Producers Produce Co.

In the Matter of PRODUCERS PRODUCE COMPANY and AMALGAMATED MEAT CUTTERS AND BUTCHER WORKERS OF NORTH AMERICA ,, PouvTRy AND EGG HANDLERS DIVISION, LOCAL No. 172, AFFIIIATED WITH THE AND EGo -HANDLERS DrvrsiGw,. LooAL No. 172, AFFILIATED WITH THE Case No. C 844.Decided May 16, 1940 Agricultural Produce Processing Industry-Interference , Restraint , and Coer- cion: employer's notice encouraging individual bargaining and discouraging col- lective action as well as union organization ; employer's expression to foremen of hostility to Union and requests that foremen report union activities of employees ; anti-union statements to employees-Discrimination : by discharges; allegations of, dismissed-Unit Appropriate for Collective Bargaining : production and maintenance employees exclusive of supervisory and clerical employees ; no controversy as to-Representatives : proof of choice : membership list com- pared with pay roll ; no controversy as to-Collective Barga'aung : refusal to enter.,into oral or written agreements w.ith.Union embracing terms and provisions of understanding reached ; employer's contention that Union agreed not to seek a binding agreement not supported by the evidence, nor may the right to a binding agreement be waived ; observance of understanding as a statement of policy insufficient when Union requests contract ; refusal to enter into contract not justified by fear of loss of customers ; refusal at conclusion of unsuccessful collective bargaining negotiations to give Union written recognition as exclusive collective bargaining representative ; ordered, to bargain and to embody any understanding reached in a written, signed contract upon request-Processing Cooperative : contention that officers of cooperative have no authority to contract with labor organization without express consent and approval of stockholders rejected ; officers did not in fact refuse to enter into contract because they believed they lacked authority to bind respondent ; if such authority is necessary officers are under a duty to submit the question of executing a contract to stockholders. Mr. Bernard L. Alpert, for the Board. Mr. Frank C. Mann and Mr. Arthur M. Curtis, of Springfield, Mo., for the respondent. Mr. Robert Burstein and Mr. N. Barr Miller, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon amended charges duly filed by Amalgamated Meat Cutters and Butcher Workers of North America, Poultry and Egg Handlers Division, Local No. 172, affiliated with the American Federation of 23 N. L. R B., No. 93 876 PRODUCERS PRODUCE COMPANY 877 Labor, herein called the Union, the National Labor Relations Board, herein called the Board, by Ernest C. Dunbar, Acting Regional Di- rector for the Seventeenth Region (Kansas City, Missouri), issued its complaint dated July 5, 1938, against Producers Produce Com- pany, herein called the respondent, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting com- merce, within the meaning of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the complaint, accompanied by notice of hearing, were duly served upon the respondent and upon the Union. In respect to the unfair labor practices, the complaint alleged in substance (1) that the respondent on about July 26, 1937, and at various times thereafter, by refusing to negotiate in good faith with the Union and by refusing to sign a contract agreed upon by repre- sentatives of the Union and of the respondent, refused to recognize the Union and to bargain collectively with it as the exclusive representa- tive-of the respondent's employees in an. appropriate bargaining unit composed of all the employees, exclusive of supervisory and clerical employees and salesmen; (2) that the respondent on,June 22 and on- July 1, 1937, respectively, discharged and thereafter `refused to rein- state Fred Brixey and Bud Thurman for the reason that they had attempted to initiate a labor organization in 1934 and 1936 and had assisted in the formation of the Union; (3) and that the respondent by the afore-mentioned acts and refusals to act, and by statements derogatory to the Union and to unions generally has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. Thereafter, the respondent filed its answer, which admitted that its business was interstate in character, that the unit for collective bar- gaining as set forth in the complaint was appropriate, and that on August 11, 1937, and at all times thereafter the Union was the exclu- sive bargaining representative of all the employees in such unit, but denied that it had engaged in or was engaging in the alleged unfair labor practices. In addition the answer averred that the respondent and the Union were unable, after numerous conferences, to arrive at a full and complete agreement on all matters under negotiation; that it was therefore understood and' agreed' that a formal written contract would not be entered into, but that such matters as were verbally agreed upon would be carried out by both parties; and that the re- spondent has at all times thereafter fully complied with the terms and conditions of such verbal agreement. Pursuant to notice, a hearing was held in Springfield, Missouri, on July 14, 15, 16, and 18, 1938, before Hugh C. McCarthy, the Trial Examiner duly designated by the Board. The Board and the respond- ent were represented by counsel and participated in the hearing. Full 878 DECISIONS OF NATIONAL LABOR RELATIONS BOARD opportunity to be heard, to examine and cross-examine witnesses, and to produce evidence bearing upon the issues was afforded to all parties. At the 'close of the hearing, counsel for the Board moved that the complaint be conformed to the proof adduced. The motion was granted by the Trial Examiner. We have reviewed this ruling and all the other rulings made by the Trial Examiner on motions and on objections to the admission of evidence and find that no prejudicial errors were committed. The rulings are hereby affirmed. Pursuant to the Trial Examiner's suggestion at the hearing, the respondent, on August 2, 1938, filed a brief relating to the construc- tion of the Missouri statute governing agricultural cooperative asso- ciations. On August 20, 1938, the Trial Examiner filed his Intermediate Re- port in which he found that the respondent had engaged in and was engaging in unfair labor practices within the meaning of Section 8 (1) and (5) of the Act but not within the meaning of Section 8 (3) of the Act. On August 26, 1938, the respondent filed exceptions to the Inter- mediate Report. The parties, although accorded an opportunity for oral argument before the Board, made no request therefor. The'Board has considered the exceptions to the Intermediate Report and, in so far as they are inconsistent with the findings, conclusions, and order below, finds them to be without merit. Upon the entire record in the case, the Board makes the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The respondent is a corporation organized under the Missouri laws relating to the incorporation of agricultural or mercantile cooperative associations, and has its office and place of business in Springfield, Missouri. It is engaged in the business of buying, processing, and selling eggs, poultry, wool, and hides. In the conduct of such business the respondent operates under marketing contracts with approximately 80 farmers' exchanges and 40 contract merchants whereby the latter agree to sell to the respondent products purchased from the members of the Missouri Farmers' Association, herein called the Association, in the southwestern part of Missouri., The yearly profits of the respond- ent, over and above an 8-per cent interest dividend paid to its stock- holders, are distributed to the farmers' exchanges and contract mer- chants who in turn distribute them to the members of the Association on a patronage basis. The respondent has approximately 680 stock- 'The Missouri Farmers' Association Is a State-wide incorporated association, the mem- bers of which are also stockholders of various independent exchanges , one of them being the respondent, organized for the purpose of marketing the products of the members of the Association PRODUCERS PRODUCE COMPANY 879 holders, most of whom are individual farmers and the remainder farmers' exchanges. All products handled by the respondent are purchased within the State of Missouri. During 1936 and 1937, the respondent sold and shipped about 75 per cent of such products, totaling in value $3,566,540 -and $3,253,900, respectively, to States other than the State of Missouri including Alabama, Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, and Wisconsin. II. THE ORGANIZATION INVOLVED Amalgamated Meat Cutters and Butcher Workers of North America, Poultry and Egg Handlers Division, Local No. 172, affiliated with the American Federation of Labor, is a labor organization admitting to membership the production and maintenance employees of the respond- ent. III. THU UNFAIR LABOR PRACTICES A. Background of the unfair labor practices Attempts to organize the respondent's plant were made early in 1934 and late in 1936, but they proved fruitless. - Organizational activity was revived early in 1937 when a few employees began to discuss the necessity of a union in the plant. On July 6, 1937, a group of the respondent's employees met in Springfield and were addressed by J. R. Andrews, the secretary-treasurer of the Central Labor Union, and a voluntary organizer for the American Federation of Labor, who out- lined the procedure for securing a charter. The Union received its charter on July 15 and by August 11 had succeeded in enrolling as members a majority of the respondent's employees. B. Interference, restraint, and coercion On about February 1, 1937, the respondent was presented with a petition for an increase in wages signed by 74 of its employees. Two or three days later, A. L. Farnham, the respondent's manager, sum- moned to his office Fred Brixey, an employee of the receiving depart- ment who had suggested the petition and had been active in talking to other employees about organization. Brixey testified that Farnham first questioned him about the petition and then said : "It isn't so much the petition I want to talk to you about, it is about unionism." Brixey further testified : He said "have you ever heard any union talk around here?" I said, "Yes, sir, I have and I have done some." He said, "When was the first union talk you ever heard?" I said, "about 1934 880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD there was quite a bit of union talk." . . . He said, "Well, when was the last you heard?" I said, "In the fall of 1936 myself and another gentleman, with others, tried to get in touch with Rube Wood to hold a meeting. We didn't get in touch with him." He kind of laughed and said, "Well, Fred, you are truthful about it. I knew about it at the time . . . We don't need a union down here, don't aim to have one. We don't want you or any of the boys agitating them ... We don't want any more petitions." Farnham denied in part the statements attributed to him by Brixey. His denial is not persuasive. Early in the hearing Farnham remem- bered talking with Brixey about the petition but could not recall whether he told Brixey that he really wanted to learn about union activity in the plant and did not remember "just what we did talk about that day." Later in the hearing, however, Farnham admitted asking Brixey "if there was any union activity in the plant" but denied making any statement to the effect that Brixey was an agitator and that there would be no union in the plant. We believe that Farnham expressed himself substantially as testified by Brixey, and we so- find. At about the same time Farnham also called to his office Tom Bird, another employee, and said to him: "Tom, I have a paper here that I understand you passed around among the employees. I would rather not have any more papers passed around . . . I will put up a notice, so that one and all, I believe, will understand . : ." On February 6 Farnham posted a notice on th6 bulletin board in the plant stating that the respondent was compelled to deny a raise of wages for financial reasons and concluding as follows : In closing, please let me urge any of you who are not satisfied to come in my office at any time, either by yourself or bring a group in with you. We will sit down and talk over the problem and try and work the problems out to everybody's satisfaction. I want you to do this instead of grumbling and kicking with the other employees who are satisfied with their work. Let's not have any. more petitions. I believe we can discuss these things among ourselves to a better advantage and more results will be obtained rather than circulating a petition. Once more, let me say let's all be boosters for our company. Nobody likes a knocker. If we can't-be boosters, .let's resign and get a job with a company where we can be boosters. Also, let's not have any agitators in our plant. We can't do the best work unless we all work together for the good of our company ... Farnham testified that he did not associate the petition for a raise or the notice denying such petition with union activity. Earl Pool, the respondent's assistant manager, similarly testified that the petition did not in any way suggest to him organizational activity on the part PRODUCERS PRODUCE COMPANY 881 of the employees, although he was less emphatic in his denial that the notice on the bulletin board had reference to unions. He testified that the phrase "Let's not have any agitators in our plant" might have reference' to "dissatisfaction among the employees about their wages or things like that," and that "it didn't necessarily mean agitating on account of the union, according to [his] estimation." It is significant, however, that Farnham used a similar expression regarding "agita- tion" in the-plant in his conversation with Brixey when he told Brixey that "we don't need a union down here, don't aim to have one." While the petition for a raise was admittedly distinct from union activity as such, although some employees were "talking union" at. that time, we are convinced that by the notice Farnham intended to convey to the employees his disapproval of unions and to admonish then against union organization in the plant. Even if the notice was not designed expressly to discourage union organization in the plant, the notice was nevertheless in violation of the rights guaranteed to the employees under the Act. Section 7 of the Act not only guarantees to the•employees the right to organize into labor organizations but also "to engage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection." It is clear that the respondent's notice was directed against concerted activity on the part of its employees for the purpose of bettering their working conditions. There is no indication in the notice that the respondent objected to the petition for a raise on the ground that it may have been circulated during working hours. The respondent's sole objection is to the concerted action taken by the employees in presenting their request. In this notice the respondent attempts to dictate to the employees the manner in which they should take up grievances, namely that they should come to the respondent directly instead of "grumbling and kicking with the other employees who are satisfied with their work." However, such collective "grumbling and kicking" on the part of employees over unsatisfactory wages and working conditions is the essence of concerted activity guaranteed by the Act and is indispensable to the, obtaining of some measure of equality in collective bargaining. Furthermore, it is in this manner that unions frequently have their inception. To prevent the em- ployees from acting in concert in an effort to obtain higher wages or better working conditions is to place an obstacle at the outset to their self-organization. We find that by Farnham's statement to Brixey and by this notice the respondent attempted to hinder and impede self-organization and concerted activity on the part of its employees, and has interfered with, restrained, and coerced them in the exercise of the rights guaranteed in Section 7 of the Act. 882 DECISIONS OF NATIONAL, LABOR RELATIONS BOARD Several incidents which occurred after the posting of the notice of February 6 further serve to illustrate the respondent's hostility toward union organization at its plant. At the meetings of the respondent's safety committee in April and May 1937, Farnham again tried to find out about union activity in the plant and to learn the names of the employees engaged therein. The safety committee was composed for the most part of foremen and officers of the respondent and met every month to discuss methods of preventing accidents. Shortly before the hearing, Arthur Kiser, who was at that time in charge of the lower feeding station and had attended the April and May meetings of th3 committee, furnished the Board's attorney with a signed statement containing a summary of the events which took place at these two meetings. The statement recites that at the April meeting Farnham told those present : "If you have anybody who walls to belong to a union, or who is agitating a union, I want to kno«, so that we can arrange for them to work at a place where they have a union." The statement further recites that at the May meet- ing Farnham said that, according to his attorney, he could not dis- charge an employee for joining a union, but "he'd like to know if lie had any in the plant so [he would] know [what] to do"; that Farnham then asked several people at the meeting what they knew about a union and was told by Reed : "I've got two men who have told me that we've got to have a union"; and that Farnham stopped him from saying anything further and retained him after the meeting adjourned. Paul Beam and Duane Smith, two employees who were present when Kiser made the statement to the Board's attorney, testi- tied that such statement was read to Kiser before he signed it and that it represented a correct report of what Kiser told the Board's attorney. At the hearing Kiser repudiated in part his statement. With respect to the April meeting Kiser testified : There was some talk of labor trouble over the country and some- thing was said about it might move into our plant. 'Farnham said if we had any employees that wanted to belong to a union that he would like to know it so he could arrange so they could belong to a union. When questioned by the Board's attorney whether Farnham did not in fact say, as recited in Kiser's statement, that he wished to know the names of the employees desirous of belonging to a union "so that we can arrange for them to work at a place where they, have a union," Kiser replied that he "could not be exact what [Farnham] said at that time." In regard to the meeting in May, Kiser testified that Farnham stated he had been informed by his attorney that PRODUCERS PRODUCE COMPANY 883 according to the Wagner Act the respondent could not interfere with the union movement in the plant; that Farnham then asked several of those present what they knew about unions in the plant and was told by Reed, an organizer of the Missouri Farmers' Association in the respondent's employ, that he knew of two men who believed in the necessity of having a union in the plant; and that Farnham stopped Reed before he finished his remark and retained him after all the others had left. Farnham testified that at a meeting which he "thought" took place in May he asked the foremen, one by one, if they knew "of any union activity of any kind going on in the plant" and received a negative reply in each case; and that he then told them : ... If any union should start or if any folks should start agitating a union or working for a union, we must not take any part in that at all; that under the Wagner Act the employees have right to organize themselves into a union if they see fit and we must not offer any objections to their forming a union. Farnham denied making the statement either at the May meeting or at any other meeting that he wished to know which employees talked about a union so that he would secure work for them where they could belong to a union, but he admitted asking the foremen to inform him "if they heard anything about a union being started." Farnham offered no explanation of why he was so anxious to learn about the union activity in the plant and the employees engaging in such, activ- ity. Such curiosity seems inconsistent with his alleged instructions to the foremen not to interfere with the organization of the employees and we do not credit the testimony that such instructions were given. Whether Farnham told the foremen, as set forth in Kiser's state- ment, that he wished to know the names of those who were engaging in union activity "so that we can arrange for them to work at a place where they have a union" or whether he told them that it was, as testified by Kiser, "so he could arrange so they could belong to a union," it is clear that Farnham did not intend his words to be taken by the foremen at their face value, that he contemplated actively assisting the employees in their organization. The instructions to the foremen to report union activities of employees were not given in connection with any rule against such activities on the respondent's premises and hence obviously had no legitimate purpose. Moreover, in view of Farnham's animus toward concerted activity by the em- ployees. found above, we find that at these meetings Farnham in- tended to and did reveal to the foremen the respondent's disapproval of unions and union organization. We find that by the instructions, considered together with the accompanying statement, the respondent 884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act.2 Late in July 1937 Farnham approached Harry Crow, one of the employees, and talked with him about the Union which, as noted above, had been organized earlier in that month. Crow testified : He said he thought I hadn't ought to join the union, I ought- to have come to him and speak to him about it. He said I was an old man in the plant. He thought maybe my joining would induce somebody else to join. I ought to have been loyal to the company and to him, talk to him about it first. Farnham denied telling Crow that he should have consulted him before he joined the Union. According to his testimony he talked to Crow about the labor situation and, in the course of conversation, told Crow that the employees had a right to organize themselves into -a union and he had a right to become a member if he saw fit. The record does not disclose any reason for discrediting Crow' s testimony. In-view of Farnham's hostility toward organization of the employees, as found above, we find that Farnham expressed himself as testified by Crow. Margaret Gordy, an employee of the warehouse, testified that during the lunch hour on about August 1, 1937, Charlie Mace, her foreman, told her and two other girls who were sitting together that the Union "wouldn't do [them] any good," and that they would have work in the winter if, they did not join the Union. Gordy further testified that Mace, pointing to two employees who were passing, said that "there were two girls if they didn't watch out would get laid off . . . because they were union members." Mace denied having engaged in any such conversation with Gordy. Gordy's testimony, however, is supported by the testimony of Velma Clark, another employee. We see no reason to disbelieve the testimony of Gordy and Clark. There is reason, however, for believing that Mace might have made the statements at- tributed to him. It is hardly likely that he was'not influenced by Farnham's disapproval of union organization as expressed by him at the meetings of the safety committee. Under these circumstances we cannot accept Mace's bare denial, and we find that he, in fact, made the statements as testified by Gordy and Clark. We find that the respondent, by the aforesaid statements of Farn- ham to Crow, and Mace to Gordy and Clark, has interfered with, restrained, and coerced its employees in the exercise of their rights to 2That the record does not disclose whether the foremen made any reports does not negate the finding stated in the text Matter of Okey Hosiery Company, Incorporated, and R H Thneting, Receiver, and American Federation of TTosiery Workers, North Caro- lina District (CIO), 22 N L R B 792 PRODUCERS PRODUCE COMPANY 885 self-organization, to form, join, and assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purposes of collective bargaining and other mutual aid and protection as guaranteed in Section 7 of the Act. C. The refusal to bargain collectively 1. The appropriate unit The complaint alleges and the answer admits that all of the em- ployees of the respondent, exclusive of supervisory and clerical em- ployees and salesmen, constitute a unit appropriate for the purposes of collective bargaining. At the hearing it was stipulated by counsel for the Board and counsel for the respondent that all the production and' maintenance employees, except supervisory and clerical employees, constitute an appropriate unit. Counsel for the respondent stated that the respondent did not employ any salesmen. Under the usual rule, supervisory and clerical employees are ex- cluded from the unit of production and maintenance workers in the absence of any evidence with respect to their inclusion. We find that the production and maintenance employees of the respondent, except- ing supervisory and clerical employees, at all times herein material, constituted and that they now constitute a unit which is appropriate for the purpose of collective bargaining, and that such unit insures to the employees the full benefit of their right to self-organization and to collective bargaining, and otherwise effectuates the policies of the Act. 2. Representation by the Union of the majority in the appropriate unit At a conference between representatives of the respondent and of the Union held on August 11, 1937, the union membership lists were checked against the respondent's pay rolls and showed that 113 of the 207 employees on such pay rolls were members of the Union. The respondent, in its answer and at the hearing, admitted that on August 11 and at all times thereafter the Union represented a majority and was the exclusive bargaining representative of the employees in the appropriate unit. We find that on August 11, 1937, and at all times thereafter, the Union was the duly designated representative of a majority of the employees in the appropriate unit, and, pursuant to Section 9 (a) of the Act, was the exclusive representative of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment. 283034-41-vol. 23-57 886 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ' 3. The refusal to bargain collectively a. Chronology of events On July 28, 1937, negotiations were begun between the respondent and the Union with regard to an agreement covering the matter of wages, hours, and working conditions. At the conference held that day, J. R. Andrews, the secretary-treasurer of the Central Labor Union and an organizer for. the American Federation of Labor, sub- mitted on behalf of the Union a proposed contract as a basis for negotiation. Farnham questioned the claim of the Union that it represented a majority of the respondent's employees and demanded proof thereof. It was agreed that the Union would present such proof at the next conference. The contract was not discussed. On August 5, 1937, the union representatives presented an affidavit that 122 of the respondent's employees had joined the Union. The respondent's representatives refused to accept the affidavit as proof of the majority. It was finally agreed to check the Union's member- ship lists against the respondent's pay rolls. This was done at the conference on August 11, 1937. The respondent conceded that the Union represented a majority of its employees and indicated its will- ingness to proceed with the negotiations. After some discussion, the contract which had previously been presented by Andrews was found to be inapplicable to the business of the respondent, because it cov- ered meat cutters and butchers rather than'employees engaged in the poultry-and egg business. On' August 13, 1937, William Brasher, an employee of the respond- ent and the president of the Union, handed Farnham another pro- posed contract which was discussed paragraph by paragraph at the conference held on August 20, 1937.3 The respondent agreed to some of the provisions, offered slight modifications to others, and rejected still others. . The, respondent suggested that the word "only" should be stricken from the provision that "the Company agreed to bargain collectively, only with representatives of the Union . . ." and that "it will not bargain collectively with any other agency or indi- vidual"; agreed not to discriminate against its employees because of membership in the Union; accepted, with a slight change in word- ing, the provision relating to holidays and compensation at the rate of time and one-fourth for work on such holidays; rejected the pro- vision that employees should be laid off and rehired on the basis of seniority,, offering as a counterproposal a modified seniority clause 8 There is a confusion in the testimony as to which of two proposed contracts was pre. sented to Farnham. The two forms are, however, identical except that one of them pur- ports to make the contract effective for a period of 1 year, and the other for a period of 6 months. PRODUCERS PRODUCE COMPANY 887= pursuant to which efficiency and ability as well as seniority would be considered; refused to accept the provision for a 48-hour week, insist- ing on a 54-hour week; agreed to guarantee any employee ordered to report to work at least 2 hours' work or 2 hours' pay; rejected the provision for a 10-cent increase in pay ; accepted the provision guaranteeing the regular hourly wage rate to employees engaged in piece work; refused to accept the arbitration provision for an arbi- tration board to consist of two members chosen" by the Union,' two by the respondent, and a fifth member to be chosen by-the other four, suggesting in lieu thereof a provision whereby its directors would act as arbitrators; offered no objection to the provision for the duration of the contract. With respect to the result of this discussion, Farnham testified : "We got the impression from these [union] representatives that they personally were in-favor of the changes suggested at that meeting. It looked. like we were pretty close to an agreement." In answer, to the question by the respondent's attorney whether a tentative agree- ment had been reached on the entire contract, "subject, of course, to the union's approval of its members and your approval of your board and your stockholders," Farnham replied : "That is correct." Later, in reply to the question of the Board's counsel whether he. told the union committee that any contract would have to be submitted to the stockholders for final approval, Farnham replied : "I think so." Near the close of the hearing, however, Farnham testified he told the union committee "that before the Producers Produce Company could definitely agree to any contract, that it would first be necessary to take the matter up with our exchanges and the board of directors for their approval. This seemed to be agreeable to the Union because they- said they would also have to get the consent of their membership to any contract before they could enter into it." The record indi- cates that in testifying to the latter statement Farnham was referring to the notes of the minutes taken at that conference.' Brasher denied that anything was said at this conference about the necessity of the approval of the contract by the respondent's stockholders.' Since Farnham's earlier testimony lacks, certainty, and since in his later testimony his recollection was refreshed by the minutes of the meeting, and in the light of subsequent events, we conclude that he, in fact, stated that the contract would have to be submitted to "the managers of the farmers exchanges" rather than to "the stockholders." On August 24, 1937, Brasher informed Farnham that the Union had rejected the changes in the contract proposed by the respondent, * In response to the question whether Farnham would be willing to say that the minutes showed that the contract would have to be submitted to the stockholders, Farn- ham replied : "No, sir, I told him we would have to submit it to the managers of the farmers exchanges " 888 DECISIONS OF NATIONAL LABOR RELATIONS BOARD particularly those in the seniority and arbitration provisions. Brasher submitted to Farnham another contract which was substan- tially the same as the former one and demanded that the respondent take action on it, stating that the Union would meet again the follow- ing Monday, August 30, 1937, at which time it would decide what course to pursue in the event of a rejection of the contract. Farnham remonstrated that the time given the respondent in which to reply was insufficient. He testified : I told him we had discussed the situation all along, that it would be necessary . . . to go back, take the matter up with the interested farmers in our territory. I told him when he came in and gave us this week's notice that it would be impos- sible for us to let him know in one week's time. It wasn't giving us enough time to get word out, call a meeting and get the inter- ested people in so that they could give it consideration. At the conference on the following day, Andrews also insisted that the respondent act on the proposed contract. Farnham stated that an answer by the following Monday was impossible but agreed to call a meeting and to submit the contract. There appears to be a confusion in the testimony as to whether Farnham referred to a meeting of the "stockholders" of the respondent or of the "managers of farmers' exchanges" and "interested farmers." It is clear from the record, however, that the representatives of the Union were insist- ing that the contract be submitted to whatever group had authority to approve the contract. It is equally plain that the management of the respondent agreed that the meeting to be called would be one which could authorize the acceptance or rejection of the contract proposed by the Union. On August 26, 1937, the management of the respondent issued a call for a meeting to be held on September 2, 1937. The letter sent out by the respondent calling the meeting and the events which transpired at the meeting disclose that the respondent did not call a meeting of its stockholders and that the meeting of September 2, 1937, was not a stockholders' meeting. Stockholders, as such, were not notified of a meeting. The letters announcing the meeting were addressed to the "Managers of Farmers Exchanges." Farnham described the meeting as one "for the interested parties, members of M. F. A., the exchanges, their directors and country representatives." Farnham personally excluded from the meeting Otto Muggelburg, one of the respondent's stockholders, on the ground that he had been active in organizing a union at the M. F. A. Milling Company. The letters announcing the meeting stated that it was called "to consider demands made on the Producers Produce Company by labor unions." The letters pointed out that the meeting was "one of the PRODUCERS PRODUCE COMPANY 889 most important meetings ever held in Springfield pertaining to the M. F. A. or its agencies" and stated : At this meeting we want to discuss thoroughly and frankly with you the contract which the labor union has presented to us. We want to get your ideas as to whether their demands should be met or not. Each Farmers Exchange and its patrons are interested in the welfare of the Association and the Producers Produce Company. Before taking any steps which might have a bearing upon the success of the Association, your exchange, or this plant, we wanted to call you Managers in and discuss the matter with you as thoroughly as possible. As to the purpose of the meeting, Farnham testified that at the August 25, 1937, conference he insisted that it was necessary to take up the matter with the interested farmers in the territory, and that the ex- change managers would have to be consulted because "the business of [the respondent] comes through the farmers' exchanges. He wanted to feel out the sentiment of the exchange managers and their directors as to how they would feel about our entering into a contract of that kind." On the basis of the above evidence, we conclude that when Farnham told the union representatives at the August 25 conference that he would call a meeting to submit the contract for approval, he was referring to a meeting of the respondent's patrons rather than its stockholders. The meeting was held on September 2, 1937, as scheduled. It was attended by 200 or 250 people composed of exchange managers and directors and members of the Missouri Farmers' Association. The majority of those present were also stockholders of the respondent .5 Andrews, on behalf of the Union, requested that a union representa- tive be permitted to appear at the meeting to explain the contract. Permission was refused. The meeting was opposed to the contract. However, C. E. Lane, president of the respondent, made a speech in favor of a 5-cent raise for all the employees. The meeting adopted a statement of policy which had been prepared by William Hirth, the president of the Mis- souri Farmers' Association, at the meeting of the respondent's board of directors held that morning. The statement, which bears the head- ing "STATEMENT ADOPTED BY THE BOARD MEMBERS, STOCKHOLDERS, AND MANAGERS OF THE M. F. A. OF SOUTHWEST MISSOURI THIS AFTERNOON," begins by announcing that "the Directors and Stockholders of the Producers Produce Company are in full sympathy with the general objectives of organized labor as developed in recent years by the American Federation of Labor . . ." The statement goes on to state the unsatisfactory financial condition of the farmers in southwestern But a majority of the stockholders were not present at the meeting 890 DECISIONS OF NATIONAL LABOR RELATIONS BOARD .Missouri, the low returns on their products, the losses incurred by such farmers in depression years, and the increased losses which would result from any increase in the operating costs of the respondent. It then calls attention to a recent statement of William Green, the presi- dent of the American Federation of Labor, that "he did not believe that the farm cooperatives should be asked to unionize until the economic condition of farmers improved sufficiently to enable them to assume this added burden"; and expresses the hope that "in this hour when our country is menaced by certain so-called labor leaders whose policies are as dangerous to the workers as they are unfair to industry, we trust that the Federation leaders of Springfield will be guided by Mr. Green's wise counsel," promising, however, that "if in the next year or two the economic condition of our farmers should improve suffi- ciently . . . we will be glad to give consideration to this, and thus we hope that nothing will be done to prejudice the friendly feeling we now 'have for the American Federation of Labor." The statement continues : For the foregoing reasons we feel compelled to reject the con- tract submitted by the local union leaders and which we were told must be accepted or rejected in its entirety; however, not because we can afford it, but to demonstrate that our attitude to our em- ployees is deeply friendly, we hereby agree that the minimum wage shall be raised 5¢ per hour, and we trust that the said employees will realize that this is our maximum concession in this matter. The statement concludes as follows : The above report which was submitted by the Directors of the Producers Produce Company was unanimously adopted by the several hundred stockholders, board members and Exchange man- agers who were in attendance, and who represented overwhelm- ingly the M. F. A. membership in southwest Missouri. The meeting also adopted a resolution which was drawn up by a committee of five managers of exchanges with the collaboration, of Farnham. The resolution stated that "the managers of the Farmers Exchanges and as such the representatives of the farmers financially interested in the Producers Produce Company, are most strongly op- posed to the management of the Producers Produce Company entering into the labor contract submitted to it" by the Union, and that they are opposed to the "management of the Producers Produce Company entering into any labor contract with any organization of employees" which would, among other things, (1) require the respondent to rein- state any employees laid off because of a reduction in business until such time `as in the judgment of the management the services of such employees are needed; (2) interfere with the exercise of the manage- PRODUCERS PRODUCE COMPANY 891 ment's judgment in transferring employees from one department to -another; (3) prevent the management from considering the merit and ability of the employees as well as their length of service in lay-offs; (4) not leave the final decision of any dispute between the manage- ment and employees with the respondent's board of directors; and (5) limit the number of working hours to 48 per week. In the same afternoon after the close of the meeting, Hirth called together the employees in the plant and informed them of the re- jection of the contract and of the 5-cent increase which had been "voted" and which would be put into effect immediately. On the fol- lowing day, September 3, 1937, Farnham and Hirth met with the union committee and discussed the results of the meeting of the day before. The Union raised certain matters which it felt should be adjusted, .including the length of hours, sufficient lighting, and other working conditions. The representatives of the respondent agreed to meet with the Union and discuss working conditions at any time. Pursuant to the suggestion of J. J. Connors, an organizer of the International Union, Farnham gave the union committee a letter addressed to Brasher as the president of the Union, and signed by Farnham. The -letter stated that, in confirmation of the conversation at the meeting, the respondent will be happy to meet with the union committee at any time and discuss working conditions; assured the Union of the respondent's intention to correct immediately the working conditions discussed at the meeting, to deal fairly at all times with its employees, and not to tolerate discrimination by the foremen against the Union and its members; and concluded as follows: While we realize that we will not be able at all times to agree with you, we will be glad to sit down and try and work out these conditions in a fair manner and try and reach a friendly agree- ment with you on all matters under discussion. ,Andrews testified that the union committee merely agreed to submit the letter to the union members, but did not agree to cease negotiating a binding agreement in consideration of the letter. Farnham did not assert that it was agreed to terminate negotiations for a contract. According to him, Connors made the statement that he would be satis- fied if the Union received such a letter, and remarked to the other union representatives : "Boys, it looks like' I have done you about all the good 1 could do." We accept Andrews' testimony that it was agreed merely to submit the letter to the union members. On November 1, 1937, the Union filed its original charge in this case, and on about November 3, 1937, House, the Board's Field Ex- aminer, informed Farnham that the respondent had been charged with a. refusal to negotiate with the Union. House was assured that the respondent would be glad to discuss a contract with the Union at 892 DECISIONS OF NATIONAL LABOR RELATIONS BOARD any time. On November 8, 1937, Brasher handed Farnham another proposed contract, which was similar to the one submitted previously, except that in lieu of a provision for a 10-cent increase it provided in effect for a general application of the 5-cent increase which had been granted on September 2, 1937. This contract was discussed in detail at a conference held on November 18, 1937. The respondent again refused to agree to the seniority and arbitration provisions. Andrews suggested that the respondent submit its own contract by way of a counterproposal and was told that the respondent's attorney was out of town and would draft a contract as soon as he returned. Several days later, Farnham handed Brasher a contract. It provided that the employees would work 54 hours a week, that ability and effi- ciency as well as seniority would be considered in lay-offs, that the existing wage scale would continue during the term of the contract, and that the final decision of any dispute would lie with the respond- ent's board of directors. The remaining provisions were the same as those contained in the contract proposed by the Union theretofore. The respondent's contract was taken up at the conference of Decem- ber 17, 1937. The union representatives found the seniority and arbi- tration clauses unacceptable. Farnham declared that under the reso- lution adopted at the meeting of September 2, 1937, he had no authority to enter into a contract with different provisions. At An- drews' request, it was agreed that the union committee would meet with the respondent's board of directors on January 17, 1938. At the meeting with the directors, the representatives of the Union stated that hitherto they had been unsuccessful in arriving at-any agreement with the management and that they had requested this meeting in the hope that something might be worked out. Some of the directors: expressed the "sentiment" of the farmers in their re- spective communities, and, as testified by Farnham, "there was quite a discussion pro and con as to contracts and what we could sign and what kind of contract we could not sign." Finally, after the futility of further discussion became evident, it was suggested that two com- mittees be appointed to carry on negotiations and attempt to reach an agreement satisfactory to both parties. Farnham, Lane, and Ed Steury, a director and vice president of the respondent, were ap- pointed to constitute the respondent's committee, and Brasher, Duane Smith, and Claude Hawley, the Union's committee. Farnham read the resolution of the meeting of September 2, 1937, and either he or one of the directors stated that any agreement which might be reached would have to comply with the terms of that resolution. It was then stated by representatives of the respondent that such agreement would have to be submitted to the "stockholders" or to "our people." It was not clear from the record which of these two terms was used. PRODUCERS PRODUCE COMPANY 893 According to Brasher's testimony, Lane stated that the board of di- rectors had no, right to sign the contract but that it would have to be passed upon by the stockholders. Andrews, in giving an account of the meeting, first testified that it was agreed "whatever agreement was worked out should be submitted to thei stockholders of the com- pany," and then that he was almost sure Farnham used the phrase "our people." Andrews explained that he used the term "stockhold- ers" in his testimony because he "supposed that is who they were representing, the stockholders." We conclude that the respondent told the representatives of the Union at the January 17, 1938, conference that the contract would have to be, submitted to the patrons of the respondent for their ap- proval. This conclusion is borne out by the fact that Farnham stated at the conference that the authority of the management was limited by the terms of the resolution adopted at the meeting of September 2, 1937, which was attended, not by stockholders, as such, but by managers and directors of farmers' exchanges and by inter- ested farmers, all of whom carried on business with the respondent. It-is-further corroborated by what occurred following the conference of January 17, 1938. On the day following that conference, there was a regular annual meeting of the stockholders of the respondent. The contract, which had been under consideration at the conference of January 17, was not submitted to the stockholders nor did the man- agement ask the stockholders to take any action with respect to negotiating any contract between the respondent and the Union. As far as the minutes of the meeting show, it was not even mentioned. It is significant, moreover, as we shall point out below, that the stockholders, at this meeting, considered plans for operating a whole- sale grocery outlined by Farnham and passed a motion that "the directors use their discretion in establishing a wholesale grocery business." On February 7, 1938, the committees of the Union and of the re- spondent met. They agreed on all matters except seniority and arbitration. The union committee finally agreed to incorporate in the contract the seniority clause advocated by the respondent and to leave out an arbitration provision altogether. A form of contract with the provisions agreed upon was then prepared and submitted by the union committee. The contract thus agreed upon was, with the exception of the elimination of the arbitration clause, practically identical with the contract which had been submitted by the respondent. The committee negotiating on behalf of the Union insisted that the contract be signed at once since both committees agreed upon it. But Farnham stated that the execution of such a contract was a matter of policy which would have to be referred to "our members 894 DECISIONS OF NATIONAL LABOR RELATIONS BOARD because there would have been a regular uprising of farmers if we had taken anything of this kind up without their O. K. on it first." Farnham further testified that he made it plain that all the manage-' ment committee had power to do was to meet with the union com- mittee and attempt to "work out something which we felt we had a chance to sell to our members, that we thought there was any chance that would work." According to Farnham "the understanding be- tween the two committees was that we were to call in the farmers' group and pass on this new contract that had been submitted to us." According to Lane, the understanding was that the contract would be submitted to "our members and stockholders." Hawley, a member of -the union committee, testified that it was understood that any agreement reached by the two committees. would have to be approved by the members of the Union and by the "stockholders of the M. F. A. or the Producers Produce Company" before a contract could be executed. On the basis of all the testimony, we conclude that the respondent's representatives told the union representatives that the proposed con- tract would be submitted by the management for approval to the farmers' group, which Farnham defined as composed of "stock- holders, M. F. A. members, directors of these farmers' exchanges from whom we get out eggs and poultry," and we further conclude that the union representatives were given to understand that the con- sent of this group was necessary in order to empower the manage- ment of the respondent to execute the contract. These conclusions are corroborated by the events which followed the conference of February 7. Within a few days after February 7, Lane and Farnham communi- cated with various farmers, stockholders, exchange managers and directors, and M. F. A. members with whom the respondent carried on its business. They discovered, according to their testimony, that the overwhelming sentiment of these groups, most of which were patrons of the respondent, was against entering into any binding agreement but that these groups would consent to a "tentative agree- ment or oral understanding" with the Union. When Brasher noti- fied Farnham that the members of the Union on February 14, 1938, had approved the contract, Farnham suggested the possibility of post- poning submission of the contract to "the farmers" for approval. He further suggested that the respondent and the Union operate under it as an oral understanding until "the farmers became familiar with the laws and the labor situation." Farnham further told him that "the farmers out in the territory, due to the fact that they didn't understand the situation, were not acquainted with the laws, . . . were very much against us entering into any agreement right at the present time." Brasher replied that in view of the action taken by the Union PRODUCERS PRODUCE COMPANY - . " 896 he had no authority to agree to such a proposal and, as testified by. Farnham, insisted that the respondent call a meeting of the "farmers". and submit the contract to them. Farnham reported to Lane the result of the meeting with Brasher., On February 20, 1938, Lane called Brasher to his office and made a. similar suggestion, that if Brasher were willing to postpone entering into a contract Lane "would guarantee that the company would live under this contract, see that the contract was carried out in full, section by section." Lane stated that he had been communicating, with the farmers and was afraid that they would not approve the con- tract. He also pointed out to Brasher the fact that the respondent's competitors in Springfield were not being required to sign contracts, but were operating under oral understandings with labor organiza- tions in their plants, and urged a "gentlemen's agreement" between the respondent and the Union. Brasher also told Lane that he had no authority to postpone entering into the contract but offered to, call a special meeting of the union members and have Lane tell them of his proposal, explaining that "one of the worst things . . was that there was so much nagging in the plant," that "the non-union folk were nagging at the union people ; that they hadn't accomplished anything; that they were not getting any results out of being union folks." Lane in turn suggested that he talk to the employees in the plant. Brasher agreed.' The respondent contends that the union representatives agreed to postpone entering into a binding agreement with the respondent and to carry out the terms and provisions agreed upon by the two nego- tiating committees as an oral understanding on condition that Lane make the talk to the employees. Brasher denied that the union rep- resentatives made any such agreement. According to his testimony, he told Lane that he would submit the question of postponement to the union members if Lane spoke to the employees. Lane at first testified that Brasher said : "Mr. Lane, if you will make a talk to all of the employees . . . we can go along on this oral contract." How- ever, when asked whether Brasher qualified his "agreement" in any way, Lane replied : "I don't remember that he did." In answer to the further question whether Brasher said that "he would be willing to go along if it was agreeable to his members" or whether he said the union members "would go along with us for a while," Lane re- plied: "I think that is what he said." On cross-examination, Lane denied being told by Brasher that the latter could not agree to an oral contract for the members of the Union, and asserted that "if he had I would never have made the talk to. the workers." In• view of the fact that the proposed contract had been submitted to the union members on February 14, 1938, and the members had instructed their representatives to "carry it back [to the respondent] for signature," 896 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and the further fact that subsequently on March 18, 1938, the union representatives made a final demand for a signed contract on the in- struction of the members of the Union, and upon consideration of the entire record, we accept Brasher's testimony that he did not agree to postpone entering into the contract but that he merely told Lane that he would submit the question to the members. On February 21, 1938, Lane delivered a speech to the employees in the plant. Calling their attention to the past negotiations, Lane said that "a committee has been negotiating for some time, trying to work out a plan, or a condition, by which the Union and the Pro- ducers Produce Company could carry on; and an agreement has been reached (an understanding, better say, has been reached)" between the committees of the respondent and of the Union; and that he was hopeful "that we can work from here on together as one family without any discord or without one party nagging another." He continued : Now, the agreement that has been reached is almost identical with the one that we have ,been working under now for the paste few weeks . . . By this agreement between the Producers Produce Company and the Union . . . we hope that we can all benefit ; we hope it will make you all feel better. ... It is to every individual to answer for themselves whether or not they want to belong to the Union. We haven't a word in the world to say-against the Union activities. If it is your desire to become a member, that is your business absolutely. I've thought many times that with such a farm organization as we have in this section I could hardly understand why every farmer who is living in this particular section, from which this institution draws its products, could hesitate to become a mem- ber; but, nevertheless, they have their own choice as to whether they become members of the M. F. A. or whether they don't. That's one privilege the American people have, and I hope the day will never come when they won't have it; because, after all, that's a privilege by which we should all be proud. ... And, now, just please don't, while you are on duty, nag each other because there might be an individual who belongs to the Union or because there might be some individual that hadn't yet decided to join it. I want to say again to you that I hope good will come of this understanding, which I am sure each committee understands PRODUCERS PRODUCE COMPANY 897 and which I have promised that the Producers Produce Com- pany would carry out to the letter, and I mean that; I hope it will make us feel better toward each other .. . On the following day, Brasher told Farnham that he thought Lane's speech was satisfactory but that he did not know what the response on the part of the union members would be and would not be able to give him an answer until the next meeting of the Union. On February 28, 1938, the Union met to discuss whether the respond- ent should be permitted to postpone the signing of the contract and in the meantime to operate according to the terms and provisions the negotiating committees had agreed upon. The meeting was op- posed to this proposition and voted unanimously that the contract again be presented to the respondent for signature. Brasher com- municated to Farnham the Union's decision. Farnham promised to take the matter up with the respondent's executive board.° On March 18, 1938, a committee of the Union, consisting of Brasher, Hawley, and Paul Beam, met with Farnham and Pool. Hawley, who acted as spokesman for the union committee, repeated that the Union had rejected the plan of operating under an oral "arrangement" or understanding and asked Farnham if he would sign any sort of a contract embodying the previous negotiations. Farnham refused on the ground that, according to his understand- ing, it was agreed to operate under the "oral arrangement," 7 and that the unsatisfactory financial condition of the respondent made him unwilling to bind the respondent to fixed wage rates. Hawley then asked him if he would sign a contract leaving out any reference to wages. Farnham replied that he had no authority to sign any- thing. Hawley testified that he finally requested him merely to sign a letter recognizing the Union as the exclusive bargaining agency and that Farnham refused, saying that he "wouldn't sign any- thing." Hawley's testimony is substantiated by that of Paul Beam. Farnham did not deny that Hawley requested him and that he re- fused to sign a letter recognizing the Union as the exclusive bargain- ing agency. At first he testified that he thought he was asked to sign such a letter but replied that he "didn't have authority at that time to do it." He later testified that he could not recall whether he was asked to sign such a letter or not, that he could not "be posi- tive of it either way." We find the testimony of Hawley and Beam to be true, that Farnham was asked and refused to sign a letter recognizing the Union as the exclusive bargaining agency. G The executive board of the respondent consists of 5 members selected from the board of directors, and meets monthly to receive reports of the management. ° Farnham admitted , however, that Brasher did not at any time tell him that he "would go along under this oral understanding without a signed contract." 898 DECISIONS OF NATIONAL LABOR RELATIONS BOARD b. Conclusions The record establishes that on February 7, 1938, the negotiating committees representing the Union and the board of directors of the respondent agreed upon the provisions to be embodied in a con- tract between the Union and the respondent. Within a few days, thereafter, the provisions were approved by the Union and the union representatives were authorized to execute such a contract on behalf of the Union. Brasher, president of the Union, then re- quested the respondent to sign a contract embracing the provisions agreed upon on February 7. The respondent's officers proposed to defer entering into a contract, but offered to abide by the terms of the understanding reached. The Union rejected the proposal for delay, and orr, March 18, 1938, made a final demand that the re- spondent execute the contract. When Farnham objected on the ground that the respondent could not obligate itself to pay a definite scale of wages for an extended period of time because of unsettled business conditions, Hawley, a union representative, asked him if he would sign a contract omitting all wage provisions, but including the other terms agreed upon. Farnham not only refused to sign a contract, but also denied the Union a letter recognizing it as the exclusive bargaining representative of its employees. He offered a again to "live under" the terms and provisions previously agreed upon. The respondent contends that pursuant to the statute under which the respondent is incorporated, the officers of the respondent had no authority to enter into a contract with the Union, but that author- ity therefor was vested solely in the stockholders; and that the pro- posed contract of February 7, 1938, was not presented to the stockholders because the officers, having "felt the pulse" of the stockholders, were of the opinion that the contract would not be approved. The statute under which the respondent is incorporated first pro- vides that "every such association shall be managed by a board of not less than 5 directors" and then states: Notwithstanding the foregoing provision for the manage- ment of the general affairs of each such association by its board of directors, the control of the policies of such association is hereby reserved to and conferred upon their respective stock- holders, who shall by direct vote govern the policies of such associations, including their policies with reference to the de- claring of dividends, the setting aside of reserve funds; the method of distributing profits, the amendment of articles of association, the increasing and diminishing of capital stock, and other general policies . . . PRODUCERS PRODUCE COMPANY _ 899 It is argued by the respondent that in the case of corporations or- ganized under such statute the authority to act on general policies or matters "which in ordinary private corporations require the action of the board of directors as distinguished from the authority vested in its officers" must "come from the stockholders and is not vested in the board of directors," and that entering into the contract with the Union involved a "general policy" within the contemplation of the statute requiring the approval of the stockholders. In our opinion, there was nothing in the proposed contract which ,would require the action of the stockholders.8 The record shows that the power to regulate the wages, hours, and conditions of em- ployment of the respondent's employees had been delegated to Farnham, the respondent's manager,, and that prior to the demand for a collective agreement, Farnham has always exercised such power without consulting the stockholders. The terms and provisions agreed to on February 7, 1938, outside of recognition of the Union as the bargaining agent of the employees, contemplated nothing more than the regulation of wages, hours, and conditions of employment, matters which Farnham had been regulating for many years and which were clearly within the scope of his authority .11 Nor do we find any significance in the circumstance that Farnham had thereto- fore never bound the respondent to fixed wages for a definite period of time as provided in the proposed contract. The fact that a col- lective agreement is for a period of 1 year is hardly so unusual as to be beyond the authority of the general manager and to require the approval of the stockholders.10 Moreover, assuming that a pro- vision in the proposed contract binding the respondent to certain wage rates for a definite period of time is a matter of "general s Under the respondent's constitution and bylaws , the board of directors is empowered to "exercise full supervision and control over the affairs of this Company where such supervision and control has not been limited by the action of the shareholders ," to adopt policies and methods for the marketing of products received by the respondent, to enter into marketing contracts , to make loans, to prorate profits among the agencies under con- tract with the respondent, to authorize the signing of any contract or other instrument binding upon the respondent , and "in addition to hiring its regular Manager and fixing his salary, employ such other persons as it finds necessary, fix their compensation and pre- scribe duties ." The constitution and bylaws prescribe it to be the duty of the manager "to have general oversight and control over the business of the Company , subject, how- ever, to the action of the Board of Directors." *The general manager of a corporation may make contracts which are in the course of the ordinary business of the company and within the scope of his express , implied, or apparent powers 2 Fletcher, Cyclopedia of the Law of Private Corporations, Sec. 671. 10 It is generally held that in the absence of an express limitation a manager of a cor- poration has the authority to make a contract proper under the circumstances . Manross v. Oil Co., 88 Kan. 23T; Ceeder v. Lumber Co., 86 Mich. 541 ; Pink v. Metropolitan Milk Co., 129 Minn 353; Allen Gravel Co . v. Nam, 129 Miss. 809; Pick v. Dexter S. P . & P. Co., 164 N. Y. 127 ; 2 Fletcher , op. cit. supra, Sec. 677. In the Manross case the Court stated : "The weight of authority seems to hold that as a rule the general manager of a corpora- tion may make it contract of employment for one year which is binding on the corporation, upon the theory that a contract for such time is not unusual or extraordinary." We take notice of the fact that contracts with unions are often made for yearly periods. 900 DECISIONS OF NATIONAL LABOR RELATIONS BOARD policy" requiring the approval of the stockholders, such "general policy" was inapplicable in the instant case since the Union offered to omit the wage provisions. Furthermore, the officers of the re- spondent, although in consultation with counsel, at no time during the negotiations suggested that the period of time for which the proposed contract was to run raised in their minds any doubt as to their authority to enter into a contract with the Union ; and we are satisfied that they entertained no belief that they lacked author- ity on that account. This, indeed, was virtually admitted by the respondent when, in response to the question by the Trial Examiner, counsel for the respondent agreed that his position was that whether the respondent "should sign a contract with a labor organization is a matter of general policy, therefore the stockholders should be consulted." For the reason stated above, we find no merit in the contention that the respondent's officers had no authority to enter into any contract with the Union without the approval of the respondent's stockholders. In addition, the record also establishes that the re- spondent's officers never, in fact, declined to enter into a contract with the Union because of a belief that they needed the approval of the stockholders. When the regular annual meeting of the stockholders was held on January 18, 1938, the question of a contract with the Union was not even considered, although this was more than five months after the Union and the respondent had begun to negotiate a contract and two months after the respondent had notice of the filing of a charge of refusal to bargain. The respondent attempts to justify the failure to submit the question to the stockholders at their meeting on Jan- uary 18, 1938, on the ground that there was as yet no contract upon which a complete understanding had been reached as to terms. The argument is on its face without merit and, in the light of the record. is completely disingenuous. Assuming that the respondent's officers had believed that the entering into a contract with a labor union involved a question of "general policy" requiring stockholders' ap- proval, certainly they could not have thought that the approval needed was anything more than a decision by the stockholders as to whether the officers or someone else was to represent the respondent in the collective bargaining mandatory under the National Labor Relations Act. Patently the officers could not have believed that the statute required, or even contemplated, that the stockholders should be consulted as to the details of any contract with a labor union, or that such details should be submitted to them for ratification. In- deed, the record clearly shows that the officers never entertained any such notion. As we have stated above, the stockholders were asked PRODUCERS PRODUCE COMPANY 901 at the meeting of January 18, 1938, to authorize the operation of a wholesale grocery. It is revealing that it was not considered neces- sary to present to the stockholders a detailed plan even though, ap- parently, the step was deemed to involve a matter of general policy. On-`'the., contrary, Farnham merely "outlined the possibilities of the wholesale grocery," and the stockholders considered this a sufficient basis for authorizing the directors to "use their discretion in estab- lishing" a wholesale grocery. The obvious fact is that the respondent was never concerned with any lack of authorization by its stockholders to enter into a contract with the Union. On September 2, 1937, the respondent summoned the representatives of the Farmers Exchanges rather than the stock- holders to act on the contract proposed by the Union. At the hearing Farnham declared that "the sentiment of the managers of the ex- changes" was the important thing at that time and explained : Here is the idea why we should take the matter back to the farmers exchanges. The Producers Produce Company depended upon the Farmers Exchanges and their M. F. A members for support. If the contract was distasteful to our customers they would immediately break their contract . . . The cooperative has to take into consideration their members and maintain con- fidence between the various branches. At the conference between the respondent and the Union on August 25, 1937, Farnham in no way indicated that the meeting which he agreed to call on September 2, 1937, would only be a preliminary step and that further meetings of the stockholders would be neces- sary before the contract could be entered into. Moreover, at the hearing Lane admitted that he considered the resolution adopted by the meeting on September 2, 1937, as a delegation of power to the re- spondent's board of directors to bargain with the Union on the terms set forth in such resolution; and, at the meeting between the Union and the board of directors, on January 17, 1938, it was stated that any agreement which might be reached would have to comply with the same resolution. On February 7, 1938, when the com- mittees of the Union and the respondent reached an agreement on the terms of the contract, there was no question of submitting such contracts to the stockholders qua stockholders, but rather, according to Farnham's own testimony, to the "farmers' group" which Farn- ham defined to mean "stockholders, M. F. A. members, directors of farmers exchanges." Finally, the testimony of the respondent's manager, Farnham, reveals that one of the respondent's principal reasons for not integrating the understanding in a signed contract was the fact that the respondent's competitors in Springfield were not being required to sign contracts but were working under oral 283034-41-vol. 23-58 902 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agreements or arrangements with the unions in. their plant. Lane told Brasher that "the fact that the farmers knew about this oral understanding between some of our other competitors and the union made it difficult to go to our farmers and demand that they sign a contract." Thus, we are convinced that the respondent's real con- cern was its fear that its patrons would "break their contract" and cease to do business with the respondent if the respondent executed a contract with the Union and not any lack of authority by the management or board of•directors.to execute, a binding agreement. We have considered in detail the contention that the respondent's officers could not and/or believed that they could not enter into a contract with the Union until authorized to do so by the respond- ent's stockholders. While we have found that contention to be with- out merit, it is further clear that, assuming that it was necessary and/or that it was believed to be necessary to submit the question of entering into a contract with the Union to the stockholders as the sole repositories of the authority to approve such a contract, it was the duty on the part of the respondent's officers under the Act,wto do so. Manifestly, 'a labor organization is entitled to have its demand considered by those in authority. Otherwise, its right to bargain collectively is meaningless. As we have stated on another occasion, "the respondent may designate whomever it desires to represent it for purposes of collective bargaining, whether it be certain of its executives, its plant manager, or other persons, but such representa- tives must be available for collective bargaining . . . (The respond- ent) can not shackle the collective bargaining procedure with diffi- culties arising out of its own organizational set-up and thereby ren- der ineffectual the collective bargaining provisions of the Act." 11 In its exceptions to the Intermediate Report the respondent ad- vanced the further contentions that the Trial Examiner should have found that on September 3, 1937, the Union agreed not to demand a signed contract if the manager of the respondent furnished the Union with a letter recognizing it as the bargaining agency of the respondent's employees; that on February 7, 1938, the committees of the respondent and of the Union reached an agreement., which "they were willing to recommend to their respective members and stockholders"; that on February 20, 1938, it was agreed not to sub- mit the proposed contract "to respondent's stockholders until such time as the respondent's officers had reason to believe their stock- holders would approve the same" and to consider the proposed con- tract "as a verbal agreement and understanding between the parties with reference to [its] subject-matter"; that no request had since "Matter of P Lorillard Co. and Local Union No. 201, Tobacco Workers International Union, 16 N. L R. B. 703. PRODUCERS PRODUCE COMPANY 903 that date been made by the Union to submit the contract to the re- spondent's stockholders; and that the respondent has at all times ."lived up to and observed the oral understanding and agreement." As we have seen, negotiations between the respondent and the Union covering the matter of wages, hours, and working conditions -were begun on July 28, 1937, and on September 2, 1937, the respond- ent called a meeting of the managers of the farmers' exchanges who rejected the contract proposed by the Union. It was upon being informed- of such rejection that the union committee on September 3, 1937,, suggested that the respondent embody in a letter certain •matters which had been discussed on that day. The letter of Sep- -tember 3, 1937, merely announced the respondent's intention to deal fairly with its employees and to meet with the Union to discuss working conditions. It did not, as contended by the respondent, recognize the Union as the bargaining agent of the employees. Moreover, while the letter was written at the request of the union committee, the union committee did not agree to abandon the demand for a signed agreement in exchange for the letter, but merely consented to submit such letter to the union members. By filing charges about 2 months thereafter and by the negotiations which followed, the Union made it plain that it was not content with the ,letter as a substitute for a contract. It is equally clear that Brasher did not on February 20, 1938, agree to postpone entering into the contract in consideration of Lane's speech to the employees but, as found above, merely consented to present to the union members Lane's proposal. On February 28, after Lane had made his speech in which he stated that an "under- standing" had been reached but said nothing about the eventuality of a binding contract, the Union rejected the proposal to postpone entering into a contract, and the respondent was promptly so ad- vised. At that time Farnham promised to take the matter up with the respondent's executive board, but there is nothing in the record to indicate that he ever did so. Again on March 18 the union representatives insisted that, Farnham sign a contract embodying the terms and provisions agreed upon during the previous negotia- tions. Farnham refused. The record clearly shows that there was never any agreement by the Union to abandon its demand for the execution of a contract, that there was no basis for any alleged belief by the respondent that such an agreement had been made, and that, in fact, no such belief was ever entertained by the respondent. Moreover, even if the Union had agreed on September 3, 1937, to accept the letter of the respondent in lieu of a signed agreement, or had agreed on February 20, 1938, to postpone its demand in consideration of Lane's speech, 904 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Union was not precluded from making subsequent demands for the execution of a binding contract embracing the terms and pro- visions of the understanding reached by the negotiating committees. It may not validly be contended that the right of collective bar- gaining may be bargained away at the insistence of an employer. The right of employees to bargain collectively is a right guaranteed by the Act in furtherance of a valid public policy, and it is contrary to such policy for an employer to enter into a transaction whereby the right to bargain collectively is stipulated away or renounced by employees or their representatives.12 Without merit also is the contention that the Union had not, since February 20, 1938, requested that the proposed contract be submitted to the respondent's stockholders. In the first place, the contention rests upon the premise, which we have found to be fal- lacious, that the officers of the respondent had no authority to execute the contract without submitting it to the stockholders. In the second place, the contention is contrary to the record. On or soon after February 28, 1938, the union representatives notified the respondent that the Union had rejected the proposal to postpone execution of the contract, and on March 18, 1938, the Union made a final demand upon the respondent for the execution of the con- tract. Implicit in both of these incidents was the request that the proposed contract be submitted to whatever persons, stockholders or others, whose approval was necessary to its execution by the respondent. Indeed, that the respondent so understood is clear from Farnham's statement on the first of these occasions that he would take the matter up with the executive board. We shall next consider the further contention made by the respond- ent that by observing the terms and provisions of the oral under- standing with the Union it has satisfied the requirements of the Act. When Lane spoke to the employees on February 21 he stated that the Union had been negotiating for some time "a plan or a condi- tion," that an "understanding" had been reached by the committee representing the Union and the respondent, and that he had prom- ised that the respondent would "carry out to the letter" such "under- standing." He made no mention whatever of a binding agreement. To Brasher he referred to his proposal as a "gentlemen's agreement." Similarly, Farnham stated that it was the hope of the management that after "working under a verbal agreement" for a period of time the farmers "would be willing to allow us to enter into an agreement of some kind" with the Union. He proposed to a union representa- u See Matter of Killefer Manufacturtnq Corporation and Steel Workers Organizing Com- neittee, 22 N. L R B 484 Cf National Lecaice Company v National Labor Rela- tions Board, 60 S Ct 569 PRODUCERS PRODUCE COMPANY 905 tive that, until such change in settlement occurred, the parties operate under the agreed terms and provisions as an oral understanding, since the farmers in the territory on which the respondent depended for his business were opposed to "any agreement" with the Union. At the final conference on March 18, after refusing to sign any- thing, Farnham again proposed that the Union and the respondent continue under an "oral arrangement." The proposal by Lane and Farnham was no more than an offer by the respondent to observe the terms and provisions agreed upon on February 7, as a matter of business policy so long as the respond- ent regarded it convenient to do so, but not to make any kind of an agreement-oral or written-which would contractually bind it to observe those terms and provisions. In short, the respondent's position was that it was willing orally to represent the understand- ing reached as expressing its policy concerning the wages, hours, working conditions, and grievance procedure which would prevail until the respondent chose to alter them; and that beyond this state- ment of policy the respondent would not go. The duty to -bargain collectively, 'which the Act imposes upon employers, has as its objective the establishment of such a con- tractual relationship to the end that employment relations may be stabilized and obstruction to the free flow of commerce thus pre- vented.13 As contemplated by the Act, collective bargaining does not connote merely discussion designed to clarify employer policy, but is a procedure looking toward the making of a collective agree- ment by the employer with the accredited representative of its employees concerning wages, hours, and other conditions of employ- ment. The duty is not limited to recognition of the employees' representatives qua representatives or to a meeting and discussion of terms with them. The duty encompasses an obligation to enter into discussion and negotiation with an open and fair mind and with a sincere purpose to find a basis of agreement concerning the issues 13 See N L R B. v Highland Park Manufacturing Company, 110 F (2d) 632 (C C A 4), decided March 11 , 1940 , enf'g Matter of Highland Park Manufacturing Company and- Textile Workers Organizing Committee, 12 N I, R B 1238 , in which the Court said : that Congress contemplated that collective bargaining should be pursued with the end and aim of arriving at trade agreements . . . does not admit of doubt. House Repoi t No. 1147, 74th Congress, 1st Sess , p. 20, says : "As has frequently been stated, collective bargaining is not an end in itself; It is a means to an end, and that end is the making of collective agreements stabilizing employment relations for a period of time, with results advantageous both to the worker and the employer" Senate Report No. 573, 74th Congress, 1st Sess , p. 13, says • "The object of collective bar- gaining is the making of agreements that will stabilize business conditions and fix fair standards of working conditions " See also Mattel of Pittsburgh Metallurqical Company, Inc, and Local 12,077 Gas and By-Products Coke and Chemical Workers Union , District 50, U. M. W A , 20 N L. R. B , 1077; Matter of Westinghouse Electric & Manufacturing Company and United Electrical Radio and Machine Workers of America, 22 N. L R. B. 147 906 DECISIONS OF NATIONAL LABOR RELATIONS BOARD presented, and to make contractually binding the understanding, upon the terms that are reached?' In this case such an under- standing was reached on February 7, 1938 by the committees repre- senting the respondent and the Union as to all terms and provisions under negotiation; and indeed when Farnham objected on March 18, 1938, to executing a contract embodying the terms and provisions agreed upon, on the ground that business conditions were so un- certain that the respondent could not obligate itself to pay a definite wage scale for any extended period of time, the union representatives offered to omit the wage provisions. A statement of policy, such as we have found the respondent offered the Union, lacks the elements of a binding collective agree- ment since the terms and provisions announced therein are effective only at the pleasure of the employer. Moreover, such a unilateral- declaration plainly fails to subserve the function of a collective agreement sought by the Union :" It denied the Union the status of it contracting party accepting responsibility for and seeking to secure peaceful adjustment of disputes which might arise as to the understanding between the parties or changes desired in such under- 14 Westinghouse Electric d Manufacturing Company and United Electrical, Radio and Machine Workers of America, 22 N. L. R. B. 147, and cases collected in notes 12, 13, and 14 therein In N L- R. B v. Highland Park Manufacturing Co., C. C. A. 4, decided March 11, 1940, enf'g Matter of Highland Park Manufacturing Company and Textile Workers Organizing Committee, 12 N. L. R B. 1238, the Court said : . . . "The requirement to bargain collectively is not satisfied by mere discussion of grievances with employees ' representatives It contemplates the making of agree- ments between employer and employee which will serve as a working basis for the carrying on of the relationship . The net, it is'true,- does not require that the parties agree; but it does require that they neeotiate in good faith with the view of reaching an agreement if possible ; and mere discussion with the representatives of employees, with a fixed resolve on the part of the employer not to enter into any agreement with them. even as to matters as to which there is no disagreement, does not satisfy its provisions.. . . In Consolidated Edison Company of New York, Inc., et al. v. National Labor Relations Board, et al., 305 U. S. 197, 236, the United States Supreme Court said : "The Act contemplates the making of contracts with labor organizations. That is the manifest objective in providing for collective bargaining." In National Labor Relations Board v. The Sands Manufacturing Company, 59 S. Ct. 508, 513-14, that Court said : "The legislative history of the Act goes far to indicate that the purpose of the statute was to compel employers to bargain collectively with their employees to khe end that employment contracts binding on both parties should be made." In Globe Cotton Mills v. National Labor,Relatiohs'•Board, 103 F. (2d) 91 (C. C. A. 5, 1989), the Court stated: 11. . . there is a duty on both sides . . . to enter into discussion with an open and fair mind, and a sincere purpose to find a basis of agreement touching wages and hours and conditions of labor, and if found to embody it in a contract as specific as possible which shall stand out as a mutual guarantee of conduct, and as a guide for the adjustment of grievances." 15Matter of Westinghouse Electric d Manufacturing Company and United Electrical, Radio and Machine Workers of America, 22 N L R B 147, and cases cited therein. PRODUCERS PRODUCE COMPANY 907 standing.18 The statement of policy, announcing., terms and condi- tions of employment, terminable at the will of the respondent without notice to or negotiation with the representatives of its employees, was in nowise calculated to achieve the stability of relations be- tween employer and employee sought' to be furthered by the Act 17 On the contrary it continued in existence the very situation which Congress on the basis of the history of labor, relations, regarded as undesirable because it tended to induce employees to, resort to strikes and other methods of industrial warfare rather than to turn to the procedure of collective bargaining 18 , We do not understand that the respondent contends that it was justified in refusing to enter into a binding contract with the Union because of an apprehension, that since the farmers did not approve of such action they would cease to do business with- the respondent. In, any case, the respondent's obligation under the Act to embody its understanding in a binding agreement with the Union, upon request, is not a duty which may be avoided on the ground that it would result in the loss of customers.19 To hold otherwise would' be to ' assume 1e In National Labor Relations Board v. Sands Manufacturing Company; 306 U. S. 332, 342, the Supreme Court said : The legislative history of -the Act goes far to indicate that the purpose of the statute was to compel employers to bargain collectively with their employees to the end that employment contracts binding on both parties should be made . . . we assume that the Act imposes upon the employer the further obligation to meet and bargain with his employees' representatives respecting proposed changes of an exist- ing contract and also to discuss with them its true interpretation , if there is any doubt as to its meaning. 17 Matter of Pittsburgh Metallurgical Company, Inc. and Local 12,077 Gas and By-Products CokesaiidhiChemical Workers Union, District' 50' UMWA, 20 N. L. R. B. 1077 '; Matter of Westinghouse Electric d Manufacturing Company and United Electrical, Radio and Machine Workers of America, 22 N. L. R. B. 147, and cases cited in notes 35 and 36 therein. 10 See cases cited in footnote 17, supra. In Matter of Harnischfeger Corp and Amal Ass'n of Iron, Steel d Tin Workers of N. Amer., Lodge 1114, 9 N. L. R. B. 676, 684, we said • "An essential purpose of collective bargaining is to stabilize labor relations so that workers may deal as business equals with their employers as to their terms and condi- tions of employment . If the employer is at all times to be free to change such terms and conditions unilaterally, collective bargaining will have failed to achieve one of its fundamental aims." 10 Cf Fort Wayne Corrugated Paper Company v. N. L. R B., C. C. A. 7, decided March 28. 1940, enf'g Matter of Fort Wayne Corrugated Paper Company and Local No. 182, Int'l Brotherhood of Pulp, Sulphite, and Paper Mill Workers, 14 N. L. R B. 1 (customers' withdrawal of business from respondent because of union activities of respondent's employee does not justify discharge of said employee ) ; Matter of Arcade-Sunshine Co., Inc. and Laundry Workers, Cleaners and Dyers Union, 12 N. L. R B 259, 264-5, (circula- tion by employer of petition whereby employees agreed not to strike may not be justified on the ground it was intended to assure customers that the service of the employer would not be interrupted). See also the following cases holding that an employer may not condition collective bargaining upon the union's obtaining contracts with the employer's competitors , Matter of Samuel Youlin, Murray H. Rosenberg, and Murray Youlin, doing business as I. Youlin and Company and International Ladies Garment Workers Union, 0 1. 0, 22 N L. R B 879; Matter of George P. Pilling it Son Co. and Dental, Surgical and Allied Workers Local Industrial Union No 119, affiliated with the C. I. 0, 16 N. L. R. B . 650 at pp. 11-12 ; Matter of American Range Lines, Inc and Maiine Engineers' Beneficial Ass'n, 908 DECISIONS OF NATIONAL LABOR RELATIONS BOARD authority to pass upon the wisdom of the application in a particular case of the public policy embodied in the Act of securing stability in the relationship between employers and employees by collective agreements which Congress deemed essential to prevent obstructions to commerce. Moreover, it is inconsistent with public policy to hold that public duties may be set at naught because of alleged private inconvenience claimed to exist by reason of the actions or threatened actions of third persons.-'0 The facts recited above show that the, respondent not only offered no more than a statement of policy in place of a binding agreement, but that the respondent refused to integrate its understanding with the Union in a written and signed agreement. The duty to bargain collectively encompasses not only the duty to make contractually bind- ing the terms of the understanding reached, but also the duty to reduce that obligation to the form of a permanent signed memorial if re- quested to do so by the employees' representatives. 21 Moreover, the 13 N. L. R. B. 139, 146-7; Matter of Harry Schwartz Yarn Co, Inc and T W. O. C., 12 N L. R. B 1139, 1158; Matter of Harbor Boat Building Company and Ship Carpenters - Local Union No. 1335, 1 N. L. R. B. 339, 355; and the following cases holding 'that 'an employer may not refuse to enter into a binding agreement with properly designated representatives because of apprehension of a boycott by a rival union, Matter of Westing- house Electric & Manufacturing Company and United Electrical, Radio and Machine Workers of America, 22 N. L R. B 147, or a strike by a rival union at another plant of the employer , Jacob Hunkele and Local No. J10 United Laundry Workers Union, 7 N. L. R. B. 1276, 1286-7, or because of uncertain business conditions , Matter of Pittsburgh Metallurgical Company, Inc., and Local 12,077 Gas and By-Products Coke and Chemical Workers Union, District 50, U. M. W. A., 20 N. L. R B 1077. See also Matter of Phelps-Dodge Corp and International Assn. of Machinists, Local 223, 15 N. L. R. B. 732, 738-9, holding that an employer is not excused from bargaining collectively by an apprehension that negotiations with several appropriate craft units would consume an undue amount of the management's time; and Matter of Simmons Co. and Steel Workers Oiganizing Committee, 6 N. L. R. B. 208, 211-12, holding apprehension that an election of representatives would curtail production and result in a boycott of the employer by a rival union is not a ground for refusing to direct an election. 20 See cases cited in footnote 19, supra See also the following cases holding that appre- hension of strike by a labor organization does not excuse discriminatory discharge of members of rival labor organization , Matter of Star Publishing Company and Seattle Newspaper Guild, Local No. 82, 4 N. L. R B. 498, 505, enf'd in N. L. R. B v. Star Pub- lishing Co., 97 F. (2d ) 465 (C. C. A. 9, 1938) ; Matter of Trawler Mans Stella, Inc. and American Communications Ass'n (C 1. 0.), 12 N. L R. B. 415, 422-3 ; Matter, of,,Cape Cod Trawling Corp. and American Communications Ass'n, affiliated with the C I. 0, 23 N. L R B 208; nor justify other interference with rights of employees guaranteed in Section 7 of the Act, Matter of Electric Vacuum Cleaner Co., Inc. and United Electrical h Radio Workers of America, Local 720, 18 N. L R B 591 , at p. 24; nor does appre- hension of boycott by labor organization justify such interference, West Oregon Lumber Co. and Lumber and Sawmill Workers, Local No. 3, I W A, 20 N. L R. B 1, at p 26 °'Matter of Westinqhouse Electric & Manufacturing Company and United Electrical, Radio and Machine Workers of America, 22 N. L. R. B 147, and cases cited in note 23 therein The majority of the Circuit Courts of Appeal which have passed upon this question have so held : Art Metals Construction Company v N. L. R B , C C A 2, decided February 26, 1940, mod'g as to other issues and enf'g Matter of Art Metal Construction Co. and Int Ass'n. of Machinists, Local 1.;59, 12 N L. R. B 1307; N. L R. B v Highland 'Park Manufacturing Company, 110 F. (2d) 632 (C C A 4), enf'g Matter of Highland Park Manufacturing Co and Textile Workers Organiz,nq Committee, 12 N L R B 1238; PRODUCERS PRODUCE COMPANY 909 circumstances of the instant case entirely warranted the Union's insistance upon a signed agreement and they establish that the re- spondent's refusal thereof was not in good faith.22 From February to August 1937 the management of the respondent had demonstrated on numerous occasions its hostility to the Union.23 On September 3, 1937, during the course of its negotiations, it had failed to give the Union recognition in writing as the exclusive bargaining representa- tive of all its employees. Time and again the Union was informed by the respondent that its patrons were hostile to collective bargaining with labor organizations; and throughout the negotiations there was indicated to the Union the respondent's subservience to the desires of those patrons. Under the circumstances, the Union was entitled to doubt that the respondent would observe the terms and provisions of the understanding reached by the parties in the absence of a perma- nent memorial thereof signed by the parties; and good faith required that the respondent sign the agreement reached as evidence of intent to' carry it out. We have pointed out that there was implicit in the respondent's refusal to embody in a binding agreement the understanding reached with the representatives of its employees a refusal to recognize such representatives as exclusive bargaining agent for the purpose of contracting on behalf of the employees. On March 18, 1938, the denial was made explicit and unmistakable by Farnham's refusal even to sign a letter stating that the respondent recognized the Union as exclusive bargaining agent. True, at all times since August 11, 1937, the respondent has admitted that the Union has been chosen by a majority of the employees as bargaining agent. However, the Union, having failed to achieve the normal result of collective bar- gaining-a contract-was entitled to a clearer assurance of acceptance as the exclusive bargaining agent than a mere verbal admission that it had been designated by a majority. Under the circumstances, the respondent's refusal to sign a statement acknowledging the Union as the exclusive representative of the employees for the purposes H. J. Heinz Company v N L R B , 110 F ( 2d) 843 , (C C A 6), ent'g Matter of H. J. Heinz Co. and Cannery and Pickle Workers, Local Union No. 325, 10 N. L R. B. 963; N. L R B v Sunshine Mininq Company, 110 F. ( 2d) 780 (C C. A 9), mod'g and enf'g Matter of Sunshine Mining Company and Interndtuonal Union of Mine, Mill and Smelter Workers, 7 N. L R. B 1252 . Contra : Inland Steel Co v. N. L R. B., 109 F. (2d) 9 (C C. A 7) ; but see Fait Wayne Corrugated Paper Company v N L R B, 111 F. (2d) 869 (C. C. A 7), enf'g Matter of Fort Wayne Corrugated Paper Company and Local No. 182, Int'l Brotherhood of Pulp, Sulphite and Paper Mill Workers , 14 N L R B. 1 ^ Cf Fort Wayne Corrugated Paper Company v N L R B, 111 F (2d) 869 (C. C. A. 7), enf'g Matter of Fort Wayne Corrugated Paper Company and Local No. 182, Int'l Brotherhood of Pulp, Sulphite and Paper Mill Workers, 14 N. L R B. 1; N. L. It. B V Highland Park Manufacturing Company, 110 F ( 2d) 032 (C C A 4), enf'g Matter of Highland Park il!annfaeturinq Co and Teztrle Workers Organizing Committee, 12 N L R R. 1238. z, See Section III , B, slip) a 910 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of collective bargaining was tantamount to a refusal of formal recog- nition as such representative. The respondent's action was clearly expressive of continued hostility to the self-organization of its em- ployees and an unwillingness to grant to the Union even a modicum of the status and prestige to which it was entitled. 24 It is clear that the respondent, while willing to discuss terms and conditions of employment with the Union, was unwilling to and refused to grant it the recognition which in itself is. of paramount importance'" in,se- curilig collective bargaining and plainly required by the Act.26 We find that 'the respondent by refusing to enter into any bind- ing agreement embodying the terms and provisions of the under- standing reached on February 7, 1938; by refusing, on March 18, 1938, to enter into a signed written agreement with the Union em- bodying any such understanding; and by refusing on March 18, 1938, to sign a statement recognizing the Union as the exclusive bargaining agency of the respondent's employees has refused to bargain collec- tively with the Union as the representative of its employees in the ap- propriate unit with respect to rates of pay, wages, hours of employ- ment, and.-other conditions of employment. We,also find that by.such refusal the respondent has interfered with, restrained, and coerced its employees in the exercise of the rights, guaranteed in Section 7 of the Act. D. The alleged discrimination The complaint alleged that the respondent had discriminated in regard to the hire and tenure of employment of Fred Brixey ; and Bud Thurman. We find that the evidence does not sustain the allegations of the complaint in this respect, and we concur in the Trial Examiner's recommendation that they be dismissed. Since the Union has not taken any exceptions to the Intermediate Report, we will not discuss the alleged discrimination in detail. We find that the respondent has not discriminated against Fred Brixey and Bud Thurman in regard. to.hire or tenure of employment. a Cf Fort Wayne Corrugated Paper Company v. N. R L B., 111 F. (2,1) 869 (C. C.. A. 7), enforcing Matter of Fort Wayne Corrugated Paper Company and Local No. 182, International Brotherhood ' of Pulp, Sulphite and Paper Mill Workers, 14 N. L. R B. 1. Indeed, the respondent's conduct in this respect goes far to indicate that the respondent at no time negotiated , and certainly after February 7, 1938 , did not negotiate in good faith ; and -utterly discredits the claim that the respondent was motivated by any concern as to lack of corporate authority. 25 The United States Supreme Court has repeatedly emphasized the "pivotal factor" of recognition N. L. R B. v. Pennsylvania Greyhound Lines, Inc, 303 U. S. 261, 266-268 (1938 ) ; Texas & N. C. R. Co. v. Brotherhood of Railway d S. S Clerks, 281 U. S. 548 (1930) ; Virginian By. Co v. System Federation No. 40. 300 U S 515. 26 Matter of Griswold Mfg. Co. and ,Amalgamated Ass'n of Iron, Steel & Tin Workers of N. A , 6 N L R B 298, enf'd in N. L. R B. v. The Griswold Mfg Co, 106 F. (2d) 713 (C. C. A. 3) ; Matter of Piqua Munising Wood Products Co. and Federal Labor Union Local 18787, 7 N L R B 782, enf'd in N. L. R. B. v. Piqua Munising Wood Products Go., 109 F. (2d) 552 (C C A 6) ; Matter of McQuay-Norris Manufacturing Company and United Automobile Workers of America, Local No 286, 21 N. L. R. B 709. PRODUCERS PRODUCE COMPANY 911 IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondent set forth in Section III B and C above, occurring in connection with the operations of the respondent described in Section I above, have a close, intimate, and substantial .relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and 'obstructing commerce and the free flow of commerce. THE REMEDY It is essential in order to effectuate the purposes and policies of the Act that the respondent be ordered to cease and desist from certain activities and practices in which we have found it to have engaged, and in aid of such order and as a means of removing and avoiding the consequences of such activities and practices, that the respondent be directed to take certain affirmative action, more par- ticularly described below. We have found that the respondent has interfered with, restrained, and =coerced' its employees dn' the exercise of the rights • which the Act has secured to them. It is plain that the respondent must cease and desist from such practices, and we shall so order. We have also found that the respondent has refused to bargain collectively with the Union as the representative of the respondent's -employees. In order to effectuate the policies of the Act, it is neces- sary to order, and we, therefore, shall order the respondent to cease and desist from its said refusal, to bargain collectively with the Union as such representative, and, if any understanding is reached, upon request to embody such understanding in a written signed agreement. Upon the basis of the foregoing findings of fact and upon the ,entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. Amalgamated Meat Cutters and Butcher Workers of North America, Poultry and Egg Handlers Division, Local No. 172, affili- ated with the American Federation of Labor, is a labor organization, within the meaning of Section 2 (5) of the Act. 2. The respondent, by interfering with, restraining, and coercing ,its employees in the exercise of the rights guaranteed in Section 7 of the Act, has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (1) of the Act. 3. All production and maintenance employees of the respondent, -except supervisory and clerical employees, at all times herein material, constituted and they now constitute a unit appropriate for 912 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the purposes of collective bargaining, within the meaning of Section 9 (b) of the Act. 4. Amalgamated Meat Cutters and Butcher Workers of North America, Poultry and Egg Handlers Division, Local No. 172, affiliated with the American Federation of Labor, was on August 11, 1937, and at all times thereafter, has been, the exclusive representative of all em- ployees in such unit for the purposes of collective bargaining, within the meaning of Section 9 (a) of the Act. 5. The respondent, by refusing to bargain collectively with Amal- gamated Meat Cutters and Butcher Workers of North America, Poultry and Egg Handlers Division, Local No. 172, affiliated with the American Federation of Labor, as the exclusive representative of the employees in the aforesaid unit, has engaged in and is engag- ing in unfair labor practices, within the meaning of Section 8 (5) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. 7. The respondent, by discharging Fred Brixey and Bud Thur- man, has not engaged in an unfair labor practice within the mean- ing 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 re- spondent, Producers Produce Company , its officers, agents, successors. and assigns shall : 1. Cease and desist : (a) From refusing to bargain collectively with Amalgamated Meat Cutters and Butcher Workers of North America, Poultry and Egg Handlers Division, Local No. 172, affiliated with the American Fed- eration of Labor, as the exclusive representative of all the production and maintenance employees of the respondent , except supervisory and clerical employees; (b) From in any other manner interfering with , restraining, or coercing its employees in the -exercise of their rights to self-organi- zation, to form , join, or assist labor organizations , to bargain col- lectively through representatives of their own choosing, and to engage in concerted activities for the purposes of collective bargain- ing and other mutual aid and protection , as guaranteed in Section 7 of the National Labor Relations Act. 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act : PRODUCERS PRODUCE COMPANY 913 (a) Upon request, bargain collectively with Amalgamated Meat Cutters and Butcher Workers of North America, Poultry and Egg Handlers Division, Local No. 172, affiliated with the American Fed- eration of Labor, as the exclusive representative of all its production and maintenance employees, except supervisory and clerical em- ployees, in respect to rates of pay, wages, hours of employment, and other conditions of employment; and, if an understanding is reached on any of such matters, embody said understanding in a written signed agreement, if requested to do so by Amalgamated Meat Cut- ters and Butcher Workers of North America, Poultry and Egg Handlers Division, Local No. 172, affiliated with the American Federation of Labor; (b) Post immediately in conspicuous places throughout its plant, and maintain for a period of at least sixty (60) consecutive days from the date of posting, notices to its employees stating: (1) that the respondent will not engage in the conduct from which it is ordered to cease and desist in paragraphs 1 (a) and (b) above, and (2) that the respondent will take.the affirmative action set forth in paragraph 2 (a) above; (c) Notify the Regional Director for the Seventeenth Region in writing within ten (10) days from the date of this Order what steps the respondent has taken to comply herewith. AND IT IS FURTHER ORDERID 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 by discriminating in regard to the hire or tenure of employment of Fred Brixey and Bud Thurman. MR. WILLIAM M. LEISERSON took no part in the consideration of the above Decision and Order.