International Harvester Co.

In the Matter Of INTERNATIONAL HARVESTER COMPANY A CORPORA- TION, and FARM EQUIPMENT WORKERS ORGANIZING COMMITTEE and EMPLOYEES MUTUAL ASSOCIATION OF MCCORMICK WORKS, PARTY TO THE CONTRACT 11 INTERNATIONAL HARVESTER COMPANY A CORPORATION, and FARM EQUIPMENT WORKERS ORGANIZING COMMITTEE and ROCK FALLS, EMPLOYEES ASSOCIATION, PARTY TO THE CONTRACT INTERNATIONAL HARVESTER COMPANY A CORPORATION, and FARM EQUIPMENT WORKERS ORGANIZING COMMITTEE and UNITED MOTOR POWER ASSOCIATION, PARTY TO THE CONTRACT INTERNATIONAL HARVESTER COMPANY A CORPORATION, and FARM EQUIPMENT WORKERS ORGANIZING' COMMITTEE and EMPLOYEES AS- SOCIATION OF EAST MOLINE WORKS, PARTY TO THE CONTRACT ' INTERNATIONAL HARVESTER COMPANY A CORPORATION, and FARM EQUIPMENT WORKERS ORGANIZING COMMITTEE and WEST PULLMAN INDEPENDENT UNION, PARTY TO THE CONTRACT INTERNATIONAL HARVESTER COMPANY A CORPORATION, and FARM EQUIPMENT WORKERS ORGANIZING COMMITTEE and HARVESTER EM- PLOYEES INDUSTRIAL UNION, PARTY TO THE CONTRACT Cases Nos. C-1561 to C-1566, inclusive.Decided February 8, 1941 Jurisdiction : agricultural machinery and equipment manufacturing industry. Unfair Labor Practices Interference, Restraint, and Coercion: campaign by councilmen 'in company- dominated employee representation plan to obtain revocations of member- ships in outside labor organization ; threats of plant removal, of discharge, and of wage reduction; warnings that signing membership ,arils in outside labor organization constituted signing a "power of attorney"; discrediting leaders of outside labor, organizations; interrogation of 'e,aployees as to union membership. Company-Dominated Unions: employee representation plan dissolved after validation of Act; letter urging retention of its benefits in future collective bargaining-formation of successor organizations by councilmen in company- dominated employee representation plan prior to dissolution of the plan ; responsibility of management for acts of councilmen-support to : loans from club and credit union supported by management; solicitation of members and collection of dues in plant on company time ; participation and approval of management; parallel hostility to outside labor organizations. Remedial Orders : disestablishment of company-dominated unions; abrogation of contracts. 29 N. L. R. B., No. 89. 456 ' INTERNATIONAL HARVESTER COMPANY 457 Evidence _ Request denied for "evidentiary" election to determine whether employees desired to be represented by alleged company-dominated labor organizations, since such evidence is irrelevant to determination of company domination:" Mr. I. S.'Dorfman and Mr. Robert R. Rissman, for the Board. Pope c6 Ballard, by Messrs. Ernest S. Ballard, Preston C. King, Jr., and Ralph E. Bowers, of Chicago, Ill., and Mr. Frank B. Schwarer, of Chicago, Ill., for the respondent. - Meyers & Meyers, by Mr. Ben Myers, of Chicago,, Ill., for the C. I. O. Cusack c i Cusack, by Mr. John F: Cusack, of Chicago, Ill., for the Employees Mutual and for the W. P. I. U., Mr. C. J. Willett. of Chicago, Ill., for the W. P. I. U. Mr. Harry S. Drury, of Sterling, Ill., for the R. F. E. A. Bell, Farrar & Scott, by Mr. Earl L. Scott, and Mr. Edward D. Smith,; of -Rock Island, Ill., for the U. M. P. A. ' . Mr. F. H. Railsback, of Moline, Ill., for the Employees Associa- tion. ' Beznor, McDonald cC Beznor, by Mr. David Beznor, of Milwaukee, Wis., for the H. E. I. U. ' Mr. Frederick R. Levinstone and Mr. N. Barr Miller, of counsel to the Board.' " DECISION AND ORDER STATEMENT OF THE CASE Upon charges duly field, and subsequently amended,' by the Farm Equipment Workers Organizing Committee, affiliated with the Con- gress of Industrial Organizations, hereinafter called the F. E. W. O. C. or the C. I. 0., the National Labor Relations Board, herein- after called the Board, issued its,consolidated complaint,,dated June 6, 1939, and amended consolidated complaint, dated June 16, 1939, against the International Harvester Company, hereinafter 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 (2) and Section 2 (6) and (7) of the National Labor Relations' Act, 49 Stat. 449, hereinafter called the Act. With respect to the unfair labor practices, the amended con- solidated complaint, hereinafter called the complaint , alleges in 'Amended consolidated charges were dated April 18, 1939, and second amended con- solidated charges on which the complaint was based were dated April 26. 1939. 458 DECISIONS. OF NATIONAL LABOR RELATIONS;BOARD substance that the respondent has actively fostered, promoted, and encouraged, has contributed financial and other support to, has en- tered into an illegal collective bargaining contract with, and other- wise has interfered with and dominated the formation and admin- istration of labor organizations at plants particularly named as follows : the Employees Mutual Association of McCormick Works, hereinafter called the Employees Mutual, at its McCormick Works, in Chicago, Illinois; the Rock Falls Employees Association, herein' after called the R. F. E. A., at its Rock Falls Works, in Rock Falls, Illinois; the United Motor Power Association, hereinafter called the U. M. P. A., at its Fhrmall Works, in Rock Island, Illinois; the Employees Association of East Moline Works, hereinafter called the Employees Association, at its East Moline Works, in East Moline; Illinois; the West Pullman Independent Union,2 hereinafter called the W. P. I. U., at its West Pullman Works, in West Pullman (ahicago), Illinois; and the Harvester Employees Industrial Union; hereinafter called the H. E. I. U.; at its Milwaukee Works, in Mil- waukee, Wisconsin.3 The complaint further alleges that by these acts the respondent has engaged in, and is engaging in, unfair labor practices within the meaning of Section 8 (1) and (2) of the Act. The complaint as amended at the hearing further alleges that the respondent, from on or about March 15, 1937,' at all and each of its plants described above, (1) has advised, urged, and warned its em- ployees to refrain from becoming or remaining members of the F. E. W. 0. C.; (2) has stated to its employees that organizers and officers of the F. E. W. 0. C. were "Communists," "radicals" and irresponsible persons; (3) has interrogated its employees with respect to their union affiliations; (4) has advised its employees to become members of "independent" labor organizations and not to join "out- side" organizations; and (5) by said acts and by other acts, has inter- fered with, restrained, and coerced, and is interfering with, restrain- ing, and coercing its employees in the exercise of rights guaranteed in Section 7 of the Act, and thereby has engaged and is engaging in unfair labor practices, within the meaning of Section 8 (1) of the Act. 2 The pleadings , introduced at the opening of the hearing, erroneously referred to this organization as the west Pullman Industrial Union. A motion made by counsel for the Board was granted without objection , by the Trial Examiner on August 10, 1939, to correct the complaint and the record in this respect . This ruling is hereby affirmed When these organizations are referred to collectively herein they will be called the Independents. 4 At the close of the Board 's case-in -chief, counsel for the Board moved to amend the complaint by changing the date of April 14, 1937 , appearing in the complaint , to March 15, 1937 Counsel for the respondent objected to this amendment . The objection was overruled and the motion was granted by the Trial Examiner . The ruling is hereby affirmed. INTERNATIONAL HARVESTER COMPANY' ' 459 A' copy of the complaint, accompanied by notice of hearing, was duly served upon the respondent, the F. E. W. O..C., the Employees Mutual, the R. 'F. E. A:, the U. M. P. A., the Employees Association, theW. P. I. U., and the H. E. I. U., more than ten days prior to the date of the hearing. Thereafter the respondent' filed with the Re- gional Director for the Thirteenth Region a motion to sever the causes of action in the complaint, a motion for a bill of particulars, and its answer, dated June 21, 1939. The Employees Association filed its answer to the complaint, dated June 19, 1939. In their respective answers the respondent and the Employees Association denied all material allegations of the complaint.5 Pursuant to notice, a hearing was held in Chicago, Sterling, and Moline, Illinois; in Davenport, Iowa; and in Milwaukee, Wisconsin, beginning on June 22 and ending October 5, 1939, before C. W. Whittemore, the Trial Examiner duly designated by the Board. All parties were afforded an opportunity to participate in the hear- ing, to call, examine and cross-examine witnesses and to introduce other evidence.'' At the opening of the hearing, counsel for the respondent moved for continuance of the proceedings until its motion to sever the causes of action had been ruled upon by the Board. Similar motions for continuance were made by counsel for the Employees Mutual, the W. P. I. U., and the H. E. I. U., all of which organizations also filed separate motions for severance. The motions for continuance were denied by the Trial Examiner and his rulings thereon are hereby affirmed. Counsel for the respondent renewed its motion for a bill of particulars which had notbeen passed upon by the Regional Director, and similar motions were separately made by counsel for the three aforementioned organizations. These motions were denied. At the time of the denial of the motions and at the request of the Trial Examiner, counsel for the Board made more specific certain allegations concerning contracts entered into between the respondent and the several Independents. The rulings of the Trial Examiner on these motions are hereby affirmed. During the hearing, counsel for the Employees Association filed its motion to sever the causes of action. Board orders denying the several motions for severance were entered during the hearing as follows : on June 23, denying the The H. E. I. U. filed a motion to intervene , dated June 9, 1939, in which it was stated that the H. E. I. U. had been served with a! copy of the,eomplaint and that the H. E. I. U. denied each and every allegation thereof. The motion to intervene was received as an exhibit, since the H. E. I. U. had already become a party to the hearing by virtue of having been named in and served with a copy of the complaint. The Board, the respondent, the F. E. w. O. C., the` Employees Mutual, the W. P. I. U., the B F. E. A., the Employees Association, the U. Al. P. A and the H. E. I. U. all entered appearances and were represented at the hearing. 460 DECISIONS OF NATIONAL LABOR RELATIONS -BOARD respondent's motion; on June 29, denying the motions of the W. P. I. U., the H. E. I. U. and the Employees Mutual ; and on July 14, denying,the motion of the Employees Association.. On August 15, at the conclusion of the Board's case-in-chief, counsel for the re- spondent, the H. E: I. U., the W. P. I. U., and the Employees Mutual filed separate motions for dismissal of the complaint, which were renewed at the close of the hearing . The motions were denied by the Trial Examiner and his rulings thereon are hereby affirmed .7 , At the close of the Board's affirmative case, and again at the close of the hearing, the respondent moved that the Board conduct an "evidentiary" election among employees of each of the six plants, as distinguished from an election under Section 9 (c) of the Act, to deter- mine whether or not the allegedly company -dominated labor organiza- tions were the free and untrammeled choice of the employees, and to incorporate the results of such an election into the record. The Trial Examiner properly denied this motions and his ruling is hereby affirmed. On August 28, counsel for the respondent moved that the Trial Examiner declare a mistrial , and that testimony of certain named and all "C. I. 0." witnesses be stricken from the record. These ' The parties contended that the complaint should be dismissed because the Board's case was not sufficient as a matter of law to support an order against the respondent. The respondent offered three reasons for the insufficiency of the Board's case: ( 1) that the only evidence in support of the allegations of the complaint consists of inferences which were rebutted by other witnesses called by the Board ; ( 2) that if there is any direct evidence in support of the allegations of the complaint there is so much direct evidence in the Board 's case against the allegations that the evidence is in equilibrium and any judgment by the tryer of the facts would be a guess; ( 3) that the Board has not presented sufficient evidence to sustain the burden of proof In support of its motion the respondent cited several witnesses called by the Board who were officers of the respondent 's works Councils or of the respective labor organizations alleged to be dominated by the respondent. Most of these witnesses were apparently hostile and , as a result thereof, the Board called other witnesses to contradict portions of their testimony. The motions to dismiss filed by the other parties were based on substantially the same grounds we have hereinabove affirmed the Trial Examiner's rulings on the motions to dismiss since the Board's findings of fact, under the Act, are made upon the entire record, and the record impels the findings, hereinafter made, on the merits of the unfair labor practices charged 8 The motion was properly denied because the fact that employees express a desire to be represented by a labor organization is not determinative of, or even relevant to, the question of whether that organization has in fact been dominated and assisted by the respondent in violation of Section 8 (2) of the Act. See N. L R. B. v. Newport News Shipbuilding & Dry Dock Co., 308 U. S. 241 , reversing modification of Board 's Order in 101 F. ( 2d) 841 (C. C. A. 4), enf'g as modified, 8 N. L. R B. 866 ; N. L. R. B. v. Brown Paper Mills Company, 108 F. (2d) 867 (C. C. A. 5), enf'g 12 N. L . R B. 60; cert. denied, 310 U. S. 651. At the same time, upon request of the respondent's counsel , the Trial Examiner ordered a continuance of the hearing on August 15, at the close of the Board 's affirmative case, in order to provide counsel an opportunity to appeal directly to the Board from his ruling on this motion and on the motions to dismiss . On August 16, counsel for the respondent informed the Trial Examiner and all parties of its decision not to ask leave to appeal directly to the Board. At that time the respondent was granted a contluuance until August 24, to complete preparation of its defense. INTERNATIONAL HARVESTER COMPANY 461, motions were denied by the Trial Examiner and his rulings thereon are hereby airmed.° At the close of the hearing, counsel for the respondent renewed certain previous motions, including the motion to dismiss the coin- plaint, to hold an "evidentiary" election among the : respondent's employees , to declare a mistrial, and to strike certain testimony from the record. Ruling upon said motions was reserved by the Trial Examiner and the motions denied in his Intermediate Report. His rulings are hereby affirmed. At the close of the hearing counsel for the Board made a motion to conform the complaint to the proof adduced in such respects as dates, names, and places. Counsel for the respondent objected; the objection-vas overruled and the motion was granted. Subse- quent to the close of the hearing, counsel for the Board filed with the Trial Examiner a motion for the admission in evidence of certain documents,10 consisting of the original charges filed by the Amalga- mated Association of Iron, Steel & Tin Workers of North America, affiliated with the Committee for Industrial Organization, with re-, spect to the alleged activities of the respondent at its plants in Rock Falls, Illinois; in Milwaukee, Wisconsin; and its McCormick Works in Chicago. The motion was resisted by counsel for the respondent and was denied. These rulings of the Trial Examiner are hereby • The motions for a mistrial and to strike testimony were based upon a handbill distrib- uted at the West Pullman Works , which was offered in evidence by the respondent, and upon an offer of proof -in connection therewith . The handbill contained the following statements : Refuse to be a stooge for the management at the hearing. Don't let anybody kid you, you don't have to testify for International Harvester Company when it begins its "defense" before the National Labor Relations Board After citing how testimony might help to continue company unionism , the leaflet continues: I H C. workers are against all of these things Don't testify for the Company and aid it in its futile attempt to keep the stooge union alive. * * * Therefore-inform anyone who tells you that you have to testify for the Company because a CIO member mentioned your name that he is talking through his hat. The laws of the United States protect you in any refusal you may make to give testimony favorable to the Company and its anti -labor policies. The offer of proof stated that the respondent , if permitted to call witnesses , would prove that the handbill had been distributed during the course of the hearing , to employees of the West Pullman plant by members of the C. I. O . who had previously testified on behalf of the Board. - The respondent contended that the distribution of the handbill amounted to a criminal obstruction of justice by intimidating prospective witnesses , that this obstruction entitled the respondent to an order declaring a mistrial , and that the distribution of the handbills by witnesses who had previously testified on behalf of the Board , and under the auspices of the labor organization to which they belonged, completely discredited their testimony. The Trial Examiner refused to receive the handbill in evidence and denied the offer of proof. At the same time he stated : If you find any witnesses which you intended to call refuse to come , I assure you I am willing to entertain an application for subpoena , and if it appears they didn't come because of this, all right, then it might have some bearing , but I don 't anticipate that such is the case. The respondent made no showing that the distribution of the handbill prevented the presentation of any defense testimony. 10 These documents are identified in the record as Board Exhibit No. 15-A. 462 DECISIONS OF NATIONAL LABOR :RELATIONS BOARD affirmed. At the conclusion of the hearing all parties were offered,, but declined, an opportunity to argue orally before the Trial Exam' iner and were likewise afforded 30 days to submit briefs. Counsel for the F. E. W. O. C. filed a brief with the Trial Examiner. No other briefs were filed." - On May 1, 1940, the Trial Examiner issued his Intermediate Report, copies of which were duly served upon the parties, finding that the respondent had engaged in unfair labor practices within the meaning of Section 8 (1) and (2) and Section 2 (6) and (7) of the Act. He recommended that the respondent cease and desist therefrom; that it cease giving recognition to, and that it disestablish, each of the six labor organizations found to be company-dominated; that it cease giving effect to any existing contracts, and refrain from entering into any further contracts, with any of these' six labor organizations. Thereafter, exceptions to the Intermediate Report were filed by the respondent, the H. E. I. U. and the U. M. P. A. The H. E. I. U.,1 also filed a brief. - On June 5, 1940, the Board granted the motion of the respondent to include in the record of the proceedings here a part of the report' of the Special [House of Representatives] Committee to Investigate the National Labor Relations Board. The respondent urged that the- testimony given before that Committee with respect to the conduct of Trial Examiner Whittemore indicated that it had been denied a fair hearing. We have carefully considered the evidence in support of this allegation and find that neither the respondent nor any other party to these proceedings was prejudiced thereby or denied a fair hearing.12 "On November 27, 1939, after the close of the hearing , counsel,for the Board and the respondent entered into a stipulation providing that certain corrections be made in the transcript of the official record. These corrections were also submitted to and approved by all other parties to the proceedings. Counsel for the Employees Association submitted an additional correction . The Trial Examiner ruled that all these corrections be made on the face of the official transcript His ruling is hereby affirmed. 12 The Committee report shows that Whittemore wrote a letter , dated June 23, 1939, to Chief Trial Examiner Pratt, describing an attempt on the part of the re,pondent 's counsel to prove that the Board Attorney , by interviewing prospective witnesses at union head- quarters , thereby became part of a conspiracy directed against the respondent. In the letter of June 23, Trial Examiner Whitemore wrote : It seemed like good [newspaper] copy-until Rissman [Attorney for the Board] got up, offered Ballard [counsel for respondent ] full privilege of examining the witness as far as he liked on what occurred in the room when the interview took place and furthermore offered to put not only himself on the stand-but his sec- retary-who was present in each individual interview. Even the crease in Ballard 's pants sagged and chagrin made a common countenance at his colleagues' table. He quit crossexannnation promptly. Whittemore then stated that the respondent 's counsel might later demand the statements received by Rissman at the interviews , and that he wondered whether or not they should be produced Whittemore 's letter states. . Probably it would be unwise to establish a precedent-but if I could be sure that such statements would be as straightforward and honest in refuting Ballard 's implica- tion that Board practices smack of shysterism-I'd like to seem them produced The respondent urges that the Trial Examiner in the above statement indicates a prejudice against the respondent in that he would have refused to receive the statements if he INTERNATIONAL HARVESTER COMPANY . - 463 The Board has reviewed all the rulings of the Trial Examiner on motions and on objections to the admission of evidence, including those sea forth in the exceptions filed, and finds that no prejudicial errors were committeed. The rulings are hereby affirmed. On Sep- tember 5, 1940, a hearing for the purpose of oral argument vas had before the Board in Washington, D. C. The respondent,-the F. E. W. O. C., the H. E. I. U. and the W. P. I. U. were represented and participated in the argument. The Board has considered the exceptions filed to the Intermediate Report and.to the entire record and finds them to be without.merit, except as they are consistent with the findings of fact, conclusions of law, and order, set forth hereinafter. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT International Harvester Company is a New Jersey Corporation with its principal executive offices in Chicago, Illinois. It is engaged in the design, manufacture, assembly, repair, sale, and distribution ,of motor trucks, farm tractors, industrial tractors, tillage imple- ments, planting and seeding machines, haying machines, grain har- vesting machines, corn harvesting machines, motors, stationary en- gines, dairy equipment, general farm equipment and like .items and supplies. The respondent maintains and operates 15 manufacturing plants in 6 States of the United States, 2 plants in Canada, 4 in Europe and - 1 in Australia. It also operates 6-twine mills, variously located in the United States, Canada and Europe. For purposes of supplying thought.-that they might prejudice the Board No decision was ever made upon this matter by the Trial Examiner , since no request was made at the hearing to produce the statements In another letter contained in the Special Committee report, Trial Examiner Whittemore states that he discussed the respondent's trial tactics with the Board's Regional Attorney 1. S Dorfman , during the course of the heating . When called to the stand by the Com- mittee , Whittemore stated that lie was interested only in the rather unusual trial tactics being pursued by the respondent since the respondent had failed for several days to cross-examine any of the Board's witnesses. - Upon our consideration of the letters and the allegations respecting the statements and conduct therein revealed , we -are of the opinion- that the respondent was not prejudiced thereby As to the first letter ,- the Trial Examiner was never called upon -to rule on the matter discussed ' therein With regard to the second letter, the Report of the Special Committee does not indicate that the merits of the case were discussed in the conversation between the Trial-Examiner and the Attorney for the Board, and the Report wholly fails to disclose the occurrence of-anything of-a character-prejudicial to the respondent. More- over, the record of the hearing reveals no instance of partiality of bias on the part of the Trial Examiner . See N. L R B. v. Stackpolc Carbon Company, 105 F (2d) 167 (C C A 3), cert denied, 308 U. S. 605; Subin v N -L R B, 112 F. (2d) 326 (C C A 3), cert. denied, 311 U. S. 673, N L R B. N Reinrnigton Rand, Ine, 94 F (2d) 862 (C C A 2i cert . denied, 304 U S 576 464 DECISIONS OF NATIONAL LABOR RELATIONS ; BOARD r'i, basic materials used in its manufacturi'ng operations the respondent ,,owns and operates iron ore mines in Minnesota, coal . mines in Ken- tucky, a coke plant and steel mills in Illinois , a sisal plantation and sisal fibre producing plant in Cuba. International Harvester products - are available for use in industry, - agriculture, and transportation . Agricultural implements include more than 75 different types of machines for plowing of the soil, preparation of the seed bed, planting of the grain , cultivation of the crop, harvesting and preparation of the farm products for market- ing. Industrial tractors manufactured by the respondent and known as TracTracTors are used principally in logging, road buiding,' pipe-line construction , and coal mine operations. Stationary engines, both Diesel and gasoline powered, are used for oil well dfilling, irri- gation and saw mill operations. The respondent manufactures many sizes and types of motor trucks for use in all fields of highway transportation. The respondent's products are distributed in the United States through 152 branch houses , transfer houses, sales and service agen- cies located in 42 States and the District of Columbia . Principal distributing points are maintained and operated in 19 cities in Canada, 18 in South America , 7 in Mexico , 7 in Australia, 5 in central America, 5 in South Africa, 5 in the West Indies and 100 in other portions of the world . The respondent owns all the capital stock of the Illinois Northern Railway and the Chicago , West Pullman & Southern Railroad Company , common carrier industrial railroads. During the fiscal year of 1938 the respondent had an average of 47,106 employees in the United States. Sales during the fiscal year of 1938 amounted in value to approxi- mately $282 ,361,000.13 The 6 plants of the respondent involved in this proceeding and the products manufactured therein are ': McCormick Works, Chi- cago, Illinois-agricultural implements ; Milwaukee Works, Milwau- kee, Wisconsin-tractors, engines and'' dairy machines ; Farmall Works, Rock Island, Illinois-tractors ; West Pullman Works, Chi- cago, Illinois-magnetos , carburetors , bearings , gears, milk coolers;. In the United States : Tractors ------------------------ -------------------- $60:200 , 000.00 Farm Implements------------------------------------- 59, 686, 000. 00 Motor.Trucks ---------------------------------------- 60,209,000.00 Steel, Binder Twine, etc------------------------------- 16, 805, 000. 00 Total, United States---------------------------- 196, 900, 000. 00- In Foreign Countries: - All products------------------------------------------ 85, 461, 000. 00 Grand Total------------------------------------ 282, 361, 000 00, INTERNATIONAL HARVESTER COMPANY 465 East Moline Works, East Moline, Illinois-agricultural implements; Rock Falls Works, Rock Falls, Illinois-agricultural implements. In the manufacturing operations at McCormick Works, Rock Falls .Works, Farmall Works, East Moline Works, West Pullman Works and Milwaukee Works, the respondent uses large quantities of raw ,materials consisting of steel, lumber, paint, sheet metal, supplies; and accessories. , For the fiscal year 1938 the value of such raw materials was approximately $51,989,000. A substantial amount of such raw materials was shipped to the 6 plants from the States of the United States other than the States of Illinois and 'Wisconsin, and from foreign countries. For the fiscal year 1938 the total value of manufactured products shipped from the 6 plants was approxi- mately $83,871,000. A substantial percentage of such shipments were directed to States of the United States other than the States of Illinois and Wisconsin, and to foreign countries. II. THE ORGANIZATIONS INVOLVED Farm Equipment Workers Organizing Committee is the organ- izing and collective bargaining agent of the United Farm Equip- ment Workers of America, and is affiliated with the Congress of Industrial Organizations." United Farm Equipment, Workers of, America admits to membership employees of the respondent gat the 6 plants here involved. Employees Mutual Association of McCormick Works is a labor organization admitting to membership employees of the respondent at its McCormick Works. Rock Falls Employees Association is a labor organization admit- ting to membership employees of the respondent at its Rock Falls Works. United-Motor Power Association is a labor -organization admitting to membership employees of the respondent at its Farmall Works. Employees Association of East Moline Works is a labor organi- zation admitting to membership employees of the respondent at its ,East Moline Works. Harvester Employees Industrial Union is a labor organization admitting to membership employees of the respondent at its Milwau- kee Works. West Pullman Independent Union is a labor organization admit- ting to membership employees of the respondent at its West Pullman Works. 1* Prior to the formal establishment of the F. E . W. O. C. in 1937 there existed at each of the 6 plants here involved locals of the Amalgamated Association of Iron, Steel & Tin Workers, affiliated with the C . I. 0 through the Steel Workers Organizing Committee These locals later become,locals of the F. E. W. 0 C. % J 466 DECISIONS OF NATIONAL LABOR RELATIONSI BOARD III. THE UNFAIR LABOR PRACTICES A. The Harvester Industrial Council Plan On March 10, 1919, the respondent began introduction into all its United States and Canadian operations the "Harvester Industrial Council Plan," hereinafter called the Plan. In general, the respond- ent continued the Plan as a form of employee representation until April 21, 1937, when in this country it was ordered disestablished, as it had been introduced, by medium of a letter from the respond- ent's president to all employees. At the time of the hearing in these proceedings the Plan was still in operation at the respondent's Canadian plants. Analysis of the Plan, as it existed at each of the 6 plants here involved reveals: (1) that it was conceived and formulated by the employer and not by the employees and (2) that the respondent in- stalled, operated, and ultimately abolished it. The Plan was intro- duced to the employees by means of the following letter: INTERNATIONAL HARVESTER COMPANY, OFFICE OF THE PRESIDENT, Chicago, Ill., March 10; 1919. To the Employees: The directors and officers of the Company have for some time been working out a plan to establish closer relations between the employees and the management. To this end they now offer the following Harvester Industrial Council plan for the consider- ation of the employees, hoping that it may meet with their approval. The plan provides for a "Works Council" in which representa- tives elected by the ,employees shall have equal voice and vote with the management in the 'consideration of matters 'of mutual interest. It guarantees to every employe the right to present any sug- gestions, request, or complaint and to have it promptly con- sidered and fairly decided. Provision is also made for impartial arbitration. Should this plan,be adopted by vote of the employes, the officers pledge their best efforts to carry it out in letter and spirit. It is my hope and belief that the plan, if adopted, will mate- rially strengthen our relations in the work we have in common, and will make for the greater contentment and .well-being of us all. (S) HAROLD F . MCCORMICK, President. INTERNATIONAL HARVESTER COMPANY 467 The text of the foregoing letter leaves no alternative to the conclusion that the respondent participated in and dominated the formation,of the Plan, and we so find. A detailed description of the Plan, prefaced by a facsimile of the above letter, was given to each employee. Offi- cials at individual plants were informed of the Plan's provisions by representatives of the respondent's general management, and the em- ployees were acquainted with its proposals either by superintendents or foremen, or by executives of the Industrial Relations Department.16 With respect to the 6 plants here involved, the Plan was adopted in 1919 at the Rock Falls, Milwaukee and West Pullman Works; in 1921 at McCormick Works; in 1930 at Farmall Works; and in 1934 at East Moline Works. - In general; the Plan provided for the formation of a Works Council at each plant; the Council to be composed of approximately equal numbers of elected employee representatives and appointed manage- ment representatives. Only citizens with a continuous employment record of. one year were eligible for nomination as employee repre- sentatives. - Nominations were required to be posted in the plants before election. After election of. employee representatives, the man- agement announced appointment of its -representatives. Tke re- spon`dent's Industrial Regulations Manager or some'official designated by'him acted, as chairman of council- meetings; the vice chairman was customarily the superintendent or assistant superintendent of the re- spective plants, and the secretary was generally the local employment manager or industrial relations representative. On all subcommittees both employees and management had equal membership fluid equal, voting powei-. Expenses of each Works Council were borne wholly by the respondent. Employees serving on the Council received reg- ular pay from the employer during their absence from work on Council business. The powers of the Works Council were limited to investi- gation, consideration, conferring upon and making recommendations as to "questions relating to working conditions, protection of health, safety, wages, hours of labor, recreation, education, and other. similar matters of mutual interest to the employees and the manage- ment." Execution of any company policy thus "shaped" remained, with, the respondent. Regardless of the number of elected council- men and the number of management representatives on the -Works Councils, the employees and the management had equal voting strength on all questions. This was accomplished by a provision in the Plan m George Hodge , since 1922 assistant manager of the Industrial Relations Department, thus described its function : "We are rather a go-betnneen for the eniployees and the man- agement in, bringing to the attention of the management the n lewpomts of employees and bringing to employees through various methods the viewpoints of the management." The department was established in 1918 , with Arthur It. Young as its manager , and George Kelday its.assistant manager Since 1924 Kelday has been its manager, and besides ]lodge his assistants have included H. D Herron and Van B Hunter. 4 1 8 60 3-42-%01 29--31 468 DECISIONS- OF -NATIONAL LABOR RELATIONS, BOARD that elected councilmen and management representatives should take separate votes of their two groups and then that each group should cast its vote as u unit. Thus, in every case where the employee rep- resentatives disagreed with the management there would be -a tie vote. In case of a tie vote the dispute was to be referred to the respondent's president. At the consent of the president, any unsettled dispute -was thence submitted to a Gei eral Council, composed of designated rep= resentatives from a number of Works Councils, or to arbitration. Decisions of the General Council or of any arbitrator or arbitrators was to , be binding. The Plan could be terminated, at any plant, after 6 months' notice, by a majority vote of the employees at the respective plant, or by action of the Board of Directors of the Company.- The Board found in November 1936 that the Plan, as it operated at the respondent's plant in Fort Wayne, Indiana, was in violation of Section 8 (2) of the Act.1' On November 16, President McAllister addressed a statement to all employees that the company had appealed the Board's order.17 The letter stated the Board's decision is of no 16 Matter of International Harvester Company and Local Union No. 57, International Union, United Automobile Workers of America, 2 N. L. R. B. 310. 17 The statement is quoted in full : , A STATEMENT BY THE INTERNATIONAL HARVESTER COMPANY MANAGEMENT TO EMPLOYERS OP THE COMPANY On November 12 the National Labor Relations Board rendered a decision ordering the International Harvester Company to Withdraw all recognition from the "Harvester Industrial Council Plan" as repre- sentative of its employes at the Fort Wayne Works for the purpose of dealing with respondent concerning grievances, labor disputes, wages, sates of pay, hours of em- ployment, or conditions of work ; and completely disestablish the "Harvester Industrial Council Plan" as such representative. i This decision is of no effect until all questions of law and findings of fact have been reviewed by the Circuit Court of Appeals of the United States and this Court may affirm or reverse or modify the order. The Company has appealed the case to the U. S. Circuit Court of Appeals in Chicago. - Pending the court hearing, a few comments are here made -for the lnforrnati'o n,og, em- ployes in order that they may know the basis on which the National Labor Relations Board reached its decision and why the Company believes the decision is wrong and will be reversed The Board says: The whole philosophy of the Plan is- based upon free discussion between employer and employes as a method of handling disputes, instead of a resort to direct employe action as a group. It presupposes well-informed employe representatives and Intel- ligent discussion between them and management. . . . The employe representatives at Fort Wayne Works have never had the aid of experts. The Board concludes that "The Plan does not provide genuine collective bargaining." It is noteworthy that thtoughout the whole opinion the Harvester Company is not criticized for unfairness. There is no charge of discrimination against union men-no charge of interference in elections-no criticism of working conditions On the contrary, the very conclusion of "dominance" of the employe representatives seems to be based largely on the finding that working conditions have been. kept on such. a mutually satis- factory basis that the representatives have not had enough to do. The Harvester Company is proud of the fact that over sixteen years before the passage of the National Labor Relations Act requiring collective bargaining it voluntarily agreed to so bargain with its employes at all of its Works and that since that date its relations' with its employes, worked out through free discussion with freely elected employe repre- INTERNATIONAL HARVESTER COMPANY - '469 effect- until'reviewed by the United States Circuit Court :of Appeals. The respondent points out in the letter that "over sixteen years before the passage of the National Labor Relations Act requiring collective ,bargaining it voluntarily agreed to so bargain with its. employees at all of its Works." The letter asserts that ". . . It is these freely chosen and duly elected successors [i. e. representatives] who are now denied the right to deal with the Company" and suggests that the Order of the Board in that case denied the employees the right to continue to bargain collectively through representatives whom they had freely chosen and through methods that the employees desired to continue. The respondent withheld disavowal of the Plan, at any or all of its plants, until the Supreme Court of the United States declared the Act to be constitutional, on April 12, 1937. The record -shows that the respondent's decision to abandon the Plan was reached 'as a result of the Supreme Court action of that date. Subsequent to the Fort Wayne decision, Industrial Relations Manager Kelday and .Assistant Manager Hodge considered possible dissolution of the Plan, and the respondent began taking steps toward that end, in the 'spring of 1937. As more fully discussed below, at some 'of the plants such steps began in March. Coordinated action was taken on= April 16, 1937, when a formal meeting of superintendents • was held. On that day superintendents of the respondent's United States manufacturing plants and raw material operations were summoned .to a special meeting at the administrative offices in Chicago. A -rough draft of a letter, to be signed by McAllister for transmittal to all employees, was discussed, and superintendents were instructed sentatives, have been kept on a basis such that no strikes and no "employment of experts" -have been necessary. The original collective bargaining plan which the Harvester Company proposed to its employes March 10, 1919, contained the follov^ing provisions : There shall be no discrimination under this plan against any employe , because of ,race, sex, political or religious affiliation or' membership in any labor or other organization. This policy has been rigidly adhered to ever since by the Harvester Company and it is not now charged with departing from it - In April, 1935 , the Automobile Labor Board , appointed by President Roosevelt, held elections at the Fort Wayne Works and duly certified the persons chosen to represent the employes for collective bargaining purposes for the following year, and in April 1936,1 these duly certified representatives called and supervised an election for their successors. It is these freely chosen and duly elected successors who are now denied the right to deal with the Company , for that of course is the effect of the National Labor Relations Board's order denying the Company 's right to deal with them. It is difficult to see how the Board can legally make such an order considering that the very purpose of the National Labor Relations Act was to guarantee to employes the right to bargain collectively through representatives of their own choosing. In effect the decision would leave the employes without any representatives for the time being and force them to seek some other form of collective bargaining in the future even though they may prefer to continue methods here- tofore tried and found satisfactory . It would seem that the Labor Board is substituting its own choice for the choice of the employees S. G. MCALLISTER, President. CHICAGO, ILLINOIS, November 16, 1936 470 DECISIONS OF NATIONAL LABOR RELATIONS, BOARD as to the method of making local announcement to foremen and councilmen. According to the testimony of Hodge. ... Immediately following that . . . they were to hold a special meeting of the Works Council and they were given specific instructions to not permit any other discussion than the announcement that the management had decided to discon- tinue the Councils and read the McAllister letter. There would be no minutes kept of that meeting, nothing printed. That Was just a meeting to terminate tnd throw out the window, you might say, the Harvester Industrial Council Plan. On April 21, 1937, a letter was mailed to each of the respondent's employees announcing the disestablishment of the Works Council Plan."' In the letter the respondent stated that it was making the is The complete text of the letter follows : To All Employes of International Harvester Company in the United States: With the greatest regret the management has come to the conclusion that it should no longer deal for collective bargaining purposes with the representatives of employes elected under the "Harvester Industrial Council Plan" at all works of the Company in the United States . Your representatives have been so notified and now in this letter I want to give each employe a frank and full statement of the reasons for this decision To begin with, what is the Harvester Industrial Council Plan? The plan came into existence in 1919 as the result of a proposal of collective bargaining by the Company and the subsequent acceptance and adoption of the plan by secret ballot of employes It Is worthy of note that this was sixteen years before the passage of the National Labor Rela- tions Act requiring employers to bargain collectively with their employes. This plan was one of the pioneer and volunteer efforts in the United States to encourage full and free discussion between freely chosen representatives of employes and management as a means of settling matters of mutual concern. As to the success of the plan , the record of eighteen years speaks for itself• During that period many matters of wages, hours and working conditions have been fully and freely discussed by the Works Council at each and all of ' the Company 's works, and all of these matters have been settled without a single strike and without loss of time or earnings. Industrial strife has been entirely avoided Free discussion and exchange of information and iiewpoints-were substituted and over the years this has developed a, feeling of mutual confidence and respect between the Company and its employes, each iecognizing the prob- lems of the other and joining in efforts to arrive at fan and ieasonable solutions. In the "Annual Report to Employes," a copy of which was recently mailed to you, the general policies . of our Company are discussed . I think you know , as I do , that the Works Councils have played an important part in developing and shaping these policies It is not a mere coincidence that the Councils have existed and that our Company is the kind of a company men like to work for Neverthe'ess the National Labor Relations Board decided last November that the Works Council at Fort Wayne Works did not afford to employes the full and lice collective bar- gaining to which they were entitled under the National Labor Relations Act, and ordered the Company to discontinue dealing with the eiuploe representatives. This decision was not final as the law permitted an appeal' to the U S Circuit Court of Appeals and the Company took an appeal, believing that the decision was not justified and that most of its employes (who should know best whether their own freedom was restricted) were of the same belief This appeal is now pending and undecided In justice to the Company, we believe employes should know the general nature of the grounds on which the decision of the 'National Labor Boaud was based The Board did not find or suggest that the Company had discriminated in any way against eniploies who were members of unions. The Board's conclusion that the operation of the plan intei fered with employes' freedom of action, was based largely on its findings that the Company initiated the plan and commended it to the attention of new employes . and that the Com- pany paid for printing the minutes of meetings and election ballots and allowed eniploye representatives their regular hourly pay while attending to Council activities ; and that tli e extension of the Council prv,ceedmgs to cover the subjects of safety, athletics, iecieation,, INTERNATIONAL HARVESTER ' COMPANY- '- - . 471 announcement "with the' greatest regret." The respondent pointed out that the Plan had introduced collective bargaining to its em- ployees 16 years before the Act had, been passed requiring such bar- gaining and that the representatives under the Plan were the "freely chosen representatives of employees." The letter stressed the "suc- cess" of the Plan in handling matters of wages, hours, and working conditions and that "free discussion and exchange of ... view- points" had "developed a feeling of mutual confidence." Continuing in the same vein, the respondent then stated that although it did not believe that the Board's decision regarding the Plan at • the respondent's Fort Wayne Plant was "justified" and did not believe that most of its employees thought their "freedom . . . restricted" by the Plan, it had decided to withdraw its appeal from the Board's, Order. The respondent also asserted that the Board's decision "was based largely" on findin's that the respondent had, initiated and commended the Plan, paid expenses of its operation and had ex- tended its scope to activities beyond the realm "of the more funda- mental subjects of collective bargaining," and added that "... the Employe Benefit Association and other matters of mutual interest constituted improper support of the plan and tended to lead to an inadequate discussion of the more fundamental subjects of wages, hours , grievances, etc There is nothing in these findings reflecting on'the'fairness of the Company and it has no apology to make for its part in the inception and operation of a plan which , over the years , has accomplished so much and can be criticized so little It is proud to have been a pioneer in proving the value of collective bargaining with freely chosen representatives of employes. Recent elections at Fort Wayne Works to select employe representatives for the present year were conducted entirely by the employes Practically all employes voted and three of the twelve representatives elected were union men No one can question the fairness or independence of this election-yet the group so elected to bargain with their fellow employes is prohibited by the order of the National Labor Board from so doing. That Is the effect of the order, for 'if the Company cannot deal with them neither can they deal with the Company This presents an extraordinary situation and it is quite possible that a review of the proceeding by the Circuit Court of Appeals would result in a reversal or modification of the Labor Board's decision in order to preserve to employes their right to have the manage- ment meet their freely chosen representatives , and possibly directing some changes in future procedure The Company, however, has decided to dismiss its appeal and comply with the order of the National Labor Board It is taking this action because of its desire to cooperate with the Government's efforts to eliminate industrial strife and in the belief it is not for the best interests of the employes or the Company to continue collective bargaining under a plan which has been subject to criticism, even though the criticism may not be justified. The decision of the National Labor Board has raised a question whether Harvester employes have full freedom in collective bargaining and the Company wants to remove that question. With the Works Council form of collective bargaining now discontinued, what lies ahead? This is for the employes to determine for themselves and each employe has his own individual right of free choice guaranteed to him by the National Labor Relations Act The recent decision of the Supreme Court interpreting this Act makes it clear that no employe is required to join any union or bargaining group and may deal with the Company directly on his own account On the ' other hand, ariy employe who wishes to bargain collectively may do so and for this purpose he may join with any existing group or union, national or local, or join with others in forming any new bargaining group or union. The management will continue its past policy of meeting and dealing with individual employees or with the authorized representatives of any groups who wish to discuss any 472 . DECISIONS '-OF NATIONAL LABOR RELATIONS BOARD Company- .. has no apology to make for . . . a plan which .. . has.accolnplished so much and can be criticized. so little." As to future action,. the respondent suggested that no employee is com- pelled to join a union, but that "he may join with any existing group or union, national or local, or join with others in forming any new bargaining group or union." The letter also warned. of the use of "coercive methods" by unions to obtain a majority. In conclusion, the letter praised the Plan and suggested "that assets of greatest value have been developed which should not be lost by whatever changes in the form of collective bargaining may come about in the future." . The facts, above-recited, plainly disclose that the respondent estab- lished, dominated, and supported the Plan, and we so find. It was conceived and installed by the respondent. No dues were collected at any of the works, and all expenses incidental to its operation were borne by the respondent. The provision that the industrial relations manager or his. appointee should serve as chairman of Council meet- ings.assured the respondent of administrative supervision over the Plan's operation, and demonstrated that control of the respondent's matters of concern to them. In the future , however, these relationships will be limited so far as required to conform with that section of the National Labor Relations Act which provides that the representatives of a majority of the employees in any "appropriate unit" (as determined or approved by'the National Labor Relations Board ) shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining in respect to rates -of pay, wages, hours of employment or other conditions of employment: Rival groups will no doubt seek to obtain majority representation and in this com- petition some groups or individuals may be tempted to use coercive methods The manage- ment strongly appeals to all employees not to attempt to deprive each other of the right of free choice for two very sufficient reasons. First, because it is unfair and undemocratic and will tend to defeat the very purposes of the National Labor Relations Act, Second, because representation obtained by coercion is not real representation at all, but an illegal fraud which cannot be made the basis for any legal claim to recognition. The Company will rightly be slow to recognize or deal with the representatives of any group ( whether claiming a majority or minority ) which has advanced its membership by coercive methods, and we believe the National Labor Board will fully support it in this position. I One of the functions of the National Labor Board is to deal with situations where there Is doubt as to the extent or validity of the authority of any persons or organizations claim- ing to represent employees. In such cases the Boaz d may call and supervise secret elections to ascertain the free choice of employees . When this happens coercion will of course be disclosed and will be measured by the ,difference bete een the representation claimed and the representation confirmed by the secret election Organizations using coercion will thus stand convicted by the election and, needless to say , they will go down in the estimation, and confidence of the employees and management and public As we look backward over our eighteen years of experience with works Councils I think we can all agree that assets of the greatest value have been developed which should not be lost by whatever changes in the form of collective bargaining' may come about in the future. These are the mutual confidence and respect between employees and manage- ment, the frank and free discussion , the spirit of fairness on both sides , and the recognition that employees and stoci:holdeis have definite common interests in the welfare of the Company which can be advanced by their joint efforts I wish to assure employees that the management will earnestly endeavor to approach all matters coming up for discussion in the same spirit as in the past and I believe em- ployees will do likewise. With that spirit on both sides, fair and reasonable solutions of all problems -should be possible ^+.) S G MCALLiSTER. INTERNATIONAL HARVESTER COMPANY 473 labor relations with employees at various plants was centralized, and under the direction of the industrial relations manager. The re- spondent was both responsible for the conception and the existence of the Plan. And upon a date decided by management alone, the Plan was summarily disavowed by the respondent. The -complaint in these preceedings does not allege that the re- spondent-engaged in an unfair labor practice within the meaning of the Act by dominating or interfering with the Plan, and,we make no finding to that effect. However, the' sponsorship, domination, support, and control of the Plan by the respondent for almost 2 years after July 5, 1935, the effective date of the Act, reveals the respondent's course of action up to the time of the events alleged by the complaint to be unfair labor practices, and provide a back- ground against which these subsequent events can be more accurately evaluated?9 Moreover, as we point out below, the respondent's let- ter`s to, all its employees concerning the Board's decision in the Fort Wayne case and announcing abandonment of the Plan, gave impetus to the •1 orlnation "of "inside" unions at each of the 6 plants. B. Interference, Restraint, and Coercion by 'Olcials and Foremen Prior to Abandonment of the Plan During the latter part of 1936 and early in 1937, there developed in each of the.plants here dealt with local labor organizations of employees which were either initially formed as, or later became, affiliates of the C. I. 0. Management executives were aware of these movements , as evidenced by Industrial Relations Manager Kelday's reports to the Special Conference Committee.20 Local management representatives likewise knew of organizational activities in the respective plants. At all six plants the respondent expressed its antipathy to all outside labor organizations, and especially to those affiliated with the C. I. 0., and by statements and actions made the employees aware that their support of such organizations was contrary , to the policies and desires of the management. t At the Rock Falls Works, prior to disestablishment of the Plan, the Works Council minutes of January 20 , 1937, show that Assistant Works Manager Harrison was present at the Council meeting as a visitor from the respondent's executive offices in Chicago. Har- rison has jurisdiction , over nine plants of the respondent's "Imple- ments Division," including the Rock Falls, McCormick, and East Moline Works. The minutes of that meeting contain a printed w See National-Labor Relations Board v. Pennsylvania Greyhound Lines, Inc., and Grey- ihound Management, Company, 303 U. S. 261. See also National Labor Relations Board V. Newport News Shipbuilding & Dry Dock Company, 308 U. S. 241. 20 See note 22, infra. 474 DECISIONS OF NATIONAL LABOR RELATIONS BOARD summary of Harrison's formal remarks made during the business meeting, in which he lauded the "cooperation of the employees and the management through the Works Council." Following the business meeting, according to Councilman Gorman's testimony, Harrison told the employee representatives of an instance in Chicago where he was a superintendent of labor trouble at one time . . . where he had broken up a strike that 5was in progress and further went on in his speech that it seemed to him the Rock Falls Works would be a good place to start in and break up the C. I. O. Harrison denied making this statement. However, in view of the fact that the councilmen immediately thereafter began an overt and vigorous campaign to cause revocation of C. I. O. memberships in the plant and from his observations of the witnesses, the Trial Exam- iner did not credit Harrison's denial. Further support for the Trial Examiner's conclusion is the testimony of several. employees that Councilman Long told them that councilmen had been instructed by the management to stop the, "C. I. O. at any cost." We find that Harrison made the statement as testified to by Gorman. On the day after this meeting, Councilman Long called employee representa- tives to the council room during working hours. They discussed methods of combatting the C. I. O. Superintendent Gleason was invited into the meeting and his advice was sought. Gleason said that although he would have nothing to do with it, he would per- mit England, who was the appointed secretary of the Plan and an assistant to 'the employment manager, to remain and act as secre- tary for the representatives. The councilmen drafted and, dictated to England the text of a petition which read : 21 We the following employees, are in favor of the present set-up of collective bargaining through the Works Council Plan and are opposed to any interference 'of outside organiza- tions. We feel that the employees are better represented under this plan than they would be under any other system of col- lective bargaining. Thereafter, the councilmen, while serving as such under the Plan, circulated the petition through the plant, and at the same time caused approximately 90 employees of the 500 or 600 men then work- ing to relinquish their C. I. O. memberships. Employees were pre- vailed upon to yield their cards by warning them that' in signing their union applications they had signed away their "power of at- , a England denied having prepared or having seen the petition . The Trial Examiner did not believe his denial and we agree . England's presence in the meeting with Gleason's approval is established by 'the unrefuted testimony of Gorman . The petition was there drawn up and it is unreasonable to believe that England did not see it. ,INTERNATIONAL HARVESTER COMPANY 475 torney." Councilman Long carried with him a C. I. 0. card at- tached to a small board, which he described as : a kind of persuader, showing the men what they signed, a power of attorney, when they signed it, that some outsiders would come in and do their bargaining for wages, labor, and working conditions, that is what the card said at the top, the C. I. 0. card. The record warrants our finding that this method of attacking the C. I. 0.. was suggested by the respondent's Industrial Relations Department.22 In the course of the councilmen's anti-C. I. 0. cam- paign Long also told at least one employee that the Rock Falls Works might be moved away if the employees did not prevent the organiza-, tional drive of the C. I. 0.23 So far as the record indicates, the councilmen were paid by the respondent for the time taken during 22 That this argument was supplied by the management of the respondent Is evidenced .•by,,the following facts: ( 1) Since 1919 the respondent has been a member of and has con- tributed annually to the support of the Special Conference Committee, which consists of representatives of 12 of the leading corporations in the United States and, according to Kelday, "Is a group of men, industrial relations men like myself, . .. who'get together periodically . . . for the purpose of discussing matters pertaining to industrial relations, where we have an inter-exchange of ideas and experiences on any matter relating to Industrial relations " The 1937 annual report of this committee, dated February 11, 1937, and signed, among others; by the respondent's industrial relations manager, Kelday, con- tains the following : "Activities of the Committee for Industrial Organization during 1936 were so thoroughly publicized that any extensive account of them here is unnecessary. This committee, headed by a,leader who is able, ruthless, and histrionic, has undertaken the task of organizing the employees in several of the major mass production industries, including steel , electrical manufacturing, automobiles , rubber and petroleum . This has been intensified rather than retarded by the factional split in the American Federation of Labor, as a result of which most of the C. I. O. unions are under suspension from the parent body. In its efforts to enlist employees in its membership the C. I 0 organiza- tion has adopted various expedients, including temporary remission of initiation fees and dues. Sometimes it has asked employees to sign applications which, while cleverly worded so as to avoid arousing suspicion , in effect give the union power of attorney an dealing with the employer." (2) On the subject of "public relations in connection with labor," the following suggestion appears in the same annual report : "Satisfactory methods should be worked out for a continuous interchange of information between management and employees. This may be done through personal contacts, through printed bulletins, through plant magazines or newspapers, or through whatei,er machinery of collective bargaining is in existence. Extreme care should be taken to see that the passing of information to employees has no element of threats, coercion or attempted dominance of opinion." (3) Minutes of the Special Conference Committee, dated February 11, 1937, and under the hearing, "International Harvester Company," contain the following: "There have been no serious labor difficulties but at several plants there are small locals of unions affiliated with the Committee for Industrial Organization The Works Councils are very active and are pressing requests for liberalization of Company policies ... The Company is redoubling its efforts to make sure that all supervisors understand and prop- erly apply the labor policies of the management " (4) At a Works Council meeting at Rock Falls in January, according to Gorman's testimony, Superintendent Gleason told the representatives that signing a C. 1. O. card was signing a power of attorney. Gleason's denial cannot be believed in view of the foregoing statement signed by Kelday, and 'because of surrounding circumstances. It is clear that Long, Desmond, and other council- men, in causing C. I. O. members to relinquish their cards, were acting with the full approval of management and in accordance with its policy (Italics supplied ) 2e Although Long denied he made this statement, he admitted that he talked to employees (including the witness, Ohda) about the C. I. O. and contended that signing a C. I. O. card constituted signing a "power of attorney " The record clearly shows Long's hostility to the C. I. O. and we do not credit his denial of Ohda 's testimony. 476 DECISIONS OF NATIONAL LABOR RELATIONS BOARD working hours to engage in this campaign, just as they were paid by the respondents for all council activities under the Plan. On the basis of all the evidence we find- that the respondent instructed the Rock Falls councilmen in January 1937 to institute an aggres- sive campaign against the C. I. O. and its affiliated locals and that the councilmen engaged in, the. above-described activities pursuant to those instructions, while acting as councilmen under the respondent- dominated Plan. Prior to the abandonment,of the Plan in April 1937 the C. I. 0.21 had commenced a membership drive among-employees of the Mc- Cormick Works. The supervisory officials revealed to the employees the respondent's opposition to this organization through several -channels. Foreman Thomas Flannigan went through his department at the plant and warned one employee after another not to sign "C. I. 0." application cards because in so doing the employee would be signing a power of attorney.25 Flannigan also advi,sed;,at .least one employee that if he signed such a card he would be compelled to pay dues whether or not a local organization was established. In March 1937, Plant Superintendent Cottrell called into his office .Gerald Fielde, an employee who was a Plan councilman and also a member of the C. I. 0., and described to Fielde the -contents of a pamphlet which charged John L. Lewis with being "a bad man," "a radical," "taking milk away from babies with the check-off system." Cottrell further described "the affairs' of John L. Lewis and the C. I. 0." and told Fielde that he believed that each employee should receive a copy of the pamphlet.26 24 The local organization at that time was Farm Equipment Workers Association , a divi- sion of Amalgamated Association of lion, Steel and Tin Workers of North America, affiliated with the C. I. O. 25 Three employees , Gerald Fielde , Stanley Mrozek, and Sergio Puccini , so testified.' Flannigan admitted that he advised the men not to sign cards but on the ground that they were, in effect, wage assignments. We believe the testimony of Fielde , Mrozek and Puccini, especially since the warning that signing C. I. O. cards was equivalent to signing a power of attorney was a device also used by the respondent in combatting the "C. I. 0." at its Rock Falls plant. As pointed out In that connection , supra, the respondent had participated in Special Conference Committee gatherings of industrial relations men prior to February 1937, at which C. I. O. application cards had been described as `.`cleverly worded" and "in effect give the union power of attorney in dealing with the employer." Assistant Workers Manager Harrison of Chicago , who as we -have found , supra, initiated the anti-C. I. O. campaign at the Rock Falls plant early in 1937 , also had jurisdiction over the McCormick Works. 2° Although Cottrell denied Fielde's testimony concerning the pamphlet we find for several reasons that the incident occurred as related by Fielde. In the first place , Cottrell admitted that he called Fielde into his office, but said it was for the purpose of discussing the amount of time Fielde was spending on the Works Council. Since Cottrell was a member of,the Works Council and as its presiding officer knew what the Works Council was doing, and ordinarily communicated with the chairman of the employee representa- tives on the Council , this explanation is unsatisfactory. In the second place, Cottrell stated that he had never had opinions concerning John L. Lewis nor had he discussed Lewis with anyone. In view of the fact that Lewis was the subject of much public controversy during February and March of 1937, it seems incredible that the chief executive of a plant as large as the McCormick Works had no opinions whatsoever with respect to Lewis. INTERNATIONAL HARVESTER COMPANY - 477 At, the West- Pullman Works we And that in the latter part of 1936 Foreman Mabey called into his office George Dillman, an em- ployee in his department who had been -a member of the C. I. O. since August 1936, and said, according to Dillman's testimony, that "I didn't know as much about the C. I. O. as I should know, because if I would only talk to some of the miners I would find out that John L. Lewis robbed the miners, that the C. I. O. is a bunch of Communists and radicals and that to belong to the C. I. O. is only ,to throw money away." 27 On January 9, 1937, Ray E. Miller was elected president of the C. I. O. local at the West Pullman Works. Soon thereafter General Foreman Bernard F. Small 28 approached him at his work, remarked about his election, and further decleard, according to Small's own testimony, "I . . . said that I didn't see any reason for the boys at West Pullman needing an outside organi- zation." Asked what he meant - by "outside organization" Small- further testified : "Any outside, representation,. as they did have the Works Council to represent them." Small also admitted that fol- lowing a meeting of the C. I. O. local in March, he called John Piejko to the Employment Office. Small's testimony concerning this ,occasion is quoted : - I told him I heard he was attending meetings of the C. I. ' O. and asked him if there was anything wrong with his Job or his pay, or whether the assistant foremen were treating him right and he said he was. I said, "Then why do you want an outside organization when you have the Works Council?" Small further admitted similarly questioning employee Gus Mees 29 the following morning. Small candidly admitted that he questioned all employees whom he learned had joined the C. I. O. in the same manner in which he questioned Piejko and Mees described above. It is apparent, therefore, that the incidents thus described do not fully indicate the extent to which Small carried on his campaign to dis- courage membership in the C. I. O. but that these incidents are merely illustrative of his general course of conduct. Foreman Ivan Collett of the West Pullman Works in February 1937, asked Paul Kowalzyk why he had attended the C. I. O. meeting of the night before. Collett admitted making the inquiry and ex- plained that he asked Kowalzyk because he thought that Kowalzyk might be imposed upon by the C. I. O. Collett further stated that n Our finding that this incident occurred, despite, Mabey's denial that he discussed the ,C: I 0. with Diliman, is based on the fact that Mabey admitted sending for Dillman and told him to stop organizing and on the further fact that Mabey's assistant, Harold Anderson, and May Jackson, his stenographer, who were identified by Dillman as present during this conversation, were not called by the respondent to testify. 21 Frequently referred to in the transcript as "Barney Small," and sometimes as "Smallinski," or "Smolinski." 20 Sometimes referred to in the transcript of the hearing as Gus Maas. 478 DECISIONS OF NATIONAL LABOR RELATIONS BOARD he thought attendance at a C. I. O. meeting by an employee might be an indication of dissatisfaction with conditions in the plant. On one occasion in March or April 1937 , Auditor Krauser of the West Pullman Works told Albert Spirakas , secretary of the C. I. O. local and a clerk in Foreman Small's office, that he was fired, stating that "you know what the reason is-union activity ." As Spirakas started to leave, Krauser advised him he would rescind the order if Spirakas would resign from the C . I. O. Spirakas later resigned and retained his position in the plant . _ Although there is much dispute about facts surrounding the subsequent resignation of Spirakas from the Union, we find that he was inspired by Krauser 's warning. This finding is supported by the 'fact that Assistant Superintendent Juby, together with Krauser, advised Spirakas that he could retain his job provided that he stayed away from the spot welders . Juby explained that the spot welders were a bald influence . The record shows that the spot welders at that time were predominantly members of the C. I. O. Foremen at the Milwaukee Works were similarly active in opposi- tion- to outside labor organzations . We find that in February or March 1937, Foreman Marejke advised Ralph Mandy, an employee, that he (Marejke ) had previously been active in the Machinists Union, that he knew all about unions , and that they were all "rackets." 30 Likewise , Foreman William Knaebe twice talked to employee Grueb about John L. Lewis and the C. I . O. The foreman told Grueb that the C. I. O. was "no good," that Lewis was a "bum" and a "Com- munist.'-' 31 We also find that in March 1937, Foreman Heiz of the Milwaukee Works told Joseph Smul , an employee , that a relative of Heiz was an A. F. of L. organizer and that he had been told by his relative that unions were "crooked." Heiz advised Smul that he did not believe in unions.32 In March 1937 , the C. I. O. local was becoming active at the re- spondent's Farmall Works at Rock Island, Illinois . The department supervised by Foreman Hammer was in operation on Sundays. On a Sunday in March, according to the testimony of employee Morrill, Hammer told him that the International Harvester Company was a good place to work, that there was no necessity of having an out- side union in the place , that "the boys would be better off if they 80 Marejke admitted discussing the Machinists Union with Mandy but denied ever stating that unions were rackets. However, Marejke, himself, testified that he demanded of a union solicitor, "what kind of a racket are you pulling off?" The record discloses that Marejke was hostile toward outside unions. In view of these facts we discredit Marejke's denial of Mandy's testimony Si Since hnaebe admitted making at least one other remark hostile to the C. I. O. (See infra, Section III C) and the record discloses that he supported the H. E. I. U. by per- mitting solicitation in his department, we do not credit Knaebe's denial of Grueb's testimony. 12 we do not believe Heiz's denial to be credible in view of the fact that, although he at first denied making the statement, he stated orb cross-examination that he could not recall whether or not he made it. INTERNATIONAL HARVESTER COMPANY -- 479 didn't; there would be no strikes, or anything like- that" to cause them to lose time. Hammer denied making the statement, adding "That would be against our instructions" as foremen. On cross- examination, however, Hammer admitted that he did not receive instructions concerning non-interference until disestablishment of the Plan on April 21, 1937. The Trial Examiner accepted Morrill's testimony as true and discredited Hammer's denial. We agree with the Trial Examiner, and so find. We find also that Hammer attempted to dissuade employees from joining the C. I. O. by'telling them that by signing the application cards for membership they were signing a power of attorney. This is the same device that was used at the Rock Falls and McCormick Works, the use of which we have found was inspired by the respond- ent's Industrial Relations Department. , In view of the respondent's position that "taking management in its broad term, we include everybody from the Assistant Foreman directly up to the President," it is clear that all the above-found statements and incidents made by assistant foremen, foremen, and other supervisory officials are attributable to the respondent. The above- related statements of councilmen are also attributable to the re- spondent, since they were acting at that time in their capacities as councilmen under the Plan and pursuant, to the instructions of the management. We find that by these statements, and activities, above described, the respondent interfered with, restrained and coerced its employees in the exercise of the rights guaranteed to them in Section 7 of the Act. C. The formation of the Independents at the six plants and subsequent events - 1. Relation of Councilmen to Management Prior to the dissolution of the Plan on April 21, 1937, councilmen at all six plants led campaigns (1) to discourage membership in out- side labor organizations and (2) to form inside organizations to suc- ceed the Works Councils. At some of the plants the councilmen concentrated on one or the other of these types of activity, but fre- quently engaged in both, their course of action being dependent upon the circumstances at each of the plants. In view of their role in the organizational affairs of the respond- ent's employees it is necessary to examine in general the status and function of the councilmen in terms of their relation to the manage- ment. We have already found that the respondent dominated the Plan and consequently controlled the activities of the councilmen. We have also found that the councilmen emulated the respondent's 480 DECISIONS OF- NATIONAL LABOR - RELATIONS BOARD foremen and other supervisory officials in their opposition to outside unions and that they reflected the respondent's views as expressed in the February 1937 Report of the Special Conference Committee. Review of the council minutes at each of the plants involved, from January 1935, to March 1937, reveals that Works Council meetings- were mainly devoted to two subjects: safety and efficiency. Council- men conducted safety meetings of employees in their divisions; coun- selled employees in the use of "goggles" and metal shoe-caps, and made safety inspection trips through the plants.33 ' Councilmen co- operated with management not only in evolving means of reducing waste but also obtained results desired by management through ex- ercising their influence over the general body of employees.34 Coun- cilmen held frequent and regular meetings with management. 'Many of them had served for several years on- their respective Works Councils. The relationship of_ councilment to management is in- dicated in the following statement of Assistant Industrial Relations Manager Hodge, made at a meeting of the Milwaukee Works Council and quoted in the minutes of January 15, 1935: I believe, that 95°/"0 of the council work is done right on the job. The real value of that practice lies in adjusting differences and solving' problems affecting the individual before they be- come serious. The councilmen and the foremen at Milwaukee' Works have,'always cooperated splendidly. Also relative :to ,this , association , Hodge testified:-". . . through the 'Council they -(the employees) had a track to the management the same as the management had a track to the men to give them their 83 Concerning this phase of councilmen 's duties, Hodge testified : "I can't say there was any general practice with respect to safety . Sometimes they would concentrate on plant inspections, other times they might go at it from an educational point of view. There wasn't any general plan on safety ; in other words , each committed worked out its own way of trying to help solve the problem .. . Of significance also is the testimony of Otto Sattler , councilman at McCormick Works . Q. And as a member of the safety committee one of your duties was to hold safety meeting's, wasn't it? ' A. Well, yes, to give a talk to the men, show them the dangerous points of the machines. Q. Sometimes the foremen would hold a meeting and sometimes you would hold It?, A. Correct. 34 For example , the following excerpts are quoted from the minutes of the McCormick Works Council , dated February 8, 1937: The defective parts were gone into in detail, many of them being passed around among the various representatives and, at the close of the meeting, many of the parts were taken back into the departments by the elected representatives for discussion with the employees responsible for the defects . . . 'Mr. Cottrell- [ superintendent] stated that for the benefit of Mr. McCormick [ vice-president Fowler McCormick] he wished to explain that the elected group bad done a splendid job -in the reduction of scrap and in getting the subject back to the men in the departments where the scrap had been caused. He said that he thought by the representatives getting in on this spoiled work program it had been -found that their familiarity with the conditions had had a marked , effect on the entire subject. " , 'INTERNATIONAL HARVESTER COMPANY 481- point of view as to various conditions . . ." Following abandon- ment of the Plan, the management appointed its own committees to- carryon safety and efficiency programs. Concerning this, point, Hodge testified ". . . we realized that safety work must be carried on, quality work must be carried on, and the company formulated-I mean appointed management committees which carried on that' work." It is clear that so long as the Plan remained in operation council- men occupied a dual role and the relationship-of councilmen to man- agement was peculiarly close. 'For time spent on Council work dur- ing their working hours, they were paid by the respondent at their regular rate of pay. For many purposes councilmen were the emis- saries of management to the employees. Often they actually rep- resented and acted for management in dealing with other employees, as illustrated by the safety and efficiency campaigns which were interchangeably handled by foremen and by councilmen. At the Milwaukee Works the personnel manager stated that in 1936 he had called one of the councilmen to his office and requested him, as a councilman, to stop certain solicitation for membership in an or- -ganization which was being carried on at that time in the plant and "to spread the word among the men." In addition to representing management in matters concerning its employees, the councilmen also served as representatives of manage- ment in public relations matters. Thus in 1934 or 1935 Councilmen Sembach and Oliver of the McCormick Works were taken by George Hodge, assistant manager of the re'spondent's Industrial Relations Department, to Washington to testify before a Senate Committee- conducting hearings on proposed legislation which later was enacted as the National Labor Relations' Act. Oliver read to the Committee a statement defending the respondent's'Works Council Plan. Their expenses,were paid by the respondent. That" the councilmen themselves recognized that they represented the management in its relation to the employees is evidenced by the testimony of William H. Desmond, councilman at the Rock Falls Works, and Schulte, councilman, at, the West Pullman Works, who stated that such was-the general understanding of the employees. Desmond explained his failure to become active in-the R. F. E. A. on the ground that he was a councilman : "I figured if I was a councilman they (the employees) wculd think I was working for the Company, in 'summary, councilmen occupied their positions by virtue of a Plan dominated and,controlled by the respondent; they represented the management in instructing their fellow employees on matters of safety and efficiency, width was a duty also often performed by fore- 482 DECISIONS OF. NATIONAL LABOR RELATIONS BOARD men, they acted in accord with the respondent's policy as reflected in the 1937 Report of the Special Conference Committee 35 and as revealed by the anti-union activities of admittedly supervisory officials; the coun- cilmen themselves believed, and their fellow employees believed, that they represented the views of the management. For all these reasons we conclude and herewith find that councilmen who were employee representatives in the Plan, were acting for and on behalf of the respondent in all their activities herein described and that the respond- ent is responsible for their activities as councilmen .36 2. Activities of Respondent's Officials and of Councilmen in forming the Independents At each of the six plants the labor organizations herein alleged to be company dominated stemmed directly from,the Works Councils through the activities of various councilmen. Although the forma- tion of the respective Independents follows a common formula, the comprehensive pattern can best be shown by a description of the facts surrounding the formation of each of the six organizations. Employees Mutual Association at McCormick Works During his testimony concerning the management conference j n Chicago on April 16, 1937, Hodge stated that the procedure,of--an- nouncing abolition of the Plan was so designed as to "prevent any leak getting out prior to April 21." He declared that envelopes, for the mailing of the McAllister letter, were to be addressed and ready at .each of the Works, but that "no one was to know what was to go in those envelopes." The significance of this averment becomes apparent in considering the fact that on April 19, two days before the official announcement was made to employees generally, the elected repre- sentatives on the McCormick Works Council wwere informed by;;their,, chairman that the Plan was to be dissolved and they immediately began organizing the Employees Mutual. On April 17, Otto Sattler, for 8 or 9 years a councilman, ordered the printing of application cards for membership in an independent organization." Sattler told other employees, prior to April 19, that "the Wagner law had thrown it [the Plan] out." On April 19 Henry Sembach, who had served on the council since 1921 and for many years as chairman of the elected representatives, called a meeting of the councilmen during working hours. The meeting was held in the council room on the property ee See note 22, supra, and related text. 80Internattonal Association of MaclN,n,sts V. Natwnal Labor Relations Board, 311 U. S 72, aff'g 110 F. (2d) 29 (App D C.), enf'g, 8 N L It B. 021. 8' Sattler testified " I ordered the cards on the 17th, or the 18th, I ain't sure." Since April 18 was Sunday, we agree with the Trial Examiner that April 17 Is the correct date. INTERNATIONAL HARVESTER COMPANY , 483 of the respondent. Sembach testified that he issued the call at the request of other representatives, and that when the meeting had con- vened he inquired as to its purpose. He declared that the representa- tives wanted to know what information he could furnish on the disestab- lishment of the Council, and that he told them he had no information. The Trial Examiner concluded, and we find, that the disingenuousness of this testimony makes it unworthy of belief. It is refuted not only by Gerald Fielde, a Board witness, but also by Kowalkowski, another employee representative who testified for the respondent. Kowalkowski quoted Sembach as stating at the meeting, "In a couple of days we will have notice there won't be no Council left any more." Sembach admitted that he had talked with Superintendent Cottrell on April 16, but denied that this official had informed him of the management's plans. If Hodge's testimony is to be accepted, - con- cerning the precautions adopted to insure secrecy , then it is reason- able to believe, as the Trial Examiner did, that Sembach could have obtained the foundation for his accurate forecast from no other source than Cottrell or some other management representative, and we so find. It is equally clear that Sattler had received,advance information. We agree with the Trial Examiner that it is unreasonable to believe that either Sembach or Sattler, both of whom had been councilmen for many years, should, suddenly undertake the, forma tion .,of a com- petitive independent organization without the knowledge and approval of management . Both Sembach and Sattler had long been entrusted with semi-supervisory powers as "safety instructors," and had fre- quently called meetings of employees to issue precautionary advice. Prior to the passage of the Act, Sembach 's expenses to Washington had been paid by the respondent to appear before the Senate commit- tee. According to his testimony, "they sent us there for the purpose to try, if we could , to protect our Works Council." Following , Sembach's announcement to the representatives on the morning of April 19, discussion arose as to a successor organization. Gerald Fielde, already a member of the C. I. 0. local, suggested that the nucleus of a union then existed at the plant . Sembach there- upon insisted that the representatives must leave the company prem- ises if they were to talk about unions. According to his own testi- mony, "I said, `I wont't allow it to be , done on company property. If you want to- organize , start an organization , you will have to do that on your own time.'" Sembach admitted that never before had he ordered representatives,from the company property , but explained that a, union formed on company property, would be "illegal," and that his opinion was "based on parts of the Wagner Act." 'Sembach's concern lest his employer be placed in the position of violating an Act designed to protect the employee's rights of organization leads 413602-42-vol 29-32 484 DECISIONS OF NATIONAL LABOR RELATIONS BOARD us to conclude that Sembach had previously been cautioned -by man- agement, particularly when we consider Sembach's action .in connec- tion with Hodge's testimony that on April 16 he "gave very specific instruction" to the superintendents that: We would have to be extremely careful that no one would be able to say and prove that there had been any discrimination against any man because he had joined a labor organization, and gave very specific instructions that the no solicitation policy of the company would mead there , should be no solicitation of members for a labor organization or collection of dues in the plant during working hours. [Italics supplied.] Following Sembach's instructions ,'the councilmen left the plant, ,and resumed discussion at a nearby tavern. They obtained no permission from their foremen to absent themselves, nor were they questioned by watchmen at the gates. By a vote of approximately two to one, the 17 representatives decided to form an independent organization, and temporary officers were elected or appointed . Although the record is not clear as to the exact time when the representatives re- turned to the plant, Senibach reported to Employment Manager MacLeod that the men were absent until 11:40 a. m. and pay-roll records show that the men were not paid for the interval between 9: 30 a. in. and 11 : 40 a. in. Although Sernbacli testified that he told the employment manager the purpose of their absence, the evi- dence shows that none of the men were reprimanded or disciplined for their action. On the morning of April 20 application cards for membership in the "McCormick Works Local Union" appeared at the plant. Eleven of the councilmen met almost every- night for the ensuing 2 weeks, soliciting members and forming the organization. On the morning of April 21, Superintendent Cottrell called the coun- cilmen together and, according to the testimony of Kowalkowski, told them in substance : Boys, I will shake hands . . . because we will meet here for- the ' last time . . . Now it is up to you-. . . Now you can go do whatever you please. You can organize whatever you - see fit, organize, or you don't have to organize .. . • If you ever go any place, the company is not responsible - for your time. Councilmen thereafter called together' employees in their respec- tive divisions and announced the Plan's dissolution . Kelly, a witness for the Board testified that when Sattler made this announcement to employees in his division , he further told the assembled employees that "they had a nucleus of an organization for another council they were intending to organize." According to Kelly, Settler .further INTERNATIONAL HARVESTER COMPANY 485 stated that cards had been printed and that Bill Russin and another employee would represent him in the department. Russia denied having been appointed "representative" but admitted that he 'could not recall all that was said by Sattler on this occasion. Sattler con- ceded 'making the announcement about the Plan, but denied other statements- attributed to him by Kelly In view of the surrounding circumstances, particularly the established fact that prior to this meeting Sattler was already engaged in forming another organiza- tion, the Trial Examiner believed Kelly's testimony, and found that Sattler used his position, as councilman to help organization of the Employees Mutual. We agree with the Trial Examiner, and so find. Kowalkowski, councilman representing Department 28, called a similar meeting of the employees of that department, with the per- mission of Foreman Burghardt. Clarence Stoecker, an employee who attended, testified, and we find, that Kowalkowski explained that the respondent was disbanding the Plan and that the-councilmen ex- pected to form a new organization.38 Near the same time, Assistant Foreman Phil Skrentny 39 gave Joe Wayer, an employee' active in organizing the Employees Mutual, permission to speak to the night shift in Department 73. Wayer, who was employed on the day shift, told Joseph Novacki, a night-shift employee, that he was in the plant to organize the employees. Wayer told the employees about organi- zational activities of the C. I. 0. in other factories and what dues were charged, and then said: "We are going to have an organization. We don't need no outsider. It will only cost you a quarter." Assist- ant Foreman Skrentny remained within 10 feet of Wayer during his talk. . Some months later Skrentney was reprimanded by General Foreman Krueger for having permitted Waver to speak, but the re- spondent did not inform the employees at any time that Wayer did not- represent the respondent's views regarding labor organizations. In view of Skrentny's grant of permission and his presence' when Wayer spoke, we find that the respondent approved Wayer's activi- ties and that the'employees reasonably inferred that the respondent approved of and was encouraging the 'formation of the Employees Mutual. - , - A few days after the above-described, announcements -on April 21 that the respondent had dissolved the Plan and that the councilmen were forming a new organization, a mass meeting of employees was held at a nearby hall. Former councilmen, Fornearand Helmholt, ss We do not ciedit Kowalkowski's denial of Stoecker's statement that a new organiza- tion was discussed since this meeting took place at least two days after April 19, the day on which the councilmen, including Kowalkowski, had conferred on plans for organizing the Employees Mutual. Skrentny is sometimes designated in the transcript of the hearing as Kritsky or Scritsky. 486 DECISIONS-1OF NATIONAL LABOR -RELATIONS BOARD led the discussion, and the organization was formally named the Em- ployees Mutual Association. In view of the fact that the respondent had expressed its opposition to outside labor organizations and that councilmen had begun formation of the Employees Association prior to the dissolution of the Plan 'and-while they were acting in their capacities as councilmen, we conclude that the councilmen who took the leadership at this mass meeting were continuing their role of subservience to the respondent. That the respondent approved of the councilmen's action in forming the new organization is further evidenced by the action of Assistant Foreman Skrentny in permitting employee Wayer to hold a meeting in the plant -to advocate the formation of an inside organization. The West Pullman Independent Union at West Pullman Works As at McCormick Works, initial steps toward formation of the West Pullman Independent Union were taken immediately before the respondent's disestablishment of the, Council, and were guided and directed by the chairman of the Council's elected representatives. On April 14, 7 days before the respondent advised its employees of the Plan's abandonment James Teerlink, chairman of the elected repre- sentatives, presided at a meeting of councilmen and a few other employees at which, according to his own testimony, "they thought it was best for me to outline what I had in mind to do, which I did." Councilmen and others approved his suggestion to form an organ- ization and Teerlink assumed charge of a committee to arrange for a mass meeting the following Saturday, April 17. Teerlink described the meeting of April 14 as follows : ^. After reading the paper, the head lines about the Wag- ner Act, April 12, 1937, there was quite a bit of commotion in the.shop, inquiring if the Council was in effect or if it was not in effect. And the employees had talked previous of forming an organization, so we called a group together down there, and I asked them what they had in mind. Teerlink's testimony, however, does not reasonably explain why he should call a meeting of a select few, at a hall a mile and a half distant from the plant, to ascertain whether or not the Council was "in effect." Teerlink's testimony that "the employees had talked previously of forming an organization" is directly controverted by another witness, also called by the respondent. Arthur Schulte, president of the W. P. I. U. from the date of its formal organization, testified that he had not heard of any attempt to form a labor, union prior to April 17. As in the case of Semback at McCormick Works, it is inconceivable that Teerlink, close to management by INTERNATIONAL HARVESTER.'COMPANY - 487 virtue of, his long service as councilman and his office as chairman of the elected representatives, should have assumed leadership in 'setting up another labor organization without the full knowledge and approval, if not at -the instigation of management officials, at a time when no open announcement had been made of the decision to abolish the, Plan. This is particularly, true in view of President McAllister's letter of November 16, 1936, addressed to each employee, in which the respondent declared its, intention to appeal the Board's decision in the Fort Wayne case. The Trial Examiner concludes, and we find, from the sequence of events, Councilman Teerlink's leadership, the fact that the councilmen were still serving in an official capacity under the Plan, and Teerlink's promotion a few weeks later to the position of assistant foreman,'that on April 14 he was informed as to the respondent's intention, and willingly initiated an "inside" organization, which subsequent findings amply .show the respondent to have desired and urged. Teerlink and Councilman Fahrenbach, according to Teerlink's tes- timony, shared the expenses incidental to the hiring of halls and for- mation of the W. P. I. U. Teerlink presided at the mass meeting on April 17, read parts of the Wagner Act, and warned employees that they could not organize on company time.40 A number of C. I. 0. members were present. Teerlink testified that, "I noticed a lot of ,commotion in the hall, by various cards, application cards, being distributed from another organization . . . I brought out to the au- dience . . . I believed we could serve the employees the best, as there was enough intelligence in the West Pullman Works to serve the employees by forming our own organization." The membership cam-' paign began on April 17. A small organizational group met again on April 19, and a committee began drawing up bylaws and a con- stitution. After the organization was well under way, Teerlink, Fahrenbach and other councilmen, with the exception of one, withdrew from active participation in the leadership of the W. P. I. U. Teer- link assumed supervisory duties. as an assistant foreman in July 1937, and Fahrenbach was transferred to the 'respondent's plant in Indi- anapolis, Indiana, as a safety inspector with management responsibil- ities.41 Councilman Anderson was elected to the advisory board of the new organization. The printed constitution and bylaws of the W. P. I. U. bear on their cover the following words: "Established "It is notable that on April 16, one day before Teerlink's statement to the employees, the plant superintendents had been specifically instructed on the very same point-namely, to permit no organizational activities in the plant during working hours. ` 41 The record does not accurately reveal the date of Fahrenbach's transfer. However, C. R. Evans, who was transferred 'from the East Moline Works to assume managership of industrial relations at Indianapolis, testified that his transfer occurred early in October 1937, and Fahrenbach came there to serve as his assistant 488 DECISIONS. OF NATIONAL "LABOR, RELATIONSi BOARD April 20, 19,37." On the following day President McAllister's letter was mailed to all employees, announcing that the Plan was abolished. At the West Pullman Works, supervisory employees were par titularly active in opposing the C. I. O. both before and after the formation of the W. P. I. U.42 While some supervisory officials restricted themselves to discouraging membership in the C. I. 0., "Happy" Baggio'43 a crew leader in the constructioli gang,44 was par- ticularly active in soliciting members on behalf of the W. P. I. U. ,He, by his own admission, took several employees, including Joseph Balsis, Eugene Voltolima and Walter Ekert to the tool shed and solicited them for membership in the W. P. I. U. Balsis testified that Baggio said, "Joe, do you give 'it to • me the favor?" When Balsis asked 'what he meant, Baggio, according to Balsis, stated, "That is Independent, the Union." Balsis answered, "No, `Happy,' I have no to do." Baggio then warned Balsis that he would make him sign and he "grab,me with hand by neck again. He .push me_ this way (indicating)," and hit him so "I bleed (indicating his mouth)." Although Baggio admitted taking Balsis, Voltolima and others to the tool shed and soliciting their membership for the W. P. I. U., he denied striking Balsis. However, the record is clear that Baggio was persistent in his campaign to win the employees in his crew to the W. P. I. U., and Balsis' testimony is straighforward and impressive. We find that Baggio made the statements and com- mitted the acts attributed to"him by Balsis. The, Harvester Employees Industrial Union at Milwaukee Works Councilmen at the, Milwaukee Works began organization of an independent union in March 1937, several weeks before dissolution of the Plan. By April 21, the H. E. I. U. was openly function- ing. The organization campaign was conducted by 10 of the 12 councilmen then serving, and was led by Urban and LaPorte, re- spectively chairman and secretary of the elected representatives.- Hintz, one of the organizers, had served on the Council since 1923, and for 1 year had represented the management as an appointed member. The record shows that late in the summer of 1936, Councilmen LaPorte and Urban were approached by leaders of an organization known as the A. B. C. which had originated among employees at " See our finding, in Section III B , supra, and Section III C4, infra. 4' Sometimes designated in the record as Maggio. 4f Although Bagglo does not have the title of 'assistant foreman at the west Pullman works , he was admittedly a gang leader and often handled crews of 6 employees . Foreman Widgren , who was Bagglo 's superior, stated that Baggio was the only one of the crew who spoke English and "he (Baggio ) would take care of the job." We find that Bagglo was, in fact , a supervisory employee and that the respondent is responsible for his activities on behalf of the W. P. I. U. INTERNATIONAL HARVESTER COMPANY , 489 the, respondent's Tractor Works in Chicago. The initial purpose of this organization was to foster the election of councilmen who would more' effectively represent the workers-under the respondent- dominated Plan. LaPorte gave this 'group his support for a num-, her of weeks. J n the fall of 1936, Personnel Manager Brooks called LaPorte into his office and, according to Brooks' own testimony, warned the councilman not to permit solicitation of membership in this organization during working - hours.45 LaPorte thereafter became inactive in the A. B.^ C. -Miller, its leader, testified that When he asked LaPorte why his support was withdrawn, the council-' man told ' him that the "office" suspected his connections with the organization, and further that he could not endanger himself because lie had a wife'and family. The Trial Examiner did not credit La- Porte's 'denial of Miller's testimony on 'this point. We find' that LaPorte made the statement attributed to him by Miller. We fur- ther find, as did the Trial Examiner, that Brooks' warning was effectively designed not only to curb activity in an organization other than the Plan during working hours, but also the council- men's participation in it, both inside and outside the plant.46' In March 1937, after LaPorte had abandoned his activity on behalf of the A. B. C. following Personnel Manager Brooks' warning, LaPorte assumed leadership of the councilmen in organizing the H. E. I. U. The. respondent's active encouragement of their efforts in behalf of the new "inside" organization is in significant con- trast to Brooks' discouragement of the A. B. C. Although numerous witnesses described instances of membership activity during working hours, on behalf of the H. E. I. U., management neither rebuked nor warned LaPorte or other councilmen during this period. In fact, 10 of the 12 councilmen joined with LaPorte in an active organizational campaign for the H. E. I. U. while they were still serving as councilmen under the Plan. Thus, in March 1937, Coun- cilman Hintz, told employee Lippek, "Pretty soon we will have a union here of our own. We don't want any outside union." Lippek asked Hintz what kind of a union it would be and what attitude the respondent would assume with regard to it. Hintz 45 Brooks testified that he summoned LaPorte because he was the councilman for the division in which he had learned "slips " were being distributed . Concerning the slips, Brooks said , "Several of the men came to the office at various times and complained that they were being annoyed by certain other employees distributing slips and urging them to pay a small fee to join a union unidentified or an organization unidentified. They presented several of these slips to me, and the slips, as I recall it , provided for a name, check number, department, but no name of any organization appeared on the slip . . . Upon inquiry, they told us that they were asked to pay a fee of 25 cents . . . 'w In support of this finding the Trial Examiner stated : Brooks admitted that he had received no complaints of membership solicitation from foremen, subordinates from whom he might reasonably have been expected to learn of such activities , and to whom he normally would have restricted the issuance , of such warnings. Nor did he name, in response to inquiry , any employees who had made complaints. 490 DECISIONS OF NATIONAL LABOR RELATIONS BOARD replied that the respondent would accept it and "stand" for it. Hintz also urged Lippek to join the new organization. Filo Gar- rison was told by Councilman Wetzel shortly before the Plan was abandoned that if the Plan had to be given up "it won't stop us from operating . . . We can keep the old council just like it is now." We do not ,credit the denials of Hintz and Wetzel. Councilman Urban, who was soliciting members for the H. E. I. U. while still chairman of the employee representatives of the Works Council, told employee Ralph Mandy that "we are taking names to' see if we can form a union on the basis of the old Council Plan." Urban was soliciting memberships in the new organization during working hours and told Mandy that he was "on council business." During the early stages of H. E. I. U. organization, in March, the councilmen were aided in drafting a constitution by Attorney Ansfield. Prior to March, Ansfield had been retained both pri- vately and in behalf of the Harvester Credit Union by John Bouw- meester,- the, respondent's, assistant' personnel ,manager and a manage- ment representative on the Council. Early in March, according to Ansfield's testimony, he was told by Bouwmeester; "You ought to get in line, you ought to get yourself interested in labor unions and organization." When Ansfield, who had never represented labor organizations, asked how he should go about it, Bouwmeester re- plied, "You know quite a few of the councilmen, and you are a lawyer, you ought to know what to do." Ansfield testified that Bouwmeester further said, "Under the law, you know, we won't be able to operate with the Harvester Council." A few days later, LaPorte telephoned to the attorney from the respondent's employ- ment office, and the same evening Ansfield called at the council- man's home, where arrangements were made for his "legal sugges- tions." Bouwmeester was not called as a witness. The. Trial Ex- aminer accepted Ansfield's testimony as substantially true,47 and concluded that Bouwmeester, an agent of the respondent, gave support to a labor organization by soliciting Ansfield's assistance. We agree- with the Trial Examiner, and so find. We further find that Bouwmeester's action clearly established the respondent's ap- proval of the councilmen's subsequent undertakings. Sometime soon after the middle of March 1937 the A. B. C. group led by Miller and the councilmen backing the formation of the H. E. I. U. met to determine whether they might compose their 44 The record shows that Ansfield was retained by the councilmen only a short time, that another attorney, who had been sharing office space with Ansfield, became counsel for the H . E. I U., and that thereafter Ansfield made statements to the former councilmen indicating that he resented their action . The Trial Examiner observed the mutual hos- tility of witness Ansfield and counsel for the H. E . I. U , but states that Ansfield 's testi- mony as a whole remains unrefuted in the record or, where disputed , is supported by other credible evidence , and we so find. INTERNATIONAL HARVESTER COMPANY 491 differences and form a single organization. LaPorte and the other councilmen sought to get approval by the leaders of the A. B. C. of a constitution patterned after the Works Council' Plan, which was still in operation at the time. Ansfield attended this conference as legal adviser of the councilmen. Miller and the A. B. C. group rejected the proposed constitution and soon thereafter the A. B. C. affiliated with the C. I. 0. On April 10, LaPorte and other councilmen called a mass meeting of employees of the Milwaukee Works at the Armory Hall which was attended by a large number of employees. Councilman Hen- ning presided. A number of persons spoke, including Councilman LaPorte on behalf of the councilmen advocating the H. E. I. U., and Miller, A. B. C. and C. I. O. leader. H. E. I. U. cards, pre- viously prepared by the councilmen, were distributed at the meeting. Henning, LaPorte, Wetzel, and Weber, all councilmen, were elected as temporary officers. On April 17, 4 days before official announce-' ment of the Plant's disestablishment, the H. 'E. I. U. -held its first "annual" meeting. Henning was elected president; LaPorte, vice president ; and Weber, treasurer. All three were still serving as councilmen on April 17. Since LaPorte had -been warned against his activities in the A. B. C. and thereafter undertook leadership in the H. E. I. U. without interference -from the respondent, since respondent had ex- pressed its opposition to outside organizations at the Milwaukee Works, and since Urban, LaPorte, Wetzel, and other leaders still retained their positions as councilmen under the respondent's dom- inated Plan and appeared to be acting in their capacities as council- men while forming the H. E. I. U.,'we conclude and herewith find, that they were acting on behalf of the management in the activities herein described.48 After April 21, when the Plan was abolished, as well as prior to that date, the respondent lent encouragement to the H. E. I. U. by permitting solicitation in the plant during working hours. For example, Foreman William Knaebe gave employee Michael Gyurak express permission to distribute H. E. I. U. cards in his department during working hours49 The Employees Association at East Moline Works The record does not accurately reveal the date when councilmen at the East Moline Works first began to organize the Employees Association. However, from the testimony of several witnesses whom the Trial Examiner specifically found to be credible, and the n See note 36, supra, and related text. '0 Gyurak, who testified for the Board under subpoena, was corroborated by two other witnesses . We do not credit Knaebe's denial. 492 DECISIONS OF NATIONAL LABOR RELATIONS BOARD sequence of events described by them, it is clear and we find that the councilmen were informed of the Plan's impending dissolution prior to April 21, and promptly -began the formation' of a succeeding or- ganization. Hodge, from Chicago, was present at a March council meeting. Employee Joseph Gardner attended as a deputy elected representative. Gardner testified that Hodge said, at this meeting, that "we of the elective group would' be foolish if we permitted an outside organization to come into the plant, it was not needed." Hodge denied making the statement. In view of the fact that at this time the Industrial Relations Department was already recorded as being hostile to C. I. 0. organization, the Trial Examiner placed no credence in Hodge's denial and we agree. We therefore find that at the East Moline Works, as at Rock Falls, the respondent openly suggested to councilmen a course of action with regard to the labor organization it desired for its employees. The Trial Examiner concluded,'and we find, that Councilman Bagge and former Councilman Zahn actually initiated,the independent.or- ganization movement, notwithstanding the testimony of Charles Waite, another employee, that he "went ahead and started it." Waite said that "right after the council plan was abandoned," he invited some of his friends to his house and told them it "would be a wonderful idea, to have an organization of our own." He further testified, "They all agreed with me, so we drew up a temporary agreement that Sunday afternoon." He did not recall the date. The first Sunday following April 21, was April 25. That Waite's meeting was of April 18 or before, and not April 25, or thereafter, is shown by the following facts : (1) on April 21, the same day the McAllister letter was mailed to employees, Waite received a loan of $136.87 from the East Moline Works Credit Union, which he admitted was for the purpose of organ- izing the Employees Association; (2) both Bagge and Zahn were serv- ing upon the Credit Union's Board of Directors, which was required to approve all loans exceeding $50; (3) Waite stated that prior to the Sunday meeting at his home "just Martin (Zahn) and I would meet" to discuss the ways and means of organizing. It therefore follows and we find, that Waite, Zahn, and other councilmen, were aware of the respondent's plans to disestablish council before the Sunday immediately preceding April 21.50 "The Trial Examiner also stated : Waite's testimony is replete with evasions , inconsistencies and sudden bursts of revealing candor. He first characterized Zahn and the three or four others present at his home as his "friends," but later said of the same individuals , "I didn't know anybody very well I wasn't personally acquainted with anybody." He further said that before the meet- ing he had known Zahn "probably a week." Waite was asked over how long a period he had met with Zahn and others prior to the Sunday meeting . He replied, "Oh, we prob- ably,-you see the reason he came to my house nobody wanted to be the goat. They didn't want to, they didn't want to come right out and say, `I will, be the head of it.' He also declared, "I have been the goat for somebody or something all my life. If it :wasn't' my relatives it was this." t _ ., I . 11 INTERNATIONAL HARVESTER COMPANY 493 A few hours prior to the meeting, Waite called at- the home of a local attorney and said : I told him we were organizing a company union amongst our- selves over there, I would like to .have him to take care of it, to see that they done everything in a legal manner. - Waite borrowed $136.87 on April 21, 1937, from the East Moline Works Credit Union which was admitted by him to be for the purpose of underwriting the expenses of organizing the Employees Association. In April, 1937, the credit committee of the Credit Union, which com- mittee was required to approve all loans of more than $50, was,com- posed of Inspector H. C. Granning, Carl Bagge, employees' chairman of the Plan, and Martin Zahn, a former councilman. Waite sought to deny that Credit Union knew the purpose of his loan. ' However, in view of the fact that both Bagge and Zahn were on the credit committee and Zahn had already been in conference with Waite concerning the 'formation of a new organization, we find that the Credit Union made the loan with the knowledge that it was for the purpose of organizing the Employees *Association. - The East Moline Works Credit Union is a joint management-employee enterprise. Its directors in 1937 included C. R. Evans, personnel manager of the Works. Its business was carried on within the plant without rental charges by the respondent. We find that the respondent in this man- ner assisted the organizers of the Employees Association in obtaining the necessary funds for starting the organization. Some days later the committee promoting the Employees Associa- tion met to draw up plans for a mass meeting on May 1. Councilman Bagge invited a few other employees in addition to the original com- mittee. Waite took charge of the organizing committee, while Zahn acted as secretary-treasurer until the, election on May 1. Waite had application cards printed, and Councilmen Bagge and Wagner, and formed Councilman Zahn actively solicited membership. The May 1 meeting opened with Waite as chairman; he was later relieved by Bagge. Zahn, Bagge, and Wagner were nominated to the office of president,-but each declined. - The respondent also assisted the Employees Association through the activities of its foremen. Foreman Harry Zimmerman transferred Frank Seward, secretary-treasurer of the Employees Association in 1937, from the assembly line to less confining "salvage work" so that Seward could more easily leave his work to engage in the business of the Employees Association. - Seward made a practice of leaving his work and going from department to department on pay days to distribute dues stamps and to receive the monthly dues which had been collected by the departmental stewards.- 494 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Foreman Thomas Kurkowski lent his support to the Employees Association by soliciting membership on its behalf. In December, 1937, Kurkowski told Harvey Adams, an employee, about the trouble the Company was having with the C. I. O. in Chicago, and stated that some of the boys had started a "little union of their own." Kur- kowski thought it was a good idea and requested Adams to talk to the boys on his shift to see whether they could be signed ups, and advised him where application blanks could be found. Pursuant to this policy, Kurkowski, upon bringing over ' new men who were to be broken in by Adams, advised Adams to go ahead and "work on him." In accordance with this plan, Adams signed up most of the 10 or 15 new men brought to him during that period. When selling the Employees Association to the new men, Adams advised them 'that if the C. J. O. came in , they would probably have a strike and that the plant would , be shut down. Adams received this idea from Kur- kowski who advised him that they did not want the C. I. O. or any outside organization in the plant. In October 1937, Gerald McMahill, while going through Kurkowski 's department, was accosted by him and was asked why he was wearing a C. I. O. button. When McMahill claimed that he had the privilege to do so, Kurkowski suggested that he join the Employees Association, and went on to tell him how well the `Company had treated the men by granting them a bonus and vacation . In July 1938, Kurkowski advised Ira O ,Dell, an employee, that "the Company was getting pretty well scared for a while, thought there was going to be an outside union get in there, now that they got their own union, why, they ain 't worried any more." Kurkowski did not appear to testify and we find that the above statements were made, as attributed to him. In-the late spring or early summer of 1937 , C. R. Evans, personnel director at the East Moline Works, told Frank Seward : I wouldn't be a bit surprised if the Employees Association goes over, that there wouldn't be. a raise in store for everyone concerned. On the strength of Evans' statement, Seward and Bryce ,Ruback, first president of the Employees Association, obtained a number of mem- bers by stating Evans' promise of a raise in wages. After the Em- ployees Association had been recognized by the respondent, and no increase in wages had been put into effect, Seward and Ruback pro- tested to Evans. Evans.. then wrote .the executive offices of the re- spondent in Chicago and was informed that no raise in wages could be granted because the respondent contemplated an increase in the annual bonus to employees. When Seward and Rhuback declared that this decision left them "in a hole" because of their earlier state- ments to other employees, Evans agreed to, and did , pcst notices on INTERNATIONAL HARVESTER COMPANY 495 the bulletin boards in the plant stating that the respondent was unable to raise the wage scale at that time but contemplated an increase in 'the annual bonus. Although Evans denies that he held out to Seward the promise of a general wage increase in the event the organizational drive of the Employees Association should be successful , we do not credit his denial because he admitted posting the notices. We find that Evans made the statement to Seward and thereafter posted the notices in order to assist the Employees Association. The United Motor Power Association at Farmall Works Chairman Mozena, of .-the Farmall Works Council's elected rep- resentatives, was the organization leader of the U. M. P. A. He was aided by Councilmen Burton, Larsen, Maynard, and Pilcher, as well as former Councilman McGinn. At the Farmall Works, as at others, the councilmen were advised of the respondent's plans to discontinue the Plan prior to the open and general announcement. Mozena testified that he first received specific information at the last Council meeting in March that the Plan was to be abandoned. He testified further, however, that he initiated no move toward or- ganizing an independent group until after April 21. This statement is inconsistent with his elaborate account of events leading to active organization., He testified that after he and other councilmen had informed employees, on April 21, that the Plan was formally dis- established, "lots of inen . . . talked to me about their own organi- zation"; that lie "thought perhaps we could get along for awhile without what they thought they'had to have"; that "everywhere I met men on the street, after working hours, and at the noon hour, wherever there was groups of inen, it seems as though they kind of took me as a target of some kind to kind of help along"; ,that "fel- lows kept coming after me, and I lived out in the country and they kept driving out there and wanting to know what to do"; that "they would have something they wanted to talk to me about, even Sun- days and Saturdays and nights"; and that finally "it got to where the fellows said we want you to organize us here." Mozena's home was 20 miles from the plant. At length, according to his testimony, he had cards printed and distributed to learn whether the employees actually wanted an independent union, and in the following 3 or 4 days he and Councilman Burton obtained signatures from 85 per cent of the 5,000 workers. Most of the cards were distributed in the plant. Thereafter handbills were distributed, calling a mass meeting for April 28. The minutes of this meeting establish that there was present a local attorney who had previously prepared a proposed set of bylaws. Mozena testified that he had retained the lawyer's-services "five clays or four" before April 28, but not until 496 DECISIONS OF NATIONAL LABOR, RELATIONS; BOARD after all cards had been signed. This would time Mozena's,meet- ing with the attorney as April 23 or 24-only 2 or 3 days after April 21. There were no Sundays between April 21 and 24. Mo- zena's testimony is thus self-contradictory. It is more reasonable to believe, and we find, as did the Trial Examiner, that Mozena began organizational activities before April 21 while still an official of the dominated Plan, and that his efforts were prompted by Herron, assistant in Kelday's Industrial Relations department at Chicago, who was present at the March 19 meeting of the Farmall Council, which was the last March meeting of the Council. That the councilmen were told of management's proposed plans at this meeting is further sub- stantiated by the testimony of Councilman Rose, who admitted that he had there received instructions to tell the men "they still had representatives to take care of them until we were washed up with this." 51 To defray initial expenses, Mozena borrowed $200 from the Farmall Club, a social organization open to all employees but of which only, foremen were officers. The loan was granted by General Foreman Nicholson, president of the club, after Mozena explained to him that it was needed "to start a union." No note covering the loan was executed. The money in the treasury of the Farmall Club was ac- cumulated largely through receipt of fees paid by a ,concessionaire for the privilege of selling food and soft drinks within the Farmall Works. The respondent had given the Farmall Club, without charge, the right to sell the concession in the plant, so that the club's funds were, in fact, a subsidy from the respondent. Nicholson's act in granting the loan with full knowledge of its purpose, was plainly in support of the U. M. P. A. Mozena was the first president of the U. M. P. A., and Burton the first vice-president. In June, Burton was elected president, Frank Brown, vice-president, and McGinn secre- tary. All were ' former councilmen. The constitution and bylaws of the U. M. P. A., adopted on April 28, 1937, provided " for 9 divi- sional representatives. The divisions and number of representatives were the same as those in -effect under the respondent-dominated Works Council Plan., After its formation, the respondent gave support to the U. M. P. A., inter alia, by providing each week a list of transfers of em- ployees from department to department. This list was prepared in the employment office of the Farmall Works without charge to the U. M. P. A. Rose was a witness for .the respondent He testified that there had been "difficulties" between foremen and employees . " Some of the boys were very, very radical ... claiming the foremen had done this to them and done that to them . I told them they still had representatives to take care of them until we were washed up with this , April 21st .. . Rose testified that he had received such instructions at a regular meeting of the Works Council. . i - INTERNATIONAL HARVESTER`COMPANY .:.2.:;i 497 At the time recognition as exclusive bargaining representative was accorded the U. M. P. A:, the employment office of the Farmall Works assisted the U. M. P. A. with its audit of membership. The U. M. P. A. hired and paid the Assistant Employment Manager, Raymond McElroy, to represent it at the audit. At the same time, we find that McElroy was the representative of the respondent at the'audit.52 During the course of the audit, when auditors rejected U. M. P. A membership cards because they were not properly signed, McElroy had the cards taken out to the employees for signature and then returned to him to be included in the audit. R. F. E. A. at Rock Falls Works We have already found that the councilmen at the Rock Falls Works, at the direct and urgent suggestion of the respondent, had conducted a vigorous campaign against the C. I. O. during March and April, 1937, and had obtained revocations of membership in the C. I. O. from approximately 90 employees. In this manner the respondent prepared the way for another "inside" union whenever the Plan should be abandoned. At a meeting of councilmen with several employees who were members of the C. I. 0., Councilman Long stated that the Plan was about to be disbanded and that the respondent desired to set up a local union in order to keep the C. I. O. out.53 Immediately after dissolution of the Plan, a petition was circu- lated in the plant during working hours urging the formation of an "inside" organization. The petition stated : Do you want to help form a "Union" inside this plant? A Union of this plant alone and to be supervised by officers elected by the men of the Union. One man from each Department will .be voted on to be a representative of the "Grievance Committee." Canton Works formed a Union of this kind, for their plant, on April 21, 1937, and 1,800 out of 2,000 employees voted for it. Individual leadership was assumed by Edward' Dawson, brother- in-law of Peter McCormick, who in 1937 was assistant to the assistant superintendent. It does not appear that either Councilmen Long or Desmond was openly active in formation of the R. F. E. A. Des- 62 This flailing Is based on McElroy's position with the respondent and on Employment Manager Greenwood's testimony that although he, had been designated to represent the respondent at the audit he paid little attention to It because McElroy was present. 53,Although Long denied that he made , such statement we' do not credit his denial because the record clearly reveals that he made a number of statements in opposition to the C. I O. and had been active In the anti-C. I. 0. campaign conducted by councilmen at the Rock Palls Works That the respondent did in fact convey such an idea to Long is amply supported by our finding that the manager of the respondent 's Implements Divisions made such statements at a meeting of the Council in March, 1937. 498 DECISIONS OF NATIONAL LABOR RELATIONS BOARD mood admitted that councilmen withdrew from such activity after a meeting during which they decided to stay in the background, because "it would be better if we stayed away from it," otherwise it would- be accused of being a "company" union. As for his own individual part, he testified : "I figured if I was a Councilman they would think I was working for the Company." Despite this view, one of the five councilmen, Etchison, took part in the organization of the R. F. E. A., Councilman Desmond signed the R. F. E. A. charter, and within two months of its formation Long began to solicit members for the organization. We find below that the respondent, through its foremen and super- visors at the Rock Falls Works and at the other plants as well, con- tinued to engage in anti-C. I. O. activities, and lent further support to the R. F. E. A., and the other Independents, by permitting its rep- resentatives to solicit memberships and collect dues during working hours, while warning members of the C. I. O. not to engage in similar practices. 3. The respondent's contracts with the Independents As in the administration of the Works Councils, the respondent's negotiations with the Independents came under the executive direction and responsibility of Hodge.54 The methods of requesting and grant- ing exclusive recognition, and of proging majority representation, all conform to a significantly similar pattern. At each of the six plants and within a few days after the Plan's dissolution, request was made by the respective Independents for recognition as the bargaining agent for the employees. On various dates between May 5 and May 19, the respondent posted notices at each of the six works, recognizing the respective Independents for their members only.55 At McCormick 54 Hodge testified : "In order that the management of the Harvester Company would be sure that the matter of recognizing a labor organization was in accordance with the line of policy of our own department, I took it upon myself to clear such matters and worked hand in hand with the general attorney for the company, Air Siefkin In important cases, w e called in our vice-president and general counsel, Mr Elliott At a meeting of superin- tendents, I told, them in the presence of higher officials of the company than myself, that we wanted the superintendents to refer all matters to the general office before they took any action 46 The bulletin posted at McCormick works, similar in essential substance to the others, read as follows NOTICE This is to inform you that the EMPLOYEES MUTUAL ASSOCIATION OF MCCORMICK WORKS claims to represent a majority of the employees at this works and to be entitled under the National Labor Relations Act to bargain for all employees as to wages, hours, and working conditions. The Company has agreed to recognize this organization as the representative of its members and has asked for further time to consider Its request to bargain for all employees. The Company desires to give all persons an opportunity to be heard, either in support of or opposition to this request, and will not reach a decision until it has given careful consideration to all matters presented. ' It is understood that the decision of the Company, when made, may be reviewed by the National Labor Relations Board. INTERNATIONAL HARVESTER COMPANY- 499' and Milwaukee Works, Locals of the Farm Equipment Workers As- sociation, affiliated with the C. I. O. entered counter-claims. At-these two plants, the respondent then posted almost identical notices, rec- ognizing the C. I. O. affiliates as the bargaining agents for their members.56 At the Milwaukee works, the C. I. O. local, protested against the respondent's recognition of the IT. E. I. U. According to Hodge's testimony, this local claimed that the H. E. I. U. was company dominated. Management officials, including Hodge and gen- eral attorney Seifkin, held a conference with representatives \of the local, gave "very careful consideration" to the C. I. O:'s charge and, again quoting Hodge, "the company came to the conclusion that 'their-complaint and charges was unjustified, that we had nothing to ,do with the Harvester Employees Industrial Union of Milwaukee." Local auditing concerns thereafter checked the Independent's in cards against the respective plant pay rolls at the suggestion of the respondent.57 Based upon reports of the auditors, the re- spondent thereafter granted exclusive bargaining privileges to each of the Independents at its-respective plant by posting notices, at various dates between June 10 and July 15, 1937. Thereafter the respondent entered into written contracts with each of the Independents, and such contracts were in continuing existence at the time of the hearing in these proceedings: Tabulation of the contracts, the Independent involved, and the dates of signing, is as follows : - i Works Organization Date of initial con- tract McCormick--------_--- Employees Mutual Association of McCormick Works, February 21, 1938 Inc West Pullman -------- West Pullman Independent Union, Inc------------------ December 14, 1937 Rock Falls ----- ------ Rock Falls Employees Association--- ------------------- January 21, 1938. East Moline -----_----- Employees Association of East Moline Works ------------ March 11, 1938. Farmall-------------- United Motor Power Association ----_-_--------------_ November 3, 1937. Milwaukee ------__--- Harvester Employees Industrial Union _--_------ November 1, 1937 10 These notices stated i This is to inform you that until it has been determined , iii a satisfactory manner, whether any labor organization represents the ma.Ioiity of employees (exclusive of super- iisory forces at McCormick Works) the McCormick Works Local of the Farm Equipment Works Association has asked, and the Company has agreed to recognize it as the bargain- ing agent of those employees who belong to that organization. The above announcement does not change the recognition announced by bulletin dated May 14, 1937, in which the Company agreed to recognize the Employees Mutual Associa- tion of McCormick Works as the bargaining agent for those employees who belong to that organization I Such recognition of both organizations as announced is now in force. We still have under consideration the request of the Employees Mutual Association of McCormick Works for recognition of that organization as sole collective bargaining agent at McCormick Works. D7 Ilodge testified "we instructed our superintendents to simply say we didn't want to look at membership cards, . . but if there was sonic way in which some neutral body could state how an oiganization represented .i majority of the employees we would consider that evidence " IHowever, as we have previously found, nianagenient representatives examined the U M P A cards at the Farmall Works 413602-42-vol 29--33 500 DECISIONS - OF NATIONAL LABOR RELATION S- BOARD 4. Acts " o f interference, restraint, and coercion by supervisors and foremen subsequent to the formation of the Independents; continu- ing support by respondent It is unrefuted that the respondent on or about April 21, 1937, instructed all of its supervisory officials to refrain from any acts of ,interference with respect to union activities. The Trial Examiner in his Intermediate Report concluded that since no instructions with "respect to neutrality were given until April 21, that fact would be taken into consideration in resolving disputed testimony concerning alleged acts occurring prior to that date. He concluded further that "the unrefuted evidence that on or about that date supervisors re, ceived specific instructions not to engage in such interference cast -reasonable doubt on the testimony that such acts occurred after that date." We, are impelled to disagree with the conclusions of the Trial Examiner in this respect. As noted below, the record is replete with instances of interference and coercion on the part of supervisory offi- cials subsequent to April. 21, 1937. We have found, in previous cases that it is not unusual for supervisory officials to disregard instruc- tions with respect to neutrality and that, despite such instructions, supervisory officials are frequently inclined to show favoritism toward a particular union. The Supreme Court recognized the existence of such practice 68 when the Court stated, We do not doubt that the Board could have found these activi- ties to be unfair labor practices within the meaning of the Act if countenanced by petitioner, and we think that to the -extent that petitioner may seek or be in a position to secure any ad- vantage from these practices they are not any the less within the condemnation of the Act because petitioner did not authorize or direct them. In a like situation we have recently held that the --employer, whose supervising employees had, without his authority, so far as appeared, so participated in the organization activities of his employees as to prejudice their rights of self- organization, could not resist the Board's order appropriately designed to preclude him from gaining any advantage through recognizing or bargaining with a labor organization resulting from such activities. International Association of Machinists v. National Labor Relations Board, No. 16, decided November 12,'- 1940 (7 LRR Man. 274). See National Labor Relations Board v. Link-Belt Co., Nos. 235, 236, decided this day. From the entire record it is apparent that the respondent's super- visory officials did not appear to take its assurances of neutrality 58 National Labor Relations Board Y. H J. Heinz Company, Jan 6, 1941 (311 U. S 514), aff'g, 110 F. ( 2d) 843 (C. C. A. 6), enf'g., 10 N. L. R. B. 963. INTERNATIONAL HARVESTER COMPANY • • 501 seriously. Instead they continued to disparage -the C. I. O. and en- courage membership in the respective Independents. In April, 1939, Assistant Foreman Jack Psaac of the McCormick Works warned Richard Shirley, an employee, when he saw him with a C. I. O. but- ton, "Oh, you're a C. I. O. man too . . . Well, Employees' Mutual Association is the only union the Company recognizes, and that would be something rather foolish because there is a lay-off pending and the'C. I. O. men would be the first to go." After this warning Shir- ley took off his button and did not wear it in the plant again for 2 weeks. Psaac admitted making- the statement but asserted that he was only' "kidding." `We do not believe that Shirley would reason- ably have understood that Psaac was joking. Moreover, the above- quoted statement of Psaac itself indicates his antipathy toward the C. I. O. and negatives the likelihood of Shirley's accepting it as "kidding." - , While foremen at other plants attempted to induce employees to .discard their C. I. O. buttons, Foreman Bob Kraemer of the West Pullman plant resorted to more extreme measures in April 1939, when he took a union button from the shirt of Carl Engels, an employee. Kraemer asserted that it was a mistake and that all he did was take •an orange peel from Engel's shirt which may have resembled a yel- low button. He asserted further that he was only, "fooling." Asa explained by Engels, he "didn't think it was a joke and the button was gone." - It is apparent that Kraemer's action served to intimidate 'Engels. As found above, Foreman Small was particularly active in discouraging membership in the C. I. O. By his own admission he- inquired of numerous employees whom he learned to be C. I. O. members why they joined and whether their membership indicated .dissatisfaction with their 'conditions of employment.- Although most of Small's activities occurred 'prior' to the forma- tion of the W. P: I. U., Foreman Phil Lehning exhibited a similar curiosity at the 'Milwaukee Works subsequent to the formation of the H., E. I. U. when, he inquired as to the union membership of Dominic Yenius in May 1937. At that time Lehning approached Yenius and advised him that he saw him coming out of the C. I. O. hall. -Although Lehning denied seeing Yenius leaving the hall, he admitted making inquiry of Yenius with respect to his union mem- bership. Lehning testified that when Yenius asked what he ' meant, he merely answered, "'Anyone, either Independent or C. I. -O." It is apparent that Lelining's explanation was evasive and false, and we attach no credibility thereto. Shortly after the formation of the H. E.4. U. and after ;the respondent had pasted notices stating that it would maintain a policy of neutrality toward unions, Foreman Harry Koehler came through the department about noon on April 29 502 DECISIONS OF NATIONAL LABOR- RELATIONS BOARD and described the music being played outside as follows : "I suppose it is the old C. I. O. out there again. Now listen, if you fellows know what's good for yourself, you are going to keep the organization you got. If you get an outside organization out here your wages will be cut to 760 an hour piece work." Koehler denied making this statement, attributed to him by employee Leonard Galbrecht, and asserted further that he never knew of the C. I. O. or H. E. I. U. organizing drives. Since both drives were widely publicized in the plant, we cannot attach credibility to Koehler's denials and we find that, he made the statement attributed to him by Galbreclit. In July- 1937, Foreman William: Knaebe confronted Filo Garrison, an employee who was wearing a large C. I. O. button, and asked, "Why don't you wear a cardboard to advertise?" When Garrison stated he was proud of the button, Knaebe asserted that unions were a "graft" and that it would be cheaper to join the H. E. I. U. Knaebe admitted making the statement about Garrison's wearing a cardboard but denied the disparaging statements with respect to unions. Knaebe, by, his admitted statement, indicated hostility toward the C. I. 0., and we find he made the statement attributed to him. As noted above, Foreman Kurkowski of the East Moline plant was particularly active in soliciting members on behaaf of the Employees Association at East Moline. Kurkowski did not restrict his activities to solicitation, however, but supported the Employees Association through the additional means of discouraging member- ship in the C. I. O. On'- one occasion in October 1937, he accosted employee Gerald McMahill while McMahill was going through Kur- kowski's department wearing a C. I. O. button. Kurkowski in- quired about the reason for McMahill's wearing the button and suggested that he join the Employees Association. As noted above, Kurkowski did not appear to- testify, and we find that the state- ment was made,as -attributed to him. At the Farmall Works, Foundry Superintendent Harry Heiniger pursued a course of conduct similar to that of Kurkowski described above when he accosted Lacey L. Sines, an employee who was wearing monthly, quarterly and steward's C. I. O. buttons. Heiniger; after being informed as to the nature of the buttons, warned, "You can't represent the C. I. O. in here. We want you to understand that there is-the Company doesn't recognize the C. I. 0.11 and advised Sines that the Company had a contract with the U. M. P. A. Heiniger did not appear to testify, and we find that he made 'the statement attributed to him. As has been previously shown, the respondent conducted a vigorous plant-wide, campaign against the C. I. O. local early in 1937 at the Rock Falls Works with full knowledge of Superintendent Glea- INTERNATIONAL :HARVESTER •COMPANY• 5O3 son and other management' officials. This program succeeded in causing numerous C. I. O. members to relinquish their C. I. O. membership cards and to disclaim membership in that organization. It was, therefore, unnecessary to follow the same course of con- duct pursued in some of the other plants, described above, whereby employees wearing C. I. O. buttons were either ridiculed or threat-, ened with possible loss of employment or reduction in income. How- ever, Foreman Grosse advised Williamson, leader of the C. I. O. local, about the time of the "Memorial Day riot" at the Republic Steel plant in Chicago, "That's the kind of trouble a fellow gets into when he gets into unions: The Company here wouldn't have no unions to dictate to them."-19 Grosse denied making this state- ment. His credibility, however, is seriously weakened by his in- sistent denial of any knowledge of plant activities either anti-C. I. O., or pro-R. F. E. A. during the spring, of 1937: He declared' that he first learned of the councilmen's campaign at the hearing. Under the circumstances we find that Grosse made the statement attributed to him by Williamson. In the same vein''is the admitted statement of Foreman M. D. Clark in October or November 1937 to employee Albert Murray that the sit-down strikes were caused by the "red element." We find that Clark also stated that the A. F. of L. and the C. I. O. were "a bunch of Reds." We find that by all the above-described incidents the respondent after April 21, 1937, continued to display to the employees at each of the six plants its hostility to outside labor organizations, and espe- cially to the C. I. O. and thereby has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. The Trial Examiner found that, while some solicitation for member- ship on behalf of the Independents was indulged in at each of the plants, it was largely of a surreptitious nature and that where solicita- tion was brought to the attention of the foreman the offenders were promptly reprimanded. On the basis of that finding the Trial Ex- aminer concluded that the respondent did not permit solicitation of members or collection of dues by representatives of the Independents. As in the instances of interference, restraint, and coercion recited above, we are again compelled to disagree' with the conclusions of the Trial Examiner. Although it is true, as found by the Trial Examiner, that solicitors were frequently reprimanded, such was not the case in all instances. In fact, we have pointed out above, and have found, that supervisory officials themselves indulged in solicitation on be- 89 Williamson obviously referred to the occurrence of May 30, 1937, when police dispersed a crowd of strikers and sympathizers , 10 of whom were killed . See the Chicago Memorial Day incident, Report (No. 46, Part 2) of the Committee on Education and Labor of the U. S Senate, pursuant to S. Res. 266 (74th Congress). 504 DECISIONS- OF NATIONAL ` LABOR RELATIONS BOARD half 'of the Independents, and it is therefore evident that such super- visory officials would not have interfered in,any way with the solicita ti"on of employees on behalf of those organizations. Moreover, the" record' shows that after April 21, 1937, the practice of soliciting mem- berships" for the Independents and collection of dues" therefor was so widespread and commonplace that we are wholly unable to believe- that it was not known to and approved by the managements of each of the six plants.60 By way of illustration, we point to the following' incidents, among others, all of which we find to have occurred : At the McCormick Works, in 1938 the Employees Mutual stewards left their work, without reprimand, to collect dues, on pay days, which collections often occurred in the presence of foremen. At Rock Falls, a former steward for the 'R. F. E. A. customarily collected dues in the plant during working hours without reprimand from foremen, and officers of the R. F. E. A. solicited memberships in the latter half of 1937 in the presence of Foreman Grosse, who had warned C. I. 0. members "that they must not engage in similar practices in the plant. We-have found above that at the West Pullman Works Crew Leader Baggio solicited his men to join the W. P. I. U. At the same plant, employees paid their W. P. I. U. dues to stewards during working hours.- The practice was similar at the East Moline Works, where stewards for the Employees Association left their work on pay days to collect dues, without reprimand from their foremen.. At this plant, at least one foreman admitted that he knew dues collection was- occurring during working hours, and he did not interfere. At the Farmall Works collection of dues for the U. M. P. A. regularly oc- curred- on pay days in the presence of foremen. We have found above that at the Milwaukee Works Foreman Knaebe expressly permitted solicitation of members for the H.-E. I. U. in his department during working hours., At the same time, Foreman Lewin warned members of the C. I. 0. not to solicit in the plant during working hours. We find that after April 21, 1937, as well as before that date, the respondent contributed support to the six Independents by permitting the collection of dues and solicitation of membership for the Inde- pendents on the respondent's property during working hours. D. Conclusions In summary, it is plain that the respondent has not permitted its employees their free choice of a bargaining representative at any 60 See N L R B V. Link Belt ,Co, dec d"d January 6 , 1941. ( 311 U. S. 584) rev'g modification of Board 's order in 110 F. ( 2d) 506 (C. C. A. 7) which enf'd as modified 12 N. L. R. B. 854, where the United States Supreme Court stated : . . . as the Board concluded , it seems impossible to infer that , in view of the ex- tensive and Intensive solicitation for Independent in the plant on company time, the supervisory staff were not aware of the campaign and did not acquiesce in it. INTERNATIONAL HARVESTER COMPANY 505 of the six plants. Its tactics were simple but effective. The chron- ologyof events leading to the organization of the respective Inde- pendents reflects a planned procedure to retain the representation of employees in the hands of its old and trusted employees who had served as councilmen. In November 1936, the respondent announced its intention to'retain the Plan, notwithstanding the Fort Wayne de- cision. by the Board outlawing the Plan at that plant, and" in its announcement to the employees dwelt at length upon the benefits derived from the established procedure. In mid-April 1937, it was convinced by the SupremeI Court decisions of April 12 that the Plan could not be continued. A long letter was prepared, protesting the desire of the company to conform to the Act but concluding with a plea to the employees not to lose the benefits of their long years of coordinated relations. The Works Councils operating under the Plan were lauded and the employees were urged not to lose "assets of the greatest value" which had been developed by the Councils by what- ever changes in collective bargaining procedure might take place in the future. We conclude that the letter was an obvious invitation' to see that any new organization departed no -farther than necessary from the old one, and that the respondent thereby made known to the employees its desire that any new plan of collective bargaining should follow closely the pattern of the Works Councils. That pat-' tern had included separate organizations for each plant'and had vir- tually precluded "outside" labor organizations as collective bargaining representatives. Not only did the respondent inform its employees by these communi- cations that it desired them to form "inside" labor organizations mod- eled - alohg the lines of the Works Councils, but prior to dissolution of the Plan the respondent engaged in campaigns against the C. I. 0. or issued warnings against "outside" labor organizations at each of the six plants.. The methods used to resist the activities of outside labor organizations threatening to get a foothold among the respond- ent's employees were strikingly similar at all the plants. Between 'January and March 1937, prior to the dissolution of the Plan, the leaders of the outside organizations were called to the office of a super- intendent or foreman and warned about the radicalism of the C. I. 0. and John L. Lewis, or respondent-dominated councilmen were in- structed to stop the organizational activities of the outside group, and to prevent such groups from gaining a foothold. At the McCormick Works the superintendent called in Gerald Fielde, a member of the' F. E. W. 0. C.; at West Pullman, Dillman of the same organization was subjected to the same treatment by Foreman Mabey; at the Mil- waukee Works, LaPorte's activities on behalf of the A B. C. were stopped by the' personnel manager; at the East Moline Works the 506 DECISIONS OF NATIONAL LABOR RELATIONS BOARD councilmen- were told by Assistant Industrial Relations Manager Hodge that they "would be foolish" to permit an "outside" organiza- tion to come into the plant; at the Farmall Works there was comparable activity; at Rock Falls, the councilmen were instructed by Assistant Works Manager Harrison to stop the C. I. P., organizational drive and they in turn arranged a meeting with the C. I. 0. leaders in the plant and told, them the management did not want a C. I. 0. local in'the plant. Thereafter at the Rock Falls Works during March 1937 council- men caused revocation of C. I. 0. memberships by warning em- ployees that they had signed away their "power of attorney" and by statements that the respondent did not want the C. I. 0. and might remove the plant if that organization gained a following. At other plants employees who had joined the C. I. 0. were warned, that they had signed away their "powers of attorney." That this form of attack upon the C. I. 0. emanated from the respondent's centralized Industrial Relations Department is evidenced by the February 1937 report of the Special Conference Committee in which Industrial Relations Manager Kelday had participated. At ,the West Pullman Works, General Foreman Small admittedly counter- attacked outside organizations by such statements to employees as "Why do you want an outside organization when you have the Works Council ?" By these and other acts of interference, restraint, and coercion, which we have found above, the respondent thwarted the employees in the exercise of their right freely to- choose labor organizations to represent them and laid a foundatioii for formation of "inside" unions at the time of the disestablishment of 'the Plan 81 The dissolution of the Plan was carefully timed in relation to the formation of the Independents at each of the six plants. In five of the six plants, councilmen, while still serving as representatives in the, respondent-dominated Works Councils; had completed the forma-` tion of, or were in the process of forming successor organizations to the Plan prior to April 21, 1937, the date on which the Plan was publicly disavowed and disestablished. At the sixth plant, the Rock Falls Works, where the C. I. 0. had obtained a stronger following among the employees, councilmen had carried out in February and March 1937, an aggressive campaign against the C. I. 0. at the behest of Assistant Works Manager Harrison and with the approval of Superintendent Gleason. The councilmen's anti-C. I. 0. campaign at Rock Falls was merely another facet of the respondent's con- "See N L R B v. Link Belt Co, decid ^d January 6, 1941 (311 U S. 584) rev'g modification of Board 's order in 110 F. ( 2d) 506 (C. C. A. 7 ) which enf'd as modified 12 N. L. R B 854; Sol.ay Process Company V. N. L' R B, decided January 4, 1941 (C. C. A. 5), enf'g 21 N . L. R. B 882; N L R B. v Crystal Springs Finishing Co, decided Januaiy 7, 1941 (C. C. A. 1 ), enf'g as mod. 12 N. L. R. 'B 1291. INTERNATIONAL HARVESTER COMPANY 507 certed effort to establish "inside" labor organizations in each of the six plants to replace the outlawed Plan. Thus, the fact that the R. F. E. A. was not launched until after April 21, does not in any way detract from our conclusion that the respondent was following a preconceived pattern of conduct at each of the six plants. It only indicates that the anti-C: I. 0. campaign had so depleted the ranks of an "outside" union that-the management considered as less urgent the need for haste in promoting an organization to replace the Works Council. Even here, however, there was no long delay, and ' coin- cident with receipt of the McAllister letter announcing dissolution of the Plan, employees were solicited for membership in a new organ- ization by Councilman Etchison and employee Dawson, the latter a brother-in-law of a management official. The activities of the councilmen in forming the Independents and in opposing the C. I. 0. were preceded in several of the plants by a visit from a representa- tive of the Industrial Relations Department or some other official from the respondent's executive offices in Chicago. At the Rock Falls Works it was Assistant Works Manager Harrison from the re- spondent's executive offices who advised the councilmen to commence a- campaign against the C. I. 0. At East Moline, Assistant. Indus- trial Relations Manager Hodges advised the councilmen in March 1937, that they would be foolish to permit an "outside organization to come into the plant." At the Farmall Works, Assistant Industrial Relations Manager Heron attended a meeting of the Works Council at that plant in March and gave the councilmen advance notice of the impending dissolution of the Plan. In each of the six plants councilmen were used to establish "inside" organizations to succeed the Plan. We have found that these coun- cilmen were acting for and on behalf of the respondent, and that their fellow employees so regarded their activities. The councilmen had .been elected under a Plan dominated and supported by the respond- ent for nearly a score of years.62 Relationship between management and these,employee representatives had been peculiarly close. For example, the mission of Councilman Sembach of the McCormick Works, who was sent to Washington at the expense of the respondent to protect and defend the Works Council before the passage of the Act, reveals the confidence and trust placed in councilmen by the management and could not have failed to impress other employees at the plant with the confidential nature of the position they occu- pied. As previously found, the councilmen served on committees of safety and efficiency and frequently made inspection trips of a quasi-supervisory nature, lectured employees and made reports and 02 See Matter of John 4. Roebling's Sons Company and Steel Workers Organizing Com- mittee, 17 N. L. R. B. 482. 508 DECISIONS OF NATIONAL'LABOR RELATIONS; BOARD 'recommendations to the management. For all of their activities under the Plan during working hours, the councilmen were paid by the ' respondent at their regular rate of pay. The respondent ,'having placed these councilmen in such positions must be held responsible for their acts with relation to other employees 63 - . The fact that at five of the six plants there were new labor organi- zations ready to assume representation of the employees, at the moment the admittedly company-dominated Plan was dissolved by the respondent, and, the fact that the leaders of the new organiza- tions for the most part were the employee representatives in the dominated Works Council Plan, prevented the employees from having complete freedom of choice in selecting collective bargaining repre- sentatives 64 When there is added to those facts the concerted effort on the part of the respondent's officials and the councilmeh, to fore- stall the growth of outside labor organizations among the employees in any of, the plants and the subsequent support given the inside or- ganizations by the respondent's supervisory officials it becomes plain that the respondent encouraged, dominated, and interfered with the formation and administration of the six Independents.0 In addition to these factors there is evidence of direct support by .the respondent in the formation and administration of the Inde- pendents. The U. M. P. A. and the Employees' Association received substantial loans from organizations whose funds were within the control of management officials. The H. E. I. U. obtained the services of Attorney Ansfield at the suggestion of Bouwmeester, respondent's assistant personnel manager at Milwaukee. At the `Farmall'Works the audit of membership in the U. M. P. A. was directed by the respondent in a manner to insure the auditor's ap- proval of all membership cards submitted. At the Milwaukee` Works where the F. E. W. 0. C. had openly accused the respondent of fostering and dominating the H. E. I. U. the management conducted a hearing, determined that it was not guilty, and found that the H. E. I. U. represented a majority of the employees at that plant. Further support for the Independents appears in their subsequent' relationship to the respondent. It has been noted that within "a m See supra, note 36. 64 In National Labor Relations Board v. Link-Belt Company and' Independent Union of Craftsmen, decided 311 U. S. 584, the Supreme Court of the United States stated with regard to similar facts : "The Board bad the right to believe that the maintenance of the company union down to the date when Independent 's membership drive was com- pleted was not a mere coincidence. The circumstantial evidence makes credible the finding that complete freedom of choice on the part of the employees was effectively forestalled by maintenance of the company union by the employer until its abandonment would coincide with the recognition of Independent." 06 See Solvay Process Company v. N. L. R . B., decided January 4, 1941 ( C. C. A. 5), enf'g 21 N. L R. B. 882. - •" INTERNATIONAL' HARVESTER ^COMPANY.: r•, „ 509 few 'weeks after dissolution of the Plan, notices were posted at each plant recognizing the respective Independents as bargaining agents for their members. Thereafter came recognition of each of the Inde- pendents as exclusive bargaining representatives for' all the em- ployees. The posting of notices granting exclusive bargaining privi-_ leges to the Independents were effective barriers against further expansion of the C. I. O. locals. The execution of contracts with the Independents served to discourage membership in, and activities on behalf of the C. I. 0. locals. There is also evidence that after the formation of the Independents, foremen and other supervisory officials gave aid by soliciting and otherwise encouraging membership in those organizations. The respondent and the Independents contended at the hearing that . none of the Independents was dominated or interfered with by the respondent either in its formation or administration, and the re- spondent, the H. E. I. U., and the U. M. P. A. filed exceptions to the Trial Examiner's Intermediate Report in which he had found such domination and' support. The general basis of all the exceptions is that the evidence is in- sufficient to support the findings of the Trial Examiner. More speci- fically, the respondent contends that in forming the Independents councilmen were acting of their own free will and not at the behest of the management. We have heretofore concluded that the council- men were in fact acting for and on behalf of the management in forming the Independents and in resisting the C. I. 0. In-any event it is plain and we find that by reason of the councilmen's close rela- tion to the management the general body of 'employees reasonably believed them to be acting for the respondent. The respondent, and the H. E. I. U. also urge that the Trial Examiner failed to give proper consideration to the fact that the employees at the Milwaukee Works chose the H. E. I. U. in preference to the F. E. W.. 0. C.,ss and that elections at all the plants would show that the employees preferred the respective Independents to C. I. 0. organizations. However, in view of the respondent's domination and interference with the Inde- pendents, as we have found, neither the fact that the Independents are preferred by the employees nor, the fact that they have obtained 86 At the Milwaukee works the record shows that a C. I. O. representative spoke to the employees at a mass meeting on-April 10 , 1937, when the H . E. I. U. was formally organized , and also that in April 1938 a vote of the H. E. I. U. was taken to determine whether that organization should remain unaffiliated or affiliate with either the C. I. O. or the American Federation of Labor . Original charges of domination of the H E. I. U. by the respondent had been filed in February 1938 . In view of our findings with respect to the respondent 's unfair labor practices at the Milwaukee plant, we do not regard either of the above actions as an expression of the employees' free choice of representatives at that plant. 510 DECISIONS OF NATIONAL LABOR RELATIONS' BOARD- benefits for their members establishes that they are capable of func- tioning as bargaining representatives 67 The respondent and the H. E. I. U. also contend (1) that evidence surrounding-the negotiations of contracts with the Independents and evidence of the subsequent activities of the H.: E. I. U. disclose that the Independents were militant in protecting their members and were not in fact company dominated; and (2) that action of the Board's Regional Director for the Twelfth Region with regard to the H. E. I. U. indicates that the Regional Director had concluded that it was not a company-dominated organization. As to the first of these contentions, assuming that the negotiations with all the Independents were protracted and vigorous, and the H. E. I. U. militant in its support of labor legislation, such evidence does not offset our finding that the respondent participated in 'the forma-' tion of the Independents and thereby impaired the freedom of its employees in their choice of a bargaining representative 68 The sec- ond contention, of the parties is based 'upon the fact that the Board's Regional Director for the Twelfth Region had reviewed charges filed against the respondent in its relation to the H. E. I. U., stated to the respondent that he had dropped the charges, and subsequently had drafted a stipulation for a consent election between the F. E. W. 0. C. and the H. E. I. U. Before the stipulation for a consent election was signed, the Board determined to issue its complaint against the re- spondent in the present proceedings and ordered the charges involv- ing the H. E. I. U. at the Milwaukee Works consolidated with those relating to five other plants. The Board had not approved the pro- posed stipulation for a consent election and its action in consoli- dating the cases and ordering the issuance of a complaint supersedes any disposition proposed by the Regional Director. We find no'merit in the contention. Upon the entire record we- are convinced that the several Independ- ents named in the complaint are not and never have been the freely chosen bargaining representatives of the respondent's employees at the six plants involved."" We find that the respondent dominated and interfered with the formation and administration of the Employees Mutual, the W. P. I. U., the H. E. I. U., the Employees Association, the U. M. P. A., and the e7 N. L. R. B. v. Pennsylvania Greyhound lanes, Inc., et al, 303 U. S. 261, rev'g mod. of Board's order in 91 F. (2d) 178 (C. C. A. 3), enf'g as mod. 1 N L R. B. 1; N. L. R. B. v. Newport News Shipbuilding if Drydock Co., 308 U. S. 241, rev'g mod. of Board's order in 101 F. (2d) 841 (C. C. A. 4), which enf'd as mod. 8 N L. R B 866. 68 See N. L R B. v. Link-Belt Company, decided January 6, 1941 (311 U. S 584), reversing modification in 119 F. (2d) 506 (C. C A 7), which enforced as modified 12 N L R B. 854. 0 See N L. R B. v Link-Belt Conipany,'decided January 6, 1941 (311 U S 584), reversing modification in 110 F. (2d) 506 (C. C. A. 7), which enforced as modified 12 N. L. R. B 854. INTERNATIONAL HARVESTER COMPANY - 511 R. F. E. A. at the six plants named, and contributed support to,each of them ; that by such acts the respondent interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. We further find that by the above-cited acts of executives, superintendents, foremen, assistant foremen, and councilmen in attempting to discourage membership in all outside labor organizations, and the C. I. 0., in particular, the respondent interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in'Section 7 of the Act. VI. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE We find that the activities of the respondent set forth in Section III above, occurring in connection with the operation 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 In order to, effectuate the -purposes and policies of the Act, it is essential that the respondent cease and. desist from unfair labor prac- tices in which we have found i6 have engaged, and we shall so order. To remove the effects of such practices we shall also order that the respondent take certain affirmative action. It has been found that the respondent dominated and interfered with the formation and administration of the Employees Mutual Association, at McCormick Works, the Rock Falls Employees Asso- ciation at Rock Falls Works, the United Motor Power Association at Farmall Works, the Employees Association of East Moline Works at East Moline Works, the West Pullman Independent Union at West Pullman Works, and the Harvester Employees Industrial Union at Milwaukee Works, and contributed support to each of them. The re- spondent must cease and desist from such practices. Also, since "the effects and consequences of the respondent's support, domination, and interference with respect to, and its continued recognition of, the above-named organizations as exclusive bargaining representatives Hof the respective plants, constitute a continuing obstacle to the free exercise by the respondent's employees of their right to self-organi- zation and to bargain collectively- through representatives of their own choosing, we find that the policies of the Act will be best effec- tuated by ordering, the respondent to withdraw all recognition of and td disestablish the several named organizations as the representa- tives of any of its employees at the respective plants for the purpose 512 DECISIONS OF NATIONAL LABOR - RELATIONS BOARD of dealing with the respondent in respect to grievances, labor dis- putes, wages, rates of pay, hours of employment, and other conditions of employment. It has likewise been found that the respondent, at each of the above-named plants, entered into agreements with the respective organ- izations covering wages, hours of employment, and working condi- tions of its employees. In order to free the respondent's employees completely from the effects and influence of the existing contracts consummated with the employer by the dominated organizations and to assure the -employees of the rights guaranteed by the Act, we will order the respondent to cease giving effect to or performing, any con- tract or arrangement now existing, and to refrain from entering into, -renewing, or extending any contract, relating to grievances, labor disputes, rates of pay, wages, hours of employment, and other con- ditions of employment, with the above-named organizations. How- ever, nothing in this Decision and Order shall be taken to require the respondent to vary or abandon the substantive features embodied in the contracts relating to rates of pay, wages, hours of employment, or other conditions of employment. Upon the basis of the above findings of fact and upon the entire record in the case, we make the following : CONCLUSIONS OF LAW 1. The Farm Equipment Workers Organizing Committee, the Em- ployees Mutual Association of McCormick Works, the Rock Falls Em- ployees Association, the United Motor Power Association, the Employ- ees Association of East Moline Works, the West Pullman Independent Union, and the Harvester Employees Industrial Union, are labor organizations within the meaning of Section 2 (5) of the Act. 2. By dominating and interfering with the ,formation and admin- istration of the Employees Mutual Association of McCormick Works, the Rock Falls Employees Association, the United Motor Power Asso- ciation, the Employees Association of East Moline Works, the West Pullman Independent Union, and the Harvester Employees Indus- trial Union, and contributing support to each of them, the respondent has engaged in and is engaging in unfair labor practices, within the meaning of Section 8 (2) 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. INTERNATIONAL:HARVESTER COMPANY=_ .^ ,513 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, International Harvester Company, its officers, agents, successors, and assigns shall: 1. Cease and desist from : (a) Dominating or interfering with the administration of the Employees Mutual Association of McCormick Works, the Rock Falls Employees Association, the United Motor Power Association,, the Employees Association of East Moline Works, the West Pullman Independent Union, and the Harvester Employees Industrial Union, or with the formation or administration of any other- labor organi- zation of its employees, or contributing financial or other support to -the above-named organizations or to any other labor organization of its employees ; ' (b) Giving effect to or performing any contract or arrangement now existing, or entering into, renewing, or extending any contract or arrangement, with the Employees Mutual Association of McCor- mick Works, the Rock Falls Employees Association, the United Motor Power Association, the Employees Association of East Moline Works, the West Pullman Independent Union, and the Harvester Employees Industrial Union, relating to grievances, labor disputes, rates of pay, wages, hours of employment, or other conditions of -employment ; (c) In any other manner interfering with, restraining, or coercing its employees in the exercise of the rights to self-organization, to form, join; or assist labor organizations, 'to bargain collectively through representatives of their own choosing, and to engage in con- certed 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) Withdraw all -recognition from the Employees Mutual Asso- ciation of McCormick Works, the Rock Falls Employees Associa- tion, the United Motor Power Association, the Employees Associa- tion of East Moline Works, the West Pullman Independent Union, and the Harvester Employees Industrial Union, as the representa- tives,of its employees for the purpose of dealing with the respond- ent concerning grievances, labor disputes, rates of pay, wages, hours of employment, or other conditions of employment; and completely disestablish those organizations as such representatives; (b) Immediately post notices in conspicuous places throughout its plants and offices at its McCormick Works, West Pullman Works, 514 DECISIONS - OF NATIONAL LABOR" -RELATIONS' BOARD Farmall Works,, Rock Falls Works, East Moline Works, and Mil= waukee Works, 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 set forth in 1 (a), (b), and (c) and that it will take the affirmative action set forth in 2 (a) of this Order; (c) Notify the Regional Director for the Thirteenth Region within ten (10) days from the date of this Order what steps the respondent has taken to comply therewith. CHAIRMAN HARRY A. MILLIs took no part in the consideration of the above Decision and Order. 1