Williams Motor Co.

In the Matter Of WILLIAMS MOTOR COMPANY and LODGE 1426 INTER- NATIONAL -ASSOCIATION OF MACHINISTS, A. F. OF L. and WILLIAMS MOTOR COMPANY EMPLOYEES UNION, PARTY TO THE CONTRACT Case No. C-1593.-Decided May 9, 1941 Jurisdiction : automobile buying and selling industry. Unfair Labor Practices Interference, Restraint, and Coercion: anti-union statements. Company-dominated Union: formation of, for the purpose of defeating "outside organizational attempts-participation by representatives of management in initiation, formation, and administration-contract entered into without proof of,.majority designation Discrimination: discontinuing operations of one department to eliminate union- ism from plant ; charges alleging demotion and discharge of two employees, dismissed. Collective Bargaining: majority established by membership and designation cards-refusal to meet and negotiate : failure to reply to union's letter request- ing a conference; refusal to negotiate with union because of outstanding con- tract with dominated labor organization. Remedial Orders: disestablishment of dominated union; abrogation of contract; order to bargain collectively ; employees discriminated against ordered rein- stated or placed upon a preferential list and if department reopened to be offered immediate reinstatement therein ; back pay from 'date of discrimina- tion to date of reinstatement or placement upon preferential list. Unit Appropriate for Collective 'Bargaining : mechanical employees, including the auto mechanics, auto body and fender men, trimmers, auto painters and greasers, radiator repairmen, ignition men, electricians, helpers and appren- tices, but excluding office and clerical workers, salesmen, janitors, porters and delivery boys, and supervisors with power to hire and discharge ; no controversy-as to. Mr. Lee Loeviin,.ger, for the Board. - Sifford & Wadden, by Mr. B. L. Sifford and Mr. S. F. Wadden, of Sioux City, Iowa, for the respondent. - Mr. P. L. Siemiller, of Washington, D. C., for the I. A. M. Miss Marcia Hertzmark, of 'counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly filed by Lodge 1426, International Association of Machinists, A. F. of L., herein called 31 N. L. R. B., No. 122. , 715 716 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the I. A. M., the National Labor Relations Board, herein called the Board, by the Regional Director for the Eighteenth Region (Minne- apolis, Minnesota), issued its complaint dated October 20, 1939, against Williams Motor Company, Sioux City, Iowa, herein called the respondent , and Williams Motor Company Employees ' Union, party to the contract , herein called the Employees ' Union, alleging that the respondent had engaged in and was engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1), (2), (3), and ( 5) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat . 449, herein called the Act. The complaint and notice of hearing were duly served upon the respond- ent, the I. A. M., and the Employees' Union. Concerning the unfair labor practices , the complaint alleged in substance (1) that the respondent , on or about March'7, 1939, insti- gated the formation of the Employees ' Union and thereafter advised, urged, threatened, and warned its employees to join the Employees' Union, dominated and interfered with its administration , " and con- tributed financial and other support to it; (2) that on or about April 1, 1939, the respondent entered into a written agreement with the Employees' Union, although the Employees '.- Union was not the law- ful representative of a majority of the employees in an appropriate unit, for the purpose of furthering and maintaining its domination and control of the Employees' Union; (3) that on or about March 8, 1939, the respondent demoted Clifford Fallon from the position of department manager or foreman to the position of a non-supervisory- employee, for the reason that he refused to participate in the forma- tion of the Employees' Union; (4) that on or about July 29, 1939, the respondent discharged and thereafter refused to reemploy Clifford \ Fallon , William 'Carlson, Edwin Hanson, and John Herbst for the reason that they joined and assisted the I . A. M. and engaged in concerted activities for the purposes of collective bargaining and other mutual, aid and protection ; '( 5) that -on or about July 26, 27, and 31 , _ 1939, the respondent refused to bargain collectively with the I. A. M. as the representative of its employees within an appro- priate unit; and (6) that since about February 15, 1939, the respond- ent advised, urged, threatened , and warned its employees to refrain from becoming or remaining members of the I. A. M. On October 30, 1939, the respondent . filed an answer to the com- plaint denying that it was engaged in commerce within the meaning of the Act, that the I. A. M. represented a majority of the employees within an appropriate unit, and that it had engaged in the unfair labor practices alleged in the complaint. Pursuant to notice, a hearing was held at Sioux City, Iowa, from February 29 through March 5, 1940, before Berdon M. Bell; the WILLIAMS MOTOR COMPANY 717 Trial Examiner duly designated by the Board. The Board and the aespondent were represented by counsel and participated in the hearing: - The I. A. M. was represented by its Grand Lodge Repre- sentative. No appearance was entered on behalf of the Employees' Union. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues was af- forded all-parties. At the close of the Board's case the respondent moved to dismiss the complaint. This motion.,was denied. The Trial Examiner granted a motion by counsel for the Board to amend the complaint to conform to the proof. At the conclusion of the hearing the respondent moved to strike certain allegations of the complaint and also moved to dismiss the complaint. Ruling was reserved on these motions. They are hereby denied. During the course of the hearing the Trial Examiner made a number of other rulings on motions and on objections to the admission of_ evidence. The Board has reviewed the rulings and finds that no prejudicial errors were committed. The rulings are hereby affirmed. Thereafter, the Trial Examiner issued his Intermediate Report, dated May 20, 1940, copies of which were duly served upon all the parties, finding that the respondent had engaged in and was engaging m;unfair-•labor practices, within the meaning of Section 8 (1), (2), of -(5) of the Act. He recommended that'the respondent cease and desist from engaging in such practices; that it disestablish the Em- ployees' Union, and that, upon request, it bargain- collectively with the I. A. M. He recommended further that the complaint, in so far as it alleged that the respondent had engaged in unfair labor prac- tices within the meaning of Section 8 (3) of the Act, be dismissed The. I.'A: `M. and the respondent filed exceptions to the Intermediate Report. The Board has considered the exceptions and, in so far as they are inconsistent with the findings; conclusions, and order set forth below, finds no merit in them. On July 13, 1940, the Board issued an Order reopening the record in the case and ordering that a further hearing be held for the purpose of adducing further testimony relative to the respondent's reasons for closing its body and fender shop and for such other purposes as the- parties. desired: The Order referred the proceeding to the Re- gional Director and authorized him to issue notice of such further hearing. - Pursuant to notice, a further hearing was held at Sioux City, Iowa, on October 7, 1940, before Horace A. Rtickel, the Trial Examiner duly designated by the Board. The Board and the respondent were represented by counsel and participated in the hearing. Full oppor- tunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues was afforded all parties. 718 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 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 December 4, 1940, the Board, acting pursuant to Article II, Section 36, of the National Labor Relations Board Rules and Regu- lations-Series 2, as amended, transferred the proceeding to and con- tinued. it before the Board for action pursuant to Article II, Section 37, of said Rules and Regulations. Its order directed that no further intermediate Report be issued, that Proposed Findings of Fact, Pro- posed Conclusions of Law, and Proposed Order be issued, that the parties should have the right within 20 days from the date of said Proposed Findings of Fact, Proposed Conclusions of Law, and Pro- posed Order, to file exceptions thereto and'to request "oral` arb ment before the Board, and, within 30 days from the Proposed Findings of Fact, Proposed Conclusions of Law, and Proposed Order, the right to file a brief with the Board. On February 18, 1941, the Board issued Proposed Findings of Fact, Proposed Conclusions of Law, and Proposed Order, copies of which were duly served upon all parties. Exceptions to the Proposed Findings of Fact, Proposed Conclu- sions of Law, and Proposed Order were filed -by the respondent on March 10, 1941. The Board has considered the exceptions to, the Proposed Findings of Fact, Proposed Conclusions of Law, and Pro- posed Order and in so far as they are inconsistent with the findings, conclusions and order set forth below, finds no merit in them. . Upon the entire record in the case, the Board makes the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Williams Motor Company, an Iowa corporation, is engaged at Sioux City, Iowa, in the business of buying, selling,, and distributing automobiles, trucks, parts, and supplies; and servicing and repairing automobiles and trucks. The respondent operates under a. sales agree- ment with Chrysler Corporation, Dodge Division, for the purchase, sale, and distribution of Dodge and Plymouth automobiles and trucks, auto parts and accessories as a "direct dealer." The respondent is re- quired, to appoint and maintain within the area allotted to it, which includes designated portions of Iowa, South Dakota, and Nebraska, "dealers" who are acceptable to Dodge Division and who are. governed by the terms of the sales agreement between the Chrysler Corporation' and the respondent. Under the agreement the respondent agrees to WILLIAMS MOTOR COMPANY 719 provide and maintain adequate facilities for servicing automobiles sold within its allotted area. The dealer purchases automobiles, trucks and parts from the direct dealer who in turn obtains these items from the Chrysler Corporation. The respondent has supervision over the sales activities of the dealers and receives reports from them. The respondent makes reports to the Chrysler Corporation. The respondent places directly with the Chrysler Corporation all orders for automobiles, trucks, parts, and accessories which are shipped to the respondent by truck from Detroit, Michigan.' The dealers in South Dakota and Nebraska come to the respondent's place of business in Sioux City and there obtain the automobiles which the respondent has ordered for them. In addition to the sales of new and used automobiles, automobile parts, and accessories, the respondent is also engaged ,in the business of operating an automobile service department which is composed of a lubrication department, a paint department, a body and fender shop, a used car reconditioning department, and a department in which mechanical repair work is done on customer's cars, used cars, and new cars both'before they ale sold and during the guarantee period. During the period from November 1, 1938, to October 31, 1939, the respondent purchased new automobiles valued at $346,435.52. It also made other purchases totaling $63,405.47, of which the sum of $19,664.12 represented purchases from sellers outside the State of Iowa. Of its total purchases, 89 per cent were shipped to it from outside the State of Iowa. During the same period the respondent sold parts and ac- cessories valued at $39,467.18, of which 5.20 per cent were shipped out- side Iowa. It sold at wholesale to its dealers new cars valued at $225,067.03, of which 31.04 per cent were sold to buyers from outside Iowa. Its sales of new cars delivered at Sioux City to retail customers who live outside the State of Iowa totaled $21,222.85, which amount was 13.78 per cent of, its total retail sales of new cars. Of the used cars sold at retail, 23.79 per cent of the total value of $120,350.44 were sold to, persons who live outside Iowa. II. TIE ORGANIZATIONS INVOLVED Lodge 1426, International Association of Machinists, is a labor or- ganization , affiliated with the American Federation of Labor. It The respondent contends that it makes its purchases of new cars from the Securities Acceptance Corporation in Sioux City , Iowa, and that it makes no purchases from outside Iowa. It is clear, hos ever, that the arrangement is one of financing and that the Securi- ties Acceptance Corporation merely retains title under a conditional sales contract until payment is made to it by the respondent. See N. L R. B. v. Henry Levaur, Inc., at at., decided Octobei 25, 1940 (C. C. A. 1), enf'g Matter of Henry Levaur, Inc and International Association of Machinists, Local Dealers Association, a corporation, et at, and.- Capital Automotive Lodge`N6..606, International Association of Machinists, 10 N. L. R. B. 1173. 720 DECISIONS OF NATIONAL LABOR' RELATIONS BOARD admits to membership machinists, mechanics, helpers, and apprentices in the machine and,metal industry in the vicinity of Sioux City, Iowa: Williams Motor Company Employees' Union is an unaffiliated labor organization admitting to membership employees of the respondent. III. THE UNFAIR LABOR PRACTICES A. Williams Motor Company Employees' Union The I. A. M. began its organizational activities among the em- ployees of the respondent about February 1, 1939, and a•riumber,of employees became members in the following months. During the early part of these activities, in the spring of 1939, Wilbur S. Wil- liams, the vice president, treasurer, and general manager of the re- spondent, told James T. Connor, an employee in the service depart-, ment, that outside unions would not do the employees any good. Williams added that he would not let organized labor come into his shop, that he would close the body shop rather than let organized labor come in, and that a company union would be a good thing., About the same time Max Radcliffe, then an employee engaged in electrical work but a few days later made foreman of the used car reconditioning department, told employees that outside labor organi- zations were coming into town and causing trouble. Radcliffe did not deny that he made this statement. Williams denied having made the statements attributed to him by Connor, but, in view of the whole record and the finding of the Trial Examiner who had an opportunity to observe the witness, we filid that Williams made the above statements. Early in March James H. Fuller, office and credit manager of the respondent, obtained a copy of the constitution and bylaws of an outside union existing at the Auto Hospital in Sioux City. Fuller employed an attorney to whom he gave these copies with instruc- tions to use them to form an inside union. Fuller arranged a meet- ing to be held on March 8 at the West Hotel in Sioux City and he and other supervisory employees of the respondent, including Daniel Engebret'son;.service manager and shop foreman, invited+temployees to-attend. Fuller asked Clifford Fallon, foreman of the body and fender shop, to attend this meeting but Fallon stated that he saw nothing to be gained by membership in a company union and ex- pressed a preference for the American Federation of Labor. He refused to attend the meeting. Fuller, presided at the beginning of the meeting but shortly thereafter the attorney he employed dis- cussed the formation of the Employees' Union, and presented a mem- bership agreement which was signed by several of those present. WILLIAMS MOTOR COMPANY 721 Engebretson and Neil Thacker, parts department manager, were among those who attended the meeting and Engebretson and Fuller signed the membership agreement. An election was held in- which James T. Connor was chosen president, Neil Thacker, secretary- treasurer, and Harvey Berry, a painter, vice president. Fuller paid for the use of the room and for refreshments which were served and was reimbursed for these expenses by the respondent. Following this meeting a campaign 'to secure members for the Employees' Union was launched and actively participated in by Fuller and other supervisory employees. Engebretson admitted ask- ing employees Cornish, Herbst, and Carlson to join. Engebretson urged'Carlson for 2 or 3 days to sign the membership agreement and the -last time Engebretson spoke to him about it Carlson was told that he had "better sign it." When Engebretson asked Cornish why he did not join Engebretson stated, "It might mean you a better job if you did." He added that Fallon was "slipping," and that Fallon had refused to sign up in the Employees' Union. Fuller asked Corn- ish to join, saying that Cornish was the only one in the body shop who was holding back and that if he joined the Employees' Union the rest of the men would join. The, membership cards for the Em- -ployees' Union were multigraphed on the respondent's machine which was supplied for that purpose,by Fuller. Subsequent meetings of the Employees' Union were held in the plant, the first on March 15, and another about a week later. At the meeting of March 15 a grievance committee was appointed but it appears, that the committee never functioned in any way. At the second meeting, and the last so far as the evidence discloses, moving, pictures were shown by W. S. Williams, Jr., assistant manager and son of Wilbur S. Williams. About this time Fuller informed Wilbur S. Williams of the formation of the Employees' Union and, accord- ing to Fuller's testimony, Williams "didn't seem to be against it in any way." On April 1, 1939, the respondent entered into a contract with the Employees' Union. The contract was to run for 2 years and pro- vided for recognition of the Employees' Union as exclusive bar-' gaining agent for the employees of the respondent in regard to wages, hours, and working conditions; that new employees should, as a condition of employment, first apply for membership in the Employees' Union and tender to it dues and assessments; that the Employees' Union should 'remain a local and unaffiliated organiza- tion; and that either the respondent or the Employees' Union might pursue such legal action as was necessary to prevent outside parties from interfering with the performance of the contract. The con- tract contained no other provisions. It was - signed upon the state- 722 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ment of the committee presenting it that the Employees' Union represented a majority,of the employees and Williams made no during the course of its brief dealings with the I. A. M. No dues were collected by the Employees' Union after April 29, 1939, and it engaged in no-activity after that date. The record does not disclose how many members the Employees' Union had at any time during its existence. Some time after its activity ceased Wil- liams asked Connor if it was still functioning and when told that it was not Williams informed Connor that it should be kept going. The foregoing recital of the circumstances surrounding the forma- tion of the Employees' Union and its short life thereafter make it clear that it was brought into existence by supervisory employees of the respondent for the purpose of defeating the organizational attempts of the I. A. M. Although Fuller stated that the original suggestions as to formation of the organization came from Harvey T3erry, a painter, who became vice president of the Employees' Union, and from an employee of the Auto Hospital who was secre- tary of the union formed there, he admitted that it was his desire that the Union remain independent, that he took the steps necessary to bring the Union into being, and that the purpose of the Em- ployees' Union was to keep any other union from getting into the shop. Thereafter, whatever activity was engaged in by the Em- ployees' Union was, directed and participated in by foremen and other supervisory employees of the respondent with the approval of its -vice president, Williams: The contract was signed by the re- spondent without proof that the Employees' Union represented a majority of the employees and, in itself, discloses the -purpose of the organization. There is no showing that action was ever taken pursuant to the contract with regard to any of its provisions. We' find that the respondent dominated and interfered with the formation and administration of, and contributed support to - the; Employees' Union, and that it thereby, and by the statements and acts of its officials and supervisory employees, hereinabove set forth, interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed by Section 7 of the Act. - ' B. The refusal to bargain 1. The appropriate unit The complaint alleged, and the I. A. M._contended, that an ap- propriate unit consists of all -mechanical employees who work on automobiles, including the auto mechanics, auto body and fender men, trimmers, auto painters' and greasers, radiator repairmen, ignition men, electricians, helpers and apprentices, excluding office WILLIAMS MOTOR COMPANY 723 and clerical workers, salesmen, janitors , porters and delivery boys, and supervisors with power to hire and discharge. The, respondent made no contention witli respect to the unit either at the hearing or during the course of its brief dealings with the, I. A. M. We find that the mechanical employees of the respondent, including the auto mechanics , auto body and fender men, trimmers, auto painters and greasers , radiator repairmen , ignition men, electricians, helpers; and apprentices , but excluding office and clerical workers, salesmen, janitors, porters and delivery boys, and supervisors with power to hire and discharge, 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 effectuates the policies of the Act. 2. Representation by the I. A. M. of the majority in the appropriate unit The respondent's pay roll for the period from July 20 to October 21, 1939, discloses that there were 18 persons within the appropriate, unit on July 26, when the I. A. M. made its first request of the re- spondent to bargain, and that one additional employee was hired prior to August 5, 1939, when the I. A. M. made its second request to bargain collectively. The number of employees in the appropriate unit never exceeded 19 during the period under consideration. Membership and authorization cards submitted in evidence by the I. A. M. show that 14 of these employees had designated the I. A. M. as their bargaining representative prior to its first request to bargain , and that it continued to represent them at all times material herein. We find that on July 26, 1939, the I. A. M. was, and at all times thereafter has been, the duly designated representative of a majority _ of the employees of the respondent in the appropriate unit, and that by virtue of Section 9 (a) of the Act it was the exclusive representative of all the employees in said unit for the purpose of collective bargain- ing with the respondent in respect to rates of pay, wages, hours of employment , and other conditions of employment. 3. The refusal to bargain On July 26, 1939, the I. A. M. addressed a letter to the respondent requesting a conference for the purpose of collective bargaining. The letter stated that the I . A. M. represented a majority of the respondent 's employees within an appropriate unit and requested 441843-42-vol. 31-4 7 724 DECISIONS OF NATIONAL LABOR RELATIONS BOARD recognition as representative of these employees. Enclosed with the letter was a copy of a proposed contract. The respondent made no reply to this letter. On about August 5, P. L. Siemiller, Grand Lodge Representative of the I. A. M., and Robert F. Kydney, one of its international rep- resentatives, called upon Williams at his office and requested that the respondent enter into a contract with the I. A. M. Williams replied that the respondent, already had a contract with the Employees' Union, that it would be illegal for it to negotiate with another union, and that he was not interested in carrying on negotiations with the I. A. M. When Siemiller stated that Williams' refusal to negotiate would make it necessary to file a charge with the Board, Williams told him that he did not think the Board had jurisdiction over his type of business. Williams also stated that his son had just finished law school and, according to Kydney's testimony, which was not denied, Williams "was going to find out how good an attorney this lad, was, and that he was willing to spend another $5,000 on this case to find out the lad's ability, ... that he wanted to give that son of his the opportunity of having a case before the National Labor Relations Board." The respondent has a duty, under the Act, to recognize and bargain with the labor organization which represents a majority of its em ployees within an appropriate unit. In view of our finding above that the Employees' Union is a dominated labor, organization, the respondent's contract with that union cannot serve as a valid reason, for refusing to recognize the I. A. M. In fact, as we have found above, the contract was entered into without proof of majority and for the sole purpose of foreclosing any attempt to bargain which should be made by the I. A. M. The respondent's failure to reply to the letter of July 26, 1939, from the I. A. M., and its subsequent refusal to consider negotiations with representatives of the I. A. M. constituted a refusal to bargain. We find that on July 26, 1939, and at all times thereafter, the respondent refused to bargain collectively with the I. A. M. as the exclusive representative of the employees within an appropriate unit, and that the respondent has thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed by Section 7 of the Act. C. Discrimination 1. The alleged discriminatory demotion of Clifford Fallon Clifford Fallon ,was employed by the respondent in -September 1935 as a body and fender mechanic. In March 1938 he was made foreman of the body and fender shop and on January 1, 1939, he was WILLIAMS MOTOR COMPANY 725 also made foreman of the used-car reconditioning department. The complaint alleged that on or about March 8, 1939, Fallon was demoted from a supervisory position because of his refusal to aid in the forma- tion of the Employees' Union. The evidence discloses that on about March 20, 1939, Fallon was removed from his position as foreman of the used car reconditioning department and replaced by Max Radcliffe. It appears that Fallon was inefficient in the performance of his duties in connection with the used car reconditioning department, that he was incapable of handling the work, that he drank while on duty and that jobs were delayed because of his neglect. On one occasion in February 1939 he and another employee took a used car out of the shop, for several hours during which time they were both drinking. W. S. Williams, Jr., had to go out and find them and drive them back. The evi- dence shows also that just prior to March 20 Williams called Fallon in and told him he was to be replaced by Radcliffe and that shortly thereafter the employees of the service department were called to- gether by Williams and informed of the contemplated change. Although Fallon contended that, at .the time he was demoted from the position of used car reconditioning foreman, he was also demoted from the position of foreman of the ' body and fender shop, the evi- dence does not sustain this contention. Prior to March 20 the em- ployees of the body shop had been paid on a weekly salary. There- after the respondent inaugurated a new system whereby all the mechanics worked on a percentage basis and each bid against the other to secure jobs brought into the body shop. Fallon, as foreman, had estimated the cost of jobs for that department prior to March 20, 1939, but thereafter he was in the same position as other employees in this regard. However, there is no showing that Fallon was ever told that he was no longer foreman of the body shop or that any action was taken by the respondent which would'be inconsistent with its position that he retained that status. Fallon had no occasion to hire or discharge employees after March 20 and, although he testi- fied that he no longer purchased materials for the body shop, there is evidence that he did do some purchasing thereafter. It is admitted that Fallon refused to attend the first meeting of the Employees' Union when requested to do so by Fuller. How- ever, Fallon was not then a member of the I. A.- M. and, in fact, joined the Employees' Union before he joined the I. A. M. We find, as did the Trial Examiner, that Fallon was removed from his posi-_ tion as foreman of the used-car reconditioning department because of his inefficiency in that position and that he remained foreman of the body and fender shop until the date of hiss discharge, which we shall discuss hereinafter. 726 DECISIONS OF -NATIONAL LABOR RELATIONS BOARD We find that the respondent did not discriminatorily-demote Fal- lon as alleged in the complaint. We shall dismiss the complaint in this respect. 2. The alleged discriminatory discharge of Edwin C. Hanson Edwin C. Hanson was employed by the respondent on November 27, 1937, as a body and fender mechanic assigned to work on used cars. He joined the Employees' Union early in March 1939, and became a member of the I. A. Al. on, April 27, 1939. He attended most of the I. A. M. meetings and solicited members among the respondent's employees. - On or about July 11, 1939, Hanson became ill while at work and went home at noon. He testified that he attempted to find Radcliffe, his foreman, but was unable to locate him and that he asked another employee to tell Radcliffe why he had left the premises. He admitted that he made no effort thereafter to inform the respondent of the reason for his absence. Hanson remained at home for several days and when he returned to work was informed that Robert Miller, who was also a member of the I. A. M., had been employed in his stead. Radcliffe testified that Hanson was working' on a rush job, that he did not know where Hansonshad gone, and that Miller was there- fore employed to replace Hanson. The respondent also presented evidence that Hanson was often absent from work without permis- sion, that he drank during working hours, and that he had twice been discharged for being drunk on the job. Hanson admitted that he was absent from work on several Mondays but denied that his absence was due to drinking. He denied that he drank excessively while on the job. He also denied that during the period following July 11, when he was supposed" to be.home, he was seen in a beer parlor near the respondent's premises by W. S. Williams, Jr., and that he asked Williams not to'report seeing him. We do not credit Hanson's denials in this respect. On one occasion W.° S. Williams, Jr., secured the release of Hanson from jail where he had been placed following a charge of disorderly conduct. In view of all the evidence, we. find, as did the Trial Examiner, that Hanson was discharged because of his continued absence from work and because of his drinking, and that he was not discharged because of his union membership and activity. We shall dismiss the allegations of the complaint with respect to Hanson. 3. The discriminatory discharge of Fallon, Carlson, and Herbst On July 29, 1939, the respondent discontinued the operation of its body and fender shop and discharged Clifford Fallon, William R. Carlson, and John Herbst, the only employees of that subdepart- WILLIAMS MOTOR COMPANY 727 went., Work on customers' cars, formerly done by the body shop, was thereafter performed in part by the Auto Hospital and in part by other body and fender shops in Sioux City. The complaint al- leged, and the respondent's answer denied, that these employees were dismissed because of their membership and activity in the I. A. M. It appears from the record that more activity in behalf of the I. A. M. was conducted by the employees of the body and fender shop than by-those of any other department.- Fallon and Herbst, especially, frequently discussed the I. A. M. with other employees and solicited members among them, and Fallon was elected a delegate to the Trades and Labor Assembly. On July 27, 1939, 2 days before the closing of the body and fender shop, the respondent received from the I. A. M., a letter requesting a conference for the purpose of col- lective bargaining. The respondent contended that the abolition of the body and fender shop was made necessary by economic conditions. At the first hear-, ing it introduced much testimony to show that poor business condi- tions made its operations unprofitable, and that Fallon, as foreman of the body and fender shop, had been notified that unless conditions improved and the body and fender shop was able to show a profit as it had in the past, the respondent would be forced to close it. Engebretson testified that he suggested advertising in order to secure more business, and that an advertisement of the body and fender shop was run shortly thereafter. It was the respondent's contention that business continued to decline and that on about July 15, prior to leaving on a vacation, Williams instructed Engebretson to have all jobs in the body and fender shop completed and to close it there- after. To illustrate the precipitous drop in the business of the body ,and fender shop, the respondent introduced in evidence the following table showing the operating statement of the body shop. JANUARY 1, 1939, TO JULY 31, 1939 Sales Cost of sales Gross protxt Expenses Net profit Percent sales January__ _ _________'_ $1,488 16 $552 08 $936 08 $435 56 $497 52 33 43 February____________________ 1,248 64 567 46 681 18 387 45 293 73 23 52 March______________________ _ 1,123 31 444 27 679 04 344 07 334 97 29 82 April ________________________ 1,160 13 726 03 434 10 277 04 157 06 13 54 May-------------------------- 500 14 258 06 242 08 238 62 3 46 68 June _________________ ______ 486 14 216 04 270 10 247 15 22 95 4 72 July____________ -------------------------- 421 99 294 88 127 11 203 d4 - 76 03 -18 02 The respondent's witness explained that the principal reason for the decline of business was the loss of contracts usually obtained from insurance adjusters, and Williams testified that several of them had told him that the bids of his employees in the body shop were too high. The increase in the prices bid, it ii-as testified, was due to the 728 DECISIONS OF NATIONAL LABOR RELATIONS BOARD- I fact that on about March 20, 1939, all the body and fender mechanics were put on a percentage basis instead of a weekly salary and that, in attempting to make more money, the mechanics set their -rates at exorbitant figures. Fuller admitted that, although he and Williams had discussed the fact that the changed method of paying the men resulted in prices being too high, it did not occur to either of them to return to the previous practice. ' ' Fallon denied that he had been called into conferences with Williams and other supervisory employees in, March, April, and May and denied that he had been informed that the body and fender shop would be discontinued if business did not improve. Carlson denied the testimony of Engebretson that on or about July 20 or 22 he told Carlson that the body, and fender 'shop was going to be closed. Fallon and Herbst denied that work in the body and fender shop had decreased during the period from January to July 1939. A record of the earnings of Fallon, Carlson, and Herbst introduced by the respondent discloses- that Herbst earned more money in May and July than in any previous month of 1939; that although Fallon's earnings dropped somewhat there was no radical decrease until July; and that Carlson's wages did not vary greatly until June. On cross-examina- tion of Fuller it was brought out that the operating statement intro- duced by the respondent contained at least one inaccuracy in that the "cost of sales" figure shown for April, which was almost $300 greater than that for March, was computed by including the cost of materials used in prior months. He explained that this was due to the dis- covery that the respondent had not been charging the body and fender shop a sufficient amount for materials used by it. , , The evidence also disclosed that other subdepartments of the service department, as well as the service department itself, were showing a drop in profits, especially the paint department which sustained a drop of approximately 75 per cent of its gross profits. The respondent contended, and the Trial Examiner found in his Intermediate Report, that although it was necessary for the respondent to operate the paint shop and other subdivisions of the service depart- ment, it was not essential to the respondent's business that it operate a customer body and fender shop.2 The Trial Examiner found further that Williams knew of the I. A. M. membership of Fallon, Carlson, and Herbst. He stated that, in view of the respondent's previous ac- tivity in sponsoring and dominating a company union, it was difficult to believe that the respondent overlooked entirely the effect on union ' The I A. M. excepted to this finding. It contended that the continuance of the paint shop was no more essential to the respondent 's business than the body and fender shop, that the respondent retained the former because the only man employed in it was a leader in the formation of the Employees' Union , and that it eliminated the latter because it was a center of activity on behalf of the I. A. M. WILLIAMS MOTOR COMPANY 729 activities of the discharge of the three employees of the body and fender shop; but that the evidence was not sufficient to disprove the respondent's position that the discontinuance of the body and fender shop was prompted by economic conditions. The second hearing in this case, held on October 7, 1940, supplies the deficiency in proof noted by the Trial Examiner and casts an, en- tirely new and different light on the case. - From the testimony of James H. Fuller, who was the sole witness at the reopened hearing, the following pertinent facts appear. The sales figures shown on the operating statement for the,body and fender shop, which were introduced at the first hearing, do not include any used-car work after May 1, 1939, as they previously did. In fact, from that date until November 1, 1939, work done by any subdivision of the service department upon used cars was no longer carried in a sales account but was charged directly to the used car upon which the work was performed. The effect of this changed method is illus- trated by the following table which shows sales for the service-depart- ment and for each of its subdivisions : Service Customers' Body and Paint Interde- depart- repair fender de- Outside depart- Storage partmental merit total , labor partment nt work merit repairs, sales went labor 1989 1 January- --------------- $3,874 22 $1,043 83 $1,488 16 $178 38 $653 45 $9 25 $501.15 February ______________ 3,611.65 745 30 1,248 64 281 .1 7 638 66 5 50 692 38 March_________________ 3,581 05 837 95 1,123 31 216 45 530 51 3 00 869 83 April__________________ 3,499 45 804 25 1,160 13 152 22 614 98 .50 767 37 May------------------- 1 , 806 91 929 87 500 14 163 38 213 52 __________ ____________ 1,732 08 838 25 486 14 247 49 160 20 :_________ ------------ July -------------------- - 1,785 25 895 99 - 421 99 236 87 _ 224. 40 _ 6.00 --- --------- Fuller admitted, and it is obvious that this change in the respond- ent's method of bookkeeping which had not been used before and has not been used since November 1, 1939, accounted for the startling drop in sales shown on the operating statement. The record does not show the profits made by the -used-car department, but- is is clear that after May 1, 1939, earnings previously credited to the body and- fender shop must have been accounted for in the increased profits made when used cars were sold. Fuller explained that expenses of the body and fender shop were arrived at by computing the percentage of expenses to sales in the entire service department and applying that percentage figure to the sales of the body and fender shop. Since the new accounting method was applied to all subdivisions of the service department and all of the sales dropped drastically, and since many expenses, such as taxes, heat, insurance, etc., remained fixed, the ratio of expenses to sales naturally increased and the profits dropped accordingly. In addi- 730 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tion, one subdivision, of the service department, called interdepart- mental repairs labor, was entirely removed from the service depart- ment account and caused a further substantial decrease in the service department's total sales and therefore an increase in the expenses of the subdepartments of the service department. The change in bookkeeping alluded to above resulted' not only in a decrease in sales for the • body and fender shop and a relative increase in expenses, but also in a relative increase in cost of sales for that subdepartment. That was so because the used-car body and fender work was done at a lower cost than the customer work,' and the elimination of the former type of work from the accounts of the body and fender shop resulted in the cost of sales figures for the months after the change reflecting only work performed at a higher cost. The relative increase in the cost *of sales figures after May 1, 1939, necessarily resulted in a corresponding decrease in gross and net profits. Another interesting fact was brought to light by, a comparison of the following operating statements of the body and fender depart- ment for 1938 and 1939: JANUARY 1, 1938 TO JULY 31, 1938 Month Sales Cost of sales Gross profit Expenses Net profit Percent to sales January_____ _________________ $772 53 $290 44 $482 09 $356 14 $125 95 16.3 February_____________________ 485 04 247 18 237 86 212 45 25 41 5 2 March_______________________ 627 53 . 293 70 333 83 251 01 82 82 13 2 April _________________________ 494 54 327 54 167 00 176 06 - 9 06 -1 8 May__________________ 569 18 280 99 288 19 194 66 93 53 16 4 June -- --------------- ---------- 440 70 339 31 101 39 161 74 -60 35 -13 7 July__________________________ 661 92 304 50 357 42 249 54 107 88 16 3 JANUARY 1, 1939 TO JULY 31, 1939 January______________________ $1,488 16 $552 08 $936 08 $438 56 $497 52 33 43 February _____________________ 1,248.64 567 46 681 18 387 45 293 73 23.52 March_ ______________________ 1,123.31 444 27 679 04 344 07 334 97 29.82 April__ ______________________ 1,160 13 726 03 434 10 277 04 157 06 13.54 May_______________ 500 14 258 06 242 08 238 62 3 46 .68 June______________ 486.14 216 04 . 270 10 247 15 22 95 4 72 July__________________________ 421 99 294 88 127 11 203 14 -76 03 -18 02 It will be noted that in every month of 1939, except May and July, the body and fender shop showed a larger net profit than for the corresponding month in 1938. The` figures for July 1939 were not available at the time the decision 'was made to close the body shop, and could not have been considered. The above figures are particularly enlightening in view of Fuller's testimony that he started keeping a separate operating statement for the body and ' The precise differential between the cost of sales for used-car work and customer work is*not , apparent from the record. WILLIAMS MOTOR COMPANY 731- fender shop in February 1939; since obviously there was no occasion a that time for a check of the body shop, and in view of the testi- t mony that Williams constantly. urged that the body and fend'er' shop must make the showing it had the previous year. Fuller admitted, however, that Williams had no figures for 1938 before him, at the time and that, in fact, it was not known what net profit the body shop made in 1938 because the respondent's books showed only a computation of sales, cost of sales, and gross profit. The figures for expenses and net profit were calculated for the purposes of these proceedings. Furthermore, since Williams was aware of the changed accounting method inaugurated on May 1, 1939, we may well question his asserted ignorance as to the reason for the sudden drop in sales volume and'his good faith in calling for suggestions as to methods, for improving business conditions. This is especially true because, in spite of his claim- that the newly adopted system of pay- ing his employees was causing an increase in prices and a conse- quent loss of business, he refused to revert to the original method of payment,for services, a method which had resulted in substantial profits being earned by the body and fender shop. Fuller testified that the first "danger sign" appeared in the operat- ing statement for April 1939 which was compiled about the first week in May, although Williams stated at the first hearing that he had called Fallon in for a conference after the March statement was compiled. Reference to the exhibit discloses that sales in March were only slightly below those for February and that those for April were larger than in March. Only because of the inclusion in the `.'cost of sales" figure for April of materials used in previous months was the gross profit reduced in April. Since Fuller was well aware of the reason for the increased cost of sales, it is incredible that he or Williams was actually alarmed by the April figures: Fuller also stated that when the decision to close the body shop was finally made Williams had before him the figures from January through June.1939 but not for July.- The body and fender shop' showed a net profit for every month in 1939 until July, while the 1938 operat-, ing statement shows losses for April and June of that year. From the evidence before us, we find 'that the following events occurred in connection with the closing of the body and fender shop and the discharge of Fallon, Carlson, and Herbst. As heretofore rioted, the I. A. M. began to organize the respondent's employees in February 1939 and almost immediately thereafter the respondent brought into existence the Employees' Union to counteract such organ- ization. In the same month the respondent commenced to keep an operating statement for the body and-fender shop, where the most active proponents of the I. A. M. were employed, and in doing so 732 DECISIONS OF NATIONAL LABOR RELATIONS BOARD followed a method never before used in checking one of its depart- ments. In the early spring Williams informed Connor of his inten- tion to close the body shop rather than let organized labor come into his plant. About March 20, 1939, the respondent began paying the employees of the body and fender shop on a percentage basis rather than a• salary. The respondent contended that this change resulted in higher bids and a loss of business. However, Fuller admitted without con- tradiction that the customer' work in the body and fender shop normally averaged about $400 or $500 a month. The operating statement for 1939 shows that the body shop continued to average that much after May 1, 1939, in spite of the removal of all used-car sales from its totals, and it is apparent that there was no actual drop in business during this period. Moreover, even if we were to credit the testimony that sales dropped after May 1, there is no attempt by the respondent to explain its failure to return to the original system when the result of the new method was discovered. We do not believe that the respondent would have given up a profitable portion of its business merely because of a desire to adhere to a new method of paying its employees. In May the respondent, at Fuller's suggestion, changed its bookkeep- ing system, assertedly because the existing method operated to show a fictitious profit in the service department. While the respondent may, of course, use any accounting procedure it desires, we think that the asserted reason for the adoption of the practice under consideration is without merit.4 Moreover we cannot give credence to the respondent's claimed innocence of the reasons for the radical drop in sales, for the increase in cost of sales and expenses, and for the decrease in profits, which apparently resulted thereafter. Nor are we impressed It with its testimony at the first hearing that sales in the body and fender shop dropped so drastically that it was no longer profitable to operate, a department which it had apparently operated since the business began. As noted above, the change in the accounting procedure merely caused a transfer of profits from the body and fender shop to the used-car de- partment. The respondent did not offer evidence as to the profits of the used-car department. Further doubt is cast upon the respondent's actions by its failure to assign to one of the men who were slated for discharge the position 4 It is true that the profit of the body and fender shop, resulting from work on used cars, as reflected in the books , was "fictitious" in the sense that It was created by book entries and without the immediate receipt of cash or accounts receivable by the respondent. How- ever, the work performed in the body and fender shop enhanced the value of the used cars and created an opportunity for profit which was subsequently realized with the sale of the used car. Under the new system of accounting that profit now accrues to the used-car department. WILLIAMS MOTOR' COMPANY 733 left open by the dismissal of Hanson. The respondent contended that Williams issued orders on July 15, 1939, to discontinue the body shop. Robert Miller was employed to replace Hanson within a few days of that time, and Williams admitted that he never considered keeping any of the complainants when he decided to close the shop. The evidence indicates that about half of the body and fender work on customers' cars, which the respondent still accepts, is done by the Auto Hospital. in Sioux City. This circumstance furnishes an addi- tional basis for our findings as to the respondent's attitude toward outside labor organizations,-since it was from the Auto Hospital that Fuller obtained the constitution and bylaws for the Employees' Union, and since its owner, Guy Ramesbotham, admitted that he had had trouble with the I. A. M. and that his shop had been picketed. Our findings as to the respondent's motives are further fortified by the fact that it adopted inconsistent positions at the two hearings in this case, a fact which convinces us that little credit can be given its testimony as to its reasons for closing the body and fender shop. It is our conclusion, and we find, that the respondent followed a pre- conceived plan to stamp out unionization of its employees and that the steps taken by it, beginning in February 1939, were in furtherance of such plan. We find that the respondent discontinued the operation of its body and fender shop on July 29, 1939, and discharged Fallon, Carlson, and Herbst pursuant to its determination, made in February 1939, to eliminate unionism from its plant. We find that the respondent has discriminated in regard to the hire and tenure of employment of Fallon, Carlson, and Herbst, thereby discouraging membership in a labor organization, and by such action has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondent set forth in Section III above, oc- curring in connection with the operations of the respondent described in Section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having 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 which we find necessary to effectuate the policies of the Act. 734 DECISIONS OF NATIONAL LABOR RELATIONS BOARD We have found that the respondent has dominated and interfered with the formation and administration of the Employees' Union. In order to effectuate the policies of the Act we will order the re- spondent to withdraw all recognition from the, Employees' Union as the representative of any of the respondent's employees for the' purpose of dealing with the respondent concerning grievances, labor disputes, wages, rates of pay; hours of employment, and conditions of work, and disestablish it as such representative. Since the agree- - lnent of April 1, 1939, between the respondent and the Employees' Union embodies recognition of the Employees' Union as such repre= tentative, we will order the respondent to cease and desist from giving effect to it or any other agreement it may have entered into With the Employees' Union in respect to rates of pay, wages, hours of employ- l,ient, or other conditions of employment. 'We have further found that on July 26, 1939, and at all times there- .after, the respondent refused to bargain collectively with the I. A. M. as the exclusive representative of its employees in an appropriate ulnit. Accordingly, in order to effectuate the purposes of the Act, we shall order the respondent, upon request, to bargain collectively with i he I. A. M. We have found that the respondent discontinued the operation of its body and fender shop and discharged Fallon, Carlson, and Herbst in order to discourage membership in the I. A. M., thereby discrimi- nating in regard to their hire and tenure of employment. We shall, therefore, in accordance with our usual practice, order the respondent to offer' them immediate reinstatement to their former or substantially equivalent positions, or to any other available positions for which they are qualified, without prejudice to their seniority and other rights and privileges. We shall further order that, in the event there sre no positions available for which they are qualified, their names be placed on a preferential list and that they shall thereafter be of- fered employment in any positions for which they are qualified as such employment becomes available and before other persons are hired for such work ; and that if the body and fender shop is! reopened, Fal- lon, Carlson, and Herbst shall be offered immediate employment therein. We shall also order the respondent to make whole Fallon, Carlson, and Herbst for any loss of pay they have suffered by reason of their discharge by payment to each of them of a sum of mondy equal to the amount which he would normally have earned as wages from July 29, 1939, to the date of the offer of reinstatement,5^ or placement c The amount of compensation to be paid these employees shall not be diminished on account of the closing of the body and fender shop since that action itself constituted an unfair labor practice. WILLIAMS MOTOR COMPANY 735 ,upon the preferential list as above provided, less his net earnings during said period. Upon the foregoing findings of fact, and upon the entire record in the case, the Board makes the fdllowing : CONCLUSIONS OF LAW 1. Lbdge 1426, International Association of Machinists, and Wil- liams Motor Company Employees Union are' labor organizations within the meaning of Section 2 (5) of the Act. 2. The respondent's mechanical employees, including the auto mechanics, auto body and fender men, trimmers, auto painters, and, greasers, radiator repairmen, ignition men, electricians, helpers and apprentices, excluding. office and clerical workers, salesmen, janitors, porters, and delivery boys, and supervisors with power to hire and discharge, constitute, and at all times material herein constituted, a unit appropriate for the purposes of collective bargaining within the meaning of Section 9 (b) of the Act. 3. Lodge-1426, International Association of Machinists, was on July 26, 1939, and at all times thereafter, The exclusive representative of all ,the employees in such unit for the purposes of- collective bargaining within the meaning of Section 9 (a) of the Act. 4. By refusing on July 26, 1939, and at all times thereafter, to bar- gain collectively, with Lodge 1426, International Association of Machinists, as.the exclusive representative of its employees in such unit, the respondent has engaged in and is engaging in unfair labor practices within the.meaning of Section 8 (5) of the Act. 5. By dominating and interfering with the formation and adminis- tration of, and by contributing support to, the Williams Motor Com- pany Employees' Union, the respondent ,has engaged in and is engag- .ng in unfair labor practices within the meaning of Section 8 (2) of the Act. - 6. By discriminating in regard to the hire and tenure of employment of Clifford Fallon, William Carlson, and John Herbst, thereby dis- couraging membership in a labor organization, the respondent has engaged in and isiengaging in unfair labor practices within the mean- ing of Section 8 (3) of the Act. 6 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 his unlawful discharge and the consequent necessity of his seeking employment elseiihere See Matter of Crossett Lumber Company and United Brotherhood of Carpenters and Joiners of Amer- iua, Lumber and Sawmill Worl, ers Union, Local 2590, 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 'decided by- United States Supreme Court, November 12, 1940 736 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 7. 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 Tabor , practices within the meaning of Section 8 (1) of the Act. 8. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2 (6) and (7) of the Act. 9. The respondent, by discharging Edwin Hanson, and by demoting Clifford Fallon from a supervisory position, has not engaged in unfair labor practices within the meaning of Section 8 (3) of the Act. ORDER Upon the basis of the above findings of fact and conclusions of law, and pursuant to Section 10 (c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the respondent, Williams Motor Company, Sioux City, Iowa, its officers, agents, successors, and assigns, shall: 1. Cease and desist from : (a) Refusing to bargain collectively with Lodge 1426, Interna- tional Association of Machinists , as the exclusive representative of its 'mechanical employees , including auto mechanics, auto body and fender men, trimmers , auto painters and greasers , radiator repair- men, ignition men, electricians , helpers and apprentices , excluding office and clerical workers, salesmen , janitors, porters and delivery boys, and supervisors with power to hire and discharge, with respect to rates of pay, wages , hours of work, or other conditions of employment; (b) Dominating or interfering with the formation or administra- tion of, and contributing financial or other support to, Williams, Motor Company Employees' Union, or any other labor organization of its, employees; (c) Recognizing the Employees ' Union as the representative of any of its employees for the purpose of dealing with the respondent concerning grievances, labor disputes, wages, rates of pay, hours of employment , ,or conditions of work; (d) Giving effect to the contract of April 1, 1939, or any other agreement which it may have entered into with the Employees' Union in respect to rates of pay, wages , hours of work, or other conditions of employment ; (e) Discouraging membership in Lodge 1426, International As- sociation of Machinists or any other labor organization of its em- ployees, by discriminatorily discharging or refusing to reinstate any of its employees or in any other manner discriminating in regard to their hire or tenure or terms and conditions of employment; WILLIAMS MOTOR COMPANY 737 (f) In any other manner interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing,' and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, as guaranteed in Section 7 of the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act; (a) Upon request, bargain collectively with Lodge 1426, Inter- national Association of Machinists, as the exclusive representative of the respondent's mechanical employees, including auto mechanics, auto body and fender men, trimmers, auto painters and greasers, radiator repairmen, ignition men, electricians, helpers and appren- tices, excluding office and clerical workers, salesmen, janitors, porters and delivery boys, and supervisors with power to hire and discharge, with respect to rates of pay, wages, hours of work, and other conditions of employment; (b) Withdraw all recognition from, and completely disestablish, the Williams Motor Company Employees' Union as the representa- tive of any of its employees for the purpose of dealing with the respondent concerning grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of employment; (c) Offer to Clifford Fallon, William Carlson, and John Herbst immediate and full reinstatement to their former or substantially equivalent positions, or to any other available positions for which they are qualified, without prejudice to their seniority or other rights, and privileges previously enjoyed; and if no such positions are presently available, place them upon a preferential list and thereafter offer them employment as it becomes available, in the manner provided in the section entitled "The Remedy"; (d) Make whole Clifford Fallon, William Carlson, and John Herbst for any loss of pay they have suffered by reason of the respondent's discrimination against them, by payment to each of them of a sum equal to the amount which he normally would have earned as wages during the period from July 29, 1939, to the date of the offer of reinstatement, or placement upon the preferential list as provided in the section entitled "The Remedy," less his net earnings 7 during said period; but without diminution on account of the closing of the body and fender shop ; (e) Post immediately in conspicuous places in its premises and maintain for a period of at least sixty (60) consecutive days from 7 See footnote 6. 738 DECISIONS OF' NATIONAL LABOR RELATIONS BOARD the date of posting, notices to its employees stating (1) that the respondent will not engage in 'the conduct from Which it is ordered to cease and desist in` paragraphs 1 (a), (b), (c), (d), (e), and (f) of,this Order; and' (2) that the respondent will take the affirmative action set forth in `paragraphs 2 (a), (b), (c)', and (d) of this, Order; and that its employees are free to become or remain members of the International Association of Machinists and the respondent will not discriminate against any employee because of membershii or activity in that organization; . (f) Notify the Regional Director for the Eighteenth Region in writing within ten (10) days from the date of this Order what steps `it has taken to comply herewith. _ MR. EDWIN S. SMITH, dissenting in part: I agree with the finding of the majority that the respondent discon- tinued the operations of its body and fender shop and discharged Fallon, Carlson, and Herbst in order to discourage membership in the I. A. M. I do not think that the remedy provided by the majority will effectuate the purposes of the Act. Efectuation of the policies of the Act is achieved by restoration 'in so far as possible of the status quo existing before the commission of the unfair labor practices." The majority orders the respondent to reinstate Fallon, Carlson, and Herbst to their former or substantially equivalent employment, or to any other available positions for which they are qualified; but if no such posi- tions are available orders that they be placed upon a preferential list for future employment in positions for which they are qualified. Since the respondent no longer operates a body and fender shop, and since it appears from the evidence that it has no intention of reestab- lishing such a shop in its plant, the respondent may be permitted to, comply with the Board's order merely by placing on a preferential list the names of the employees against whom it has discriminated. As far as appears, they may remain in that status indefinitely. Clearly the-employees will not have been placed in status quo by such action. In order to remedy the situation as it exists and place the employees discriminated against in status quo, the respondent should be required to offer them immediate reinstatement to their former or substantially equivalent employment. The Board should also order that, if neces- sary, the respondent reopen the body and fender shop to provide such N L R. B v. Jones & Laughlin Steel Corp , 301 U. S . 1,, reversing 83 F. (2d) 998 (C. C. A. 5) and enf'g 1 N L. R. B. 503; N. L. R B v Black Diamond Steamship Corpora- tion, 94 F (2d) 875 (C. C. A. 2), enforcing 3 N. L R B 84, cert denied 304 U. S. 579 ; N L R B. v. Hamilton-Brown Shoe Co, 104 F (2d) 49 (C C. A 8), enforcing as mod. 9N.L R . B 1073. WILLIAMS MOTOR COMPANY 739 employment. The Board has frequently dealt with situations in which similar affirmative action has been ordered.9 The respondent, evidently anticipating that the Board might issue ,an order directing it- to reopen its body and fender' shop, presented evidence that physical -changes made in its service department left no space available for the body and fender shop. The respondent should not be permitted to evade its obligations under the Act by setting up the contention that it lacks space for a body and fender shop after it has eliminated that shop and discharged the employees thereof for the purpose of discouraging union membership. To require the respondent to reopen its body and fender shop would not necessitate drastic change since it has continued to operate .all of- its other departments without curtailment, since it already ,employs one person as a body and fender mechanic to. do work on its used cars, and since the respondent holds itself out to the public as accepting body and fender work.10 . I believe that under the circumstances the effectuation of the pol- icies of the Act requires, and I would order, that the respondent reopen its body and fender shop, if necessary, in order to provide employment for Fallon, Carlson, and Herbst. ' See Matter of Isaac Schieber, A. J. Rosenberg, and Ben L. Shifrin (the last office) s and directors of Schieber Millinery Co ) as trustees of Schicber Millinery Co and Isaac Schieber, individually, and Allen Hat Co. and United Hatters, Cap and Millinery Woe hers' Interna- tional Union, affiliated with the American Federation of Labor, 26 N L R B 937, in which the Board ordered the respondents either to move their plant back to its original location or to employ those discriminated against in the new location and compensate them for any necessary expense entailed in their transportation, the removal to a new location having been found to constitute an unfair labor practice (In a supplemental opinion in this case I stated That I thought the respondents should have been ordered to return their business to its original location and to reinstate the employees there ) Matter of Jacob H. Klotz and Ruth Klotz, doing business under the name and style of J. Klotz and Company and Joint Board of Suitcase, Bag and Portfolio Makers' Union, A F. of L, 13 N L R B- 746, in which the Board stated that, although a return to New York City'of the plant (the transfer of which the Board found was an unfair labor practice) would most nearl3 achieve the restoration of the status quo, in view of peculiar circumstances the respondent was or- dered either to pay foi the reasonable expenses entailed in the transportation and mom ing of the New York City union members and their families from New York City to Pawling of to pay for the transportation biweekly from Pawling to New York City and back for those em- ployees who wish to visit their families, at the option of the individual union members ; Matter of Kuehnc Manufacturing Company and Local No 1;91, United Brotherhood of Car- pentees and Joiners of America, 7 N. L R B. 304, where the plant was closed after a lock- out and ienianied closed at the time of the hearing ; the Board ordered reinstatement either to the closed plant when it resumed operations or to another of the respondent's plants ,See also X L. R. B. v. Republic Steel Corp, 107 F (2d) 472 (C. C. A. 3), enf'g as modified, J N L R B 219 Cf. Dubinsky v. Blue Date Dress Co , N. Y Sup. Ct., N Y L J, Dec 31, 1936, p 2454, col 1, 50 I-larv L Rev. 700, in which the court upheld an agieement prohibit- ing the iemoial of factories outside of a restricted area and ordered the employers to move back within the agieed area all the machinery and other effects removed, and United States v American Lii.estocl, Commission Company, 279 U S 435, 'wherein the court upheld an order of tie Secretaiy of Agriculture requiring the company to discontinue a boycott against another company, found to be in violation of the Packers & Stockyards Act, 42 Stat. 159, and by v loch boycott the first company refused to do business with the second 10 As stated in the majority opinion, the respondent accepts body and fender work from customers but turns such wok over to other shops 44184:;-42-i of 31-48