmulgee refinery, the establishment of an employee representation plan. This plan, known as the Phillips Plan of Employee Represen- tation, was drafted by the respondent, and thereafter put into opera- tion throughout the properties of the respondent. In January 1934 the respondent published and distributed to all employees a booklet entitled "The Employees' Manual of the Phillips Plan of Employee Representation," which contained the provisions of the Plan and an "Now the Congress of Industrial Organizations It was chartered as Local 212 of International Association of Oil Feld, Gas Well, and Refinery Workers of America, affiliated with the American Federation of Labor. (See Section II , supra.) PHILLIPS PETROLEUM COMPANY 747 explanation of its operation. The booklet was prefaced by a statement by Frank Phillips, president of the respondent, endorsing the Plan as "an important step in our progress" and "an essential, worthwhile arrangement for the promotion of your contentment and usefulness as an employee in the common cause." In the booklet the respondent advocated the Plan as the most "democratic and effective" "scheme of cooperation." The Plan established "joint councils, composed of representatives of the employees . . . elected by the employees, and [an equal num- ber of] representatives of the management, to discuss and adjust, subject to final review by the Board of Directors, all matters of com- mon interest, such as hours, wages, working conditions, and grievances of employees." Councils were set up for each plant of the respondent; the Okmulgee refinery had its own council, the employee representa- tives on the council being elected by, the employees at the refinery. Each local council was to hold meetings "at regular intervals on dates prescribed by the personnel officer." Elections were held annually in which each employee of the respondent of 6 months' standing was eligible to vote "except those identified with management." Only employees of 1 year's standing who were American citizens and over 21 years of age were eligible to serve as employee representatives. There were no dues or assessments required of the employees; all expenses of the Plan were defrayed by the respondent. Amendments to the Plan required the approval of two-thirds of the local councils in any of the respondent's divisions of operations,"-such approval to be manifested by the favorable vote of two-thirds of the employees' representatives and two-thirds of the management's representatives of each local council-, and the approval of the Board of Directors of the respondent. No amendment could be adopted "that will destroy or limit the equal voting power of the employees' representatives and the management's representatives in the local councils." The Plan was patently the creature of the respondent. It was sponsored, organized, and advocated by the respondent. By the structure of the Plan the respondent insured its control and super- vision of the operations of the Plan, and the Plan was rendered in- capable of functioning as a real bargaining agency for the employees. The employees did not pay dues or contribute to the support of the Plan; it was financed completely by the respondent and was thus dependent upon the respondent for its operation. In selecting rep- resentatives to represent them in meetings with the respondent, the employees were restricted to employees of the respondent. By the set-up of the joint councils the respondent maintained a controlling 10 The properties of the respondent were divided into various divisions, such as the Pro- ducing Division , Refining Division, etc. Amendments could be adopted for one division alone. 748 DECISIONS OF NATIONAL LABOR RELATIONS BOARD voice in all matters discussed at council meetings, and all such matters, moreover, were "subject to final review by the Board of Directors." Finally, by the requirement that amendments to the Plan be approved by two-thirds of the management representatives and the Board of Directors, the essential structure of the Plan could not be altered without the consent of the respondent, and it was further expressly provided that the set-up of the joint councils which insured a controlling voice to the respondent could not be altered in any fashion. Such control of the form and structure of the Plan by the respondent obviously subjects the operation of the Plan to the will and domination of the respondent and deprives the employees of the complete freedom of action guaranteed to them by the Act.ll The respondent, in its brief, admits that the Plan "was a company- sponsored organization" and does not contend that it did not domi- nate and control its operation. The respondent does contend, how- ever, that the Plan "fell into disuse by 1936 and was officially -disbanded in 1937." The precise duration of the Plan is not clearly established by the record. It is clear, however, that the Plan was functioning at least as late as July 1, 1936, and probably thereafter. An employee who was laid off in July 1936 filed a grievance pursuant -to the Plan. Clifford G. Gregory testified that he was an employee representative in 1935, 1936, and 1937. Moreover, on May 10, 1937, -the respondent considered that there was sufficient vitality in the Plan to cause the respondent to post a notice addressed to "Em- ployees' Councilmen," referring to the Plan as being, as of that date, in existence and participated in by the respondent; and stating that, pursuant to the decisions of the Supreme Court upholding the con- stitutionality of the Act, the respondent was withdrawing from further participation in the Plan. In any event, it is obvious from the record that the respondent dominated and supported the Plan :after July 5, 1935, the effective date of the Act. Accordingly, whether or not the Plan was thereafter disestablished or disbanded, the re- spondent, because of its domination and support of the Plan, engaged in unfair labor practices from July 5, 1935, to the date of its -disestablishment or disbanding. We find that the respondent from July 5, 1935, until some time in 1937, dominated and interfered with the administration of, and con- tributed financial and other support to the Plan at Okmulgee, and -thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. B. Interference, restraint, and coercion Local 212's organizing activities in 1933 met with little success -and activity abated until June 1936. An active campaign to organ- ' See N. L. R. B. v. Newport News Shipbuilding and Dry Dock Company, 00 Sup. Ct. 203. PHILLIPS PETROLEUM COMPANY 749, ize the employees of the respondent in Okmulgee was initiated at that time. Several open meetings of Local 212 were held in Ok- mulgee during June and July of 1936 and were attended by a large number of the respondent's employees. Knowledge of these organizing activities soon came to the re- spondent.12 During the month of July, according to the testimony of several employees of the respondent, supervisory officials of the respondent sought to discourage membership in Local 212, in some instances threatening employees with discharge if they engaged in union activities. Two employees, Brandon and Stroud, testified that in July 1936, Floyd Sunderland, foreman of the yard gang, expressed the re- spondent's opposition and hostility toward Local 212, and threatened employees who were members of Local 212 with discharge. Brandon testified that Sunderland asked him if he was a member of Local 212, and that when he replied in the affirmative, Sunderland told him that the respondent was opposed to Local 212 and Brandon should "get out of it," concluding with, "Well, the old man is against this, strictly against this, and it is your damn job." Stroud testi- fied that, sometime in July, Sunderland spoke to the pipe-fitting gang and said to them, "You boys had better stay out of that God damn union because Frank Phillips don't want it." Sunderland denied that he made these statements, and insisted that, except in conversations with his fellow foremen, he never spoke about unions to anyone. The Trial Examiner, who heard the witnesses testify and observed their demeanor, credited the testimony of Brandon and Stroud in his Intermediate Report. As we have found above, the respondent disparaged Local 212 and sought to discourage membership therein at the time of Local 212's first period of organizational activity in 1933, and shortly thereafter the respondent advocated and established a rival labor organization which functioned under its domination, control, and support. The record discloses nothing to indicate that the respondent had by the summer of 1936 altered its hostility to Local 212, as expressed by Evans, the manager of the Okmulgee refinery, and by the inaugura- tion and continuance of the Plan.13 For these reasons, and in the light of the entire record, we find that Sunderland made the state- ments attributed to him by Brandon and Stroud. 12 Notices of the open meetings at Ohmulgee appeared in the local newspapers. Dave Kane , an assistant foreman of the respondent , attended one of these open meetings 13 That the passage of the Act on July 5, 1935 , did not cause the respondent to alter its labor relations policy is indicated by the evidence , recited above , that the respondent after the passage of the Act , engaged in admittedly illegal activities in that it dominated and' interfered with the administration of and contributed support to the Plan , a labor organi- zation of its employees , and saw no occasion to announce its withdrawal of participation in the Plan until after the Supreme Court decisions upholding the constitutionality of the Act. 750 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Three employees, Frederick, Stroud, and Davis, testified concern- ing statements in opposition to Local 212 made by Ben Moore, fore- man of the pipe-fitting gang. Frederick testified that in about the middle of July, Moore spoke to the pipe-fitting gang and said to them, "If you stay out of the union the company will take care of you. If you don't, I don't know what will happen ." Both Stroud and Davis testified to a substantially similar incident . Stroud testi- fied, in addition , that Moore spoke to him about Local 212 on several occasions in July and, on one of these occasions, said to him , "Blackie, Bob Evans [general manager of the refinery ] told me to tell you boys that any of you who would not join that union would be guar- anteed a steady job," and added, "I tell you, Blackie , there is a bunch of them going to get in bad, I just feel sorry for some of these boys. I am just telling you what Mr. Evans said ." Moore denied that he had made these statements, although on cross-examination he admitted that he "might have said something" about unions, but could not remember exactly what. The Trial Examiner credited the testimony of Stroud , Frederick, and Davis. For the reasons stated above in considering the conflict of testimony with regard to the statements attributed to Sunderland , and upon the entire record, we find that Moore made the statements attributed to him by Stroud, Frederick, and Davis. John Riley, an employee in the power plant, testified as follows : That on July 31, 1936, on which day a number of employees were laid off by the respondent,14 Milt Lothrop, superintendent in charge of the mechanical and construction department of the respondent, spoke to him and another employee, R. W. Klein; that Lothrop was "talking about the lay-off" and said, "I like you boys , and I have had an awful time getting you off that list, but, if you want to stay here, you had better stay out of that damn Union"; that Lothrop then added that Frank Phillips had said that he would shut the refinery down "before he would have any damn bunch of radicals in there trying to run that place"; and that Lothrop con- cluded with , "I will say this, there is nobody else here but us three, and if there is ever anything said about it, I will say it is a damn lie." Klein did not testify. Lothrop denied that he made these statements . However, as we point out below, neither Lothrop nor any other representative of the respondent offered a tenable ex- planation for the subsequent discharge or lay-off of Riley on August 21, 1936. The Trial Examiner credited Rileyls testimony . For the reasons stated above in considering the conflict of testimony with regard to the statements attributed to Sunderland , and upon the entire record , we find that Lothrop made the statements attributed to him by Riley. 14 These lay-offs are discussed Infra In Section C. PHILLIPS PETROLEUM COMPANY 751 We find that the respondent, by making the anti-union statements and the threats of discharge for activity on behalf of Local 212, set forth above, interfered with, restrained, and coerced its em- ployees in the exercise of the rights guaranteed in Section 7 of the Act. C. The discriminations in regard to hire and tenure of employment 1. The compromise agreement The complaint alleges that the respondent discriminated in re- gard to the hire and tenure of employment of twenty-named indi- viduals, by causing the termination of their employment in July and August 1936.16 The respondent contends that,, because of an agreement entered into on September 11, 1936, between the respond- ent and a representative of Local 212, the Board should not consider the merits of this allegation. The agreement of September 11, which was entered into after an informal conference before the Regional Director, reads as follows: The, matter of the controversy between the Independent Oil and Gas Company 16 and Local #212 of the Oil Field, Gas Well and Refinery Workers of America arose out of the alleged dis- charge of some twenty-four (24) men for their Union' activity. The Company holds that it has not discharged the men but they have been layed off, because of the necessity for reduction of force, and these men are eligible for re-employment in the properties of the Phillips Petroleum Company,in any job avail- able for which they are qualified. In order to facilitate the re-employment of these men, the Phillips Petroleum Company will receive applications from each of them, in, which they will state jobs for which they are qualified and also a statement as to their willingness to accept employ- ment in the properties of the Company outside the Okmulgee area. The Company agrees to exercise every diligence in notifying its properties of the availability of these men for employment, and when employment is available to any of these men they will receive prompt notice. As opportunity for employment in the Okmulgee plant is presented this employment will be offered to the eligible available men. 16 The complaint contained the names of twenty -two employees , but, at the hearing, the complaint was dismissed in so far as it alleged unfair labor practices with regard to two of these employees. See footnote 3, supra. 1e This Company was at the time a wholly owned subsidiary of the respondent and was later merged with the respondent. 752 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In consideration of the above the Union withdraws its charges presented to the National Labor Relations Board. We have heretofore held that, although not bound by such a com- promise agreement, where such an agreement has-been entered into with the participation of an agent of the Board, we would, -in order to effectuate the policies of the Act, give effect to such an agreement and refrain from consideration of the alleged unfair labor practices so compromised.17 We have, however, also held that it would not effectuate the policies of the Act for the Board to refrain from con- sidering the unfair labor practices, unless the compromise agree- ment has, in fact, been complied with by the employer.18 In the instant case Local 212 charges that the respondent, subsequent to the signing of the agreement, failed to comply with its terms. Ac- cordingly, we will examine the record for a determination of this issue. In its brief submitted after the hearing, the respondent for the first time contended that the agreement, properly interpreted, established an application for reemployment as a requisite condition for con- sideration for reemployment ."' The wording of the agreement permits, and for the purposes of our decision we shall assume that the agreement should be so interpreted. The record is clear, however, that at least three employees, Cates, Riley, and West applied for reemployment shortly after the signing of the September 11 agree- ment. All three were offered temporary employment, but not until April and May 1937.20 At the time of the offers, West and Cates were told that the employment offered might last 5 or 6 days, and Riley was told that the employment offered might last from ten days to two weeks. Both West and Cates refused the offers because of better opportunities elsewhere. Riley accepted the offer, but worked only 6 days, was laid off and was never offered employment again by the respondent. These were the only offers of employment made to these three men, although the evidence is overwhelming that employment was avail- able at the Okmulgee refinery both before and after April and May 1937. West testified, without contradiction, that in January 1937 the respondent hired almost 30 employees on a temporary basis and we find this testimony to be true. Nevertheless, neither he, Cates, nor Riley were offered employment at this time. West, moreover, 17 Matter of Shenandoah-Dives Mining Company and International Union of Mine, Mill and Smelter Workers, 11 N. L R. B. 885. 18Cf Matter of Picker X-Ray Corporation and International Association of Machinists, 12 N. L. R. B 1384; Matter of Harry A . Half and International Ladies' Garment Workers' Union, 16 N L R B 667 19 Evans, in his testimony at the hearing concerning offers of reemployment , made no distinction between those who had filed applications and those who had not. 20 West was offered employ mant in April or May 1937 ; Cates and Riley in May 1937. PHILLIPS PETROLEUM COMPANY 753 was unable to obtain employment despite a specific request from the foreman in charge. The respondent offers no explanation for its failure to offer the applicants employment in January. Further, au exhibit prepared by the respondent reveals that em- ployees who had been hired for the first time early in 1937 were still employed at the Okmulgee refinery as of the date of the hearing. This exhibit shows that five employees who had been hired in the compounding plant on April 1 and 2, 1937, as well as six others who had been hired in June 1937 and January, March, and April, 1938, were still employed in August 1938. Similarly, there were still in the employ of the respondent in August 1938 four employees who had been hired for the first time for the pipe-fitting gang in April, June, and October, 1937, and six who were hired for the yard gang in August and November 1937 and in February and March 1938. A]1'21 of these new employees were hired as laborers, for which jobs all of the applicants were plainly qualified.21 The respond- ent offers no explanation for its employment of new employees in April prior to its offers to Cates and Riley in May.22 Nor does it explain the basis upon which, when an offer of employment was made to the applicants, the respondent could promise only a maxi- mum of two weeks work, while other individuals who were hired at the time of these offers were still working, without any break in employment, more than a year later. This is particularly significant with regard'to Riley, who accepted employment, but was laid off after 6 days and was not again offered employment, although other new employees who were taken on at the same time were still em- ployed more than a year later. In view of the overwhelming evidence of availability of employ- ment at the Okmulgee refinery from January 1937 through July 1938, the respondent's offers of employment to the employees covered by the agreement of September 11 who applied for employment cannot be considered a fulfillment in good faith of the respondent's obliga- tions under that agreement.23 We find that the respondent did not, comply with the agreement of September 11, 1936. The agreement, therefore, affords no reason why we should not consider the merits of the allegations in the complaint with respect to the discriminations 11 Cates and West were employed in the yard gang which performed general labor. Riley was employed as a turbine operator. The temporary positions offered to 'all three of them re at labor jobs. 3 As we have noted above, the record is not clear as to whether employment was offered to West in April. 23 It should be noted, moreover, that offers of employment were made to other employees who were covered by the agreement of September 11, but who did not apply See footnote 19, supra. So far as appears from the record, all of those to whom work was offered, were, with one possible exception, offered employment of the same temporary nature as was offdred to West, Riley, and Cates. Sam Beavers, one of the employees laid off in July and August 1936, but who is not covered by the complaint, was rehired in April 1937 and was still employed as of the date of the hearing. 754 DECISIONS OF NATIONAL LABOR RELATIONS BOARD in regard to hire and tenure of employment, and we will accordingly do so. 2. The reduction of personnel in July and August The complaint alleges that the respondent discriminated in regard to the hire and tenure of employment of 20-named employees.24 Ac- cording to the respondent, these employees were not discharged but were, laid off in July and August 1936, in the course of a reduction in force which was brought about by an increase in hours.25 Evans, the general manager of the refinery, testified that he received notice of the change in hours early in July 1936; and that he then called in his two assistant superintendents, E. V. Duff, in charge of the operat- ing department, and Lothrop, in charge of the mechanical and con- struction department, informed them of the change in hours, and instructed them that the change would require a reduction in; force. According to Duff and Lothrop, they in turn consulted with their, respective foremen,26 and asked them to prepare lists of employees in their departments rated according to efficiency; these lists were ac= cordingly prepared and after consultation with Evans,, the lay-offs, were made. The, lay-offs, however, were not all made at one time; some occurred in July.and some in.August.27 , Therrecord contains considerable conflicting evidence,'whicli cannot be reconciled, as to the number of men who were laid off at this time. Riley, a member of Local 212 and one of the employees laid off, testi- fied that there were 28 in all; Evans testified that there were about 32. Duff testified that there were 8 laid off in his department; C. E. King, general yard foreman, testified that 6 were laid off in the pipe- fitting; gang and 6 in the yard gang; Boden, foreman of the power plant, that 3 men under him were laid off; and it appears from other evidence that one employee was laid off from the warehouse and one from the laboratory. This would make a total of 25, which conforms neither with the figure advanced by Evans nor that advanced by 24 See footnote 15, supra. 25 Numerous other factors were mentioned as causes leading to the reduction of force at this time. Among these factors were a falling off in construction work , a change in the system of operation of crude battery stills, and the partial transfer of the blending and compounding operations to another of the respondent's plants The testimony , however, stresses the change in hours as the chief factor leading to the reduction 21 The foremen under Duff at this time were F H Kech , in charge of the light-oil depart- ment ; George Taylor, lube-oil foi eman , L H. Itayl , compound -plant foreman , and shift foremen , L W. White, Thane Foster , and Wade Allison . Under Lothrop were J. H Boden, in charge of-the-power -plant, A F. Miller,, in-charge of the warehouse, and C.'E'King, general-,yard foreman- King , in turn , had under his supervision , Floyd Sunderland , fore-' man of the yard gang, and Ben Moore, foreman of the pipe-fitting gang n Evans testified that he approved one set of lay-offs in July, but that another set was made while he was on vacation The testimony of Duff and Lothrop, as well as the fore- men under them, contain no intimation that the lay-offs were not made at one time. They merely state that the instructions were given, the lists prepared , and the lay-offs were made, However. the record is clear that the lay-offs were made in July and August PHILLIPS PETROLEUM COMPANY 755 Riley. There was, however, introduced into evidence an exhibit pre- pared by the respondent which showed the monthly fluctuations in the number of employees on the pay roll of the respondent for the years 1936, 1937, and 1938. According to this exhibit, the respondent had 237 employees in its employ in July 1936, 219 in August 1936, and 201 in September, 1936, making a total of 36 employees laid off, 18 in July and 18 in August. Although the evidence in this exhibit does not conform with the oral testimony, we find it necessary to rely upon the exhibit as the most reliable statement of the number of em- ployees laid off at this time. Accordingly, we find that 36 employees were laid off in the months of July and August 1936, 18 in July, and 18 in August. 3. The individual terminations of employment The terminations of employment upon which the allegations in the complaint are based were made in July and August 1936, just at the period, as we have recited above, when Local 212 was again beginning to organize and gain strength. We have found that in 1933, the first period of organization of Local 212, the respondent evidenced its hostility toward Local 212, and openly promoted and supported the formation and adimmnistration of a rival respondent-dominated labor organization. We have also found th:it in July, 1936, when a new campaign to enroll the respondent's employees in Local 212 was in process, these activities came to the knowledge of the respondent and the respondent again manifested its hostility toward and dis- paraged Local 212 and threatened employees with discharge for their activities in behalf of Local 212. After these terminations of em- ployment which had been preceded by the respondent's anti-union statements and threats of discharge for union activity, set out above, the campaign of Local 212 for membership among the respondent's employees was disorganized; the respondent's employees ceased to attend meetings of Local 212. The allegations of discrimination, in' the complaint must be considered against the background of these facts. 147illiam Louis Fowler entered the employ of the respondent in 1927, and at the time of his lay-off or discharge on July 31, 1936, was a gateman, although he worked one day a week in the yard gang. About a month prior to the lay-off, Evans complimented Fowler on his work, and said to him: "You have been here longer than I have. You are an old timer down here. I have been well pleased with your work. You can be here that much longer if you want to." As we have found above, in 1933, Evans inquired of Fowler whether he had joined Local 212, and upon Fowler's affirmative reply said : "Wouldn't it be better if you belonged to a company union than to go up there and pay those fellows $2.10 a month and never do you 756 DECISIONS OF NATIONAL LABOR RELATIONS BOARD any good." At the time of the renewed activity by Local 212, Fowler attended several open meetings held by Local 212, and signed an application for membership. At the hearing, the respondent offered no explanation for the in- clusion of Fowler among the employees laid off in July. C. E. King, general yard foreman, testified that Fowler was on the list prepared by Sunderland, foreman of the yard gang, but Sunderland contra- dicted this testimony, stating that Fowler worked for him only one day a week and was not employed in the yard gang. Since Lothrop, Sunderland's superior, corroborated Sunderland's testimony, stating that Fowler worked in Lothrop's department only one day a week, we credit the testimony of Sunderland that Fowler was not employed in the yard gang. No other foreman or official of the respondent testified that he played any part in the selection of Fowler, or that Fowler was on any of the lists prepared as a basis for the lay-off.28 Moreover, according to the exhibit to which we have referred above, there was no reduction in force among the gatemen in July or August 1936; on the contrary, the gatemen were increased from 4 in July and August to 5 in September. We find that Fowler was not laid off because of any reduction of force. In view of the respondent's hostility toward Local 212, and its many threats that union activity would lead to discharge from em- ployment, it may be inferred that when the active campaign of Local 212 which was conducted in June and July of 1936 came to the respondent's knowledge, the respondent determined to make its threats effective. The impending lay-offs presented the respondent with the opportunity of including among the employees to be laid off active union employees. Evans knew of Fowler's union member- ship in 1933. That he learned of Fowler's union activities in June and July 1936, and concluded to terminate Fowler's employment on that account, is plainly indicated by the fact that as racently as a month before Fowler was dismissed, Evans praised his work; that no foreman testified to being consulted concerning his dismissal; that the respondent presented no evidence to explain the basis upon which he was chosen as one of the employees to be "laid off"; and that at that time no reduction was made in the force of gatemen. We find that Fowler was discharged at this time because of his affiliation with and his participation in the activities of Local 212.21 28 While Lathrop testified that Fowler "was a fairly good blacksmith , but we didn't have very much blacksmith work to be done out there, " Lothrop did not advance this as a reason for Fowler's lay-off but rather as a casual observation . That it constitutes no explana- tion for the lay-off is evident from the undisputed evidence that Fowler was a gateman. 2D In making our findings with respect to the reason for the termination of Fowler's employment, Re have taken into consideration the fact that, as found below , 'loyalty to the company" was a major consideration in the selection by the respondent of the persons whos° em'loyment was terminated during this period. The significance of this criterion is, discussed below. PHILLIPS PETROLEUM COMPANY 757 We find that the respondent, by the discharge of William Louis Fowler on July 31, 1936, discriminated in regard to his hire and tenure of employment and the terms and conditions of his employ- ment, thereby discouraging membership in Local 212, and thereby interfering with, restraining, and coercing its employees in the exer- cise of the rights guaranteed in Section 7 of the Act. Shortly after his discharge, Fowler filed an application for reem- ployment. In April 1937 he was offered temporary work cleaning tanks by Kane, an assistant foreman of the respondent, but was later told by Sunderland and Lothrop that the work which required climbing was too "high and heavy" for him, and Evans subsequently advised him not to take the work. Fowler was never offered reem- ployment as a gateman or to a position similar to that which he had held prior to his discharge. Fowler was earning 68 cents an hour at the time of his discharge. Subsequent thereto Fowler secured employment at a sawmill and, from the date of his discharge to the date of the hearing, had earned $231.01. John Riley entered the employ of the respondent in 1927, and at the time of his lay-off or discharge on August 21, 1936, was a turbine operator in the power plant. Riley joined Local 212 in 1933 and was the first president of the Local. Lothrop admitted knowledge of Riley's union membership. Boden, foreman of the power plant, testified that, in accordance with Lothrop's instructions, he prepared a list of the least efficient employees and chose Riley and R. L. Stinson as the employees to be laid off from the power plant. Boden added, at a later point in his testimony, that Carl Charles was also laid off at this time. The record does not show the date on which Charles was laid off. Stinson, however, was laid off on July 31 and Riley on August 21, No explanation was made by either Lothrop or Boden for the interval between the two lay-offs. Other factors indicate that Boden's description of the lay-off of Riley as part of the general reduction in force is not in accordance with the facts. Although the exhibit to which we have referred above shows a reduction in force of two employees in the power plant in July, it shows that no reduction was made in August. Riley was laid off in August. In addition, Riley testified that his position of turbine operator was not eliminated, but was filled immediately by Raymond Sunderland. Riley's testimony was corroborated in this respect by Raymond Sunderland, who testified that he became a turbine operator at about the time of Riley's lay-off, and we find that Riley's position was filled by Raymond Sunderland. Since 283034-41-vol. 23-49 758 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Riley's position was filled by another employee, and no reduction in the number of employees in the power plant was achieved as the result of his discharge or lay-off, it is clear that Riley was not laid off in the course of the reduction of force, but was discharged three weeks later for some other reason, and we so find.311 Both Boden and Lothrop testified to several acts of inefficiency allegedly committed by Riley. All of the incidents recited in their testimony occurred at least approximately a year before.Riley's dis- missal, and it was not contended that these alleged acts of inefficiency were of sufficient gravity to warrant the discharge of Riley. As we have found above, Riley was not dismissed in the course of the reduction in force in the power plant in July, but was discharged three weeks later, with no reduction being achieved as the result of his dismissal. Since Riley was not laid off in the course of any reduction in force it is clear that these alleged acts of inefficiency, concededly insufficient to warrant Riley's discharge, were not the motivating cause for his discharge subsequent to the reduction in force. We have summarized above, in connection with our discussion of the termination of Fowler's employment, the respondent's hostility toward Local 212 and the manner in which it employed the lay-offs to effectuate its threats of discharge for union activities. Riley had been president of Local 212 and especially prominent in union activ- ities. Lothrop admittedly knew of Riley's union membership and, as we have found above, on July 31, 1936, the date of the lay-off of a number of the respondent's employees, Lothrop spoke to Riley "about the lay-off," saying, "I like you boys, and I have had an awful time getting you off that list, but, if you want to stay here, you had better stay out of that damn Union." In view of these circum- stances, and the fact that the respondent offers no adequate explana- tion for Riley's discharge subsequent to the reduction in force, we find that Riley was discharged because of his union activities. This. conclusion is corroborated by the subsequent failure of the respond- ent to offer employment to Riley until May 1937, although work was available in January 1937, and the further fact that the work given him in May 1937 was of short duration while new employees were "As we have heretofore held, a lay-off, if made for union activities, constitutes a dis- crimination in regard to hire and tenure of employment, as well as a discharge made for that reason. Matter of Jefferson Lake Oil Company, Incorporated and Sulphur Workers Local Union No 21195, 16 N L R B 355; Matter of Precision Castings Company, Inc. and Iron Molders Union of North America, 8 N L R B 879 From this view, whether Riley was laid off or discharged is immaterial However, as may be seen from the ensuing discussion, the fact that he was discharged and not laid off throws light upon the respond- ent's motive in terminating his employment PHILLIPS PETROLEUM COMPANY 759 then, and in the previous month had been, given employment, lasting in some cases for more than a year."l We find that the respondent by its discharge of John Riley on August 21, 1936, discriminated in regard to his hire and tenure of employment and the terms and conditions of his employment, thereby discouraging membership in Local 212, and thereby interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act. Riley was earning 80 cents an hour at the time of his discharge. Since August 21, 1936, he has worked at various jobs and up to the date of the hearing had earned approximately $763.00, including his earnings for the six days' employment with the respondent in May 1937. Golden Brandon, Torn Davis, D. N. Stroud, and John 0. Frederick. Brandon was dismissed from the yard gang and Davis, Stroud, and Frederick from the pipe-fitting gang, all on July 31, 1936. We will consider their cases together. Brandon entered the employ of the respondent in 1926, and at the time of the termination of his employment was a lead-off man in the yard gang. He attended several open meetings of Local 212 in June 1936, and signed an application for membership at that time. As we have found above, Brandon's foreman, Sunderland, approached him in July 1936, and asked him if he was a member of Local 212, and when Brandon replied in the affirmative, Sunderland told him that the respondent was opposed to Local 212 and Brandon should "get out of it," concluding with, "Well, the old man is against this, strictly against this, and it is your damn job." Stroud worked for the respondent for a short period in 1926, and reentered the respondent's employ in 1928. At the time of his dis- missal he was lead-off man in the pipe-fitting gang. Stroud had joined Local 212 in 1933 or 1934, but failed to keep up his dues pay- ments. He attended several open meetings of Local 212 in July 1936 and applied for reinstatement at that time. We have found that in July 1936, Stroud's foreman, Moore, spoke to him about Local 212, and on one of these occasions, said, "Blackie, Bob Evans told me to tell you boys that any of you who would not join that union would be guaranteed a steady job." Stroud replied that he did not see how anybody could be guaranteed a steady job, and that he thought Local 212 was "all right." As we have found above, Moore then added, "I tell you Blackie, there is a bunch of them going to get in bad, I 81 As in the case of Fowler, in making our findings with respect to the reason for the termination of Riley's employment, -,ie have taken into consideration, the fact that, as found below, "loyalty to the company" was a major consideration in the selection by the respondent of the persons whose employment was terminated during this period See footnote 29, supra 760 DECISIONS OF NATIONAL LABOR RELATIONS BOARD just feel sorry for some of these boys. I am just telling you what Mr. Evans said." Frederick entered the employ of the respondent in March 1934. He attended several open meetings of Local 212 held in July 1936 and at one of these meetings signed an application for membership. Davis entered the employ of the respondent in September 1928, and at the time of the termination of his employment was lead-off man in the pipe-fitting gang. Davis was a charter member of Local 212 having joined in 1933. He dropped out about a year thereafter, but rejoined in July 1936. As we have found above, in July 1936 Moore, the foreman of the pipe-fitting gang, made statements in opposition to Local 212 to the pipe-fitting gang, and on one occasion said to the men under him, "If you stay out of the union the com- pany will take care of you. If you don't I don't know what will happen." On this occasion, Frederick asked, "ain't a man got a right to do what he pleases when he gets through work, as long as it don't interfere with the company ?" and Moore replied, "Well, you will see." On a similar occasion about the middle of July 1936, Davis challenged Moore by asking "What will the company do if you don't stay out of the union ?" In September 1936, Frederick asked Evans why he had been dismissed and Evans replied that he had kept those who were "most loyal to the company." The respondent contended , as in the cases of Fowler and Riley, that the lengthening of working hours at this time necessitated a reduction in the number of employees , that it had selected the least efficient employees to be laid off, and that Brandon, Stroud, Fred- erick, and Davis were less efficient than any who were retained. The respondent's officials testified that Brandon had been an ex- cellent worker until his promotion to the position of lead-off man in the latter part of 1935 or the early part of 1936 , but that thereafter he "didn't want to take orders" and "thought he knew more about it" than his foreman. Sunderland, his foreman , added that Brandon had been dismissed rather than demoted, because he believed that, if demoted, Brandon "would feel biggety or smart alecky." Lothrop testified that Stroud had been a good worker until he had quarreled with his strawboss , Shannon. On that occasion, Stroud had been discharged, but was reemployed within 30 days. Stroud testified that he had had no trouble with Shannon after the incident; and Moore, Stroud's foreman, admitted that there was "nothing serious" in Stroud's relations with Shannon. Moreover, since Stroud was himself a strawboss he had little occasion to come in contact with 'Shannon. Moore added that Stroud "was not a lazy man or he wasn't the best," that there were "some things" Stroud could not do, and that he was not "as good" as men who were kept. . Lothrop testified PHILLIPS PETROLEUM COMPANY 761 that Stroud "just hung back and wouldn't work" and did not "do a full 8 hours work in 8 hours time." With regard to Davis, Lothrop testified that he considered that Davis "did have an outside income" and "would never be a good pipe setter because he couldn't read blue-prints, he didn't have educa- tion enough to do that work." Moore added that in selecting Davis to be laid off, one of the factors weighed was "loyalty to the com- pany." Frederick, according to Lothrop, "just didn't want to work, he wouldn't get in there and do his work." The alleged inefficiency of Brandon, an admittedly excellent worker, amounts to a claim that a change in his attitude occurred after his promotion. Stroud's difficulty with his strawboss Shannon is con- ceded by Moore to have been of no consequence, and the respondent also grants that Stroud was a good worker although allegedly not "the best." Frederick's alleged shortcoming was that he "just didn't want to work." In Davis' case, the factors allegedly determinative in his selection were an outside income, and lack of potentiality for advancement, factors which were apparently not generally considered in the selection of employees to be laid off. Clearly, testimony of such a vague and general character without support in specific instances carries little weight or conviction. More significant than such general allegations of unsatisfactory work or attitude, we be- lieve, are the respondent's admission to Frederick that the respondent retained the employees who were "most loyal to the company," and Moore's testimony at the hearing that one of the factors considered in Davis' case was "loyalty to the company." We have described above the respondent's hostility and antagonism toward Local 212, its expression of opposition toward the activities of Local 212 in contrast to its open promotion of the Plan, and its, many threats that union activity would lead to discharge from em- ployment. In the light of these circumstances and the entire record, we entertain no doubt that the respondent considered allegiance to Local 212 an act inconsistent with "loyalty to the company," and we find that membership in or activity on behalf of Local 212 was a major consideration in the selection of employees to be dismissed. For one reason or another, Brandon, Stroud, Davis, and Frederick were regarded by the respondent as active partisans of Local 212.g2 Brandon had been specifically warned by his foreman to "get out of" Local 212; Stroud had challenged Moore's warning that non-member- ship in Local 212 would mean a "steady job," and had expressed to Moore his belief that Local 212 was "all right." Davis and Frederick had both challenged the respondent's threat of discrimination because of union activity; Davis was admittedly classed as one not "loyal 12 As were Fowler and Riley whose cases we have considered above. 762 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to the company"; and Frederick, on inquiring as to the reason for his dismissal, was told that the respondent had kept those who were "most loyal to the company." We are convinced that Brandon, Stroud, Frederick, and Davis were selected to be dismissed because of their activities on behalf of Local 212, and we find that the respondent thereby discriminated in regard to their hire and tenure of employment and the terms and conditions of their employment, thereby discouraging membership in Local 212, and thereby interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act. Sometime in 1937, Brandon secured temporary employment with the Cities Service Refinery in Okmulgee. In June or July 1937, he was offered employment by the respondent, but after examination by the respondent's doctor, he was told he had a hernia and for that reason could not be given work. Brandon continued to work for Cities Service Company at common labor for about 3 or 4 months thereafter, and was then laid off. Subsequently he worked on a W. P. A. project. Brandon has earned approximately $1,020 since his dismissal from the respondent's employ.33 Stroud has worked at various jobs since his dismissal and has earned between $1,000 and $1,100. Frederick has worked for a refinery, a pipe-line company, and on relief work since his dismissal. He has earned approximately $503 at these jobs. Davis was earning 68 cents an hour as a lead-off man at the time of his dismissal. He has since secured steady employment in the yard gang at Cities Service Refinery and at the time of the hearing was earning 68 cents an hour. However, as of the date of the hear- ing, the position of lead-off man with the respondent was paying 78 cents an hour. Davis desired reinstatement to his old position with the respondent. We find that Davis has not secured substantially equivalent employment.34 Up to the date of the hearing, Davis had earned approximately $1,649.22 since his discharge. R. L. Stinson was employed as a turbine operator in the power plant and E. R. Youngblood as a Stillman helper at the time of their lay-offs on July 31, 1936; E. W. Christian was a compounder in the compounding plant at the time of his lay-off on August 15, 1936. Elmer West and W. J. Cates were laid off from the yard gang and Ralph Oakley from the warehouse, all on July 31, 1936. Although the major part of our discussion of the cases of Brandon, Stroud, 89 For a discussion of the respondent's contentions concerning the reinstatement of Bran- don, see Section V below. 84 See Mooresville Cotton Mills v. N. L. R. B., 110 F. (2d) 179 (C. C. A. 4), enf g Matter of Mooresville Cotton Mills and Local No. 1221, United Textile Workers of America, 15 N. L. R. B. 410. PHILLIPS PETROLEUM COMPANY 763 Frederick, and Davis is applicable to these persons as well, neverthe- less the record does not establish that the respondent had knowledge of their union activities or believed that they had engaged in activ- ities on behalf of Local 212. Consequently, it is not established that their activities in behalf of Local 212 were considered by the respond- ent in selecting them to be laid off. Accordingly we find that the record does not support the allegation in the complaint that the employment of R. L. Stinson, E. R. Youngblood, E. W. Christian, Elmer West, W. J. Cates, and Ralph Oakley was terminated because ,of their union activities. Horace Adams, E. E. Johnson, Henry Johnson, Guthrie Davison, M. E. Detherow, Ira M. Harper, C. R. Peters, and John R. Stinson, who were listed in the complaint as having been discriminated against by the respondent, did not testify at the hearing,35 nor was evidence introduced by other witnesses establishing the charge that their employment was terminated because of their union activities. Accordingly, we find that the record does not support the allegations in the complaint that the employment of these eight men were dis- ,criminatorily terminated. D. The agreement of March 20 as interference, restraint, and coercion On March 20, 1937, the respondent executed a "Working Agree- ment"' with five employees of the refinery as representatives of the employees as a whole. These employees had been selected by the employees in the refinery, each from the particular division in the refinery in which he worked. After they had been selected the respondent requested them to meet with it for the purpose of nego- tiating this agreement.36 The respondent had already prepared a form of agreement, which was presented to these representatives upon their meeting with the respondent, and after negotiations the agree- ment was executed by the respondent and the five representatives. After execution, the respondent requested the representatives who had signed the agreement to circulate a petition to be signed by the employees in the refinery. This petition stated that "the under- signed employees . . . hereby ratify Working Agreement and Rate 85 At the hearing, the application by Board counsel for leave to take the depositions of these individuals and to hold the record open for receipt into evidence of such depositions was denied by the Trial Examiner. 89 The record does not reveal the exact method of the selection of these representatives, nor the origin of the idea for such a selection . George P Bunn , an official of the respond- ent, testified that the idea originated with some employees of the respondent in southern Oklahoma , who requested a contract ; that the idea spread to other divisions of the re- spondent ; and that in some instances where no request was made by the employees, the respondent took the initiative , informing the employees of the occurrences at these other divisions, and suggesting that a similar procedure be followed . The record does not dis- close whether the employees at the Okmulgee refinery were informed of this procedure by other employees of the respondent or by the respondent itself. 764 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Schedule entered into on March 20th, 1937" between the five repre- sentatives and the respondent. The petition was typed in the respondent's office by one of the respondent's stenographers and then circulated by the five representatives. One hundred seventy-six employees of a total of 191 employed in the refinery at the, time signed the petition. Thus, the agreement was clearly one directly between the respondent and its employees as individuals, and not between the respondent and any labor organization of its employees. The agreement as executed was similar to other agreements which had been entered into between the respondent and other groups of employees in various departments in Oklahoma. The agreement was stated to be "for the purpose of establishing an understanding as to the conditions of employment." It was for a yearly term, renew- able automatically, but subject to cancellation on thirty days' notice "by either party to the other party." 37 The agreement covered wages and hours of work, seniority in lay-offs, reemployment and promo- tions, and vacations with pay, and provided that, "There shall be no cessation of work through strike or lockouts during the term of this agreement." A rate schedule setting forth the wage rates to be paid to the different classifications was attached to the agreement. The agreement also established a grievance procedure, providing that in the case of any grievance, the "employee affected shall, him- self, or through a workers grievance committee of his choice first seek adjustment . . . with his immediate foreman." Upon failure to secure a satisfactory settlement the employee or the grievance committee, as the case might be, could carry the issue through suc- cessive foremen to the head of the department. If no satisfactory adjustment was arrived at in the course of these appeals, the case could then be referred to a "Settlement Committee" to "consist of one member to be appointed by the employee and one to be appointed by the company." In the event of a disagreement, the two appointees could select a third member .3' The decision of the committee so composed would be final. It is plain from the wording of the agree- ment itself that, in establishing a procedure for the handling of grievances, the agreement restricted the employees in their choice of bargaining representatives. Under the agreement an employee was required to raise a grievance either by himself or "through a workers grievance committee." His choice of bargaining representative was thus restricted to the employees of the respondent; he could not, if ' Since the employees were a party to the agreement, it they desired termination of the agreement, they were required to give notice of cancellation . Obviously, since the em- ployees were not organized as a group , the giving of notice by the employees generally might have presented considerable difficulties. 88 The agreement provided that, if the two members failed to agree on a third, then the third member could be appointed by the Commissioner of Conciliation of the U. S. Depart- ment of Labor. PHILLIPS PETROLEUM COMPANY 765 he wished, choose to be represented by a bargaining agency or com- mittee comprised of individuals who were not employees of the respondent. The inclusion in an agreement with the respondent, of such a restriction upon the employees' free choice of representatives, constitutes interference, restraint, and coercion by the respondent with the rights guaranteed to its employees by Section 7 of the Act, and we so find.38 Moreover the agreement which, we have found above, was between the respondent and its employees directly, in providing that the employees should not strike, restricted the em- ployees in their right to self-organization and their freedom to en- gage in concerted activity, and thereby constituted interference, re- straint, and coercion by the respondent with the rights guaranteed to its employees by Section 7 of the Act, and we so find.40 E. Interference with, domination, and support of the Federation We have found above that the respondent, from July 5, 1935, until sometime in 1937, dominated and interfered with the administration of and contributed support to the Plan. On or about May 10, 1937, there was posted on the respondent's bulletin board in the refinery a letter to the employees' councilmen under the Plan, reading as follows : To EMPLOYEES' COUNCILMEN : In 1933 Phillips Petroleum Company and certain groups of its Employees entered into an Employer-Employee Representation Plan, the provisions of which were later set forth in a booklet entitled "The Employees' Manual of the Phillips Plan of Em- ployee Representation for the Employees of Phillips Petroleum Company and its Subsidiaries, January 1934." This Plan was made and entered into in all good faith. The relations sus- tained between the Company and its Employees thereunder have been harmonious. The decisions of the Supreme Court, construing the Wagner Act and sustaining the validity thereof, make it definite that the Company, as to operations within the scope of the Act, is pro- hibited from participating in such a Plan by the payment of traveling expenses of the Employees' representatives, paying costs of elections, and the doing of other things incident to the existence of such a Plan. Therefore, the Company withdraws se Cf. Matter of The Duffy Silk Company and Silk Throwsters Union, Local 81, Textile Workers Union of America, 19 N L. R. B 37. See also Matter of Killefer Manufac- turing Corporation and Steel Workers Organtizing'Commtttee, 22 N. L. R. B. 484. 40 See Matter of Arcade Sunshine Company, Inc. ar.d Laundry Workers Cleaners it Dyers Union, 12 N. L. R. B 259. As we find below the agreement was subsequently adopted by the Federation and thereby became an agreement with a labor organization However, since, as we also find below, the Federation is dominated by the respondent, the agreement was thereby rendered illegal as an agreement with an employer-dominated labor organiza- tion. See infra, Section E. 766 DECISIONS OF NATIONAL LABOR RELATIONS BOARD its representatives from the councils and from further participa- tion in said Plan, leaving the Employees entirely free to admin- ister Employer-Employee relations by contact with the Manage- ment of the Company through their chosen representatives. In full accord with the Wagner Act, as construed by the Su- preme Court, the Employees have the right to initiate their own organization or Plan for negotiating with the Company. Various field groups of Employees have recently entered into Working Agreements with the Company. These were negoti- ated through fellow workers, chosen as employees' representa- tives in full compliance with the Wagner Act. Such an approach, so initiated by the Employees without any interfer- ence, coercion, or restraint on the part of the Company, may be sustained by adopting some more permanent method of negotiat- ing with the Company, from time to time, in reference to all matters affecting working conditions and matters of mutual interest. It is the earnest hope of the Management that the friendly relations that now exist may continue. Cordially yours, FRANK PHILLIPS, /s/ President. Shortly after the posting of this notice Gregory, one of the em- ployee representatives under the Plan, called a meeting of the em- ployees "to decide what kind of an organization we would have in the refinery." This meeting was held and the question of "what kind of an organization we should have" was discussed. At a subsequent meeting held on May 26, 1937, an election -board was selected pre- paratory to a ballot on the question of the "kind of an organization" desired by the employees. The election was held on June 2, 1937, with the following results : 66 votes for Employees Plant Union 81 votes for some major Union 22 votes for no Union. Another meeting of the employees was held on June 4, at which "it was voted that since no one organization got a majority of all votes cast, it would be necessary to hold a run-off between the two that had received the most votes." The run-off election was held on June 9, with the following results : 41 - 130 votes for Employees Union 64 votes for some major Union. 41 Prior to the run-off election, Gregory had had reprinted and distributed among the employees at the refinery, an article from "The Voice, official publication of employees of the Humble Oil and Ref. Co.," which was a bitter attack against the C. I. O. PHILLIPS PETROLEUM COMPANY 767 All of these meetings were held in the "change house," a building owned by the respondent, and in which the employees punched the time clock and changed clothes. On June 10, 1937, "Wm. Bush, Chairman" and "C. G. Gregory, Seely," dispatched a letter to Evans, informing him of the results of the two elections, and concluding with : Some time in the near future we will hold another meeting and organize our Employees Union. Knowing how much you are interested in these affairs, and trusting you will be pleased with the results, I am Yours very truly, C. G. GREGORY, Seely. WM. BusH, Chairman. Subsequently, a meeting of the employees was held and a formal organization was established. William Bush was elected president, Bill Neelan, vice president, and Gregory, secretary-treasurer. In addition, two employees were chosen from the "rank and file" who, together with the three officers, constituted a "council." Thereafter, according to Bush, this council prepared a constitution for the organization. The constitution was modeled, according to Gregory, after the constitution of a labor organization of the employees of the Humble Oil & Refining Company 42 and of a labor organization which had been established at the Bartlesville office of the respondent. Gregory could not recall where and in what manner the copy of the constitu- tion of the labor organization of the employees of the Humble Oil & Refining Company was obtained. The copy of the constitution of the labor organization at Bartlesville, however, was obtained with the assistance of Carl Gammons, who was secretary of the "Refining Committee," which is in charge of refining operations for the re- spondent. On one of Gammons' periodical visits to Okmulgee, Greg- ory asked him if there was an "Employees Association" at Bartlesville, and who the officers were. Gammons replied that there was such an organization, that he did not know who the officers were but could find out. According to Gammons, upon his return to Bartlesville he made inquiries and learned the name of the presi- dent of the "Employees Association" at Bartlesville, and then tele- phoned Gregory at Okmulgee to communicate this information to him. Gregory testified that he thereupon wrote to the president of the "Employees Association" at Bartlesville, and received a copy of its constitution from him. 42 See Matter of Humble Oil & Refining Company and Oil Workers International Union, Locals Nos 333 and 316, 16 N L. R. B 112, where the Board found that the Humble Oil & Refining Company had dominated and interfered with a labor organization of its employees at Baytown and Ingleside, Texas. 768 DECISIONS OF NATIONAL LABOR RELATIONS BOARD According to Bush, the constitution of the Federation which was thereafter prepared by the "council" was approved "at a meeting of the organization" with "50 or 60" people present. The constitution provides that the "name of this organization shall be Employees Federation of the Phillips Petroleum Company, Okmulgee Refinery." Membership is restricted to "permanent" employees at the refinery except those "in an administrative capacity and department heads and chief clerks." The constitution further provides that representa- tives are to be elected from election divisions, to be fixed by the council, but that only members of the Federation who have one year's service with the respondent and are citizens of the United States are eligible to election as representatives. The elected representatives constitute a "council," 43 which is the governing body of the Federation. The constitution states that it "shall be the duty of the representatives to receive from their con- stituents all complaints and grievances and to present the same to the proper representatives of the management for adjustment and settlement. If the representatives are unable to settle satisfactorily or adjust such matters with the representatives of the management, -then the representatives shall refer the whole matter to the council for consideration." The council is not only empowered to establish "election divisions" which serve as the basis for the apportionment of representatives, but also "to negotiate a written agreement with the company providing a method of discussion, adjustment, and settling all matters with respect to wages, hours, or working condi- tions." This latter power of the council is subject to the proviso that, prior to execution, the proposed agreement must be submitted to the members of the Federation. Each member is subject to an assessment of 50 cents a year to be made by the council, but additional assessments to the limit of $5.00 a year can be made by majority vote of the members of the Federation. During the first year the only assessment made was a 50-cent assessment by the council. Until January 1, 1938, the Federation held its meetings in the "change house" which we have described above. Only two meetings were held in 1938. Both were held in the club room of the "Social Club," rent free to the Federation.44 The "Social Club" is a social organization which limits its membership to the employees of the respondent's Okmulgee refinery, including supervisory employees. Both Evans, manager of the refinery, and Lothrop, mechanical and construction superintendent, are members. On July 1, 1938, an elec- 49 The constitution also provides for the election of a president, vice president, and sec- retary-treasurer. The provisions do not state , however, whether these officers are members of the "council " " The Federation did pay a janitor 's fee of 250 at one meeting PHILLIPS PETROLEUM COMPANY 769 tion meeting was held in the clubroom of the Social Club at which James Hawk and Wayne Cunningham were elected president and secretary-treasurer, respectively 48 The minutes of the Federation's meetings were typed in the refin- ery office by a stenographer who was a member of the Federation. At the Federation's request, the respondent furnished it with a bulletin board in the plant to be used as the Federation chose 48 The Federation never attempted to negotiate an agreement with the respondent because, according to Gregory, "we were using" the agreement of March 20, 1937.47 This was corroborated by Raymond Sunderland, one of the five employees who negotiated the March 20 agreement, who testified that the Federation had adopted the agree- ment of March 20 and was working under it. We find that the Federation adopted and operated under the agreement of March 20, 1937. Gregory, who was the moving spirit in the formation of the Fed- eration, could not state any purpose for its organization. Although he had actively campaigned for the Federation and against the "C. I. 0.," 411 he testified that "we just wanted to try to satisfy the men . . . we decided to leave it up to the men whether or not they wanted to go into some major organization or have a plant organiza- tion of our own; or no organization at all. That is the three ques- tions on the ballot." And, when asked on cross-examination, "Really there wasn't very much necessity for your organization at all," Gregory replied, "For my part there wasn't." Upon the basis of all the evidence, we believe that the formation of the Federation was the result of the respondent's encouragement and activities, and that the Federation, thereafter, operated with the re- spondent's support and under the domination of the respondent. As we have found above, in 1933, the first period of the organization of Local 212, the respondent expressed its hostility toward Local 212, and formed the Plan, an employee-representation plan for its em- ployees. Thereafter, the Plan continued under the respondent's domi- nation and control and with the support of the respondent until some- time in 1937. In July 1936, when Local 212 was again beginning to organize, the respondent, through the repeated statements of its fore- men, expressed its opposition to Local 212, threatening employees with "After the election the Federation held a party in the clubroom, to which Evans and other supervisory officials were invited and attended 48 On October 18, 1937 , the Federation posted on this bulletin board a list of employees who had not become members of the Federation , stating • "In the future it will be neces- sary for you to be a member if you expect the Employees' Federation to do anything for you , so , let's try to cooperate " 47 Gregory also testified that the Federation had an agreement with the respondent to take up grievances through the elected representatives He did not specify, however, whether this was under the terms of the March 20 agreement , or merely an informal understanding 48 See footnote 41, supra 770 DECISIONS OF NATIONAL LABOR RELATIONS BOARD discharge for their activities in behalf of Local 212, and in fact did discharge six employees because of their activities in behalf of Local 212. Subsequently, on March 20, 1937, at the suggestion of the re- spondent, the employees, through representatives chosen by them, entered into a "Working Agreement" with the respondent. This agreement had been prepared by the respondent and established a grievance procedure which was to operate through a "workers griev- ance committee." As we have found above, the insertion of this provision in the agreement restricted the employees in their choice of bargaining representatives to employees of the respondent and thereby constituted interference, restraint, and coercion by the re- spondent with the rights of its employees. At the time of the execution of the agreement there was in existence no permanent body that could function as a "workers grievance committee" except possibly the representatives under the Plan, who, since they were all employees of the respondent, were qualified for such a role. Unless these representatives were chosen to serve in such a capacity, it apparently would have been necessary for the operation of the agreement to choose a "workers grievance committee" for each grievance, or establish some other body to fulfill this function. The respondent pointed this fact out to its employees and more particularly to the employee representatives under the Plan, in its letter of May 10, 1937, announcing its withdrawal of participation in the Plan. The respondent did not in this letter announce its disestablishment of the Plan, but merely its withdrawal of participation '411 "leaving the em- ployees entirely free to administer Employer-Employee relations by contact with the Management of the Company through their chosen representatives." The respondent, moreover, in the same letter re- minded the employees that during the life of the Plan the "relations sustained between the Company and its Employees thereunder have been harmonious," and informed them that, "In full accord with the Wagner Act, as construed by the Supreme Court, the Employees have the right to initiate their own organization or Plan for negotiating with the Company." The letter concluded with the following : Various field groups of Employees have recently entered into Working Agreements with the Company. These were negotiated through fellow workers, chosen as employees' representatives in full compliance with the Wagner Act. Such an approach, so initiated by the Employees without any interference, coercion, or restraint on the part of the Company, may be sustained by adopt- ing some more permanent method of negotiating with the Com- 4° That the equivocal character of this notice was recognized by the respondent is shown by its subsequent posting on or about August 5, 1938, of a notice of disestablishment. This notice is discussed below, in Section V It should he noted, however, that this notice was not posted until after the formation of the Federation PHILLIPS PETROLEUM COMPANY 771 parry, from time to time, in reference to all matters affecting working conditions and matters of mutual interest. It is the earnest hope of the Management that the friendly rela- tions that now exist may continue. Thus, the respondent not only emphasized its satisfaction with the "harmonious" "relations" under the Plan, but also referred with approval to the execution of the "Working Agreement" which had been "negotiated through fellow workers" and provided for dealing with the respondent through "a workers grievance committee." Fur- thermore, in its letter the respondent stressed its view that it was desirable to establish a "more permanent method" in order that "such an approach may be sustained." Such a statement, viewed against the background of the respondent's open espousal of an employee- representation plan since 1933, and its renewed hostility toward Local 212 as recently as 1936, which hostility had resulted in the disorgani- zation of Local 212 among the respondent's employees, was an open invitation to the employees, and even more patently to the employee representatives under the Plan to whom the letter of May 10 was nominally addressed, to form an organization patterned after the Plan which would serve the purpose of implementing the agreement of March 20. The letter was, furthermore, an assurance that such an organization would be looked upon with favor by the respondent. It is most significant, therefore, that the leading spirit in the promo- tion of the Federation was Gregory, an employee representative under the Plan, particularly since Gregory's letter to Evans of June 10, 1937, clearly indicates that he initiated steps for the formation of the Federation because he knew of the respondent's interest, approval, and support. His testimony at the hearing in which he stated that "for my part" there vas no need for the formation of the Federation indicated further that he would not have taken these steps without such knowledge, and that his motivation lay in the respondent's suggestion that such an organization be formed. Moreover, in line with the respondent's suggestion and its advocacy of -a method of bargaining through representatives chosen from among the employees, the Federation, when formed, established representation upon that basis. Much of the structure of the Federation resembled that of the Plan. As in the Plan, membership was restricted to employees of the respondent and only an employee of 1 year's standing who was a citizen of the United States was eligible to election to office as a representative ; the entire scheme of representation by means of rep- resentatives chosen from among the employees, as well as the very name of "council," appears to have been borrowed from the Plan. Finally, precisely in accordance with the respondent's suggestion in its letter of May 10, the Federation adopted and operated under the agreement of March 20. 772 DECISIONS OF NATIONAL LABOR RELATIONS BOARD It is apparent from the foregoing facts that the Federation was not the free choice of the respondent's employees. On the contrary the record establishes that the Federation was formed at the instance of the respondent and with assurance of the respondent's support, and that its structure was devised so as to conform to the respondent's wishes. Further the record shows that the Federation represented the next step in a process whereby free collective action by employees was at first circumscribed and restrained by the agreement of March 20, and the Federation thereafter created to implement the agreement and more certainly to obstruct the exercise of the rights guaranteed by the Act. While the respondent's interference with, domination of, and con- tribution of support to the Federation is apparent from the fore- going, the record shows that the respondent in other ways, in addi- tion, assisted and supported the formation and administration of the Federation. The organization meeting and subsequent meetings of the Federation were held on the respondent's property. It is diffioult to believe that the respondent had no knowledge of such meetings, and, in any event, its prior conduct had made clear to the employees that the respondent would not object to such use of its property. Thereafter meetings were held rent free in a clubroom maintained by the "Social Club" which included the respondent's supervisory officials as members. Further, the respondent aided in the prepara- tion of the constitution of the Federation and after the formation of the Federation furnished it with a bulletin board in the respondent's plant, and permitted its minutes to be typed in the respondent's office.", We find that the respondent, by the above-described course of con- duct, dominated and interfered with the formation and administra- tion of and contributed financial and other support to the Federation, and thereby interfered with, retrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondent set forth in Section III above, occurring in connection with the operations of the respondent de- scribed 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. co As in the case of the use of the respondent's propeity for meetings, the use of such office facilities was, if not with the knowledge of the respondent, then at least with its tacit consent. PHILLIPS PETROLEUM COMPANY V. THE REMEDY 773 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 which we find necessary to effectuate the policies of the Act. We have found that the respondent has discriminated in regard to the hire and tenure of employment and the terms and conditions of employment of William Louis Fowler, John Riley, Golden Brandon, D. N. Stroud, John 0. Frederick, and Tom Davis. We shall, there- fore, order the respondent to offer to these employees immediate and full reinstatement to the respective positions held by them on the date of their dismissals, i. e., Fowler to a position as a gateman, Riley to that of a turbine operator, Brandon as lead-off man in the yard gang, Stroud and Davis as lead-off men in the pipe-fitting gang, and Frederick as a laborer in the pipe-fitting gang, or if these are not available, to substantially equivalent positions. Where neces- sary, we shall require the respondent to displace employees who have succeeded to these positions, or to positions which either because of seniority or the practice of the plant should have been offered to one of the above-named employees.51 With regard to Brandon, the respondent contends that he should not be reinstated (1) because of his rejection for reemployment after a physical examination, and (2) because of his institution against the respondent of a suit for damages caused by blacklisting. With regard toy the first contention, it is clear from the record that other doctors approved Brandon as capable of working at common labor, and more significantly that he continued to work at common labor after his rejection by the respondent's physician. We find it un- necessary to pass upon Brandon's allegation that his rejection by the respondent's physician was fraudulent. It is sufficient to note that Brandon's subsequent employment at common labor clearly in- dicates that he is capable of working at his former position with the respondent. Moreover, had it not been for the respondent's un- lawful discrimination against Brandon, no occasion would ever have arisen for Brandon to take a physical examination as a, condition of employment with the respondent. There is no showing that the respondent has any rule requiring its employees to be periodically examined in order to continue at work, and the record clearly shows that if Brandon had not been unlawfully dismissed by the respond- ent, there would have been no occasion to require that he be ex- amined. We do not see why a standard applied by the respondent to new employees should, under the circumstances, be applied to 51 See Matter of Model Blouse Co. at at and Federal Labor Union No 21560, 15 N. L. R. B. 133. 283034-41-vol 23-50 774 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Brandon. Accordingly, we see no merit in this first contention of the respondent. As to the respondent's second contention that Brandon instituted suit against the respondent, we cannot see what relevance such institution of a suit bears to Brandon's reinstatement pursuant to the Act. Accordingly, we will order Brandon to be reinstated together with the other employees. We shall also order the respondent to make whole the employees discriminated against for any loss of pay they may -have suffered by reason of such discrimination by payment to each of them of a sum of money equal to the amount which he normally would have earned as wages from the date of the discrimination against him, to the date of the offer of reinstatement, pursuant to our order, less his net earnings'52 during said period, including, in the case of Riley, the sum earned during the period of his employment with the re- spondent in May 1937. We have found that the respondent dominated and interfered with the administration of and contributed financial and other sup- port to the Plan. We have also found that the respondent dom- inated and interfered with the formation and administration of and contributed financial and other support to the Federation. The notice of May 10, 1937, which we have discussed above, was, as we have found, an equivocal statement with regard to the respondent's future relations toward the Plan. On August 5, 1938, however, shortly before the opening of the hearing, the respondent posted a notice to its employees, which stated that the respondent "has with- drawn recognition of and disestablished its relation with the `Phillips Employees' Representation Plan' as a bargaining agency." Since the respondent has already disestablished the Plan, it will accordingly not be necessary to order its disestablishment. The notice of August 5, however, makes no reference to the Fed- eration. We find that the effects and consequences of the respond- ent's domination, interference with, and support of the Federation, as well as the continued recognition of the Federation as bargaining representative for its employees, constitute a continuing obstacle to the free exercise by its employees of their right to self-organization and to bargain collectively through representatives of their own 52 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 discrimi- nation by the respondent and the consequent necessity of seeking employment elsewhere. See Matter of Crossett Lumber Co and United Brotherhood of Carpenters and Joiners of America, Lumber and Sawmill Workers Union , Local 2590, 8 N L R B 440 Monies re- ceived for work performed upon Federal , State, county , municipal, or other work-relief projects are not considered as earnings but, as provided below in the Order, shall be de- ducted from the sum due to 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 piojects PHILLIPS PETROLEUM COMPANY 775 choosing. The Federation was created for the purpose of and has been utilized by the respondent as an instrumentality to defeat the rights of its employees under the Act. Because of the respondent's illegal conduct with regard to the Federation, it is incapable of serv- ing the respondent's employees as a genuine collective bargaining agency. Moreover, continued recognition of the Federation by the respondent would be obstructive of the free exercise by the employees of the rights guaranteed to them by the Act. Accordingly, we will order the respondent to disestablish and withdraw all recognition from the Federation as the representative of its employees for the purposes of dealing with it concerning grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of emplovment.53 We have also found that the agreement of March 20, 1937, as an agreement directly between the respondent and its employees, restricted the employees in their choice of representatives, and obstructed their right to self-organization and to engage in con- certed activity, and that the respondent by entering into the agree- ment thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. We have also found that thereafter the Federation adopted and operated under the agreement. Thus the agreement, both when originally executed and when it was later adopted by a respondent-dominated labor organization, has served to frustrate self-organization and defeat collective bargaining by its employees. So long as the contract remained one between the respondent and its individual employees, we would have restrained only the enforcement of the specific provi- sions limiting the choice of representatives and the right to strike.64 The agreement, however, having become a collective agreement be- tween the respondent and a dominated labor organization, any con- tinuation, renewal, or modification of the agreement would perpetuate the conditions which have deprived its employees of the rights guar- anteed to them by the Act and would render ineffectual other por- tions of our remedial order. We shall, therefore, direct the respond- ent to cease giving any effect to the agreement, or to any modifications or extensions thereof, or to any agreement between it and the Federation. As recited above, shortly before the hearing, the respondent posted a notice disestablishing the Plan and stating that the respondent would not interfere with the rights of its employees under the Act. "See N. L. R. B. v. Newport News Shspbuilding and Dry Dock Company, 60 Sup Ct 203, N. L R. B. v. The Falk Corporation, 60 Sup Ct 307; N. L. R B. v Pennsylvania Greyhound Lines, 303 U S 261 mCf Matter of Ktillefer Manufacturing Corporation and Steel Workers organizing Com- mittee, 22 N L R B 484, see also National Licorice Co 1 N L R B , 60 Sup Ct. 569; American Manufacturing Company v N L R B, 60 Sup Ct 612 776 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The notice is not in a form which we would approve. Moreover, since, as we have found above, the respondent, subsequent to the post- ing of the notice, continued and continues to engage in unfair labor practices, we find it necessary in order to effectuate the purposes and policies of the Act to order the respondent to post the notice herein- after set forth. We shall also order the respondent to take certain other action more particularly set forth in the order. Where we have found that the record does not support the allega- tions of unfair labor practices set forth in the complaint, we will order the complaint dismissed in so far as it alleges such unfair labor practices. Upon the basis of the above findings of fact and upon the entire record in the case, the Board makes the following: CONCLUSIONS OF LAW 1. Oil Workers International Union, Local 212, and Employees' Federation of Phillips Petroleum Company, Okmulgee Refinery are labor organizations, and The Phillips Plan of Employee Representa- tion was a labor organization, within the meaning of Section 2 (5) of the Act. 2. By the making of anti-union statements, and by threats of dis- charge for membership in and activity on behalf of Oil Workers International Union, Local 212, the respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (1) of the Act. 3. By entering into the agreement of March 20, 1937, with its employees, which agreement restricted the employees in their choice of bargaining representatives and in their right to self-organization and to engage in concerted activity, the respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (1) of the Act. 4. By discriminating in regard to the hire and tenure of employ- ment and the terms and conditions of employment of William Louis Fowler, John Riley, Golden Brandon, D. N. Stroud, John O. Fred- erick, and Tom Davis, thereby discouraging membership in Oil Workers International Union, Local 212, the respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (3) of the Act. 5. By dominating and interfering with the administration of and contributing financial and other support to the Phillips Plan of Em- ployee Representation, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (2) of the Act. PHILLIPS PETROLEUM COMPANY 777 6. By dominating and interfering with the formation and ad- ministration of and contributing financial and other support to the Employees' Federation of Phillips Petroleum Company, Okmulgee Refinery, the respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (2) of the Act. 7. By interfering with, restraining and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, the re- spondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (1) of the Act. 8. The aforesaid unfair labor practices, and each of them, are unfair labor practices affecting commerce within the meaning of Section 2 (6) and (7) of the Act. 9. The respondent has not discriminated in regard to the hire and tenure of employment of Horace Adams, W. J. Cates, E. W. Christian, Guthrie Davison, M. E. Detherow, Ira M. Harper, E. E. Johnson, Henry Johnson, Ralph Oakley, C. R. Peters, John R. Stin- son, R. L. Stinson, Elmer West, and E. R. Youngblood, 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, Phillips Petroleum Company, and its officers, agents, successors, and assigns shall: 1. Cease and desist from : (a) Discouraging membership in Oil Workers International Union, Local 212, or any other labor organization of its employees by laying off, discharging, or refusing to reinstate any of its employees, or in any other manner discriminating in regard to their hire and tenure of employment or any terms or conditions of their employment, or by threats of such discrimination; (b) Dominating or interfering with the administration of The Phillips Plan of Employee Representation or with the formation or administration of Employees' Federation of Phillips Petroleum Com- pany, Okmulgee Refinery, or with the formation or administration of any other labor organization of its employees, and from contribut- ing financial or other support to said labor organization or to any other labor organization of its employees; (c) Giving effect to the agreement of March 20, 1937, or any modification or extension thereof, or any other contract between the respondent and the Federation; (d) In any other manner interfering with, restraining, or coercing its employees in the exercise of their right to self-organization, to 778 DECISIONS OF NATIONAL LABOR RELATIONS BOARD form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection as guaranteed in Section 7 of the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act: (a) Offer to William Louis Fowler, John Riley, Golden Brandon, D. N. Stroud, John O. Frederick, and Tom Davis immediate rein- statement to their former positions in accordance with the section on Remedy above, or, if these are not available, to substantially equiva- lent positions, without prejudice to their seniority or other rights or privileges, and where necessary, displace any employees who may have succeeded to their former positions, or to any other position which because of seniority or the practice of the plant should have been offered to any of the above-named employees ; (b) Make whole William Louis Fowler, John Riley, Golden Bran- don, D. N. Stroud, John O. Frederick, and Tom Davis for any loss of pay they may have suffered by reason of the respondent's dis- crimination in regard to the hire and tenure of their employment and the terms and conditions of their employment by payment to. each of them ' of a sum of money equal to that which each would normally have earned as wages from the date of such discrimination to the date of the offer of reinstatement, less his net earnings during said period; deducting, however, from the amount otherwise due to each of the said employees, monies received by said employees during said period for work performed upon Federal, State, county, municipal, or other work-relief projects, and pay over the amount so deducted to the appropriate fiscal agency of the Federal, State, county, municipal, or other government or governments which supplied the funds for said work-relief projects; (c) Withdraw all recognition from Employees' Federation of Phillips Petroleum Company, Okmulgee Refinery, as the representa- tive of any of its employees for the purpose of dealing with the respondent concerning grievances, labor disputes, wages, hours of employment, or other conditions of employment, and completely dis- establish said Employees' Federation of Phillips Petroleum Company, Okmulgee Refinery, as such representative; (d) Post immediately in conspicuous places throughout its Okmul- gee refinery, and maintain for a period of at least sixty (60) consecu- tive 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), (b), (c), and (d) of this Order; (2) that the respondent will take the affirmative action set forth in paragraphs 2 (a), (b), and (c) of this Order; and PHILLIPS PETROLEUM COMPANY 779 (3) that the respondent's employees are free to become or remain members of Oil Workers International Union, Local 212, and the respondent will not discriminate against any employee because of membership or activity in that organization ; (e) Notify the Regional Director for the Sixteenth Region in writing within ten (10) days from the date of this Order what steps the respondent has taken to comply therewith. AND IT IS YURTHER 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 with respect to Horace Adams, W. J. Cates, E. W. Christian, Guthrie Davison, M. E. Detherow, Ira M. Harper, E. E. Johnson, Henry Johnson, Ralph Oakley, C. R. Peters, John R. Stinson, R. L. Stinson, Elmer West, and E. R. Youngblood. MR. WILLIAM M. LFAsRsoN took no part in the consideration of the above Decision and Order.