Singer Manufacturing Co.

In the Matter Of SINGER MANUFACTURING COMPANY and UNITED ELECTRICAL, RADIO AND MACHINE WORKERS OF AMERICA, LOCAL No. 917, AFFILIATED WITH THE CONGRESS OF INDUSTRIAL ORGANIZATIONS Case No. C-1336.-Decided June 6, 1940 Sewing Machine Manufacficring Industry-Interference, Restraint, and Coer- cion-Unit Appropriate for Collective Bargaining: production and maintenance employees, excluding clerical and supervisory employees , timekeepers and tech- nicians ; unit identical with unit found appropriate in prior representation proceeding ; no dispute as to-Representatives : proof of choice : allegations of complaint as to ' Union's majority not controverted in answer ; certification of Union by Board in prior representation proceeding ; no dispute as to- Collective Bargaining : ( a) paid legal holidays and vacations : held subjects of collective bargaining ; further held, refusal to bargain when employer declined to bind itself to continue practice of, because it wished to be free to grant as gratuities ; (b) absence of good faith held evidenced under circum- stances of case, by employer's insistence Union agree to (1) 10 per cent wage reduction, introduction of wide differential between existing minimum wage rates and starting rates for new employees , and right of employer to reduce wage rates further; ( 2) waive overtime requirements in Fair Labor Standards Act; (3) right of employer to discontinue at will paid legal holidays and annual vacations ; (4) inclusion of family status in seniority clause; (5) sweeping restrictions on collective action by employees without correlative restrictions on employer's powers-Remedy : employer ordered to cease and desist from unfair labor practices and to bargain collectively on request. Mr. Hyman A. Schulson, for the Board. Burlingame, Nourse & Pettit, by Mr. Arthur E. Pettit, of New York City, and Jones, Obenchain & Butler, by Mr. Roland Oben- chain, of South Bend, Ind., for the respondent. Mr. James J. Matles, of New York City, for the United. Mr. Harold M. Weston and Mr. David Findling, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly filed by the United Electrical, Radio and Machine Workers of America, Local No. 917, affiliated with the Congress of Industrial Organizations, herein called 24 N. L. R. B., No. 41. 444 SINGER MANUFACTURING COMPANY 445 the United, the National Labor Relations Board, herein called 'the Board, by the Regional Director for the Thirteenth Region (Chi- cago, Illinois), issued its complaint, dated April 17, 1939, against the Singer Manufacturing Company, South Bend, Indiana, herein called the respondent, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1) and (5) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the complaint and notice of hearing thereon were duly served upon the respondent and the United. With respect to the unfair labor practices, the complaint alleged in substance (1) that although the United had, on or before March 19, 1938, been designated by a majority of the respondent's em- ployees in a unit appropriate for the purposes of collective bargain- ing as their representative for such purposes, the respondent, on or about June 16, 1938, and at other times, refused to bargain col- lectively with the United in that it refused and failed to bargain in good faith with the United with respect to terms and conditions of employment, and refused and failed to negotiate with the inten- tion of reaching a collective agreement with the United; (2) that by refusing to bargain collectively with the United and by other acts, the respondent interfered with, restrained, and coerced its em- ployees in the exercise of the rights guaranteed in Section 7 of the Act; and (3) that by reason of the aforementioned acts of the re- spondent, the employees of the respondent at its South Bend, In- diana, plant, on or about April 11, 1939, went out on strike and were still on strike at the time of the issuance of the complaint. On April 24, 1939, the respondent filed its answer to the complaint, in which it did not deny that the unit alleged in the complaint to be appropriate for the purposes of collective bargaining was appro- priate for such purposes, and that the United had been, designated by a majority of the employees in such unit as their representative for such purposes; admitted that a strike occurred on April 11, 1939, at the South Bend plant, and was still continuing at the time the answer was verified; but denied the averments of unfair labor prac- •tices. At the hearing on May 8, 1939, the respondent filed a supple- mental answer setting forth certain negotiations between the re- spondent and the United subsequent to the date of the issuance of the complaint. Pursuant to notice, a hearing was held at South Bend, Indiana, on May 4, 5, 8, and 9, 1939, before Samuel H. Jaffee, the Trial Exam- iner duly designated by the Board. The Board and the respondent were represented by counsel and participated in the hearing. Full opportunity to be heard, to examine and cross-examine witnesses, and 446 DECISIONS OF NATIONAL- LABOR RELATIONS BOARD to introduce evidence bearing upon the issues was afforded all par- ties. At the close of the hearing the Trial Examiner granted with- out objection the motion of counsel for the Board to conform the pleadings, as to formal matters, to the proof. During the course of the hearing the Trial Examiner also made rulings on other motions and on objections to the admission of evidence. The Board has, re- viewed the rulings of the Trial Examiner and finds that no preju- dicial errors were committed. The rulings are hereby affirmed. Pur- suant to leave granted, on May 24, 1939, the respondent filed a brief for consideration by the Trial Examiner. On or about July 29, 1939, the Trial Examiner issued his Inter- mediate Report, which was thereafter filed with the Board, and copies of which were duly served upon the respondent and the United. In his Intermediate Report the Trial Examiner found that the re- spondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1) and (5) and Section 2 (6) and (7) of the Act, and recommended that the respondent cease and desist therefrom and that it take certain affirma- tive action designed to effectuate the policies of the Act. On Septem- ber 15,.1939, the respondent filed a request for oral argument before the Board, on September 18, 1939, its exceptions to the Intermediate Report, and on October 21, 1939, a brief in support of its exceptions. Pursuant to notice duly served upon the respondent and the United, a hearing for the purpose of oral argument was held before the Board in Washington, D. C., on November 2, 1939. The respondent and the United were represented at and participated in the argument. The Board has considered the exceptions to the Intermediate Re- port and the briefs filed by the respondent. We find the exceptions to be without merit in so far as they are inconsistent with the findings, conclusions, and order set forth below. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Singer Manufacturing Company, a New Jersey corporation having its principal place of business at Elizabeth, New Jersey, is engaged directly and through various subsidiary and affiliated corporations in the manufacture, assembly, sale, and distribution of domestic and industrial sewing machines, electric motors, sewing machine cabinets, vacuum cleaners, electric irons, electric shears, and other household and industrial electrical appliances. The respondent is, and at all times in question has been, operating a plant located at South Bend, SINGER MANUFACTURING COMPANY 447 Indiana, herein called the South Bend plant, which is the only plant involved in this proceeding, where it is engaged in the manufacture and distribution of wooden cabinets and in the installation of motors and other equipment in the cabinets. During the period from May 1, 1938, to May 1, 1939, the total quantity of material of all descriptions, including coal, moving into the respondent's plant at South Bend, consisted of approximately 614 carloads. Approximately 59 per cent of such materials were trans- ported to said plant from States other than the State of Indiana. During the same period, the total quantity of material of all de- scriptions moving out of the respondent's South Bend plant aggre- gated 548 carloads, of which over 97 per cent were shipped to points outside the State of Indiana. H. THE ORGANIZATION INVOLVED United Electrical, Radio and Machine Workers of America, Local No. 917, is a labor organization affiliated with the Congress of Indus- trial Organizations,' and admitting to membership employees of the respondent at its South Bend, Indiana, plant. III. THE UNFAIR LABOR PRACTICES A. The, appropriate wait In a previous Decision and Certification of Representatives,2 issued on July 20, 1938, the Board found that all production and mainte- nance employees of the respondent at its South Bend, Indiana, plant, exclusive of clerical and supervisory employees, timekeepers, and technicians, constitute a unit appropriate for purposes of collective bargaining. In the instant case, the respondent did not deny the alle- gation of the complaint or take exception to the finding of the Trial Examiner that the aforesaid unit was appropriate for such purposes. We find that all production and maintenance employees of the respondent at its South Bend, Indiana, plant, excluding clerical and supervisory employees, timekeepers, and technicians, constitute and at all times herein material constituted a unit appropriate for purposes of collective bargaining, and that said unit insures -to employees of the respondent at said plant the full benefit of their right to self-organization and collective bargaining, and otherwise effectuates the policies of the Act. i Formerly the Committee for Industrial Organization. 2Matter of Singer Manufacturing Company and United Electrical, Radio and Machine Workers of America, Local No. 917, 8 N. L. R. B. 434. 448 DECISIONS ' OF NATIONAL LABOR-, RELATIONS BOARD B: Representation by the United of a majority in the appropriate unit . On March 19, 1938, the respondent employed. 890, on. June 16, 1938, 885, and on April 10, 1939, 905 employees in the unit which we have found to be appropriate for purposes of collective bar- gaining. On March 19, 1938, 689, and at the time of hearing herein, 746 such employees were. members of the United. In the aforementioned Decision and Certification, issued on July 20, 1938, the Board found that on March 19, 1938,3 the United had been designated as representative for the purposes of collective bargain- ing by a majority of the respondent's employees in the appropriate unit. In the instant case, the respondent did not controvert the allegations of the complaint, or take exception to the findings of the Trial Examiner that at all times since March 19, 1938, the United was designated as collective bargaining agent by a major- ity of the respondent's employees in the appropriate unit, and was the exclusive representative of all such employees for the purposes of collective bargaining.4 We find that on March 19, 1938,, and at all times thereafter, the United was the duly designated representative for purposes of col- lective bargaining of a majority of the respondent's employees in the appropriate unit, and that, pursuant to Section 9 (a) of the Act, it was and is therefore the exclusive representative of all the employees in said unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, and other con- ditions of employment. C. The refusal to bargain 1. Chronology of events Late in November 1936 the respondent 's employees at its South Bend , Indiana, plant began to organize, and on or about December 15 obtained a charter as a local of the United Automobile Workers of America and elected officers.5 Several conferences were there- after held between representatives of the U. A. W. A. local and of the respondent with a view to negotiating a collective bargaining 8 This date was adopted by the Board in Its Decision of July 20, 1938, as the appro- priate pay-roll date for purposes of determination of representatives. 4 The respondent stipulated in the instant case that on and after the date of the Certifi- cation, the United was the exclusive representative of the employees in the appropriate unit for the purposes of collective bargaining. 5 Temporary officers were elected in December.1936, and regular officers in March 1937. SINGER MANUFACTURING COMPANY 449 contract, but the parties failed to reach an agreement. The last such conference was held on April 24, 1937.6 On July - 20, 1937, the U. A. W. A. local voted to change its affiliation, and on July 23 received a charter from the United Elec- trical, Radio and Machine Workers of America as Local No. 917. Thereafter, until April 1938, several conferences were held between representatives of the United and of the respondent, also for the purpose of reaching a collective bargaining contract, but again with- out success? . . On January 12, 1938, the United filed a charge against the respondent with the Regional Director of the Board, and on May 14; 1938, a complaint was issued by the Board, alleging that the re- spondent had refused to bargain in good faith with the United. . A hearing on the complaint was held from May 23 to 25, 1938, inclu- sive, before a Trial Examiner designated by the Board, during which evidence was presented in support of the allegations of the complaint. At the close of the Board's case, Arthur E. Pettit, the attorney for the respondent, stated : The company at all times has been willing to bargain, and has bargained collectively with the union, and has always as- sumed that a memorandum of any agreement reached through such collective bargaining would be made in a form mutually agreed upon. After final disposal of the present charges the com- pany will, upon request, be willing to continue to bargain col- lectively with the union upon the same assumption. Upon "the basis" of the foregoing statement, the respondent's attor- ney moved "that the charges and the complaint herein be dismissed on the merits," and the Board's attorney did not oppose the motion. Accordingly, the Trial Examiner so ordered. Thereafter, on May 31, 1938, the United filed a petition with the Regional Director requesting an investigation and certification of representatives pursuant to Section 9 (c) of the Act, and on July 20, 1938, the Board issued its Decision and Certification previously mentioned.8 Following the dismissal of the unfair labor. practice proceeding on May 25, 1938, representatives of the United and of the respond- 6 Conferences were also held on February 13 and March 8, 1937 . During the conference of April 24, 1937, the Union claimed for the first time that it had been designated as col- lective-bargaining agent by a majority of the respondent's employees at the South Bend plant. 7 These conferences were held on October 23, 1937, February 18, March 17, and April 8; 1938. The United claimed to include a majority of the respondent's employees in its membership at all times during the period of these negotiations, and this claim was not disputed by the respondent. 8 See Section III A' and B, supra. 450 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ent held further numerous collective bargaining conferences.s Dur- ing the course of the negotiations, the United presented several proposed agreements all of. which contained, inter aria, provisions covering recognition, grievances, wages, hours, seniority, strikes, and duration, in regard to which provisions the respondent submitted counterproposals, and some of which also contained, inter alia, pro- visions covering paid holidays, vacations, bonuses, lock-outs, dis- charges, discrimination, passes, use of bulletin boards, and leaves of absence. As will be apparent from our discussion below, relatively little progress was made in reaching an agreement, the parties being substantially as far apart at the conclusion of the last conference as they had been when negotiations were commenced. Following the filing of new charges by the United, the present complaint was issued on April 17, 1939, again alleging that the re- spondent had refused to bargain with the United in good faith, and on May 4, 1939, the hearing in the instant case began. At the com- mencement of the hearing a "Stipulation of Evidence" was received in evidence, which provides, inter alia, as follows : It is further stipulated that the National Labor Relations Board may offer in this proceeding the official transcript and en- tire record of the proceedings in Case No. XIII-0-621 and Case No. R-84810 and that the same may be received and read in evi- dence as a part of the evidence of this cause; provided, never- theless, that the admission thereof shall not have the effect of presenting or raising any issue in this proceeding respecting any acts, conduct, or transactions of the company which occurred before May 25, 1938, and that the dismissal on the merits en- tered in said cause on May 25, 1938, is and shall remain con- clusive and res adjudicate respecting all such acts, conduct, and transactions. In accordance with this stipulation, the transcript and record referred to were received in evidence. On April 11, 1939, the United called a strike which was still in progress during the hearing. While the immediate cause of the 9 Twelve such conferences were held as follows : On June 16, 17 , 23, July 8, September 1, October 28, November 4, 17, December 16, 1938, and January 20 , April 17 and 18, 1939. At these conferences the respondent was represented by Dale Parshall, Lentz, and Roland Obenchain, its works manager, plant superintendent , and attorney, respectively. The United was represented by its bargaining committee, consisting of Paul ; Gibson, Howard White, and Stanley Bejma. James Matles, the International organizer of the United, attended the conference of January 20, 1939, while James Pascoe , the International rep- resentative of the United, was present at the conferences of September 1, October 28, November 4 and 17, December 16, 1938, and April 18, 1939. Switzer, an attorney for the United, attended the conferences of April 17 and 18, 1939.. 10 These are the file numbers of the prior unfair labor practice and representation pro- ceedings, respectively. SINGER MANUFACTURING COMPANY 451 strike was the hiring by the respondent of a new employee instead of one of several employees who had been previously.laid off and who, according to the United, were qualified and available, an addi- tional cause was the belief on the part of the United that the respond- ent had not bargained with it in good faith." 2. The course of negotiations We are concerned in the instant proceeding only with the question of whether or not the respondent, in the negotiations after May 25, 1938, refused to bargain collectively with the United as required by the Act. For convenience, such negotiations will be reviewed accord- ing to certain of. the principal subject matters considered.12 Duration. On June 16, 1938, when the first conference was held after the dismissal of the prior unfair labor practice proceeding, the United submitted a proposed contract 13 which contained a pro- vision that the agreement continue for a term of 1 year from its effective date, and for further annual periods thereafter unless can- celed by either party for just cause on 30 days' notice. The re- spondent rejected this proposal and expressed the view that any agreement reached must be terminable on 30 days' notice. The following day the United submitted a proposal that the con- tract continue for a period of 1 year from its date of execution unless terminated on 30 days' written notice. The respondent then stated that the contract should not recite any definite period of duration but should provide merely that "this agreement shall be in full force and effect from the date of signing until terminated on 30 days' written notice." On October 28, 1938, the United reverted to its original proposal that the agreement continue for a period of 1 year and for further annual periods thereafter unless canceled by either party for just cause on 30 days' notice. The respondent then again stated that it "insisted" upon the right to terminate any agreement on 30 days' notice. On January 20, 1939, the United offered to accept a contract for 1 year with a provision that if, during the term of the agreement, 71 In its exceptions and brief the respondent states that the strike was subsequently ter- minated, and the employees participating in the strike reinstated to their respective posi- tions on the "same terms and conditions that existed the, day the strike was called" ; and this statement has not been challenged by the United. 12 While events occurring prior to May 25, 1938 , will also be referred to hereinafter, such matters have been considered only in order to determine the propriety of the respond- erit's conduct since that date, and not as the basis of any findings of unfair labor practices. Cf. Matter of Gulf Public Service Company and International Brotherhood ' of Electrical Workers, Local 790, :18 . N. L.- R. B. 562 ; -Matter of The Western Union Telegraph Com- pany, a corporation, and American Communications Association , 17 N. L . R. B. 34. Is This contract was the same as the contract which the United had presented on March 17. 1938, prior to the hearing in the previous unfair labor practice proceeding. 452 DECISIONS OF NATIONAL LABOR RELATIONS BOARD either party desired. modification, conferences should "be convened" for such purpose, and if no agreement was then reached, the, pro- posed change or modification should be referred to arbitration. The respondent rejected this proposal, but stated that it was not "stand- ing" on a 30-day cancelation clause and that it was "not unwilling to consider" a contract for 60 or 90 days. It also then declared that it would not accept an agreement of 6 months' duration. On April 28, 1939, after the complaint herein had been served, the respondent Stated in a letter to the United that it was willing "to agree upon some reasonable initial period" with a provision that the agreement continue in effect thereafter subject to cancelation on 30 days' notice. The respondent, during the negotiations, stated as reasons for its desire for a contract of indefinite duration with a 30-day cancelation clause, its view that "the contract ought to continue for a long period of time and not automatically terminate," that it could see no "good" reason why there should be periodic need for negotiating new con- tracts when both parties are content, and that its "only remedy for matters complained of by it" 14 was cancelation of the contract. In its letter dated April 28, 1939, the respondent further expressed the view that an agreement of indefinite duration subject to cancelation by either party, "has the advantage.of doing away with definitely recurring periods of negotiations and leaves both sides free to negotiate at any time in view of changed circumstances." The United, on the other hand, urged upon the respondent during the negotiations that such an agreement as the respondent proposed was, in effect, one for 30 days only, that the respondent was taking con- tradictory positions, that it was encouraging instability and frequent negotiations,. that the contract "ought to run for a definite time," and that "one year gives security and makes employees feel more safe." Wages. Late in December 1936 the manager of the respondent's South Bend plant called Gibson,, president of the U. A. W. A. local, into his office, told Gibson that he understood that a union had been formed at the plant, and asked Gibson what his grievance was.15 Upon being informed that Gibson was dissatisfied with the wage situ- ation, the manager inquired why Gibson "didn't come over and take it up with him," and stated that he and Parshall, the works manager, "were always willing at any time to talk to any of the employees of the : plant." Shortly thereafter, the respondent instituted a 5-per cent general wage increase, effective January 3, 1937, and on or about January 14 posted a notice on its bulletin boards stating that "em- 14 Apparently, the respondent thus referred to, the contingency of a breach of the con- tract by the United. 15 See footnote 12, supra. SINGER ' MANUFACTURING COMPANY 453 ployees do not need to join any union in order to present individually; or in ' a group, any suggestion or grievance and to obtain full and fair hearing thereon," and that "employees are always welcome 'to present such matters-directly" to management. On April 24, 1937, the U. A. W. A. local informed the respondent that it was "asking . . . for a [further] general wage increase." In that connection Gibson stated that he had obtained figures from the respondent's financial statements showing that the respondent had never "gone in the red" or passed a dividend, that its dividends ranged from $2.50 to $28 or $29 a share, and that its stock had been "worth" more than $600 a share and was now "worth" over $400. Parshall replied that the respondent had made most of its profits in other countries, had been among the first to discontinue work on Saturdays, had raised and never reduced wages since 1920, had granted paid holidays and vacations in 1935, had given a 2 weeks' bonus in 1936, and had increased, wages by 5 per cent in January 1937. However, approximately 1 month after this conference, the respondent granted its employees a further general wage increase of 10 per cent effective May 30, 1937. Negotiations thereafter, until April 8, 1938. apparently contemplated no provision for a change in wage rates. On April 8, however, the respondent informed the United that it desired to include in the agreement a provision for a 10-per cent wage reduction. This pro- posal was rejected by the United, and on April 19 a meeting of the United was held which was attended by approximately 600 members, and at which approximately 97 per cent of those present voted to grant the executive committee of the United power to call a strike in its discretion, if the respondent put the proposed wage reduction into effect. The respondent was informed of this action and there- after took no steps to make the reduction effective. The discussion with regard to wages,-after May 25, 1938, centered mainly about the respondent's insistence throughout the negotiations that "if there was not a 10 per cent cut, there could be no agree-. ment." However, while insisting during the conference on Sep- tember 1, 1938, and prior conferences, upon an "immediate cut" and that such a cut was "imperative;" the respondent indicated on October 28, 1938, that although the desired reduction "must" be included in the agreement, its "effective date" could be determined "later." 1s The United refused to consent to the reduction, offering instead to agree to a provision providing for the continuance of existing wage rates, and during the course of the negotiations requested the re- spondent to agree to permit a government accountant to inspect its 3e The respondent did not state whether or not the effective date of the reduction would be determined by collective bargaining. 283035-42-vol. 24-30 454 DECISIONS OF NATIONAL LABOR RELATIONS BOARD books with regard to operations at the South Bend plant, or.to agree to submit the wage dispute to arbitration." The proposals were rejected by the respondent. The respondent also . stated for the first time on April 8, 1938, that any contract which was negotiated must provide that the respondent retain the privilege of instituting further wage reductions "at the dis- cretion of the company." In that connection, the respondent subse- quently stated on September 1, 1938, that "it was contemplated that the company should have sole control of the subject of wages and would decline to obligate itself to consult" with the United prior to any such further reduction; and on October 28, that "it was oper- ating a business and must determine these questions [the necessity for further wage reductions] for itself." At the conference of Jan- uary 20, 1939, the respondent declared that its "mind was open" on the question of further reductions. However, it also then declared that "it was the company's intention not to put itself in the position of being unable to require further reductions should that, be necessary." On April 18, 1939, which was while the strike heretofore referred to was in progress, the respondent stated that it "might be willing" to agree to post a notice of any further proposed reduction in rates of pay 2 weeks in advance of the date on which the reduction would become effective, with the right to the United then to "negotiate the matter with the company" if the United "cared to." 18 On April 28, 1939, which was after the complaint herein had been ,served, the respondent stated in a letter to the United that "present wages are ... substantially above the national average for the wood-working industry and are even further above the average in this area," and requested, in addition to the 10-per cent general wage reduction previously discussed, the inclusion of a clause as follows : In establishing new piece rates or altering existing rates be- cause of changes in product, equipment or operation the new rates shall provide the operator with earning opportunity equal to the average for similar work. Considerable discussion, beginning, with the conference on June 16, 1938, was also had with regard to minimum wage rates. The 17 During the negotiations the United also suggested that it "might " agree to accept the seniority clause desired by the respondent if the respondent would "yield" on the 10-per cent wage reduction. - 18 The following clause was submitted : The company may post a notice during two weeks in advance of the effective date of any proposed reduction in rates of pay. If, within this time, the union cared to, it could negotiate the matter with the company and if, as a result, no amicable settle- ment was reached , the union could then indicate to the company its willingness to arbitrate on the matter. The company to have the privilege to accept or refuse arbi- tration in the event of refusal. Both the company and union to be free to act as they chose in the matter. SINGER MANUFACTURING COMPANY 455 minimum hourly rates paid by the respondent at that time and there- after throughout the period of the negotiations were 521/2 cents for males and 461/4 cents for females. The 10-per • cent general wage reduction sought by the respondent would have reduced these rates to 471/2 cents for males and 411/2 cents for females. Apparently, there was no special scale of minimum rates for new employees. At the June 16 conference the United proposed an increase in minimum rates to 65 and 55 cents per hour for males and females, respectively. The respondent rejected the United's proposal and proposed instead that in addition to the 10-per cent reduction in existing rates, minimum hourly rates for new employees should be fixed at 40 cents for adults and 30 cents for minors.18 The United offered to compromise the conflicting proposals by fixing minimum rates at 521/2 cents for males and 421/2 cents for females, in other words to accept a reduction of approximately 10 per cent in mini- mum rates for women, but this proposal also was rejected by the respondent. As grounds for its position with regard to wage proposals, the respondent stated to the United, in substance, that the necessities of its business required the wage provisions which it sought; that it had not reduced wages since 1920; that it had granted two wage increases in 1937; that its wage scale was far above that of companies in the furniture business with which, according to the respondent, it competed; 20 that the respondent had lost money in connection with its American operations in 6 of the 7 prior years and had "only broken even" in 1937; and that salaries, as contrasted with wage rates, had been reduced.21 However, the respondent at no time offered to the United any evidence that the proposed wage reduction, the introduc- tion of a wide differential between existing minimum rates and min-, imum rates for new employees, and the reservation of a right to reduce wages further, were at this time necessary, although, plainly, the existence of such facts was peculiarly within its own knowledge; and while rejecting, as we have stated, the United's proposal to permit a government accountant to inspect the respondent's books, or, in the alternative, to submit the matter to arbitration, itself made no sug- gestion whereby, the validity of its claim that business necessities re- quired the wage clauses which it. proposed, might be demonstrated. Moreover, although the respondent indicated that if the United would 19 While the record does not disclose what the rate was, it appears that the respondent had a minimum wage scale for minors. -21 The United stated during the negotiations, in substance, that the , respondent was not in the furniture business and that a comparison between its wage rates and those of furni- ture manufacturers was not a sound basis for a wage reduction , since other advantages accrued to the respondent as a consequence of its manufacture of its own parts, which compensated for any higher cost which might be involved. 21 The record does not disclose when the alleged reduction in salaries was made. 456 DECISIONS OF ,NATIONAL .LABOR RELATIONS BOARD agree to accept the reduction the "effective date of the cut would be determined later"; and offered to agree to' post a notice of further wage reductions 2 weeks before their effective date, and, after such posting, to discuss the proposed reductions with the United if the United so desired ; it insisted upon the inclusion of the wage reduc- tion, and refused to bind itself not to reduce wages further during the term of the contract, even while proposing that the agreement be subject to cancelation on 30 days' notice or continue only for a short fixed term such as 60 or 90 days. Hours. The respondent's regular schedule of hours was an 8-hour day and 5-day week ; extra pay for occasional overtime was uncom- mon. At the conference on June 16, 1938, the.United submitted a proposal for an 8-hour day, 40-hour week, and time and one-half for overtime. The respondent refused to accept such a proposal and insisted early in the course of the negotiations that the contract pro- vide that a standard workweek should consist of a 9-hour day. and 49-hour week before payment of overtime rates ; and later in the ne- gotiations, shortly after the effective date of the Fair Labor Standards Act, that the agreement provide that no employee shall be employed more than 1000 hours during any period of 26 consecutive weeks. This latter provision would have permitted the respondent, as pro- vided in the Fair Labor Standards Act, to cause its employees to work 12 hours per day and 56 hours per week without payment of time and one-half for hours worked in excess of 8 hours per day and 44 hours per week as required by that Act in the absence of such a clause as the respondent sought.22 Thus, the respondent demanded that the United by a collective agreement. concede to it an immunity with.respect to payment of overtime, which the law, in the absence of such concession by the United, denied. The United rejected the 1000-hour proposal, urging as a reason for its rejection the fact that instances had occurred when an em- ployer had required his employees to work long hours to "pile up" large inventories and then had "let the men be idle for long periods"; and offered at various times to compromise the issue by agreeing to a 9-hour day and 40-hour week before payment of overtime rates; by agreeing to a provision for 8 hours of work per day and 44 hours of work per week before payment of time and one-half for 22 The provisions of the Fair Labor Standards Act (52 Stat . 676) with respect to hours became effective on October 24, 1938. The proposal referred to was first made by the respondent on December 16. 1938. Section' 7 (b) of the Fair 'Labor Standards Act provides that an employer shall not be deemed to have violated that Act when his employees work 56 hours per week and 12 hours per day before time and one-half for overtime is paid, where a collective agreement entered into between the employer and representatives of his employees duly certified by the National Labor Relations Board, provides that no employee shall be employed more than 1000 hours during any period of 26 consecutive weeks. The respondent offered to exclude maintenance and plant protection employees from this clause, if such exclusion was "legal" and "satisfactory" to the United. - SINGER MANUFACTURING COMPANY . ' 457 overtime, but with a statement in the contract that the respondent's regular schedule of hours, i. e., 8 hours per day and 40 hours.per week, be continued; by agreeing to accept'the provisions of the Fair Labor Standards Act; and by agreeing to submit the matter to arbitration. The respondent' stated' that it would be willing to "indicate" that its practice had been and would, "so far as con- venient" continue to be a 40-hour week consisting of five 8-hour days, but rejected all of the United's compromise proposals on the grounds of "necessities" of its business and a desire to be "free to meet emergencies." However, it offered no evidence to the United that any immediate emergency was then anticipated or that its busi- ness was seasonal '23 and made no effort otherwise to demonstrate that the "necessities" or "emergencies" of its business required the concession as to hours which the respondent sought.' Moreover, it did not offer to abandon its proposal as to hours if the term of the contract were limited to its satisfaction, or if some provision with reference to emergency periods were included in the agree- ment, but, on the contrary, requested the inclusion of the 1000-hour clause even in a contract terminable on 30 days' notice or of 60 or 90 days' duration. Furthermore, it offered the United no concession in return for the concession which it requested. Seniority. In February 1937 the U. A. W. A. local submitted a proposal for strict seniority in retaining and rehiring employees, ' based upon length of service.24 The respondent then stated that such a seniority policy "followed along the lines that the company had always taken," and shortly thereafter posted on its bulletin boards and mailed to all employees a letter in which it stated, inter alia, as follows : Seniority and equalization of hours, substantially as contained in your proposal, have been policies of the company in the past and, as you are well aware, only in emergencies, such as existed a short time ago, has seniority been compelled to give way to the needs of individual employees and their families. On April 8, 1938, the respondent suggested, apparently for the first time, that in determining lay-offs and reinstatement, the primary considerations must be ability and fitness for the work, value to the respondent, and family status; that 12 months' employment should be a prerequisite to the attainment of seniority rights; and that such rights should cease after discharge for cause, "voluntary quit- ting," or 3 months' severance from the pay roll. This proposal the United then rejected. "Indeed , Gibson, the president of the United, testified that the respondent' s operations are not seasonal, and this testimony was not denied by the respondent. 24 See footnote 12, supra. 458 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The discussion after May 25, 1938, with regard to seniority, cen- tered to a great extent about the inclusion of family status as a factor, the United offering at various times thereafter :to agree that "length of service, ability, and fitness to perform work" be con- sidered and all other factors excluded; and to agree on the inclusion of special skill and value to the respondent as factors if the re- spondent would abandon family status.25 As grounds for its insistence upon a seniority clause containing family status, the respondent stated that another local of the United Electrical, Radio and Machine Workers of America had accepted such a clause in a contract with another company, that considera- tion of family status was "essential to the good of the community," that the respondent's experience in its use had been good, that it had been its practice "for years to -consider family status, that it was felt that it was necessary from a humanitarian standpoint" to do so, and that the respondent could see no reason for omitting it other than an "utterly groundless fear" on the part of the United that "it would be used as a means of discrimination against union members." The United contended, on the other hand, that the con- sideration of family status afforded no protection "whatever" to men of long service, that a majority of the employees desired its elimina- tion, and that its consideration "antagonized" the men. Nevertheless, on January 21, 1939, the United offered to accept the respondent's "present policy and practice" with respect to seniority and embody it in the agreement and, in this regard, expressly stated that it would accept the respondent's proposals with respect to seniority if they were in fact the "present policy as practiced in the plant." The United thus plainly indicated, however, that it did not accept as fact the respondent's assertion that such was the case.. That the respondent, as it obviously must have realized, was at least partly responsible for the doubts which the United entertained in. this regard is plain in view of the fact that there was no clearly established seniority practice at this time and, as we have, pointed out above, the respondent had previously stated in writing in 1937 that a seniority policy substantially such as was requested by the United, i. e., one which provided for strict seniority based on length of service, had been the policy of the respondent in the "past," and that only in "emergencies such as existed a short time ago, has seniority been compelled to give way to the needs of individual employees and their families"; and in view of the further fact that. 26 The United also offered to agree to an initial period of employment of 60 days before seniority rights accrued, and to agree that seniority rights be lost after 12 months' sev- erance from the pay roll ; and, subsequently, offered to reduce this period to 9 months. The respondent indicated its willingness to make "some" compromise in regard to the latter proposal "if it came to a point where this difference was the only matter standing in the way of an agreement." SINGER MANUFACTURING COMPANY 459 the respondent made no claim at any time that an emergency still existed. The respondent, nevertheless, limited itself to a statement of its demands and a bare assertion that its proposals. were no more than a statement of its existing practice, and offered the United no evidence in that regard. Paid holidays, vacations, and bonuses. The respondent's practice, since 1936 admittedly has been to grant its employees seven legal holidays with pay per year, a 1-week vacation with pay computed upon the basis of the number of days per week the plant was operat- ing at the time of the vacation, and a bonus at Christmas.26 The United first proposed, on June 16 and October 28, 1938, in effect, that the agreement provide for it continuance of the respondent's practice with regard to paid legal holidays and vacations, and that "payment of a yearly bonus, as in the past, be continued in the future subject to discretion of the company",27 and thereafter pro- posed, on January 21, 1939, that the respondent's "present policy" concerning vacations and paid legal holidays be "embodied" in the contract, that in the event that the respondent desired to change its practice in that regard during the term of the contract "it be sub- ject to collective bargaining," and that if no agreement as to modifica- tion were thus reached, the company shall be at liberty to proceed under the terms of the contract and the union shall have the same recourse." The contract proposed at this time also provided for arbitration of disputes arising out of a desire for modification of the agreement. The respondent rejected the United's proposals, even in a contract with a 30-day cancelation clause, although it admitted that it was "extremely unlikely" that any change in its practice with regard to paid holidays, vacations, and bonuses would be made, and that it had no "thought or intent" of doing so; and insisted that "any contract, to. which we agree, will have to concede us the right to revoke them [paid holidays, vacations, and bonuses] should such revocation, in our opinion, become necessary or desirable." 28 The respondent's position was that it "could" not commit itself to continuance of its practice in that regard, that "conditions might in the judgment of the com- pany warrant a change," that while such matters were "a part of working conditions" and the respondent "can bargain" and was will- 20 The respondent paid a bonus equal to 2 weeks ' pay at Christmas in 1936, and bonuses of $20 at Christmas in 1937 and 1938, respectively. 72 Although the contracts submitted by the United on June 16 and October 28, 1938, provided for 2 weeks' vacation with pay for employees who had more than 5 years of service, and that vacation pay be computed 'on the average . rate for 6 months prior to vacation," the United did not press its proposals in this regard. It seems clear that the United 's proposal , which the respondent rejected , reserved to the respondent the right to discontinue bonus payments in its discretion. 460 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ing "to talk" about them, its practice was one which it had adopted "voluntarily" as part of it "liberal policy" the continuance of which it would not agree should be required in any agreement; and that "to continue [the practice] voluntarily was one thing while to con- tinue [it] under compulsion was, another." Thus, the grounds advanced by the respondent for its insistence upon the reservation of the right, in its sole discretion, to discontinue paid holidays, vacations, and bonuses were essentially two, i. e., the neces- sities of its business-the existence of which it did not attempt to demonstrate to the United-and its desire to preserve the privilege which it believed itself entitled to retain and which it was determined not to yield, of continuing such practice voluntarily and in the nature of a gratuity to its employees.29 Discrimination, strikes, and lock-outs. The proposed agreement which the United submitted on June 16, 1938, contained the following proposal with respect to discrimination : Further, that there shall be no discrimination of any kind against members of the union by foremen, or any other persons in the employ of the employers. That the employees shall be free from interference, restraint or coercion by employers or manage- ment in any activities of their union. The respondent rejected this proposal and a similar proposal sub- mitted on October 28, 1938, on the grounds that such a clause was un- necessary because the respondent had never discriminated against mem- bers of the United, and because the clause was a "mere" statement of law, that "there was no more reason for putting that provision in a contract than there was for requiring the company to agree to furnish a place of work or to provide fire protection, and that it would be equally absurd for the company to insist that the contract should expressly include an agreement on the part of the men to do an honest day's work"; and urged, on the other hand, that provision should be made against coercion of non-union members by the United, and union organizational activities "on company time or property." The respondent's position is stated as follows in its brief : In any event, we submit that an employer is perfectly justified in retaining something that he may give to his em- ployees. It is not necessary that every gratuitous act of an employer benefiting employees be converted into a contractual obligation. An employer is entitled to give and feel that he may give benefits aside and in addition to his legal obligations and upon occasions to have his employees know and appreciate that he is in his relations with them going beyond the strict letter of his legal obligations. Therefore, although vacations and bonuses are proper subjects of bargaining negotiations, it does not follow that the employer must accede to the request of the negotiators and embody his intentions in regard thereto into a legally binding instrument. He may say : "These I reserve from the contract for the very reason that I want the privilege of granting them, not under compulsion, but of my own free will." SINGER MANUFACTURING COMPANY 461 On June 17, 1938, the United proposed a clause as follows : The company has never 'discriminated against any, employee because of their affiliations with a union. It has never encouraged or discouraged membership in any labor organization. The` com- pany agrees to continue that policy. Likewise, the union agrees not to intimidate, coerce, or use unfair tactics on any employee of the company, and also not to solicit membership on corporation time or plant property. The company agrees to use its best efforts to discourage discussion of union affairs during working hours or on company property. This also applies to non-union members among the employees. After first indicating that this clause was acceptable "in principle," the respondent declared, on June 23, 1938, that the "substance of the clause did not require the inclusion of the first three sentences nor the last sentence" and that the "fourth sentence [which provided that the United agrees not to `intimidate, coerce, or use unfair tactics on any employee,' and not to solicit members on `corporation time or plant property'] probably expressed all that was necessary." Although the United, after November 4, 1938, abandoned its pro- posal for a clause against discrimination, the respondent at all times continued to insist upon the inclusion of a clause providing that there should be "no discrimination, interference, restraint or coercion" by the United or its members against any employee because of non- membership in the United, that neither the United nor "any officer, agent or member thereof shall solicit membership or transact other union business" on company time or property, and that violation of such provisions "is expressly recognized by the union" as cause for discharge. However, the respondent did not point to any incident as indicating a need for such a clause as it proposed, nor did it other- wise seek to demonstrate any necessity for its insistence upon the inclusion thereof. At the conference on June 16, 1938, the United submitted, also, a clause prohibiting strikes and lock-outs until "every peaceable means of settlement of difficulties shall have been tried." The respondent rejected this proposal, and requested that the contract provide that "no strike should be caused or sanctioned by the union until or unless" the grievance procedure set forth in the agreement had been exhausted. On the following day the United submitted a clause pro- hibiting strikes and lock-outs "until those methods of settling the dispute provided in this agreement have [been] complied with." The respondent then, and at all times thereafter, rejected any provi- sion as to lock-outs. On the other hand, the respondent insisted that in addition to the limitation upon strikes proposed by the United, the United should 462 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agree that "under no circumstances" would it cause or permit its members to participate in a sympathetic strike or in any "stay-in," "slow-down," or "sit-down," and that participation by any member of the United in any action contrary to the foregoing provisions was jus- tifiable cause for discharge.30 The respondent presented its wishes in this regard in a lengthy counterproposal which it submitted on December 16, 1938, as follows : The union should agree not to cause or permit its members to cause a strike and that no member of the union will take part in ' a strike until recourse has been had to the procedure outlined above and reasonable efforts have been made in the manner therein provided to settle any differences involved, and not then until and unless such strike shall have. been sanctioned and ordered by the union : - The union should further agree that under no circumstances will the union cause or permit its members to take part in a sympathetic strike and that no member of the union will take part in such sympathetic strike, and that any strike called, sanctioned or permitted by the union or taken part in by any member of the union shall be limited to strikes arising out of .or alleged to have arisen out of disputes or differences as to wages, hours, working conditions or other grievances in con- nection with the operation of the plant at South Bend, Indiana : - The union should further agree that under no circumstances will it cause or permit its members to cause and that no mem- ber of the union will take part in any stay-in, slow-down, sit- down, or other conduct or action which results in stoppage of or interference with work, either total or partial, conducted on or within the premises of the company during the life of the agreement : - The union should further agree that it recognizes as justifiable cause for discharge participation by any member of the union in any strike, conduct or action contrary to the above provisions. In the proposed agreement which the United submitted on April 18, 1939, no clause prohibiting lock-outs was included, and a pro- vision was presented. that "no strike will be called by the union 80 Early in the course of the negotiations , the respondent insisted further that any agreement reached must also contain a provision for maintenance during a strike of the "vital services" of light, heat, and water, and the United thereupon agreed to make pro- vision for maintenance of such services during such time as production was not attempted. There was considerable discussion of details in that regard thereafter, but the respondent indicated that the United's proposal "probably" would be acceptable "if'other matters could be agreed upon." On December 16, 1938, however, the respondent abandoned its request for maintenance of such services , stating that it did so as a concession to the United. The United replied that abandonment of the clause was "no concession." SINGER MANUFACTURING COMPANY 463 until the above procedure [relating to presentation of grievances] has been followed." In its reply, by letter on April 28, the respond- ent stated merely than it preferred its counterproposal of December 16, 1938. . As an alleged reason for its refusal to include a clause prohibiting lock-outs, the respondent maintained that a lock-out was prohibited by law and that a clause prohibiting lock-outs was therefore un- necessary. On September 1, 1938, the United stated that the South Bend council of the C. 1. O. had devised a ,method of enforcement .of payment of dues by which members of unions other than that to which the delinquent members belonged, picketed to enforce col-' lection, and had suggested the use of the check-off as an alternative to such picketing. Thereafter, on November 17, 1938, the respond- ent stated as additional grounds for its objection to a clause limiting lock-outs that it was "thinking of picketing by outsiders," and further, that it was necessary to protect the employees from injury, that the respondent must decide for itself questions of danger to workers, that it could not "surrender control" in that regard, and that it did not wish to be bound not to "shut down." 31 3. Conclusions as to the refusal to bargain Collective ,bargaining, as contemplated by the Act, is a procedure looking toward the making of a. collective' agreement by the em- ployer with the accredited representatives of its employees concern- ing wages, hours, and other conditions of employment. The duty to bargain collectively, which the Act imposes upon employers, has as its objective the establishment of such a contractual relationship to the end that employment relations may be stabilized and obstruction to the free flow of commerce thus prevented ; and, indeed, the pro- tection to organization of employees afforded by the first four sub- -divisions of Section 8 of the Act is intended to make possible and to implement the 'stabilization of working conditions through collective bargaining conducted between employers and the freely designated representatives of their employees as equals. The duty to bargain -collectively is not limited to the recognition of the employees' repre- a' In addition to the foregoing matters , the parties discussed at various conferences, but reached no agreement upon, inter alia, the phraseology of a "recognition " clause, details of the procedure for presenting grievances , and the manner of promulgating the contract. The respondent also rejected the ,requests of the United , made at some of the conferences, that the United be notified of all proposed dismissals and lay -offs ; that the justice of dis- charges, when questioned by the .United, be submitted to arbitration. if no agreement.upon the matter was otherwise reached ; that the United be granted the use of the respondent's bulletin boards or be permitted to provide its own bulletin boards ; that the respondent :agree to permit representatives of the United to enter the plant during working hours, by pass from the respondent, to ascertain whether or not the agreement was being observed, or to assist in the adjustment of grievances ; and that the respondent agree that employees whose duties as union representatives required their absence from work, be "guaranteed" reemployment upon their return , without loss of seniority rights. 464 DECISIONS OF NATIONAL LABOR RELATIONS BOARD sentatives qua representatives, or to a meeting and discussion of terms with them. The duty encompasses, an obligation to enter into dis- cussion and negotiation with an open and fair mind and with a sin- cere purpose to find a basis of agreement concerning the' issues presented,82 and to make contractually binding the understanding upon the terms that are reached.33 The sole question presented here is whether the respondent in the instant case has fulfilled its duty, thus defined, to bargain collectively with the United. With respect to wages, obviously among the most vital elements and troublesome problems of employment relations, the respondent insisted that the United accept a wage reduction to which the em- ployees had manifested their strong opposition, as the respondent knew, by voting by a large majority to strike if such reduction were 32 Manifestly, in exploring the possibilities of reaching an agreement the open- and fair- mindedness and sincerity of purpose required by the Act contemplates an interchange of ideas, the communication of facts peculiarly within the knowledge of either party, per- sonal persuasion, and willingness to modify demands in accordance with the total situation thus revealed. See Matter of S. L. Allen & Company, Inc., a corporation and Federal Labor Union Local No. 18526, 1 N. L. R. B. 714, at page 728. 83 Matter of St. Joseph Stockyards Company and Amalgamated Meat Cutters and Butcher Workmen of North America, Local Union No. 159, 2 N. L. R. B. 39. We have reaffirmed this interpretation of the Act in all subsequent cases involving this question . See Matter of Westinghouse Electric & Manufacturing Company and United Electrical, Radio and Machine Workers of America, 22 N. L. R. B . 147, and cases cited in footnote 14, therein. The reviewing courts have indicated their accord. In Consolidated Edison Co. v. N. L. R. B., 305 U. S. 197, 236, the U. S. Supreme Court said : The Act contemplates the making of contracts with labor organizations . This is the manifest objective in providing for collective bargaining. And Mr. Justice Reed, concurring in part and dissenting in part, said at page 245: It is agreed that the "fundamental purpose of the Act is to protect interstate and foreign commerce from interruptions and obstructions caused by industrial strife." This is to be accomplished by contracts with labor organizations , reached through collective bargaining. Similarly , in N. L. R. B. v. The Sands Manufacturing Co., 306 U. S. 332 , 342, the U. S. Supreme Court observed that : 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. In N. L. R. B. v. Highland Park Manufacturing Co., 110 F. ( 2d) 632 (C. C. A. 4, 1940), the Court said: The Act, it is true, does not require that the parties agree ; but it does require that they negotiate in good faith with the view of reaching an agreement if possible .. . In Globe Cotton Mills v. N. L. R. B ., 103 F. (2d) 91, 94 ( C. C. A. 5, 1939 ) the Court stated : ... 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. In N. L. R. B. v. Griswold Mfg. Co., 106 F. (2d) 713, 722 (C. C. A. 3, 1939 ) the Court said : It is obvious that an employer who enters into negotiations with a labor union representing his employees , with his mind hermetically sealed against even the thought of entering into an agreement with the.Union, is guilty of refusing to bargain collectively with the. representatives of his employees in good faith , as required by the Act, and is therefore guilty of an unfair labor practice. SINGER MANUFACTURING COMPANY 465 instituted; that the United agree to the-introduction of a wide differ- ential between existing minimum wage rates and rates for new em= ployees; and that the respondent be permitted to institute further wage reductions. On the other hand,' with respect to hours, also a vital element in employment relations, the respondent demanded that the collective agreement secure to it the legal right to cause its em- ployees to work, for considerable periods, 12 hours per day and 56 hours per week without payment of overtime rates. Similarly, the respondent insisted that the United agree to a contract which placed restrictions, and in the most sweeping of terms, upon collective action by its employees, but refused to include correlative restrictions upon its own power. The respondent also insisted upon a seniority clause which the United had indicated the employees believed established a less desirable seniority rule than was the existing practice in the plant, and which provided for consideration of family status, a mat- ter which the respondent was informed antagonized the employees and to which a majority was opposed. Finally, the respondent re- fused to bind itself contractually to continuance of its practice of paid legal holidays and annual vacations. . Essentially, the respondent's position with respect to the wage pro- visions proposed by it was that business exigencies required their inclusion in any agreement. However, although it insisted at first upon an "immediate cut" and that a wage reduction was "impera- tive," subsequently, by offering, if the agreement provided for the reduction, to determine its effective date "later," the respondent in- dicated that the wage reduction which it sought was not then necessary. Moreover, the respondent insisted upon the wage reduc- tion and upon the reservation of the right to reduce wages further during the term of the agreement, even while insisting that the agreement be subject to cancelation on 30 days' notice. Further- more, even though the proposed wage reduction had been preceded by two general wage increases granted directly to the employees while the United or its predecessor was engaged, to the respondent's knowledge, in organizational -activities among the employees; and, indeed, one of these increases had been granted after negotiations for a collective agreement had begun, and immediately after the United's proposal for a wage increase had been rejected on grounds similar to those now urged as necessitating a wage reduction; the respondent nevertheless refused to permit an accountant to examine its books, or to submit the wage clauses to arbitration, and proposed no alternative method whereby the United might be satisfied of the existence of the facts upon which the respondent based the demand for a' wage cut. The grounds advanced by the respondent for, its proposal as to hours were also business "necessities," this time expressed as a need 466 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to be free to 'meet "emergencies." However, as in the case of the wage proposals, the respondent at no time sought to demonstrate to the United that the "necessities" or "emergencies"- of its business required the concession which it sought as to overtime. Moreover, although the respondent was requesting, by its'proposal, an immunity from the duty imposed by law to pay its employees time and one- half for hours worked in excess of 8 hours per day and 44 hours per week, it offered no concession to the United in return therefor. The respondent also advanced the necessities of its business as one of the grounds for its refusal to agree to continue its practice with regard to paid holidays and vacations. Again, however, it did not attempt to demonstrate that the necessities of its business pre- cluded it from agreeing to the continuance of its practice with re- spect to such matters. On the contrary, by stating that it had no "thought or intent" of changing its practice and that it was "ex- tremely" unlikely that any change in that regard would be made, the respondent indicated that no such business necessities then existed. Nevertheless, it insisted upon reservation of the right to discontinue its practice with regard to paid holidays and vacations, even in a contract subject to cancelation on 30 days' notice. Although the United offered to accept the respondent's proposal that family status be considered in determining seniority, if this was the respondent's existing practice, the United, indicated that it did not accept the respondent's bare assertion in that regard. The re- spondent, however, did not seek at any time to demonstrate to the United that its seniority clause conformed to its practice, although it must have known that it was itself responsible, in part at. least, for the doubts which the United entertained, and also knew that the employees were strongly opposed to consideration of family status as a factor in the determination of seniority rights. Finally, the respondent's -reasons for its rejection of the discrim- ination and lock-out clauses submitted by the United were patently specious. The United did not request a non-discrimination clause upon any notion that the Act did not prohibit such action on the part of the respondent, and, indeed, proposed to declare that the respondent had not discriminated in the past. The United's pur- pose in seeking the clause, as the respondent knew, was simply to give to the employees a feeling of security in the exercise of the rights guaranteed by the Act.34 As applied to the United's proposal that the respondent agree not to lock out its employees, the respondent's 84 The United pointed out to the respondent during the negotiations that the omission of a clause prohibiting discrimination against members of the United and interference, restraint, or coercion by the respondent with regard to union activities "would embitter the men and create a bad situation" and urged that it would "cost" the respondent "nothing" to include the provision which the United desired in that regard. SINGER MANUFACTURING COMPANY 467 initial objection that lock-outs were illegal and a clause prohibiting lock-outs, therefore, unnecessary, was equally untenable. The Act does not proscribe a shut-down except where used to interfere with the exercise by employees of rights guaranteed by the Act.35 Plainly, therefore, the purpose of the United's no-strike, no-lock-out clause was to forestall the use of even permissive economic weapons and to substitute settlement by collective bargaining. That the respond- ent appreciated that this was the United's purpose is also clear; indeed, the respondent advanced as a ground for its objection to a lock-out clause the claim that it might wish to shut down its plant, upon the United's suggestion that picketing might be resorted to in order to enforce collection of dues. Such clauses as the United sought are not unusual in collective agreements, and they tend - to realize' the purposes of the Act by encouraging the practice and procedure of collective bargaining rather than resort to industrial warfare.36 Moreover, 'whereas the clauses proposed by the United proceeded upon the recognition of the equal status, dignity, and responsibility of both the employer and the employees as contractually bound parties, the respondent, on the other hand, in effect insisted that the' TJnited accept an inferior position by agreeing to a contract which placed -restrictions only upon the United, and in the most' sweeping of terms. Certainly, upon the record in the instant case, there was no warrant for such a position by the respondent. On the contrary, it could have only the purpose of discrediting the United in the eyes of its members; and it denied to the designated representative of the employees that equality of. status which the Act expressly sets forth as one of its objectives and which is an essential basis for collective bargaining. Thus, the United was required to accept the respondent's proposals as to wages, hours, seniority, paid holidays, and ' vacations-among the most important elements of a collective agreement-without: any se See Matter of Lengel-Fencil Company and American Federation of Hosiery Workers, 8 N. L. R. B. 988. Cf. Matter of American Radiator Company, a corporation, and Local Lodge No. 1770, Amalgamated Association of Iron, Steel and Tin Workers of North America, affiliated with the Committee for Industrial Organization , 7 N. L. R. B. 1127. See, also, N. L. R. B. v. The Sands Manufacturing, Company, 306 U. S. 323, affirming 96 F. (2d) 721 (C. C. A. 6), setting aside Matter of The Sands Manufacturing Company and Mechanics Educational Society of America, 1 N. L. R. B. 546. $e In Consolidated Edison Co. v. N. L. R. B., 305 U. S. 197, Mr. Chief Justice Hughes pointed out: Moreover, the fundamental purpose of the Act is to protect interstate and foreign commerce from interruptions and obstructions caused by industrial strife. This pur- pose seems to be served by these contracts in an important degree. Representing such a large majority of the employees of the companies , and precluding strikes and providing for arbitration of disputes , these agreements are highly protective to interstate and foreign commerce. See also Matter of Highland Park 'Manufacturing Co. and Textile Workers Organizing Committee, 12 N. L. R. B. 1238, enf'd N. L. R. B. v. Highland Park Manufacturing Co., 110 F. (2d) 632 (C. C. A. 4, 1940). 468 DECISIONS OF NATIONAL LABOR' RELATIONS BOARD evidence that such proposals were, as asserted by the respondent, necessary for business reasons or, in the case of the seniority clause, a statement of the respondent's existing practice. The respondent made no real effort to persuade the United to accept its proposals by communicating to it facts peculiarly within the respondent's knowledge. On the contrary, the United was required to accept the respondent's bare statements with regard to such matters as fact, even though the United was plainly entitled, for the reasons already discussed, to doubt,'as it obviously did, the respondent's motives in insisting upon its proposals. The United was also required to accept a clause as to strikes and discrimination which denied it status and dignity as an equal in the bargaining process. Moreover, although acceptance by the United of the respondent's proposals, under the circumstances disclosed by this record, would manifestly have seri- ously discredited the United and threatened its continued existence as the collective bargaining agency of the respondent's employees, the respondent made no genuine effort to seek to enable the United to point out to its members the justice of the respondent's proposals or the propriety of the United's acceding to them. In the light of the fore- going, and on the entire record, we.think the conclusion is inescapable that the respondent entertained no desire to reach an agreement with the United, and made no effort in good faith to do so; and we so find. The natural effect of the course which the respondent pursued was to indicate to the employees that their best interests lay in their continued reliance upon the generosity and good will of their em- ployer; that the United could not secure for them any -substantial objective which they sought with respect to their conditions of em- ployment; and that, on the contrary, their continued membership therein threatened them with the loss of such desirable conditions as they already enjoyed. Immediately upon learning of the organizational activities among its employees in December 1936, and that the employees' grievances centered mainly about the wage situation, the respondent granted its employees a general wage increase of 5 per cent. By granting the increase under the circumstances, the respondent, in effect, declared to its employees that it was unnecessary for them to join a union in order to make suggestions to the management and to secure the adjustment of their grievances; and the notice, which the respondent posted shortly thereafter, bluntly so stated. With an obviously similar purpose, the respondent, upon learning subsequently that its employees remained dissatisfied with their wages, granted a 10 per cent general increase directly to them even though their continued dissatisfaction over wages had been communicated to it by the United during the course of negotiations for a collective agreement. When, despite these wage ` . SINGER MANUFACTURING COMPANY 469 increases, the employees still demanded that the respondent enter into a collective agreement with the United, the respondent took and for over a year adhered to the position that unless the United accepted a 10-per cent wage reduction "there could be no agreement"; that the desired reduction "must" be included in any agreement, even one terminable on 30 days' notice; that if provision were made for the reduction in the agreement, the effective date of the "cut" could be determined "later"; and that the United agree to the introduction of a wide differential between existing minimum wage rates and rates for new employees. While, upon the basis of the negotiations as to wages alone, we might not conclude that such was the case, in the light of the negotiations with respect to other matters, we are satisfied and find that the respondent sought to impress upon its employees that in con- trast to concessions to be obtained directly by the employees they must expect less favorable wage conditions if they adhered to their demand for a collective agreement between the respondent and the union they had chosen to represent them. Although indicating its willingness to continue to grant the em- ployees paid holidays and annual vacations as was its practice, and that a change in this regard was not contemplated and, indeed, was extremely unlikely, the respondent refused, nevertheless, to agree to continue such practice even in a contract terminable on 30 days' notice. On the contrary, the respondent asserted that to continue the practice voluntarily was "one thing" while to continue it "under compulsion was another." Thereby the respondent plainly indicated -to the employees that their insistence on bargaining through a union could not secure for them contractual assurance even of the continu- ance of benefits which the respondent was entirely willing to grant the employees individually. With respect to hours, the respondent's insistence that any collec- tive agreement with the United be a medium through. which the re- spondent would secure an immunity from payment to the employees of overtime rates otherwise required by the Fair Labor Standards Act, manifestly was intended to persuade the employees that their membership in the United threatened them with less desirable condi- tions of employment in this regard than they were otherwise entitled to receive under the law. The respondent's plan and purpose, reflected by its conduct during the negotiations, is clear. It would meet and deal with the United whenever requested, it would appear to listen with respectful atten- tion to the United's demands, and it would pretend a semblance of an endeavor to reach a mutual understanding. However, it would refuse to agree with the United to grant conditions of employment or make concessions which it was willing to grant the employees 283035-42-vol. 24-31 470 DECISIONS OF NATIONAL LABOR RELATIONS BOARD directly, and would require the United to accept less desirable condi- tions of employment than it would grant the employees if they bar- gained individually, or than they were legally entitled to receive in the absence of a collective agreement. Thus the respondent's hos- tility to the United would be manifested, membership in the United discouraged and, by pretending to bargain, collective bargaining defeated. There remains for consideration the respondent's contention that it was entitled to the privilege of continuing its practice with regard to paid holidays, vacations, and bonuses, voluntarily, and in the nature of a gratuity to its employees; and accordingly, that it was entitled to refuse to agree, solely for that reason, to bind itself con- tractually to a continuance of its practice in that regard.37 This view, however, rests upon a fundamental misconception of the re- spondent's duty to bargain collectively with the representatives of its employees. Paid holidays, vacations, and bonuses constitute an integral part of the earnings and working conditions of the employees and, as the respondent conceded during the course of the negotiations, are mat- ters which are generally the subject of collective bargaining. The Act plainly contemplates that the employees shall have the right, through representatives of their own choosing, to bargain collectively with respect to such conditions of employment, if they so desire. Whether or not it be considered an outright withdrawal of the matter of paid holidays, vacations, and bonuses from the sphere of collective bargaining, the respondent's insistence upon treating such matters as gratuities to be granted and withdrawn at will, consti- tutes a refusal to bargain collectively with the United with respect to such matters. We have repeatedly held it to be a. refusal to bar- gain collectively where an employer unilaterally acts with respect to matters which normally are the subject matters of collective bargain- ing, after his employees have requested an opportunity to bargain collectively with regard to such matters.38 The respondent's position with respect to paid holidays, vacations, and bonuses, differs only in the immaterial circumstance that by taking such a position the re- spondent threatened unilateral action so far as these important mat- ters were concerned, in the future. Such a threat at once created a situation antithetical to the stable relationship envisaged by the Act. $' See footnote 29, supra. '8 Matter of Whittier Mills Company and Silver Lake Company and Textile Workers Organizing Committee, 15 N. L. R. B. 457, enf'd N. L. R. B. v. Whittier Mills Co., 111 F. (2d) 474 (C. C. A. 5) ; Matter of Wilson t Company and United Packinghouse Workers L. I. Union No. 51, 19 N. L. R. B. 990, and cases cited in footnote 11, therein ; Matter of John J. Oughton, et at., individuals and co-partners trading as The Windsor Mfg. Co. and Textile Workers Organizing Committee (C. I. 0.), 20 N. L. $. B. 301 ; Matter of Brown Shoe Company, Inc., et al., and National Leather Workers Association Local #44, affiliated with the Committee for Industrial Organization, 22 N. L. R. B. 1080. SINGER MANUFACTURING ^ COMPANY 471 We find that on June 16, '1938, and at all times thereafter, the re- spondent refused to bargain collectively with the United as the exclusive representative of its employees within an appropriate unit, and that the respondent has thereby interfered with, restrained, and coerced its employees in the exercise of rights guaranteed by Section 7 of the Act as IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE We find that the activities of the respondent set forth in Section III above, occurring in connection with the operations of the respond- ent described in Section I above, have a close, intimate, and sub- stantial relation to trade, traffic, and commerce among the several States, and have led and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found. that the respondent has engaged in unfair labor practices, we shall order it to cease and desist therefrom and.to take such affirmative action as will remedy the effects thereof. We have found that on June 16, 1938, and at all times thereafter, the respondent refused to bargain collectively with the United.as the exclusive representative of its employees in an appropriate unit. Accordingly, in order to effectuate the policies of the Act, we shall order the respondent to cease and.desist from,its unfair labor prac- tices, and upon request to bargain collectively with the United. Upon the basis of the above findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. United Electrical,. Radio and, Machine Workers of America, Local No. 917, affiliated with the Congress of Industrial Organiza- tions, is a labor organization, within the meaning of Section 2 (5) of the Act. 2. The production and maintenance employees of the. respondent at, its South Bend, Indiana, plant, exclusive of clerical and super- visory employees, timekeepers, and technicians, constitute, and at all °9 In so finding, we do not question the right of the respondent , for reasons not in vio- lation of the Act, to reduce the wages of its employees ,. to refuse to continue to grant its employees paid holidays, vacations , and bonuses, or otherwise to. change the conditions under which Its employees work . It is only the respondent's bona fides in the negotiations In the Instant case, and its contention that paid holidays, vacations, and bonuses may be withdrawn from the scope of collective bargaining merely because of a desire by the respondent to grant them to its employees as a gratuity, which we have scrutinized. 472 DECISIONS OF NATIONAL LABOR RELATIONS BOARD times herein material constituted a unit appropriate for purposes of collective bargaining, within the meaning of Section 9 (b) of the Act. 3. United Electrical, Radio and Machine Workers of America, Local No. 917, affiliated with the Congress of Industrial Organiza- tions, was on March 19, 1938, and at all times thereafter has been, the exclusive representative for the purposes of collective bargaining of all employees of the respondent in the above unit, within the meaning of Section 9 (a) of the Act. 4. The respondent, by refusing on June 16, 1938, and at all times thereafter, to bargain collectively with United Electrical, Radio and Machine Workers of America, Local No. 917, affiliated with the Con- gress of Industrial Organizations, as the exclusive representative of all its employees in the appropriate unit, has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (5) of the Act. 5. 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. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2 (6) and (7) of the Act. ORDER Upon the basis of the above findings of fact and conclusions of law, and pursuant to Section 10 (c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the respondent, Singer Manufacturing Company, South Bend, Indiana, and its officers, agents, successors, and assigns, shall: 1. Cease and desist from : (a) Refusing to bargain collectively with United Electrical, Radio and Machine Workers of America, Local No. 917, affiliated with the Congress of Industrial Organizations, as the exclusive representa- tive of the production and maintenance employees of the respondent at its South Bend, Indiana, plant, exclusive of clerical and super- visory employees, timekeepers, and technicians; (b) In any other manner interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, as guaranteed in Section 7 of the National Labor Relations. Act. SINGER MANUFACTURING COMPANY 473 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act : (a) Upon request, bargain collectively with United Electrical, Radio and Machine Workers of America, Local No. 917, affiliated with the Congress of Industrial Organizations, as the exclusive repre- sentative of the production and maintenance employees of the re- spondent at its South Bend, Indiana, plant, exclusive of clerical and supervisory employees, timekeepers, and technicians, with respect to rates of pay, wages, hours of employment, and other conditions of employment; (b) Post immediately in conspicuous places throughout its South Bend, Indiana, plant, and maintain for a period of at least sixty (60) consecutive days from the date of first posting, notices to its em- ployees stating : (1) that the respondent will not engage in the conduct from which it is ordered to cease and desist in para- graphs 1 (a) and (b) of this Order; and (2) that it will take, the affirmative action set forth in paragraph 2 (a) of this Order; (c) Notify the Regional Director for the Thirteenth Region in writing within ten (10) days from the date of this Order what steps it has taken to comply herewith.