Allied Yarns Corp.

In the Matter of ALLIED YARNS C ORPORATION and TEXTILE WORKERS UNION OF AMERICA, AFFILIATED WITH THE C. I. O. Case No. C-1574.-Decided August 26, 1940 Jurisdiction : novelty yarn manufacturing industry. Unfair Labor Practices Discrimination: charges of, dismissed as to three persons. Refusal to reinstate active union employee after she secured intervention of union committee in effort to obtain reemployment during a temporary lay- off, held discriminatory where alleged misconduct of committee in conferring with the respondent found to be only a pretext for refusal to reemploy. Collective Bargaining: charges of refusal to bargain collectively, dismissed. Where the respondent had indicated no unwillingness to enter into a written contract, as such, and where further negotiations were contemplated held not inconsistent with the duty imposed by the Act for the respondent to decline to enter into a written contract prior to the reaching of an accord as to all the basic terms then the subject of consideration. Where during negotiations with the union there has been an increase in personnel, which casts a reasonable doubt upon the majority of the union, respondent's request for such proof of majority before continuing the negotia- tions held not to be a refusal to bargain within the meaning of the Act. Remedial Orders : reinstatement and back pay awarded discriminatorily dis- charged employee. Mr. Daniel Baker, for the Board. Feldman d Barrett, by Mr. Maxwell Barrett, of New York City, for the respondent. Mr. Alfred Udoff, of New York City, for the Union. Mr. Raymond J. Compton, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly filed by Textile Workers Union of America, affiliated with the Congress of Industrial Organi- zations, herein called the Union , the National Labor Relations Board, herein called the Board , by the Regional Director for the Second Region (New York City), issued its complaint dated August 17, 1939, against Allied Yarns Corporation , New York City, the respondent 26 N. L. R. B., No. 132. 1440 ALLIED YARNS CORPORATION 1441 herein, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the complaint, accompanied by notice of hearing thereon, were duly served upon the respondent and the Union. The complaint alleged in substance that the respondent (1) discharged and thereafter refused to reinstate Sarah Handelman, Estelle Rosenthal, Eleanor Newman, and Irene Resen, for the reason that they joined and assisted the Union and engaged in concerted activities for the purposes of collective bargaining and other mutual aid and protection; (2) on or about June 1, 1938, and at all times thereafter, refused to bargain collectively with the Union as the exclusive representative of its employees within an appropriate bargaining unit, although the Union represented a majority of such employees; and (3) by the afore-mentioned acts, as well as by urging, persuading, and warning its employees to refrain from becoming or remaining members'of the Union, by threatening its employees with discharge and other reprisals if they became or remained members of the Union, by questioning employees with respect to their interest in the Union, by making statements deroga- tory to the Union, 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 18, 1939, the respondent filed a written answer to the complaint, denying that its operations affect commerce among the several States or that it had engaged in the unfair labor practices alleged therein and setting forth as an affirmative defense that the employees named in the complaint had been laid off for lack of work. Pursuant to notice, and notices of postponement, a hearing was held at New York City from September 18 to 22, 1939, before Gustaf B. Erickson, the Trial Examiner duly designated by the Board. The Board and the respondent were represented by counsel, partici- pated in the hearing, and were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing upon the issues. During the hearing, the Trial Examiner denied a motion by the respondent that its answer be amended to allege that the employees named in the complaint were laid off not only for lack of work but also because- of their incompetence. This ruling is hereby reversed in accordance with the order of the Chief Trial Examiner hereinafter set forth. The respondent further moved that its answer be amended to allege that Sarah Handelman was refused reinstatement because she had threatened Bernard Ziman, the respondent's president, and William Miller, a foreman, with bodily harm. The motion was granted. 'At the close of the Board's case, the Trial Examiner denied a motion by the respondent to dismiss 1442 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the complaint because of the insufficiency 'of the evidence. At the conclusion of the hearing, a motion by counsel for the Board to amend the complaint to conform to the proof with respect to variances in names and dates was granted by the Trial Examiner. On October 4, 1939, the respondent filed a written motion to dismiss the complaint for failure of proof. The Trial Examiner denied the motion in his Intermediate Report filed thereafter. On January 10, 1940, the Chief Trial Examiner, acting pursuant to Article II, Section 30, of National Labor Relations Board Rules. and Regulations-Series 2, as amended, and in accordance with the above-mentioned motion of the respondent which the Trial Examiner previously had denied, ordered that the hearing be reopened for the purpose of permitting the respondent to amend its answer to the effect that certain employees alleged in the complaint to have been dis- charged for union activities were discharged because of incompetence, and to offer evidence pertinent to the, issues raised by such amend- ment. Pursuant to notice and notice of postponement, a further hearing was held at New York City on February 26, 1940, before Gustaf B. Erickson, the Trial Examiner duly designated by the Board.. The Board and the respondent were represented by counsel and participated in the hearing. At the commencement of the hearing, the Trial Examiner permitted the respondent to amend its answer to allege that the lay-off of Eleanor Newman and Irene Resen was caused by their incompetence as well as lack of work. All parties were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing upon the issues raised by the amendment to the respondent's answer. The Board has reviewed the rulings of the Trial Examiner on motions and on objections to the admission of evidence and finds that no prejudicial errors were committed. Except as indicated above, the rulings are hereby affirmed. The Trial Examiner filed his Intermediate Report dated May 9, 1940, copies of which were duly served upon the parties. He found that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the Act. He accordingly recommended that the respondent cease and desist from engaging in the unfair labor practices; that it offer reinstatement to their former positions, with back pay, to the four employees found by him to have been discriminatorily discharged and refused reemployment by the respondent; and that upon request it bargain collectively with the Union. Thereafter, the respondent filed exceptions to the Intermediate Report of the Trial Examiner, and a brief in support of its exceptions. The Union and the respondent waived the right to present oral argu- ALLIED YARNS CORPORATION 1443 ment before the Board. The Board has considered the exceptions of the respondent and finds them to be without merit except as they are consistent with the findings, conclusions, and order set forth below. Upon the entire record in the case, the Board makes the following: FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENT The respondent is a New York corporation engaged in the manu- facture, sale, and distribution of novelty yarns. Its factory, ware-. house, and principal place of business are located in New York City. The raw materials purchased by the respondent include wool, rayon, and cotton. In 1938 the gross volume of such purchases totaled be- tween $50,000 and $90,000, of which approximately 90 per cent of the wool, 75 per cent of the rayon, and more than 50 per cent of the cotton, were shipped to the respondent's plant from points outside the State of New York. During the same period, the respondent's gross volume of sales amounted to approximately $275,000, of which approximately 10 per cent were shipped to States other than New York. The respondent employs from 40 to 90 employees in the opera- tion of its plant. 1I. THE ORGANIZATION INVOLVED Textile Workers Union of America, formerly known as Textile Workers Organizing Committee,' is a labor organization affiliated with the Congress of Industrial Organizations, herein called the C. I. 0., admitting to membership employees of the respondent. III. THE UNFAIR LABOR PRACTICES A. The alleged refusal to bargain collectively On July 14, 1938, pursuant to the terms of a contract entered into by the respondent and the Union in July 1937, Weinberg, representing the Union, met with Maxwell Barrett, counsel for the respondent, for the purpose of negotiating a renewal contract. The proposed terms which Weinberg presented for the respondent's approval included a 10-per cent wage increase, a preferential shop, the in- auguration of a check-off system, and a decrease in the number and an increase in the wage rate of learners. Barrett advised Weinberg that he would present these demands to Bernard Ziman, president, and Max Berger, vice president of the respondent, for their considera- tion, and suggested that Weinberg communicate with him in the near future. ' The name of the Union was changed to Textile Workers Union of America at a convention on May 15, 1939. 1444 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Following the above conference, Martin Sher replaced Weinberg As the representative of the Union. On or about July 28, 1938, Sher telephoned Barrett and was asked to submit proof of the Union's majority membership before proceeding with the negotiations. At a conference on August 9, Sher submitted to Barrett 36 authoriza- tion cards which had been signed by the respondent's employees at a union meeting on August 5, and the Union was thereupon acknowl- edged by the respondent to be the representative of a majority of its production employees. Barrett told Sher that the respondent was "union-minded" and would sign another contract following an agreement as to terms, but pointed out that the respondent had been placed in a disadvantageous position by signing a contract with the Union in 1937 when its competitors had not, and that it was doubtful .that the respondent would grant a wage increase under the conditions then existing. Barrett further stated that since he was not authorized to commit the respondent definitely to any of the proposed terms he would arrange a conference at which- Ziman and Berger would be present. Accordingly, on August 18, 1938, Ziman and Berger attended a conference in Barrett's office, at which Lloyd Klenert, vice president of the Greater New York Board of the Textile Workers Organizing Committee, and Jerome Jacobson, its counsel, represented the Union. According to Klenert, the respondent expressed its reluctance to enter into a contract when its competitors had not, refused to grant any wage increase, rejected the preferential shop and learner proposals, and also refused to renew the old contract without change. He testified, however, that the respondent agreed to submit counter- proposals at a later date. The same day, the Union filed charges with the Board alleging that- the respondent had failed to bargain in good faith. Barrett denied that the respondent had refused to renew the old contract or to agree to any of the new demands, and testified that at all times from and after August 18, 1938, the respondent was willing to accede to all the terms proposed .by the Union with the exception of the wage increase. It was stipulated at the hearing that the testimony of Ziman and Berger, if questioned as to the bar- gaining conferences in which they participated, would be the same as that of Barrett. The Trial Examiner found that the respondent had conceded none of the Union's demands, failed to make counter-proposals, refused to renew the old contract or to make any agreement with the Union in the absence of similar union agreements with its competitors, and that at that time it had wholly abandoned the terms of the old contract which had expired on August 1. He further found that on August 18 the Union offered "a mere renewal of the old contract without change ALLIED YARNS CORPORATION 1445 in wages," which the respondent refused. The Trial Examiner con- cluded that on this date the respondent had failed to bargain in good faith with the Union. Although it is not clear that the respondent at ,this conference made all the concessions which it claims to have made, we do not believe, on the other hand, that the Union was willing to agree to a contract which provided for no change in wages, since during the subsequent negotiations hereinafter discussed the Union at no time receded from its demand for a wage increase. The failure of the respondent to make counter-proposals during this conference is largely compensated for by its agreement to offer them at a later date. That they were not tendered thereafter we do not believe is attributable to the bad faith of the respondent, but rather to the course taken by the subsequent negotiations. While it also appears that the respondent abandoned some of the provisions of the old contract following its expiration, the evidence does not show that it had done so at this time.' We are of the opinion that the respondent did not refuse to bargain in good faith with the Union on August 18, 1938. On August 30, 1938, Barrett and Sher met in the office of Charles, Kramer, a field examiner for the Board, for-the purpose of discussing the charges filed by the Union. Barrett denied that the respondent had failed to bargain in good faith and asserted that the respondent was at all times prepared to negotiate with the Union and would be willing to resume negotiations at once. Barrett admitted to Kramer that there was some "hesitancy" on the part of the respondent to sign a contract because Ziman "felt or thought that he was, at a dis- advantage in being one of the very few who were unionized." He told them, however, that he realized and had made it clear to the respondent that such a position was not a legally justifiable excuse for delaying negotiations, but that it was "a consideration that they bear in mind." Barrett then suggested that the negotiations be postponed for "a couple of months" pending the action of other employers in the indus- ,try with respect to the. signing of contracts with the Union, as he testified, "not with the view of delaying signing the contract or de- laying negotiations, but with the view of getting together." Kramer in turn suggested that the respondent and the Union renew the old agreement and leave the wage increase for further negotiation. Barrett stated that he would submit this proposal to his clients, but that since the respondent was willing to abide by the "spirit and letter" of the old old contract,' he did not deem it advisable for the respondent to sign any contract until there was complete accord as to 2 Although Ziman testified at the hearing that the respondent had abandoned the seniority provision and had paid time and one-half for overtime on a 44-hour instead of a 40-hour basis following the expiration of the old contract on August 1, 1938, the evidence does not establish that this abandonment occurred either during the period the respondent was asserting its willingness to abide by the terms of its prior contract or before the negotiations reached an impasse in November 1938. 3 See footnote 2, supra. 323429-42-92 1446 DECISIONS OF NATIONAL LABOR RELATIONS BOARD all the terms to be included in the new agreement. On this point Barrett testified as follows: Q. Then why did you feel it was something you did not want you clients to do? A. Because I felt that it would put upon them some pressure, .some compelling pressure to make them do something, which they did not want to do, and as long as they were living up to the agreement and not violating it, and that the workers were not in the slightest degree prejudiced by the nonsigning of such an extended agreement, I saw absolutely no point, and, furthermore I hoped that there would be an early conclusion on the one re- maining stumbling block, the wage increase. At this point Sher became ill and negotiations were not resumed until his recovery several weeks later. On October 11, 1938, Kramer held a second conference in his office, at which Barrett, Sher, and one Barkin, research director for the Textile Workers Organizing Committee, were present. Barrett ieviewed the negotiations, again stating that the respondent was willing to abide by the old contract and had agreed to all the terms with the exception of the wage increase, which was the "stumbling block and the only point that stood in the way." Barkin then made a suggestion similar to that proposed by Kramer at the August 30 conference, that the old contract or a contract containing the terms agreed upon to date be signed and that the question of wage increases be submitted to arbitration. Barrett replied that he did not believe the suggestion to be "practical," since he felt that there was no point in signing a contract until the Union and the respondent were in complete accord as to its terms, but would again consult his clients and advise the Union by mail as to the respondent's reaction to this proposal. Accordingly, on October 14, 1938, Barrett wrote the Union as follows: We have taken up with our clients the suggestions made by Mr. Barton (sic) on the occasion of our recent conference before the National Labor Relations Board, and we are informed by our clients that they do not wish to renew or extend the old agreement, until such time as they reach a complete accord with you. They are still willing to resume negotiations in an effort to reach a complete understanding. If that can be accomplished, they will, of course, have no hesitancy in signing a written agree- ment. If you wish to resume negotiations with us, please get in touch with the undersigned, and we will arrange for an appointment. ALLIED YARNS CORPORATION 1447 On October 20 Sher advised Barrett that the Union was "ready to begin negotiations immediately." After the exchange of several letters between the Union and the respondent, a conference was arranged for November 2, 1938. On November 2 Barrett asked that the conference be postponed because his clients were involved in ,a court proceeding and stated that he would notify the Union as soon as they were free to continue negotiations. On November 9 Barrett again informed the Union that although the proceeding was still in progress it would soon be disposed of, and that the Union would be notified at once. On November 14 Sher wrote Barrett as follows: Your letter of November 9th received and contents noted. Frankly speaking, this time I believe your client is stalling because I have made it my business to investigate through the employees of the Allied Yarn, and find that every time your client stated they were not in, this was not so. They were in their plant. We have some sworn affidavits from the employees to that effect. Such obvious dilatory tactics do not constitute good faith in bargaining as called for in the Labor Act. Will you kindly notify us whether or not you are ready to stop giving us the "runaround" and sit down and bargain with us, in order that we may work out the terms of the agreement. Barrett answered Sher's letter the following day, replying as follows: I am very much surprised at the tenor of your letter of Novem- ber 14th, and particularly am I surprised at the investigation which you made through the employees of the Allied Yarns Corp. I cannot understand what occasion. there was for you to investigate a fact which I disclosed to you in my letter of Novem- ber 9th. I told you in so many words that our clients could not arrange a conference, because they were waiting to be called from their place of business to attend a trial in the Supreme Court at any moment. I didn't tell you that they were actually attending Court and away from their business, and had you taken the trouble to read my letter carefully, you would not have conducted an investigation to determine a conceded fact, namely, that my clients were at their place of business during the time in question. Be that as it may, the trial was disposed of yesterday before Judge Valente, and we are now free to meet with you at your earliest convenience. Please telephone me and arrange an appointment at your convenience. 1448 DECISIONS OF NATIONAL LABOR RELATIONS BOARD , Barrett testified that his reason for not proceeding with the negotia- tions until such time as his clients were actually summoned to court was because " it was not a practical way of doing it. We did not want conferences interrupted." On November 23, 1938, a conference was held in Barrett's office, at which time the Union presented a set of 12 proposals , increasing the demands submitted at the commencement of negotiations in July 1938. Whereas in July the Union had asked for a preferential shop, a $15 minimum wage; and a 10-per cent wage increase , the new terms included a closed shop, a $16 minimum, and a 15-per cent wage increase for those earning $14.50 or more per week. Also included were several other demands not previously submitted to the respond- ent. Sher testified that his reason for presenting the new demands was because he "felt that these demands would be correct , it would be more bargaining room on these terms and we would be able to get a clearer picture" of whether or not the respondent was negotiat- ing in good faith or whether the Union was "just getting the well known stall ." Barrett protested the submission of the new demands before an understanding had been reached as to the original proposals, and stated that in view of the substantial changes involved the respondent would require time to consider them. A conference was scheduled for the following week. On November 30, 1938, Barrett , Ziman, Sher , Udoff, and Herman, general manager of the Joint Board of the Union, met to discuss the proposals submitted on November 23. The 12 demands were taken up individually, starting with the closed shop and the check-off. Although the Union proposed modified versions of the closed-shop demand, they were refused , Barrett stating, "Let us go to the next point" and sug- gesting that both the closed shop and the check-off be deferred for later discussion . The next two proposals were for a 40-hour week and time and one -half for overtime. Ziman stated that the respondent would agree to only what was required by the " Wage and Hour Law.7¢ The Union protested that this would be granting no concession what- soever, to which, according to Sher, Ziman replied: "Take it or leave it." The next proposal for a $16 wage minimum was refused , the re- spondent offering to retain the present minimum of $ 1,^. The demand for a 40=hour work guarantee per week was likewise refused. To the proposal for a 15-per cent wage increase , Ziman replied , " No increases whatever." Regarding the demand for double pay for work performed on holidays, Sher testified that Ziman stated, "My customers don't pay me double time when I give them yarn which was made on a legal + Fair Labor Standards Act (June 25, 1+938), c. 676, sec. 1, 52 Stat. 1060. ALLIED YARNS CORPORATION 1449 holiday." The next two proposals discussed were for the arbitration of all disputes and the application of seniority rules in case of lay-offs. To these the respondent agreed. The respondent's refusal to concede those demands to which it had previously agreed is explained by Bar- rett's testimony that if the Union "chose to scrap their original de- mands and start anew I wanted to do likewise." When the discussion reached the eleventh item which provided for a 2-year agreement and which the respondent refused to grant, Sher announced that the Union was being given the "runaround" and that the respondent was "mak- ing a joke of the whole thing." The union representatives then de- parted without discussing the closed-shop and check-off provisions which had been deferred for further consideration. Upon leaving the conference, Sher went to the office of the Board and asked that a complaint be issued. Kramer, however, arranged for another meeting. On January 4,1939, Sher and Barrett met at Kramer's office. Barrett charged the Union with bad faith in submitting more stringent de- mands after the respondent had agreed to all but one of the original demands submitted in July, but agreed to continue the negotiations. At a subsequent conference held in Kramer's office on February 2, the respondent requested proof of the Union's majority membership before proceeding with negotiations, assertedly because of the substantial changes occurring in its, personnel during the months of December 1938 and January 1939.5 A further conference at the Board on March 11, 1939, brought no change in the status of the negotiations. We have found that at the conference on August 18 the respondent did not refuse to bargain in good faith with the Union. From the facts set forth above we conclude that thereafter the respondent ex- pressed its willingness to continue negotiations and to abide by the terms of the old contract, but refused to enter into a written, contract until there was a final accord as to all the demands submitted by the Union. In his Intermediate Report the Trial Examiner stated that although "respondents insist they were willing to concede all the de- mands except the wage increase, there is no evidence that they made this willingness known. or that they advanced a single proposal which they were willing to incorporate in an agreement." We do not believe that the record supports this finding. The course of the negotiations showed clearly that prior to November 30, neither of the parties was willing to yield on the issue of, the wage increase. No other explana- tion is found for the repeated request by the union representatives that the old contract be renewed and that the subject of wages be left for further negotiation. Similarly, the respondent's refusal to in- 'corporate. any proposals in a written contract was a refusal only to incorporate less than a complete agreement into a written contract. 6 The pay roll of the respondent submitted in evidence shows that its personnel had increased from 54 employees in November 1938 to 88 employees in January 1939. 1450 DECISIONS OF NATIONAL LABOR RELATIONS BOARD We have repeatedly held that the duty to bargain collectively under the Act encompasses an obligation to enter into negotiations with an open and fair mind for the purpose of finding a basis of agreement concerning the issues presented, and to embody whatever agreement may be reached in a written, signed agreement.' We believe, how- ever, that where further negotiations are contemplated it is not in- consistent with the duty imposed by the Act to decline to enter into a written contract prior to the reaching of an accord as to all the basic terms then the subject of consideration. While there may be circum- stances where such a refusal would be indicative of a determination to avoid making any contract whatsoever, such circumstances are not present in the instant case. The respondent had indicated no un- willingness to enter into a written contract, as such. While it is true that the respondent expressed a reluctance to enter into a contract with the Union because its competitors in the industry had not yet done so, a factor which we have held does not afford any justification for failure to seek to arrive at an understanding,' we are not convinced, as was the Trial Examiner, that it was in this instance intended by the respondent to be a condition precedent to reaching an agreement with the Union. Considering all the circumstances, we find that the refusal of the respondent to sign an agreement before an accord was reached as to all the terms thereof did not constitute a refusal to bargain in good faith. As we have previously found, the Union substantially increased its demands prior to the November 30 conference for the purpose of bettering its bargaining position, and we cannot say under such circumstances that the respondent's withdrawal of its approval as to some of the original demands and its unwillingness to make more favorable concessions indicates that it was attempting to evade its duty to bargain. The Trial Examiner further predicated his finding that the respon- dent had failed to bargain with the Union upon the delay.in the negotiations which he attributed to the dilatory tactics of the respon- 6 Art Metal Construction Company v . N. L. R. B., 110 F. (2d) 148 (C. C. A. 2), enf'g as mod ., Matter of Art Metal Construction Company and International Association of Machinists, Local 1559, affiliated with District #65, of the I. A. M. (A. F. of L.), 12 N. L. R. B. 1307; N. L. R. B. v. Highland Park Manufacturing Co., 110 F. (2d) 632 (C. C. A. 4), enf'g Matter of Highland Park Manufacturing Co. and Textile Workers Organizing Committee, 12 N. L. R. B. 1238; N. L. R. B. v. Sunshine .Mining Company, 110 F. (2d) 780 (C. C. A. 9), enf'g as mod., Sunshine Mining Company and International Union of Mine, Mill and Smelter Workers, 7 N. L. R. B. 1252; H. J. Heinz Company iv. N. L. R. B., 110 F . (2d) 843 (C. C. A. 6), enf'g Matter of H. J. Heinz Company and Canning and Pickle Workers , Local Union No. 625, affiliated with Amalgamated Meat Cutters and Butcher Workmen of North America, American Federation of Labor, 10 N. L. R. B . 963; Matter of Fort Wayne Corrugated Paper Company and Local No. 182, International Brotherhood of Pulp, Sulphite, and Paper Mill Workers, 14 N. L. R. B. 1, enf'g Fort Wayne Corrugated Paper Company v. N. L. R. B., 111 F. (2d) 869 (C. C. A. 7). r Matter of Harbor Boat Building Co. and Ship Carpenters Local Union No. 1385, 1 N. L. R. B. 349; Matter of Harry Schwartz Yarn Co., Inc . and Textile Workers Organizing Committee, 12 N. L. R. B. 1139 ; Matter of American Range Lines , Inc. and Marine Engineers' Beneficial Association, 13 N. L. R. B. 139; Matter of George P. Pilling & Son Co. and Dental, Surgical & Allied Workers Local Industrial Union No. 119 , 16 N. L. II. B. 650. ALLIED YARNS CORPORATION 1451 dent, and upon its demand in February for proof by the Union of its majority representation. While the negotiations were considerably delayed from August to November 1938, approximately 5 weeks of such delay was due to the illness of the union representative, and the ensuing delay of several weeks was occasioned by the respondent's involvement in court proceedings. Although the respondent's ex- planation for not proceeding with the negotiations during the interim that it was awaiting notice to appear in court is of doubtful merit, we do not believe under all the circumstances of the case that it supports a finding that the respondent refused to bargain with -the Union. As for the respondent's demand in February for proof of the Union's membership, since the increase in the respondent's personnel occurring shortly after the November conference casts a reasonable doubt upon the majority membership of the Union, we do not find, under the circumstances here present, that the respondent's request for such proof before continuing with the negotiations was a refusal to bargain within the meaning of the Act. Although the evidence pertaining to the negotiations as a whole permits some doubt as to the good faith of the respondent, it fails to show that there was such insincerity in attempting to reach an agree- ment with the Union as would constititute a failure on the part of the respondent to fulfill its duty under the Act. We find that the respondent has not refused to bargain collectively with the Union as the exclusive representative of its employees in an appropriate unit, and has not thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed by Section 7 of the Act. In view of the foregoing it is unnecessary to make any determination as to the appropriate bargaining unit or as to representation by the Union of a majority in the appropriate unit. B. The discharges and lay-offs Sarah Handelman had been in the respondent's employ since 1936. At the time of her lay-off on January 19, 1939, she was classified as a tuber, although prior to the 1937 contract with the Union she had also performed winding and coning work. Handelman joined the Union in July 1937, and approximately 1 month later was elected shop chairlady. As chairlady she collected dues, notified fellow members of union meetings, and zealously protected the rights of employees under the union contract. The evidence shows that during the period of the contract several incidents occurred illustrative of Handelman's militancy in safe- guarding the interests of the Union and indicative of the respondent's resentful attitude toward such activity. One of these incidents 1452 DECISIONS OF NATIONAL LABOR RELATIONS BOARD occurred late in 1937 or early in 1938, shortly after the respondent had hired two new girls to whom it was paying less than the minimum provided for in the union contract. Handelman testified that Miller, the foreman, reprimanded her for telling these new employees that they were entitled to the minimum of $15, and that he stated, "You are mixing into my business too much. You are stepping out of your place." The following clay Ziman called her into his office and told her "I hear that you make a lot of trouble in the place, you go around there to the girls, you sign them up and you do this." Ziman denied that he had reprimanded Handelman on this occasion, but admitted that Handelman had protested concerning the underpayment of the two new girls, and that he accordingly discharged them because they were not competent enough to warrant receiving the $15 minimum. We credit, as did the Trial Examiner, Handelman's version of the incident. Shortly before the expiration of the contract, Handelman stopped after working hours to ask Alice Anderson, who was still working, if Miller had told her that she would be paid for working overtime. Handelman testified that Mylanas, the forelady, overheard the con- versation and asked her what she meant by stopping the girls from working. When Handelman replied that she had merely asked if Anderson was being paid time and one-half for overtime, Mylanas grabbed her arm and told her, "I wish to God that I should live to see all the unions broken and people like you shoudn't have the right to tell us what to do." Handelman further testified that when she complained to Ziman about Mylanas' action on this occasion she was told, "Listen, you are getting too fresh in this place. Willie [Miller] is complaining about you, always arguing with you having trouble." Handelman replied that it was because Miller was not living up to the union contract and that Miller always "picked" on her. 1\1ylanas did not deny and Ziman did not recall making the foregoing state- ments attributed to them by Handelman. We credit, as did the Trial Examiner, Handelman's testimony regarding the incident. At noon on January 19, 1939, approximately all of the girls in the tubing department, including Handelman, were laid off for lack of work. Hanidelinan protested to William Miller, the shop foreman, that girls with less seniority were working in the winding department, which was busy at the time, and asked that she be given work in that department. Miller refused, stating that she was a -tuber and not entitled to share the work of girls regularly employed at winding.' After accusing Miller of discriminating against her, Handelman went to union headquarters and complained of her lay-off. That same after- 8 At this time the respondent had abandoned the seniority provision of the 1937 contract and had returned to its former practice of sharing the work during slack periods among the most competent and permanent employees. ALLIED YARNS CORPORATION 1453 noon a union committee of four accompanied Handelman to the office of Ziman, the respondent's president, to demand that she be given. employment. A heated argument ensued between Ziman and Lloyd Klenert, a member of the committee. Ziman testified that the first thing Klenert said upon entering his office was, "What the hell is the matter with you? Why don't you put Sarah Handelman back to work in another department?" Ziman replied that Handelman was a tuber and had been temporarily laid off with the other tubers and that there was no work for her in the other departments unless one of the regular girls was laid off. When Ziman protested Klenert's abusive manner, according to Ziman, Klenert retorted, "Well, you try and put me out," and threw his cigarette on the floor and started to remove his coat, shouting, "Where's Mr. Miller? I'm going to break his neck for him. That's what we're here for." Handelman, who sat outside the office with the three other members of the union committee, testi- fied that both Klenert and Ziman were "hollering" at other each and that Ziman finally told Klenert, "If you don't get out of my office I'll have you arrested." Klenert thereupon left with Handelman and the other members of the committee. Klenert denied that he had made the abusive and threatening statements attributed to him by Ziman,, or that he had thrown his cigarette on the floor, and testified that Ziman had called him a gangster and a hoodlum. On Monday, January 23, Handelman returned to the plant f9r her weekly pay check. Miller told her that she was discharged for bringing the union committee'to the plant and threatened her life if she did so again.' The respondent contends that Handelman was discharged solely because of the threatening conduct of the union committee for whose intervention she was responsible. The evidence shows that during the month of January work in the tubing department was slack and that practically all the tubers had been forced to lose considerable working time. Although Handelman was not accorded seniority preference; it appears that she received a relatively proportionate share of work.with the other girls, union and, non-union members alike. Since the seniority provision of the union contract was not in effect at this time, we do not find.that Handelman's lay-off on January 19 was discriminatory. We are not in accord, however, with the respondent's contention that it was justified in discharging Handelman thereafter because of the conduct of the union committee. The Trial Examiner in finding 6 Handelman testified that when she returned to the plant for her check on Monday , January 23 , Miller took her to a side exist of the plant and told her : "Well, you stepped on my corns too many times , and the best thing for you to do is to get yourself a different place. Don't think that I'm so dumb. I have plenty of connections to do away with you. . . . Yes, I have plenty connections to do away with you and if you go back to the union and you feel you are going back to the union to tell it to them or if I see those four fellows around here that were here with you Thursday, don't forget your mother will say Kadish." Handelman explained that in Jewish "kadish" meant "prayer for the dead." 1454 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that Handelman's discharge was discriminatory, did not find it .necessary, apparently, to resolve the conflict in testimony with respect to the exchange of words between Ziman and Klenert. We agree with the Trial Examiner's finding, and we likewise believe it unnecessary to resolve the conflict. While we do not condone their conduct, it is apparent that the expressions of both Zimanand Klenert were made in the heat of argument and mutually objectionable and provocative. We do not believe that Klenert's threats against Miller were intended to be taken seriously any more than those which Handelman testified were later made to her by Miller. We are of the opinion that the conduct of the representatives of both parties on January 19 did not justify denying the employee's right to be free from discrimination. We are satisfied and find that the re- spondent seized upon the incident to relieve itself of the obligation to reinstate the most active union member in the plant. We find that Sarah Handelman was discharged on January 19, 1939, and was refused reinstatement because of her membership and activity in the Union, and that by her discharge the respondent has discriminated in regard to the hire and tenure of her employment, thereby discouraging membership in a labor organization. We further find that the respondent thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. When discharged, Handelman was. earning $15.40 a week. At the time of the hearing she had been temporarily employed for approxi- mately 2 months, earning $16 weekly. Estelle Rosenthal 10 had been employed by the respondent as a bailer since 1936, and was admittedly a competent employee. She joined the Union in July 1937. Rosenthal was laid off on April 1.3, 1.939, due to the seasonal slack business period during which the respondent customarily decreased its working force, and was recalled to. work the following October. Following the dismissal of Handelman, Rosenthal had expressed her concern over the discharge to Catherine Mylanas, her forelady. According to Rosenthal, Mylanas remarked, "Well, there you have your Union for you. You see, they. can't do anything about it." Rosenthal replied, "Well, they'll get around to it in time." Rosenthal also testified that on a prior occasion Miller, the foreman, had sym- pathized with her because her husband was engaged in a union strike and remarked that he thought unions were a "racket." Rosenthal observed that she was satisfied with the Union because it was re- sponsible for obtaining a wage increase. The Trial Examiner found that, since the busy period in the respondent's business normally begins in July, Rosenthal should 10 Also referred to in the record as Estelle Blitz. ALLIED YARNS CORPORATION 1455 have been recalled to work at least 2 months earlier than October 1939, and that the respondent's failure to do so was motivated by her union affiliations and activities. Although the incidents related above indicate that Rosenthal was a loyal proponent of the Union, we do not believe that they support an inference that her lay-off was discriminatory. While the evidence shows that the respondent's slow season normally begins in April and ends in July, the pay-roll .records for the year 1939 show, contrary to the finding of the Trial Examiner, that following the lay-offs in April the respondent's per- sonnel decreased from 65 to approximately 40 employees, remaining at this level through the month of September. Since there is no showing that the respondent had increased its force prior to Rosenthal's recall, we find no discrimination in her belated return to work. We find that the respondent has not discriminated in regard to the hire and tenure of employment of Estelle Rosenthal. Irene Resen and Eleanor Newman had been employed by the respondent for over 8 years, Resell, as a tuber, toner, and spinner, Newman as a gimper. Both joined the Union in July 1937. When the Union was first organized and before Handelman's election as chairlady, Resen was a member of the grievance committee for approx- imately a month. Resen and Newman testified that they were separately asked on one occasion by Mylanas, the forelady, what they thought of the Union, and that they both expressed approval of its then recent organization. Mylanas never discussed the Union with them further. Newman and Resen were among the last to be laid off during the seasonal curtailment in production, Newman being dismissed on April 27 and Resen on May 11, 1939. The respondent contends that Resen and Newman were selected for lay-off and not recalled because of their incompetence. Evidence was introduced to show that Resen had become increasingly slow in her work, and that Newman's defective workmanship had been a growing cause of complaint. While much of this evidence is contro- verted and, as found by the Trial Examiner, fails to remove consider- able doubt as to their alleged incompetence, there is, on the other hand, no convincing evidence that -their dismissal was motivated by their adherence to the Union. The Trial Examiner concluded that their close association with Handelman as the leader of the Union in the plant, and the desire of the respondent to rid itself of those most likely to reflect her senti- ments and leadership, motivated their discharge. We find nothing in the record, however, to show that there was such a close relation- ship between Handelman, Resen, and Newman as would warrant such an inference. The only indication of such a relationship of which the respondent was shown to have knowledge lies in Newman's 1456 DECISIONS OF NATIONAL LABOR RELATIONS BOARD testimony that Mylanas, the forelady, and Miller, the foreman, had seen her and Resen enter the elevator with Handelman upon leaving work for the day.11 Newman further testified that the other girls also entered the elevator at the same time when leaving work. Although their discharge is not free from doubt, we find that the evidence does not support a finding that the respondent discriminated with respect to the hire and tenure of employment of Irene Resen and Eleanor Newman. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondent set forth in Section III above, occurring in connection with the operations of the respondent described in Section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY We have found that the respondent has engaged in certain unfair labor practices. We will, therefore, order the respondent to cease and desist therefrom and, to effectuate the purposes of the Act, will also order the respondent to post notices stating that it will not engage in the conduct from which it is ordered to cease and desist. Having found that the respondent discriminatorily discharged and subsequently refused to reinstate Sarah Handelman because of her union membership and activity, we will order the respondent to offer her reinstatement to her former position without prejudice to her seniority and other rights and privileges. We will also order the respondent to make whole Sarah Handelman for any loss of pay she has suffered by reason of the respondent's discrimination by payment to her of a sum of money equal to the amount which she normally would have earned as wages from the date of the discrimination to the date of the offer of reinstatement, less her net earnings 12 during that period. 11 Newman testified that "most of the time" she left work with Rosenthal and Rosen "since we all lived the same way" and that "sometimes" Handelman would enter the elevator with them. Although she further testified that "all the girls" knew that they went home together, she did not testify that either Miller or Mylanas had knowledge of this fact. 12 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 elsewhere than for the respondent, which would not have been incurred but for his unlawful discharge and the consequent necessity of his 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 government or governments which supplied the funds for said work-relief projects. ALLIED YARNS CORPORATION .1457 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. Textile Workers Union of America, affiliated with the Congress of Industrial Organizations, is a labor organization within the mean- ing of Section 2 (5) of the Act. 2. By discriminating in regard to the hire and tenure of employ- ment of Sarah Handelman, thereby discouraging membership in Textile Workers Union of America, affiliated with the Congress of Industrial Organizations, 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. 5. The respondent has not discriminated in regard to the hire and tenure of employment of Estelle Rosenthal, Irene Resen, and Eleanor Newman, within the meaning of Section 8 (3) of the Act. 6. The respondent has not engaged in unfair labor practices, within the meaning of Section 8 (5) of the Act. ORDER Upon the basis of the above findings of fact and conclusions of law, and pursuant to Section 10 (c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the respondent, Allied Yarns Corporation, and its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Discouraging membership in Textile Workers Union of America, affiliated with the Congress of Industrial Organizations, or any other labor organization of its employees, by discriminating in regard to their hire and tenure of employment or any terms or conditions of their 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. 1458 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act: (a) Offer to Sarah Handelman immediate and full reinstatement to her former or substantially equivalent position, without prejudice to her seniority or other rights and privileges; (b) Make whole Sarah Handelman for any loss of pay she may have suffered by reason of her discharge by the respondent, on January 19, 1939, by payment to her of a sum of money equal to that which she would normally have earned as wages from the date of her discharge to the date of such offer of reinstatement , less her net earnings13 during said period ; deducting , however, from the amount otherwise due said employee, 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 govern- ment or governments which supplied the funds for said work-relief projects; (c) Post immediately notices to its employees in conspicuous places throughout its plant and maintain such notices for a period of at least sixty (60) days from the date of posting, stating (1) that the respondent will not engage in the conduct from which it is ordered to cease and desist in paragraphs 1 (a) and (b) of this Order; (2) that it will take the affirmative action set forth in paragraphs 2 (a) and (b) of this Order; and (3 ) that its employees are free to join and remain members of Textile Workers Union of America, affiliated with the Congress of In- dustrial Organizations, and that it will not discriminate against any employee because of membership or activity in said labor organization; (d) Notify the Regional Director for-the Second Region in writing within ten (10) days from the date of this Order what steps the respond- ent has taken to comply herewith. AND IT IS FURTHER ORDERED that the complaint , in so far as it alleges that the respondent has engaged in unfair labor practices within the meaning of Section 8 (5) of the Act, and that the respondent has en- gaged in unfair labor practices within the meaning of Section. 8 (3) of the Act with respect to Estelle Rosenthal, Irene Resen, and Eleanor Newman, be, and it hereby is, dismissed. 13 See footnote 12, supra.