Mountain City Mill Co.

In the Matter of M UUN'I vIN C17Y MILL COMPANY' (CH_»°rANOOCA BAK]:1iY DIVISION ) , AND CHv'iT.ANO()OA BAIIEKY, INC. wnd BA KERY AND CONEECTIONFRY WTORKP'RS' IN'1 VeNAIItIN \L UNION OF A1IERICA, LOCAL No. 25 Case No. C-1508.-Decided July 1.5,'1940 Jurisdiction : baling indusny Unfair Labor Practices In genet al. responsibility of employer fo" acts of supervisory employees. Intel lei ence, Rest, at?tt, aid Coci clod: espionage and surveillance, anti-union statements: interrogation concerning union membership. refusal to consider relatives of union members for employment because of the union activities of such employees, interference with right of employees to bargain collectively, threat to cease operations. Disci initiation Applicants for initial employment held entitled to protection afforded by Section 8 (3). Employer's normal right to select employees as guaranteed by Fifth Amendment to Federal Constitution held not infringed by interdicting dis- criminatory blacklisting Respondent found to have engaged in discrimination by its refusal to hire 27 union employees on pay roll of the Company, which it had purchased, and Ai-ho applied for employment to respondent where respondent employed all non-union Company employees, and reasons given by respondent for the refusal in some cases did not exist in fact, and in all cases, except where respondent objected to specific union activity, other than affiliation, were pretexts for the refusal to hire Refusal of respondent to reinstate employees who struck in protest against refusal to hire more readily dispensable union members and displacement by non-union workers found to be discriminatory where strikers were replaced with inexperienced strikebreakers and employer indicated that disaffiliation was condition precedent to reinstatement Where Company's efforts to sell its business antedated advent of the Union, Board held that liquidation was occasioned by recurrent business losses and not by a desire to eliminate the Union, and dismissed the allega- tions of the complaint that it engaged in unfair labor practices within the meaning of Section 8 (3). Remedial Orders : offer of employment to individuals discrnnina torily refused employment, back pay awarded from date of refusal to hire to offer of employ- ment ; ieinstatement and back pay awarded to striking employees. Board held that since Section 10 (c) of the Act expressly permits the Board to require upon a finding of unfair labor practices ". . . such affirma- tive action . as will effectuate the policies of the Act," it is thereby empowered to order the employment with back pay of individuals who were not employees of the respondent but who, absent the respondent's discrimi- 25N L R B , No 56 397 398 DECISIONS OF NATIONAL LABOR RELATIONS BOARD natory refusal of employment contrary to Section 8 (3) of the Act, would have been hired and paid wages. Where at time of hearing a Company although not operating an active business existed as a corporate entity and was engaged in the liquidation of its remaining assets it was ordered to post notices in the event it has reentered, or shall hereafter reenter, its former business or any substan- tially similar business. Mr. Alexander E. Wilson and Mr. John McKee, for the Board. Mr. John S. Fletcher, of Chattanooga, Tenn., for the Mill Company. Mr. Cecil Sims, of Nashville, Tenn., for Bakery, Inc. Mr. Herbert G. 'B. King and Mr. Curtis R. Sim, of Chattanooga, Tenn., for the Union., Mr. Eugene R. Thorrons, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon an amended charge duly filed by Bakery and Confectionery Workers' International Union of America, Local No. 25,1 herein called the Union, the National Labor Relations Board, herein called the Board, by the Regional Director for the Tenth Region (Atlanta, Georgia) issued its complaint, dated October 25, 1939, against the respondents, Mountain City Mill Company (Chattanooga Bakery Division), Chattanooga, Tennessee, herein called the Mill Company, and Chattanooga Bakery, Inc., Chattanooga, Tennessee, herein called Bakery, Inc., alleging that the respondents had engaged in and were engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1) and (3) 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 respondents and the Union. With respect to the unfair labor practices, the amended complaint 2 alleged in substance (1) that during a certain specified period the respondents urged. persuaded, and warned their employees to refrain from becoming or remaining members of the Union, and threatened them with discharge or other reprisal if they became or remained mem- 1 Erroneously designated in the record as Bakery and- Confectionery Workers, Local Union No. 25. 2 On November 13, 1939 , the respondents filed separate answers to the complaint accom- panied by written motions for a bill of particulars. Subsequently, the Board issued an amended complaint, dated December 2, 1939. At the opening of the bearing on December 14, the Trial Examiner denied the motions for a bill of particulars without prejudice to the right of the respondents to request a continuance in the event of surprise, and the respondents filed separate answers to the amended complaint. MOUNTAIN CITY MILL COMPANY 399 bers thereof; (2) that on or about June 30, 1939, the Mill Company ceased doing business, notified its employees to apply to Bakery, Inc. for employment, and supplied the names of its employees who Were union members to Bakery, Inc.; (3) that on or about June 30, 1939, Bakery, Inc. refused and has since refused to employ 27 named individ- uals, listed in Appendix A hereto, who had applied for employment, because they joined and assisted the Union and engaged in concerted activities for the purposes of collective bargaining and other mutual aid and protection; (4) that on July 14, 1939, 16 named employees of Bakery, Inc., who, except Will Scudgins,3 are listed in Appendix B hereto, went out on strike in protest against the refusal of Bakery, Inc.' to eiuploy the persons listed in Appendix A and because of other unfair labor practices mentioned in the amended complaint; (5) that on or about October 24, 1939, Bakery, Inc. refused and has since refused to reinstate the 16 named employees in order to discourage membership in the Union; and (6), that by the above acts the respondents interfered with, restrained, and coerced their employees in the exercise of the rights guaranteed in Section 7 of the Act. In their answers, filed December 14, 1939, the respondents denied the material allegations of the amended complaint. In addition, Bakery, Inc. asserted affirmatively (1) that it refused to employ the 27 individ- uals listed in Appendix A solely on "the basis of efficiency, tempera- ment, compatability, age and other matters pertinent to the rendition of proper services, ... the proper performance of duties, and ability for advancement . . . " and (2) that the 16 employees listed in Appendix B voluntarily quit their employment and that at the time of their ap- plication for reinstatement their postions were filled by new employees who were hired on a permanent basis. Pursuant to notice, a hearing was held at Chattanooga, Tennessee, from December 14 to December 20, 1939, inclusive, before Gustaf B. Erickson, the Trial Examiner duly designated by the Board.4 The Board, the respondents, and the Union were represented by counsel and participated in. the hearing: Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bear- ing; upon the issues was afforded all parties. During the course of the hearing the Trial Examiner granted without objection motions of counsel for the Board to dismiss the allegations of the amended com- plaint as to Will Scudgins 5 and to conform all pleadings to the proof 3 Scudgins was named in the amended complaint but the allegations were dismissed as to him by the Trial Examiner, as discussed infra ' The amended complaint and an amended notice of hearing were served upon the re- spondents on December 4, 1939. At the opening of, the hearing, the respondents entered into a stipulation with counsel for the Board and agreed to naive any objection arising by reason of the interval of time elapsing between the service of the amended complaint and the hearing. Also variously referred to in the record as William Scudgins and Scudgrons 400 DECISIONS OF N A fIONAL LABOR RELA CiONS BOARD with respect to dates, spelling of names, and typographical errors. The Trial Examiner also made several rulings on -other motions and on objections to the admission of evidence. The Board has reviewed the rulings of the Trial Examiner and finds that no prejudicial errors were committed. The rulings are hereby affirmed. After the close of the hearing, counsel for the Board and counsel for the respondents sub- mitted briefs to the Trial Examiner. On March 14, 1940, the Trial Examiner filed an Intermediate Report, copies of which were served upon all parties, finding that the respond- ents had engaged in and were engaging in unfair labor practices, within the meaning of Section 8 (1) and (3) and Section 2 (6) and (7) of the- Act. He recommended that the respondents cease and desist from their unfair labor practices and offer reinstatement with back pay to the 27 individuals listed in Appendix A. He further recommended that Bakery, Inc. offer reinstatement to the 15 employees listed in Appendix B, and that the respondents pay the 15 employees back pay. There- after, the respondents filed exceptions to the Intermediate Report, and the Mill Company submitted a brief to the Board. Pursuant to notice served upon all parties, a hearing for the purpose of oral argument was held before the Board in Washington, D. C., on May 2, 1940. The respondents were represented by counsel and participated in the argu- ment ; the Union did not appear. The Board has considered the exceptions to the Intermediate Report and the briefs submitted by each of the parties, including those filed with the Trial Examiner, and, save as the exceptions are consistent with, the findings of fact, conclusions of law, and order set forth 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 RESPONDENTS A. Mountain City Mill Company Prior to June 30, 1939, the respondent, Mountain City Mill Company, a Tennessee corporation, was engaged in the business of operating a flour mill and a bakery 6 under a common roof in adjoining plants located in Chattanooga, where it had its principal office and place of business. It also maintained eight branch houses located in Georgia, Mississippi, and Alabama. The principal raw materials used by the Mill Company consisted of wheat and corn in the mill, and flour, sugar, and lard in the bakery. During 1938 the Mill Company purchased approximately 76,895,094 pounds of raw materials, valued at approxi- 6The bakery depaitinent was known as the Chattanooga Bakery Dwsion XIOL'N"I'-UN CITY MILL C0\IPA\1 401 mately $1,297,400.42, of which it obtained about 90 per cent outside the State of Tennessee. During the same period the Mill Company manufactured approximately 72,837,694 pounds of finished products valued at approximately $2,165,974.25. Of this amount, the Mill Com- pany shipped approximately 60 per cent to purchasers located outside Tennessee. The Mill Company employed a total of approximately 242 employees, excluding those who worked in a supervisory or clerical capacity, and its annual pay roll approximated $144,211.32. B. Chattanooga Bakery, Inc. As more fully set forth in Section III B, infra, about June 30, 1939, the Mill Company disposed of its principal assets and ceased operating the null and bakery; the principal assets of its bakery department were acquired by the respondent, Chattanooga Bakery, Inc., which thereafter continued the manufacture, sale, and distribution of bakery products. During the period from July 1 to November 30, 1939, Bakery, Inc. used approximately 2,196,500 pounds of raw materials, consisting of flour, shortening, sugar, salt, soda, and baking powder, valued at approxi- niately $71,485.44. Of this amount, it purchased 10 per cent outside the State of Tennessee. During the same 5-month period, Bakery, Inc. manufactured approximately 1,910,000 pounds of finished products, valued at approximately $191,071.01, and shipped approximately 60 per cent thereof to States other than Tennessee. Bakery, Inc. nor- mally employed approximately 112 person,,, excluding 7 persons who worked in a supervisory, sales, mechanical, or clerical capacity, and its annual pay roll for production and maintenance employees approximated $80,600.00. At the hearing, S. H. Campbell, Jr., president of Bakery, Inc., ad- mitted that on July 1, 1939, the respondent "became engaged in inter- state commerce." II. THE ORGANIZATION INVOLVED Bakery and Confectionery Workers' International Union of America, Local No. 25, is a labor organization affiliated with the American Federation of Labor. The Union admitted to membership the employees of the Mill Company's bakery division in a subsidiary organization known as "Cracker Workers Branch of Local No. 25." Ill. THE UNFAIR LABOR PRACTICES A. The Mill Coim parry 1. Background of the unfair labor practices; interference, restraint, and coercion The Union began organization of the employees in the Mill Com- pany's bakery division in May or June 1938. Approximately all the 402 DECISIONS OF NATIONAL LABOR RELATIONS BOARD persons listed in Appendix A and Appendix B joined the Union in the late spring or early summer of 1938. About that time Forelady Siddie Vondrake questioned Media Bragg, one of the individuals listed in Appendix A, about her union membership and directed her to ascertain which employees belonged to the Union.' In July 1938 Lois Baker, one of the individuals listed in Appendix A, and other employees of the Mill Company attended a meeting at the Labor Temple in Chattanooga. Both Union and Mill Company officials were present and Richard Bean, Mill Company officer, spoke. During the meeting Baker asked some questions with respect to seniority. The next day she was summoned to Vice-President Bean's office. We adopt Baker's testimony as to what Bean told her: Mr. Bean'asked ine what I thought I would gain by joining a union or why I would join a union ... He went on to say . . . that the union was painting a pretty picture; that we were asking and demanding entirely too much; that the company could not afford to pay us the wages. He went on to ask about . . . senior- ity . . . He said that he would like to know just why we people would put our confidence in a man like the leader of this union- Curtis Sims, a man . . . who had already ruined two companies. Mr. Bean said that he didn't have any use for the union and he didn't see what profit anyone could have by letting the union run their shop. Bean did not testify. On or about August 4, 1938, the Union called a strike at the Mill Company bakery when bargaining negotiations were unsuccessful. The strike lasted until about October 6, 1938. Following the termina- tion of the strike the Mill Company and the Union entered into a con- tract, dated October 6, 1938, in which the Union secured recognition as the "sole collective bargaining agency for the employees of the Chattanooga Bakery Department . . . exclusive of office, sales (non- productive), mechanical and supervisory employees." In addition to provisions as to wages, hours, and other working conditions, the contract provided that .. . any cessation of- operations due to a sale of the Bakery shall not be considered as a violation of this agreement . . . this plant will not be sold to a stockholder of this company or a relative to the degree of second kin of the present owner, unless the pur- chaser assumes this contract, . . . ownership shall not be trans- ferred or sold to any parties for the purpose of injuring or destroying the Bakers Union No. 25 in this plant .. . ' Vondrake did not testify at the hearing She is also referred to in the record as Von Drake. MOUNTAIN CITY MILL COMPANY 403 and provided further that the agreement was to remain in force from the date of signing until August 31, 1939, and thereafter, until a new agreement was signed or upon 30 days' written notice of cancella- tion given after August 31, 1939, by either party.' At the close of the bargaining negotiations, the Mill Company and the Union agreed to permit Paul L. Styles, a National Labor Relations Board field representative, to conduct a poll of the bakery employees to ascertain their position with reference to union affiliation and with respect to adoption or rejection of the proposed contract. Under date of October 11, 1938, Styles, acting in his individual capacity, certified in writing that 62 named employees of the Mill Company's bakery division voted "in favor of belonging to the Union and being bound by the terms of its contract." Shortly after the issuance of the certificate, Styles furnished a copy of it to the Mill Company. '91 According to the testimony of Curtis Sims, international representa- tive of the Union, about the middle of July 1938, President Hutcheson, or Vice-President Bean, stated to the union bargaining committee during the course of the negotiations which led to the signing of the contract that the plant has been operating down there for a number of years . . . that they have had no labor trouble whatsoever, and it, always had gone along all right until [Sims] came into the picti re . .. [Sims] painted a big flowery picture to those people down there and got them dissatisfied . . . that they were paying all of the wages that they could pay, and that if the Union didn't leave them alone that they were going to shut the thing down and sell it out . . they were losing money . . . (Italics supplied) and that Hutcheson added, that . . he had an income of a thousand dollars a day and that he didn't have to operate the plant. Neither Bean nor six of the seven other members of the union bar- gaining committee testified at the hearing "a The remaining member, 8 During the negotiations the Union feared that the Mill Company might formally tiansfer its business to escape its obligations under the proposed contract. It sought therefore to incorporate a provision in the proposed contract to bind thereto the Mill Company' s suceessois and assigns On the other hand, the Mill Company insisted upon the privilege to remain free to sell its business The provision quoted above represents a compiomise l o The cci fificate contains, among others, the names of the individuals listed in Appendix A, except William Sellers At the oral argument before the Board counsel for Bakery, Inc admitted that the 27 individuals listed in Appendix A belonged to the Union and that Bakery, Inc had knowledge of their union membership 10 In addition to Curtis Sims, the union bargaining committee consisted of Con Milligan, an attorney, a Mr Eveihart, who was associated with the American Fedeiation of Labor Central Labor Union in Chattanooga, Herbert C B King, counsel for the Union in this pr oceedmg, and employees Luther Phillips, Manes va Sutton, Jess Stewart, and Jesse Adams During the approxnnatel^ 2-month period of bargaining negotiations, the make-up of the i 404 DECISIONS OF NATIONAL LABOR RELVIIO S BOARD iVlanerva Sutton. did not testify as to what occurred at the bargaining negotiations. While Hutcheson asserted toward the close of the hear- ing that lie made no statenient to the committee with reference to the amount of his income, it is significant that lie failed to deny that he or Bean made the other statements attributed to either of them by Sims. Accordingly, we find that, except as to the statement with respect to the amount of Hutcheson's income, Hutcheson or Bean addressed the union bargaining committee in the manner related by Curtis Sims. During the 1938 strike Forelady Siddie Vonchake telephoned Kate Brown, one of the strikers, and urged her to abandon the strike and leave the Union. According to Bro« n's uncontradicted testimony, Vonclrake told her: I-don't see why You don't chop it [the Union-1 and conic back . . . I don't see why you joined the Union. When Brown refused to accede to the forelady's wishes, Voudrake warned : "We might all be sorry for this someday." When Vista Sharp, an employee, returned to work after the termuia- tion of the 1938 strike, she was interrogated while engaged in her duties by Siddie Vondrake, her forelady, as to her union membership. When Sharp confessed that, she had joined, Voudrake stated that Sharp "ought to have [herself] kicked." After the settlement of the 1938 strike, a dispute arose in con- nection with the allotment of certain work involving the question of seniority. Superintendent Shauf summoned Lois Baker, an employee who was involved in the dispute, to his office. Baker testified that Shauf told her that . . . he just wanted me to understand that, . . . the only fair way to straighten that seniority business .. . [was] . .. by drawing names . . . Then he talked to me about the union. He said that we were in this thing for it year and lie would do the best that lie could with it, but as soon as that year was up, the company would try to work up something for their own benefit I figured lie meant a company union . . . Shauf .. . said that lie could not understand why the then wanted to join the union and get the union insurance when the company could give them a much better insurance at a cheaper rate . . . Shauf said that if we had not acted . . . so quickly and walked out and left so much dough on hand, speaking of the strike in 1938, that things would have been much better for all of us. union committee in attendance at there meetings Varied fioni time to time The record does not discioce the identity of the members present at the time of the conferences in question, other than Sims. MOUNTAIN CITY MILL COMPANY 405 Shauf testified that lie never had a conversation with Baker in which lie threatened "to get rid of the Union" after the expiration of the first year of the contract. On several occasions Shauf changed his testimony with respect to other matters; the Trial Examiner who presided at the heal mg found Shauf evasive and unconvincing and concluded that he was untrustworthy as a witness. In view of the general character of Shauf's denial, his demeanor at the hearing, and the Trial Examiner's opinion as to his credibility, we find that Shauf made the statements substantially as testified to by Baker. In March or April 1939, Marvin G. Milam, Jr., an employee, went to Shauf's office to seek assistance in obtaining a job for Milani, Jr.'s wife. According to Milam, Jr., when Shauf learned the object of the visit, he inquired : ". . . how does your wife feel about the Union ?" and when Milam, Jr., indicated that she was opposed to it, Shauf stated : Well, if you will assure inc that you wife won't "join the Union, I will give her a job here.'1 . . . The company does not like this union in this place of business. We are going to get rid of this union, going to get this union [out] of this shop one way or the other. Shauf denied that, he questioned Milani, Jr., with respect to the attitude of his wife toward the Union, asserted that Milam, Jr., broached the subject of the Union, and that he (Shauf) refused to discuss it. Shauf, however, failed to deny specifically that he made the statements with respect to the Mill Company's attitude toward the Union and the Mill Company's plans with reference to its future course of dealing with the Union. Since the Trial Examiner did not credit Shauf's denial, under these circumstances we find that Shauf made the statements above attributed to him by Milani, Jr. Shauf similarly displayed an anti-union attitude in June 1938 when Stewart Kelley, one of the individuals listed in Appendix A, requested Shauf to employ Kelley's son. According to Kelley, Shauf stated Well, I will just be fair with you. You and your wife both belong to the Union. Of course, naturally he would be for the Union too, and I just couldn't use him. Shauf denied this statement. He testified that he told Kelley that he could not employ his son on the night crew since he was attending 11 Milani. Jr's wife did not secure the job About 2 weeks later Shauf told Milam, Jr , that the union contract forbade the huing of married women. The pertinent portion of the contract provides " any gun who marries automatically severs her connection with the company , but no girl now married and in our employ shall be discharged because she is married " Milani, Jr , was made a member of the union grievance committee to fill a vacancy and, in that capacity met with the management for the first time in April 1939 However, since neither the ongmal nor amended complaint alleges discrimination with respect to the hhe of Milani, Jr's aufe, we make no finding of order with respect thereto 2530 3 6-4 2-m of 25--27 406 DECISIONS OF NATIONAL LABOR RELATIONS BOARD school during the day. In view of Kelley's credible testimony and since we have found Shauf to be unworthy of belief, we find that Shauf made the statements as related by Kelley.12 In its exceptions and briefs the Mill Company urges that it is not responsible for the anti-union acts and statements of Superintendent Shauf and of the departmental foremen and foreladies who worked under him.13 The Board and the courts, however, have held that all employer is responsible for such statements and conduct of his super- visory employees.14 Carrying the weight of the employer's superior economic position, such acts and statements of persons, so allied with the management, are necessarily intimidatory and coercive of rank- and-file employees in their organizational activities. Accordingly, we find that by the statements of Mill Company offi- cers and other supervisory employees set, forth and referred to in this section the Mill Company interfered with, restrained, and coerced its employees iii the exercise of the rights giianlnteed in Section 7 of the Act. 2. The reorganization As we have noted above, prior to June 30, 1939, the Mill Company was engaged in the operation of a flour mill and a bakery. Its presi- dent was S. C. Hutcheson who owned 63 per cent of its capital stock.15 S. H. Campbell, Jr., a first cousin of Hutcheson, together with members of the Campbell family, owned approximately 30 per cent of the Mill Company capital stock."G Although Campbell. Jr , i2 We likewise make no finding or order predicated upon Section 8 (3) of the Act with respect to the refusal to hire Kelley's son since the pleadings do not encompass that issue iiTlie supervisory staff of the bakery department included Mitchell C Shauf, superin- tendent of production, David A. Parks, sales manager, Benjamin Johnston, head of the shipping room, foremen J J Cleary, Luther Phillips, John G Venable, and Bill F. Towers, assistant foreman James A Connor, foreladies Siddie Vondrake and Nellie Brown, and assistant forelady, Hazel C. Venable Shauf and Parks had authority to hire and discharge. While the foiemen and their assistants did not have such power, they made recommenda- tions to their superiors with respect to the hire and tenure of ordinary bakery employees and directed them in their work. 14 See Matter of The Serr,ck Corporation and International Union, United Automobile Workers of America, Local No. 459, 8 N L R. B 621, enf'd, International Association of Machinists, Tool and Die Mabeis Lodge No 35, affiliated with the International Association of Machinists and Production Lodge No 1,100, affiliated with the International Association of Machinists v N L R B, 110 F (2d) 29 (App D C.), pet for cert granted, 60 S Ct 721 ; Mattes of American Manufacturing Company; Company Union of the American Manufacturing Company, the Collective Bargaining Committee Of The Brooklyn Plant of the American Manufacturing Company and Textile Woihers' Organizing Committee, C 1 0, 5 N 1 L. R B 443, enf d, AT. L R B v. American Manufacturing Company et at, 106 F. (2d) 61 (C. C A. 2), 60 S Ct 612 "The remaining officers were Richard Bean, vice president and general manager in chaige of the bakery division who resigned in June 1939, Dewey G llixson, secretary, and David A. Paiks, assistant secietary. Hutcheson, Bean, S H Campbell, Jr., J. B. Fillauer, and Mrs Katherine A Hutcheson constituted its board of directors. 10 The balance of the issued stock'was owned by Bean, Fillauer, and Mrs. Julia C White Mrs white is not fuither identified in the record. MOUNTAIN CITY MILL COMPANY 407 was a director of the Mill Company, he was engaged in business as a wholesale distributor of petroleum products in Chattanooga. During 1937 the Mill Company -sustained a substantial loss 17 in its operations and, as a result, in 1938 it made several efforts to sell its business. These efforts proved unsuccessful and, in December 1938, the Mill Company decided upon liquidation and took steps looking to the distribution of its assets, including the appointment of a liquidation committee. Sometime in May 1939, Tom Ragland and Robert C. Jones, Jr.,18 approached S. H. Campbell, Jr., a director and stockholder of the Mill Company, with proposals looking toward the liquidation of the Mill Company and the organization of new companies to continue the Mill Company business. Following a series of conferences in which, Hutcheson, Campbell, Jr., Jones, and the Raglands par- ticipated, Campbell, Jr., entered into a written agreement, dated June 14, 1939, with Jones and the Raglands to serve as the basis for reorganization.l° About June 15 the Mill Company posted in its 17 The Mill Company suffered losses in 1937, 1938, and in the first 6 months of 1939, amounting to $98,619 92, $86,090 43, and $43,814 27, respectively. is At this time Tom Ragland was engaged in business with W. E. Ragland , Jr , as Ragland Bros. Co, wholesale grocers, in Knoxville and Chattanooga, Tennessee , and Birmingham and Huntsville, Alabama , and Robei t C Jones, Jr , was engaged in business as a merchan- dise broker in Chattanooga Although the Raglands and Jones had had business dealings with the Mill Company prior to May 1939, neither Jones nor the Raglands had ever been a stockholder, director, or employee of any rank of the Mill Company, or had any financial interest therein at any time 10 Among other things, the agreement provided in substance (1) that the capital stock of the proposed two new corpomations, Mountain City Mill Company, Inc and Chattanooga Bakery, Inc , consist of $50,000 and $25,000 common stock, respectively, to be issued for cash, (2) that Mill Company stockholders "be_ peimitted" to subscribe for $24,000 par value of Mill Company, Inc capital stock and, $12,000 par value of Bakery, Inc capital stock ; that either of the Raglands subscribe for $24,000 pal value of Mill Company, Inc. capital stock and, $12,000 pat value of L'akeiy, Inc capital stock, that Jones subscribe for $2,000 par value of Mill Company, Inc-capital stock and, $1,000 par value of Bakery, Inc capital stock; (3) that Mill Company, Inc offer to purchase for cash from the Mill Company the real estate, including land, plant buildings, and leaseholds, and the ma- chinery, equipment, automobiles and trucks used by the ,Mill Company milling denartment, (4) that Mill Company, Inc offer to acquire from Mill Company shareholders, or their assignees, their interests in the following assets in the event the Mill Company distributed such assets to the shareholdeis (a) notes and accounts receivable (b) inventories and (c) prepaid items of the Mill Company milling department, and to issue Mill Company, Inc 20-year 4 per cent b,nxls in p,i ment thereto' , (5) that Bakery, Inc offer to purchase for cash from the Mill Company the real estate, including land, plant buildings, and leaseholds, the machinery, equipment, automobiles, and trucks used by the Mill Company bakery department; (6) that Bakery, Inc offer to acquire from Mill Company shareholders, or their assignees, then interests in the following assets in the event the Mill Company dis- tributed such assets to the shareholdeis (a) notes and accounts receivable (b) inventories (c) prepaid items, and (d ) trademarks and trade names of the Mill Company bakery de- partment , and, to issue Bakery, Inc 20-year 4 per cent bonds in payment ther,for and (7) that the Raglands cause Ragland Bros. Co to offer to purchase for cash from the Mill Company the physical inventories, rolling stock, fixtuics, and prepaid items of it,-, eight branch houses, and, to collect all blanch-house accounts receivable for the benefit of the Mill Company. The Mill Company distributed to its stockholders the personal property and'choses inaction referred to in the June 14 agreement, and the evidence indicates, and we find, that the agreement was substantially peiformed Mill Company stockholders re- ceived approximately $70,000 in Bakery, Inc bonds in payment for notes, accounts receiv- able, and other assets which they recen ed in kind as liquidating dividends from the Mill 408 DECISIONS OF NATIONAL LABOR RELATIONS BOARD plant a notice in which it advised all its employees that the Mill Company would dispense with their services and cease business as of June 30, 1939, and suggested that they apply for employment to the two new corporations to "be organized to take over the operations of the Mill and the Bakery Department." After the announcement of the Mill Company's discontinuance of the business, Foreman Phillips, who was president of the Union, under- took to secure the disbandment of the Union. On June 21, 1939, Phillips approached Manerva Sutton, the recording secretary of the Union and a member of its grievance committee, on the parking lot outside the plant. After praising Campbell Jr., and predicting that he would make "a perfect manager," Phillips, who was coiitimled in the capacity of foreman by Bakery, Inc., after June 30. 1939, sug- gested that the Union disband. When Sutton pressed him to ex- plain why he wanted to abolish the Union, Phillips disclosed that .. . there will be few of them left after the change in man- agement . .. that there would not be more than a half dozen employees return to work, and . . . that a majority rule . . . we wouldn't have a majority after July 5 ... it won't be-e'nough to have a union, and therefore it would be clone away with .. . . [Italics supplied.] Sometime between June 20 and 27, 1939, Phillips summoned Mar- vin G. Milani, Jr., a member of the union grievance committee, from the rest room. After interrogating Milani, Jr., as to his attitude Phillips with respect to the prospective change in management. stated that It is circulating around through the shop that there will be quite a number of them not get their jobs back . . . they want us to strike if they don't all'get back. and asked Milam, Jr., for his reaction to the situation. When Milam, Jr., suggested that the Union refrain from taking any act-ion pending the future course of events, Phillips replied : I want you and Mrs. Sutton and myself, after Mr. Campbell takes charge of this place, to go down and see what he wants and to tell him that we will cocperate with him, in ani thinq that he wants done. [Italics supplied.] Company and transferred by bill of sale to Bakeiy, Inc The bonds provided that no physical properties of Bakery Inc shall be mortgaged, except for purchase money, while any such bonds remain outstanding, without the wiitten consent of the holders of not less than two-thirds in amount of the outstanding bonds Thus, Hutcheson's consent became necessary to enable Bakery, Inc to mortgage its tangible property since he owned a majority of the bonds TAIN CIT'', MILL COMPANY MOUN 409 On June 30 the Mill Company sent a letter to Phillips.20 In the letter President Hutcheson stated, among other things, that . . . since the Mill Company and its bakery department are going out of business ... in accordance with the terms of the contract entered into between the . . . Mill Company and your Union, there can be no further operations under the terms of that contract .. . During the 2-week period following June 15, a reorganization in the form of a sale of the principal assets of the Mill Company was effected in accordance with the terms of the June 14 agreement. In substance two new corporations were formed, Mountain City Mill Company, Inc., herein called Mill Company, Inc. and Bakery, Inc. which acquired the principal assets and continued the business of the mill and bakery divisions respectively, and the Mill Company ceased operations as of June 30, 1939, except that thereafter it continued in existence at least until the time of the hearing, for the purpose of liquidating certain undisposed of assets. The amended complaint alleges and the Trial Examiner found in substance that by its participation in the reorganization under the circumstances hereinabove set forth the Mill Company engaged in unfair labor practices within the meaning of Section 8 (3) of the Act. The Mill Company excepted to the finding on the ground that its liquidation and discontinuance of business in the manner hereinabove described was occasioned by its recurrent business losses and not by the unionization of its employees. While the anti-union statements of the Mill Company officers and agents, heretofore discussed, reflect the respondent's dissatisfaction with and hostility toward the Union, the Mill Company's substantial losses over a period of years, its efforts to effect a sale of the business antedating the advent of the Union, and the ultimate passage of control of the business to new interests persuade us that the sale and liquidation was not caused by a desire to eliminate the Union but was dictated by business consider- ations. We are of the opinion that the proof sustains the Mill Com- pany's position and so find. Accordingly, we will dismiss those allegations of the amended complaint. B. Discrimination by Baks;evy, Inc. in regard to hire of the 07 individuals listed in Appendix A When the Mill Company discontinued business on June 30, 1939, its bakery division pay roll contained approximately 107 non- 20The date, July 31, 1939, which appeals on the letter is the result of an error. Hutcheson testified that he wrote the letter on June 30, 1939 410 DECISIONS OF NATIONAL LABOR RELATIONS BOARD supervisory employees. Of these, approximately 55 or 56 were mem- bers of the Union. On July 1 the employees called at the plant to collect their pay.21 Lucy Tranum, Mill Company paymistress, who continued in a like position with Bakery, Inc. after the Mill Company ceased active operations, handed the employees their pay checks to which were at- tached application blanks for employment with Bakery Inc. Before leaving the plant that day the employees 22 listed in Appendix A, among others, filled out the blanks and filed them with Tranum who delivered them to Shauf. On the same day, Bakery, Inc. mailed notices to persons who had worked as production employees at the Mill Company bakery to report for work on July 5. Bakery, Inc. did not call to work the 27 individuals who are listed in Appendix A. On July 5 Bakery, Inc. started production with a crew which included all persons who had been employed by the Mill Company bakery as production workers except the 27 union members listed in Appendix A. Between July 1 and 15 Bakery, Inc. hired approxi- mately 33 new non-union employees to fill the jobs created by the refusal of Bakery Inc. to employ the 27 individuals listed in Appendix A. On July 7 or 8 Foreman Cleary, who occupied the same position with the Mill Company and Bakery, Inc., met Julia Mazerole, a union member who was given employment by Bakery, Inc., as she was leav- ing the plant for the day. Cleary inquired whether she knew that the Union had scheduled a meeting for that afternoon. When she failed to reply promptly, Cleary warned : Julia, you will have to choose between the meeting this after- noon, working with us, or being on the outside with the rest. About July 7, 1939, Forelady Vondrake discussed the change in management with Flossie Rogers, a union member and Mill Company bakery employee, who was hired by Bakery, Inc. when it commenced operation. The following testimony which Rogers gave at the hearing was uncontradicted : ... After we went back to work, after the old company closed down, sold out to the new company, and all the union employees were fired, she [Vondrake] asked me then if I wasn't sorry that I joined the union. During the first week after Bakery, Inc. started production opera- tions, Campbell, Jr., who had become president of Bakery, Inc. and who was in control of its labor policy, addressed the employees in 21 This was not a regular pay day The employees appeared at this time, however, in response to a rumor prevailing in the plant that they would be paid on July 1. 22 Except George Stubbs and Thora Mae Heaton , who did not file their applications until July 3. MOUNTAIN CITY MILL COMPANY 411 the plant on two separate occasions and, among other things, urged them to . . . report to him, that his doors would remain open at all times .. . come to his office and take up any grievance that we had with him... On July 6 a union committee interviewed Campbell, Jr., with respect to the refusal of Bakery, Inc. to employ the 27 individuals listed in Appendix A. The union committee pointed out that the 27 union members had been replaced by non-union employees and that some non-union Bakery employees of the Mill Company appeared at the plant on July 5 to resume work and were continued in their employ- ment with Bakery, Inc., although they had not received notices to report for work. When the union committee requested that the 27 union members be reinstated, Campbell, Jr., stated that he was not familiar with the reasons for the action of Bakery, Inc. with respect to the 27 individuals, that the selection of personnel was made by other persons, and that he was powerless to afford any relief since he was a minority stockholder in Bakery, Inc. Although pressed for an answer, lie refused to reveal the identity of the persons who he claimed were responsible for the elimination of the 27 union members. Again on July 10 a union committee sought from Campbell, Jr., an explanation for the refusal of Bakery, Inc. to employ the 27 and for their replacement by non-union employees. Again Campbell, Jr., disclaimed responsibility for such action, and when the union com- mittee informed him that it had filed charges with the Board, accord- ing to Sims and C. B. Norwood, union representatives, Campbell, Jr., declared that he "wasn't going to do a damn thing" about the matter. Although Campbell, Jr., denied that he made the latter statement, Vice-President Parks and Superintendent Shauf who were present at the July 10 conference and at the hearing, failed to support Campbell, Jr.'s denial. We find that Campbell, Jr., made the statement so attributed to him. We now pass to a consideration of the method used by Bakery, Inc., in staffing its force. As we have noted above, Campbell, Jr., a stock- holder of Bakery, Inc.,23 was elected president of that corporation and was in actual control of its labor policy: He retained the supervisory, sales, and office personnel of the Mill Company bakery department in the employ of Bakery, Inc. Campbell, Jr., named a committee con- sisting of Superintendent Shauf, Sales Manager Parks, and Benjamin Johnston, head of the shipping department or warehouse superintend- 23 As of June 30, 1939, the stockholders of Baleiy, Inc, and the extent of their holdings were as follows : Campbell, Jr, 30 per cent ; Hutcheson, 18 per cent ; Tom Ragland, 48 per cent ; and Jones, 4 per cent. Its remaining initial set of officers consisted of D. A. Parks, vice president ; Dewey G. Hixson, secretary ; and Tom Ragland, treasurer. The officers and Jones constituted its Boaid of Directors 412 DECISIONS OF NATIONAL LABOR RELATIO\TS BOARD ent, all of whom occupied the same posts while employed by the Mill Company, to select the production personnel of Bakery, Inc. Accord- ing to the testimony of Campbell, Jr., and Parks, on the morning of July 1, Campbell, Jr., instructed the committee to make the selection upon the basis of the individual merit of the applicants for employ- ment, including ability, efficiency, physical fitness, character, and edu- cational background. Shauf testified that Campbell, Jr., told the committee to hire the help that we could `get along with and that would do the work right . . . the folks that were most efficient 21 (Italics supplied.) According to the testimony of Shauf and Parks, the personnel com- mittee proceeded in the following manner in making its selection. On the morning of July 1 Campbell, Jr., directed Shauf, Parks, and John- ston to select a staff of production employees for Bakery, Inc., and to report to him its reasons for its action in those cases where it decided to reject Mill Company bakery employees. At the outset the committee planned to have its members separately write comments evaluating each rejected applicant. Immediately after the Mill Company em- ployees filed their applications, Shauf examined them sufficiently to note the names of the applications and dictated his reasons for not employing 25 of the individuals listed in Appendix A to a typist in the office who transcribed the dictation upon the reverse side of the application of the particular individual concerned.25 When Shauf completed this work, the committee decided to change its procedure, in order to hasten the selective process. Thereafter, the committee held a meeting, discussed the various applicants while Parks made notations iii his own handwriting upon the backs of the 25 applica- tions,2e and made its choices, adopting in every case of a rejected applicant, the decision of Shall f.27 On the afternoon of July 1, the committee directed the office stenographer to prepare notification let- ters for the signature of Campbell, Jr., and that evening such letters were mailed to the successful applicants. ' On July 3 Campbell, Jr., met with the committee and discussed with them the reasons it as- signed for rejecting the 27 applicants. In his testimony Campbell, Jr., admitted that during that conference "there might have been some additional comments placed" on the reverse side of the 27 applications. 24 Benjamin Johnston did not testify at the hearing. The remaining two individuals, George Stubbs and Tboia Mae Heaton, did not file their applications until July 3 On that date, Shauf made typewritten comments with respect to Stubbs and Heaton, and Parks made a notation with respect to Stubbs 2' Although Johnston participated in the committee meeting, he made no written- com- ments regarding the applicants 27 Although Shauf denied in his testimony that he utilized it, Shauf had in his possession a copy of the list of union members which was furnished to the Mill Company in the fall of 1938 MOUNTAIN CITY ?MILL COMPANY 413 Between July 1 and the date of the hearing, Bakery, Inc., hired 46 persons in addition to, those who had worked in the Mill Company bakery. The applications of the 46 persons were not considered by the personnel committee; generally, they were approved by the individual department heads, and in some cases, by departmental foremen. Bakery, Inc. made no investigation of the 46 persons as to their quali- fications as bakery employees prior to employing them. After July 1 Bakery, Inc. did not reject the employment application of any person who had not been employed by the Mill Company.28 We will now consider the reasons advanced by the committee for its rejection of the 27 individuals listed in Appendix A. Except as to Media Louise Bragg, Maggie E. Woodson, Burva Batey, William Sellars, Mattie Hunter Davis, Mattie L. Thomas, Louise Hobson Kelley, Marvin G. Milam, Jr., George Stubbs, and Stewart Frank Kelley, at the hearing Parks did not enlarge upon the comments which he wrote on the back of the applications. 2 Media Louise Bragg Media Louise Bragg was first employed by the Mill Company in 1926 and worked steadily until June 28, 1939. In his written com- ment, Shauf characterized her as having "a very peculiar disposition" and charged that she had "caused quite a bit of disturbance in hev department." At the hearing he sought to explain his comment by' testifying that sometimes Bragg refrained from conversing with other employees for the duration of an entire day, and that she had not been on speaking terms with her sister, a fellow employee, for years. Shauf admitted in his testimony, however, that Bragg's failure to talk to other employees did not adversely affect her work and that he never reprimanded her because of her disposition or suggested that she change her attitude. Although Bragg and her sister, Mrs. James Connor, had not talked to each other for at least a year, Bakery, Inc., employed Mrs. Connor, a non-union employee who was strongly opposed to the Union. On the back of her application Parks wrote that Bragg was "very much disliked by her associates" and that "her disposition is not con- ducive to peace and harmony necessary to conduct a profitable busi- ness." Parks testified that he considered her unfriendly to him be- cause she turned her head when he approached her in the plant. On the other hand, it seems that Bragg was kindly disposed toward Parks prior to October 1938 and that his attitude toward her changed after the 1938 strike in which she participated. In any event, Bragg was not employed in Parks' department. Moreover, at the hearing Parks 28 This statement does not apply to persons who sought to make application for employ- ment but from whom applications were not accepted for the reason that no work was available 414 DECISIONS OF NATIONAL LABOR RELATIONS BOARD admitted that Bragg did satisfactory work while employed in the Mill Company bakery and he was unable to name a single associate who disliked Bragg. While undoubtedly Bragg had petty arguments with her fellow workers during the long course of her employment, her supervisors never reprimanded her on account of her disposition or because of her alleged failure to adjust herself to her fellow employees. Maggie E. Woodson Maggie E. Woodson, who held various jobs as cake packer, worker in the icing room, and bundler, was employed by the Mill Company bakery about November 1934. On the back side of her application, Shauf wrote that her father's loss of his job as night watchman for the Mill Company "seemed to cause" her "to lose interest in her work." $O The evidence does not establish that Woodson lost interest in her work after her father's discharge. Woodson did not discuss with any per- sons in the plant her father's discharge and, thereafter, her supervisors never criticized her for lack of efficiency. Although Shauf testified that he instructed her forelady to speak to Woodson for neglecting her work, Shauf admitted that he did not reprimand Woodson. Woodson denied that her forelady reprimanded her, and the forelady failed to testify. Shauf testified also that he had received a report from Foreman Cleary to the effect that Woodson complained about the difficulty of the icing-room work when Shauf transferred her to Cleary's depart- ment. For this reason Shauf claimed that Woodson was "hard to con- trol." Intermittently during a period of approximately 1 or 2 years, Woodson's duties included the lifting of heavy cases when working in Cleary's department, the icing room. While Woodson denied that site ever complained to Cleary that the work was too hard for her or that she could not do it, she admitted saying to Cleary or to her fellow workers that a regular job of that type "would kill any woman .. . it was a man's job." Apparently, however, the Mill Company shared her opinion. After the 1938 strike, it assigned a man to the job, and thereafter no woman employee was required to lift the heavy cases. Moreover, although Billie Massengale and Claytie Plumlee, non-union women employees, complained, at least in one case to a supervisor. concerning the laborious character of the "case lifting" job,, they were given employment by Bakery, Inc. Woodson also denied Shauf's claim that she complained to her supervisors whenever she was transferred to another department. 2° Also referred to i nthe record as Elizabeth Woodson 80 The Mill Company discharged A. L. Phillips, Woodson's father, shortly after the 1938 strike. MoUN1AIX CiiY MILL COMPANY 415: Woodson's first assignment was in the cake-packing department. She was transferred next to the icing room. Thereafter she was shifted back and forth between those two departments. Apparently, in 1936, Shauf offered her a choice of assignments and she chose to work in the icing room. Foreman Cleary commended her work there to Shauf. Except as stated above, Woodson did not complain about the "case lifting" work. She did not request Shauf to transfer her to another department. Thereafter, sometime in 1937, Woodson was transferred to the cake department, the place of her original assignment, at the instance of Forelady Vondrake who desired Woodson's services and promised her a better job. Except for some work in Cleary's depart- ment and a temporary 1-day assignment as a bundler in the wrapping department, to which she made no objection, Woodson continued working in the cake department until the Mill Company bakery ceased operation. Parks noted upon Woodson's application : High strung disposition-complains when asked to work in other departments-was not able to lift cases ("hurt her side") -physi- cally unfit by her own admission-a compensation hazard. Physician Dr. Campbell. At the hearing Parks stated that the characterization "high strung dis- position" represented the opinion of the other members of the com- mittee and not his own and that he based his comments with respect to Woodson's physical condition upon statements made at the committee meeting by Shauf who claimed that he received his information from Foreman Cleary.31 While Woodson, a girl in her twenties, suffered pain on occasion when she lifted the heavy cases in the icing room, at least since the 1938 strike, her regular work was as a cake packer in another department where she was not required to do that sort of work. Moreover, after the strike the Mill Company limited the assignment of that work to a male employee. During Woodson's approximately 5 years of employment with the Mill Company, she lost about 5 days on account of illness and an additional 2 weeks about 2 or 3 years prior to the hearing, when she underwent a minor operation. The Mill Company never required Woodson to submit to a physical examination in connection with her alleged disability and her supervisors never raised any issue concerning it. At the hearing, Woodson produced statements, dated August 2 and 4, 1939, issued by two doctors, one who had performed the operation and another who had treated her for a lip irritation caused by use of a lipstick, certifying that she was in physical condition to work. 31 Cleary was seriously ill at the time of the hearing and did not testify 416 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Burva Batey 32 Burva Batey, who was employed at various times in the wrapping and cake departments, worked for the Mill Company about 5 years. In his written comment on the reverse side of Batey's application, Shauf stated that she "seemed to be quite dissatisfied with her work" and that Vice-President Bean had talked to her about it without effect. At the hearing Shauf explained that Batey's displeasure was occasioned by the amount of work allotted to her, and that Batey felt that she was entitled to a larger share of the available work. Parks wrote the following : The superintendent,is modest in making this statement. She is a constant troublemaker, insubordinate. Other former employees have been heard to say they wonder why she was permitted to work here. In her testimony Batey denied that Bean ever talked to her about her work. Bean did not testify. Batey had manifested her dissatis- faction, referred to by Shauf, by joining a group of fellow employees who presented a grievance to the management when a dispute arose with respect to seniority rights in the allotment of work after the termination of the 1938 strike. So far as appears, the grievance was presented in an orderly manner and there is no evidence that Batey caused any trouble or engaged in insubordinate conduct. Batey testi- fied that she never refused to take orders from her supervisors and that they never accused her of insubordination or complained that she caused trouble.33 At the hearing Parks admitted making changes in his written comments on Batey's application after July 1 by insert- ing the word "former" and the phrase "have been heard to say they," and changing the verb "is" to "was." Moreover, none of the former employees of the Mill Company appeared to support Parks' assertion. On the other hand, Batey was complimented on her work by her fore- lady on several occasions, and this occurred as late as May or June 1939. Gussie Sharpe 34 Gussie Sharpe, a cake packer, worked for the Mill Company on more than one occasion. She was last employed by the Mill Company about June 1929 and worked in the bakery department from that date until June 28, 1939. As to her, Shauf assigned the following brief com- ment on the back of her application as the reason for his refusal to employ her : "Just did not fit into the new company." Parks wrote 32 Also referred to in the record as Burva Holt Batey. s3 In May 1939 Shauf ordered Batey's removal as a weigher for falling behind In her work , but this was not relied upon by the committee in its decision not to employ Batey. ' Also referred to in the record as Gussie Petty Merriman Sharpe and Gussie Sharp. MOUNTAIN CITY MILL COMPANY 417 that Sharpe believed that the Mill Company 'discriminated against her and favored "pets" in other departments, and added, "R e have reason to believe that this would in time cause dissension in the de- partment." While Shauf testified that Sharpe caused dissension in the plant on several occasions by issuing orders to other employees and that he instructed the forelady to reprimand Sharpe, he did not recall when the last occasion occurred or when he issued such instruc- tion to the forelady. Sharpe testified that she received no complaint from anyone in the plant with respect to her giving orders, and to her knowledge, no employee complained to the management about her. No employee was produced to testify that Sharpe issued orders, and the' forelady failed to appear at the hearing. Sharpe also testified that she did not believe that the Mill Company had discriminated against her and that she did not know of the presence of "pets" in any depart- ment. She categorically denied that she complained to the manage- ment about the treatment that she received or about favoritism upon the part of supervisors for others. In this Sharpe was supported by the testimony of Lois Baker, who worked in the same room with Sharpe, often at her side. According to Baker's testimony, Sharpe tended to her duties at all times, and Baker never heard Sharpe engage in argument with other employees, or complain about favors extended by supervisors to other employees. Claude E. Gouger a° Claude E. Gouger worked in the glue room of the Mill Company bakery department from January 5, 1930, or 1931, until about 4 or 5 months prior to June 30, 1939, when he was transferred to the "moon pie" section, a part of the icing room. On the back of Gouger's appli- cation, Shauf inscribed: "From past experience we thought that Mr. Gouger would not fit into the new company." Parks did not write any cominent with respect to Gouger. At the hearing Shauf stated that after Gouger's transfer to the icing room, Gouger applied on two or three occasions to Johnston, who supervised operations in the glue room, for transfer to that department when work became unavailable in the, icing room, and because of such requests Shauf concluded that Gouger would refuse to work in the icing room for Bakery, Inc. In the space provided in the application, however, Gouger specified that he desired work as an "icing room helper." Shauf admitted, moreover, that he had no knowledge of this matter and that he relied entirely upon information received from Johnston. From Gouger's testimony it appears that in accordance with the usual practice, Foreman Cleary allowed Gouger "Also referred to in the record as Claud Edward Gouger and ' Claude Gouger. 418 DECISIONS OF NATIONAL LABOR RELA rIONS BOARD to do "cleaning up" work in the icing room when regular work was not available. After he spent a short time at "cleaning up" work, Gouger was advised by Cleary' that he could not permit Gouger to do extra work in the icing room since Johnston claimed Gouger as a glue-room employee, and Cleary stated that lie would try to secure a transfer for Gouger. Although Gouger admitted in his testimony that he conferred with Shauf with respect to this situation, lie denied that he ever asked his supervisors for a transfer to the glue room. Prior to the 1938 strike,, Foreman Johnston coniineii(led Gouger for his work. Gaytonz, Mullins, Johnson, Aline Gouger. Foxe) s, and i1f'oray The personnel committee asserted, in part, the same reason to explain its refusal to employ Maggie N. Gaytoii,"0 Edith Mullins. Aline Gouger, 37 Jessie M. Johnson,33 Marsouvia B. Rogers,'' and Bessie Murray. On the application of Gayton, who worked over 4r/.-, years for the Mill Company, Shauf wrote that she seemed not to be able to control her speech and seemed to be con- tinually talking about things that should not be discussed in the plant. Therefore, we thought it best not to have her in the new company. And Parks added that she ... recently led a revolt or mutiny with bitter denunciation of the Company's policies about being required to work one minute overtime. On the day previous the same crew quit work, and was ready to go home when the foreman came to tell them it was quitting time (6 minutes before quitting time). This is an unhealthy condition and this mumbling, clannish, disgruntled bunch should not be employed. Parks made the notation "See No. 10," the number of Gayton's appli- cation, on the applications of Mullins, Aline Gouger, Johnson, Rogers, and Murray,40 and Shauf testified that such notation indicated that the latter five employees participated with Gayton in the so-called mutiny or riot. While in his testimony Shauf repeated the substance of Parks' written comment, he stated that he had no knowledge of the forbidden subjects allegedly discussed by Gayton in the plant, that lie relied upon information received from Foreman Cleary concerning the par- "Also referred to in the record as Maggie Norman and Maggie Norman GaYton. 3' Also referred to in the record as Mamie Gouger and Mamie Aline Gouger as Also referred to in the record as Jessie Johnson and Jessie Johnston. m Also referred to in the record as Marsouvie Rogers "'Parks made no other-notations on the five applications MOUNTAIN CITY MILL COMPANY 419 ticipation of the six in the so-called mutiny or riot and made no inde- pendent investigation of the matters contained in Cleary's report, and that Cleary's statement to the effect that he could not control these six employees motivated Shauf in not employing them. The alleged mutiny or riot. consisted of the following: Sometime in June 1939, on a Friday or Saturday, Gayton and several other girls, all of whom worked in the icing room, complained to Foreman Phillips, chairman of the union grievance committee, that they were required by their foreman, Cleary, to start work in the morning and after their hunch before the regular time and to do clean-up work after quitting time. Phillips told them that the Union could do nothing about the matter and he refused to press their grievance. Apparently Phillips told Cleary what had occurred, since, on the following Monday, Cleary upbraided Gayton,' repeated in substance what Gayton had told Phillips. and threatened to discharge her for "talking too much about the overtime." Although Johnson, Aline, Gouger, Rogers, and Murray denied that they complained to Phillips or anyone else with respect to overtime work, apparently the personnel committee believed that they were among the group who sought to have Phillips intercede with the man- agenment for them. Gayton admitted that she presented the grievance to Phillips. She denied. however, that she refused to work overtime, that she encouraged the girls not to do work overtime, or that she complained to Cleary about the matter. In addition, the personnel committee 'assigned other reasons for rejecting the applications of the other five persons. As to Johnson, who worked more than 41/, years in the icing room, Shauf wrote that she "just did not seem to fit unto the new company." At the hearing Shauf failed to explain what he meant by this statement or to specify the particulars in which Johnson failed to meet requirements. As to Aline Gouger, who worked about 31/ years for the Mill Com- pany, Shauf wrote that she had a "peculiar disposition." By this, Shauf stated at the hearing, he meant that she did not carry her share of the work load. Shauf admitted that his observation was based entirely upon reports from Cleary who, according to Shauf, talked to Aline Gouger about her work on several occasions. In her testimony, Aline Gouger denied that she had ever received any reprimand con- cerning her disposition or relations with other employees. Indeed, on July 6, 1939, when Ali ne Gouger and Edith Mullins sought an explana- tion from Cleary for the failure of Bakery, Inc. to employ them, he stated that their work had been satisfactory and that lie did not know of any explanation. As to Edith Mullins, who was employed'for more than 6 years by the Mill Company, Shauf wrote that Mullins had lost interest in her 420 DECISIONS OF NATIONAL LABOR RELATIONS, BOARD work and Cleary had complained several times that Mullins was hard to control. In his testimony Shauf admitted that he experienced no difficulty, in controlling Mullins, he had no recollection as to when Cleary made the alleged complaints, and he failed to explain in what respect Cleary found Mullins hard to control. On two recent occa- sions, Mullins testified, Cleary requested her to lower her voice when speaking in the plant, but on these occasions Cleary mistakenly be- lieved that Mullins had been doing the talking and apologized when lie discovered his error. She admitted, however, that on other occa- sions she yelled in the plant, but she maintained that it was necessary to do so in order to be heard above the noise of the machines and that her voice could be heard in more remote parts of the plant only when the machines stopped. As we noted above, Mullins was in the com- pany of Aline Gouger on July 6, when Cleary stated that their work had been satisfactory. Although on this occasion, Cleary asserted that the failure of Aline Gouger and Mullins to gain employment with Bakery, Inc. was not due to their union activities, another inci- dent occurred about January 1, 1939, which discredits that statement. At that time, Cleary discussed with Mullins the recent discharge of Jesse Stewart,, a member of the union grievance committee." In the course of the conversation, Cleary advised Mullins that .. . if the company got anything on you that they will fire you . . . if I were you I would get out of this mess that it is in, if I could .. . By this, Mullins understood Cleary to refer to the Union. As to Rogers, who worked approximately 10 years in the Mill Com- pany icing room, Shauf wrote that she "has not seemed to be satisfied with her work for [the] past few months and did not take the interest in it she did . . ." At the hearing Shauf did not amplify this state- ment, except to say that Cleary had included Rogers in the group of the so-called "No. 10" girls who were dissatisfied and failed to "keep up their end of the work." Apparently Shauf referred to the six girls who were involved in the grievance with respect to uncompen- sated overtime work. In her testimony, however, Rogers denied that she complained to any supervisor about overtime work; she asserted that she was not among the group who presented the grievance to Phillips, and that she was never accused of losing interest in her work or"reprimanded for unsatisfactory performance of her duties by any supervisor. As to Murray, who served about 9 years with the Mill Company. Shauf wrote that she "just did not fit into the new company." Shauf testified that she did not "seem to be taking an interest in the work" 41 Stewart's discharge is not in issue in this proceeding MOUNTAIN CITY MILL COMPANY 421 and that his opinion was based upon Cleary's report with respect to the six girls in the "No. 10" group. At the hearing, Murray denied that she complained to any supervisor, including Phillips, about over- time work. Louise Kelley The personnel committee placed its refusal to employ Louise Kelley, who had worked for the Mill Company at least since 1937, on (lie ground that she intended to leave Chattanooga to join her husband who had obtained a job outside the city. On the reverse side of her application, Shauf noted that Kelley had imparted such in formation to her foreman and Parks wrote: "No need to employ someone for a few days. She told me [D. 1'.] that her mother was golnr; with her." At the hearing Sliauf stated that he received such iu forma- tion from Cleary, and admitted that lie had no personal knowledge of Kelley's plans. In her testimony Kelley denied that, lie told Cleary, Parks, or any other supervisor that- she intended to leave Chattanooga. She testified that she planned not to surrender her present job and go to Washington, D. C., where her husband had recently obtained employment, until she was assured that her Hus- band's job was permanent, and that she so informed Cleary shortly after June 15 when lie interrogated her as to her plans. Although Kelley and her mother left Chattanooga and went to Washington about the middle of July 1939, it was not until Bakery, Inc. rejected their applications for employment that they decided to move. ill attic Cornwell Mattie Cornwell, who worked for the Mill Company more than 15 years, is the mother of Louise Kelley. On her application SIIau f wrote : From past experience did not think that Mrs. Cornwell would fit into the new company," and Parks added : "No need to employ her. She is going to Washington soon with her daughter Louise." Shauf did not testify what his past experience with Cornwell had been, except to say that she was a member of the "No. 10" group of employees and that she planned to go to Washington. Cornwell is not identified with the "No. 10" group in the written comments. She slid not testify with respect to her alleged participa- tion in that group. At the hearing she denied that she told any super- visor of in intention to leave the city. She testified that she told Cleary, in response to inquiries from him, that she planned to remain in Chatta- nooga. About May or June 1939 Cornwell was summoned to the Mill Company office by Shauf and Cleary and asked by them to explain why she had broken some pies. When she explained that the pies were not in 42 Also referred to in the record as Beulah Hobson Kelley and Kelly Beulah Hobson. 2 83036-42-vol 25--28 422 DECISIONS OF NATIONAL LABOR RELATIONS BOARD condition to be packed and that she acted in response to general in- structions issued by Vice-President Bean, Sllauf agreed that she lead taken the proper course. However, shortly thereafter, Cleary ap- proached Cornwell and shaking a finger in her face, told her that .. . it made no difference with them if I belonged to the Union or didn't and that he and Mitchell didn't care whether I liked them or not . .. that lie and Mr. hlitcl,iell [Shan I'] had decided to fii e me... This is undenied Hattie 7,hovl1,as Mattie Thomas was employed in the loaf -cake and bundling depart- ments of the Mill Company bakery more than 15 years., In substance, Shauf and Parks wrote on Thomas ' application that she had been chs- .igreeable since the Mill Company transferred her from the loaf-cake department to another department. Shauf testified that Thomas showed such attitude sometime after lien transfer by iuakuig complaint to her forelady that an insufficient amount of work was allotted her. While Thomas -admitted that she felt that Shauf discruuinated against her in February 1938 by transferring her from the loaf-cake depart- ment and replacing her with Lois Shirley," who had less seniority, and that her forelady favored others with shorter service records in the dis- tribution of available vv ork, Thomas denied. however, t hat she had any quarrel with her supervisors with respect to these matters The fore- lady did not testify. On two occasions Thomas requested an explana- tion for her transfer from Shauf who referred her to her supervisor, Foreman Connor . Thomas did not, however , apply to Connor and did not talk to Parks or any other supervisor about the transfer , except as stated above. After the Mill Company discontinued its loaf- cake-de-partment, which occurred shortly after the 1938 strike, Thomas made no further appeal to Shauf with respect to the transfer , and uo super- visor ever accused her of being disagreeable during the period of her employment. George A St'Ubbs George A. Stubbs was employed intermittently by the Mill Company since 1906 . On the last occasion , lie started in March 1929 , and worked continuously from that time until Jmie.27,1939 , as an oven nian. Shauf commented on the back of Stubbs ' application : "From past experience with Mr. Stubbs we felt positive that he would not fit into the new company." Parks wrote : "Uncontrollable temper. At one time another employee had to beat him up . ( Suspected)." 13 Also referred to in the iecoid as Lois Shetlin MOUNTAIN CITY MILL COMPANY 423 At the hearing Shauf disclosed that the "past experience" to which lie referred involved Stubbs' participation in an altercation with Chester Harris, a fellow employee. In September 1936 Stubbs, who was paired with Harris at an oven, was hit on the head by a heavy piece of metal thrown at him by Harris when he mistakenly believed that Stubbs was responsible for the issuance of an order to Harris. The injury incapaci- tated Stubbs for the remainder of the clay. Although he did not work the entire day, lie suffered no deduction in pay. Shauf sent him to a doctor for treatment. Apparently the Mill Company defrayed the expense, since Stubbs did not receive a bill from the doctor. Stubbs did not strike Harris, threaten to hit him, or swear at him. Parks testified that he regarded Harris and Stubbs equally responsible for the incident. Yet lie was unable to offer any explanation why Bakery, Inc. hired Harris, a union member.44 Although this fact alone has no probative value to establish discrimination within the meaning of Section 8 (3) of the Act, it nichcates that the reason advanced by the personnel coni- mhttee for its refusal to employ Stubbs was not genuine: After the 1936 incident, both Stubbs and Harris were retained by the Mill Com- pany, and neither received discipluiary action by way of lay-off or loss of privilege. Thereafter, Stubbs was not involved in any other dispute. During his employment his supervisors never accused him of having an "uncontrollable" temper, and the record does not establish that Stubbs engaged in any activity to warrant the change. Although Parks explained at the hearing that Stubbs was suspected of stealing materials from the bakery, he was not convicted of such offense, or apprised of such charge during the period of his employment, and no evidence was introduced to show the basis of the alleged suspicion. Indeed, Stubbs retained his job with the Mill Company for at least 18 months, according to Parks, after Stubbs was first suspected. When interrogated at the hearing, Sliauf did not know what Parks meant by writing the word "Suspected" on Stubbs' application, and Shanf could not recall whether it was discussed by the personnel com- mittee when Stubbs' application was considered. Catherine Kelley 4, Catherine Kelley served the Mill Company about 14 years, working from 1912 to 1914, and from 1927 to 1939, when the Mill Company ceased operation. Shanf and Parks asserted in their written comments that she was dissatisfied with working conditions with respect to the temperature maintained in the plant and that she was not in good health. Shauf testified that Kelley caused a disturbance in that her husband, an employee, desired the installation of a fan at her place of 44 Harris engaged in a fight with another employee in 1 917. "Also referred to in the record as Katherine Belles 424 DECISIONS OF NATIONAL LABOR RELATIONS BOARD work in the plant to supplement the ceiling fan during the summer months. Shauf stated that the Kelleys did not request the management to furnish such fan but Shauf found fault with Catherine Kelley because her husband located a fan in the plant and brought it to his wife. Catherine Kelley's employment required her to nn ork close to the cracker oven. No fan was located sufficiently near her post. Accord- ing to Catherine Kelley, on one occasion, she requested a, fan from Fore- man Phillips who transmitted the requisition to Shauf. When she did not receive a fan, she took the matter up herself, but with whom, it does not appear. She made no complaint about the fan at any other time, although other employees who were similarly situated were pro- vided with fans, and she never made any other complaints with respect to the temperature maintained at the plant. Catherine Kelley ex- plained that her husband borrowed a fan for her from other employees who made it available to her after they finished their work. Her super- visor made no objection to this arrangement. Parks wrote that Kelley was a compensation hazard since slight injuries incapacitated her for weeks. He gave no testimony, how- ever, to substantiate the claim. At the hearing Shauf could not recall when she was last absent from wrok due to injury or illness. During her long period of employment, Kelley took sick leave on two occasions. In 1933 she was away from duty for about 10 weeks and in 1937, 7 weeks. In 1936 she sustained a foot injury while at work but she took no leave and did not request workmens' compensation from the Mill Company for the injury. Since 1937 Kelley had not lost a single day from work on account of illness and worked every day when work was available in the bakery. At the hearing she pro- duced a statement from a Chattanooga physician, dated August 3, 1939, certifying that he had examined Kelley and had found her in good physical condition and able to work at her usual occupation. William, Sellars 46 Shauf noted on the application of William Sellars that "we took it for granted" that Sellars was dissatisfied with his work since he often talked about returning to his farm in middle Tennessee. Shauf testified that Sellars stated "sometime last summer" that he planned to go to his farm and that he was uncertain whether he would return to the plant. Shauf admitted, however, that Sellars often took leave to return to the farm during the 5 or 6 years of his employment with Mill Company and that on such occasions Sellars stated that he -\w;a uncertain whether he would return to work. 10 Aiso referred to in the record as William Sellers MOUNTAIN CITY MILL COMPANY 425 By means of the application which Sellars filed on July 1, he re- quested Bakery, Inc. to employ him, thus showing a desire to continue working in the bakery.47 Although Sellars did not testify at the hearing and there is no evi- dence in the record with respect to his union membership, at the oral argument before the Board, counsel for Bakery, Inc. stated that the 27 individuals who are listed in Appendix A, which includes Sellars, "were union members" 45 and that that fact "was known by the chair- man of the committee who selected the employee (s)." James Henry Cordell4° James Henry Cordell worked in the Mill Company bakery approx- imately 21/2 years. He was first employed as a "case boy." After serving about a month in that capacity, he was transferred to work at the oven where it was his duty to remove pans from a machine and place them in the oven. In commenting upon Cordell, Shauf wrote that during "the past few months" he had personally observed Cordell act "haughty" when his foreman gave orders, and Parks characterized Cordell as "ignor- ant," "slow to learn anything," and "not competent for advancement." At the hearing Parks stated that he rejected Cordell because he lacked educational background." Shauf testified that Cordell was transferred from the "case boy" job because he could not maintain written records and that somewhat less than a year before the hearing, Foreman Venable reprimanded Cordell for snaking "scrap." On such occasion, Cordell "sort of frowned his face up." On the other hand, Venable also reprimanded Cordell's three coworkers for making excessive "scrap," two of whom are not listed as union members in Styles' certificate'50 and the three were employed by Bakery, Inc. When Shauf hired Cordell, no in- quiry was made as to the extent of his education; Cordell was never criticized by his supervisors for his lack of education; and Bakery, Inc. hired other Mill Company bakery employees, including Willie Capps, Jack Westbrook, and James Bledsoe, who had no greater 47 Sometime after Bakery, Inc. commenced operation , apparently in August or September 1939, Parks noted the words "Age 66" on Sellars' application Obviously, Sellars' age did not influence the personnel committee' s decision to reject Sellars' application on July 1. since so far as the record shows , the committee gave it no consideration. 49 The remaining 26 individuals listed in Appendix A testified that they joined the Union in June or July 1938 49 Cordell has a stepfather whose name is Mincey . Cordell is also referred to in the record as James Mincy and as Mincey 51 This refers to the certificate, above mentioned , issued after a poll of the employees was taken, ranter alia, with respect to their union affiliation. 426 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ability to read or write than Cordell.51 The job which he held for the entire period of his employment with the Mill Company, except for the period of 1 month, did not require the keeping of written records. Thora Mae Heaton Shauf asserted in writing and in his testimony that the personnel committee rejected the application of Thora Mae Heaton, a cake packer, because she refused to work on Saturdays . In his written comment he claimed that her failure to work on Saturdays caused a "hardship" on other employees and that Bakery, Inc. anticipated ',considerable Saturday work." Heaton, a Seventh Day Adventist, was first employed by the Mill Company in January 1934. Since Heaton was an observer of the doctrines of her church which pro- scribe labor on Saturdays, she did not work on that day of the week. After the termination of the 1938 strike, Shauf and Bean told Heaton that the Mill Company had decided to dispense with her services be- cause of her refusal to work on Saturday When Heaton-pointed ,out that she had been employed by the Mill Company almost 5 years without working on Saturdays, Bean stated that she would be com- pelled "to abide by the rules" since she had joined the Union . 52 . Hea- ton filed a grievance with the Union ; and the Union presented it to the management. As a result, Heaton was allowed to retain her job, and thereafter she was not required to work on Saturdays. The respondents introduced no evidence to show that other employees suf- fered as the result of Heaton 's abstention from Saturday work. On the contrary , the cake packers in her department worked on a piece- rate or hourly basis , and Heaton testified that they welcomed the ad- ditional work which was made available when she did not appear at the plant on Saturdays. Moreover, Sliauf admitted in his testi- mony that he had no knowledge at the time whether Bakery, Inc. 'would have more Saturday work than the Mill Company bakery. Stella Patty According to Shauf's written comment . lie rejected Stella Patty because she "did not take the interest in her work she formerly did and just did not fit into the new company." On her application Parks wrote : "Has the appearance of being a compensation hazard." To support his written statement Shauf testified that on several occasions the forelady informed Shauf that Patty was not "keeping sl Parks sought to justify the employment by Bakery , Inc. of Capps . whose name appears on Style's certificate , on the ground that Shauf was kindly disposed toward Capp 's father No attempt was made to explain, in view of then, alleged deficiencies why Bakerv, Inc hired Westbrook or Bledsoe. The union contract provided for it work week of not more than i davs , not includ- ing over time work _IIOUNIAIN CITY MILL COMPANY 427 up in her work" and that he instructed the forelady to reprimand Patty. However, Shauf could not recall the last occasion on which he issued such an order and lie did not kiuh whether the forelady carried out his instructions. The forelady, Siddie Vondrake, failed to testify. Patty was first employed by the Mill Company bakery about 1919 and, after working for 8 or 9 years, quit. She returned in 1933 Since that date until about June 30, 1939, Patty lost no time on account of sickness and worked in the bakery every day on which work was available. In October or November 1937 she visited a doctor and thereafter received medical treatment for an internal cancer during a period of approximately a year. In November 1938, the date of her last treatment, the doctor informed Patty that she "was getting along fine." On August 3, 1939, she procured a certifi- cate of 'good health from the doctor. Although on several occasions Patty stated in the plant that she "felt badly," apparently such com- plaints did not differ from those voiced by other employees who nor- mally became slightly ill. Neither Shauf nor any other supervisor ever told Patty that she appeared to be in bad health and Shauf admitted at the hearing that Patty's appearance had not changed in the past 3 or 4 years Lois Baker Lois Baker worked as a cake packer in the Mill Company bakery more than 5 years. In the written comments, Parks stated that Baker was "fussy" and "threatened violence to other employees," and Shatif wrote that she "seemed to be very much dissatisfied with her work of late and therefore, did not fit into the new company." It does not appear that Baker was "fussy" to such an extent as to make her an undesirable employee. At the hearing Parks did not amplify his written.objections to Baker; Shauf admitted that she was "fussy- just like anybody else that is fussy sometimes." Aside from Parks' statement in writing, the record contains no evidence that Baker threatened other employees with violence. Baker denied that she had any physical encounter or heated argument with other employees. On occasion, she discussed the Union with Nell Murphy, a non-union employee who worked close by in the plant. Although Nell Murphy complained about Baker to the forelacly, the latter told Baker to disregard' Murphy's complaints, and the forelady never threatened to discipline Baker for engaging in argument with Murphy. Moreover, others besides Baker had arguments with fellow employees in the plant. In his testimony Shauf stated that lie reached the conclusion that Baker was dissatisfied with her work because lie had received a letter 428 DECISIONS OF NATIONAL LABOR RELATIONS BOARD seeking information about Baker from a prospective employer to whom Baker apparently had applied for a job, and for that reason, he decided not to hire Baker. Baker denied that she made applica- tion for work elsewhere, except as stated below, and Shauf was unable to produce the letter or name the prospective employer. Baker testified that she secured extra employment elsewhere during the 1938 Christmas season with Shauf's permission when the Mill Company provided only 1 or 2 clays' work a week. On this occasion, Shauf offered to furnish a recommendation for Baker and requested her to return to her job at, the Mill Company after the Christmas season. Kate B. Brown Kate B. Biown was first employed by the Mill Company in 1911. Thereafter, until 1927) she worked there intermittently. She last re- turned to the bakery in 1927 and continued as an employee of the Mill Company until June 30, 1939. Shauf and Parks asserted that they rejected Brown's application because she involved the Mill Com- pany in an excessive number of garnishments. Parks stated also that Mill Company customers threatened to quit trading unless it assisted them in collecting their bills from Brown. Brown admitted in her testimony that her wages were garnisheed on one occasion in 1938 and on three occasions, in January, March, and April, in 1939. The March 1939 garnishment was occasioned by an unexplained error on the part of the creditor since it related to a claim which Brown had paid. It was the same claim upon which the 1938 garnishment had issued. After service of the March gar- nishment summons, Brown secured a receipt and showed it to Shauf, thus disposing of the matter to his satisfaction. The other two gar- nishments grew out of bills which Brown owed for groceries and back rent. After Shauf called the January garnishment to Brown's altention, she made arrangements with the creditor to pay the claiin ,n installments. Brown also paid the April garnishment. Since then, she has not been involved in garnishment proceedings. During the first 6 months of 1939, she obtained no more than 8 full weeks of employment and earned from $16 to $18 a week on a piece-rate basis when she worked a full week. Although the union contract provided that "any employee who has had 2 garnishments within sixty clays served on him or her is automatically discharged," the Mill Company never sought to invoke that penalty or otherwise to discipline Brown. George if. Moody George W. Moody first worked for the Mill Company' about 18 01 20 years prior to the hearing. He last began work at the bakery i JIOIT\TAI\ Cif] MILL COMPANY 429 on June 2, 1936 , and worked there until June 28, 1939. On the re- verse side of his application , Shauf wrote that " we found [Moody] to be unappreciative , therefore, we thought it would not be advisable to bring him back into the new company ," and Parks noted: (Confidential report from a specialist shows this man to be affected by syphilis.) Moody was employed as a dough roller in the bakery where his duties subjected him to flour chest. In the spring of 1938, when Moody complained of pain in his head, Shauf sent him to Dr. Wil- liard Steele , a physician to whoi.l the Mill Company had been directed by its workmen's compensation insurance carrier to send its injured employees. According to Shauf, he received a telephone report from Dr. Steele who stated that 111oody 's ailment "could be caused from syphilis." Dr. Steele did not testify . Thereafter , Moody went to a hospital where he remained for about 2 weeks . The doctor who attended him here told Moody that lie had sinus trouble . After a leave of 4 to 6 weeks, Moody returned to work as a dough roller. Nothing was said to him about having any disease and he was un- aware "that anyone might have suspected him to be infected until a union or Board representative informed him of the respondents' claim in August 1939 . On August 2, 1939, Moody applied to Dr. G Victor Williams, a Chattanooga physician who certified iii writing that he' examined Moody and found hum "able to , work." During the course of the hearing, on December 18, Dr . Williams issued a supplemental certificate stating that lie "had a Wasserman made on Mr. Geo . Moody 8-3-39, and it tested perfect. " The records of The Baroness Erlanger Hospital where Moody was a patient in April 1938, show negative results on Moody's blood and spinal-fluid Wasser- man tests made April 4. 1938. In October 1938 Moody underwent a physical examination and obtained the usual city food -handler's permit from the Department of Health. Shauf claimed in his testimony that Moody was unappreciative for the medical aid which the Mill Company furnished him in that lie showed "a lack of interest in his work" for which Foreman Venable reprimanded him. Moody denied that he was ever criticized for being unappreciative by any supervisor and Foreman Venable did not testify. Stewart Frank Kelley Stewart Frank Kelley, the vice president of the Union, entered the employ of the Mill Company in 1908 and, except for a period of 3 Shauf admitted that he was told by Dr Steele that he did not utilize a Wasserman test in diagnosing Moody's case. 430 DECISIONS OF NATIONAL LABOR RELATIONS BOARD approximately 2 or 3 years, worked in Its bakery department con- tinuously until June 22, 1939. During his long tenure, lie was en- gaged in almost every job in the bakery, except In the mixing room. At the time the Mill Company ceased operation and prior thereto for a period of approximately 10 years, lie operated a large cutting machine. In his written statenients, Shauf charged that Kelley had fallen behind in production and had stated to Luther Phillips that he (Kelley) would not remain with the Mill Company, if he could secure work elsewhere. Parks wrote: No--Frankly I'm afraid of personal violence from ties man Once when lie asked me «-by lie was never advanced I sug- gested that he improve his personal appearance by shaving at least ever [sic] other day-change work clothes more often and try to keep "booger:" from hanging on his nose whiskers con- stantly. Later Mr. Hutcheson told him practically the same thing ever since that time lie has been very unfiiendly and Ihas a very dangerous look for me. D. P. P. S.-Witt general unsanitary appearance even with the slight improvement made on prize contest I don't think that he should be reemployed. D. P. According to Shauf. Kelley was reprimanded by his foreman for lagging in production. Shauf could not, however , recall when this alleged incident occurred and the foreman did not testify . Kelley testified that on one occasion Shauf asked Kelley why production lagged and that lie told Shauf that the machine had been operating constantly at full speed. According to Kelley, on this occasion, he operated the machine at the regular speed but more than the usual amount of dough was inserted in the machine on the day in question, thus requiring a greater output. The 11Ii11 Company bakery was in- adequately staffed. Many times Kelley worked alone "on the floor." On at least two occasions, Shauf commended Kelley on his work. About 2 years before the hearing, referring to Kelley, Shauf pointed out to Hollingshead, who was then the production manager , as they toured the plant: "this man can get more out of an old worn out machine than any man I have got on the job. " As late as June 1939, Shauf told Kelley that they "had always got along awfully well . . . and . .. would continue to get along all right." At the hearing Parks stated that Kelley came to the former 's office about 3 or 4 months before July 1, 1939, and asked why he was not advancing in his employment -with the Mill Company . According to Parks, he advised Kelley to shave at least every other day and to change his work clothes more often ; and since then Parks feared Kel- MOUNTAIN CITY MILL COMPANY 431 ley because of the way he "looked" at Parks. Kelley denied that he went to Parks, who headed a department other than the one in which Kelley worked, to discuss the subject of Kelley's progress in the plant, and stated that neither Parks, Hutcheson," nor any other supervisor ever criticized him because of,his personal appearance. A part of Kelley's duties required him to do "dirty work." He assisted the Milt Company engineer. Almost "every day he disas- sembled a motor or did other similar work. In addition, Kelley helped clean the ice plant. This work he described in his testimony as "the nastiest job in the house." On the average, Kelley shaved at least twice a week. Other employees shaved less often. Moreover, Parks admitted in his testimony that Kelley improved his personal appearance during the last few months immediately preceding July 1, 1939, and never threatened Parks with violence. Mattie Davis Mattie Davis worked intermittently for the Mill Company since 1904. Shauf and Parks objected to her for the asserted reason that she "was hard to get along with." Shauf testified that her foreman, Luther Phillips, reported that she resented statements made to her by others. Sliauf could not recall when Phillips made such report and Phillips did not testify. Shauf concluded on the basis of the report that it "would be best not to bring Mrs. Davis into a new company." While Davis stated at the hearing that she had petty arguments with other employees in the plant during the long course of her employment, she denied that her supervisors ever criticized her work. Parks also noted on Davis' application: "Age 56-Too old." In fact', Davis was aged 60, the oldest employee in her department.55 Clearly, however, this notation was an afterthought since Parks did not make it until Field Examiner Styles called at the plant some time in August or September 1939, and Sliauf admitted at the hear- ing that Davis' application was rejected "mostly" because of her dis- position. Moreover, she lost not more than 1 week on account of illness in the last 10 years of her employment; she never complained that her work as a wrapping-machine bundler overburdened her or requested lighter work, and her supervisors never claimed that she did not fulfill her production quota or advised her that-she was too old for the work. She produced a certificate, dated August 7, 1939, °+ Parks admitted that he was not in (,seat when Hutcheson allegedly discussed Kelley's pci sonal cle5nluiess with him and Hutcheson failed to testify with respect to this aspect of the case. v, In her application Davis gave her age as 5G She testified , however, that she was not suie of hci age and that she later checked the family Bible and obtained the year of her birth 432 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and signed by Doctor J. B. McGhee, a Chattanooga physician, slat- ing that he had examined Davis and found her in good physical condition, free from contagious disease and able to woi;k. Frances D. Bridge Frances D. Bridge was employed by the Mill Company in 1934 as a bundler in the wrapping department. About May 1938 the Mill Company closed its loaf-cake room, and in order to make room for former employees of that department, it put Bridge on part-time work and gave her job as bundler to an employee with greater length of service. Bridge continued in her part-time job until shortly be- fore June 15, 1939. At that time, she applied to Shauf for full-tune employment. Shauf told her that he would provide her with a regu- lar job but requested that she give up an outside job as a waitress at which she worked evenings. This Bridge agreed to do. Shauf asserted that he decided to reject Bridge's application be- cause she retained her outside job contrary to her undertaking. During the month of June, Bridge worked 2 or 3 weeks on a regular- shift Oasis at the bakery. This, however, only provided her with 3 or 4 days' work a week. When the Mill Company posted the notice of discontinuance of its business Bridge decided to retain her outside job pending developments as to her future employment, and there- after worked 3 to 4 hours on Friday, Saturday, or Sunday evenings so that her hours would not interfere with her work at the Mill Com- pany. Although Shauf testified that he had received from Foreman Phillips information that Bridge continued in her outside job, Bridge was not reprimanded or criticized for retaining her job as waitress At the hearing Shauf sought to introduce another reason for re- jecting Bridge's application.`,' He testified that her foreman com- plained that Bridge did not maintain her production quota and that he (Shauf)'instructed the foreman to "talk to her about it." Shauf failed to state when the alleged deficiency in Bridge's work occurred and the foreman did not testify. M. G. M11,ilam. Jr.'S M. G. Milam, Jr., worked for the Mill Company from August 10, 1925, to November 11, 1927, when he quit. He was reemployed by it on January 4, 1937, and thereafter worked as an oven man until June 27, 1939. In support of his written objection that "from past experience we knew that Mr. Milam would not fit into the new company," Shauf 10 This reason was not assigned on the application. "Also referred to in the record as Marvin Milam and Marvin George Milam, Jr MOUNTAIN CITY MILL COMPANY 433 testified that Foreman Venable frequently' called Milani, Jr.'s atten- tion to the fact that he "slowed down" the machinery and that Milani, Jr. continued the alleged offense thereafter. However, Shauf could not recall when Milam, Jr. last "slowed down" the machinery or when Venable spoke to Milani, Jr. about it, and Shauf admitted that he never discussed the matter with Milani, Jr. As a result of these incidents, Shauf claimed, relations between Milam, Jr. and Venable became strained. This Milam, Jr. denied. He testified that he never had any arguments with Venable, that Venable never criticized or reprimanded him for failure to carry out orders or to cooperate with Venable. It was the duty of Milani. Jr. to regulate the speed of the machinery in accordance with the temperature of the oven. On oc- casion, Venable iliquired why Milani, Jr. "slowed down" the ma- chinery, and Mhlam, Jr. explained what he had done to Venable's ap- parent satisfaction. Indeed, Milauu, Jr. and Venable associated with each other after working hours, and Venable visited often at the home of Milani, Jr., and as late as July '3, 1939. Venable did not testify. Parks gave no testimony at the hearing to substantiate the follow- ing objections which he noted on Milam, Jr.'s application : It has always been a custom in plant to double cake or cracker crew over to the departments that were behind with pro- duction. Recently his attitude was-Let the cake orders wait until the cake crew can make them. The cracker crew was per- mitted to run cakes after full weeks' time was guaranteed by the company to all cake crew employees. He has a tendency to be insubordinate, is not on the best of terms with his foreman. (Off Record : His record (common talk in the plant) in connec- tion with young lady employe is not a very good recommenda- tion-) Sometime in the spring of 1939, Mr. Adams, a Mill Company office employee, told Milam, Jr., who worked in the cake department, that the Mill Company proposed to allow the cracker-department employees to work an extra shift in the cake department on a Thursday and lay off the employees of both departments on Friday, the following clay. The employees of the cake department, who had not been working fall time, objected to the plan and made their objections known in the plant. Shauf summoned the union grievance committee, consisting of Phillips, Manerva Sutton, and Milam, Jr. At the conference in Shauf's office, Milani. Jr., took a leading part in the discussion. He pointed out that the union contract provided for departmental seniority and asserted that the available work in 434 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the cake department should be given to cake-department enlployees.- Shauf demurred. He claimed that the Mill Company needed the cakes, that the cracker crew was current in its work, and that its services were required to assist in the cake department. Unable to agree, Shauf summoned C. B. Norwood, the Union's business repre- sentative, and another meeting was held later the same morning. As a result of the second conference, the Mill Company acceded to the Union's position. Aside from reporting the result of the second meeting to Venable in response to the latter's inquiry, Milani, Jr. engaged in no other activity with respect to this matter, and Shauf admitted in his testimony that Milan, Jr. was never laid off or reprimanded for insubordination. To support Parks' "off record" comment, at the hearing Bakery, Inc., sought to show that Milani, Jr. committed a statutory offense in 1927 and was the father of an illegitimate child born to an em- ployee of the Mill Company. At the hearing Milani, Jr. denied the bastardy charge. He testi- fied that he left his employment at the Mill Company plant in 1927 when a rumor spread that lie was involved in an illicit affair with a female employee. He returned to the plant, however, in 1937, discussed fully the 1927 charge with Shauf, and was reemployed. At this time the girl involved in the 1927 affair worked in the plant and was married to a person other than Milani, Jr. Thereafter both continued in the employment of the Mill Company until it ceased operation. At the time of the hearing the girl was employed by Bakery, Inc. On two other occasions, Shauf showed confidence in Mllaill, Jr. as an employee. On July 1, when Milani, Jr. applied for work with Bakery, Inc., he was told by Shauf that his name could be used for purposes of reference. Again, sometime in the first week after Bakery, Inc. started operation, Shauf promised to provide Milan, Jr. with a recommendation for employment elsewhere. Under these circumstances, we do not believe that Bakery, Inc. was motivated in its refusal to hire Milan, Jr. because of his alleged lack of moral fitness. We find it unnecessary therefore to consider whether Milam, Jr. was guilty of the bastardy charge. ' The pertinent pai t of the union contract read as follows " ( S) In times of slack- ness of work , all employees are to be retained as far as possible and laid off in rotation until normalcy has been regained Should it become necessary that some employee be laid off, then those hired last shall be laid off first , and those of seniority retained; . Seniority shall rule by departments , the respective departments being Cracker , Cake, Icing, Wrapping, Carton , Mixing, Shipping, and Receiving Departments " MOUNTAIN CITY MILL COMPANY 435 C. Conclusions concerning the alleged discrimination with, respect to the 27 individuals listed in Appendix A We are convinced from the foregoing facts that Bakery, Inc. re- fused to employ the 27 individuals listed in Appendix A in order to prevent the Union from continuing to enjoy the majority status it had among the Mill Company bakery employees and to discourage membership in the Union. When the Mill Company discontinued business on June 30, 1939, its bakery-division pay roll contained ap- proximately 107 non-supervisory employees, approximately 55 or 56 of whom were members of the Union. Bakery, Inc. hired all the non-union employees and refused employment to 27 of the union employees, whom it replaced with new non-union employees. Except possibly as to one of their number,5a the Mill Company supervisory, sales, office, and mechanical staff of the bakery division, totalling some 21 employees, all of whom were excluded from the operation of the union contract by its terms, continued in their employment in the same capacities with Bakery, Inc.- Thus, in the process of reor- gnnization, Bakery, Inc. refused employment to the 27 union mem- bers whose names are listed in Appendix A, and to no others.61 Of four Mill Company bakery employees who held office in the Union, including grievance committee posts, Bakery, Inc. refused to hire two, the vice president, Stewart Frank Kelley, and Marvin Milaan, Jr., a member of the grievance committee. 12 The record af- fords explanation of the employment of Bakery, Inc. of Luther Phillips, the president of the Union and chairman of its grievance committee, and Manerva Sutton, its recording secretary. Phillips was made a Mill Company foreman and received an increase in pay shortly after it entered into the contract with the Union in October 1938. Phillips had sat as a member of the committee which nego- tiated the contract on behalf of the Union. Thereafter on many occasions Phillips refused to accept grievances from employees $0Of the seen Mill Company bakery salesmen excluding Parks, the name of one, J B Shacklett , does not appear on the list, introduced in evidence , of Bakery , Inc. em- ployees as of July 15, 19:9 The ciiciunstances ' giving rise to such omission are not disclosed in the recoid a0 Of 11 m ' mbei s of the smpervi 0orv staff Foreman Luther Phillips was president of the Union and the name of G Venable, a foreman, appeals on Styles' certification of union members "The reorganization of the Mill 'Company mill division , where the employees were not organized in the Union, is in striking contrast to that of the bakery Although Mill Company, Inc. failed to hie 16 Mill Company mill employees, it did not employ other -persons to fill their places Thus the result was a reduction in force Moreover, the Mill Company Inc staff, unlike that of Bakery , Inc , was selected by the various depart- mental foremen and not by a contra; authority such as the Bakery, Inc personnel committee 62 The membership of the grievance committee ' consisted of the Union's officers and Milam, Jr C B Norwood , the Union's business representative , also occupied the post of financial secretar}, but lie was not an employee of either of the respondents 436 DECISIONS OF NATIONAL LABOR RELATIONS BOARD although he Was chairman of the grievance comittee; rather he sought to dissuade the employees from filing grievances through the Union and urged them to present the matters individually to the management. Either in April 1939 or shortly after the Mill Com- pany announcement to its employees in June 1939 of the discon- tinuance of the business, he indicated to Milam, Jr. in a conversation that he (Phillips) Was ready to abandon the Union completely saying that he "didn't care whether he stayed in the Union any longer or not, . . . that so far as he Was concerned with it, he Was through with it." Indeed, shortly before the respondents consummated the reorganization, Phillips disclos'd that a disproportionate number of union members would not be continued in the employment of Bakery, Inc., and attempted to effect the dissolution of the Union. When the Union authorized the calling of a strike, as set forth in Section III C, infra, Phillips suggested, in the presence of the employees, that Campbell, Jr. secure police protection at the plant to offset pickets in order to induce the employees to remain at work. Under these circumstances, we believe that the respondents regarded Phillips as more closely allied with management than with the Union. With respect to Manerva Sutton, on June 24 she inquired of Foreman Phillips whether Bakery, Inc. planned to employ her, and threatened to cause trouble in the event that unlawful union discrimination occurred. The possibility of such resistance by one of the theretofore active unionists forestalled discrimination'as to her. For these reasons, the fact that Bakery, Inc. continued Phillips and Sutton in its employment loses what probative bearing it might otherwise have on.the issue of Whether an unlawful discrimination has occurred. We do not believe, as Bakery, Inc. contends, that it based the selection of its employees exclusively upon the factors set forth in its answer and that the disparity in treatment between union and non-union Mill Company bakery employees was merely coincidental. The members of the supervisory staff of the. Mill Company were opposed to, the Union. They questioned the workers about their union membership, disparaged the Union and its leaders, belittled the advantages to be gained from union membership, sought to enlist the aid of one of the members to engage in espionage activities to ascertain the identity of employees who had joined the Union, and threatened to take steps to remove the influence of the Union from the bakery. Superintendent Shauf, who played the leading role in the selection of Bakery, Inc. personnel,63 expressed opposition to the 63 Shauf wrote all his comments on the applications before he discussed them with the other members of the committee and in all 27 cases the committee followed Shauf's decision we think it significlnt that Shauf used the plural pronoun "we" and the past tense in framing his comments He is also referred to in the record as the chairman of the committee MOUNTAIN CITY MILL COMPANY 437 Union, refused to consider relatives of union members for employ- ment because of the union activities of such employees, and threat- ened to resort to some expedient "or other" to rid the Mill Company of the Union. During the period of reorganization immediately before June 30, Foreman Phillips let it be known that the Union would lose its majority status as the result of the personnel policy planned by Bakery, Inc. After Bakery, Inc. eliminated the 27 indi- viduals listed in Appendix A, Foreman J. Cleary told a Mill Com- pany employee whom Bakery, Inc. had hired that she would meet the same fate as the 27 unless she abandoned her union activities; Forelady Vondrake rhetorically asked another Mill Company bakery employee if she did not regret joining the Union; and President Campbell by implication expressed his opposition to the Union by assembling the employees in the plant and telling them to present their grievances individually to him.e" Moreover, a consideration of the statement of the individual cases set forth above reveals that in certain instances the principal reasons advanced by the personnel committee for its rejection of the employ- ment applications of the 27 individuals listed in Appendix A did not exist. In some of these instances, the alleged ground for the refusal to hire was based upon the hearsay statement of a supervisory em- ployee who did not testify at the hearing; and the applicant involved gave testimony negativing the supposed basis for the alleged ground of rejection. In others, the alleged reasons were trivial or vague in character. Furthermore, the reasons advanced by the personnel committee, although having some foundation in fact in several cases, dc, not persuade us as being the operative causes for the rejection of the 27 union members. In many instances, the alleged reason for the rejection had existed and was known to the applicant's super- visors for a substantial period of time and yet the Mill Company neither disciplined nor criticized the applicant while employed by it. At the hearing Shauf sought to explain this failure on the ground that the Mill Company supervisory staff became lax in the enforce- 64 During the oral aigument counsel for Bakery, Inc urged that Campbell had no inter- est in the union affiliation of Bakery, Inc 's employees and had delegated the selection to be made on the basis of efhnency to three trusted super isorv eniph,yees ('.imphell's appeal however, for the individual handling of grievances negatives the assertion of his disinterest toward the self-organization of the employees Moreover, eien if contrary to Campbell's wishes, the personnel committee made a discrimmatoiy selection of applicants, Bakery, Inc is responsible for the resultant discrimination since it clothed the committee with full power to act and ratified and approved its actions despite the Union's repeated protests, heretofore discussed See, for example. Swift € Co. i. National Labor Relations Board, 106 B' (2d) '87 (C C. A 10), enf'g as mod Matter of Swift & Company, a corpora- tion and Amalgamated Meat Cutters and Butcher Workmen of North America, Local No. 6411, and United Packing House Workers Local Industrial Un on No 300. 7 N L R B 269; National Labor Relations Board v A. S. Abell Co., 97 F. (2d) 951 (C. C. A. 4), ent'g as mod. Matter of The A. S Abell Company, a corporation and International Printing and Pressmen's Union, Baltimore Branch, Baltimore Web Pressmen's Union No. 31, 5 N. L. R B. 644 283036-42-vol. 25-29 438 DECISIONS OF NATIONAL LABOR' RELATIONS BOARD ment of discipline and reluctant to discharge old employees when it learned that the Mill Company contemplated liquidation. How- ever, it is unlikely that the supervisory members of the Mill Com- pany bakery staff would have been retained by Bakery, Inc. if in fact they had seriously neglected their duties as Shauf would have us believe, or, that the undesirable employees should have been con- fined entirely to those who were union members. Indeed,' in the case of six or seven of the applicants, in effect; the principal objec- tion to their employment was found in the fact that they sought to present a grievance with respect to uncompensated overtime work to the management,65 while in another instance the applicant was rejected principally because in his capacity as a member of the union grievance committee he pressed a grievance concerning a proposed lay-off of the employees in his department. Furthermore, the union members were subjected to a rigid exami- nation of their qualifications whereas the qualifications of non-union employees of the Mill Company or entirely new non-union employees were not investigated. In accordance with the instructions of Campbell, Jr., the personnel committee submitted written comments giving reasons for the rejection of applicants who had worked in the Mill Company bakery. The personnel committee was not in- structed to give its reasons for the rejection of other applicants or for the acceptance of any applicants, and it gave none. Indeed, Shauf admitted on cross-examination that, at the time of the selec- tion, the personnel committee anticipated a "hearing." Bakery, Inc., had in its files the personnel and other records of the Mill Company, including the union membership list. Shauf, who knew the identity of employees who were members of the Union, submitted recom- mendations for the rejection of the 27 individuals listed in Appendix A and of no others. In each case the other members of the com- mittee adopted Shauf's recommendation. Every rejected applicant - was a union member, and all non-union employees of the Mill Com- pany bakery were selected for employment. Bakery, Inc. argues that, since a tendency exists in plants operated on an open-shop basis for the-least efficient employees to be the first to join a labor organization, it is natural that those rejected for inefficiency should be among those who belong to the Union. Conceding am'guenclo the validity of this assumption, it is not, however, within the probabili- ties that all rejected union,members were inefficient and all retained non-union employees efficient, or were so considered by Bakery, Inc. Moreover, while the 27 individuals listed in Appendix A could qualify as experienced bakery employees with, on the average, long service records, Bakery, Inc. hired new employees, who had no con- 66 with respect to several of this group who denied participating with the others, the supervisors believed that they joined in protesting against overtime work. -MOUNTAIN CITY MILL COMPANY 439 nection with the Mill Company, without any investigation as to their qualifications as bakery employees. In fact, they had no such prior experience. - Accordingly, we conclude from all the evidence that Bakery, Inc. did not consider all applicants for employment who had worked for the Mill Company bakery on the basis of their usefulness as em- ployees. We are convinced that Bakery, Inc. segregated those appli- cants who belonged to the Union for separate treatment; it hired all applicants who had no union affiliation on the strength of their past employment as Mill Company bakery employees without further regard to their qualifications; of the union members, in part, it rejected those applicants whose union activities, aside from Inember- ship, displeased it,66 and those whom it regarded as more readily dispensable than other union members, in order to impede the Union and discourage union membership. We do not believe, under the circumstances, that the 27 individuals listed in Appendix A, after an average service of approximately 10 years with the Mill' Company, were rejected by the personnel committee for employment with Bakery, Inc. because of the reasons it advanced, apart from those which' relate to their union membership. We find, therefore, that, except for their union membership and activity, the 27 individuals listed in Appendix A would have been employed by Bakery, Inc. at the same or substantially equivalent positions at which they had been employed by the Mill Company. Bakery, Inc. contends also that it cannot be held to have engaged in unfair labor practices by not employing the 27 individuals listed in Appendix A, for the reason that they were never employees of Bak- ery, Inc.67 It argues at length in its brief that the Act cannot be properly construed to prohibit the denial of employment to an appli- cant for a position because of his union membership or activities. We have considered this question in several cases.68 If an employer discriminates either as to hire or tenure of employment or condition of employment because of organizational affiliation or activity. thereby discouraging membership in a labor organization, he has engaged in an unfair labor practice within the meaning of the Act, 60 Such as those employees included in the "No. 10 " group discussed , supra. ei For the purposes of this decision, we assume that the employer-employee relationship did not exist between Bakery, Inc and the 27 individuals listed in Appendix A. 89 Matter of Waumbec Mills, Inc. and United Textile Workers of America , 15 N. L. R. B. 37, and cases there cited ; Matter of Phelps Dodge Corporation , a corporation and Inter- national Union of Mine, Mill ,and Smelter Woo keys, Local No 30, 19 N L R B 547; Matter ','of Milan Shirt Manufacturing Company' and Milan Improvement Company and Amalgamated Cloth -wig Workers of America, 22 N. L R B 1143 See also Matter of Southern Steamship Company and National Maritime Union of America ( affiliated with the C 1 0 ), 23 N. L. R B. 26; Matter of Sierra Madre-Lamanda Citrus Association and Benjamin H. Betz, an individual doing business as Betz Packing Company and Citrus Packing House Workers Union Local No. 20 166, 23 N L R B 143. 440 DECISIONS OF NATIONAL LABOR RELATIONS BOARD It is not a prerequisite in all cases to such finding that the status of an employee be held by the person against whom the alleged dis- crimination has been directed , for the Act expressly applies to a discrimination as to hire, and thus does not permit employers to discriminate against applicants for employment because of their union affiliation or activities. In Matter of Waumbec Mills, Inc. and United Textile Workers of America,- we.said: It is well established that the Act is not intended to interfere with the normal exercise of the right of the employer to select its employees or to discharge them. The respondent's contention, however, that the Act has no application whatever prior to the formation of the employer -employee relationship is clearly and specifically contradicted by the terms of Section 8 (3) of the Act which provides, "It shall be an unfair labor practice .for an employer-by discrimination in regard to hire 7° or tenure of employment or any term or condition of employment to encour- age or discourage membership in any labor organization: . . . " A reference to the legislative history of the Act indicates that the provision means exactly what it says .71 In addition, the broad purpose of the Act to further industrial peace by "encour aging the practice and procedure of collective bargaining" is irreconciliable with the proposition that employers may debar union applicants with impunity. Section 8 (1) of the Act likewise covers a discriminatory refusal to hire as well as a discriminatory discharge . Simply stated; Section 8 (1) makes it an unfair labor practice for an employer to interfere with, restrain , or coerce employees in the exercise of their rights of self-organization and collective bar- gaining. One form of interference , restraint, and coercion is the discharge for union membership or activities of an individual already employed. Another such form is the refusal to hire an individual seeking employmentfor the same reasons . Each is an open warning to all persons already employed, and it is the inter- fering, restraining , and coercive effect upon these employees that constitutes the violation of Section 8 (1) in both cases . Hence it is immaterial whether the individual discriminated against is already an employee or merely an applicant for employment.72 'Sec! footnote 98, supra. T" Italics supplied 41 T'"e Committee on Labor of the House in its report speaks of "Discrimination in discharge , lay-off, demotion or transfer , hire, forced resignation , or division of work; in reinstatement or hire following a technical change in corporate structure , a strike , lock-out, temporary lay-off, or a transfer of the plant" as among the various kinds of discriminations prohibited by Section 8 (3) (House Rept . No 1147, 74th Cong , 1st Sess , p 19 ; italics supplied) 12 [Citing cases.] MOUNTAIN CITY MILL COMPANY 441 Since discrimination in hiring is as telling a form of inter- ference With self-organization as any. other and as much an incitement to disputes burdening and obstructing commerce, such discrimination is plainly in conflict with both the policy and purposes of the Act. Bakery, Inc. argues also that the Act, if construed to forbid dis- crimination in selecting among applicants for employment, would violate the Fifth Amendment to the Constitution of the United States since thus construed it would compel an employer to enter into con- tracts with, or to pay money to, persons with whom the employer has no contractual relations. The position urged involves a fundamental misconception of the operation of the Act. Interdiction of discrimi- nation in selecting among applicants imposes no restraint upon the employer Which is substantially different-from the ban upon discrim- ination in discharging employees; 73 in each case the employer's free- dom to choose those with whom he desires to initiate or maintain the employment relationship, is limited to precisely the same degree. The employees' 74 freedom of self-organization, protection of which has been judicially held to justify restriction upon the employer's free- dom of choice, is equally threatened in each case if the freedom of choice may be discriminatorily exercised. Accordingly, Ave find that Bakery, Lie., by refusing to hire the 27 individuals, listed in Appendix A on July 1, 1939, and thereafter, discriminated against them in regard to hire, thereby discouraging membership in the Union. We further find that by such action and by the statements of J. Cleary to Julia Mazerole, the statements of Siddie Vondrake to Flossie Rogers, and by Campbell, Jr.'s addresses to Bakery, Inc. employees, as set forth in Section III B and D, supra and infra, respectively, Bakery, Inc. interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. D. The strike of July 14, 1939, and the refusal of Bakery, Inc. to reinstate the 15 employees listed in Appendix B As Ave noted above, on July 6 union representatives saw Campbell, Jr., protested against the employment of non-union employees to fill the jobs Which remained vacant as the result of the refusal of Bakery, Inc. to employ the 27 individuals listed in Appendix A, and requested Bakery, Inc. to employ the 27 union members; the 73 The prohibition against disci iminatory discharge violates no constitutional right of the employer. National Labor Relations Bow d v Jones & Laughlin Steel Corp , 301 U S. 1, and companion cases 'r+ We refer not io they persons refused employment but to those who are employed by the employer. 442 DECISIONS OF NATIONAL LABOR RELATIONS BOARD request was denied. The following day Foreman Cleary warned Julia Mazerole, a union member who was employed by Bakery, Inc. when it commenced operation, that unless she quit her union activi- ties, she subjected herself to the risk of treatment similar to that accorded by Bakery, Inc. to the 27 individuals listed in Appendix A. That day, July 7, the Union met, and the membership authorized the calling of a strike. At the close of work at noon on July 8, Campbell, Jr. assembled the employees in the plant. According to the uncontradicted testimony of Flossie Rogers, Campbell, Jr., inter alia, told them that there would be a picket line in front of the bakery, that they were going to pull a strike; . . . which would be illegal there would be a picket line in front of the bakery on Monday morning, and each and every one that wanted to con- tinue their service with him and hold their jobs to come on and come right to work . . . [Italics supplied.] and in response to an inquiry from Luther Phillips, Campbell, Jr. assured the employees of ample "police protection" at the plant. After an unsuccessful conference with Campbell, Jr., Shauf, and Parks on July 10, in which the union representatives notified Bakery, Inc. of the Union's intention to strike, the Union called a strike on July 14,75 and placed pickets outside the bakery. On July 14, 15 employees listed in Appendix B and Will Scudgins left the plant. Thereafter, at unstated times, at least five other employees left their work. Some of the 21 joined the picket line which included the 27 individuals listed in Appendix A. The five who left the plant after July 14, returned to work prior to October 25, 1939, the date on which the Union terminated the strike.76 On October 25, union repre- sentatives handed Campbell, Jr. a letter announcing that the Union had terminated the strike and requesting that Bakery, Inc. reinstate the employees listed in Appendix B. At first, Campbell, Jr., re- fused, saying that in the interim Bakery, Inc. had permanently filled their places with other employees, but later he stated that he would "consider the matter" of their reinstatement. Manerva Sutton, Lewis Carter Sutton, and Julia Mazerole, three of the strikers, visited the plant on October 26, 1939, and requested reinstatement. Campbell, Jr. interrogated them as to their union affiliation. When Manerva Sutton answered that the Union still represented them, Campbell, Jr. replied that he would have to "consider [their] employment." 75 On July 12 the International Union gave its permission for the calling of the strike. re Neither the exact date nor the circumstances surrounding the reinstatement of the five are disclosed in the record. MOUNTAIN CITY MILL CONIPAN] 443 Since October 25 to the date of the hearing, Bakery, Inc. has not recalled to work any of the 15 employees listed in Appendix B.77 At the hearing Manerva Sutton, Lewis Carter Sutton,", Julia Mazerole, Howard Johnston, and Flossie Rogers, 5 of the employees listed in Appendix B, testified in substance that on July 14 they were members of the Union, that they were in sympathy with the demand of the 27 individuals listed in Appendix A that they' be employed by Bakery, Inc., and that they refused to work on July 14, when the Union called a strike, because Bakery, Inc. refused to em- ploy the 27 individuals listed in Appendix A. Counsel for the Board, the respondents, and the Union stipulated that if the remaining employees listed in Appendix' B were called as witnesses they would give testimony similar to that of Howard Johnston and Flossie Rogers recorded above. Bakery, Inc. contends that the 15 employees listed in Appendix B voluntarily terminated their employment. It argues that they quit their employment because they feared physical violence from the 27 fellow members of the Union, who, unlike themselves, were unsuc- cessful applicants for employment with Bakery, Inc. In support of its defense, Bakery, Inc. offered in evidence 1-i copies of so-called Separation Notices 79 which contain statements by Bakery, Inc.80 that the employees named in the notices "voluntarily quit" for'the reason that, they were "afraid of bodily harm in crossing [the] picket line.""' The Trial Examiner excluded the '16 copies of the Separa- 97 Will Scudgins , however, was given employment on October 30, 1939. Scudgins had belonged to the Union but he was expelled from membership at an unstated time for non- payment of dues. About 2 or 3 weeks before October 30 , he visited the bakery and told Shauf that he desired to return to work , thus abandoning the strike The Trial Examiner granted the motion of Board 's counsel at the hearing to dismiss the allegations of the amended complaint as to Scudgins, which ruling we have affirmed supra. Accordingly, we will dismiss the allegations of the amended complaint as to him. 78 Referred to in the amended complaint as Louis Sutton. 79 Under Rules and Regulations adopted by the Commissioner of the Department of Labor of the State of Tennessee pursuant to the provisions of the Tennessee Unemplopment Com- pensation Law, whenever a worker is separated from his employment , except under cir- cumstances not material here, the employer is required to furnish such worker with a Separation Notice on official forms , setting forth , among other things, the cause of the separation ii The notice forms do not require the signature of the employee , and except as to those of Maude Edgeman and Julia Mazerole , the notices were not signed by the employees listed in Appendix B. In all cases they bear the signature of Bakeiy, Inc. 81 Of the 16 Separation Notices, 2, those concerning Cliff DeForrest Mansfield and Chris- tine Taylor, relate to persons other than the 15 employees listed in Appendix B While Mansfield had been employed by the Mill Company , Taylor was an applicant who was hired by Bakery, Inc. from outside the Mill Company personnel . So far as appears, neither was a member of the Union Except for Shauf's statement that Taylor "quit," the cir- cumstances surrounding their leaving the plant are not shown in the record ; they did not return to work prior to October 25 and, so far as appears , did not apply for reinstatement. Mansfield and Taylor are not included in the allegations of the amended complaint. The Separation Notices offered in evidence by Bakery , Inc related to Will Scudgins and the 15 employees listed in Appendix B, except Willie Capps and John Thomas . Bakeiy, Inc. did not offer in evidence a Separation Notice with respect to Willie Capps or John Thomas. 444 DECISIONS OF NATIONAL LABOR RELATIONS, BOARD tion Notices offered by Bakery, Inc. on the ground that they were not properly authenticated.82 However, since Campbell, Jr. testi- fied that the documents came from the files of Bakery, Inc., we reverse the ruling of the Trial Examiner and admit them in evidence. We consider now the weight to be given the Separation Notices. At the outset it should be noted that they represent self-serving state- ments of Bakery, Inc. Apart from the notices themselves, there is no evidence that those who requested the notices dictated-to Tranum that portion of the notices relating to the reason for their separation or that Tranum followed their directions in the preparation of the notices. At the hearing Lewis Carter Sutton, one of the employees listed in Appendix B, denied that he gave Tranum any instructions and asserted that Tranum drafted a Separation Notice and that lie received it in the form in which she prepared it; Julia Mazerole, another of the employees listed in Appendix B, testified that when she applied for her pay she received a Separation Notice from Tranum, and that it was filled in when Tranum presented it to her. Tranum did not testify. Moreover, when Manerva Sutton, one of the em- ployees listed in Appendix B, applied for a notice, she objected to the explanation for her absence from work which Tranum incorporated in the notice. She told Tranum that she (Sutton) left work "because of the strike" and had not quit. At Sutton's insistence, Tranum pre- pared another notice omitting the matter objectionable to Sutton. The original of the notice which Tranum ultimately delivered to Sutton did not state that she "voluntarily quit" or that she was "afraid of bodily harm in crossing the picket line" as the copy of the Separa- tion Notice relating to her offered by Bakery, Inc. purports to sliow.83 We are not persuaded that the other employees by accepting the Sep- aration Notice in the form indicated ratified the reason for severance stated therein since their primary interest was in the notice as a requisite to obtaining unemployment compensation during the period of the strike rather than in the legend, contained in such notices. Apart from the statements embodied in the Separation Notices, fur- -thermore, there is no evidence in the record that violence occurred at the bakery, that the pickets threatened violence, or that any employee feared violence. Indeed Bakery, Inc. promised to afford protection to those employees who would not support the strike, and policemen patrolled the vicinity of the plant when the picket lines formed. 82The Separation Notices offered in evidence are vaiiously dated July 17, 1S, 19, 22. and October 7, 1939 Sometime after the 15 employees listed in Appendix B left the plant they visited the offices of Bakery, Inc and icquested Separation Notices for use in connec- tion with applications they proposed to make to the State of Tennessee for benefits under its Unemployment Compensation Law Lucy Tranum, Bakery, Inc paynustress, prepared Separation Notice forms in duplicate and delivered the originals to the employees, who in turn presented them to the State Unemployment Compensation Division and received unemployment benefits. 8 The originals of the Separation Notices were not introduced at the hearing. JlOLNTAIN CITY HILL COMPANY 445 Under all the circumstances, we find that none of the 15 employees listed in Appendix B instructed Tranum to prepare the Separation Notices in the form in which they appear iud that they slid not quit for the reasons recited therein, but on the contrary obtained such notices merely as a requisite to securing State unemployment com- pensation during the period of the strike. However, even if contrary to our finding the employees had au- thorized or ratified the statements appearing on the Separation Notices, in our opinion it would not be conclusive upon the issue of the continuance of the employer-employee relationship. Apart from their own testimony SF as to their reasons for leaving their work, the evidence establishes that the 15 employees listed in Appendix B be- longed to the Union on July 14 and that the Union called a strike on that day because of the refusal of Bakery, Inc. to give employment to the 27 individuals listed in Appendix A; that the 15 employees promptly refused to work" and did not work thereafter until the Union terminated the strike; and that they applied for reinstatement immediately upon the termination of the strike. - We find that the 15 employees listed in Appendix B ceased work on July 14, 1939, and became strikers as the result of the refusal of Bakery, Inc. to hire the 27 individuals listed in Appendix A, and did not thereafter quit their employment. We further find that the strike was caused by the respondent's unfair labor practices and was a labor dispute within the meaning of Section 2 (9) of the Act; 86 that the strikers' work ceased because of the respondent's unfair labor practices and as a consequence of a current labor dispute and that they retained their status as employees within the meaning of Section 2 (3) of the Act; and that as such employees they were entitled to protection against unfair labor practices prohibited by the Act.87' When the Union applied for reinstatement of the 16 strikers on October 25, 1939, Bakery, Inc. had on its pay roll, exclusive of super- visory, mechanical, sales, and office employees, approximately the sane number of persons employed by it on July 14 when the Union called the strike. Since the bakery was operating at the same ca- pacity, Bakery, Inc. would have been able, by displacing persons hired after the strike began, to have restored all the striking em- ployees to their former positions at the time of their application for v Including the stipulation mentioned above with respect to the testimony of 10 em- plovices listed in Appendix B 85 The Union called the strike during the night of July 13. The 15 employees fisted in Appendix B refused to report for work Friday morning, July 14, and some of them joined the picket line "The onion called the strike duiing the night of July 13. The 15 employees listed in Appendix B refused to report for work Friday morning, July 14, and some of them joined the picket line. F' See, for example, National Labor Relations Board v Maclay Radio & Telegraph Co., 304 U 8 333 446 DECISIONS OF NATIONAL LABOR RELATIONS, BOARD reinstatement, or shortly thereafter. Apart from the intention of Bakery, Inc. to discriminate against members of the Union who re- mained on strike to its end, considered hereinafter, there is no show- ing in the record that the refusal by Bakery, Inc. of such reinstate- ment was based upon grounds other than the desire not to displace new employees hired since the beginning of the strike. Where, as here, a strike has been caused by the respondent's unfair labor practices, the striking employees are entitled to their former positions upon making application therefor s8 The failure of Bakery, Inc. to reinstate the striking employees listed in Appendix B, by displacing persons hired after the commencement of the strike if necessary, in effect and in result discriminated and constituted a discrimination, concerning hire and tenure of employment, of such employees. Such discrimination discourages union membership. Accordingly, we find that by the foregoing refusal to reinstate the 15 striking employees listed in Appendix B, Bakery, Inc. has engaged in unfair labor practices within the meaning of Section 8 (3) of the Act, and has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed" in Section 7 of the Act 89 Independently of the foregoing, we are convinced that the reason for the refusal of Bakery, Inc. to reinstate the strikers listed in Ap- pendix B , lay in its desire to inflict a penalty upon them for their union activities and thereby discourage membership in the Union. Of the approximately 112 employees, exclusive of supervisory, mechan- ical, sales, and office employees, on the Bakery, Inc. pay roll on October 25, 1939, approximately 50 were not employed by the Mill Company bakery as of June 30, 1939. While the employees listed in Appendix B had on the average, long service records with the Mill Company bak- ery, the approximately 50 new employees possessed no bakery expe- rience prior to their employment by Bakery, Inc.; and Bakery, Inc. offered no evidence that the new employees retained in its employ to the exclusion of those employees seeking reinstatement were continued because of their superior skill or ability. There is no showing in the record, aside from the bare assertion, that Bakery, Inc. promised them permanent positions or that it could not dismiss them without breach- I's See, for example, National Labor Relations Board v. Remington Rand, Inc, 94 F. (2d) 862, (C. C. A. 2), cert den , 304 U S 576, enf'g as mud Matter of Remington Rand, Inc. and Remington Rand Joint Protective Board of the District Council O ffice Equipment Workers, 2 N. L. R B. 626 ; Black Diamond S S. Corporation v. National Labor Relations Board, 94 F (2d) 875 (C. C A. 2), cert. den , 304 U S 579, enf'g Matter of Black Diamond Steamship Corporation and Marine Engineers' Beneficial Association, Local No. 33, 3 N. L. R B. 84; National Labor Relations Board v . The Good Coal Company, 110 F. (2d) 501 (C. C A 6), cert. den , 310 U S. 630, May 6, 1940, enf'g Matter of The Good Coal Com- pany and United Mine Workers of America, District 19, 12 N. L R. B. 136. 89 Matter of McKaig-Hatch , Inc. and Amalgamated Association of Iron, Steel, and Tin Workers of North America, Local No 1139, 10 N L. R. B. 33 ; Matter of Western Felt Works, a corporation and Textile Workers Organizing Committee, Western Felt Local, 10 N. L R B. 407; and see cases cited in footnote 88, supra. MOUNTAIN CITY- MILL COMPANY 447 ing any legal or moral obligation. Furthermore, of the strikers, Bakery, Inc. gave employment to five who abandoned the strike before the Union terminated, it, and' to Scudgins- who, although employed thereafter, informed Bakery, Inc. prior to October 25 that he desired to return to work. Moreover, when three of the strikers applied indi- vidually for reinstatement after the Union ended the strike, by inter- rogating them as to their union membership, Campbell, Jr. indicated that disaffiliation with the Union was a condition precedent to rein- statement. Such a preference as Bakery, Inc. showed in retaining the new employees can be explained only on the ground that the 15 employees listed in Appendix B were union members who persisted in engaging in concerted activities and that the others were not union members or were union members who had ceased to give it vital support. Even if, contrary to our finding, the strike was not caused by the respondent's unfair labor practices, the strikers listed in Appendix B whose work ceased as a consequence of the current labor dispute re- mained employees. Although the respondent was privileged to con- tinue the operation of its bakery with strikebreakers, it could not with impunity discriminatorily bar the strikers from employment when they made application therefor.90 In view of the foregoing, and upon the record as a whole, we find that Bakery, Inc. denied reinstatement to the 15 employees listed in Appendix B on or about October 25, 1939,, because of their union mem- bership and activities and that this constituted discrimination in re- gard to hire and tenure of employment of its employees, thereby discouraging membership in the Union. Bakery, Inc. has therefore engaged in and is engaging in unfair labor practices within the mean- ing of Section 8 (3) of the Act, and has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondents set forth in Section III above, occurring in connection with the operations of the respondents de- scribed in Section I above, have a close, intimate, and substantial 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 respondents have engaged in unfair labor practices, we will order them to cease and desist therefrom and to take 10 National Labor Relations Board v Mackay Radio & Telegraph Co., 304 U. S. 333 448 DECISIONS OF NATIONAL LABOR RELATIONS BOARD certain affirmative action designed to effectuate the policies of the Act and to restore as nearly as possible the condition which existed immediately prior to the commission of the unfair labor practices. We have found that the Mill Company interfered with, restrained, and coerced its employees in th3 exercise of the rights guaranteed in Section 7 of the Act. At the time of the hearing the Mill Company, although it was not operating an active business, existed as a corporate entity and was engaged in the -liquidation of its remaining assets. In the event the Mill Company has reentered, or shall hereafter reenter, its former business or any substantially similar business, we shall require it to post notices as hereinafter provided. We have found that the respondent, Bakery, Inc. has discriminated in regard to the hire of the 27 individuals listed inAppendix A. This discrimination took the form of a refusal to hire. Clearly the ap- propriate remedy to effectuate the policies of the Act is to require that Bakery, Inc. offer employment to the 27 individuals listed in Appendix A and make them whole for any loss of pay each may have suffered as the result of the respondent's refusal to hire them. The respondent contends that the Board lacks power to require the employ- ment of individuals who were not employees, within the meaning of the Act, at the time the discrimination against them occurred. We do not agree with this contention. Since Section 10 (c) of the Act expressly permits the Board to require upon a finding of unfair labor practices "... such affirmative action . . . as will effectuate the pol- icies of the Act," the Board is thereby empowered to order the employ- ment with back pay of individuals who were not employees of the respondent but who, absent the respondent's discriminatory refusal of employment contrary to Section 8 (3) of the Act, would have been hired and paid wages."Y We will, therefore, order Bakery, Inc. to offer immediate employment, without prejudice to full seniority and other rights and privileges, to the 27 individuals listed in Appendix A at the same or substantially equivalent positions at which they would have been employed on July 1 or July 3, 1939, as the case may be, had the respondent not unlawfully refused to hire them, dismissing if necessary to provide employment for those to be offered employment, all persons not employed by the Mill Company bakery on June 30, 1939. We have found also that the 15 employees listed in Appendix B ceased work on July 14, 1939, as a consequence of unfair labor prac- tices and that on October 25, 1939, Bakery, Inc. discriminated against them in regard to their hire and tenure and terms and-conditions of employment. We shall, therefore, order Bakery, Inc. to offer rein- statement to their former or substantially equivalent positions to the 91 See Matter of Watrnibec Mills, Inc and United Textile Workers of America, 15 N. L. R B 37 , Matter of Phelps Dodge Corporation, a corpo>ation and tnternational Union of Mine, Mill and Smelter Workers, Local No 40, 19 N L R B 547 M0U\TA1N C111 1IILL COMPANY 449 15 employees listed in Appendix B without prejudice to their seniority and other rights and privileges, dismissing, if necessary, to provide employment for those to be reinstated, all persons hired after July 14, 1939, the date of the commencement of the strike. If, after the employment of the persons listed in Appendix A and the reinstatement of the persons listed in Appendix B, there .is not, by reason of a reduction in the force of employees needed, sufficient employment available for all employees, including those to be offered employment or renlstatement, all available positions shall be distributed among the employees in accordance with the respondent's usual method of reducing its force, without chscrnnina- tion against any person because of his union affiliation or activities, following a system of seniority to such extent as has heretofore been applied in the conduct of the respondent's business. Those per- sons remaining after such distribution, for whom no employment is Immediately available, shall be placed upon a preferential list prepared in accordance with the principles set forth in the previous sentence, and shall, thereafter, in accordance with such list, be em- ployed or reemployed fit their former or substantial equivalent positions as such employment becomes available and before other persons are hired for such work. The respondent shall make whole the individuals listed in Appen- dix A for any loss of pay each may have suffered as the result of the refusal of Bakery, Inc. to hire by payment to each of a slue equal to- the amount w1 hich he normally would have earned from the date of refusal to the date of offer of employment or to the date of placement on a preferential list as aboie set forth,a' less his net earnings 9i in the interim. sa Since the July 14 sti ice was caused by the i espondent s unfau labor practices in relusmg to lute the 27 individuals listed in Appendix A and the bakery was in operation during the strike Nse will iequiie Bakery. Inc to give back pad to those 27 individuals toi the period including the duration of the strike See National Labor Relations Board v 1Villiao, Randolph flea,st, et al, 102 P (2d) 638 (C C A 9) . Matter of Hai iy Schwan to fain Co, Inc and Teat,le 'Vorheis Oigan,',ng Committee, 12 N L Il R 1139 at 1191 ; Matter of Precision Castings Company, Inc, and Iron Molders Union of Noah Amerlea, 8 N L I{ B 879 at 59:1 O' By "net e:nnings" is meant earnings loss expenses, such as for transportation, ioom, and Maid, mcuited bN an employee in connection with obtaining work and working else- wshere than for Bakery. Inc, which would not have been incurred but for the unlawful diseuinination in his or her hire of temrie of employment and the consequent necessity of his or her seeking employment elseNslreie See Matter of Crossett Lumber Company and United Brotherhood of Carpenters and Joiners of America, Lumber and Sawmill 1Vorheis Union, Local 2790, 8 N L It 11 440 Monies received for work performed upon Federal, -State'.'county, municipal, or other work-relief projects are not considered as earnings, but as provded below in the Order, shall be deducted from the suni'due the employee, and the amount thereof shall be paid over to the appropriate fiscal agency of the Federal, State. county, municipal, of other govetmnent or governments which supplied the funds for said work-ieliet projects Matter of Republic Steel Corporation and Steel 1Vorleis Organ,,-mg Committee, 9 N L I2 n 219, enf'd as modified as to other issues, Republic Steel Corpora- ho.', N L. R. B, 107 F (2d) 472 (C C. A. 3), cent: gianted, May 20. 1940. ,450 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The respondent shall make payment to each of the employees listed in Appendix B ordered to be offered reinstatement an amount equal to that which he normally would have earned as wages dur- ing the period from October 25, 1939, to the date of the offer of reinstatement, or placement on a preferential list, less his net earnings 14 during that period. Even if we were to assume that the denial of reinstatement to the striking employees listed in Appendix B was not an unfair labor practice, as contended by Bakery, Inc., we would nonetheless under the circumstances award reinstatement and back pay to the strikers in the manner set forth above. Assuming that Bakery, Inc. denied them reinstatement because their jobs were occupied by strike- breakers, and for no other reason, and assuming that a denial of reinstatement on this ground alone was not a violation of Section 8 (3) of the Act, nevertheless the entire situation was brought about by the unfair labor practices of Bakery, Inc., in refusing to give employment to the 27 individuals listed in Appendix A. In this situation, the Board and the courts have held that the ordinary right of an employer to select its, employees is qualified as the result of the unfair labor practices causing the strike, and not only are the striking employees entitled to reinstatement upon application,95 but also, any refusal by the employer of their request for reinstate- ment subjects him to liability for loss of wages sustained by virtue of the refusaL96 Under substantially similar circumstances and in language equally applicable here, we stated the basis for such order in Matter of Western Felt Works, a corporation and Textile Work- ers Organizing Committee, Western Felt Local: 17 At the time the striking employees offered to return to work, the question as to whether the respondent would itself rein- state employees whose work had ceased as a consequence of unfair labor practices or await an order of this Board requiring it to do so' reposed entirely in the judgment of the respondent. Where, as here, employees who cease work as a consequence of unfair labor practices offer to return to work, without re- ee footnote 93, supra. I'S 95 See, for example, National Labor Relations Board V. Remington Rand, Inc, 94 F. (2d) (C C A. 2). cert. den, 304 U. S. 576, enf'g as mod., Matter of Remington Rand, Inc. and Remington Rand Joint Protective Board of the District Council Office Equipment Workers, 2 N L. R. B. 626. 96 Black Diamond S. S. Corporation v. National Labor Relations Board, 94 F. (2d) 875 (C C. A. 2), cert den, 301 U. S. 579, enf'g Matter of Black Diamond Steamship Corporation and Marine Engineers' Beneficial Association, Local No 33, 3 N. L. R. B. 84 ; The M. H. R2tzu oiler Company v National Labor Relations Board, 114 F. (2d) 432, (C C A. 7), enf'g as mod , Matter of The d1 H. R2tzwoller Company and Coopers' International Union of - North America, Local No. 22, 15 N. L. R. B. 15. i 10 N L.' R. B. 407, enf'd,by consent decree, Western Felt Works v N. L. R.'B., March 25, 1939 (C. C. A. 7). MOUNTAIN CITY MILL COMPANY 451 quiring as a condition that the employer cease the unfair labor practices which, caused them to cease work, and the employer refuses to permit them to return to work, thereby depriving the employees of their jobs and attendant earnings until this Board issues a remedial order, we are of the opinion that the policies of the Act will best be effectuated by requiring that in addition to reinstatement, the employer pay back pay to the employees from the date on which they offered to return to work. Upon the basis of the foregoing findings of fact and upon the entire record in the proceeding, the Board makes the following : CONCLUSIONS OF LAW 1. Bakery and Confectionery Workers' International Union of America, L,)cal No. 25, is a labor organization within the mean- ing of Section 2 (5) of the Act. 2. By discriminating in regard to,the hire of the 27 individuals listed in Appendix A and thereby discouraging membership in Bakery and Confectionery Workers' International Union of Amer- ica, Local No. 25, the respondent, Chattanooga Bakery, Inc., has engaged in and is engaging in- unfair labor practices within the meaning of Section 8 (3) of the Act. 3. By discriminating against the 15 employees listed in Appendix B in regard to their hire and tenure of employment and thereby dis- couraging membership in Bakery and Confectionery Workers" Inter- national Union of America, Local No. 25, the respondent, Chatta- nooga Bakery, Inc., has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (3) of the Act. 4. By interfering with, restraining, and coercing their employees in the exercise of the rights guaranteed in Section 7 of the Act, the respondents have engaged in and are engaging in unfair labor prac- tices within the meaning of Section 8 (1) of the Act. 5. The aforesaid unfair labor practices are unfair labor practices within the meaning of Section 2 (6) and (7) of the Act. 6. The respondent, Mountain City Mill Company, has not engaged in unfair labor practices within the meaning of Section 8 (3) of the Act. ' ORDER Upon the basis of the above findings of fact and conclusions of law and pursuant to Section 10 (c) of the National Labor' Relations Act, the National Labor Relations Board hereby orders that the 452 DECISIONS OF NATIONAL LABOR. R ,LATIONS, BOARD- respondent, Chattanooga Bakery, Inc., Chattanooga, Tennessee, and its officers, agents, successors , and assigns shall 1. Cease and desist from : (a) Discouraging membership in Bakery and Confectionery Workers' International Union of America, Local No. 25, or any other labor organization of its employees , by discriminating in regard to hire or tenure of employment or any term or condition of employ- ment ; (b) In any other manner interfering with, restraimng, or coerc- ing its employees in their rights to self-organization, to form, join, or assist labor organizations, to bargain collectively through repre- sentatives of their own choosing, and to engage in concerted activi- ties for the purposes of collective bargaining and other mutual and or protection as guaranteed in Section 7 of the National Labor Rela- tions Act. 2. Take the following affirmative, action which the Board finds will effectuate the policies of the Act : (a) Offer immediate employment without prejudice to full sen- iority and other rights and privileges to the 27 individuals listed in Appendix A at the same or substantially equivalent positions at which they would have been employed on July 1 or July 3, 1939, as the case may be, had the respondent not unlawfully refused to hire them, in the manner set forth in the section entitled "Remedy" above, placing those persons for whom employment is not immedi- ately available upon a preferential list in the manner set forth in said section, and thereafter, it said manner, offer them employment as it becomes available; (b) Make whole the 27 individuals listed in Appendix A for any loss of pay each may have suffered as the result of the respondent's refusal to hire him from July 1 or July 3, 1939, as the case may be, to the date of offer of employment or placement upon a preferential list, less his net earnings se during that period, deducting, however, from the amount otherwise due to eacti of them monies received by him or her during said period for work performed upon Federal, State, county, municipal, or other work-relief project, and pay over the amount so deducted to the appropriate fiscal agency of the Fed- eral, State, county, municipal, or other government or governments which supplied the funds for said work-relief project; (c) Offer to the employees listed in Appendix B immediate and full reinstatement to their former positions without prejudice to their seniority and other rights and privileges, in the manner set forth in the section entitled "Remedy" above, placing those employees for whom employment is not immediately available upon a prefer- OS See footnote 93, supra MOUNTAIN Ci'i ] MILL COMA-] 453 ential list in the manner set forth in said section , and thereafter, in said manner , offer them employment as it becomes available; (d) Make whole the employees listed in Appendix B for any loss of pay each may have suffered by reason of the respondent's refusal to reinstate them on October 25 , 1939, and thereafter , by payment to each of them respectively of a sum of money equal to that which each would have earned as wages during the period from October 25, 1939, to the date of the offer of reinstatement or placement upon a preferential list, less his net- earnings 1' du ring said period, had the respondent reinstated him on October 25, 1939, deducting however, from the amount clue to each of them monies received by him or her during said period for work performed upon Federal, State, county, municipal, or other work-relief project, and pay over the amount so deducted to the appropriate fiscal agency of the Federal, State,, county, iuunicipal, or other government or governments which sup- plied the funds for said work- relief project; (e) Post immediately in conspicuous places in its plant and main- tain for a period of at least sixty (60) consecutive days from the date of posting, notices to its employees stating: '(1) that the re- spondent will not engage in the conduct from which it is ordered to cease and desist in paragraphs 2 (a) and (b) of this Order; (2) that the respondent will,take the affirmative action set forth in para- graphs 2 (ii), (b), (c), and (d) of this Order; and (3) that the respondent's employees are free to become or remain iiienibers of Bak- ery and Confectionery W'orkers' International Union of America, Local No 25, or any other labor organization, and the respondent will not discriminate ag;unst any employee because of membership or activity in that organization, or any other such, organization; (f) Notify the Regional Director for the Tenth Region, in writ- ing, within ten (10) clays from the date of this Order, what steps, the respondent has taken to comply herewith. 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, Mountain City Mill Company, Chattanooga, Tennessee, and its officers, agents, successors , and assigns, shall: 1. Cease and desist from 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 Rela tions Act. °' See huitnote 9 : sups a 283040-42-vo1 2-)--30 -454 DECISIONS OF NATIONAL LABOR RELATIONS BOARD .2. Take the following affirmative action which the Board finds will -effectuate the policies of the Act : (a) In the event the respondent or its agents, successors, or assigns has reentered its former business or any substantially similar business, post immediately in conspicuous places at its plant or office and main- tain for a period of sixty (60) days from the date of posting, notices to its employees stating that the respondent will not engage in the conduct from which it is ordered to cease and desist in paragraph 1 of this Order immediately above; or, in the event the respondent or its agents, successors, or assigns shall in the future reenter its former business or any substantially similar business, at that time immediately post such notices and keep them posted for the same period; (b) Notify the Regional Director for the Tenth Region, in writing, within ten (10) days from the date of this Order what steps the re- spondent has taken to comply herewith. AND IT IS FURTHER ORDERED that the allegations of the amended com- plaint that the respondent, Mountain City Mill Company, has engaged in unfair labor practices within the meaning of Section 8 (3) of the Act, be, and they hereby are, dismissed. AND IT IS FURTHER ORDERED that the amended complaint, in so far as it alleges that Chattanooga Bakery, Inc. discriminated in regard to the hire and tenure of employment of Will Scudgins, be, and it hereby is, dismissed. MR. WILLIAM M. LEISERSON, concurring : I concur in this Decision and Order but on another ground with respect to the 27 persons listed in Appendix A. As the main opinion states, the Mill Company bakery business and supervisory staff con- tinued unchanged although the stock ownership changed. I agree with the Trial Examiner that under all the facts in this case the per- sons listed in Appendix A. continued as employees of Bakery, Inc. within the meaning and protection of the Act, irrespective of the corporate reorganization, and their selection for discharge because of their union membership and activity by the supervisory committee consisting of Shauf, Parks, and Johnson constituted a prohibited discrimination against them. The record establishes, as the Trial Examiner found, that some time prior to June 30, 1939, when Bakery, Inc. took over the operation of the bakery, Shauf, Parks, and Johnson were appointed by Campbell (President of Bakery, Inc.) as a personnel, committee to select em- ployees for the new bakery company. During June, therefore, the three men were not only managers and supervisors for the Mill Com- pany but they were also acting in the interest of Bakery, Inc. as its designated representatives and agents. As such the supervisory com- MOUNTAIN CITY MILL COMPANY 455 mnittee stood in the relation of employer to the employees, and Bakery, Inc. is as responsible for the acts of the committee as was the Mill- Company. APPENDIX A Media Louise Bragg (Maggie) Elizabeth Wood- son Burva Batey Gussie Sharpe Claude E. Gouger Jessie M. Johnson Louise Kelley Edith Mullins Marsouvia B. Rogers George A. Stubbs Mattie Thomas Catherine Kelley William Sellars James Henry Cordell Thora Mae Heaton Stella Patty Lois Baker Kate B. Brown Mamie Aline Gouger Mattie Cornwell Bessie Murray Maggie Norman Gayton George W. Moody Marvin G. Milam, Jr. Mattie Davis Frances D. Bridge Stewart Frank Kelley APPENDIX B Earl Manning Marion Bates Willie Capps Manerva Sutton Flossie Rogers Arthur Johnston Maude Edgeman Chester Childress George Wise Sherman Hammontree George Ferguson John Thomas Lewis Carter Sutton Julia Mazerole Howard Johnston