National Seal Corp.

In the Matter of NATIONAL SEAL CORPORATION and INTERNATIONAL ASSOCIATION OF MACHINISTS, LONG ISLAND CITY LODGE 295, A. F. OF L. Case No. C-1726.-Decided March 8, 19.111 Jurisdiction : metal closure manufacturing industr$,. •, Unfair Labor Practices Interference, Restraint, and Coercticei: anti-union statements Collective Bargaining: refusal to cooperate with union In determining majority representative; refusal to grant exclusive recognition to majority representa- tive ; refusal to embody understandings reached in a signed agreement,; attempts to undermine authority of union by appealing directly to employees. Remedial Orders: affirmative order to bargain with union and upon request to embody understandings reached in a signed agreement; reinstate, upon request, striking employees with back pay from date of refusal to reinstate. Unit Appropriate for Collective Bargaining : production and maintenance em- ployees of the respondent, including machinists, tool and die makers, die setters, packers, stampers, inspectors, general helpers, miscellaneous machine operators, shipping and receiving employees, production clerks, and the porter, excluding office and clerical employees, supervisors, supervisory foremen and salesmen. Mr. Mark Lauter, for the Board. Kotzen, Mann and Siegal, by Mr. Abraham Mann, of New York City, for the respondent. Mr. Edward V. Broderick, of New York City; and Mr. Paul Hutchings, of Washington, D. C., for the Union. Mr. Edward Scheumemann, of counsel. to the Board. DECISION AND ORDER' STATEMENT OF THE CASE Upon charges and amended charges duly filed by International Association of Machinists, Long Island City Lodge 295, A. F. of L., herein called the Union, the National Labor Relations Board, herein called the Board, by the Regional Director for the Second Region (New York City), issued its complaint dated August 2, 1940, against National Seal Corporation, herein called the respondent, alleging 30 N L. R B., No 27. 188 '1'INTATIONAL' SEAL CORPORATION 189 that'the respondent liad engaged in and was engaging in unfair labor practices 'affecting commerce within the meaning of Section 8 (1) and' (5) and Section 2 (6) and (7) of the National'Labor Relations Act, 49 •Stat. 449, herein called the Act. Copies of the complaint, accompanied by notice of hearing, were' duly served upon ' the respondent and the Union. The complaint alleged, in substance, (1) that on or about March 7, 1940, and thereafter, the respondent urged, persuaded, and warned its employees to refrain from aiding, becoming, or remaining mem- bers; of the Union, and threatened them _ with discharge or other reprisals if they engaged in activity on behalf of the Union;-.(2) that. on or about March 26, 1940,--and at all times thereafter, the respondent refused to bargain collectively with the Union as the exclusive representative of its employees in an appropriate unit; and (3) that the unfair labor practices of the respondent caused and prolonged a strike of its employees which began on March 28,' 1940. On August 14, 1940, the respondent -filed its' answer in ` which it admitted some of the specific facts alleged in the complaint, denied that it had engaged in any unfair labor practices, and alleged affirm- atively that it had bargained collectively with the Union. Pursuant to notice, a hearing was held in New York City from 'August 19 to August 22, 1940, inclusive, before George Bokat, the Trial Examiner duly designated by the Board. The Board, the re- spondent, and the Union were represented by counsel and partici- pated in the hearing. Full opportunity to •be heard, to examine and cross-examine witnesses and to introduce evidence bearing on the issues was afforded all parties. During the course of the hearing the Trial Examiner made a number of' rulings on motions and on objections to the admission of evidence. The Board has reviewed the rulings of the Trial Examiner and finds that no prejudicial errors were committed. The rulings are hereby affirmed. On November 8, 1940, the Trial, Examiner issued his-Intermediate Report, copies of -which were duly 'served- upon the parties. He found - that the respondent had engaged- in unfair labor practices affecting. commerce within the meaning, of Section 8 (1) and (5). of the Act, and recommended that the respondent cease and desist from such violations and. take appropriate affirmative action. On December 19, 1940, the respondent filed exceptions to the Intermediate Report. On December 19, .1940,, pursuant to, notice, a hearing .was held before the Board 'iri Washington, D. 'C., . for 'the purpose of oral argument. The respondent and the Union were ' represented ..by counsel and presented argument. 190 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Board has considered the exceptions to the Intermediate Re- port and, save as the exceptions are consistent with the findings, conclusions, and order set forth below, finds them to be without merit. Upon the entire record in the case the Board makes the following : FINDINGS OF FACT 1. THE RESPONDENT AND ITS BUSINESS , The respondent, a New York corporation with its principal office and place of business in Brooklyn, New York, is engaged in the manufacture, sale, and distribution of metal closures for glass and tin containers and related products. In July 1939, the respondent was organized as the successor to National Seal Co., Inc. herein called the Old Company. The Old Company was formed. about January 1, 1920. On June 1, 1927, the accounting firm of F. Gordon Blackstone & Company took over the active management of the Old Company to protect the interests of the estate of one of the stockholders in the Old Company. In July 1939, the Old Company transferred its entire assets to a holding company called National Closure Corporation which in turn transferred all the assets to the respondent. The respondent, thereafter, continued the-business of the Old Company with the same plant, equipment, employees, man- agement, and assets. F. Gordon Blackstone, president of the Old Company, and Herbert Wainwright, vice president, became presi- dent and vice-president, respectively, of the respondent. In 1939 the 'respondent purchased raw materials valued at approxi- mately $200,000 from outside the State of New York. Such ma- terials constituted approximately 60 per cent of the total volume of raw materials used by the respondent. In the same period the respondent -sold and shipped finished products -valued at approxi- mately $500,000 to points outside the State of New York. Such sales constituted approximately 50 per cent of the total volume of the respondent's sales during that period. The respondent admits that it is engaged in commerce within the meaning of the Act. II. THE ORGANIZATION INVOLVED International Association of Machinists, Long Island City Lodge 295, is a labor organization affiliated with the American Federation of Labor, herein called the A. F. of L. It admits to membership employees of the respondent. NATIONAL SEAL CORPORATION 191 III. THE UNFAIR LABOR PRACTICES A. Background In .July 1935, Automatic Metal Cap, Production Workers' Union affiliated with the A. F. of -L., attempted to organize the employees of the Old Company. Shortly after the organization began, Wain- wright stated to James Doweiko, foreman of the production depart- ment, that the employees were forming a union, and instructed him to discharge three of the union leaders or to require them to cease talking about the Union. On July 8, 1935, the employees went on strike, and Wainwright then asked Doweiko to use his influence to persuade the employees to return to work. Doweiko succeeded in causing 60 of the strikers to return to work. After the strike, Wain- wright instructed Doweiko to discharge one Randazzo and Frances Contini, two employees who had been active in the strike. Doweiko discharged Contini, and did not rehire Randazzo after the strike. The respondent advanced no reason for such action, and it is appar- ent from the record that the respondent was motivated.by -hostility to the Union in terminating the employment of Randazzo and Contini. Late in 1935, the Old Company entered into a written agreement with a labor organization of its employees known as Employees Association of the National Seal Company. The agreement which provided for certain terms and conditions of employment, contained a provision "that the employer has the right to hire or discharge anyone for any reason or for no reason and regardless of his affilia- tion, or non-affiliation, with any union." The agreement was exe- cuted for the respondent by Wainwright and Blackstone. The record does not reveal the duration either of the agreement or the association.2 In 1937, United Electrical and Radio Workers of America, affili- ated with the Congress of Industrial Organizations, attempted to organize the employees of the Old Company. Early in the summer of 1937 Wainwright remarked to Doweiko that the employees were organizing again. In the fall of 1937, Doweiko promoted Frances Lehane,3 from the factory to the production office. Two or three ' The events refereed to in this section relate to the labor policies of the Old Company Since Wainwright executed the labor and management policies of the Old 'Company and, also of-the present respondent, his activities with reference • to'the self-organization of the em- ployees' of the Old Company are helpful in evaluating the good faith of the respondent, acting through him, in its dealings with the Union involved in this 'proceeding 2 Autom-tic Metal Cap Production Workers ' Union filed a charge with the Board in 1935, and the Board issued a complaint but was restrained from holding a hearing due to an injunction obtained by the Old Company No heating was eves held on this charge and complaint $ Also referred to in the record as Frances Leo 192 DECISIONS OF NATIONAL LABOR RELATIONS BOARD weeks later Wainwright told Doweiko, "Jimmie, take this girl out of the production office immediately. She is in the union." Doweiko, accordingly, demoted Lehane to the factory. He then selected another employee, Amy Massa, as production clerk. A few days after she was employed in the office, Doweiko loaned her to one Olney, an engineer, who needed clerical assistance. A few days later, Olney told Doweiko,,"You put me in an awful mess. This girl is union." Take her out completely. Put her back in the factory. The boss tol'd' me to say that." Doweiko, accordingly, transferred Massa back to the factory.4 B. Interference, restraiAt, and coercion On March 1, 1940, Wainwright informed Doweiko that the em- ployees had accused him of favoritism and that he was therefore demoted to the job of assistant foreman. On or about March 4, 1940, the Union began organizing the employees. On March- 7, 1940, Doweiko joined the Union. On the same' day Wainwright' ,summoned Doweiko to his office and in the presence of one Vann, Blarcom, a salesman, informed Doweiko that he had heard that the employees were joining the Union and that Doweiko had joined. Wainwright then instructed Van Blarcom to take Doweiko to his office "and explain to him more thoroughly about the situation." Van Blarcom took Doweiko to his office and stated, "Jimmie, by joining the union it won't help you much. You will only be double- crossing the company." Van Blarcom also told Doweiko that "There is a bigger job for you in the future here." 5 We find that the respondent, by these activities and statements of Wainwright and Van Blarcom on March 7, 1940, interfered with, restrained, and coerced its employees in the exercise of rights guar- anteed in Section 7• of the Act. C. The refusal to bargain 1. The appropriate unit. The Board and the respondent stipulated at the hearing that the production and maintenance employees of the respondent, including 41n 1937, the Board issued a complaint against the Old Company based upon charges filed by United Electrical and Radio Workers of America, but for reasons which the record does not reveal no hearing was ever held thereon. c-It is apparent from all the testimony that Van Blarcom, although only a salesman, was closely identified with management He appeared as a representative of the respondent at various meetings between the respondent and the Union. Moreover, it is clear from the above-mentioned instructions given Van Blarcom by wainwright that wainwright author- ized Van Blarcom to make the statements related above to Doweiko. We find that in making the statements to Doweiko, Van Blarcom was acting for the respondent 14 - NATIONAL SEAL CORPORATION 193 machinists, tool and die makers, die setters, packers, stampers, in- spectors, general helpers, miscellaneous machine operators, shipping and .receiving employees, production clerks, and the porter, exclud- ing office and clerical employees, supervisors, supervisory foremen and salesmen, constitute an appropriate unit. We find that such employees at all times material herein constituted, and that they now constitute, a unit appropriate for the purposes of collective bargaining with respect to rates of pay, wages, hours of employment, and other conditions of employment, and that said unit- insures to the employees of the respondent the full benefit of their right to self-organization and to collective bargaining and otherwise effectu- ates the policies of the Act. 2. Representation by the Union of a majority in the appropriate unit The respondent employed approximately 139 employees within the appropriate unit on March 26, 1940. The respondent and the Board ,stipulated at the hearing that 111 employees within the appropriate unit had authorized the Union to bargain for them on that date. On March 28, 1940, most of the employees of the respondent par- ticipated in a strike called by the Union. The respondent does not deny and we find that the strikers remained employees within the meaning of Section 2 (3) of the Act." By April 3, 1940, the Union had' 123 members within the appropriate unit. ' On April 3, 1940, the respondent, in its negotiations with the Union, recognized that the Union had obtained a majority of the employees within the ap- propriate unit by offering to recognize it as sole collective bargaining representative. Beginning on April 9 ; ,1940, strikers began returning to work be- cause of the respondent's unfair labor practices hereinafter set out. On May 9, 1940, the respondent posted on its bulletin boards a state- ment of labor policy containing terms of employment which it had offered to the Union. The statement made no reference to recog- nition of the Union. On May 29, 1940, the respondent stated to the union representatives that it would recognize the Union only as the representative of its employees who were members of the Union. Seventy-seven of the 123 employees who had joined the Union on or before April 3, 1940, had returned to work at the time of the hearing. The, reshondeilt contends that at the time of the hearing the Union no longer represented a` majority of the employees and argues in sup- port thereof that the 77 employees by returning to work during the 9 See N L R. B v Mackay Radio & Telegraph Co., 304 U S. 333 , rev'g 92 F ( 2d) 761, and aff'g , Matter of Mackay Radio & Telegraph Co and Amer¢can Radio Telegraphists Ass'n , etc, 1 N' L. R B. 201. 194 DECISIONS OF NATIONAL LABOR RELATIONS BOARD continuance of the strike repudiated their designation of the Union as collective bargaining representative. None of the employees, at the time of the hearing, had withdrawn their membership in the Union or had notified it or the respondent that they no longer desired the Union to act as their bargaining representative,, and,in view of the respondent's unfair labor practices heretofore and hereafter set out, we find that if there were, in fact, any defections from the Union, they are attributable to such unfair labor practices and must be dis- regarded in determining the representation by the Union of a majority of the employees in the appropriate unit." We find that on March 26, 1940, and at all times thereafter, the Union was the duly designated representative of a majority of the employees in the appropriate unit for the purposes of collective bar- gaining and, pursuant to Section 9 (a) of the Act, the exclusive repre- sentative of all employees in such unit for the purposes of collective bargaining with respect to rates of pay, wages, hours of employment and other conditions of employment. 3. The refusal to bargain a. Chronology of events On March 14, 1940, the Union wrote to the respondent, stating that it represented a majority of the respondent's employees and request- ing that the respondent enter into negotiation's for a collective bar- gaining contract. Upon receipt of the Union's request, Wainwright conferred with Blackstone, president of the respondent, and discussed with him whether the Union represented a .•inajorityr of the, employees. On March 18, 1940, the respondent replied by letter which read in part as follows: In reply to your letter of March 14, please be advised we doubt that your union represents a majority of our employees because ' The respondent contends that the Union had not acted upon the applications for mem- bership in accordance with its constitution and that many of the striking employees who ieturned to work paid no dues to the Union and were by virtue of its constitution, no longer membeis with respect to the latter contention, the record shows that the Union had sus- pended dues payments during the strike. Moreover, the asserted failure of employees or the Union to comply with the bylaws of the Union respecting membership is not decisive of the issue whether they have designated, and continue to designate, the Union as their bar- gaining representative See N. L. R. B v Benjamin Fainblatt, etc, 300 U S 601, rev'g 18 F (2d) 615 (C C A. 3), and aff'g, Matter of Benamin Famblatt, etc, and International Ladies Garment, WorLers Union, etc, 1 N L R B 864, Mattes of C. M DeKay, etc, and International Brotherhood, etc, 2 N L R'13. 231 8N L. R B v Bradford Dyeing Association, 310 U S 318, rev'g 106 F (2d) 119 (C. C A. 1), and enf'g Matter of Bradford Dyeing Association (U S A ) ('a corporation) and Textile 1Porlers Organi inq Comniittec of the C 1 0 , 4 N I. R B 601 Intl Ass'n of Naehintst' v N L R B, 311 U S 72 aft'g 110 F (2d) 20 (App D C ) ent'g Matter of The 5errick Corp and Intl, Union, etc , 8 N L R B 621 NATIONAL SEAL CORPORATION 195- to date our employees have not informed us of any such affiliation and have not in the recent past presented any grievances to us. Since you claim to represent some of the employees and there- fore we assume that they.ha,%ye some,grievances,-we have arranged to meet with you and those of our employees who have such grievances, at our office on Tuesday, March 26, at 4: 15 p. in. On March 19, 1940, the Union informed the respondent in substance that the Union represented a majority of the employees and desired to discuss wages, hours, and working conditions; and that if the re- spondent intended to bargain with the Union, the respondent should call the union representatives for a conference. On March 21, 1940, the respondent by letter asserted an intention to bargain with the Union. On March 23, 1940, the Union filed with the Board its petition for investigation and certification. Thomas Carey, the organizer, for the-Union, testified that the petition was•filed because.the•respondent had questioned the Union's majority. On March 25, 1940, a field examiner for the Board sent a letter to the respondent, informing it that a petition had been filed by the Union "to investigate the ques- tion that has arisen concerning the representation of your employees," and, suggesting that the respondent appear at the Boaid's Regional Office on March 29, 1940. The Regional Office also sent a letter to the Union requesting that it be present on the same day. On March 26, 1940, a union committee consisting of four employees, together with Carey, met with Wainwright, Van Blarcom, and one O'Reilly, the respondent's sales manager, representing the respondent. Carey stated that the Union represented a majority of the employees and was ready to bargain collectively for them. Wainwright referred to the letter he had received from the Regional Office of the Board notifying him that the petition had been filed and requested that Carey explain its meaning. Carey explained that the Union had filed the petition because the respondent had asserted doubt concerning its status as majority representative, and that if the respondent was still doubtful, the Union • was ready and willing to submit proof to the Board at the March 29 conference at the Regional Office "either by a cross-check of cards with the applications for membership, or if the Board decided, and he [Wainwright] wished, an election." Wainwright replied that since they were already meeting together, it was unimportant, and asked.that the Union present its demands. He also asked Carey again whom he represented. Carey replied that lie represented a' majority of the employees, and Wainwright an- swered that he had no proof of that. Carey again(suggested that they 44013'-42-Vol 30-14 196 DECISIONS OF NATIONAL LABOR RELATIONS BOARD let the matter of representation rest until the March 29 conference at the Regional Office, at %v1iich time it could be decided whether or not the Union represented a majority of the employees. WTannwright repeated that the matter of recognition ii as unimportant, and again asked what the Union desired. Carey replied that the Union Was there to bargain collectively for all the employees and that "the first part of the bargain was recognition of our union as the sole exclusive bargaining agency . . ." Wainwright stated, in substance, that lie had no desire to go to the Board's Regional Office on the 29th of March. He stated further that he had no authority to recognize the, Union as the sole collective bargaining agency without first consulting the other officials of the respondent. He admitted at the hearing, however, that he did have such authority without consultation with the other officers if the Union presented proof that it was majority representative. Wainwright asked if it would be satisfactory for him to notify-the Union on March 28 whether or not the respondent would recognize it as collective bargaining agency, in order to avoid ap- pearing at the Board's Regional Office on the 29th. Carey replied that Wainwright had had from March 14, the date of the Union's first letter, until the 26th, to determine whether or not the respondent would recognize the Union, and that the Union desired a reply by the 27th. The- parties agreed that Wainwright would call Carey by telephone on the afternoon of the 27th to inform hin-r whether or not the respondent would recognize the Union. Dun-mg the course of the conference Wainwright stated "In the back of my head there isn't a doubt that you have a majority." 13 Wainwright testified that he did not "particularly" desire time to consult Blackstone in order to determine whether he should recognize the Union, but that he "wanted a little time in which to think,.about it." At the time Wainwright promised to give the Union his answer on March 27, 1940, he already had an appointment with Blackstone for March 28, 1940. Wainwright did not inform the Union that his appointment was for March 28, 1940. Moreover, althoulph there is The above account of the March 26 conference is based upon Carey's testimony wain- wright, who testified for the respondent concerning the conference . denied that the proposed meeting at the Regional Office on the 29th was discussed of that he stated that the respond- ent did not desire to attend He admitted , however . that during the conference he did refer to the letter which he had received from the Regional Office wainwright denied further that he stated that he had no doubt the Union represented a maioiity of the employees The Trial Examiner stated in his Intermediate Report "At the hearing . the demeanor of both these witnesses [Carey and Wainwright] was carefully noted Carey was forthright, consistent , and plausible . On the other hand Wainwright was someww hat inconsistent and contradictory . For these reasons, the undersigned accepts Carey 's testimony as being sub- stantially in accord with the facts ' In N iew of the findings of the Trial Examiner, and upon the entire record, we do not credit Wainwiight 's testimony where it differs substan- tially from that of Carey, and we find that the conference on 11Lirch 26, 1940 proceeded substantially as set out above NATIONAL SEAL 'CORPORATION 197 no showing that Blackstone was unavailable on March 27 , 1940, Wain- wright made no attempt to confer with him prior to the time at which he was to give the Union the respondent's answer to the request for recognition. On the afternoon of March 27 , 1940, Carey telephoned Wainwright and Wainwright stated "The situation remains exactly as it re- mained last night . I suggest you call later tomorrow ." Carey re- plied that he would see Wainwright at the Regional Office on the 29th; Wainwright stated that neither he nor any representative of the respondent would appear at the Regional Office but "that is none of your concern . We will let matters remain as they are." 10 In the afternoon of March 27 , 1940, Carey reported to a union meet- ing the result of his negotiations with Wainwright. The members of the Union discussed the respondent 's refusal to recognize the Union as collective bargaining representative . Some of the members at the union meeting stated that the Company was stalling and that it had followed the same procedure in 1935 and 1937. The members present unanimously , passed a motion "that nobody report for work on Thurs- day, March 28, until the Company recognized the Union , granted a closed shop , seniority rights , a written agreement, and reinstated John Steward." On the morning of March 28, 1940, none of the employees reported for work and the plant was closed down. On the same day the re- spondent wrote to the Regional Office in part as follows : This morning , without warning, the union has called a strike. Since we have not refused to bargain with them nor to recognize them at the moment as the representation [sic] of our employees who are members of their organization , we fail to see how this matter can be of concern to your Board . If the union desires to carry on further negotiations with us, they are free to do so, and if they will write to us we will arrange for further conferences. Carey came to the Regional Office of the Board for the conference scheduled on March 29 , 1940. No representative of the respondent ap- peared. On the same day the Union wrote a letter to the respondent stating that it was willing to commence collective bargaining negotia- tions immediately and that it had withdrawn its petition for certifi- cation in view of the fact that "100 per cent of the employees are out on strike.", The Union also sent to the respondent a copy of a pro- posed agreement . The respondent replied to the Union 's letter, and w wainwright denied that the conference scheduled for March 29, 1940, was mentioned in the conversation and testified that he merely told Carey he had no answer for him and requested more time,in which to consult with Blackstone . For the reasons stated in the preceding footnote, we do not credit Wainwrigbt's testimony in this respect , and find that the conversation w as substantially as described by Carey and set out above 198 DECISIONS OF NATIONAL LABOR RELATIONS BOARD stated that it would agree to meet with the Union on April 3 , 1940, in order to discuss the Union's proposed agreement . The respondent in its letter also stated : Your letter contains an erroneous statement when you say that the company refused to bargain collectively with you as representa- tive of its employees. The company arranged for a conference which did take place at our office on Tuesday, March 26, at 4: 15 p. in. By so doing we were under the impression that we had recognized you as the bargaining agency. You at that time- demanded that we recognize you as the sole bargaining agency. We informed you that that was immaterial since we have not refused to negotiate with you and that if during the course of the negotiations it was proven to us that you did represent the major- ity that under the law we had no choice in the matter and would recognize you as such. We also told you that we would be pleased to consider any grievances or demands that you had to make but you refused to even present any grievances or demands and it was your actions that ended that conference on March 26. Prior to the conference on April 3, 1940, Wainwright and Black- stone considered the Union 's proposed contract and wrote out a state- ment consisting of counter proposals to it. Wainwright had_ authority to revise the counter proposals except with respect to pay increases, a closed shop,, and the incorporation of any agreement in a written contract, without further consultation with Blackstone. On April 3, 1940, a committee of the Union consisting of four employees and Carey met with Wainwright, Van Blarcom, and O'Reilly. Wain- wright stated that the respondent had received a copy of the Union's proposals and had formulated counter proposals which the respond- ent desired that the Union refer to the employees. He also stated : "I am not empowered to change the counterproposals because this has been arrived at after serious deliberation by the people concerned in this company and these are the Company's proposals." Wainwright thereupon read the respondent's counter proposals which agreed to recognize the Union as the exclusive representative of the employees for a period of 1 year, and to grant 1 week's vacation with pay, rejected the Union's demand for a closed shop, pay increases, a stricter seniority policy, settlement of disputes by arbitration and modified its proposal concerning overtime. The concluding paragraph of the counter pro- posals provided as follows: The company cannot agree to enter into a written contract with any union or its employees due to the fact that it must feel free- and it must be unencumbered in the event that business-conditions warrant it to liquidate or sell its business under the best possible- NATIONAL SEAL CORPORATION 199 terms. However, if the terms as outlined by us are acceptable to you we would be pleased to write you a letter to that effect and that these terms would be the policy of the company in the future and that we would agree to maintain them as long as the employees do not strike against the company. The company would also agree not to lock out its employees although it must retain the right to increase or decrease its working staff according to its best judgment. On the same day the union committee reported on the conference-to ,a, meeting of the Union. The respondent's counter proposals were -discussed at the meeting, and the Union voted to reject consideration of the counter proposals unless the respondent would agree to embody understandings reached in a written agreement. Carey telephoned Wainwright and told him that the Union had unanimously rejected the counter proposals. Wainwright replied that he thought the respondent could make further concessions on the seniority problem. Carey replied that the Union did not believe that seniority or any other concessions of the respondent would be observed unless the respondent were willing to reduce them to writing in the form of an agreement. Wainwright reiterated the respondent's posi- tion that it could not enter into a written agreement with the Union and stated "You know how you can get in touch with me." Carey replied, "The same thing is true of me." 11 On April 5, 1940, the respondent appealed directly to its employees by sending a letter to each of them and a copy to the Union. The respondent stated in the letter that the only question between the Union and the respondent was that of a closed shop, and that the respondent could not agree to a closed shop. The respondent also stated that it had agreed generally with the propositions advanced by the Union pertaining to hours, overtime, recognition, vacations with pay, and seniority. The letter concluded with the following paragraph : - The company hereby offers you your former job under the condi- tions and terms outlined to your representatives and we request you to return to work immediately. We hope you will not come to hasty conclusions but will give this deep consideration and that you will decide to .accept the conditions that the company has presented to your representatives. 11 Wainwright testified that Carey told him in the telephone conversation that the Union agreed to all counter proposals except those with reference to the closed shop and seniority, and that Carey, upon Wainwright's suggestion, stated that he would attempt to persuade the union members to reconsider their position on a closed shop. For the reasons stated in previous footnotes, and in view of the findings of the Trial Examiner, we do not credit Wainwright's testimony in this respect 200 DECISIONS OF NATIONAL LABOR RELATIONS BOARD It i`s evident , from the facts heretofore set out, that the statements con- tained in the letter to the employees were misleading and inaccurate,, particularly in so far as the letter stated that the only issue remaining between the Union and the respondent was that of a closed shop, and that the respondent had agreed with the'Union's proposals respecting hours, overtime , and seniority. On or about April 9, some of the strikers began to return to work, and the respondent began to hire new workers to replace those on strike. In addition to its letter , of April 5, heretofore referred to, the respondent attempted to induce its employees to return to work by sending a representative from the Murray Hill Detective Agency to- gether with the superintendent of the respondent , Ralph H. Stone, to the homes of the strikers . One of the strikers, Mary Halligan, testi- fied without contradiction and we find that one Walsh, a representative of the detective agency, and Stone called at her home.on April 7, and invited her and two other strikers to return to work the following morning. Walsh informed Halligan and two other strikers that the respondent desired "to get about 10 per cent of the older employees back to work" so that they could "break in" some new girls whom the respondent intended to hire. On April 12, 1940, Ernest W. Lanoue, a mediator of the New York State Board of Mediation , wrote to the Union and the respond- ent inviting them to a conference for the purpose of attempting to settle the strike. The Union accepted the invitation , but the re- spondent declined, and in its letter again stated that the only issue remaining between the respondent and the Union was that of a closed shop and that a further meeting would serve no useful purpose. At a meeting of the Union on April 29, 1940 , the members dis- cussed the respondent's letter of April 5. Despite the bargaining committee's denial of the statement contained in the letter that the only issue remaining between the respondent and the Union was that of a.closed shop, the members passed a motion instructing the bar- gaining committee to ascertain from Wainwright whether the re- spondent had agreed to all the Union's proposals except the closed shop: On April 30 , 1940, Carey and the bargaining committee met with Wainwright. At the conference, the respondent again took the same position as 'it did on ` April 3, 1940, with respect to the demands of the Union, except that Wainwright stated the respondent might be willing to make some concession on the seniority problem. At the request of the committee , Wainwright also agreed to supply -a statement to. the Union stating the conditions under which , the re- spondent would reinstate ' the strikers. On May 1, 1940, Wainwright sent a letter to the Union containing a statement of labor policy which the respondent intended to follow. NATIONAL SEAL ' CORPORATION 201 The statenient,,in substance, contained the proposals presented by the respondent on^ April 5, 1940; and affirmed - on April 29, 1940. The statement concluded as follows: The Company will adhere to the' above-mentioned policy as long as the workers do not go out on strike or engage in strike activities against it. On May 2, 1940, the Union rejected the terms and conditions set 'forth in the aforesaid letter, primarily because the respondent still refused. to incorporate them in the form of a written agreement. On May 3, 1940, Carey notified Wainwright that the Union would not consider the proposals unless contained in the form of a binding written agreement. - Wainwright replied that he could do nothing further. On May 7, 1940, the respondent again 'sent a letter to all of its 'employees still on strike with the exception of members of the bar- gaining committee, again requesting them to report for work not later than Friday, May 10. The letter stated "We would appreciate you informing us prior to May 10 whether or not you intend to work for us again." On May 9, 1940 , the respondent put into effect the labor policy outlined in its letter of April 5 , 1940, and posted a copy of the terms on the bulletin board. The notices as posted eliminated the clause recognizing the Union as the "sole collective bargaining agency" of the respondent's employees. On May 9, 1940, the Union prepared a form letter for the signature of the striking employees in reply to the respondent's letter of May 7. The letter stated that the employees signatory intended to return to work "as soon as the present controversy . . . is settled to our mutual satisfaction ." On the same day, the Union wrote to the respondent calling attention to the fact that a number of the em- ployees on strike had not received a copy of the May 7 , 1940, letter and stating for them that they would be willing to return to work upon the settlement of the strike. On May 25, 1940, the Union wrote to the respondent requesting, a conference in an attempt to settle the strike. On May 29, 1940, the bargaining committee of the Union met with the respondent's offi- cials. At the meeting, Wainwright read to the representatives of the Union a prepared statement in the form of a letter to the Union identical with that of the May 1, 1940, letter, theretofore given to,the Union, with the exception of the recognition clause. The respondent in its statement proposed to "recognize your union only as the repre= sentative of those of our employees who are members of your union, and since the number of our employees in your union is merely a 202, DECISIONS OF NATIONAL LABOR RELATIONS BOARD minority of our workers, you may only present grievances on their behalf." After some discussion of the respondent's proposals a re- presentative of the Union asked, "In other words, this is take it or leave it." Wainwright replied "That is correct." The Union rejected the respondent's proposals. b. Concluding findings Wainwright at the first conference on March 26, 1940, refused to recognize the Union as exclusive bargaining representative until it proved that it represented a majority of the employees. At the out- set, we may note in this connection that Wainwright admitted to the Union, in subsance, on March 26, that he had no doubt of its majority designation. Moreover, assuming that the respondent entertained a bona fide doubt thereof, it was at least under obligation to cooperate with the Union in a good-faith effort to resolve such doubt and to determine whether the Union actually represented a majority.12 This obligation the respondent failed to satisfy. Thus Wainwright, for the respondent, evaded the issue by insisting that the question of recognition was "immaterial." Thereafter, he rejected the Union's proposal to determine the question at the Regional Office on March 29, 1940, and failed to propose any reasonable alternative. Although Wainwright informed the Union on March 26 that he had no au- thority to recognize the Union as exclusive representative without first consulting the respondent's other officials, he in fact had such authority. Wainwright admitted at the hearing that his alleged motive for requesting a postponemnent-a desire to confer with other company officials-was not his true motive in making such request, and it does not appear that he attempted to confer with other officials prior to the time at which he was to communicate to the Union the respondent's decision with respect to the issue of recognition. Wain- wright failed to keep his promise that such decision would be made by March 27. Finally, on that day he refused again to`,appear'at the Regional Office or to propose any alternative except further delay. We find that the respondent on March 26 and 27, 1940, by attempting to evade, and by refusing to cooperate with the Union in determining, the issue of majority representation, refused to bargain collectively with the Union.13 "See N L R B v International Assoeaataon of Machinists, 311 U. S. 72, aff'g Intelna- ttonal Association of Machinists v. N. L. R. B., 110 F. (2d) 29 (Ct. App. D C.), enf'g Matter of The Serrick Corp. and International Union, United Automobile Workers of Amer- ica, etc, 8 N. L It B 621 , N. L R B. V. C. A Lund, 103 F (2d) 815 (C. C. A 8), enf'g Matter of 'C A Lund Co. and Novelty Workers Union, etc., 6 N L. R. B . 423; Matter of Burnside Steel Foundry Company and Amalgamated Association of Iron, Steel and Tin Workers, etc, 7 N. L. R. B. 714. 13 Ibid. NATIONAL SEAL CORPORATION 203 Carey reported the results of the conference on March 26 and 27 to the union meeting on March 27, and the members of the Union there- upon voted to strike. The respondent contends that since the minutes of the meeting recite that the employees voted to strike until the respondent agreed to certain proposals in addition to recognition of the Union, the respondent's unfair labor practice in refusing such recognition was not the cause of the strike. We cannot accept this contention, since it is undenied that the strike vote was taken after Carey's report that the respondent had refused to bargain with the Union, that the members present stated their belief that the respond- ent had "stalled"' in 1935 and 1937 and was "stalling" in the present negotiations, and since the refusal of the respondent to recognize the Union was included in the motion calling for the strike. More- over, the respondent's refusal to recognize the Union foreclosed the possibility of negotiations on the Union's other demands, and left the Union no alternative but to strike for them. We find as did the Trial Examiner, that the respondent's unfair labor practices caused the strike which began on March 28, 1940. The strike was thereafter prolonged by the respondent's continued unlawful refusal to bargain with the Union. Although the respondent offered to grant the Union recognition as exclusive bargaining agency at the April 3 conference, it subsequently retracted such offer and thereby conntinued its refusal to bargain. The respondent also revealed its bad faith in the negotiations by its re- fusal, in effect, to consider any material changes in its "counter-pro- posals" and by Wainwright's statement to the Union that he lacked authority to change any proposals when he, in fact, had such authority. Moreover, the respondent's persistent refusal to embody under- standings reached in a signed agreement constituted a clear infringe- ment of Section 8 (5).14 Finally, the respondent demonstrated its refusal to bargain and its infringement of rights guaranteed to employees by its letters addressed directly to its employees on April 5, 1940, and May 7, 1940, and by the activity of Walsh and Stone on April 7, 1940, for by this conduct the respondent attempted, unlawfully, to undermine the, authority of. the Union 15 "Y L R B v II J Heinz Co, 311 U S 514 , aff'g N L R B v, H J Heinz Co , 110 F. (2d) 843 (C. C A. 6) ; Matter of Westinghouse Electric Manufacturing Co. and United Elects teal, Radio cf Machine Workers of America, etc , 22 N L R B 147 In view of the respondent's refusal to reduce any agicement to a binding contract and the other cir- cumstances disclosed , the Union was clearly justified in refusing to consider such "counter- proposals " s See N L R B v Acme dii Appliance Co , Inc, 117 F (2d) 417 (C C A 2), enf g as rood. Matter of Acme Air Appliance Co, Inc and Local No 1223, etc, 10 N L R B 1385; Steuat Die Casting Cap v N L R B, 114 F (2d) 849 (C C A 7), cert den 312 U .S. 680 enf'g as mod Matter of Steuai t Die Casting Corporation and United Automobile Worl- ers of A merica, Local 298, etc, 14 N. L R. B 872 ; N L R B v . Highland Park Mfg. Co., 204 DECISIONS OF NATIONAL LABOR RELATIONS BOARD . We find that the respondent on March 26, 1940, and at all times thereafter refused to bargain collectively with the Union as the rep- resentative of its employees in an appropriate unit with respect to rates of pay, wages, hours of employment and other conditions of employ- ment; that the respondent's refusal to bargain collectively with the Union caused and prolonged the strike which began on March 28, 1940; and that the respondent by these acts and by its attempts to alienate its employees from the Union on April 5, and May 7, 1940, has interfered with, restrained, and coerced its employees in the exer- cise of rights guaranteed in Section 7 of the Act. IV. 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 operations of the respondent described in Section I above,, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States) and have led and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. THE REMEDY Since we have found that the respondent has engaged in unfair labor practices, we shall order it to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. We have found that on March 26, 1940, and at all times thereafter, the respondent refused to bargain collectively with the Union as the representative of the employees in the appropriate unit. We shall therefore order the respondent, upon request, to bargain collectively with the Union as the exclusive representative of the employees in the appropriate unit with respect to rates of pay, wages, hours of employ- ment, and other conditions of employment, and upon request of the Union to embody any understandings reached in a signed agreement. We have found that the unfair labor practices of the respondent in refusing to bargain collectively with the Union on March 26 and 27, 1940, caused and prolonged the strike which began on March 28, 1940. In order to restore the status quo as it existed prior to the time the respondent committed the unfair labor practices and in order to enable the processes of collective bargaining to function, we shall order the respondent to offer reinstatement, upon application, to the employees 110 Fed ( 2d) 632 (C C. A. 4 ), enf'g Matter of Highland Parl. Mfg. Co. and Textile Work- ers Organizing Committee, 12 N. L. R. B. 1238; N L. R. B v. Remington Rand, Inc., 64 Fed. ( 2d) 862 (C: C. A. 2), cert. den. 304 U. S 576 , enf'g Matter of Remington Rand, Inc. and Remington Rand Joint Protective Board of the District Council Equipment Workers, 2 N. L. R. B. 626. 1 NATIONAL SEAL. CORPORATION 205 -who went on strike on March 28, 1940, and who have not since been fully reinstated, to their former or substantially equivalent positions, without prejudice to their seniority and other rights and privileges; dismissing if necessary any persons hired by the respondent after March 28, 1940, the date of the strike, and,not in the employ of the respondent on said date. If thereupon, despite such reduction in force, there is not sufficient employment available for the employees to be offered reinstatement, all available positions shall be distributed among such employees without discrimination against any employee because of his union affiliation or activities; following such a system of seniority or other practice to such extent as has heretofore been applied in the conduct of the respondent's business. Those employees, if any, remaining after such distribution, for whom no employment is imme- diately available, shall be placed upon a preferential list and ;offered -.employment in their former or substantially equivalent positions, as such employment becomes available -and before other persons are hired for such work, in the order determined among them by such sys- tem of seniority or other practice as has heretofore been followed by the respondent. We shall also order the respondent 'to make whole the employees to be offered reinstatement for any loss of pay they may suffer by reason .of the respondent's refusal, if any, to reinstate them or place them upon a preferential list, as provided above, by payment to each of them of a stun of money equal to that which he would normally have earned as wages during the period from five (5) days after his appli- cation for reinstatement to the date on which he was reinstated or placed upon a preferential list, less his net earnings,- if any, during .such period. Upon the basis of the above findings of fact, and upon the entire -record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. International Association of Machinists, Long Island City Lodge 295, affiliated with the American Federation of Labor, is a labor organization, within the meaning of Section 2 (5) of the Act. 2. The production and maintenance employees, of the respondent including machinists, tool and die makers, die setters, packers, stamp- 10 By "net earnings " is meant earnings less expenses , such as for transportation, room, and board , incurred by an employee in connection with obtaining work and working else- where than for the respondent , which would not have been incurred but for the respondent's discrimination against him and the consequent necessity of his seeking employment else- where. See Matter of Crossett Lumber Company and United Brotherhood of Carpenters and Joiners of America, Lumber and Sawmill Workers Union, Local 2390; 8 N. L R B. 440 Monies received for work performed upon Federal , State, county, municipal or other work- relief projects shall be considered as earnings . See Republic Steel Corporation v. N L. R B, 311 U. S. 7. 206 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ers, inspectors, general helpers, miscellaneous lllachine operators, ship- ping and receiving employees , production clerks, and the porter,. exclusive of office and clerical employees, supervisors, supervisory foremen, and salesmen, constituted - at all times material herein and now constitute a unit appropriate for the purposes of collective bar- gaining, within the meaning of Section 9 (b) of the Act. 3. International Association of Machinists, Long Island City Lodge- 295, is and at all times since March 26, 1940, has been the exclusive representative of ah-the employees in tile' above unit, for the purposes of collective bargaining , within the meaning of Section 9 (a) of the Act. 4. By refusing on March 26 , 1940, and at all times thereafter, to, bargain collectively with International Association of Machinists, Long Island City Lodge 295 , as the exclusive representative of its employees in such unit , the respondent has engaged in and is engag- ing in unfair labor practices, within the meaning of Section 8 (5) of the Act. 5. 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. 6. The aforesaid unfair labor practices are unfair labor practices' affecting commerce within the meaning of Section 2 (6) and (7) of- the Act. ORDER Upon the basis of the above findings of fact and conclusions of law,. and pursuant to Section 10 (c) of the National Labor Relations Act,, the National Labor Relations Board"hereby orders that the respondent, National Seal Corporation, Brooklyn, New York, and its officers,. agents, successors , and assigns, shall : 1. Cease and desist from : (a) Refusing to bargain collectively with International Association. of Machinists, Long Island City Lodge 295, as the exclusive represen-- tative of its production and maintenance employees including machin- ists, tool and die makers , die setters, packers, stampers, inspectors, general helpers, miscellaneous machine operators , shipping and receiv- ing employees, production clerks, and the porter , exclusive of office and clerical employees, supervisors, supervisory foremen, and salesmen ; (b) In any other manner interfering with, restraining , or coercing its employees in the exercise of the rights of self-organization , to form, join, or assist labor organizations , to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, as guaranteed in Section 7 of the Act. NATIONAL SEAL CORPORATION 204 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act: (a) Upon request, bargain-collectively with International Associa- tion of Machinists, Long Island City Lodge 295, as the . exclusive bargaining representative of all the production and maintenance em- ployees in the respondent's plant at Brooklyn, New York, -including machinists, tool and die makers, die setters, packers, stampers, inspec- tors, general helpers, miscellaneous machine operators, shipping and receiving employees, production clerks, and the porter, excluding office and clerical employees, supervisors, supervisory foremen, and salesmen with respect to rates of pay, wages, hours of employment and other conditions of employment, and if an understanding is reached on any such matters, embody said understanding in a signed agreement; (b) Upon application, offer to those employees who went on strike on March 28, 1940, and who have not since been fully reinstated, im- mediate and full reinstatement to their former or substantially equiva- lent positions, without prejudice to their seniority or other rights, or privileges, in the manner provided in the section entitled "The Remedy" above; and place those employees for whom employment is not immediately available upon a preferential list in the manner set forth in said section, and thereafter, in said manner, offer them employ- ment as it becomes available; (c) Make whole the employees specified in subsection (b) above, for any loss of pay they may suffer by reason of the respondent's refusal, if any, to reinstate or place them upon a preferential list, pursuant to subsection (h) above, by payment to each of them of a sum of'money equal to that which he would normally have earned as wages, during the period from five (5) days after his application for reinstatement to the date on which lie is reinstated or placed upon a preferential list, less his net earnings during said period; (d) Post immediately in conspicuous places within its plant and maintain for a period of not less than sixty ( 60) consecutive days from the date of posting, notices to its employees stating : that the respondent will not engage in the conduct from which it is ordered to cease and desist in paragraphs 1 (a)` and ' (b) of this Order and that the respondent will take the affirmative action set forth in paragraphs 2 (a), (b), and (c) of this Order; (e) Notify the Regional Director for the Second Region , in writing within tent (10) days from the date of this -Order, what steps the respondent has taken to comply herewith. CHAIRMAN HARRY A. MILLIS took no part in the consideration of the above Decision and Order.