Okey Hosiery Co., Inc.

In the Matter of OKEY HosIERY COMPANY, INCORPORATED AND R. H. THEILING, RECEIVER and AMERICAN FEDERATION 01' HOSIERY WORK- ERS, NORTH CAROLINA DISTRICT Case No. C-956.Decided April 8,1940 Hoscery Manufacturing Industry-Interference, Restraint, and Coercion: in- structions to foreman to keep Union out of plant; employer-conducted elec- tion--Discrinnnation: discharges ; charges of, not sustained-Procedure : record reopened to join receiver as party respondent when receivership proceedings instituted subsequent to hearing. Mr. Charles Y. Latimer, for the Board. Guthrie, Pierce cC Blakeney, by Mr. F. Grainger Pierce and Mr. Whiteford S. Blakeney, of Charlotte, N. C., for the respondent. Mr. Henry I. Adams, of Charlotte, N. C., for the Union. Mr. F. Hamilton Seeley, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly filed by American Fed- eration of Hosiery Workers, North Carolina District, herein called the Union, the National Labor Relations Board, herein called the Board, by the Acting Regional Director for the Fifth Region (Baltimore, Maryland), issued its complaint dated June 10, 1938, against Okey Hosiery Company, Incorporated, Charlotte, North Carolina, herein called the respondent, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1) and (3) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the complaint and notice of hearing thereon were duly served upon the respondent and the Union. Concerning the unfair labor practices, the complaint, as amended, alleged in substance that the respondent (1) terminated the employ- ment of and refused to reinstate Clifford A. Herrin and Edwin R. Condor, its employees, because of their membership in, and affiliation with, the Union and because they engaged in concerted activities with 22 N. L. R. B., No. 49. 792 OKEY HOSIERY COMPANY, INCORPORATED 793 other employees of the respondent for the purpose of collective bar- gaining and other mutual aid and protection; (2) terminated the employment of and refused to reinstate Ernest Ross, an employee, because of his sympathy with and assistance to the Union; and (3) by making threats to close the plant and to move operations else- where, by conducting an election at the plant, by making remarks calculated to discourage the membership of its employees in, and their affiliation with, the Union, and by other acts, interferred with, restrained , and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. On June 18, 1938, the respondent filed its answer to the com- plaint which, as amend cQduring the hearing, admitted certain spe- cific allegations but denied the allegations of unfair labor practices. The respondent also,.Zenied the jurisdiction of the Board on the ground that it wasx^riot engaged in interstate commerce. Pursuant to notice a hearing was held on June 27, 28, and 29, 1938, at Charlotte, North Carolina, before Harlow Hurley, the Trial Exam- iner duly designated by the Board. The respondent and the Board were represented by counsel ; the Union was represented by its dis- trict manager. All parties participated in the hearing and were af- forded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing upon the issues. At the opening of the hearing, the Trial Examiner granted the motion of counsel for the Board to amend the complaint to cover the alleged discriminatory discharge of Ross. At the opening of the hearing, at the conclusion of the Board's case, and again at the conclusion of the hearing, the respondent moved to dismiss the complaint upon the ground that the Board lacked jurisdiction over the respondent. These motions were denied by the Trial Examiner. At the conclu- sion of the hearing the Board's attorney moved to conform the plead- ings to the proof. This motion was granted by the Trial Examiner. During the course of the hearing, the Trial Examiner made rulings on other motions and on objections to the admission of evidence. The Board has reviewed the rulings of the Trial Examiner and finds that no prejudicial errors were committed. The rulings are hereby affirmed. On August 23, 1938, the respondent submitted a brief in support of its contentions to the Trial Examiner. On September 20, 1938, the Trial Examiner filed his Intermediate Report, copies of which were duly served upon the respondent and the Union. The Trial Examiner found that the respondent had en- gaged in unfair labor practices affecting commerce within the mean- ing of Section 8 (1) and (3) and Section 2 (6) and (7) of the Act. He recommended that the respondent cease and desist from its un- fair labor practices, reinstate Herrin and Condor with back pay, 794 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and post appropriate notices in its plant. He further recommended that the complaint be dismissed in regard to Ross. On October 5, 1938, the respondent filed exceptions to the Inter- mediate Report and a request for oral argument before the Board. On November 5, 1938, it filed a brief in support of the issues raised by its exceptions. The Union did not file any exceptions to the Intermediate Report. On December 10, 1938, R. H. Theiling, herein called the Receiver, filed with the Board: (1) an affidavit alleging that pursuant to a cause of action 1 instituted in the Superior Court of Mecklenberg County, North Carolina, on or about September 10, 1938, the respond- ent was adjudged insolvent and that on September 23, 1938, Theiling was appointed permanent receiver; (2) a certified copy of an excerpt from the court order making such appointment; and (3) a petition to make additions to the record and a request that the Board reopen the record for this purpose. On April 19, 1939, the Board, acting pursuant to Article II, Sec- tion 36, of National Labor Relations Board Rules and Regulations- Series 1, as amended, ordered that the record be reopened for the purpose of introducing evidence that the respondent had been placed in receivership and for the purpose of making the Receiver a party to this proceeding, that a further hearing be held, and that the pro- ceeding be remanded to the Regional Director for the purpose of conducting such further hearing. The Board further authorized the Regional Director to accept a third amended charge and to issue thereon an amended complaint and notice of such further hearing. Upon a third amended charge duly filed by the Union, the Regional Director issued an amendment to complaint, dated May 4, 1939, join- ing the Receiver as a party respondent. Copies of the amendment to complaint and notice of hearing thereon were duly served upon the respondent, the Receiver, and the Union.2 On May 9, 1939, the respondent and the Receiver filed their answer to the amendment to complaint issued on May 4, 1939, in which they admitted the appoint- ment of the Receiver, alleged affirmatively that the alleged unfair labor practices occurred prior to the receivership, and denied that the Receiver could be held liable therefor. On May 9, 1939, the Regional Director issued an amended com- plaint and notice of hearing thereon, copies of which were duly, 1 Royersford Needle Works. Inc. v. Okey Hosiery Company. 2 Pursuant to the notion granted by the Trial Examiner at the hearing to amend the complaint to allege the discriminatory discharge of Ross, the Regional Director on May 5, 1939, issued an additional amendment to complaint setting forth this allegation. Copies of this amendment were served upon all the parties. On May 10, 1939, the respondent and the Receiver filed an answer denying that they had engaged in any unfair labor practices with respect to Ross. OKEY HOSIERY COMPANY, INCORPORATED 795 served upon all parties. The amended complaint incorporated the allegations of the complaint and the amendment to the complaint. On May 11 , 1939, the respondent and the Receiver filed their answer to the amended complaint in which they repeated the denials and defenses contained in the answers previously filed. On May 11, 1939, the respondent , the Receiver , the Union, and counsel for the Board entered into a stipulation , subject to the approval of the Board. This stipulation provided , inter alia, "that the record heretofore made shall be the record in the case with the same force and effect as if offered pursuant to said amendment to complaint and all motions, exhibits, and testimony heretofore filed shall be considered pursuant to said amended complaint with both the Company [respondent] and the Receiver as parties." On October 19, 1939, the Board issued its order approving the said stipulation. Pursuant to notice duly served upon all parties , a hearing was held on July 6, 1939 , at Washington, D. C., before the Board for the purpose of oral argument. The respondent and the Receiver were represented by counsel and participated in the hearing . Although afforded an opportunity, the Union did not participate. The Board has considered the exceptions to the Intermediate Report, the brief, and argument in support thereof and , save for those exceptions which are consistent with the findings , conclusions , and order set forth below, finds them to be without merit. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Okey Hosiery Company, Incorporated, a North Carolina corpora- tion,' is engaged in the business of manufacturing ladies' full- fashioned silk hosiery at its plant in Charlotte, North Carolina. The principal raw materials consist of silk and cotton, of which the respondent uses approximately 2,000 pounds of silk and 500 pounds of cotton per week. The respondent produces approximately 2,700 dozens of hosiery per week for which it is paid approximately $5,000. The respondent operates under a lease contract with ' the Vertex Hosiery Mills, Inc., Allentown, Pennsylvania. This contract pro- vides among other matters that the Vertex Hosiery Mills, Inc., will supply the respondent with the necessary raw materials for the manufacture of hosiery and, in turn, that it will purchase all of s On March 1, 1938, the respondent was placed on the inactive list of corporations by the Secretary of State of North Carolina. A This contract was entered into by the respondent on August 3, 1936, with Ajax Hosiery Mills and apparently assigned by the latter company to Vertex Hosiery Mills, Inc 796 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the respondent's product upon a percentage basis. Pursuant to the terms of this contract, the Vertex Hosiery Mills, Inc., ships, on consignment to the respondent, cotton secured in North Carolina and silk secured in Pennsylvania. After the raw materials are manufactured into hosiery by the respondent the entire output is shipped on consignment to the Vertex Hosiery Mills, Inc., into the Commonwealth of Pennsylvania.,' About September 10, 1938, the respondent was adjudged insolvent by the Superior Court of Mecklenberg County, North Carolina. On September 23, 1938, R. H. Theiling was appointed permanent re- ceiver by the court and authorized "to proceed with the performance of the contracts now in process of performance . . . and to carry on the general business of said corporation and the operation of its plant pending further orders of the court." II. THE LABOR ORGANIZATION INVOLVED American Federation of Hosiery Workers, North Carolina Dis- trict, is a labor organization affiliated with Textile Workers Organizing Committee, which in turn is affiliated with the Committee for Industrial Organization.6 The Union admits to membership production and maintenance employees of the respondent. III. THE UNFAIR LABOR PRACTICES A. Interference, restraint, and coercion In the summer of 1937 the Union, which during the preceding 3 years had been unsuccessful in organizing the respondent's em- ployees, started an intensive campaign for members. In the spring of 1937 the respondent's president, Okey, Sr., called a meeting of the "best" knitters and outlined an employees' stock-ownership plan under which the respondent would purchase knitting machines and move the plant to a locality about 8 miles from the city of Char- lotte.7 These employees were given an opportunity to subscribe for shares of stock in the new enterprise and a number of them did so subscribe. Thereafter the plan was abandoned and those employees who had subscribed were reimbursed in full. The complaint alleges that the respondent threatened to close its plant and move operations elsewhere in order to discourage union activity. The record does not support this allegation. Okey, Sr., 5 See Matter of Benjamin Fainblatt et at and International Ladies' Garment Workers' Union, Local No 149, 1 N. L. R B. 864 enf'd, N. L. R B. v Fainblatt et at, 306 U. S. 601, rev'g 98 F. (2d) 615 (C. C A. 3) ; Matter of Harrisburg Children's Dress Company and International Ladies' Garment Workers' Union, 2 N. L. R B. 1058. ° Now Congress of Industrial Organizations. 4 Most of the knitting machines then in operation at the plant were leased and not owned by the respondent. OKEY HOSIERY COMPANY, INCORPORATED 797 told the employees that the proposed removal was for the purpose of obtaining lower rent and avoiding city taxes. The Union was not mentioned during the speech. The proposed location of the new plant was not inaccessible to the employees, many of whom lived in that vicinity. There is no evidence to support a finding that the removal was used as a threat to combat the organizational efforts of the Union.' Ernest Ross, the ranking foreman, testified that in August 1937 he was instructed by Okey, Sr., to discourage the employees from joining the Union, and that Okey, Sr., 'said, "We don't want the Union to come in here, you . . . are in charge of bad work, and you know what to do." Okey, Sr., denied having so instructed Ross. The Trial Examiner, who had an opportunity to observe the de- meanor of the witnesses, did not credit Okey's denial. We find that Okey, Sr., issued the instructions testified to by Ross. Ross tes- tified that he made no attempt to enforce these instructions. None- theless we are of the opinion that Okey, Sr., by issuing the instruc- tions, sought to interfere with and discourage the employees in the exercise of their right to self-organization. On March 18, 1938, Henry Adams, a union organizer, conferred with- Okey, Sr., in an attempt to gain recognition for the Union as the collective bargaining agent of the respondent's employees. Okey, Sr., questioned Adams' claim that the Union had been designated by a majority of the employees and the conference ended. There- after on March 29, 1938, the respondent conducted an "election" among its employees. The respondent had ballots printed in the following form : Do You WANT THE AMERICAN FEDERATION OF HOSIERY WORKERS (C. I. 0.) TO REPRESENT You? Yes ---------- No ---------- No signature required These ballots were distributed by the respondent's foremen who in- structed the employees to check the ballots. The ballots were then collected by the foremen and turned over to the management. No representative of the Union or the Board participated in this election. The employees were not informed of the purpose of the election or of the results. However, Okey, Sr., testified that the vote was 8 The respondent subsequently transferred five knitting machines to a Florida corporation also owned by Okey, Sr., but there is no evidence that this transfer was used as an implied warning to the employees to retrain from joining the Union. 798 DECISIONS OF NATIONAL LABOR RELATIONS BOARD overwhelmingly in favor of no representative. In previous decisions we have repeatedly condemned elections held by employers without the consent of all the labor organizations involved.9 Our experience has shown that the sponsorship of an election by the employer, the conduct of it in his plant during the customary working hours with supervisory officials present, and the possibility, doubtless known to employees, of hidden identification marks on the ballots, have the effect of influencing the employees to vote as they believe the em- ployer desires 10 We find that the election conducted by the respond- ent amounted to an interference with the employees in the exercise of their rights under the Act. We find that the respondent, by its instructions to Ross and its conduct of the above-described election, interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. B. The alleged discriminatory discharges Edwin Reid Condor. Condor was employed by the respondent as a knitter in May 1934. He joined the Union on April 26, 1937, became a member of the organizing committee, and was active in soliciting members for the Union. Condor made no attempt to conceal his union activities and wore a union button while working at the plant. On December 16, 1937, certain knitting machines, including Con- dor's, were shut down and Condor was laid off. The record shows that the machines were shut down because of a temporary curtailment in operations and that approximately 50 other employees, many of whom were not members of the Union, were also laid off at that time. At no time did Condor attribute the shut-down and his consequent lay-off to his union activities. In view of all the circumstances, we find that the respondent did not discriminate against Condor by the lay-off of December 16, 1937. The respondent asserts that Condor was not reemployed because of his conduct at the time he was laid off. Ordinarily the respondent's 9 See Matter of Remington Rand, Inc and Rem ington Rand Joint Protective Board of the District Council Office Equipment Workers, 2 N L. R B 626 , enf'd, N L. R. B v. Remington Rand, Inc., 94 F. (2d) 862 ( C C. A 2d, 1938 ) ; Matter of Maryland Distillery, Inc and Distillery Workers Union 20270, 3 N. L R . B. 176; Matter of Northrop Corpora- tion and United Automobile Workers, Local No 229, 3 N L. R. B . 228, 234; Matter of Eagle Manufacturing Company and Steel Workers Organizing Committee , 6 N L R B. 492, enf'd, N. L R B v Eagle Manufacturing Company, 99 F (2d) 930 (C C A 4th, 1938 ) ; Matter of McNeely & Price Company and National Leather Workers Association, Local No. 30 of the C I. 0 , 6 N L. It. B 800 , Matter of The Heller Brothers Company of Newcomerstown and International Brotherhood of Blacksmiths, Drop Forgers, and Helpers, 7 N L. R B 646, 657; Matter of Shellabarger Grain Products Company and Flour and Cereal Workers Union, No 20765, 8 N. L R . B 336 Cf J Wiss if Sons Company and United Electrical, Radio if Machine Workers of America, 12 N L. It. B. 601 ; Matter of Lengel-Fencil Company and American Federation of Hosiery Workers, 8 N. L R B 988. 10 Matter of The Heller Brothers Company of Newcoinerstoion and International Brother- hood of Blacksmiths, Drop Forgers, and Helpers, 7 N L. R B 646, 657. OKEY HOSIERY COMPANY, INCORPORATED 799 employees are paid for work performed during the previous week since several days are required to make up the pay roll and balance the accounts of the employees. This lag was known and understood by Condor. Okey, Sr., testified that when Condor was laid off he became angry and demanded his pay check, immediately, and that when he reminded Condor of the lag Condor proceeded to curse him. In an effort to calm Condor, Okey, Sr., ordered the bookkeeper to prepare his pay check immediately. While this was being done, Condor remained inside the office contrary to a plant rule requiring employees to stand outside the office barrier. Because of this occur- rence in his office, Okey, Sr., issued orders that Condor was not to be reemployed at the plant in the future. Okey, Sr., testified, "I bear Ed Condor no ill will. I never have. I am not willing to put him back to work. I feel that I must draw a line somewhere on discipline." A stenographer and another employee testified that they were present during the above-described occurrence and their testimony supports that of Okey, Sr. Condor did not deny that he had acted in the manner described by the respondent's witnesses. We find that the respondent has not discriminated against Edwin Reid Condor because of his union activity. Clifford Art/uuir Herrin.'1 Herrin started to work for the respond- ent in December 1936. He joined the Union in April 1937 and became active in soliciting members for the Union. Herrin was among those employees laid off along with Condor in December 1937. The alle- gation that Herrin was discriminatively discharged is not supported by the record. Herrin testified that he applied for reinstatement in January 1938 but that another employee had filled his position. He applied again early in April and was again refused employment.12 Herrin did not thereafter apply for reinstatement. The respondent denies that Her- rin applied for his position in January. Assuming Herrin's testi- mony to be correct, we do not find that Herrin was discriminated against since his position was already filled. Niemer, the foreman, testified that Herrin was intoxicated at the time he applied for work in April and that he was not reinstated for that reason. This was not denied by Herrin. While there is some evidence that drinking is not uncommon around the plant, the record is insufficient to support a finding that the respondent refused to reinstate Herrin because of his membership in and activities on behalf of the Union. Ernest Ross. The complaint as amended alleges that the respon- dent terminated the employment of and refused to reemploy Ross Incorrectly spelled "Herring" in the complaint and amended complaint It is the respondent 's practice to post a notice at the plant whenever positions are available following a shut-down. The respondent makes no attempt to notify the individual employees. Soo DECISIONS OF NATIONAL LABOR RELATIONS BOARD because of his sympathy with and assistance to the Union. The Trial Examiner in his Intermediate Report found that the respondent had not discriminated against Ross, and he recommended that the com- plaint as amended be dismissed in regard to him. The Union did not file any exceptions to this recommendation. We have consid- ered the evidence in regard to Ross and are satisfied that the Trial Examiner's finding is correct. We find that the respondent has not discriminated against Ernest Ross because of his sympathy with and assistance to the Union. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE We find that the activvties of the respondent set forth in Section III A above, occurring in connection with the operations of the re- spondent described in Section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the sev- eral States, and tend to lead to labor disputes burdening and obstruct- ing commerce and the free flow of commerce. V. THE REMEDY Having found that the respondent has interferred with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act, we shall order the respondent to cease and de- sist therefrom and to post notices throughout its plant stating that it will so cease and desist. The respondent's employees will thus be assured that they may exercise the rights guaranteed by the Act free from interference, restraint, and coercion by the respondent. The Receiver's contention that, since the alleged unfair labor prac- tices occurred prior to his appointment, he therefore "may not be charged or in any wise held liable therefor" is without merit. Our order will be directed against the Receiver with the same force and effect as against the respondent 13 Upon the basis of the foregoing findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. American Federation of Hosiery Workers, North Carolina Dis- trict, affiliated with the Congress of Industrial Organizations, is a labor organization within the meaning of Section 2 (5) of the Act. 13 See Matter of Mason Manufacturing Company and United Furniture Workers of America, Local No. 576, 15 N. L R B. 295; Matter of Arthur L Colten, and A. J. Colman, co-partners, doing business as Kiddie Kover Manufacturing Company and Amalgamated Clothing Workers of America, 15 N L R B 355, enf'd N. L R B. v. Arthur L. Colten and Abe J. Colman, doing business as Kiddie Kover Manufacturing Company, 105 F. (2d) 179 (C C. A 6) ; Matter of McKesson & Robbins, Inc., et al . and International Longshore- men & Warehousemen's Union, Local No. 9, District 1, affiliated with the C . 1. 0., 19 N L R. B 778. OKEY HOSIERY COMPANY, INCORPORATED ' 801 2. 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. 3. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of ' Section 2 (6) and (7) of the Act. 4. The respondent has not engaged in unfair labor practices with- in 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 Rela- tions Act, the National Labor Relations Board hereby orders that the respondent, Okey Hosiery Company, Incorporated, and its Re- ceiver, officers, agents, successors, and assigns shall: 1. Cease and desist from in any manner interfering with, restrain- ing, or coercing its employees in the exercise of the right to self- organization, to form, join, or assist labor organizations, to bar- gain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining and other mutual aid and 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) Immediately post notices in conspicuous places throughout the plant, and maintain such notices for a period of at least sixty (60) consecutive days, stating that the respondent will cease and desist in the manner aforesaid ; (b) Notify the Regional Director for t}ra Fifth Region in writ- ing within ten (10) days from the date of this Order what steps the respondent has taken to comply herewith. AND IT IS FURTHER ORDERED that the allegations of the complaint and amended complaint; in so far as they allege that the respondent has engaged in unfair labor practices within the meaning of Sec- tion 8 (3) of the Act, be, and they hereby are, dismissed.