Stehli & Co., Inc.

In the Matter of STEHLI & CO., INC. and TEXTILE WORKERS UNION OF LANCASTER, PENNSYLVANIA AND VICINITY, LOCAL #133, AFFILIATED WITH THE TEXTILE WORKERS UNION OF AMERICA AND THE C. I. O..and TEXTILE WORKERS UNIT #1 OF THE NATIONAL LABOR LEAGUE, INC., AND NATIONAL LABOR LEAGUE, INC., PARTIES TO THE CONTRACT Case No. C-1793.-Decided August 28, 1941 Jurisdiction : textile weaving industry. Unfair Labor Practices Interference, Restraint, and Coercwon: discriminatory application of contract "preferential clause" in laying off and rehiring non-members of company- dominated union. Company-Dominated Union: formation of by "old and trusted" employees who had been officers of predecessor union found to be illegally formed in prior decision ; membership solicitation by representatives of management ; failure of employer to inform employees that predecessor union was illegal-support : signing contract with dominated union and checking off dues for it ; affording job preferences to members of company union. Remedial Orders : employer ordered to disestablish dominated organization; abrogation of contract with dominated organization ordered. Mr. Jack Davis,'for the Board. Zimmerman, Myers & Kready, by Mr. S. R. Zimmerman and Mr. B. M. Zimmerman, of Lancaster, Pa., for the respondent. Mr. W. Curtis Yerger, of Lancaster, Pa., for the Union. Mr. W. Hensel Brown, of Lancaster, Pa., for the Unit and the League. Mary M. Persinger, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly filed by Textile Workers Union of Lancaster, Pennsylvania and Vicinity, Local #133, affiliated with the Textile Workers Union of America and the C. I. 0., herein called the Union, the National Labor Relations Board, herein called the Board, by the Regional Director for the Fourth Region (Phila- delphia, Pennsylvania), issued its complaint dated October 2, 1940, against Stehli & Co., Inc., Rossmere, Pennsylvania, herein called the 35 N. L. R. B., No. 12. 44 SfPEHLI & CO., INC.- 45 respondent, alleging that the respondent at its Rossmere, Pennsylvania, plant had engaged in and was engaging in unfair labor practices af- fecting commerce, within the meaning of Section 8 (1) and (2) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. With respect to the unfair labor practices, the complaint alleged, in substance, that the respondent (1) beginning about August 1937, dominated and interfered with the formation and administration of Independent Silk Workers Union of Rossmere, a labor organization herein called the Independent, known since about April 1938 as Textile Workers Unit #1 of the National Labor League, Inc., herein called respectively the Unit and the League; (2) since about April 1938, dominated and interfered with the formation and administration of the Unit and the League; (3) contributed aid and support to the said labor organizations; and (4) thereby, and by other acts, interfered with, restrained, and coerced, and is interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act. Copies of the complaint, accompanied by a notice of hearing thereon, were duly served upon the respondent, the Union, the Unit, and the League. Thereafter the respondent filed its answer, admitting the allegations of the complaint concerning its incorporation and business, but deny- ing that it had engaged in or was engaging in the alleged unfair labor practices, and denying specifically that Unit #1 of the League is a successor to the Independent or is or was the same organization in fact or in law. The League and the Unit also filed answers to the complaint, alleging that the Independent had been dissolved and de- nying that the respondent had dominated or interfered with the formation or administration of, or had contributed support to, Unit #1 or the League. Pursuant to notice, a hearing was held in Lancaster, Pennsylvania, from October 24 to November 4, 1940, before E. G. Smith, the Trial Examiner duly designated by the Chief Trial Examiner. The Board, the respondent, the Unit, and the League were represented by counsel, and the Union by a subregional director; all participated in the hear- ing. Full opportunity to be heard, to examine'and cross-examine wit- nesses, and to introduce evidence bearing on the issues was afforded all parties. During the course of the hearing the Trial Examiner reserved ruling as to several motions to strike testimony, and in his Intermediate Report denied such motions. At the conclusion of the hearing, counsel for the Board moved to amend the pleadings to con- form to the proof with respect to certain minor matters. This motion was granted by the Trial Examiner without objection. During the hearing the Trial Examiner made numerous rulings on other motions 46 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and on objections to the admission of evidence. The Board has re- viewed the rulings of the Trial Examiner and finds that no preju- dicial errors were committed. The rulings are hereby affirmed. At the conclusion of the hearing all parties were afforded an opportunity to present oral argument to the Trial Examiner and to file briefs with him. None of the parties availed itself of such opportunity. On January 25, 1941, the Trial Examiner issued his Intermediate Report, copies of which were duly served upon the respondent, the Union, the Unit, and the League, wherein he found that the respondent had continued its domination of and interference with the Inde- pendent' by continuing the Independent in existence under the name of the Unit and the League, and had dominated and interfered with the formation and administration of the Unit and the League, and contributed support to these organizations. He recommended that the respondent cease and desist from its unfair labor practices and take certain affirmative action to remedy the situation. Exceptions to the 'Intermediate Report and to the record were filed by the respondent on February 18, 1941, and by the Unit and the League on February 21, 1941. On March 7 and 10, 1941, respectively, the respondent, and the Unit and the League, filed briefs in support of their exceptions. On June 3, 1941, pursuant to notice duly served upon all parties a hearing for the purpose of oral argument was held before the Board in Washington, D. C. The respondent, and the Unit and the League were represented by counsel and participated in the hearing. The Board has considered the exceptions and briefs filed by the respondent, and by the Unit and the League, and, to the extent that the exceptions are inconsistent with the findings of fact, conclusions of law, 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 I. THE BUSINESS OF THE RESPONDENT The respondent, Stehli & Co., Inc., is incorporated under the laws of the State of New York, and is registered to do business in five other States. All the stock in the corporation is owned by members of the Stehli family. This family has been engaged in the silk industry in Switzerland since 1840 and in this country since 1880, at which time Stehli & Co. A. G., of Zurich, Switzerland, had a selling agent here. The respondent's first weaving mill in this country was established in Lancaster, Pennsylvania, in 1898. IIn an earlier proceeding Involving the respondent the Board , on March 30, 1939, found, among other things, that the respondent had dominated and interfered with the formation and administration of the Independent and contributed support to It. See Section III A, infra. STEfEILI & CO., INC. 47 The respondent's main office is in New York City. Its principal plant, which is the only one involved in these proceedings, is in Ross- mere, just outside Lancaster, Pennsylvania. The respondent also owns and operates throwing plants in Waynesboro and Harrisonburg, Virginia, and owns plants at High Point, North Carolina, and Man- heim, Pennsylvania, which it leases to other companies. The Rossmere plant is chiefly a weaving plant. The raw materials used consist mainly of rayon and silk, but also include cotton, wool, and other miscellaneous yarns. The yarns are treated when necessary, and then woven into fabrics, which are transported to plants, some of which are within and others outside Pennsylvania, for finishing and dyeing. They are then transported to the respondent's New York office for marketing. More than 90 per cent of the rayon and silk used at the Rossmere plant is imported from China, Japan, Italy, and various States of the United States. About 60 per cent of all the raw materials shipped to the Rossmere plant are produced at the respondent's throwing plants in Virginia and at other plants outside Pennsylvania not owned by the respondent. The Rossmere plant produces in excess of 12,000,000 yards of fabric a year, having a total sales value of approximately $5,600,000. More than 90 per cent thereof is shipped to dyers and finishers located in seven different States, from which points the merchandise is trans- ported to the respondent's New York office for marketing. Approxi- mately 6,000,000 yards of the respondent's products are sold to cus- tomers in New York City, 5,000,000 yards are sold and transported to customers throughout the" United States, and about-100,000 yards are exported to customers in Cuba, Mexico, Australia, and Argentina. The respondent purchases through its New York office in excess of 1,000,000 yards of woven fabrics a year, which are, manufactured in six different States, and which have a sales value of approximately $500,000. This merchandise is shipped to, and dyed and finished by, plants located in six different States, and then transported to the respondent's New York office for marketing. In addition to the busi- ness described above, the respondent, through its New York office, purchases on consignment from the Swiss corporation, and sells throughout the United States, about 6,000 yards of finished silk.2 II. THE ORGANIZATIONS INVOLVED Textile Workers Union of Lancaster, Pennsylvania and Vicinity, Local # 133, is a labor organization affiliated with the Textile Work- z This statement of the respondent 's business is taken from Matter of Stehli •and Co., Inc. and Textile Workers Union of Lancaster, Pennsylvania and Vicinity, Local #133, 11 N. L. It. B. 1397 . Counsel for the Board and counsel for the respondent stipulated at the hearing that the operations of the respondent have remained substantially the same in volume and character. 48- DECISIONS OF NATIONAL LABOR RELATIONS BOARD ers Union of America and the Congress of Industrial Organiza- tions. It admits to membership employees of the respondent. Textile Workers Unit #1 is a labor organization affiliated with the National Labor League, Inc. Its membership is limited to employees of the respondent. National Labor League, Inc., is a labor organization incorporated under the laws of the State of Maryland in October 1937. It admits to membership any "employee of_ any industry or profession ... in any State of the United States, District of Columbia, or territories and possessions of the United States," except aliens who have not declared their "intention to become a citizen of the United States before a proper official." III. THE UNFAIR LABOR PRACTICES A. Background The respondent was involved in an earlier proceeding before the. Board, in which the Board issued its Decision and Order on March 30, 1939,3 finding that the respondent had refused to bargain collec- tively with the Union, which represented a majority of the respond- ent's employees in an appropriate unit; had dominated and interfered with the formation and administration of the Independent, formerly known as Stehli Independent Silk Workers Association and as Inde- pendent Silk Workers Union of Employees of Stehli, Inc., and con- tributed support to it; had discriminated in regard to the hire, tenure, and conditions of employment of 18 employees; and had interfered with, restrained, and coerced its employees in the exercise of their rights under Section 7 of the Act. Pursuant to a stipulation signed by the respondent and by a repre- sentative of the Board, respectively, on June 25 and July 10, 1940, a consent decree was entered in the United States Circuit Court of Appeals for the Third Circuit, dated July 23, 1940, which provided, in substance, that the respondent would cease and desist from in any manner dominating or interfering with the administration of the Independent or the formation and administration of any other labor organization of its employees, or contributing support to the Inde- pendent or to any other labor organization of its employees; from discouraging membership in the Union or in any other labor organiza- tion of its employees by discriminating in any-manner in regard to hire and tenure of employment or any term or condition of employ- ment; and from in any other manner interfering with, restraining, 3 Matter of Stehlt and Co., Inc. and Textile Workers Union of Lancaster, Pennsylvania and Vicinity, Local #133, 11 N. L . R. B. 1397. - STPETILI & Co., INC. 49 or coercing its employees in the exercise of their rights under Section 7 of the Act. The decree- provided further that the respondent would refrain from recognizing the Independent, "by whatever name now known, as a representative of any of its employees for the purpose of deal- ing with the respondent concerning grievances, labor disputes, rates of pay, wages, hours of work, or other conditions of employment, and completely disestablish said organization as a representative of its employees"; offer to seven employees immediate and full reinstate- ment and make whole 16 employees for loss of pay by payment to each of them of a specified sum ; and post immediately, and maintain for a period of at least 60 days, notices to its employees that it would not engage in the conduct from which it was ordered to cease and desist, that it would take the affirmative action prescribed above, and that its employees were free to become or remain members of the Union. B. Domination of and interference with the formation and admnimis- tration of the Unit and the League 1. Formation of the Uriit and the League On February 28, 1938, the Trial Examiner in the former case involving the respondent issued his Intermediate Report, in which, among other things, he found that the respondent was responsible for the formation and continuance of three successive unaffiliated labor organizations at its plant-namely, Stehli Independent Silk Workers Association, Independent Silk Workers Union of Em- ployees of Stehli & Co., Inc., and Independent Silk Workers Union of Rossmere, and recommended that the respondent cease and desist from dominating and interfering with the last-named organization and from contributing financial or other support to it. The issuance of that Intermediate Report, as will appear, constituted an incentive for the organizers of the Independent and its, predecessors to make still another attempt to satisfy the desires of their employer by forming another "inside" organization. On March 18, 1938, W. Hensel Brown, attorney for the Independ- ent and its predecessors, wrote to one Young, attorney for the.Cam- bridge Workers Association, a labor organization among employees of another manufacturing concern, asking him to recommend some- one with considerable experience to help Brown in advising and steering the proper course for the Independent. Young replied that if Brown wanted an independent organization "local in every respect," he would recommend one Vernard L. Edmunds, and that if, on the other hand, the Independent was ready, for affiliation with a 50 DECISIONS OF NATIONAL LABOR RELATIONS BOARD national labor organization, he would recommend someone from the A. F. of L. Without having consulted the Independent concerning the type of organization it might prefer, Brown requested Edmunds, who was vice-president of the League, a labor organization which up to that time had no contracts with any employer, and had been successful only in setting up one embalmers' unit in the undertaking industry, to come to Rossmere. Early in April 1938, Brown called Clarence Davis, the secretary of the Independent, who has been em- ployed by the respondent for about 40 years, to his office and told him that the Independent was illegal and "they had to find some other means." Brown arranged a meeting between Davis and Edmunds, and Davis in turn arranged a meeting between Edmunds and all the officers of the Independent. Edmunds explained the set-up of the League to the assembled officers, who later discussed the matter among themselves.' W. Ralph Murr, the president of the Inde- pendent, who has been employed by the respondent for about 21 years, testified that they felt that if they accepted the verdict of the Board and simply "crumbled up," they would be "admitting defeat," so they decided to "stay together." As to the League, Davis testified, "We thought it was an all right body." George Whittlinger, who began working for the respondent almost 40 years ago, and who has been working there uninterruptedly for more than 21 years, had been the leader in organizing the,Independ- ent. Sometime prior to April 30, 1938, he was consulted by Edmunds and the Independent officers with regard to the League.' Whitt-- linger testified that "we decided to affiliate with the National Labor League . . . we as the old Union." The officers of the Independent called a special meeting on April 30, which was open to members only. About 65 of approximately 400 members of the Independent attended. Brown addressed the meeting and stated, as Edmunds testified, that he saw "no hope of resuscitation"- of the Independent in view of the "order of the Board," 5 and, further, that "he had taken the liberty of searching to find some method whereby they could continue their activities legally." Brown stated further, according to the minutes of this meeting, that he had investigated the League and that the officers of the "old Union had previously a long conference with Mr. Edmunds and were satisfied that this was what they were searching for." 4 Our finding that this incident occurred prior to April 30 is based upon whittlinger's testimony to that effect which the Trial Examiner credited . Edmunds and Davis testified to the contrary, that it took place after a meeting on that day , at which the Independent affiliated with the League , but they gave no independent account of the incident nor contra- dicted Whittlinger 's version of it. That version would be meaningless if the consultation had occurred after the affiliation of the Independent with the League. 5 Brown apparently was referring to the findings and recommendations of the Trial Examiner. - STEHLI & CO., INC. 51 Brown then introduced Edmunds, who explained the set-up of the League. The record is not entirely clear as to what happened next. Numerous witnesses for the respondent testified, and we find, that at the conclusion of Edmund's speech, a motion was made to dissolve the Independent and to affiliate with the Leagues Although the League had not theretofore organized in the textile industry, Ed- munds had brought to the meeting printed membership cards provid- ing for 2 years' membership "in the TEXTILE WORKERS UNIT of the National Labor League Incorporated," and they were distrib- uted. About 55 members of the Independent signed these cards. At the conclusion of the April 30 meeting, Murr announced that the next meeting would be held on May 14, the next regular meeting day of the Independent, at the regular meeting place of that organization. The minutes of the May 14 meeting, which are contained in the same book as the minutes of the April 30 meeting, state that this was a meeting of "the Lancaster Unit #1 of the National Labor League, Inc." The minutes state further that Murr presided, that there was a "roll call of officers and all present," that "the minutes of last meeting were read and approved as read," and that "a statement was made that in as much as the Silk Workers Union had ceased to exist," officers were elected for the new organization. Those elected were Murr, chairman; Edgar Norton, vice chairman; Davis, financial sec- retary; Henry Whittlinger, recording secretary; and-Raymond War- fel, treasurer. All these individuals had held the same offices in the Independent. Although the Unit had collected no dues, the minutes of the May 14 meeting contain a treasurer's report showing a balance carried over of $60.28, $8 in donations, and $16 from the social committee, making a total in the treasury of $84.28. At the July 9 meeting, a bill of $13.30 for rent was sent to the League for payment, but a bill of $7.66 for expenses incurred by the financial secretary was ordered paid out of the "local treasury," 7 leaving a balance of $76.62. Although there was testimony that the funds of the Independent following its dissolution were paid to Brown for legal services, Warfel testified that he did not turn the money over to Brown until about four months after the formation of the Unit, and that he did not know of any vote on the part of the members to pay the money to Brown. Ac- cording to the minutes, moreover, the money carried over from the Independent treasury remained in the Unit treasury at least until "In their brief, the Unit and the League take exception to the failure of the Trial Ex- aminer to find that the Independent was formally dissolved at the April 30 meeting. Not- withstanding the fact that the minutes of the meeting do not definitely state that such action was taken, the evidence compels the conclusion that a motion of dissolution was made and carried. 7 Referring, presumably, to the treasury of the Unit. 451270-42-vol. 35-5 52 DECISIONS OF NATIONAL LABOR RELATIONS BOARD October 8, 1938, and some of it was used for Unit expenses. It thus appears, and we find, that the funds of the Independent remained for some months in the possession and control.of the Unit. During the, course of the Unit's organizing campaign, which fol- lowed the April 30 meeting, Davis sent a notice to the respondent's employees who were on furlough urging them to become members of "Silk Workers Unit #1," thus confusing the names of the three earlier inside organizations, all of which used the phrase' "Silk Workers," with the name of Textile Workers Unit $ 1. In view of the circumstances of the formation of the new organization at a meet- ing of the Independent, such confusion, even on the part of one of the organizers, is readily understandable. From the many likenesses between the Independent and the Unit,'the latter must have appeared to the employees generally to be a continuation of the former. The respondent took no steps to disabuse them of this understanding.8 Indeed, counsel for the respondent stipulated at the hearing that not until after the entry of the consent decree on July 23, 1940,0 more than 2 years after the formation of the Unit, did the respondent take any steps to inform its employees that the Independent was illegal and that they were free to join any organization of their choice. Between May 14 and May 28, 1938, another circular letter was sent out by the Unit, this time to those of the 400 former members of the Independent who had not yet joined the Unit. The letter began "Dear Member" and was signed by Murr as president and Davis as secretary. It urged membership in the-Unit, and concluded with the warning, ". . . ieturn this agreement signed or unsigned by return mail, as it is very important to your welfare and to all of us in making our living. If we fail now, it may be that we may not have any jobs at all." The persuasive effect of this document is evidenced by the fact that it immediately brought the Unit 160 new members. Although, according to the minutes of the May 14, meeting, only 22 members were present, at the next meeting on June 11, Davis "reported a sufficient number of employees signed to ask for recog- nition," and steps were taken to that end. It does not appear how many members constituted this "sufficient number," but the League gained membership rapidly because of the many advantages it had in organizing. As has been stated, the organizers first sought to sign up all those employees who had been members of the Independent. 8 Such action was found to be required under similar circumstances in Westinghouse Electric & Manufacturing Co v. National Labor Relations Board, 112 F. (2d) 657, aff'd, 312 U. S 660, wherein the Court stated . . . . although the new union would be lawful , If freely formed , It had in fact arisen out of the earlier organization , and the company had done nothing to mark the separation between the two, and publicly to deprive the successor of the advantage of its apparently continued favor. See Section III A, supra. STEtILI & CO., INC. 53 When they. began to seek members among the other employees, Davis, who worked in the respondent's office, obtained the names and ad- dresses of employees, which he handed over to the organizers, usually during working hours. Some of the respondent's loom fixers, who are supervisory employees, were also active in behalf of the Unit .10 Other supervisory employees who also had been members of the In- dependent became members of the Unit, and some of them were active in promoting the Unit. Thus Helen Wenger, a forelady, went to the homes of employees with Unit organizers and urged them to give up their membership in the Union and to become members of the Unit. Other foreladies and foremen solicited employees in the plant during working hours to join the Unit, and urged employees who were members of the Union to renounce the C. I. O. In ad- dition to the officers of the Independent who became officers of the Unit, other employees who had been active in behalf of the In- dependent were also active in behalf of the Unit. Many of them were,"old and trusted employees" who had been working for the respondent for periods of from 15 to 40 years." It thus appears that the Independent officers and organizers, when informed that they must give up the Independent because it had been found to be company dominated, refused to "admit defeat," and proceeded to find "some other means" of "staying together." The "means" they selected was the League, which they foisted upon some of the respondent's employees at a meeting of the Independent called and conducted by Independent officers, who had already decided the League was "an all right body." The ease with which the transi- tion from one employer-dominated union to another took place may be attributed, in part, to thq fact that the Union at this time was still suffering from the demoralizing effects of the employer's unfair labor practices.,, -At the first meeting of the League, also called and conducted by Independent officers, the name of the, organization was changed and the officers of the Independent were elected to the same offices in the Unit.- It appears, furthermore, that the Independent 10 The loom fixers were found to be supervisory employees and agents of the respondent, and to have actively engaged in breaking the strike called by the Union in 1937, in our prior decision , discussed in Section III A, supra 11 It was with reference to such employees , and upon a similar set of facts, that the Court of Appeals for the District of Columbia stated that : Men accustomed to such submission seldom regain independence over night. The interval, if there was one, required for the transfer of allegiance (of such employees from a company-dominated organization to its successor ] was too brief for disruption of the old and basic loyalty See International Association of Machinists v. National Labor Relations Board, 110 F. (2d) 29, aff'd 311 U. S 72, Nov. 2, 1940 11 The record indicates that the Union was quiescent until after the Issuance of our Decision and Order in 1939, at which time it wrote to the respondent demanding that it ,abide by the l3oaid' s decision 'B See the- Westinghouse case (footnote 8, above) wherein the Court stated that a suc- cessor organization appeared "on the surface" to be a "revision or amendment" bf the 54 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and the Unit had the same organizers, the same officers, the same assistance by supervisory employees, the same meeting place and meeting dates, the same minute book, the same treasury, and the same attorney. Indeed, it is impossible from a study of the minutes and other evidence to determine where one organization left off and the other began. These factors, as the United States Supreme Court recently stated in the Link-Belt case '14 "all corroborate the conclusion that the employer facilitated and aided the substitution of the union, ,which it preferred, for its old company union." Accordingly we find that Unit $k 1 of the League is the same organization as the Independent, functioning under a different name, and that its domina- tion by the respondent continues. We further find that by the activities of its supervisory employees, set forth above, in promoting and soliciting membership in the Unit and the League, and by other support to those organizations, to which we shall allude below, the respondent has dominated and inter- fered with the formation and administration of the Unit and of the League and contributed support to them. During the summer of 1938, the Board's Regional office informed the respondent that it had received reports that supervisory em- ployees were interfering with the union activities of the employees. As a result, in July 1938 the respondent posted on bulletin boards in the plant the following notice : All officers, superintendents, foremen, and other super-visory em- ployees are hereby warned and directed that they shall not in any manner approach employees concerning, or discuss with the employees, the matter of their labor affiliation, or threaten employees in any manner because of their membership in any labor organization in general or in the Textile Workers Organiz- ing Committee, Local No. 133, affiliated with the C. I. O. in particular. 4 This notice, however, does not absolve the respondent from the respon- sibility for the acts of its supervisors in urging employees to give up the C. I. O. and to join the League, particularly in view of the fact that it was not posted until after the Unit had succeeded in signing up a large number of employees,15 and the further fact that the in- structions contained in the notice were later violated.1e predecessor company-dominated union "for It emanated from the old elected representatives, and that alone established an appearance of continuity between the two." 14 National Labor Relations Board V Link -Belt Company, 311 U. S 584, Jan. 6, 1941. ss The record shows that on June 21 , 1938, and on several occasions thereafter, the Unit wrote to the respondent claiming that It had signed up a majority of respondent's employees "See Section III B 2, infra; Swift of Company v. National Labor - Relations Board, 106 P. ( 2d) 87; and Matter of The Solvay Process Company and Oil Workers' International Union, Local No . 424, 21 N. L R..B. 882, enf'd (C. C. A. 5), Jan. 4, 1941. STrEHLI & CO., INC. -. 55 2. Support of the Unit and the League As stated above, the Unit officials decided at the June 11, 1938, meeting that it had sufficient membership to justify seeking, recog- nition from the respondent. They were granted a conference with the respondent shortly after this meeting. The respondent refused at this conference to recognize the Unit in view of the Trial Exam- iner's Report, which found that the Union represented a majority of the respondent's employees in the appropriate unit and recom- mended that the respondent bargain with the Union. The Unit thereafter made a number of requests for recognition, which the re- spondent refused. After the Board issued its decision on March 30, 1939, however, affirming the findings of the Trial Examiner and ordering the respondent to bargain with the Union, the respondent, in direct defiance of the Board's order, proceeded to negotiate with the Unit. A conference was held at the office of Zimmerman, the respondent's counsel, on May 3, 1939, between the Unit representa- tives and the respondent. According to Edmund's testimony, Zim- merman stated at this conference that- ... the legal obstructions that have up to this point or up to a certain point prevented action on the part of Stehli & Company, had been somewhat changed; that the final order of the Board had come through and that he was now ready to entertain the idea of a contract-I mean recognition. The Unit left with the respondent evidence of its membership. Another conference was held on May 10. There was further dis- cussion, about majority representation and 'other matters. Finally, according to Edmunds' testimony, Henry Stehli, who was present at this conference, stated that- I am willing to recognize this National Labor League because of the memberships that you have lodged here with us for evi- dence, providing you say it is legal. An agreement dated May 10, 1939, was signed by representatives of the Unit, the League, and the respondent.17 This agreement was entered into on the basis of signed pay orders authorizing the deduc- tion of dues, and a list of Unit members which the respondent checked to ascertain whether the people listed were employed at the tim2, but no effort was made to determine the genuineness of the signatures-" "The respondent on May 10, 1939, informed the Board that it would not comply with its Decision and Order but would recognize the Unit as the bargaining representative of its employees . A copy of this letter was later sent to the Union in response to its requests for bargaining negotiations in accordance with the Board 's Order va Although Huber, the respondent's general manager, stated at the hearing that the signatures were checked to determine their authenticity, Hershey, the respondent's pay- master, testified on direct examination by counsel for the Unit that he and Sidler, the 56 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Henry Stehli, when questioned at the hearing as to why he entered into an agreement with the Unit in view of the Board's Order that the respondent bargain with the Union, answered that- We wholly disagree with the findings of the Board first of all, and, secondly, there was definitely a majority and how could there be a majority of the National Labor League in 1939 and also a majority of the Textile Workers' Organizing Committee of the C. I. 0., Local No. 133, or whatever it is. You couldn't have two majorities in the mill in 1939. When asked why he had selected the League, he stated that it was because it had proven its majority. When asked if the Union had not proven its majority at the hearing, he replied, "No; we con- sidered that completely biased." Stehli admitted that he knew that many employees had signed up in both organizations, and that super- visory and clerical employees were members of the Unit. The Unit committee which negotiated the contract with the re- spondent had been appointed by Murr. The Unit sought in the course of its negotiations with the respondent to obtain a preferential shop. The respondent did not accede to this. The compromise on the preferential shop as contained in the agreement reads as follows: The Employer agrees that if,'in its sole judgment, all things are equal in the hiring, retaining in employment, laying off and re- calling employees, that the members of Textile Workers Unit Number One of the National Labor League shall 'be given pref- erence, provided that such action shall in no manner operate to discriminate against any non-member employee. Henry Stehli testified that he did not intend by this clause to grant any preference to Unit members. However, as we find below, the clause, as interpreted by the respondents' supervisory employees, be- came an effective means of forcing membership in the Unit. No dues were collected by the League until recognition was obtained on May 10, 1939. Thereafter, the respondent checked off the dues of 50 cents a month from the wages of Unit members who signed pay orders.1° Cards showing payment of monthly dues were attached to the pay checks of employees and distributed in the plant by foremen. The respondent sent to the League the money" collected for dues, deducting therefrom, by agreement with the,League, certain amounts to pay for time spent by foremen in distributing dues cards and other League material to the employees. auditor, did the actual checking of the cards, and that they did not check the signatures - on the pay orders against the signatures on the pay-roll sheets because "we did not think that was necessary." "The respondent produced records at the hearing showing that up to that time it had checked oit' dues totaling $4,667.50. STEULI & CO., INC. 57 On January 16, 1940, the Unit and the League entered into an "Addenda and Supplement to the Contract of May 10" with the re- spondent, setting forth the wage rates for the various kinds of work in the plant, providing that after application of the "preferential shop" clause in the May 10 agreement, plant-wide seniority should govern lay offs, and providing for "mutual consent to reduction of wages ..., whenever by reason of competition or unusual lack of business it becomes necessary, in the opinion of the employer, to re- duce labor costs of production .. ." The wage rates provided for in the Addenda were the same rates which existed at the plant at the time the contract was signed. The contract committee of the Unit, which was also the grievance committee, accompanied by Edmunds as the League representative, met with the respondent every 2 weeks regularly until the time of the hearing. At these meetings, the respondent first presented its grievances against the employees, and after these were discussed, the Unit presented its grievances against the management. These griev- ances were generally concluded, as was the dispute on the preferential clause, as matters within the sole discretion of the respondent. Although the matter of preference between Unit and non-Unit members was left within the sole discretion of the respondent, super- visory employees frequently invoked the "preferential clause" in the contract against those employees who resisted becoming members of the Unit, and particularly against those employees who persisted in remaining members of the Union, to lay them off sooner, to rehire them later, and to give them less desirable jobs than in the case-of Unit members. Enforcement of this provision in the course of time had the effect of inducing a number of employees to join the Unit who were in principle strongly opposed to it.20 3. Conclusions The respondent's well-known hostility to "outside" labor organiza- tions, its formation and domination of three successive labor organi- zations culmulating in the Independent, its support given the League's formation through the assistance of supervisory employees and of "old and trusted employees" who had served the respondent in the formation of the earlier organizations'21 its failure to inform its employees that the Independent was illegal and that they were free to join any organization of their choice till long after the Unit had become securely established, and the various means by which it contributed support to the Unit and the League after their forma- ' *The foregoing findings concerning preferences afforded to Unit' members are based upon the uncontradicted testimony of Irma Trapnell , Kathryn Shearer, Elsie Long, and Madora Miller. 31 See footnote 11, .supra. 58 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tion 22 show unmistakably that the respondent interfered with and coerced its employees in the exercise of their right to bargain col- lectively through representatives of their own choosing, and sought by the formation and continuation of inside unions which the respond- ent could dominate and control, to stifle the outside labor organization formed for the purpose of collective bargaining. When all these factors are viewed against a background of the respondent's flagrant and numerous violations of the Act, as found in the Board's Decision 'of March 1939, there can be no doubt that the respondent has flouted that Decision, as well as the Decree of the Circuit Court, by the formation and domination of an organization to succeed the Independent. We find, as did the Trial Examiner, that the respondent has con- tinued its domination of and interference with the Independent by continuing it in existence under the name of the Unit and the League; and that the respondent has dominated and interfered with the formation and administration of the Unit and the League, and has contributed support to these organizations. We further find that by such acts the respondent has interfered with, restrained, and coerced its employees in the exercise of their 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 purposes of collective bargaining or other mutual aid and protection. The discriminatory application of the so-called "preferential clause," above described, was in no wise justified by the contract of May 10, 1939, and the Addenda and Supplement thereto of January 16, 1940, entered into by the respondent with the Unit and the League, since both of these organizations, as found above, were assisted by the respondent's unfair labor practices and did not represent the free choice of the employees. The respondent's agreement with them is but a means of utilizing an employer-dominated organization to frustrate a free choice by its employees such as is guaranteed to them 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 with foreign countries, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. 21 See Section III B 2, supra. S1 EiFILI & Co., INC. V. THE REMEDY 59 , Having found that the respondent has engaged in unfair labor practices, we shall order it to cease and desist therefrom, and take certain affirmative action designed to effectuate the policies of the Act and to restore, as nearly as possible, the situation that existed prior to the respondent's commission of the unfair labor practices. We have found that the respondent has dominated and interfered with the formation and administration of the Unit and the League, and has contributed support to these organizations. By such domi- nation, interference, and support the respondent has prevented the free exercise of its employees' right to self-organization and to col- lective bargaining. In order to remedy the respondent's unlawful conduct and restore to the employees the full measure of their rights guaranteed under the Act, we shall order that the respondent with- draw all recognition from the Unit and from the League, and com- pletely disestablish both organizations 23 as representatives of its em- ployees for the purpose of dealing with the respondent concerning grievances, labor disputes, wages, rates of pay, hours of work, or other conditions of employment.24 We have also found that the agreement of May 10, 1939, and the Addenda and Supplement thereto of January 16, 1940, are not the result of bona fide collective bargaining between the respondent and the freely designated representatives of its employees but were ex- ecuted in furtherance of the respondent's program to foster the Unit and the League. We shall order the respondent to cease and desist from giving any effect to the contract of May 10, 1939, and the Addenda and Supplement of January 16, 1940, or to any extension, renewal, modification, or supplement thereof, or to any superseding contract which may now be in force. Nothing in this Decision and Order shall be taken to require the respondent to vary any non- discriminatory wage, seniority, or other substantive features of its relations with the employees themselves which the respondent estab- lished in performance of the-invalid contract as extended, renewed, modified, supplemented, or superseded. 29 Since it appears that the League, as well as the Unit, acted as a representative of the employees, was a signatory party to the contract and to the Addenda and Supplement, participated in the negotiations leading to the consummation of these agreements with the 'respondent and also in the meetings of the grievance committee with the respondent, and since the dues checked off by the respondent were sent to the League, it is necessary that the League, as well as the Unit, to ,ihatever extent it exists in the respondent's plant, be disestablished '+ See National Labor Relations Board v. H. E. Fletcher Co., 108 F. ( 2d) 459, cert. den. March 25 , 1940, wherein the Circuit Couit stated : To get rid of [the virus of control ], a complete destruction of the body it has lodged in is usually made necessary and with that body any feeble and ineffectual antidote in the form of a supporting organization administered to effect a cure. Such a proceeding is more salutary and presents the obvious possibilities involved in a fresh start. 60 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In view of our findings above, it is apparent that the respondent has, by varying methods and over a long period of time, dominated and interfered with labor organizations of its employees and thereby interfered with, restrained, and coerced its employees in the exercise of rights guaranteed in Section 7 of the Act. The respondent's course of conduct in this respect, by virtue both of its intensive and ex- tensive character discloses a fixed purpose to defeat self-organization and its objects. Thus the respondent, by dominating and interfering with four successive labor organizations in its plant, and by con- tributing support to each of them, and by the activities of its super- visory employees hereinabove set forth, interfered with its employees' right to self-organization, and to form, join, and assist labor organi- zations, denied its employees the free opportunity to bargain collec- tively through representatives of their own choosing, and substantially- deprived its employees of their right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, except in the channels directed by the respondent. Because of the respondent's unlawful conduct and its underlying purpose, we are convinced that the unfair labor practices found are persuasively related to the other unfair labor practices proscribed and that a danger of their commission in the future is to be anticipated from the course of the 'respondent's conduct in the past.2 , The pre- ventive purpose of the Act will be thwarted unless our order is co- extensive with the threat. In order, therefore, to make effective the interdependent guarantees of Section 7, to prevent a recurrence of unfair labor practices, and thereby to minimize strife which burdens and obstructs commerce, and thus effectuate the policies of the Act, we will order the respondent to cease and desist from in any manner infringing the rights guaranteed in Section 7 of the Act. ' Upon the basis of the above findings of fact, and upon the entire record in the case, the'Board makes the following : CONCLusioNS OF LAW 1. Textile Workers Union of Lancaster, Pennsylvania and Vicinity, Local #133; Textile Workers Unit #1 of the National Labor League, Inc., formerly known as Independent Silk Workers Union of Ross- mere, as Stehli Independent Silk Workers Association, and as Inde- pendent Silk Workers Union of Employees of Stehli, Inc. ; and Na- tional Labor League, Inc., are labor organizations, within the meaning of Section 2 (5) of the Act. 2. By continuing its domination of and interference with the administration of the Independent, by dominating and interfering 25 See National Labor Relations Board v. Express Publishsng Co., 312 U. S. 426 ; Bethle- hem Steel Company v. National Labor Relations Board (App. D. C.), May 12, 1941. SrrEHLI & CO., IN. 61 with the formation and administration of Textile Workers Unit #1 of the National Labor League, Inc., and of National Labor League, Inc., and by contributing support to these organizations, the re- spondent has engaged in unfair' labor practices, within the meaning of Section 8 (2) of the Act. 3. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, the respondent has engaged in and is engaging in unfair labor practices; within the meaning of Section 8 (1) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. ORDER Upon the basis of the foregoing 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 re- spondent, Stehli & Co., Inc., Rossmere, Pennsylvania, and its officers, agents, successors, and assigns, shall: 1. Cease and desist from : (a) In any manner dominating or interfering with the administra- tion of Textile Workers Unit #1 of the National Labor League, Inc., or of National Labor League, Inc., or .the formation or adminis- tration of any other labor organization of its employees, or con- tributing support to the above-named labor organization's, or to any other labor organization of its employees; (b) In any manner giving effect to the contract of May 10, 1939, or to the Addenda and Supplement thereto of January 16, ,1940, entered into with Textile Workers Unit #1 of the National Labor League, Inc., and with National Labor League, Inc., as well as to any extension, renewal, modification, or supplement thereof, and any superseding contract with the Unit and the League which may now be in force; (c) 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 purposes of collective bargaining or other mutual aid and protection as guaranteed in Section 7 of the Act. 2. Take the following affirmative action, which the Board finds will % effectuate the policies of the Act : (a) Withdraw all recognition from, and completely disestablish, Textile Workers Unit #1 of the National Labor League, Inc., and 62 DECISIONS OF NATIONAL LABOR RELATIONS BOARD National Labor League, Inc., by whatever name known, as represent atives of any of, its employees for. the purpose of dealing with the respondent concerning grievances, labor disputes, rates of pay, wages, hours of work, or other conditions of employment; (b) Post immediately in conspicuous places throughout its plant in Rossmere, Pennsylvania, and maintain for a- period of at least sixty (60) consecutive days from the date of posting, notices to its employees stating : (1) that the respondent will not engage in the conduct from which it has been ordered to cease and desist in paragraphs 1 (a), (b), and (c) of this Order; (2) that the respondent will take the affirmative action set forth in paragraph 2 (a) of this Order; (c) Notify the Regional Director for the Fourth Region in writing within ten (10) days from the date of this Order what steps the respondent has taken to comply herewith.