Hearst Publications, Inc.

In the Matter Of HEARST PUBLICATIONS, INCORPORATED, A CORPORATION (Los ANGELES EXAMINER DEPARTMENT) and NEWSPAPER CIRCULA- TORS, WHOLESALE DISTRIBUTORS, AND MISCELLANEOUS EMPLOYEES UNION No. 21666, AMERICAN FEDERATION OF LABOR Case No. C-1462.-Decided July 19, 1940 Jurisdiction : newspaper publishing industry. Unfair Labor Practices Interference, Rcstr aint, and Coercion anti-union statements. Dissuading employees fiom continuing with their union by attempting to induce them to accept individual contracts in lieu of the union held 8 (1). Insisting as a condition of collective bargaining that employees accept a fixed weekly salary in place of the method of compensation then in effect, in order to destroy the Union, held 8 (1). Disci nin,atton: inducing employees to forego the union; demotion and dis- charges for union membership and activity. Remedial Orders : reinstatement and back pay awarded. Definitions District managers engaged in the distribution of the respondent's news- papers held to be employees and not independent contractors within the meaning of the Act. Mr. Franc A. Houritsen, for the Board. Hardy 'c6 Horwin, by Mr. Jack TV. Hardy and Mr. Leonard Hor- win, of Los Angeles, Calif., for the respondent. Mr. Phil Edwards, of Hollywood, Calif., for the Union. Gallagher, TVirinz, and Johnson, of Los Angeles, Calif., and Isser- man, Issermnan, and Kapelsohn of Newark, N. J., for the individual complainants. Mr. Theodore W. Kneel, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly,filed by Newspaper Cir- culators , Wholesale Distributors and Miscellaneous Employees, Fed- eral Union No. 21666,' affiliated With the American Federation of ^ Incorrectly designated in the title as Newspaper Ciiculatois, Wholesale Distributors and Miscellaneous Employees Union No 21666, American Federation of Labor 25 N L R. B, No 74. 621 622 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Labor, herein called the Union, the National Labor Relations Board, herein called the Board, by Alice M. Rosseter, Acting Regional Direc- tor for the Twenty-first Region (Los Angeles, California), issued its complaint dated September 1, 1939, against Hearst Publications, Incorporated, Los Angeles Examiner Department, Los Angeles, Cali- fornia, herein called the respondent, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting com- merce within the meaning of Section 8 (1) 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 respondent and the Union. The complaint alleged in substance that the respondent (1) dis- charged Harry Marks and William W. Shapiro because they assisted in the organization and formation of the Union; (2) discharged Edward J. Maloney because he refused and failed to discharge or transfer members of the Union to less remunerative positions; (3) discharged Phil Edwards, John J. Sisto, Jack Stoneman, Louis H. Feldschau, and Theodore E. Bragg because they joined and assisted the Union; (4) demoted and then discharged Rarold L. Walsmith because he refused and failed to transfer members of the Union to less remunerative positions; and (5) by the above acts, by criticizing and condemning the Union and its officers, by urging employees to accept individual contracts while the Union was attempting to bar- gain collectively, by advising members to withdraw from the Union, by threatening members of the Union with discharge if they failed to withdraw, by permitting and encouraging the circulation of a petition on company time and property requesting members of the Union to withdraw, by refusing and failing to discipline employees who assaulted an employee known to be a member of the Union, by refusing and failing to discipline employees who invaded the sales territory of employees who were known to be members of the Union, by refusing to meet and negotiate with a certain officer of the Union, by causing the arrest of the Union's president, and by other acts, interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. On September 16, 1939, the respondent filed its answer admitting certain allegations of the complaint pertaining to its business but denying that it had engaged in the alleged unfair labor practices. Affirmatively, the re- spondent averred that Bragg, Feldschau, Sisto, and Stoneman, al- legedly discharged for membership and activity in the Union, were not employees but independent contractors and, as such, beyond the protection of the Act. Pursuant to notice a hearing was held at Los Angeles, California, from September 28 to November 16, 1939, before P. H. McNally, the HEARST PUBLICATIONS, INCORPORATED 623 Trial Examiner duly designated by the Board. The Board, the re- spondent, and the Union were represented by -counsel or other official representatives and participated in the hearing. ,Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing upon the issues was afforded all parties. During the course of the hearing the Trial Examiner made various rulings on motions and on objections to the admission of evidence. The Board has reviewed the rulings of the Trial Examiner and finds that no prejudicial errors were committed. The rulings, with the exceptions noted below, are hereby affirmed. On January 11, 1940, the Board, acting pursuant to Article II, Sec- tion 36, of National Labor Relations Board Rules and Regulations- Series 2, ordered the proceeding transferred to and continued before it for action pursuant to Article II, Section 37, of said Rules and Regu- lations. The Board further ordered that no Intermediate Report be issued by the Trial Examiner, and acting pursuant to Article II, Sec- tion 37 (c), of said Rules and Regulations, directed that proposed findings of fact, proposed conclusions of law, and a.proposed order be issued and that the parties should have the right within twenty (20) days from the receipt of such proposed findings of fact, proposed con- clusions of law, and proposed order to file exceptions, to request per- mission to file a brief with the Board, and to request oral argument before the Board. On April 27, 1940, the Board issued its proposed findings of fact, proposed conclusions of law, and proposed order, copies of which were duly served upon the parties. Since the Board had on March 11, 1940, amended Article IT, Section 37, of National Labor Relations Board Rules and Regulations to provide that "Any party may, within thirty days after the date of the proposed findings of fact, proposed conclu- sions of law, and proposed order, file a brief with the Board," it pro- vided in said proposed findings of fact, proposed conclusions of law, and proposed order that any party to this proceeding might, without request, file a brief with the Board within thirty (30) days after the issuance of said proposed findings of fact, proposed conclusions of law, and proposed order. On May 4, 1940, the respondent petitioned the Board for an extension of the time within which to file exceptions and a brief in support of the exceptions, requesting sixty (60) days from April 29, 1940, the date on which it received said proposed findings of fact, proposed conclusions of law, and proposed order. In response to this request, the Board granted all the parties to this proceeding until June 1, 1940, to file exceptions and until June 10, 1940, to file briefs. On June 5, 1940, the respondent's exceptions to the proposed find- ings of fact, proposed conclusions of law, and proposed order and on June 10, 1940, the respondent's brief in support thereof were received 624 DECISIONS OF NATIONAL LABOR RELATIONS BOARD by the Board in Washington, D. C. On June 1, 1940, exceptions were filed with the Board in Washington, D. C., on behalf of the Los Angeles Newspaper Guild and the individual complainants herein. On the same day, a motion was filed with the Board to permit the Los Angeles Newspaper Guild to intervene in these proceedings or, in the alternative, to permit counsel for the Los Angeles Newspaper Guild to file exceptions and a brief, and to take such further steps in behalf of the individual complainants herein as deemed necessary and advisable. On June 4, 1940, the Board denied the motion of the Los Angeles Newspaper Guild to intervene. It further ordered that the exceptions to the proposed findings of fact, proposed conclusions of law, and proposed order, submitted on behalf of the Los Angeles Newspaper Guild and the individual complainants, be filed only on behalf of the individual complainants and that the individual com- plainants be permitted to appear herein by counsel. Pursuant to notice duly served on all the parties, a hearing for the purpose of oral argument was held before the Board on June 11, 1940, in Washington, D. C. The respondent and the individual com- plainants were represented by counsel and participated in the argu- ment. At the conclusion of the oral argument, the Board, at the respondent's request, granted all the'parties herein until June 21, 1940, in which to file supplemental briefs. Only the respondent filed a brief. Thereafter, the Union was given until July 8, 1940, in which to file a supplemental brief but did not avail itself of this privilege.2 The Board has considered the exceptions and briefs filed by the parties and, to the extent that the exceptions are inconsistent with the findings of fact, conclusions of law, and order below, finds no merit in them. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT Hearst Publications, Incorporated, is a California corporation with its principal office and place of business at San Francisco, California. 2 Counsel for the respondent argues in its exceptions and briefs that the Board failed to grant the respondent ample time within which to file exceptions and biiefs and to'argue' orally before the Board in Washington, D C With extensions granted , however, the respondent was allowed 35 days from the date on which the pioposed findings of fact, proposed conclusionq of law, and pioposed order were issued, within which to file excep- tions, 45 days within which to file a brief , and an additional 10 days within which to file a supplemental brief We consider the time thus granted to the respondent amply sufficient for the preparation of exceptions and briefs , particularly since the exceptions and briefs were picpaned by the same counsel for the respondent as pantncipated in the hearing With respect to the time allowed for the presentation of oral argument, the respondent 's counsel made no request for additional time either before or during the course of the oral argument HEARST PUBLICATIONS, INCORPORATED 625 It is engaged in the publication of various daily and Sunday news- papers, including the Los Angeles Examiner in Los Angeles, California .3 1 The Los Angeles Examiner is a daily and Sunday newspaper with a daily circulation of approximately 202,999 copies and a Sunday circulation of approximately 513,647 copies. It is distributed throughout the State of California, principally in the metropolitan area of Los Angeles. Of the daily circulation, approximately 3 per cent or 5,426 copies are sold and distributed outside the State of California. Of the Sunday edition, approximately 9 per cent or 51,204 copies are sold and distributed outside the State of California. Raw materials used in printing the Los Angeles Examiner include -newsprint, mats, and ink. During the year 1938 all of the newsprint, consisting of 26,894 tons, was obtained from the States of Washington and Oregon and the Dominion of Canada. During the same period all of the mats, numbering 47,100 were obtained from the State of New York. The ink used, amounting to 1,058,322 pounds, was manu- factured in the State of California. The Los Angeles Examiner uses the wire reports of the Inter- national News Service,° the Associated Press 5 and the Dow-Jones Financial Service. It uses daily approximately 85,000 words obtained from these services. The Los Angeles Examiner supplies certain wire services with local news which it has collected. In 1938 the Los Angeles Examiner received and published approximately 56 feature services, the material for many of which was prepared and originated in States other than the State of California. During the year 1938 an average of 32 per cent of the space in the daisy and 48 per cent of the Sunday issues of the Los Angeles Examiner were devoted to advertising. Of this advertising spaca 81.54 per cent contained advertising originating in the State of Cali- fornia while the remainder, 18.46 per cent, contained advertising originating outside the State of California. 3In addition to the Los Angeles Examiner, the respondent operates five papers directly (Los Angeles Evening Herald and Express, San Francisco Examiner, San Fiancisco Call- Bulletin, Oakland Post-Enquner, and Seattle Post-In tell icencer), and owns stock in the following corpoiations: (1) American Weekly Inc, a New York coip'nation which publishes "The American weekly," a Sunday magazine and comic section which is a supple- ment and pait of various Sunday newspapers, including the Los Angeles Examiner and other newspapers not pait of the Hearst oigamzation ; (2) Evening American Publishing Company, an Illinois corporation, which publishes the "Chicago Evening American" ; (3) Pitt Publishing Company, a Pennsylvania corpoiation, which publishes the "Pittsburgh Sun-Telegraph" ; and (4) The Times Publishing Company, a Michigan corporation, which publishes "Detroit Times " Cf Matter of William Randolph Hearst, Hearst Publications, Inc, Hearst Consolidated Publications, Inc, Hearst Corporation, American Newspapers Inc, and King Features Syndicate, inc and American Nenspaper Guild, Seattle Chapter 2 N L R B 530 1) , 4 For a description of the business of International News Service see Matter of lVilliam Randolph Hearst, et at and American -Newspaper Could, Seattle Chapter, 2 N L R B 530 5For a description of the Nation-wide business of the Associated Press, see Matter of The Associated Press and American Newspaper Guild, 1 N. L R B 788 626 DECISIONS OF NATIONAL LABOR RELATIONS BOARD We find that the business and the operations of the respondent, and of the Los Angeles Examiner, constitute a continuous flow of trade, traffic, and commerce among the several States. II. THE ORGANIZATION INVOLVED Newspaper Circulators, Wholesale Distributors and Miscellaneous Employees, Federal Union No. 21666, affiliated with the American Federation of Labor, is a labor organization admitting to membership employees of the Los Angeles Examiner .6 III. THE DISTRICT MANAGERS The respondent argues that Theodore E. Bragg, Louis H. I+e]dschau, John J. Sisto, and Jack Stoneman, allegedly discharged for membership and activity in the Union, are not employees but independent contractors, and, as such, beyond the protection of the Act. These 4 persons, together with 15 others, distribute the morn- ing and Sunday editions, and since May 2, 1938, the so-called red line or peach edition,7 of the Los Angeles Examiner to newsboys, stores, and other outl6ts.8 They have been at various times referred to as district men, A. M. men, independents, district managers, A. M. independents, and A. M. district managers. Herein we shall call them district managers.0 Each district manager works in an assigned geographical area, varying from 4 to 40 square miles, within which he is exclusively authorized to distribute the Los Angeles Examiner. While so en- gaged, he is prohibited from selling or distributing rival newspapers. The district managers purchase from the respondent the papers they sell to stores and newsboys. They earn the difference between the price paid the respondent and the amount received from the news vendors. A maximum resale price is set by the respondent and the district managers are free to sell the papers at any price below this maximuin.10 These and other arrangements between the respondent "As described below, a movement to disband the Union was instituted by certain of its members This culminated in the suspension of its charter by the American Federation of Labor on November 9, 1938 7 This edition is released at 5 or 6 o 'clock in the evening 8 The other outlets include coin racks , owned by the respondent and placed at convenient spots by the district managers In addition to filling these sacks with papers , the district managers are expected to insert in the racks printed cards adveitising features in the Los -Angeles Examiner ° These persons are to be distinguished from the p \i district managers in charge of distributing the evening editions appearing after the ied-line edition 10 In its exceptions, the respondent asserts that the district managers have authority to wholesale the newspapers at any piece below the retail puce of 5 cents printed on the face of the daily editions of the Los Angeles Examiner Abraham Goldberg, city sales manager. HEARST PUBLICATIONS, INCORPORATED 627 and the district managers are, for the most part, observed by custom and oral understanding. There is no written contract governing the relationship of the respondent and the district managers. In addition to their earnings from the sale of newspapers, the dis- trict managers receive an allowance of $15 a week to cover automo- bile expenses in connection with the distribution of the reel-line-or peach edition. Up to May 2, 1938, this edition was distributed by a separate organization of 12 or 14 men. For reasons of business efficiency, the respondent disbanded this organization and turned the distribution work over to the district managers. Although the re- spondent contends that the district managers were afforded the option of assuming this work, it appears that they were given little choice in the matter.'1 Up to the time the district managers assumed distribution of the red-line edition, they received a weekly salary of $7.50 and were listed on the respondent's pay roll." Thereafter the weekly salary was eliminated and the district managers removed from the respondent's pay roll. The respondent maintains employees, known as checkers, who are i egular]y sent out to inspect the work of the district managers, and ascertain whether the district managers properly handle their terri- tories. The checkers make detailed written reports to the respondent of coverage, recoverage 13 sales, distribution, and display. The dis- trict managers are informed if the checkers discover any faults in their territories. Similarly, they are notified if any customer com- testified, however, that he understood that the district managers were required to charge 31/3 cents for the daily newspapers, and John J Sisto. a district manager, confirmed that Goldberg instructed the district managers to resell the daily editions at 31/3 cents a copy, warning that if I catch anybody selling any papers for 4 cents, he will be fired " Moreover, in an offer of proof which the Trial Examiner accepted, the respondent admitted that it would not per- mit the district managers to wholesale the newspapers at a price which would curtail circu- lation That is, if a district manager raised the price of the Los Angeles Examiner higher than a competitive newspaper and this tended to decrease circulation, the respondent would. upon learning these facts, direct the district manager to reduce his puce The following notice, typical of many other instiuctions given to district managers in i ounce tion with Iheir work was sent to each district manager Effective Monday May 2, the independent A ill Dealers [district managers aie to take omei the Red Line Newsstand, business within their present territories They are to personally make delivery to the newsstands or cause delivery to be made to the news- stands every night except Saturday night Irving I Sokol, a ilistiict manager called as a witness by the respondent, testified that the respondent informed the district managers "that they weie to take over the P M newsstand suns; that the papers were to cost us two and one-half cents, fully returnable, and we were to get a $15 00 check for car allowance " i' This nominal salary was not paid to the district managers but credited to their accounts On or about May 2. 1938, the accumulation was substituted for fidelity bonds carried up to that time The respondent paid a social security tax and other pay-roll taxes on this salary r,The distuct manager distributes a specified number of copies to each customer on his first round He is then expected to make an additional trip or iecovery and supply such dealers with, papers as are in need of them 628 DECISIONS OF NAT1ONAL LABOR RELATIONS, BOARD plains to the respondent about them. The respondent expects them to correct such matters as are brought to their attention. The district managers do not observe any precisely fixed hours. They are expected, however, to report to the respondent's plant at or about the time the edition they are to distribute comes from the press. To inform the respondent that they have received their papers, the district managers sign a printed form supplied by the respondent. Each Wednesday, the district managers meet infor- mally with the respondent and receive instructions for the handling of their territories. They also return their unsold newspapers from the preceding week and place orders of papers for the ensuing week. Prior to June 1938, the district managers were told how many papers to purchase and inserted that number on their order slips. To pad its circulation, the respondent compelled the district managers to buy many more papers than they could possibly sell. It also refused to allow the district managers to return all of their unsold papers. Such returns as were refused by the respondent were referred to as "rejects." In the parlance of the trade, the district managers were required to "eat" the rejected newspapers. 14 In June 1938 the re- spondent limited this practice by agreeing to require the district managers to "eat" only 10 per cent of their daily orders.15 The district managers employ helpers or swampers to assist them in their work. They control the details of the helpers' or swampers' work and have the power to hire and discharge them. In order to "stuff" or assemble the various sections of the Sunday edition,16 to store papers, and for other similar purposes, many of the district panagers rent and pay for offices or "wholesale spots." 11 In our opinion, the district managers are employees within the -meaning of the Act. As we have stated, "the statutory definition -of the word employee is of wide scope. As used in the Act, the term embraces `any employee,' that is, all employees in the conven- tional as well as the legal sense, except those by express provision excluded. The primary consideration is whether effectuation of the 11 The respondent reimbursed the district managers for some of the papers they were required to "eat" by giving them excessive promotional or expense monies or by paying them for the fictitious sale of cards This subterfuge was employed to avoid detection by the Audit Bureau of Circulation, a bureau engaged in auditing and certifying for use in the sale of advertising space the circulation of newspapers and other publications ",Some of the district managers, including Robert Tainter called as a witness by the respondent and still in its employ, asserted that the'respondent did not adhere to this agree- ment and that they were iequiied to "eat" more than 10 per cent of their daily order. 10 Until April or May 1035, the Sunday edition ooas "stuffed" by the mailing department Thereafter the respondent directed the district manageis to assume this duty 17 Describing these "wholesale spots," Edward J Maloney, one time supervisor of the dis- trict managers. stated "They were in garages and alleys and so on and so forth They were not an o(iice They were for a store i oom to stuff papers" HEARST PUBLICATIONS, INCORPORATED 629 declared policy and purposes of the Act 18 comprehends securing to the individual the rights guaranteed and, the protection afforded by the Act." 19 The district managers occupy positions comparable, in all substantial respects, to persons indisputably identified as employees. They per- form a continuous and indispensable job for the respondent. Their relationship with the respondent is terminable at will by either party. They work substantially the same hours each day and they may sell only the respondent's newspaper. While the district, managers are compensated by the difference between the purchase and resale price, the respondent retains effective control over their earnings. In April 1938, it•raised the price to district managers of the morning edition by 1/2 a cent. Up to June 1938, it required district managers to pur- chase as many- papers as it directed. While the practice of "eating" papers, was thereafter regulated, the inherent power to, increase or de- crease, the quantity.of papers, the district managers must purchase remains with the respondent. The respondent thoroughly checks the work.of the district managers and directs them to correct faults found in their territories. The record is replete with other instances of con- trol by the respondent of the work of the district managers.2' That inW n Iii ' construing the term "agricultural laborer ," the Circuit Court of Appeals in North Whittier Heights Citrus Association, a corporation and Citrus Packing House Workers Union, Local No 21091, 109 Fed (2d) 76 (C,C A 9) enf'g North Whittier Heights Citrus Asso- ciation and Citrus Packing -Louse 1Vor1eis Union, Local 21091, 10 N L R B 1269, noted that "When the product of the soil leaves the former, as such, and enters a factory for processing and marketing it has entered upon the status of 'industry' " and added that "In• this status of this industry there w ould seem to be as much heed for the remedial pro- visions of the Wagner Act, upon principle, as for any other industrial activity." So, too, as between the respondent and the district managers there would seem to be as much need for the remedial provisions of the Act, upon principle , as between the respondent and persons admittedly employees In this connection , it is interesting to compare the A. M distiict managers with the P M distiiet managers who distribute -the evening editions of the Los Angeles Examiner The respondent admits that these persons are employees They receive a weekly salary, work a specified number of hours, receive regular vacations, etc. Yet their work-the distribution of newspapers-is the same as that of the A. M. district managers. iS Matter of Seattle Post -Intelligencer Department of Hearst Publications, Inc and Seattle Newspaper Giisld, Local No. 82, 9 N L R B. 1262 See also Matter of Federal Ice it Storage Company and Produce Drivers and Employees Union, Local No 630, 18 N L R B 161; Matter of American Scale Company and Fi ank Daaenport, et at, 19 N L B B 124 , Matter of The Park Floral Company and United Greenhouse and Floral Workers Union No 510 of the United Cannery, Agricultural, Packing and Allied Workers of America, affiliated with the Congress of Industrial Organizations, 19 N. L. R B 403 °In Matter of Seattle Post-Intelligencer Department of Hearst Publications , Inc. and Seattle Newspaper Guild, Local No 82, 9 N. L. R B 1262, We said of persons performing similar functions to those of the district managers for another newspaper owned and operated by tile respondent . We••entertain no doubt that motor route drivers are employees within the legisla-, tive 'intent. Their position is relatively that of employees generally. The work they perform ig a functional part of the business of the Newspaper , subject in large measure to the control and right of control of the Company as to manner and mode of execution . Performance concerns not so much the accomplishment of any specified 283036-42-vol 25--41 630 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the district managers employ and pay assistants and rent "wholesale spots" is not sufficient to place,them beyond the pale of the Act.21 We find that the district managers are employees within the mean- ing of Section 2 (3) of the Act. IV. THE UNFAIR LABOR PRACTICES A. Interference, restraint, and coercion Employees in the respondent's circulation department began to organize a union in the spring of 1938.222 Their efforts grew out of a multiplicity of causes . In March 1938 the respondent's publisher, gen- eral manager, and circulation director were replaced by Carrington, Major A. F. Logan, and John M. Black, respectively. This aroused in employees the suspicion that other changes would follow.23 Also, the respondent had previously eliminated the fictitious promotional ' and expense monies it had been extending to the district managers in order to reimburse them for the papers they were required to "eat" in fur- therance of the respondent's scheme to pad the circulation of its news- paper. As a result, as B. B . Marcum, then circulation manager, explained, "there was certain discontentment on the part of the em- ployees not making enough money, they were working too many hours." Phil Edwards, then employed as a country and suburban roadman, was most active in the drive to organize the respondent's circulation result as continuing operation In close association with the entire enterprise of the Company. The drivers have no real interest in the business and good will represented by the subscription lists ; the business and good will are in fact the property of the Company available at any time to its exclusive enjoyment by termination of the drivers' contracts. The drivers cannot act as employees or representatives of any competing publishers without the Company 's assent but must devote their effort to securing new subscribers for the Company 's newspapers. We do not consider the method by which the drivers are compensated as inconsistent with their employee status In addition to the weekly allowance for car expense and carriage of,bundles they receive the difference between the so-called purchase pi ice and the regular sub- scription price. Inasmuch as the drivers deal only with newspapers delivered to subscribers their return is analogous to earnings measured by the number of subscrip- tion deliveries rather than profit from an independent business. 21 In The Park Floral case , cited above, we said , in considering employees engaged by persons alleged to be independent contractors : "Moreover , since the growers are em- ployees of the Company, the assistant grocers, helpers , and assistant helpers are its employees . This would be tine under general law, even though the growers did the hiring. That the growers , helpers, and assistant helpers are paid weekly by the growers out of a weekly advance by the Company to the growers does not establish that these workers are employees of the growers and not of the Company." 22 At first the Union included employees other than the A M district managers it resolved eventually , however , into an organization composed primaiily of A. M district managers 23Aithur Hampson , then a P M. district manager , added another reason stemming from- the changes in personnel . He said : "Well , with the new management coming in and the new management out asking the men , questioning, which they felt should have, been asked by their superiors , it made a dissension among the men ; there was something wrong " HEARST PUBLICATIONS, INCORPORATED 631 employees. In the middle of May 1938, he convened °a meeting of several employees and with them planned them formation of a union. The respondent was aware that its employees were contriving to estab- lish a union and that Edwards figured prominently in'these efforts.24 The Union held its first formal meeting at the home of Robert Tainter, a district manager, on June 14, 1938. All of the 19 A. M. district managers attended this meeting. Representatives of the Ameri- can Federation of Labor were present and explained to the district managers the benefits obtainable from a union. Each district man- ager then signed an application for membership and paid $1 on account of an initiation fee of $2.50. On the following night, the Union initiated members and elected -Edwards as its president. Five days later, on June 20, 1938, as we describe below, the respondent sought to transfer Edwards to Arizona because of his activity in the Union. In other ways the respondent opposed the efforts of the district managers to organize. On June 16, 1938, the respondent appointed Harold L. Walsmith, a district manager, as supervisor of all the A. M. district managers and instructed him, as we find below, to thwart the growth of the Union. In compliance, Walsmith suggested to Abraham Goldberg, his superior,25 a few days after his appointment that "maybe we could get the men to agree to take individual contracts." Goldberg favored this plan, discussed it with Black, and then instructed Wal- smith to "inform the men as to that point." Thereafter Walsmith spoke "to quite a few of them [district managers]" about accepting individual contracts. Stanley Serdynski, a district manager called as a witness by the respondent, testified that Walsmith asked him his opinion about individual contracts, commenting that "I think you boys will be foolish if you don't accept them" and that "it would be a might [mighty] good idea, to accept individual contracts rather than to join any union." Robert Tainter, another district manager'26 as- serted that Walsmith advised him "that we had better take them [individual contracts] if we knew where our bread was buttered, or something to that effect." Another district manager, Jack Stone- man, explained that Walsinith told him that "Black was very insis- tent that at this time we make up our minds about it, that he ex- 24 The respondent asserts that this meeting never took place. In support of this con- tention it called as witnesses A. M. district managers who testified that they had not heard of nor were they apprised of this meeting. However, Abe Pierce, a district manager testifying for the respondent, admitted that he had heard of the meeting although he was not invited to attend And the affirmative testimony of witnesses who stated that they were present at this meeting was not rebutted 25 Black, the circulation director, employed Goldberg and placed him in charge of the distribution of the morning and evening editions of the paper. He began to work for the respondent on May 16, 1938 25 Called originally as a witness by the respondent. 632 DECISIONS OF NATIONAL LABOR RELATIONS BOARD pected us to . . ." The other district managers, Irving Sokol 2' and John J. Sisto, also testified that Walsmith spoke to them about indi- vidual contracts. While "other district managers denied that Wal- smith discussed individual contracts with them, we are satisfied and find that the respondent, through Walsmith, sought to induce the district managers to accept individual contracts in place of the Union. Our funding is corroborated by other facts appearing below. Stoneman also testified that within the week following the Union meeting of June 14, 1938, Goldberg asked him what he "thought of a contract, an individual contract" and directed him to "contact Wal- smith down at the Examiner and see if we could get together on an - individual contract." During this conversation, Goldberg asked Stoneman "what advantage I believed that our union would do for us, what we could obtain" and commented on the "stinking little un- ion that would never amount to anything." Goldberg admitted that - Stoneman conversed with him in June 1938, and "mentioned some- thing about the Union." He maintained that he said in reply, "Jack, I don't give a damn about it, and the Company feels just that way." We are not impressed, with his testimony and we credit the account given by Stoneman.28 Moreover Stoneman's testimony jibes with Walsmith's efforts to persuade district managers to accept individual contracts. On June 30, 1938, at a conference of district managers called by the respondent, Black admittedly offered them individual contracts. This offer was considered by the district managers at a meeting of their own held thereafter on the same day. At this meeting the dis- trict managers decided to "go on with our union and forget the individual contract." 29 27 Also called as a witness by the respondent. These statements of district managers called as witnesses by the respondent gain significance when we consider that after the respondent discharged Bragg , Feldschau , Sisto , and Stoneman , it divided their territories among the remaining district managers . These witnesses appreciated that if the Board ordered any of the complaining district managers reinstated , the size of their territories would be diminished accordingly 28 As we describe in detail below , Goldberg was instrumental in preparing and inducing Walsmith to sign a false affidavit retracting a statement he had previously filed with the Board Such conduct places an indelible mark upon his credibility as a witness. Nor do we believe that Walsmith 's participation in this fraud reflects to the same extent upon his credibility as a witness Walsmith bad been discharged by the respondent shortly before he signed the false affidavit He was seeking reemployment and had experienced difficulty in securing a return of monies posted with the respondent as security. See Section IV, 2, infra. 29 The respondent maintains that the district managers first broached the subject of individual contracts at a meeting with Black on June 16, 1938, when they suggested that they might be "better off in the same classification with the suburban and country dealers ," who held individual contracts , than in a union . Black allegedly said that he would "take it up with the legal department and see what we can work out in the way of a contract and I will let you hear from me." Then on June 22 , 1938, at another meet- ing of the district managers, Black allegedly reported that he "hadn 't had an opportunity to sit down with the legal department , but that I would do it in the very near future" And finally on June 30 , 1938 , the offer'of individual contracts 'was made with the approval HEARST PUBLICATIONS, INCORPORATED 633 After the district managers voted to reject individual contracts and "to go on with our union," a committee of the Union opened negotiations with Major A. F. Logan, the respondent's business man- ager, looking toward the formulation of an agreement. Meetings, continuing to the latter part of September or the first part of October 1938, were held at intervals of 2 or 3 weeks. Throughout these nego- tiations the respondent insisted that the district managers were inde- pendent contractors and unqualified to obtain the protection and benefits of collective bargaining. This position was well expressed by Logan who testified "that I would not permit them to assume the protective cloak of a union contract as employees and retain their compensation on a profit basis." It was confirmed by members of the union negotiating committee who testified that Logan "made the re- mark that we either had to represent ourselves as employees, or we couldn't very well • be independent contractors and employees and expect [the respondent] to negotiate with us." In accordance with its position,, the respondent tendered, as a counterproposal to a con- tract submitted by the Union, an agreement whereunder the district managers would be placed on the respondent's pay roll at a fixed weekly salary.30 Primarily because the respondent insisted that the district mana- gers accept a fixed weekly salary to qualify for the benefits of col- lective bargaining, a movement to disband the Union started, cul- minating in the suspension of its charter on November 9, 1938. This movement was under way as early as September 1938, when a group of district managers informed Black, as he testified, that they "didn't want to work on a salary basis, and that a lot of the fellows was in it [the Union] and now they wanted to get out of it, and they wanted to ask my advice about it." 31 In the early part of October 1938, Joe Bonansinga, who favored disbanding the Union, circulated a petition among the district managers providing space for signatures either of the legal department The Union agrees that the respondent offered individual con- tracts to the district managers at this time but insists that it was the first time that it was mentioned in meeting with Black . Both parties agree that after this meeting, the district managers voted to reject individual contracts and continue with the Union We are satisfied, in the light of all the evidence , that the offer of individual contracts came originally from the respondent . For one thing, if the district managers first tried to obtain individual contracts, it is unlikely that they would have rejected the counteroffer when it was made. Then there was considerable dispute during the hearing as to the dates of these various meetings with Black in June 1938 The materiality of this line of inquiry went mainly to the credibility of witnesses The record fails to suppoi t the testimony of the respondent' s witnesses as to the dates of these meetings . In addition, the respondent's contentions are negatived by Walsmith 's efforts to induce the district managers to accept individual contracts 3o Black testified that if the district managers had accepted this agreement , the respond- ent would have saved $2 ,000 a week. s' Black replied to the district managers that if they found a way into the Union they should be able to find a way out. He refused to elaborate, explaining that he was not thoroughly conversant with his rights and duties under the Act. 634 DECISIONS OF NATIONAL LABOR RELATIONS BOARD under the heading "To Return Charter" or "To Retain Charter." Thirteen district managers signed to return the charter; only one, Tainter, elected to retain the charter; the remaining four district managers did not sign the petition.32 After the petition was circu- lated, it was delivered to the offices of the American Federation of Labor and a copy was given to Logan. The record establishes and we find that the respondent opposed the organization of a union among the district managers first with a campaign to induce them to accept individual contracts and, when that failed, with determined insistence that the district managers accept a fixed weekly salary as a qualifying prerequisite to the rights and benefits of collective bargaining. Its enforcement of this condi- tion effectively weakened and then dissolved the Union. The respond- ent, of course, could have insisted upon fixed salaries as a counter- proposal in bargaining collectively with the Union. But Logan main- tained that the district managers were not 'entitled to bargain collec- tively unless they accepted a fixed salary. This proposal was made, it is apparent from the record, not in connection with bona fide collective bargaining, but for the express purpose of compelling the employees to renounce the Union and abandon collective activity. In its exceptions and briefs, the respondent argues that it would have gained financially had the district managers successfully organ- ized a union and hence that it did not oppose, but in fact encouraged, their efforts. This financial gain, however, was the alleged $2,000 a week the respondent would have saved if the district managers agreed to work for the fixed salaries Logan offered as a counter-pro- posal. Far from establishing that the respondent looked with favor upon the organization of a union, these facts tend to confirm the contrary. For Logan insisted that the district managers had to accept fixed salaries in order to qualify for "the protective cloak of a union contract." In substance, the district managers were told : "You may not have the benefits of a union unless you accept fixed salaries and if you agree to fixed salaries, you will lose $2000 a week." As between the alternatives specified by the respondent-rejection of the Union or a reduction in earnings-the district managers chose the former and proceeded forthwith to disband the Union. As Joe Tellerman, a member of the group of district managers who succeeded in dissolving the Union, explained : "If I belonged to the Union, I would have to work on a salary, and I didn't care for that. I wanted to remain the way I was working as an independent contractor." 32 At this time there were only 18 district managers. Sisto, the 19th (district man- ager), either quit or was discharged in August 1938. See Section IV, B, 5, infra. No one was appointed permanently to take his place. Bragg, Feldschau, and Stoneman, who were opposed to the disestablishment of the Union, refused to sign the petition. C. H. Wilson was the other district manager who did not sign the petition . Although he testified dur- ing the hearing, he did not explain why he failed to sign. HEARST PUBLICATIONS, INCORPORATED 635 We find that the respondent, by conspiring to induce employees to accept individual contracts in place of the Union, by insisting upon conditions of employment in order to destroy the Union, by advising employees to forego the Union, and by speaking disparagingly of the Union, has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. Although the complaint alleges that in violation of the Act, the respondent encouraged and permitted the circulation of the petition above described on company time and property, and caused the arrest of the union president, we do not find that these allegations are sup- ported by the record. We shall, accordingly, dismiss that part of the complaint. B. The discriminatory discharges 1. Phil Edwards a. Chronology Edwards began to work for the respondent as a newsboy in 1920. From the latter part of 1933 or the early part of 1934 to May 1937, he was employed as supervisor of the district managers. In May 1937, he was appointed country and suburban roadman, the position he occupied at the time he was either discharged, as the Board alleges in the complaint, or resigned as the respondent avers in its answer. As stated above, Edwards became active in organizing a union timong the district managers in the spring of 1938. In the middle of May 1938, he assembled a group of employees and with them agreed "to band together for the purpose of organizing and promoting an A. F. L. Union among the District men at the L. A. Examiner [Los Angeles Examiner]." When the Union emerged, Edwards was elected its president. The respondent was aware of Edwards' activi- ties. In May 1938, B. B. Marcum, the circulation manager, learned from Edwards that he intended to secure a -charter for the district managers. He advised Edwards, as he testified, that "I think you are crazy. You have a pretty good job here, and why the hell don't you go along and play ball." 33 Thereafter, Marcum informed Black of Edwards' efforts to organize the district nanagers. On June 14, 1938, the district managers met with Black to discuss their intention to form a union 34 Edwards appeared as spokesman for the district managers. Although Black knew that Edwards was 33 Marcum explained that he so advised Edwards "probably because it has been instilled in me, working for the Examiner-for many years, since we were not in favor of any organization going on if we could satisfy them some other way." 34 There was considerable conflict during the heat ing as to whether this meeting occurred on June 14 or 16, 1938. We are satisfied from the record that it took place on June 14, 1938. 636 DECISIONS OF NATIONAL LABOR RELATIONS BOARD prominent in the organizational activities of the district managers, from information brought to him by. Marcum, he objected to Edwards' presence on the ground that as a country and suburban roadman he was an "outsider." After a time, however, Edwards was permitted to explain why the district managers were -organizing. On June 20, 1938, Edwards was told by Abraham Cohen, his imme- diate superior, that "I have orders to transfer you to Arizona." Edwards protested, asserting that during the summer it was unnec- essary to have a roadman in Arizona. He expressed the opinion that this transfer was a subterfuge to get him "out of the way because I organized this union and I am the president of such." At the hearing, he testified that Cohen replied, "Well, Phil, you've got your own self out on the limb, by doing such." Cohen admitted that Edwards objected to this transfer on the ground that the respondent did not need him in Arizona. He did not remember whether they discussed matters pertaining to the Union.35 He also testified that he advised Edwards "that there was a good chance for him to weather the storm if he would get away from local influences." 311 We are satisfied and find that Cohen informed Edwards that he had gotten himself "out on the limb" by engaging in union activities. According to Edwards, he then suggested to Cohen "Instead of going to Arizona, I have got about 6 weeks' vacation coming counting this year. What about me taking that?" and that Cohen, after con- sulting Black, returned in a few minutes, and said that Edwards could take his vacation. Cohen maintained that Edwards insisted that "he would rather take a six weeks' severance pay or vacation pay and resign." Black confirmed that Cohen reported to him that Edwards had refused to accept the job in Arizona and had said that he "would rather get out of the picture if, we could fix up about a six weeks' vacation for him." However, Edwards spoke to Logan, $5 Concerning this question, he testified as follows : Q. (by the respondent's counsel) Was there anything discussed in that conversa- tion with Mr. Edwards on the 20th about the union at all or about any organization or his membership in any union? A. I don't remember Q Is it that you don't remember the conversation or you don't remember having said that' A There were several occasions where I talked to Phil and at the mention of union activities I always had one answer s a s • s n s Tnal Examiner MCNALLY Now, I think counsel's question was, was any mention made by either you or Edwards in that conversation about union activities? Was anything said at all about it? Do you recall? The WITNESS. I don't remember. 3e By this he meant, Cohen explained, "the atmosphere or attitude of Phil due to change of administration-Phil Edwards was very friendly with the men in charge of the old administration-and there was a lot of new activities developing under the - or, from the time Mr. Black arrived we were starting in a lot of promotion work, and his particu- lar activities along the beach towns, wwere not exactly one hundred per cent, and it was just that condition that existed." HEARST PUBLICATIONS, INCORPORATED 637 the respondent's business manager, immediately after his meeting with Cohen and it is clear from their conversation, as described below, that Edwards did not resign but sought and obtained a 6 weeks' vacation in lieu of accepting the assignment in Arizona. Edwards opened the conference with, Logan by informing him of his transfer to Arizona. Logan replied that it was news to him. Edwards testified that Logan then advised him to take the job for 6 or 8 weeks and that in the meantime he would speak to Black "and we can straighten this thing out," but that Edwards protested that "Arizona is 500 miles from Los Angeles and I would be absolutely no good to the union, no good to you or anyone else." To this Logan replied that he could arrange for Edwards to go to San Francisco. Edwards also objected to this proposition and told Logan that it was merely "a scheme just to get me out of the way so that you can go ahead and disrupt this union while I am away." Concluding however, that it was futile to resist this transfer, Edwards mentioned to Logan that he was entitled to a vacation of 6 weeks. Logan replied that "if you got it coming, Phil, you can take it." Arrangements were then made for Edwards to leave immediately. Concerning this conversation, Logan testified that he instructed Edwards that he would have to accept the assignment given him by his superiors. He admitted that "the subject of him having a job in San Francisco came up." He maintained, however, that he told Edwards he had no authority in San Francisco but that he would be "willing to help him get a job in San Francisco if that's what he wanted." He denied that Edwards said that the respondent was transferring him in order to obstruct his activities in behalf of the Union. He confirmed that Edwards,asked him for a 6 weeks' vaca- tion and that he replied "Okay. If `you think you have got cumu- lative vacations coming for that long, I will give them to you." He also admitted saying, "Go ahead and go some place and go fishing for a few weeks and by the time you get back here I will probably have it all smoothed out and you can come back to work again." 37 In the light of all the evidence we find that this conversation between Logan and Edwards occurred substantially as Edwards testified. Black gave testimony concerning the respondent's decision to send Edwards to Arizona. He explained that in June 1938 an employee named Warden, stationed in Pasadena, California, was discharged for drunkenness. As a replacement, Cohen recommended Gillis, who was employed in Arizona and Black agreed.38 Then in determining s7 Logan did not explain what had to be "all smoothed out " 38 Cohen alleged that Gillis requested that he be transferred from Arizona Gillis did not testify. 638 DECISIONS OF NATIONAL LABOR RELATIONS BOARD who should replace Gillis, they considered each man on the pay roll. "We came to Edwards' name and Cohen said, `I believe that Edwards can do a'job in Arizona. He was over there on a special assignment for Al Williams a year or so ago. He understands street and news- stand sales. In fact, that is what he specialized on. I believe he can do a job over there."' Black answered, "All right, sir. Put him on there." 39 Arizona and other outlying areas served by the respondent are known as "predate" territories inasmuch as the regular edition of the newspaper cannot reach them on the date of publication. Special Sunday editions, with advanced date-lines, are issued for these ter- ritories. Ordinarily, as Marcum explained, the respondent keeps employees in Arizona for only 9 months of the year, removing them during the slow summer months. The respondent claims, however, that during the summer of 1938 it was in the midst of a promotional drive for increased circulation and, therefore required a man in Arizona. Black testified that he remarked, in passing upon a sub- stitute for Gillis, that "we know we are going to slump in Sunday pre-date sales, but we want to hold the slump as low as possible because anything we save on a natural slump we save." Besides Gillis, the respondent had Mike Ryan and another em- ployee, named Downey, in Arizona. At the same conference during which Cohen allegedly recommended that the respondent transfer Gillis to Pasadena, he informed Black that "he was moving Mike Ryan [from Arizona] down to New Mexico and Downey was taking over an agency, I believe, and he [Cohen] was putting Hart [a new man] in Colorado." Although the respondent was insistent that Gillis was assigned to Pasadena in place of Warden,40 Black testified, at the commencement of the hearing, before the Board presented its case, as follows : Q. (by the respondent's counsel). Directing your attention to on or about June 14, again, Mr. Wes Warden, he was let out as a road man, was he not? A. Yes, sir. 31 Earlier in the proceeding , the respondent's counsel stated that he would prove that Edwards was transferred to Arizona because "there was a need in the Arizona territory for the services of a man like Edwards" and also because "he was not an efficient and useful employee on the territory in which he then occupied ." In support of the latter reason, the respondent 's counsel sought to have Cohen testify that Edwards was not per- forming his job properly and that "this would be testified to by Mr Cohen as being in the conversations which he had with Mr. Black relative to that transfer " The Trial Examiner rejected this offer of proof Black testified thereafter . From his description of the con- versation between Cohen and himself , as described above, it appears that they discussed only the first of the two alleged reasons for the transfer. a On June 25, 1938, according to Cohen 's testimony. HEARST PUBLICATIONS,. INCORPORATED 639 Q. And who replaced Mr. Warden, if anyone? A. A man by the name of Hart. Q. Mr. Hart? A. Yes. Q. Where did Mr. Hart come from? A. New York. Black's testimony tends to establish that the respondent assigned Hart to Warden's job in Pasadena on June 14, 1938. Later, it trans- ferred Hart to Colorado and Gillis to Pasadena. And since only one man was, needed in Arizona during the summer, the respondent also transferred Ryan and Downey. After these shifts were made (which, ,but for the transfer 'of Gillis, were not explained) there existed a vacancy in Arizona. After Edwards left on his vacation, as Black testified, the re- spondent made the following changes. It brought Ryan back from New Mexico to Arizona and gave Downey a part-time job, "out of Albuquerque to handle what he could of New Mexico.741 Edwards first went to Catalina on his vacation but after a few days he returned to Los Angeles. While in Los Angeles he was advised by Stoneman and Sisto that the respondent was trying to break up the Union. Sisto sent him a note stating that "They're presenting us with a contract (Individual) today for a year and I don't know what the set up is, but it seems to me they are trying to break that business [Union] up. If you can please get in contact to-day. 1142 Edwards immediately went to the respondent's offices and spoke to' Logan. He testified that Logan said to him, I am God damned sore about you," since "you told me you were going on your vacation, that you were going to Catalina or some place and do a little hunting or fishing. Now I find you are back around my office agitating for this damned union and causing me a lot of trouble." Edwards replied that he would not be "agitating"' if the respondent had not attempted to disrupt the Union the minute his back was turned. Logan then said that Edwards was through with the re- spondent and Edwards answered that "there is, only one course left for me, and I imagine that is to take protection from the Wagner Act and go to the Labor Board." Logan reported, "Labor Board or no Labor Board, as far as I am concerned you are through." Ed- wards left but returned in a few minutes to have Logan verify that he was discharged. During this portion of the conversation, Logan said to him, "Why don't you pay attention, why don't you do the 41 Black also testified to subsequent changes in the pre-date territories of Arizona, New Mexico, and Colorado, not here material. 42 Stoneman and Sisto referred mainly to the respondent's campaign, above described, to induce the district managers to forego the Union in favor of individual contracts. 640 DECISIONS OF NATIONAL LABOR RELATIONS, BOARD right thing, go ahead and take the Arizona assignment and in 5 or 6 weeks I will have this straightened out. I will talk to Black in the meantime, and then everything will be all right." In response, Edwards said, "I wouldn't go to Arizona or Frisco as you want me to because it is merely an outward attempt to get me out, of the way." Logan then became incensed and ordered Edwards out of his office. Logan admitted that he accused Edwards of lying to him since, "Instead of going and resting like he agreed to do or promised, on which he had pulled my leg for this vacation money, he hadn't gone to Catalina where he said he was going." He denied that he com- plained because Edwards was "down in the alley again agitating" instead of on his vacation. He was hazy as to other details of this conversation. We find, in view of the evidence adduced at the hear- ing, that Edwards' account of this conversation is substantially correct. Edwards did not visit the respondent again until the latter part of July, shortly before his vacation would have ended. He reported to Cohen for,work "as a (natter of procedure." Cohen advised him that Black said that he was through whether or not he accepted the job in,Arizona and that the matter rested with Logan. Edwards testified that Cohen also said, "You stuck your neck out on account of this union business" and that orders were "to keep you out of the building and off the premises and if they catch you around the build- ing or on the premises to have you arrested or reported imnridiately." Also, "I am your friend. I am merely telling you so you can protect yourself." Cohen admitted that he told Edwards at this time "fur- thermore, I am your friend and the order is to keep you out of the building. I am telling you this so you can protect yourself." We And that Cohen also advised Edwards that he "stuck" his "neck out on account of this union business." Thereafter Edwards conferred with Logan and told him that "my six weeks is up and . . . I just thought I would come in and see or notify you officially and see what could be done." Logan an- swered, "I have nothing to say. You are through as far as I am con- cerned, and I told you that." Edwards then said that he would go to the "Labor Board" and Logan replied, "Labor Board or no Labor Board, Phil, I am running the place here and I want you to know that." But thereupon they began to discuss the Arizona job again and once more Logan advised Edwards to take it. According to Edwards he said, "Go on and take this Arizona assignment or the Frisco assignment." . . . "and do like I told you and let's iron this thing out." While denying parts of this conversation, Logan admit- ted that he told Edwards that the Arizona job was still open and suggested that he accept it and "try to work yourself back into the HEARST PUBLICATIONS, INCORPORATED 641 big city." Admittedly Edwards demurred and Logan warned him that "from that time on he came on the Examiner premises at his own risk." Logan also admitted that he said he would not meet with any committee of the Union if Edwards was a member of that com- mittee. According to Edwards, ' he assigned as the reason for this that "you don't belong on the committee, that you bulldozed your way into it and that you weren't rightfully elected to it." We credit Edwards' account of this conversation. Although Logan again offered Edwards the job in Arizona (despite the fact that other arrangements had been made by that time for servicing this territory) he did not consider him for his old position of country and suburban roadman. Yet, at about the same time, the respondent transferred Walsmith from his position as supervisor of the district managers to that of country and suburban roadman.43 Black explained, as a reason for this transfer, that in "the latter part of July and the first part of August, I was concentrating pretty heavy on suburban in opening up new sales outlets, and Cohen was after me for some additional men." Following Edwards' last conference with Logan, someone con-_ netted with the respondent reported to the police that Edwards had threatened Logan and Black. F. L. James, a police officer, was asked to speak to Logan. He testified, when called as a witness by the respondent, that Logan told him that "Edwards, who they had let go from the Examiner, had formed a union with other members of the Examiner, and Edwards had threatened Logan and Black, and several other members of the Examiner, with bodily harm." On the other hand, Logan testified that James came to him and warned him about Edwards and that he replied, "Oh, nuts, I have never taken the guy seriously. I think he's just got high steam pressure and pops off." According to Logan, James then warned him that Edwards "has been a bad boy and he may be one yet and don't be a fool about him." We are satisfied that James did not come to Logan to warn him about Edwards but that the respondent reported Edwards to the police as admitted by other witnesses and that Logan told James, as James testified, that Edwards "had formed a union" and "ha-l threatened Logan and Black, and several other members of the Examiner, with bodily harm." In support of the respondent's contention that Edwards had threat-' ened Black and Logan, Ralph Gordon, employed in the promotion de- partment, testified that during the last week in June 1938, Edwards" appeared- in the respondent's office, complained because he could not. see Logan, and remarked "that if Logan would get hardboiled with him he would get hard with him because he claimed he was a killer.". See Section IV, B, 2, antra. 642 DECISIONS OF NATIONAL LABOR RELATIONS BOARD - Gordon alleged that he told Logan of Edwards' statement and Logan confirmed that Gordon had so informed him. Logan also testified that during his first conversation with Edwards after his transfer," Edwards had said that "they can't push me around," that he had been in the "big house" and had nothing to lose; that "he didn't mind going back if anyone tried to push him around." Logan also. stated that an employee named Mitchell Sutherland, "related to me another incident in which Edwards came in there" [the respondent's office] but that "Mitchell gave me at that time the possible extenuating circumstance that Edwards had a pretty good edge on." 45 Suther- land did not testify at the hearing and the record does not show any, other details of this alleged threat or the date on which it was made.46 Edwards denied that he had threatened Logan.41 James conferred with Edwards after speaking to Logan and ad- vised him not to "let that union get into the muscle business, because if that gets into the muscle business, that's my business." On the same day, Edwards appeared with the negotiating committee of the Union at Logan's office.48 Admittedly, Logan refused to treat with this committee so long as Edwards, president of the Union, was one of its members. Logan also had two police officers present in the plant because "as I told the police officers, I anticipated that Edwards might show up on a committee that day, and if he did, I vas going to throw him out, and if I had to throw him out, I thought it would be kind of nice to have a representative of the law to catch him be- fore he bounced more than once." In explaining why he refused to rrleet with Edwards, Logan stated The thing-that I objected to in Mr. Edwards vas the informa- tion I had about his threatening, coercing and bulldozing my- employees and those who were associated with me in the news- paper business, and I was afraid that some of them might take 44 On or about June 20, 1938. 45 That is , that he was drunk. 4e Although James was told that Edwaids had threatened Logan , Black , and others connected with the respondent , the proof adduced at the hearing only concerned threats directed at Logan. walsmrth - testified that Edwards threatened him in March 1936; but this was long prior to the occurrence of the events material herein 47Eduards admitted that from June 1927 up to November 1932, be was incarcerated in San Quentin prison for manslaughter Also, that on other occasions he bad been arrested for burglary and bootlegging and that he was known by various aliases. Both before and after his term in San Quentin, Edwards was employed by the respondent His criminal record was well known to his employer . In 1933, after the respondent had reemployed him, someone protested to the publisher that Edwards was an ex-convict A] Williams , who was then business manager, came 'to his defense, stating, in substance, that "I have known Phil Edwards for years . He worked for me in Chicago on the Hearst paper He worked for me in San Francisco , and he worked here in this town years ago when I was circulation manager, and I will vouch for him" In 1933 or 1934 Edwards was appointed supervisor of the A. Al. district managers, a position he occupied until May 1937. 48 We discussed the negotiations between the 'respondent and the Union in Section -1V, A, supra. - HEARST PUBLICATIONS, INCORPORATED 643 him sufficiently seriously to perhaps do things that they them- selves didn't want to do. I just considered him-the best way I can put it-a racketeer. I thought he had been running a racket on the men, and I thought he was attempting to get in where he could run another one, and I took measures to see that he couldn't get his hands into anybody's pockets any more. That was the basis of my whole attitude toward Edwards at the time. b. Conclusions The complaint charges that the respondent interfered with, re- strained, and coerced its employees by refusing to meet with a com- mittee of the Union so long as Edwards was one of its members. We are satisfied that the record supports this allegation of the complaint and we- so find. We believe it eminently clear that Logan refused to meet with Edwards, not because of ' any alleged 'threats, but because he refused to accept a transfer to Arizona, and that the respondent attempted to place him in Arizona because of his activities in behalf of the Union. Although the respondent alleges in its answer that Edwards resigned, Logan admitted that he discharged Edwards because he refused to take the-job in Arizona. The events leading up to the transfer are signifi- cant. First, Edwards was instrumental in organizing the district man- agers;then he acted as spokesman for the district managers during their initial meeting with the respondent. Although Black knew that he was organizing the district managers, he referred to him as an "outsider" and at first refused to go on with the meeting while he was present. On the next day, Edwards was elected president of the Union. Five days later, Cohen notified him that he was ordered transferred to Arizona-and remarked that he had gotten himself "out on the limb" by his union activities. When Edwards protested to Logan against his transfer to Arizona, Logan offered to assist in placing him in San Francisco and then readily acceded to his suggestion of a 6 weeks' vacation despite the respondent's insistence that it needed Edwards in Arizona in furtherance of its promotional drive. In Arizona, San Francisco, or on vacation, Edwards was away from the Union. While Edwards was on his vacation, the respondent sought, as we have de- scribed above, to persuade the district managers to forego the Union in favor-of independent contracts. The respondent repeatedly stated during the hearing that it selected Edwards to fill Gillis' place in Arizona after deciding to give Warden's job in Pasadena to Gillis. Yet Black testified at the commencement of the hearing that Hart, a new man, replaced Warden on June 14, 1938, and Cohen confirmed that Gillis did not assume Warden's job 644 DECISIONS OF NATIONAL LABOR RELATIONS BOARD until June 25, 1938. Black also testified that Hart was placed in Colo- rado. Although the facts are not entirely clear, it would appear that Hart was first given Warden's job and was then transferred to Colo- rado. Then the respondent was free to transfer Gillis to.Warden's job. And-to make way for Edwards in Arizona, the respondent also removed Ryan and Downey. Instead of the incidental transfer of Gillis to Pasadena to assume the job of an employee discharged for drunkenness, as the respondent alleges, there were several transfers before a vacancy in Arizona was created. . Although Logan discharged Edwards in June 1938, for refusing to accept a transfer to Arizona, in August 1938, after reaffirming his de- cision, Logan again tendered Edwards the job in Arizona. At the same time, Cohen, Edwards' superior, was seeking additional help. Allegedly to assist Cohen, Walsmith was transferred from supervisor of the district managers to country and suburban roadman. When Edwards again refused this transfer, Logan ordered him off the respondent's premises and threatened that he would not meet with any committee of the Union so long as Edwards was one of its mem- bers. The respondent then reported Edwards to the police and had officers about the plant on the day the Union committee met with Logan to "catch" Edwards "before he bounced more than once." The respondent points to the alleged threats directed against Logan. Yet these occurred in June 1938, over a month before the respondent re- ported Edwards to the police.49 And Logan admitted that it was not these threats that disturbed him but that Edwards was "bull-dozing" his employees. However, it is strange that the respondent should have waited 6 weeks, offered Edwards employment in Arizona, and then, when he again refused this job, reported him to the police. When Logan spoke to James, the police officer, as James testified, he first informed him that Edwards had formed a union and then that he had threatened him. In its exceptions, the respondent argues that Edwards and the other complainants herein, Walsmith excepted, were associated with the respondent's "old management" (replaced-in the early part of 1938 by Carrington, Logan, and Black) in a conspiracy to pad the circulation of the Los Angeles Examiner through various improper devices.5° The respondent further asserts that Edwards and the other complain- ants organized the Union "to perpetuate their own positions and source of power in respondent's personnel, and thereby prevent the disclosure and remedy of the malpractices of which they were beneficiaries" and 49 It is not clear when the threat allegedly spoken in Sutherland's presence was made. Logan did not particularize this alleged threat and Sutherland did not testify. so These are discussed in other parts of this decision See Section III, Section IV, B, 5, and 6. ` -HEARST PUBLICATIONS , INCORPORATED 645 that, accordingly, the Union is not a labor organization within the meaning of the Act. While we are satisfied that the record amply demonstrates that the district managers joined together to secure legitimate union objectives, as discussed in Section IV, A above , it is sufficient to state that the respondent made no attempt whatsoever to discharge Edwards for any alleged malpractices . In its answer, the respondent averred that Ed- wards resigned; this contention is not sustained by the record. During the hearing, the respondent repeatedly asserted that it sought to trans- fer Edwards to Arizona to aid in a promotional drive. Although Ed- wards steadfastly refused to accept the job in Arizona , Logan continued to urge him to do so during each of their three conferences . Even as late as August 1938, Logan again told him that the job in Arizona was still "open" and advised him to take it and "try to work yourself back into the big city:" Only after Edwards remained adamant against the transfer, did Logan take "measures " to protect the district man- agers. Then Logan secured police officers to "catch him before he bounced more than once." _ To explain why it failed to discharge Edwards for these alleged malpractices,- the respondent has stated in its supplemental brief, in answer to questions propounded by the Board during oral argument, that the respondent gave Edwards and the other persons involved in the alleged malpractices "full opportunity to redeem themselves" and discharged them "only when their continuance of malpractices, or their insubordination or showing of incompetence or unwillingness to handle their respective positions in a proper manner, made it clear to respondent that they and respondent could not travel the same paths together." But, again, the respondent did not assert during the hearing that Logan or anyone else confronted Edwards with charges" of alleged malpractices or offered him an opportunity to redeem himself. The respondent's officials repeatedly insisted that Edwards' transfer was necessary solely for reasons of business efficiency. So, too, while the respondent in-its exceptions includes Bragg, Feldschau, Stoneman , and Sisto as Edwards' assistants in organizing the Union "for the purpose of maintaining existing malpractices of which they were the beneficiaries," it did not assert either in its answer or during-the hearing that it sought to discharge or did in fact dis- charge these employees for any such improper practices. The re- spondent itself recognizes the insubstantial basis of this accusation for in its exceptions, it places the word "apparently" before the allegation that these employees "constituted the coterie of assistants" to Edwards. 233636-42-v of 25-42 646 DECISIONS OF NAT10NAL LABOR RELATIONS BOARD The respondent also names Marcum as an associate of the "old management" in this "vast network of malpractices" and asserts that he, "to say the least, was not candid with the new management, un- doubtedly aided and abetted his `confidential' assistants in the program of evasion, generalities, `passing the buck,' insubordination and dis- honesty by which they resisted to the last the efforts of the new management to divest them of their established interests in the malpractices of the circulation department." Despite this blanket indictment of his loyalty and honesty, Marcum continued in the respondent's employ at the time of the hearing, almost 2 years after the "new management" assumed control of the newspaper. Upon the entire record, we find that the respondent discharged Phil Edwards in June 1938 because he joined and assisted the Union and that the respondent has thereby discouraged membership in the Union. We further find that the respondent by discharging Edwards and by refusing to meet with a committee of the Union so long as Edwards was one of its members, has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Sec- tion 7 of the Act. 2. Harold L. Walsmith Walsmith began working for the respondent as an A. M. district manager in October 1923. He occupied this position continuously up to June 16, 1938, when he was appointed supervisor of all the district managers.51 He testified that Black informed him on June 15, 1938, that he was to replace Maloney because "Maloney was too weak to thwart the union activities downstairs and that Mr.,Hampson had taken care of the union activities among'the P. M. men and it was 51 Although the respondent insists that Walsmrth assumed his job on June 22, 1938, we are satisfied that his appointment was made on June 16 , 1938 A written order from Walsmrth to the district managers which Bragg , a witness called by the Board , identified, was dated June 18, 1938. Although the respondent questioned the authenticity of this document, Tainter , called originally by the respondent , produced another copy , which he identified as having been received from Walsmith . And Brady, also called by the respond- ent, asserted that he had received a copy of a written order from Walsmith similar to the ones identified by Tainter and Bragg At the commencement of the hearing, Black testified as follows : Q. (by the respondent 's counsel ) And directing your attention again to the 15th of - on or about the 15th of June, what other personnel change took place at that particular time, as you recall A. Mr. Walsmith replaced Mr. Maloney. But, immediately thereafter , Black testified , led by the respondent's counsel , as follows : Q Directing your attention to the 20th of June, is that the date Mr. Walsmith succeeded Mr Maloney? A. Yes, sir HEARST PUBLICATIONS, INCORPORATED 647 up to me to do the same." 52 Black admitted that he told Walsmith, "I felt it would be a difficult assignment for him because the men were in a sort of agitated state of mind; they didn't know whether they wanted a union organization or what, but they were afraid of security, and it was always pretty tough for a man to step out of the ranks and manage the same bunch as he had worked with." He denied that he instructed Walsmith to "thwart the union activities down- stairs." We credit Walsmith's account of this conversation. In addition to' the corroboration it received from Black's admission that he told Walsmith his assignment was difficult because the men were "agi- tated" about the Union, Walsmith's' testimony is confirmed by the following circumstances. Walsmith alleged that,- in obedience to his instructions to "thwart" the Union, he suggested to Goldberg that the respondent induce the-district managers to accept individual contracts in lieu of the Union and that Goldberg told him, after conferring with Black, to proceed with this plan. Serdynski, Sokol, and Tainter, among others,53 testified that Walsmith advised them to accept individual contracts "rather than to join any union" and to "take them if we knew where our bread was buttered." We deem it extremely unlikely that Walsmith would have undertaken a cam- paign to discourage membership in the Union of the district mail- agers, immediately after leaving their ranks, unless he had been so instructed by,the respondent.54 Walsmith served as supervisor of the district managers until about August 1, 1938. He was then transferred to the position of country and suburban roadman under Cohen's supervision .55 Walsmith testi- fied that Black told him that he, was being transferred "owing to the fact that I hadn't remedied the conditions downstairs." Black averred that "Goldberg had reported to me that Walsmith was hav- 62 Arthur Hampson was introduced as head of the P M district managers at a meeting of these men on June 14 , 1938, immediately preceding the meeting of the Union at Tainter's house. After this meeting , as Hampson testified, Stoneman, an A M district manager, asked some of the P M district managers if they uuere going to attend the meeting of the Union . "There were none of the boys answered And I told the boys then that if they wanted to go to any meeting that was their privilege to go. One of our men spoke up and said , 'I guess there is none of the boys interested ' " Although not restricted to A. M district managers, the Union was composed , isith one or two exceptions , of only A M district managers 53 These three district managers were all called by the respondent They are still employed by the respondent and they knew when they testified that if the Board ordered Bragg, Feldschau , Sisto, or Stoneman reinstated , they would suffer diminutions in, the sizes of their territories See our discussion in Section IV, B, 3 infra Sisto and Stoneman, allegedly discharged for union activities , gave testimony similar to that of these witnesses. 5* Moreover , Walsmith had joined the Union just before his appointment as supervisor 66 Black explained that Cohen had asked for additional men to assist in a promotional drive. , Yet, while transferring Walsmith to this position of country and suburban road- man, the respondent was attempting to send Edwards , who occupied such a - position, to- Arizona. See Section IV, B, 1, supra. - 648 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ing a pretty rough time down there, that the men were agitated. That the men didn't know what they wanted to do. They were talking unionism and this, that and the other thing." He also testified that "the thing that sticks in my mind was that these fellows were having a heck of a time deciding What they wanted to do, and they were getting started on their union negotiations, and inasmuch as Walsmith had stepped out of the ranks to take over the manager's job, why they kind of felt like he was a deserter, and that sort of thing . . ." We are satisfied and find that Black advised Walsmith that he was being transferred 'because he had not "remedied the conditions downstairs." For approximately 3 weeks, Walsmith worked .as a country and suburban roadman. He was then brought in to substitute for John J. Sisto, a district manager, who was either discharged or resigned.56 He worked in this position for several weeks and was then reassigned to the country and suburban territory. It does not appear that any- one thereafter assumed the job of district manager made vacant by Sisto's discharge or resignation. On October 31, 1938, the respondent discharged Walsmith for "inefficiency." _ Cohen testified that he was dissatisfied with Walsmith's work as country and suburban roadman, "that he wasn't doing a complete job. . . . and he was taking too, long a time to do it." Black con- firmed that Cohen conferred with him about Walsmith and alleged that he then spoke to Walsmith. He testified that Walsmith ex- pressed surprise that Cohen was not satisfied with his work, "And he told me that he didn't like country work, that he wished he could get back in town." To this Black replied, "Harold, that is all we have got right now and I think if you will get out there and dig into it, you will like it." Although Black asserted that the respondent did not have avail- able a job in the city, there was the position made vacant by Sisto's discharge or resignation. The respondent permitted Walsmith to occupy this position for several weeks and then transferred him back to the country. When Walsmith was discharged on October 31, 1938, Sisto's job was still open, although, it appears, Brady, another district manager, had assumed his duties. The respondent did not explain why Walsmith was not permitted to continue with- this job. Walsmith must have been an able district manager or else the respondent would not have elevated him to the position of super- visor of all the district managers in June 1938. He was employed continuously as a district manager from October 1923 until appointed supervisor in June 1938. Admittedly, Walsmith was displeased with his employment in the country and sought reassignment in the city., 56 See Section IV, B, 4, infra. HEARST PUBLICATIONS, INCORPORATED 649 Moreover, on November 17, 1938, the respondent discharged - Bragg, Feldschau, and Stoneman, all district managers , thereby creating, three additional vacancies.' Black testified that he asked Goldberg if there were persons available to fill these vacancies and that Gold- berg replied , "I don't know anyone that wants any routes. We haven't any applications down there." Yet Walsmith was earnestly seeking reemployment with the respondent at that time. On' November 2, 1938, 2 days after his discharge , Walsmith filed an affidavit with the Board setting forth substantially the facts dis- cussed above . 511 Thereafter Walsmith returned to the respondent's plant several times to obtain a refund of his "bond money." 50 He experienced difficulty in securing this refund. On November 10, 1938, while in the respondent's plant, he spoke to Goldberg and "offered to make a complete denial of my statement to the Labor Board." Goldberg conferred with Black, returned , and escorted Walsmith to the office of the respondent 's attorney and secretary, Mitchell. After Walsmith described to them the statement he had filed with the Board, Goldberg and Mitchell prepared an affidavit, which Walsmith signed, retracting his prior statement. At the hear- ing, Walsmith took up each allegation in the second affidavit and identified the parts which he alleged were false and had been inserted at Goldberg's or Mitchell's insistence.60 Mitchell did not testify at the hearing and although Goldberg testified at length concerning other portions of the case , he did not mention this affidavit. 64 We discuss these discharges in Section IV, B, 3,'infra se This affidavit provided as follows : My services for,the L. A Examiner started October 1923. My position at that time was District Man and was continuous until June 20, 1933, at which time I was placed in the position of Mr Maloney owing to the fact that Mr Maloney could not stop the union activities I was placed in his position with the sole idea of making the men accept individual contracts with that in mind, the Company wished to defeat the purpose of the union. I made these overtures to the men but was unsuc- cessful'm my attempt and five weeks later was taken fcoin this position and placed in another on the outside Pete Bush, brother-in-law of Mi Black, took over my duties The position in which I was placed was one with which I was not familiar and had no experience After about six weeks on this position,, I was called into the office to take the position of Sisto, who had been fired, which position I kept for three weeks. I was told by Mr. Black when I took the city position that Hampson had gotten his men into line against the union activities and it was up to me to do the same. I was called at six o'clock in the evening to take over Sisto's position, which,I took the following morning when he was fired I was then transferred back to the countiy from which position I was fiied for union activities Monday, Octo- ber 31. 69 That is , money posted to insure faithful performance of duties 00 The ' affidavit contains such false statements, he alleged, as • "I was discharged for lack of ability to carry out the duties to which I was assigned." "Stoneman said . `You son of a bitch, you know what it is now to be loyal to the office, so you better get wise to yourself liefore you get yourself into a lot of trouble'" "For seasons hereinafter related I feared that Edwards would do me physical harm and for that reason went to the Labor Relations' Office with him and the others " "Stoneman and Phil Edwards told me that I would have to make a statement. I attempted to forestall my giving a statement. Thed Edwards and Stoneman repeated to me that j had to make a statement." 650 DECISIONS OF NATIONAL LABOR RELATIONS- BOARD Walsmith was asked to explain why he participated in this fraud. He testified, "Well, when I was fired from the Los Angeles Exam- iner I had purchased a new home. I had placed everything, every nickel, I had in this home, and I had 'on deposit $500 worth of stock with the Los Angeles Examiner. My home was coming out of escrow. I had three kids and a wife to take care of, and I had asked Mr. Weisbecker for that money for a week, and I had beeli delayed and delayed and delayed. Some men take a gun and go out and get money, so I took that means of getting that money so I could protect my family." On January 2, 1939, the respondent reemployed Walsmith as a verifier of home-delivery subscriptions at a substantially lower sal- ary than he was earning as district manager or as supervisor of the district managers. We find, in the light of the facts set forth above, that the respond- ent transferred and then discharged Walsmith because he failed to quash the union activities of the district managers. We further find that the respondent, by transferring and then discharging Walsmith, by instructing him to thwart the activities of the Union, and by inducing him to sign a false affidavit retracting a statement filed with the Board alleging violations of the Act, has thereby discour- aged membership in the Union and interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. 3. Theodore E. Bragg, Louis H. Feldschau, and Jack Stoneman These three employees, all engaged as A. M. district managers, were discharged on November 17, 1938. The complaint alleges, that they were dismissed because they joined -and assisted the, Union; 61 the answer avers that Bragg and Stoneman were discharged for "ineffi- ciency and incompetence" and Feldschau for "gross dishonesty, in- competence and inefficiency." We found above that as a result of the respondent's insistence that the district managers accept a fixed salary to qualify for the pro- tection of a union, a movement to disband the Union was initiated in September 1938. This movement culminated in the circulation of a petition providing space for the district managers to sign either under the caption "To Return Charter" or "To Retain Charter." Bragg, Feldschau, and Stoneman refused to sign this petition82 81 The complaint also charges that Biagg was transferred on September 17, 1938, to a less profitable territory because of his union activities ea Wilson, another district manager, also failed to add his signature but did not explain, when he testified, why he had not signed. Tainter signed to retain the charter. All the other district managers elected to return the charter. HEARST PUBLICATIONS, INCORPORATED 651 A copy of the petition was delivered to Logan in the middle of October 1938. On November 17, 1938, as we have stated, Bragg, Feldschau, and Stoneman were discharged. After Goldberg reported, allegedly, that there were no other applicants for any of their positions,63 the respondent divided their territories among the remaining district managers .64 This division is significant, we believe, particularly since the respondent maintains that Bragg, Feldschau, and Stone- man were discharged primarily for sustaining too many sell-outs in their territories. That is, checkers' reports allegedly revealed that many racks and news vendors were not supplied with additional papers after their original supplies had been exhausted. If the re- spondent had been sincerely concerned about these alleged sell-outs, it is unlikely that it would have increased the size of the remaining territories, thereby enhancing the possibility of sell-outs. Bragg testified that after his discharge, Goldberg said that he intended, to discharge those district managers who "did not sign that petition that Joe Bonansinga sent around." Although Goldberg de- nied this statement, we are satisfied, nonetheless, and find that he so informed Bragg. Moreover, shortly after Bonansinga circulated the petition and delivered a copy to the respondent, Logan called Stone- man, Bonansinga, and Sattler, all district managers, to his office. Ac- cording to Stoneman, Logan said "that there had been too much talking and.bickering, I believe, in the alley that he had heard about; he said he had documentary evidence that 14 of the men wished to withdraw from our union and accepted [accept] individual contracts and they were being bothered, and that they weren't going to be bothered and that he was going to see to it." Logan admitted that he told these men that there had 'been a lot of "bickering going on downstairs" and that the district managers were using profane and abusive language. He did not specifically deny that he said he had documentary proof that 14 district' managers wished to withdraw from the Union and accept individual contracts and that he in- tended to protect them. We find that the conversation occurred as Stoneman related. We have discussed above the affidavit retracting a previous state- ment filed with the Board that Goldberg and Mitchell prepared for Walsmith's signature. This affidavit is dated November 10, 1938, 1 week before Bragg, Feldschau, and Stoneman were discharged, al- 13 As mentioned above, Walsmith was anxious to secure reemployment with the respond- ent. Also, John J. Sisto was available. Although the respondent asserts that he was guilty of insubordination, after his discharge or resignation Logan promised him reemploy- ment. See Section IV, B, 4, infra. "The division was made in Goldberg's office immediately after he discharged Bragg, Feldscbau , and Stoneman 652 DECISIONS OF NATIONAL LABOR RELATIONS BOARD legedly upon Goldberg's recommendation. In this affidavit there ap- pear the following references to Bragg and Stoneman : 65 On November 2, 1938 I met J. Stoneman, an Examiner A. M. Independent Manager, near the alley next to the Examiner build- ing. Stoneman said: "You son of a bitch, you know what it is now to be loyal to the o ice,- so you better get wise to yourself before you get yourself into a lot of trouble." I replied : I don't understand yet why I was fired." Stoneman then left and re- turned about five minutes later and told me that he had tele- phoned Phil Edwards, formerly a suburban road man for the Examiner. Phil Edwards was no longer connected with the Exam- iner at that time. He told me that Edwards would meet me at the Pacific Electric Station at Sixth and Main Streets for the purpose of straightening out my severance pay which I thought I had coming because of my discharge. I rode to the Pacific Elec- tric with Bragg in his automobile. Stoneman and his wife fol- lowed us in Stoneman's car. * * * Then all of us went up to the National Labor Relations Board office in the Pacific Electric Building. * * * Stoneman and Phil Edwards told - me I would have to make a statement. I attempted to forestall my giving a statement. Then Edwards and Stoneman repeated 'to me that I had to make a statement. * * * All during they time I was writing said statement Phil Edwards and Stoneman stood close to me and looked at what I was writing. While the affidavit makes no specific reference to Feldschau, Walsmith testified that Feldschau was present at the offices of the Board on the day he filed his statement and that he so informed Goldberg and Mitchell. This affidavit and Walsmith's testimony establish that 1 week before Bragg, Feldschau, and Stoneman were discharged, Goldberg, who recommended their discharge, was apprised that they were continuing their activities in behalf of the Union despite the respondent's oppo- sition to the Union and the decision of almost all of the remaining district managers to forego the Union.66' Not only did the affidavit refer to the union activities of these district managers, but Goldberg inserted false and derogatory statements about Stoneman. a. Theodore E. Bragg Bragg commenced working for the respondent in 1933. - He was appointed a district manager in the latter part of 1936 and retained ^ The italicized portions, Walsmith stated , were false and inserted at Goldberg's and Mitchell 's direction 66 Tainter and Wilson excepted. HEARST PUBLICATIONS, INCORPORATED 653 this position until he was discharged on November 17, 1938. He at tended the first meeting of the Union on June 14, 1938, and was, ini- tiated into membership on the following day. On September 17, 1938, the respondent had Bragg and Pete Sattler exchange districts. Satt- ler sold fewer papers in his original territory than Bragg did in his.° The respondent asserts that Bragg was transferred because there were too many "sell-outs" in his territory; that is, checkers discov- ered, while inspecting his territory, that Bragg failed to resupply news vendors who sold all copies of the newspaper originally delivered to them. In support of this claim, the respondent introduced into evi- dence various checkers' reports on Bragg's territory. Only two of these reports were made prior to September 17, 1938. They were dated July 12 and 23, 1938, respectively. The first report showed a total of six-sell-outs, of which two were stores and four lay-down racks. This report contained the following comment : "District covered fairly well. Good display at all corners with hustlers." The second ,report indicated 14 sell-outs, of which 5 were stores and 9 lay-down racks. As appears below, this amount was not excessive when com- pared with the reports on' other district managers. When Black notified Bragg of his transfer, he protested that his territory was properly handled and asked Goldberg to confirm that statement. Goldberg admitted that Bragg turned to him and said "The morning you rode with me, my territory was covered" and that he replied, "Well, that is right, it was." In-the light of these facts, we find that the record does not support the respondent's contention that Bragg did not handle his territory properly before his transfer. While the respondent contends that Bragg was told he had too many sell=outs, according to Bragg, Black said that he was transferring him because he brought in too many returns. Black denied that this rea- son was advanced: Walsmith gave another probable reason for this transfer. He stated, in the affidavit filed with the Board, as follows: While I was on the city job, I was offered by one of the morn- ing district men, namely Pete Sattler, $2000 if I would see that he changed districts with Bragg, which change has since taken place after I was relieved of my duties. I passed this information along to Mr. Black, who informed me that he would do the hiring and firing. We are not satisfied that the respondent transferred Bragg, as al- leged in the complaint, because of his membership or activity in the Union although we do find, as mentioned above, that the respondent's 67 In his original distiict ,Bragg drew, that is, obtained from the respondent, approxi- mately 6 ,000 of the daily editions each week while Sattler drew between 2 ,000 and 2,500. Of the, Sunday editions , Bragg's draw averaged approximately 4,500 papers while Sattler drew slightly less. 654 DECISIONS OF NATIONAL LABOR RELATIONS, BOARD contention that Bragg did not handle his territory properly is not supported by the record. - Bragg spoke to Black and Goldberg several times after his transfer about securing the return of his old territory. After several weeks, Bragg alleged, Goldberg said to him, "Well, Ted, I wish you wouldn't pester me anymore. You know good and well that wasn't the full reason why you were transferred. If you don't break away from the union, you may not be out in your district very long." Goldberg did not recall any such conversation with Bragg. We find in the light of all the evidence in the record that Goldberg spoke to Bragg as set forth above. I In October 1938, several hustlers or newsboys from Tellerman's district invaded Bragg's territory. Bragg advised them to keep out. This occurred again on the following week. Bragg then com- plained to Goldberg, who refused to intercede. When these hustlers again entered Bragg's district, he compelled-them to buy 25 papers. Later in the same day, Tellerman approached Bragg, uttered some words unintelligible to Bragg, and then "hauled off and hit" him in the jaw. This punch succeeded in breaking Bragg's jaw. On the next day Bragg complained to Goldberg who, he alleged, replied, "Well, you know Joe and the boys don't like the union. You can expect anything that they give you if you don't break away from it." Although denied, we find that Goldberg made this statement. Bragg maintained that it was customary for the respondent to inter- vene and "straighten out the beef" if district managers quarreled over invasions of their territories. Sokol, called as a witness by the respondent, confirmed Bragg's contention by testifying that when the newsboys of another district manager wrongfully invaded his territory, "if I- didn't get any result 1 would come 'in and see the boss." 68 We are of the opinion and find that Goldberg refused to intervene in Bragg's behalf and then failed to discipline Tellerman for assault- ing him because of his membership and activity in the Union. The respondent claims that Bragg was discharged because of "inefficiency and incompetence" and it relies upon eight checkers' reports, introduced into evidence, to support this defense.69 The primary grievance these reports exhibit, according to the respondent, is Bragg's failure to make a proper recoverage of his territory; that 68 In fact, Sokol alleged, at one time some of Bragg's hustlers invaded his territory. First he complained to Bragg "He didn't exactly stop, so I had to report him to the office." Maloney, then supervisor, "took it up with Mr. Bragg and told him to keep the boys out of there." 66 Goldberg testified that he recommended Bragg's discharge upon the basis of checkers' reports made after he changed territories with Sattler. Two reports, discussed above, antedating his transfer, were also received in evidence. HEARST PUBLICATIONS, INCORPORATED 655 is, that they revealed too many sell-outs. The following is a listing of the sell-outs discovered by the checkers on the dates indicated : 70 1. September 28, 1938-------------------------- 5 2. September 29, 1938-------------------------- 5 3. October 5, 1938------------------------------ 5 4. November 6, 1938---------------------------- 12 5. November 7, 1938---------------------------- 8 6. November 8, 1938---------------------------- 9 7. November 10, 1938--------------------------- 8 8. November 12, 1938--------------------------- 9 Not all the checkers' reports of the other district managers during the same period were introduced into evidence. The following chart, made up from such checkers' reports as were introduced into evidence, shows the number of sell-outs found in the territories of the district managers named. None of these district managers was discharged for "inefficiency or incompetence." Name Date Num- ber of sell-outs Name Date Num- her of sell-outs James Brady-------------- Oct 28,1938 11 Stanley Serdynski --------- June 13,1938 2 Lane L. Laster------------ Oct 11 , 1938 3 John Sisto ----------------- July 8,1938 3 Oct 25, 1938 9 July 14, 1938 8 Dwight Martin ------------ July 8, 1938 3 July 18, 1938 9 Oct 24, 1938 14 July 19, 1938 11 Nov 2,1938 8 July 20,1938 6 Edward Richards --- --------- Oct. 7, 1938 0 - July 30. 1938 16 Robert Tamter------------ Oct 6, 1938 3 Aug 5,1938 4 Irving Sokol--------------- July 8, 1938 1 Joseph Trombatore-------_ Oct 29,1938 0 July 16,1938 6 Charles H Wilson -------- Oct 27, 1939 7 Aug 4, 1938 7 Oct. 10.1938 3 This chart indicates that the number of sell-outs found in Bragg's territory was not any greater, on the average, than the number found in other territories. We find that the respondent discharged Bragg because of his activ- ity and membership in the Union and that the respondent has thereby discouraged membership in the Union. We further find that the respondent, by discharging Bragg, by failing to prevent or discipline an employee for invading Bragg's territory and assaulting him, and by advising Bragg to forego the Union, has interfered with, re- strained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. 70 Goldberg conceded that five sell -outs in "a route like Stoneman 's or Dwight Martin's or Sattler's" were not excessive and that it would be extremely rare if the checkers dis- covered no sell-outs In a report to Goldberg on September 1, 1938, Cole, a checker, who had inspected the territories of Bragg, Sokol , and Serdynski on the previous day, stated that be "found that the districts were very well covered." 6 56 DECISIONS OF NATIONAL LABOR RELATIONS BOARD b. Louis H. Feldschau Feldschau was employed as an A. M. district manager in the latter part of 1933. He was discharged on May 8, 1938,71 and reemployed as a district manager on June 16, 1938, in place of Walsmith who was then appointed supervisor of the district managers. Two or three weeks thereafter, Goldberg asked him if he was a member of the Union and advised him to get out of it. The respondent assigns several reasons for discharging Feldschau. For one thing, it claims that he had too many sell-outs in his terri- tory. The following are the number of sell-outs found in his district as listed in the checkers' reports introduced into evidence : 1. September 2, 1938___________________________ 5, 2 September 30,1938--------------------------- 4 3. October 1, 1938------------------------------ 723 4. October 3, 1935------------------------------ 4 5. October 4, 1938______________________________ 73 0 6. October 31, 1938____________________ ----------------------------- 441 7. November 8, 193S---------------------------- 3 8. November 9, 1938---------------------------- 4 9 November 13, 1938 --------------------------- 464 These reports are to be compared with the reports on other district managers, listed above, who were not charged with "inefficiency and incompetence." A comparison reveals that Feldschau had as few if not fewer sell-outs than most of the remaining district managers. Gold- berg averred that in certain territories five sell-outs were not excessive and Feldschau never exceeded that amount. On October 31, 1938, Goldberg wrote Feldschau that "In checking your district this Mon- day morning, Oct. 31st, we found your district very well covered." We find that the respondent's contention that Feldschau improperly handled his territory is not sustained by the record. The respondent also asserts that Feldschau failed to make daily rack returns, that is, that he did not bring in to the respondent's plant unsold newspapers dispensed through racks. On October 3, 1938, after a checker reported that Feldschau failed to make daily returns, Goldberg wrote him, directing him to bring in his rack returns each day. Feldschau maintained that he had not received "Either for drunkenness , as the respondent contends , or for refusing to "eat" papers, as the Union contends. 72 This report states "District very well covered this a. m with dailies." - 73 This report states "All dealers well covered and served." 74 This report states "The district was very well covered this morning" 75 This report, 4 days before Feldschau 's discharge, contains the following comment : "There seemed to be plenty of papers on the district , and all stores other than these listed above had plenty of papers." HEARST PUBLICATIONS, INCORPORATED ' 657 any prior instructions concerning rack returns. Other district man- agers testified to the contrary.' This order to bring in daily returns was made in June 1938, as Goldberg testified, and conceivably during the interval between Feldschau's discharge on May 8, 1938, and his reemployment on June 16,, 1938. In any event, Goldberg admitted that Feldschau brought in daily rack returns after he called the mat- ter to his attention' on October 3, 1938. We do not believe that Feldschau's discharge, many weeks later, grew out of his failure to make daily rack returns until he was specifically instructed to do so by Goldberg. The respondent also contends that it discharged Feldschau for dishonesty. The Trial Examiner limited, improperly we believe, the testimony of two persons, Stegman and Stepakoff, who worked for Feldschau, concerning acts of dishonesty on Feldschau's part. By an offer of proof supported by other testimony, the respondent showed that Feldschau asked Stegman, an assistant, to steal papers for him; that he refused and Feldschau then discharged him; that thereafter Stegman became a wholesaler, (bought papers from Feldschau and resold them) and that Feldschau charged him for more papers than he purchased. The respondent also asserted that Feldschau asked Stepakoff to steal papers for him. Accepting the testimony of these witnesses as contained in the offer of proof, we are satisfied, nonetheless, that the respondent dis- charged Feldschau for his membership and activity in the Union and not for any acts of dishonesty. The alleged dishonest practices were committed, if at all, in July 1938. Walsmith, who was the supervisor only up to August 1, 1938, testified that it was brought to his atten- tion that Feldschau "was shorting his boys on papers." Goldberg testified that Walsmith spoke to him about Feldschau's dishonesty in the latter part of July 1938. But it was not until November 17, 1938, that the respondent discharged Feldschau, together with Bragg and Stoneman. Furthermore, the respondent's assertion, discussed above, that Feldschau sustained an over-abundance of sell-outs in his ter- ritory finds no support in the record and its reliance upon this unsupported contention casts doubt upon its other defenses. In the light of all the circumstances of the case, the fact that Feldschau refused to sign the petition used to disestablish the Union and, with Goldberg's knowledge, continued his activities in behalf of the Union after most other district managers, at the respondent's bidding, deserted the Union, we are satisfied and find that the re- spondent' discharged Feldschau for, membership and activity in the Union'." In so doing, the respondent discouraged membership in the 658 DECISIONS OF NATIONAL LABOR RELATIONS BOARD' Union and interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act.. c. Jack Stoneman Stoneman began to work for the respondent as a P. M. district manager in 1931. He was appointed an A. M. district manager in April 1933. Stoneman was active in the organization of the Union. In June 1938, Goldberg asked him what benefits he expected to obtain from the Union, which he referred to as that "stinking little union that would never amount to anything;" He also advised Stoneman to speak to Walsmith and "see if we could get together on an individual contract." 713 Upon his own initiative, Stoneman inves- tigated the merits of individual contracts and succeeded in persuading the district managers, after Black offered them individual' contracts, to "go on with our union and forget the individual contract." In the latter part of August 1938, he was made a member of the union com- mittee conducting negotiations with Logan. After the petition culminating in the disestablishment of the Union was circulated Logan instructed Stoneman to refrain from addressing other district managers as "finks." This was, of course; a recognition that Stoneman continued, despite the respondent's opposition, to'act in behalf of the Union. Previously, together with Bragg and Feld- schau, he had refused to sign the petition used to disestablish the Union and 1 week before he was discharged, Goldberg inserted in the affidavit prepared for Walsmith's signature, false and derogatory statements concerning Stoneman's union activities. The respondent maintains that Stoneman was discharged for ineffi- ciency. It alleges that checkers' reports show an abundance of sell- outs in his district. It is true that these reports reveal that Stoneman sustained more sell-outs than other district managers. 77 On the other hand, Stoneman had the largest territory of any of the district man- agers and it was to be expected that he would have a greater number of sell-outs.78 The extent to which Stoneman's territory exceeded that of the other district managers appears from the following table in 76 See Section IV, B, a, sutra. "The checkers' reports indicated the following number of sell-outs : July 11, 1938-16; July 12, 1938-14 ; August 16, 1938-10 ; October 7, 1938-5 , October 20, 1938-31 ; Novem- ber 1, 1938-6; November 7, 1938-39; November 14, 1938-22. 1 As we have mentioned above, the respondent divided his territory and that of Bragg and Feldschau, among the remaining district managers after they were discharged. If the respondent was concerned about sell-outs it is doubtful whether it would have enlarged the territories of the remaining district managers, thereby increasing the likelihood of sell-outs, after discharging Bragg, Feldschau, and Stoneman. Both Walsmith and Sisto, as we have said, were anxious to obtain any of these vacancies. HEARST PUBLICATIONS, INCORPORATED 659 which the average weekly draw of,each district manager between May 7, 1938, and September 10, 1938,'is listed.79 Name Draw 1. Stoneman---------------------------------- 7572 2. Bragg------------------------------------- 06087 3. Martin ---- -------------------------------- 5699 4. Rascon------------------------------------ 5514 5 Sokol-------------------------------------- 5361 6 Sisto-------------------------------------- 5118 7. Laster------------------------------------- 4441 8. Wilson ------------------------------------ 4004 9. Lobe -------------------------------------- 3730 10. Serdynski---------------------------------- 3343 11. Tellerman --------------------------------- 3093 12. Bonansinga-------------------------------- 2870 13. Brady ------------------------------------- 2711 14. Resnick------------------------------------ 2608 15. Tainter____________________________________ 2367 16 Sattler---------- -------------------------- 2230 17. Richards ---------------------------------- 2220 18 Trombatore-------------------------------- 2038 19. Feldschau --------------------------------- 1916 Black recognized that Stoneman was considered a "cracker-jack" district manager and for 5 years he had rendered the respondent satisfactory service.80 On November 1, 1938, but 16 days before he was discharged, Goldberg wrote Stoneman that "In checking your district this morning, November 1st, we found your district very well covered." On the other hand, as we have mentioned above, Stoneman figured prominently in the organization and activities of the Union, had refused to sign the petition circulated by Bonan- singa, and had incurred Logan's displeasure by addressing employees who deserted the Union as finks. Moreover, 1 week before he was discharged, Goldberg, who recommended his dismissal, included such false statements about him in the affidavit prepared for Walsmith's signature as the following: Stoneman said: [after Walsmith reported that he had been discharged] `You son of a bitch, you know what it is now to be loyal to the office, so you better get wise to yourself before you get yourself into a lot of trouble.' Stoneman and Phil "These dates have been selected since there is no evidence in the record as to the amount of papers the district managers drew prior to May 7 , 1938 , and on September 10, 1938, Walsmith, who had replaced Sisto, « as transferred to the country It appears that Brady, another district manager, assumed distribution of newspapers in this territory 80 Cf. Montgomery Ward d Co . v National Labor Relations Board, 107 P. ( 2d) 555 (C. C. A 7), modifying and enf'g Matter of Montgomery Ward & Co. and Reuben Lxtzen- berger, et al , 9 N. L. R B. 538, wherein the Court noted that "the histories of some of the employees in question reveal considerable length of service " and commented that "although long service does not necessarily indicate efficiency , it does indicate that the employee's work is not considered so unsatisfactory as to merit discharge " 660 DECISIONS OF NATIONAL LABOR RELATIONS, BOARD Edwards told me that I would have to make a statement [con-, cerning his discharge]. I attempted to forestall my giving a statement. Then Edwards and Stoneman repeated to me that I had to make a statement. In the light of the foregoing, we find that the respondent dis- charged Stoneman because of his membership and activity in the Union, thereby discouraging membership in the Union and inter- fering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act. 4. John J. Sisto Sisto was first employed by the respondent in July 1933. He was appointed an A. M. district manager on May 8, 1938.81 Sisto was active in the organization of the Union. In the latter part of June 1938, he wrote Edwards a note-advising him that the respondent was "presenting us with a contract (Individual) today for a year and I don't know what the set up is but it seems to me they're trying to break that business [Union] up." In August 1938, Goldberg advised him, while covering his route with him, "Johnny, you have a family. You are buying a home. Why don't you get rid of the union idea?" He also indicated that if Sisto did not do so that he "might be taking a walk up the street some clay" and remarked that he had to break up the Union or he, too, "would be taking a walk up the street." Sisto either resigned or was discharged on August 29, 1938. The respondent maintains that Sisto quit after a dispute about his fail- ure to serve a particular customer while Sisto contends that he was "framed" and then discharged. According to Sisto, Goldberg told him to stop selling papers to the news vendor in the Sir Burton Hotel after Goldberg learned from Sisto, on the day in August he accompanied him on his route, that this news vendor refused to pay for all the papers delivered to her. On August 26, 1938, Sisto claimed, Goldberg spoke to him about the Sir Burton Hotel. The news vendor in this hotel apparently had complained to the respond- ent. Sisto replied, "That was the -place you 'told me to stop" and Goldberg answered, "Okay, I will take care of it." Again, on the next day, Goldberg asked him about the Sir Burton Hotel and again Sisto reminded Goldberg that he had instructed him (Sisto) to stop selling papers to this dealer. Goldberg remarked, "Oh, I forgot about that. Okay." On the same afternoon, Wallie Miller, a checker, now deceased, informed Sisto that he intended to go with him to the Sir Burton 81 Succeeding Feldschau who was discharged at that time. See Section IV, 3b, supra. HEARST PUBLICATIONS, INCORPORATED 661 Hotel and "straighten out that beef." At the hotel, the news vendor explained her side of the case while Sisto explained his. Sisto testified that during the discussion with the news vendor, he left after telling Miller that he had to complete his round. The next day, August 28, 1938, Miller told Sisto that Goldberg wanted him to begin serving the Sir Burton Hotel again. Sisto replied that since Goldberg told him to stop selling papers to this dealer, he would speak to Goldberg before renewiilg deliveries. On the following horning, Sisto asked Goldberg why he had counter- manded his previous orders and remarked that he had told Miller that he would not serve the Sir Burton Hotel before speaking to him (Goldberg). Goldberg then said, "I will have to ask you to quit." Sisto replied, "I won't quit. You will have to fire me," and Goldberg answered, "All right. You are fired." Goldberg admitted that he had accompanied Sisto on his route in August 1938 and had visited the Sir Burton Hotel with him. He denied that he told Sisto to stop selling papers to this news dealer.82 He did not recall that he spoke to Sisto on Friday, August 26, 1938, about serving the Sir Burton Hotel. However, he did recollect that on the following day, August 27, 1938, after receiving a call from the news vendor at the Sir Burton Hotel, "I spoke to him [Sisto] about the Sir Barton Hotel. He did mention at that time that I had said something about, if a dealer doesn't pay him, that I told him that hp, didn't have to serve hlm. I don't ever recall that I told him to cut off the Sir Burton Hotel or whether he ever mentioned the Sir Barton Hotel to me before that." He claimed that he told Sisto that lie would send Miller with him to the Sir Burton Hotel to "see if we can't get it straightened out." On the next day, Sunday, August 28, 1938, Miller reported that he believed that the news vendor's com- plaint was justified. Goldberg then prepared a note to Sisto, in- structing him to begin serving the Sir Burton Hotel again, and di- rected Miller to give him the note. Goldberg alleged that later in the day Miller informed him that "he handed Sisto the note. Sisto threw it on the ground. He told him to tell me that I could go to hell . . ." Goldberg testified that Sisto was also reported as having referred to him in profane language. Goldberg determined that evening to replace Sisto and notified Walsmith, who had been transferred to the country and suburban areas, to report for duty on the following morning in Sisto's place. The next day, Gold- berg testified, he asked Sisto if he had spoken to Miller as related above and that Sisto admitted that he had made these statements. Gold- 82 Sisto, not the respondent, assumed any loss resulting from the failure of a customer to pay his full bill. 283036-42-vol 25-43 662 DECISIONS OF NATIONAL LABOR RELATIONS BOARD berg then asked him if he was resigning, to which Sisto replied, "Take it any way you want." Miller died before the commencement of the hearing. He had, how- ever, prepared a report of his investigation, dated August 28, 1938, which was introduced into evidence. This report tends to show that Miller gave Sisto a note instructing him to begin serving the Sir Burton Hotel again and that Sisto violently protested, though not in the precise language attributed to him by Goldberg.83 We are not convinced, although this case is not free from doubt, that the respondent discriminated against Sisto because of his mem- bership or activity in the Union. We are of the, opinion, however, that Sisto was discharged, and that he did not resign as the respondent alleges 84 Nevertheless, it appears that Sisto was discharged for vigorously protesting, in profane and abusive language, against Gold- berg's order that he serve newspapers to the Sir Burton Hotel. It is possible that Goldberg previously advised Sisto to stop selling papers to this news vendor, for he admitted that on Saturday, August 27, 1938, he mentioned to Sisto "something about if a dealer doesn't pay him that I told him he didn't have to serve him." Yet we are not convinced that Goldberg plotted to frame Sisto by first instructing him to refrain from serving this dealer, and then countermanding his orders. We will accordingly dismiss the complaint in so far as it alleges that the respondent discriminatorily discharged Sisto. 5. Edward J. Maloney Maloney began to work for the respondent in August 1934. In May 1937, he succeeded Edwards as supervisor of the A. M. district man- agers, a position he held until he was discharged on June 16, 1938. The complaint alleges that he was dismissed for failing to discharge mem- bers of the Union ; the respondent asserts that he was discharged for "insubordination, dishonesty, and inefficiency." According to Maloney's testimony, about June 2, 1938, Goldberg informed him that Black was disturbed because "the boys were out in the alley in groups talking about the Union meeting and the forming of the Union" and that he desired Goldberg and Maloney to "work out some plan so as we could dispose of the Union." In particular, Goldberg told Maloney that Black wanted him to discharge Stoneman a3 On the other hand, an employee named William Bosworth Chambers , an assistant foreman in the mailing department , alleged that he overheard the conversation between Sisto and Miller and did not hear Sisto use profane language. Chambers asserted that the incident impressed itself upon his mind because Sisto was discharged on the following day Ilovvever, Sisto alleged that during his conversation with Miller he asked him if this was a frame-up, and that Miller replied that he thought it was. Chambers testified that he did not hear any such statements. "Admittedly, Goldberg arranged on Sunday for Walsmith to take Sisto's place before he conferred with Sisto on Monday HEARST PUBLICATIONS, INCORPORATED 663 and Sisto because they were the "biggest agitators of the Union." Maloney demurred, claiming that Stoneman and Sisto were able and efficient district managers but Goldberg insisted that these men had to be discharged. Goldberg remarked that while he had a union card from a local in New York, he was "on the other side of the fence now." About 5 days later, Goldberg reminded Maloney that he had not dis- missed Stoneman or Sisto. Maloney further testified that on Monday, June 13, 1938, Black asked him why he had not followed Goldberg's instructions.' Maloney replied that "I haven't got the heart" to discharge Stoneman and Sisto. He also advised Black that the district men were organizing a union because he had failed to eliminate "eating" 85 of papers, although he had promised to do so. Black excitedly replied that he was boss and that Maloney should discharge Stoneman and Sisto or "I will have to make other arrangements." According to Maloney, Goldberg spoke to him againon the morning of June 14, 1938, before the meeting of the Union at Tainter's house. Maloney testified that Goldberg said to him, "I am down here to try and encourage [discourage] the men from attending the meeting at Bob Tainter's home" and added that "if you had done what I asked you to do in regard to discharging Sisto and Mr. Stoneman, I probably wouldn't have to be clown here this morning." Black discharged Maloney on June 16, 1938, at which time Maloney inquired if his dismissal grew out of his failure to "control the union activity and to discharge Mr. Stoneman and Mr. Sisto." According to Maloney, Black replied that that was the reason. Goldberg and Black emphatically denied the above statements and conversations that Maloney ascribed to them. They claimed that on or about June 9 or 10, 1938, they decided to discharge Harry Marks and William Shapiro, discussed below, and that Black suggested to Gold- berg that since he was going to confer with Logan about Marks, "if you are not satisfied with Maloney, I might as well see him on both of them." Black testified that Goldberg recommended Maloney's dis- charge, stating "I believe he [Maloney] knows what it is all about, but you know how it is, boss, sometimes an old timer just won't fit in with the new management." According to Goldberg, he reported to Black, as the basis for his recommendation that the respondent discharge' Maloney, that the district managers did not like him, that he failed to appear for work on time each morning, as directed, and that he had neglected to supply Goldberg with a report he had requested. Black also alleged that in the latter part of March or early part of April 1938, he asked Maloney for a comparative report on the daily ss That is, requiring the district managers to buy more papers than they could sell and lejectmg ninny of their returns See Section III, supra 664 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and Sunday draws of each district manager '16 their total returns, and the number of returns allowed. Stodghill, circulation director of all Hearst papers, had instructed Black to secure such a report for his con- sideration. Maloney supplied a report but, Black testified, it was replete with inaccuracies. Consequently, when Black placed Gold- berg in charge of the circulation department on May 16, 1938, he told him to watch Maloney. _ Maloney admitted that the report he submitted to Black was in- accurate but claimed that Black instructed him purposely to insert fictitious figures. First, he alleged, he prepared a report reflecting the true condition of the respondent's circulation. Black objected to this report because it revealed'."how: many papers you are padding" and the quantity of papers the ^ district managers were required to "eat." "It shows too much [padding], and I don't want to start build- ing my figures from them figures." Maloney claimed that he thereupon prepared the fictitious report. In explaining the reasons for Maloney's discharge, Goldberg asserted that after he assumed his job with the respondent 87 he also asked Maloney for a report on how he computed the "credits" granted each district manager.88 He maintained that Maloney failed to sup- ply him with this report. Goldberg also insisted, as we have men- tioned, that on two or three occasions he instructed Maloney to report for work on time but that he neglected to do so, claiming that he "had a little sickness at home and trouble with my car." Maloney alleged that shortly after Black came with the respondent he ex- plained to him that it was his custom to report early three or four times a week and "the rest of the time to leave the house about 7: 00 o'clock and ride the routes and report at the office about 9: 00 in the morning." He asked Black, if he should maintain these hours and Black replied "You continue as you have in the past." When Goldberg was placed in charge of the circulation department, Maloney told him of this conversation with Black and asked him if it would be satisfactory if he observed those hours. Maloney testified that Goldberg replied, "Yes, I have never worked on a morning paper before" and "You just continue as you are. I am learning all the time." 86 Both the A. M. district managers and the P. M . district managers in charge of dis- tributing the red line or peach edition . This organization was disbanded and their work tinned over to the A M. district managers on May 2, 1938. sT May 16, 1938. 6 In order to pad its circulation , the respondent forced distiict managers to purchase more papers than they could sell and rejected many of those which they returned. To avoid detection by the Audit Bureau of Circulation, which regularly inspected the respond- ent's circulation records, the respondent varied from day to day the number of rejects allowed district managers. To reimburse the district managers for the papers they were required to "eat," the respondent gave them excessive promotional and expense monies HEARST PUBLICATIONS, INCORPORATED 665 - Goldberg denied this conversation, pointing out that he had worked for the New York American, a morning newspaper, for many years. The parties stipulated that Black would testify that after he assumed his job with the respondent, Maloney reported to him that he had a grave illness at home and asked Black if he could remain away from the office for a few days,89 and that this was Black's only conver- sation with Maloney on that subject. From all the evidence we are not satisfied that the respondent acquiesced in any arrangement whereby Maloney could report for work after the workday commenced.90 The respondent also contends that Maloney was unpopular with the district managers. Goldberg testified that this was one of the reasons why he recommended Maloney's dismissal. The Trial Exam- iner erroneously restricted further proof along this line.91 The re- spondent's counsel then offered to prove that "Maloney was known to the men as an inefficient, arbitrary, and unliked man who did not have the cooperation of the A. M. independents; and'that this infor- mation was communicated to the management and was one of the reasons , why the management replaced Mr. Maloney with Mr. Walsmith." We are not convinced upon all the evidence introduced at the hearing that the respondent replaced Maloney for failing to dis- charge members of the Union. We shall accordingly dismiss the complaint to the extent that it alleges the discriminatory discharge of Maloney. 6. Harry Marks and William Shapiro Marks began to work for the respondent in 1923. He was ap- pointed supervisor of the P. M. district managers in 1931 and held this position until he was discharged, together with Shapiro, his assistant, on June 16, 1938. The complaint alleges that Marks and Shapiro were dismissed because they assisted in the formation and organization of the Union. Neither was ever a member of the Union. 19 This stipulation was made near the close of the hearing, at a time when Black was no longer available. 10 It should be noted , however, that this arrangement was not unreasonable. Maloney was in charge of the distribution of the peach edition , which required his presence in the plant at about 5: 00 or 6: 00 p. in., as N,^el1 as the morning edition. It would make an exceptionally long working day if Maloney had to report regularly at 4 : 00 o'clock in the morning and be on hand at 5: 00 or 6:00 in the evening . After walsmith as trans- ferred and Goldberg assumed his duties as supervisor of the A. M district managers, Pete Bush, a checker reported each morning at 4 : 00 o'clock in place of Goldberg. 91 The Trial Examiner adopted too limited a construction of the pleadings . The answer alleges that Maloney was discharged for "insubordination , dishonesty, and inefficiency " The Trial Examiner ruled that Maloney 's unpopularity was not properly an issue under the allegation of inefficiency. 666 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The respondent maintains that they were discharged for "gross dis- honesty, insubordination, and inefficiency"; that Marks was the principal in. these alleged acts of dishonesty, insurbordination, and inefficiency and that Shapiro was merely his assistant. After the respondent decided to dismiss Marks, it determined that Shapiro should also be discharged. We shall therefore consider these two discharges together. Marks alleged that in April or May 1938, he discussed the organi- zation of a union with Shapiro and two or three of the P. M. district managers, including Arthur Hampson, who later replaced Marks as supervisor of the P. M. district managers. Concerning this conver- sation, Marks testified that "it was agreed that we would organize. The morning fellows 92 had been talking about going to organize, and we were going to organize with them and Hampson was in full cooperation with me and he said he would take-get hold of the fellows and talk to them, him and Shapiro, and would have them join the Union." According to Marks, about a week later, Marcum, then circulation manager, asked him, "Are you fellows going to organize ?" and Marks replied, "Yes, sir." Marcum then asked Marks, "Who are you going to use as your spokesman?" Marks called Shapiro over and with him decided that Hampson would act as spokesman for this organization. Both Marks and Shapiro attended the meeting called by Edwards in the middle of May 1938. As we have mentioned above, the persons present at this meeting agreed "to band together for the purpose of organizing and promoting an A. F. of L. Union among the District men at the L. A. Examiner [Los Angeles Examiner]." Although Marks and Shapiro were formally discharged on June 16, 1938, Marks concluded his services for the respondent and was sent on his vacation on June 4, 1938, and Shapiro, a few days later, under the following circumstances. On the evening of June 3, 1938, Black sent John Weisbecker, whom he had employed do May 17, 1938, as'his personal accountant, to Marks with a note stating, "I want Mr. Weisbecker to give me a report on exactly how you handle the street sales draw, returns, rejects and collections from the street sale routemen [district managers]." Black claimed that he had previously sought to obtain this information directly from Marks but that Marks had failed to supply him with it. In particular, Black testified, he wanted information about the so-called "quota" 92A M district managers. HEARST PUBLICATIONS, INCORPORATED 667 system 93 and instructed Weisbecker to obtain such information for him. When Weisbecker presented Marks with the note from Black, Marks decided, admittedly, not to cooperate with him. He claims that he made this decision when Goldberg, who was present at this time, shook his head negatively. Goldberg denied that he had done this. Marks also claimed that he had been instructed in the past not to divulge any information about the respondent's circulation department. Marcum, who was circulation manager under Williams and Guild, predecessors of Black and Logan,94 testified that the district men had been instructed by Guild that "the circulation figures were not to be given to anybody, not even the advertising manager of the newspaper, unless they were sent to his office and had to clear through his office." Although Black did not give Marks such instructions, it appears that Marcum told Marks, after Black's appointment, "to keep the circulation going the way it had been." In order to keep the true condition of the respondent's circulation from Weisbecker, Marks permitted the district managers,to make full returns when they checked in on the morning of June 4, 1938. Ordi- narily, a certain quantity of newspapers would be rejected or "'eaten" by the district managers, thereby, increasing the respondent's circula- tion. Marks did not give a convincing explanation of why he granted the district managers full returns on this day. Weisbecker reported to Black the events described above. Black testified that he was disturbed because Marks had refused to honor his note. At Marcum's suggestion, lie decided to send Marks on a vacation and investigate his division of the circulation department. Marks testified that Black said to him oil the morning of Julie 4, 1938, "What is the matter with that sale" (referring to the absence of rejects) "You mean to tell me, because I sent Mr. Weisbecker down there it cost me three or four thousand sales?" and that he replied, "That was it." Marks did not assert that at this time he explained or attempted to explain to Black that Goldberg shook his head and that 93 This system was another device used by the respondent from time to time to pad its circulation . As explained by Marcum , the respondent would determine that its district managers were , for example, purchasing 22,000 papers a day at 3 cents a copy It knew, thereby, the amount of money the district managers had available for newspapers it would then install a lower rate or "quota " for all copies in excess of a specified number and charge the district managers 3 cents a copy only for the specified number and 1 cent a copy for all over that amount . For the same money, the district managers could then buy many more papers ; and they were required to do so The district managers followed the same plan with their newsboys Marcum testified : "Tor example, a boy could sell on the corner of 7th and Figueroa , 40 papers and was paying '3 cents a copy. we set a new quota of perhaps 25 papers and, in turn, supplied that boy with , instead of 40 papers, which was his regular sale, probably 55 or 60 papers . In other words, he would pay no more for the 60 papers, under the quota, than he previously paid for 40 papers " 9' Marcum continued as circulation manager for the new administration until Tune 10, 1938 668 DECISIONS OF NATIONAL LABOR RELATIONS BOARD he construed the gesture to mean that he was not to give Weisbecker any information. Marks left on his vacation on June 4, 1938; Shapiro followed in a few days. While they were gone, the respondent contends, it dis- covered that Marks was charging the district managers for more papers at 3 cents a copy than he was accounting for to the respondent 95 and that many district managers were required to pay a fee to Marks for their jobs. As a result, the respondent decided to discharge Marks and Shapiro and so notified them on June 16, 1938. Upon the entire record, we are not convinced that the respondent discriminatorily discharged either Marks or Shapiro. We will accord- ingly dismiss the complaint in so far as it alleges their discriminatory discharge. V. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE We find that the activities of the respondent set forth in Section IV above, occurring in connection with the operations of the respondent described in Section 1, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. VI. THE REMEDY Since we have found that the respondent discriminatorily discharged Phil Edwards, Theodore E. Bragg, Louis H. Feldschau, and Jack Stoneman because of their union activities, we will order the respond- ent to offer these persons full reinstatement to their former or substan- tially equivalent positions and to make each of them whole for any loss of earnings he may have suffered by reason of his discharge by payment to each of them of a sum equal to the amount which he normally would have earned as an A. Al. district manager from the date of his discharge to the date of the offer of reinstatement, less expenses normally incurred in connection with his duties and his net earnings 96 during said period. es Marks maintains that this was done with the respondent 's knowledge, as another means of padding circulation . With the additional monies obtained from the district managers, the respondent could record the sale of so many additional papers to Marks at 1 cent a copy. na By "net earnings" is meant earnings less expenses , such as for transportation, room, and board, incurred by an employee in connection with obtaining work and working else- where than for the respondent, which would not have been iucuiied but for his or her unlawful discharge and the consequent necessity of seeking employment elsewhere See Matter of Crossett Lumber Company and United Brotherhood of Carpenters and Joiners of America, Lumber and Sawmill Workers Union, Local 2590, 8 N. L. R. B. 440 . Monies received for work performed upon Federal , State, county, municipal , or other work-relief projects are not considered as earnings , but as provided below in the Order, shall be deducted from the sum due the employee, and the amount thereof shall be paid over to the appropriate fiscal agency of the Federal , State, county, municipal , or other govern- ment or governments which supplied the funds for said work -relief projects HEARST PUBLICATIONS, INCORPORATED 669 Since we have found that the respondent promoted Harold L. Walsmith from A. M. district manager to supervisor of the A. M. dis- trict managers in order to quash the Union and thereafter transferred and then discharged him because he failed to thwart the Union, we will order the respondent to offer him full reinstatement to his position as A. M. district manager or to a substantially equivalent position and to make him whole for any loss of earnings he may have suffered by reason of his discharge by payment to him of a sum equal to the amount he normally would have earned as an A. M. district manager from the date of his discharge to the date of the offer of reinstatement, less expenses normally incurred in connection with his duties and his net earnings during said period .9 We will also order the respondent to cease and desist from inter- fering with, restraining, or coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act. We have found that John J. Sisto was not discriminatorily dis- charged because of his union activity. We have also found that the respondent did not discharge Edward J. Maloney for failing to dismiss members of the Union or Harry Marks and William Shapiro because they assisted the Union. We will therefore dismiss the complaint in so far as it relates to John J. Sisto, Edward J. Maloney, Harry Marks, and William Shapiro. Upon the basis of the above findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. Newspaper Circulators, Wholesale Distributors and Miscel- laneous Employees, Federal Union No. 21666, is a labor organization, within the meaning of Section 2 (5) of the Act. 2. By discriminating in regard to the hire and tenure of employ- inent of Phil Edwards, Theodore E. Bragg, Louis H. Feldschau, Jack Stoneman, and Harold L. Walsmith, and thereby discouraging mem- bership in the Union, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (3) of the Act. 3. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (1) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. 97 Walsmith, it should be noted, was reemployed by the respondent in January 1939, in a less remunerative position 670 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 5. The respondent has not discriminated in regard to the hire and tenure of employment of John J. Sisto, Edward J. Maloney, Harry Marks, and William Shapiro, 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 re- spondent, Hearst Publications, Incorporated, (Los Angeles Examiner Department), San Francisco, California,- and its officers, agents, suc- cessors, and assigns, shall : 1. Cease and desist from : (a) Discouraging membership or activity in Newspaper Circu- lators, Wholesale Distributors and Miscellaneous Employees, Federal Union No. 21666, or any other labor organization of its employees by discriminating in regard to hire or tenure of employment or any term or condition of employment; (b) In any other manner interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, as guaranteed in Section 7 of the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Offer to Phil Edwards, Theodore E. Bragg, Louis H. Feldschau, and Jack Stoneman immediate and full reinstatement to the respective positions which each of them held with the respondent on the date of their discharge or substantially equivalent positions, without prejudice to their seniority and other rights and privileges; (b) Offer to Harold L. Walsmith immediate and full reinstatement to his position as A. M. district manager or to a substantially equiva- lent position, without prejudice to his seniority or other rights and privileges; (c) Make whole Phil Edwards, Theodore E. Bragg, Louis H. Feldschau, Jack Stoneman, and Harold L. Walsmith for any' loss of pay they have suffered by reason of their discharge by payment to each of them of a sum of money equal to that which each would normally have earned as an employee of the respondent during the period from the date of his discharge or discriminatory transfer to the date of the offer of reinstatement, less expenses normally incurred in con- nection with his duties and his net earnings during that period, de- HEARST PUBLICATIONS, INCORPORATED 671 ductling, however, from the amount otherwise due to-each of said employees, monies received by said employee during said period for work performed upon Federal, State, county, municipal, or other work-relief projects; and pay over the amount, so deducted, to the appropriate fiscal agency of the Federal, State, county, municipal, or other government or governments which supplied the funds for said work-relief projects; (d) Post immediately and keep posted for a period of at least sixty (60) consecutive days from the date of posting notices to its employees in conspicuous places at the office of the Los Angeles Examiner in Los Angeles, California, stating that the respondent will not engage in the conduct from which it is ordered to cease and desist in paragraphs-, 1 (a) and (b) of this Order; that it will take the affirmative action set forth in paragraphs 2 (a), (b), and (c) of this Order; and that the respondent's employees are free to become, or remain members of Newspaper Circulators, Wholesale Distributors and Miscellaneous Employees, Federal Union No. 21666, and that the respondent will not discriminate against any employee because of membership or activity in that organization; (e) Notify the Regional -Director for the Twenty-first Region in writing within ten (10) days from the date of this Order what steps the respondent has taken to comply therewith. AND IT IS FURTHER ORDERED that the complaint in so far as it alleges that the respondent, Hearst Publications, Incorporated, (Los Angeles Examiner Division), has discriminatorily discharged John J. Sisto, Edward J. Maloney, Harry Marks, and William. Shapiro within the meaning of Section 8 (3) of the Act be, and it hereby is, dismissed. AND IT IS FURTHER ORDERED that the complaint in so far as it alleges that the respondent interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act, by causing the arrest of the president of the Union or by permitting and encouraging the circulation on company time and property of a petition requesting members to withdraw from the Union, be, and it hereby is, dismissed.