Scripto Manufacturing Co.

In, the Matter Of SCRIPTO MANUFACTURING COMPANY and INTERNATIONAL UNION ALUMINUM WORKERS OF AMERICA, AFFILIATED WITH THE C. I. O. Case No. C-1897.-Decided October 25, Jurisdiction : pencil manufacturing industry. Unfair Labor Practices Interference, Restraint, and Coercion:. statement by foreman to employee that involvement in union activities by employee would result in discharge. Discrimination: "lay-off' of employee who had been elected to office in newly organized union 7 days previously, and who had been with Company 7 years, and who was conceded by Company to be a "good employee," held to be dis- crimination for union activities ; change by Company of business methods held to constitute excuse, rather than reason, for "lay-off' where other suitable work available for laid-off employee. Filing Charges under Act: failure to reinstate employee who filed charge under the Act. Collective-Bargaining: majority established by consent election-refusal of em- ployer to enter into collective bargaining contract with union unless union posted compliance bond or incorporated held to be refusal to bargain collectively. Remedial Orders : employer ordered to bargain collectively and to embody under- standings reached in signed agreement upon request of union ; reinstatement and back pay awarded discriminated employee. Unit Appropriate for Collective Bargaining : all employees exclusive of em= ployees in the engineering department and supervisory and clerical employees. Mr. Alexander if. Wilson, Jr., for the Board. Hirsch, Smith do Kilpatrick, by Mr. Ernest P. Rogers, and Mr. M. if. Kilpatrick, of Atlanta, Ga., for-the respondent. Mr. Charles W. Schneider, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon charges and amended charges duly filed by International Union Aluminum Workers of America,' affiliated with the C. I. 0., herein called the Union,, the' National Labor Relations Board, herein 1 The original charge was filed on January 27, 1941 ; an amended charge on February 11, 1941; and a second amended charge on March 11, 1941. 36 N. L. R. B., No. 85. 411 412 DECISIONS OF NATIONAL LABOR RELATIONS BOARD called the Board, by the Regional Director for the Tenth Region (Atlanta, Georgia), issued its complaint dated March 11, 1941, against Scripto Manufacturing Company, Atlanta, Georgia, herein called the respondent, alleging that the respondent had engaged in and was en- gaging in unfair labor practices affecting, commerce, within the mean- ing of Section 8 (1), (3), (4), and (5) and Section 2 .(6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the complaint accompanied by notice of hearing were duly served upon the respondent and the Union. Concerning the unfair labor practices, the complaint alleged in sub- stance (1) that on or about August 24, 1940. the respondent discharged Kathryn Johnson and has since refused to reinstate her because she joined and assisted the Union, and engaged in concerted activities for the purposes of collective bargaining and other mutual aid and pro- tection; (2) that on or about September 1, 1940, the respondent refused and has at all times since refused to reemploy Kathryn Johnson. for the reason that she filed or caused to be filed charges before the Board; (3) that on or about November 1, 19.40, and at all times thereafter, the re- spondent refused to bargain collectively with the Union as the exclu- sive representative of the respondent's employees in an appropriate unit, although a majority of said employees had desi nated 'the Union as their representative for.such purposes; and (4) that by these and other, stated acts, the respondent has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of 'the Act. On March 24, 1941, the respondent filed its answer, in which it ad- mitted the allegations of the complaint as to the character of its hnsi- ness and its interstate nature, and admitted that since October. 9, 1940, the Union has been the collective bargaining representative of the re- spondent's employees in an appropriate unit, but .dented that it had engaged in unfair labor practices, and affirmatively averred that it has been ready and willing at all reasonable. times to bargain collectively with the Union "as the exclusive bargaining agent of the employees of respondent," and that it has done so.- The answer further alleged that Kathryn Johnson was not discharged "in the strict sense," but was merely laid off because of a change in the respondent's operations, and further denied that she was either laid off, discharged, or refused re- employment because of her union activity-or because she filed or caused to be filed a charge with the Board. The answer further asserted the respondent's willingness at all times to recall Johnson "at the first available job that is deemed suitable for her and that she will accept." Pursuant to notice, a hearing was held in Atlanta,.,Georgia, on March 24 and 25, 1941, before Thomas S. Wilson, Jr., the Trial Examiner duly designated by the Chief Trial Examiner. The Board and the respond- -SCRIPTO' MANUFACTURING COMPANY 413 ent were represented by counsel and participated in the hearing. Full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence beaiing on the issues was afforded all parties. At the conclusion of the Board's case counsel for the Board moved to conform the pleadings to the proof. The Trial Examiner granted the motion. During the course of the hearing the Trial Examiner made several rulings 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 of the Trial Examiner are hereby affirmed. On June 3, 1941, the Trial Examiner filed an Intermediate. Report, copies of which were duly served upon the parties. The Trial Examiner found that the respondent had engaged in unfair labor practices within the meaning of Section 8 (1), (3), (4), and (5) of the Act and recom- mended that it cease and desist therefrom, and take certain affirmative action. On July 9, 1941, the respondent filed exceptions to the inter- mediate Report, and on July 15, a brief in support of the exceptions. Pursuant to notice, a hearing was held before the Board in Wash- ington, D. C.; on August 21, 1941, for the purpose of oral argument. The respondent was represented by counsel and participated in the ergument. The Board has considered the exceptions to the Inter- mediate Report and the brief submitted by the respondent, and except in so far as the exceptions are consistent with the findings, conclusions, and order set forth below, "finds" them to be without. merit. Upon the entire record in the case the Board makes the following : FINDINGS OF FACT 1. TI~IE' BUSTNEss OF TIlE RESPONDENT ' Scripto Manufacturing Company, a Georgia corporation, maintains its plant and office in the city of Atlanta; Georgia, where it is engaged in the manufacture, production; sale, and distribution of mechanical pencils. During "an average year" the respondent purchases raw ma- terials valued at approximately $300,000, of which 90 per cent is re- ceived by it from' sources outside the State of Georgia. During the same period the respondent.. manufactures and distributes products valued at approximately $650,000, 90 per cent of which is shipped to customers located outside the State of G'eorgin. II. THE OI{GANIZ'ATION INVOLVED' International Union Aluminum Workers of kmerica is a labor organ- ization affiliated with the Congress of Industrial Organizations, ad- mitting to membership employees of the respondent. On August 29, 1940, the Union chartered Local 21 among employees of the respondent. 414 DECISIONS' OF NATIONAL -LABOR RELATIONS BOARD M. THE UNFAIR LABOR PRACTICES A. Background; interference, restraint, and coercion In July 1940, the Union began to organize the employees of the re- spondent. Prior to August 17, the Union held three organizational meetings. Its first business meeting was held on that date. Kathryn Johnson, a colored employee who was elected temporary secretary and treasurer of the Union at. the meeting of August 17, testified that on August 21, 1940, J. D. Smith, a non-supervisory' ma-' at the plant and a brother-in-law of the assistant superintend- ent, Race, approached Johnson and asked what need she had to join a union; that Johnson replied that she thought it would be better if the employees had one; and that Smith asserted that the white em- ployees would not join the Union,2 and ended the conversation by :saying, "You know that we can go out on the streets and pick up three girls for every one to do what you are doing now and you know that yourself." Johnson testified further that during the conversation Cecil Fields, the plant superintendent, entered the department; that Smith left Johnson and joined Fields; that Smith and Fields then had a short conversation after which Fields departed; and that Smith ihen called Johnson and told her that she should have heard what Fields had said about the Union : "He has said that you couldn't bring in a crowd and make them pay out more money than Scripto takes" in in a day.". Smith denied that any such conversation ever took place.' His testi- lnony is not convincing. On cross-examination, he first denied that he had any knowledge that the Union was organizing the employees until "at least a month" after the termination of . Kathryn Johnson's em- ployment on August 24,1940, but later admitted that a union organizer had called at his home prior to August 24 and spent half an hour trying to convince him of the desirability of joining the Union.s We find, as did the Trial Examiner,' that the conversation between Smith and Johnson took place as described by Johnson,. and that Smith and Fields 2 The respondent employs 'about 300 people of 'whom about 225 are colored, and of these some 210 are women. 3 Smith was one of a group of white employees who sponsored a bulletin stating ' in part : During the past several weeks paid organizers have been trying to get the employees will have white and colored employees in it. * * * * * * * * * * we do not want to belong to the C. I. O. or to any other Union. * * if the Union is formed, and if the Union becomes the sole bargaining agency with which the Scripto Company will have to deal as regards the Company employees, , we will all resign and sever all connections with the Scripto Company; and * * * 'we will not return to the employ of the Scripto Company until the Company either hires all white labor or until there is no union of employees of the Scripto Company affiliated with any national labor organization. ' of the Scripto Company to -join the C. I. O. They want to get, a union started that I SCRIPTO MANUFACTURING 'COMPA•NY 415 conversed at about the same time under the circumstances set out in Johnson's afore-mentioned. testimony. Johnson also testified that on the same day one Stovall, a supervisor in charge of the metal-finishing department, asked her: "How about this union?"; that,she answered, "I don't know, what about it?"; and that Stovall then said, "I just finished talking Shelby '[an operator] out of joining this union, and the rest of you negroe*s better mind out how you get mixed up in it or you will all get fired." Stovall denied having had such a conversation with Johnson or having known any- thing about her union activity. Shelby was not a witness, and Stovall denied having conversed with him about the Union. Stovall testified that he had several conversations with Johnson in his department about interfering with, the operators. In this connection he asserted the following : ". . . Kathryn, it seemed, had the run of the building when nobody wasn't looking, and I thought that it was my duty to keep my department running so that she wouldn't interfere with my operators." The Trial Examiner found' Stovall's' denial unconvincing. Upon the entire record, we-find that the conversation described by Johnson took place between her and Stovall on August 21, 1940. We find that the respondent, by Stovall's statements made to Johnson on August 21, 1940, interfered with, restrained, 'and' coerced its em- ployees in the exercise of the rights guaranteed'in Section 7 of the Act. B. Johnson's discriminatory release on August °24,1940•: ""Johnson began to 'work ' fo"r the respondent in 1933. At , • first she jacked leads for shipment. ' After 'a few weeks she was transferred for a short time to the supply department„ and thereafter to a printing machine About 1936 she was transferredto the night shift to super- vise the work *of two or' three girls on the printing machines. Johnson disliked the night work. ' After, 3 months of it she quit.., : About 3 weeks after she left, the respondent recalled her as a time and record clerk for some 40 or 50 employees and as a relief machine operator. On August 24, 1940, she had been continuously employed'in this capacity for or 4 years. At the hearing the respondent conceded that she "was a good employee and that her services :were satisfactory in, the position that she held." Johnson was one of'the first employees to join the Union-and became one of its most active'inemb.ers, having asked 25 to 30 employees to join. As noted above,'at'the August 17 meeting of the Union, Johnson was elected temporary, secretary and treasurer, and on August 21 Sto- vall engaged her in the afore-mentioned anti-union conversation. On Saturday .morning, August 24, Getz, • her foreman, instructed Johnson to complete all her work and not leave anything for'Monday.' 416 DECISIONS OF NATIONAL LABOR RELATIONS BOARD She finished about 10. a. M.4 When she had completed her work, Getz told her that he had some sad news for her, that he was afraid that he had to let- her go, that that was what Superintendent Fields had told him to do. Johnson inquired if the decision was made because of the rumor :concerning her union activity that Getz had heard recently. She testified that Getz replied that he did not know. Getz testified, however, that he informed Johnson of her "lay off," that she inquired whether it was because of her union activity, and that he told her that it was not. We accept Johnson's testimony as to this conversation. This was the first notice Johnson received that she was to be laid off, or that there was to be a change affecting her job .5 Johnson then saw Fields, who, according to Johnson, told her that he had a white boy coming to do her clerical work, that she was "all right" on clerical work but was "no good" on machine work, and that she would be recalled if an anticipated need for employees arose in 2 or 3 weeks. She expressed her willingness to do any kind of work. Fields testified that,.on August 24, he told Johnson that he could use her somewhere else a little later on and that she should return the next week. We accept, as did the Trial Examiner, the testimony of Johnson as to this conversation. Johnson left the plant that day and has never been recalled. . Fields testified that for a year and a half the respondent had been contemplating a change in methods of manufacture and in the ac- counting system, which change would require a white instead of a colored person to do the clerical work of Johnson. According to Fields, about August 20, he sent an employee to notify a white boy named Lazenby to report for work on Monday, 'August 26, planning to have Lazenby take over Johnson's clerical work and to transfer Johnson to a machine; and about August 23 the messenger reported to Fields that Lazenby had left his sister's home in Atlanta, where he had been visiting, and had returned to his own home, some distance from Atlanta, and reported further that Lazenby's sister would try to get word to Lazenby. It is clear that, on August 24, the day Johnson's employment was terminated, no one had been definitely employed to take over her clerical work. On Monday, August 26, Lazenby failed to appear for work. Before 9 o'clock in the morning on that day Johnson returned to the plant gate. Fields sent Johnson her pay check and a letter which she was to use in seeking employment elsewhere. Getz sent her a letter of recommendation, in response to a note from her requesting it. Although Lazenby had failed to report for work, and although John- k The plant did not operate Saturdays-but Johnson came in for 3 hours to tabulate the records of the midnight shift of the day before. 5 Fields did testify that at some indefinite time in the past he had told Getz and 'Johnson of proposed changes. He did not, however, tell Johnson that the changes would affect her. SCRIPTO MANUFACTURING COMPANY 417 son was known to be at the gate at that time, the respondent did not recall her. Instead, a new employee, hired that day as an operator, was assigned to Johnson's clerical work. Although this new em= ployee and Lazenby both failed to report for work on Tuesday; John- son was still not recalled. According to the respondent, one machine was not in operation on Tuesday or else another new operator was hired that day, its witnesses being unable to state which is the fact. Lazenby reported on Wednesday and has been working since that time. In addition to Lazenby, the respondent has employed from 17 to 20 new and former machine operators since - August 24. The respondent asserts that it believed that Johnson had secured em= ploymeiit with an insurance concern. Getz testified that she stated in the note to him, that such employment could be obtained if she received from. the respondent the letters referred to. According to the respondent, it did not offer her employment for this reason. The respondent asserts that it did not know of Johnson's union membership and activities prior to the termination of her employ= ment. The respondent's contention is unconvincing. Johnson was an active union member. On August 21, only 4 days after her election .to a prominent office in the ' Union, Smith conversed with Johnson concerning the Union and had a related conversation with Superin= tendent'Fields. Also,. on the same day, Supervisor Stovall made cer- tain anti-union remarks to Johnson. Furthermore, Foreman Getz, who professed to be without knowledge, of union activity at the time he informed Johnson of the termination of her employment, expressed no surprise, according to his own testimony, at her inquiry as fo whether her union activity was the reason for such termination, and gave conflicting testimony as to when he first learned of union activ- ity among the respondent's employees. Finally, Johnson testified that on the day following her conversation with Smith, a poster or bulletin ridiculing' the C. I. O. was placed on the time clock used by white employees. Fields corroborated Johnson's testimony with re- spect to the placing of the poster, which he termed a newspaper clip- ping, and did not deny Johnson's statement as to the date of the posting. In his testimony Fields minimized the importance of 'the incident, but the respondent nevertheless considered the matter serious enough to warrant calling Rogers, its attorney, to investigate it. We conclude that the respondent was aware of and opposed to Johnson's union activity prior to her release. The respondent asserts that the sole reason for Johnson's "lay-off" was a change in the style of its pencil, allegedly involving a transfer of the time records from the plant to the office, where only white em- ployees worked. The circumstances surrounding the lay-off and the change, however, indicate that the business factor provided the excuse, rather than the reason. Johnson's release followed shortly after for- 433118-42-vol. 36-28 418 DECISIONS OF NATIONAL LABOR RELATIONS BOARD mation of the Union and within a few days after her election to office therein. According to Fields, he had been contemplating the business change for about 11/2 years. He testified that the definite decision to effect the change was made "at least a month before" the change occurred. Then on August 20 a messenger was sent for Lazenby. On August 24 it was not certain whether Lazenby would be reached or not. Nevertheless, after she had finished work for the day, on August 24, Johnson was told for the first time that she was being laid off. As we have found, Getz,, in laying off Johnson, told her that he did not know why she was being laid off ; that Fields had instructed him to do so. The reason given by Fields for this otherwise inexplicable failure to warn Johnson is that he intended to transfer her to other work, but that on August 24 and thereafter, there was nothing available for her. Neither of these assertions is consistent with the facts. Lazenby did not report for work until Wednesday, August 28; yet on August 26, the day Johnson appeared at the plant, a newly hired machine operator was employed in place of the absent Lazenby on clerical work and, although on the following 'day, that individual. and Lazenby were both absent, Johnson was still not recalled. Since that time the respondent has hired from 17 to 20 operators, some new, some experienced. Fields testified,' and' the respondent reiterates in its exceptions, that the 'respondent proposed 'to "try" Johnson as a machine operator, but did' not do' so.bee'ause it concluded that she would not be happy or do efficient work in such a position, as it would be generally regarded by her and others as 'a demotion for her. In view' • f Johnson's, previous experience as a machine operator, her satisfactory performance in that capacity, her expressions of willingness to do any kind of work, the respondent's admission that she was a "good employee," and the failure of the respondent to make any inquiry concerning her availability and desire for work, we find such a conclusion incredible. The respondent's asserted belief that Johnson had.secured employ- ment with an insurance concern, also offered as a reason for not rein- stating her, is untenable. 'According to Fields, reports of employees' terminations of employment are filed by employers with the State Bureau of Unemployment Compensation when such employees. "quit, or if they are fired, or if they are laid off for an indefinite period ..." 6 Although Fields testified that 'he was under the, impression that John- son was working for an insurance company 7 the respondent did not file the required report. Clearly it would have done so had it actually believed that Johnson was regularly employed elsewhere and did ;not 9 He testified that such reports are not filed in event of short lay-offs. 7 It should be noted that Fields did not testify that he told Hauton , the respondent's, vice president, or Johnson , in the conversations of August 29, 1940, or February, 10, 1941, more fully set out below , that he believed that she had obtained other employment. SCRIPTO MANUFACTURING COMPANY • 419 desire reinstatement with the respondent. As discussed' below, on August 29, the respondent received from the Regional Director a letter stating that a charge had been filed, alleging the discriminatory dis- charge of, and refusal to reinstate, Johnson. In addition, on Septem- ber 10, 1940, the State Bureau of Unemployment Compensation mailed to the respondent a notice informing the respondent that Johnson had applied for unemployment benefits effective as of August 26. Finally, on February 10,, 1941, Johnson applied for, and was denied, reinstate- ment, under circumstances, set forth below; which corroborate. our con- clusion that the respondent eliminated Johnson from its employment because of its hostility to her union membership and activity. • Accordingly, we find, as did the Trial. Examiner, that the respond- ent on August 24, 1940, released Kathryn Johnson and at all times since has refused to reinstate her because of her membership in, and activities in behalf of, the Union, thereby discouraging membership in a labor organization and interfering with, restraining, and coercing employees in the exercii e of rights guaranteed in Section 7 of the Act. C.' Discrimination against Johnson because she caused a charge to be `filed I'n her behalf under the Act On August 26, 1940, Johnson appeared at the Regional Office of the Board in Atlanta, where the. Union filed a charge in her behalf, that her work had been terminated because of her union membership and activities. On August'29,-the respondent ' received a letter from the Regional Director, informing it of the charge. Fields testified that Hauton, the respondent's vice president and general manager, called Fields to his office and asked who Kathryn Johnson was and why she had been "fired." Fields testified further that, he informed Hauton that Johnson had not been "fired," but had been "laid off." Hauton was not. a witness. On ebruary-10; 1941, Johnson.. returned- to the plant again and asked' Fields' fora job'. .Fields testified that he asked her why she had* not' come: back as 'he had told her to, and that he said that she would have been working, "possibly," by then, that he ,had taken it for granted that she did not want a job, and that instead of returning she had filed a "complaint" alleging that she had been discharged by the respondent. Fields denied that he told Johnson that Hauton had asked about her. Johnson's testimony, however,. is at variance with that of Fields. She testified that Fields asked her why she had not returned and stated that he could have reemployed' her the second week after she left; and that she, replied-, "It was understood, when I left, that you would let 'inc ;know about working, and I didn't know I, was to come back." - Johnson 'further testified that Fields, in re- ferring to the filing of charges on August 26, said to her, "Well, they 420 DECISIONS OF NATIONAL •I:ABOR 'RELATIONS BOARD come out here with that letter and said I fired you , and . . . Mr. Hauton got the letter, and he asked me who that girl was, and I told him, and he said, `A girl like that would be a dangerous girl to have around the plant."' Both Field `s and Johnson testified that Fields told Johnson that he was going to employ additional girls in a few weeks. Johnson expressed her"appreciation'for any job that she might be given . Johnson thereupon left the plant and has not been recalled. The Trial Examiner rejected Fields' version of his conversation with Johnson on February 10, 1941 , in so far, as it conflicted with hers. We note in this connection that'although Fields denied having told Johnson that Hauton had inquired about her, Johnson , who took the witness stand before Fields, in her testimony then given , showed knowledge of Fields' conversation with Hauton. It is thus clear that she received her information from Fields and gave the more credible testimony. Accordingly, we find that Fields conversed with Johnson, as described by her, on February 10, 1941. Upon the entire record, including Fields' statements to Johnson on February 10, 1941 , we find that the respondent, by denying Johnson reinstatement , was seeking to penalize her for having caused a charge to be filed in her behalf. We find that of . or about September 1, 1940, and at all times since , the respondent discriminatorily failed to rein- state Kathryn Johnson in available work for which she was fitted because she had filed charges under the Act, thereby interfering with, restrai.ping, and coercing , its employees in the exercise - of the rights guaranteed in Section i of the Act. D. The refusal to bargain 1. The appropriate unit By letter of August 29, 1940, the Union notified the respondent that it represented a large majority of the respondent's production and maintenance employees and requested a bargaining conference. 'On October 1, 1940, the respondent. and the Union agreed that a consent election be- held by the Regional Office of the Board to determine whether or not the Union represented a majority of the employees in an agreed appropriate unit. We find, in accordance with the agree- ment, and in accordance with the admission in the respondent's answer respecting the appropriateness of the unit, that the employees of the respondent, exclusive of employees in the engineering department and supervisory and clerical employees, at all times material herein constituted and that they now constitute a unit appropriate for the purposes of collective bargaining with respect to rates of pay, wages, hours of employment, and other conditions of employment, and that such unit insures to employees of the respondent the full benefit of their SCRIPTO M4 PTV-RING- COMPANY 421, right to self-organization and collective bargaining and otherwise effectuates the policies,of the Act. 2. Designation .of the, Union, by a majority in the appropriate unit On October 8, 1940, in accordance with the terms of the consent election. agreement, an election' was held among the employees in the unit' above found to be appropriate. On October 9, 1940, the Regional Director made his report of this election certifying that 191 employees had voted in favor of the Union and 90 against. The answer of the respondent admitted that, since' October 9, 1940, the Union has been the exclusive representative of the respondent's employees in the ap- propriate unit for the. purposes of collective ba rgaining. We find that on. October 9, 19:40, and at all times thereafter, the Union was, and, now is, the duly designated representative of a major- ity of the employees. in the appropriate .unit, and pursuant to Section 9 (a) of the Act, the exclusive representative of all the employees in such unit for. the purposes of collective bargaining in respect to rates of pay, wages, -hours of employment, and other conditions of employment. . . 3. The refusal to bargain a. Histov y Following issuance of the -election report of the Regional Director, the Union requested a conference with the respondent for the pur- pose of negotiating a contract. A meeting was held on October 22, 1940, between C. H. Gillman, Georgia State Director for the C. I. 0., Fred Wetmore, representative of the Union, and Ernest P. Rogers, secretary and treasurer of the respondent and its counsel, in Rogers' office. At this meeting, the union representatives presented Rogers with a proposed contract. Rogers requested that he be given a week in which to consider it. The Union agreed. On October 29, 1940, by agreement, the parties again met in Rogers' office. At this meeting, R. W. Goddard, District Board member of the Union, and Gillman represented the Union. As a counterproposal to the contract presented the week before by the Union, Rogers, for the respondent, presented a written memorandum outlining the basis on which the respondent was willing to enter into a contract. This memorandum was in part as follows : 1. The Company will recognize the Union as the sole bargaining agent for its employees' to the extent of the provisions and in accordance with the provisions of the National Labor Relations Act with respect thereto. 422 DECISIONS OF NATIONAL- L'ABOR RELATIONS BOARD 5. The company would require the Union to agree-that there would be no strike, walkout or stoppage•or interference with work during the life of the agreement; or lockout until .grievance has been exhausted [sic] . . . and the Union will be required to post bond with acceptable surety and in an agreeable amount to insure the faithful performance of such contractual provision. 6: Any such agreement as that contemplated would necessarily specifically specify that the company would maintain an open shop. 7. It is dubious that the company would be willing to provide for arbitration of disputes. During the conference, there was some discussion of the provisions of this memorandum. As this meeting ended, the Union's representa- tives suggested that the parties continue to sit daily until a contract was consummated. Rogers, however, stated that as the consummation of a contract would be a matter of "tedious negotiations" and as he had to make a living as an attorney,` he 'coilld' not sit continuously. Thereafter, by agreement, the parties met, generally in Rogers' office, about once each week until the negotiations terminated on February 7, 1941. From the first, the Union opposed the respondent's proposal that a bond be posted. One reason advanced, as testified by Goddard, was that it did not have the money to put up the bond." Rogers, however, insisted upon the bond requirement or "some alternative '.... proposal which would be -satisfactory," stating that the respondent .had just signed a defense contract which contained heavy penalties for failure of performance, and that the respondent's officials desired some as- surance that the Union "would live up to the terms of any agreement which it entered into with them."'• ` The:-reason'advanced by Rogers was an asserted inability to sue the Union as such. As an alternative to the proposal for a bond, Rogers suggested that, if the Union would make itself subject to suit in the State of Georgia, by incorporation,. the bond requirement would be eliminated. The Union representa- tives declined to incorporate the Union. Rogers asked them to sug- gest a counterproposal to the bond. Accordingly, the union repre- sentatives stated that they would post a bond in "some amount that was satisfactory to both sides," in the event that the respondent would agree to a closed shop and a check-off, so that the Union could be 8 Inquiries were made by the Union at three insurance companies to determine the possi- bility of securing a bond in the sum of $100,000, the figure subsequently suggested by the respondent. The first company refused to write such a bond ; the second did not reply to the inquiry; the third stated that it would write the bond provided the Union posted $100,00a collateral, and in addition paid a premium . The results of the inquiries were not com- municated to the respondent. SCRIPTO MANUFACTURING COMPANY 423, responsible for. the actions of all the people in the plants Rogers answered that the respondent would not lay down the requirement of union membership as a condition to continuing employment, that the collection of dues was purely a personal matter between the employees and the Union, and that the respondent's counterproposal was for a bond without the other requirements. With respect to the Union's request for a closed shop and check-off, Rogers acknowledged, however, that it "would be a little unreasonable" to require the Union, in the absence of a closed shop, to be responsible for the acts of all employees. He informed the Union's representatives that strikes and stoppages of work, "unless they were bronght about by the Union, or unless the Union was interested in them; or backed them up in some way or other, would not constitute a violation on the part of the Union." At a conference in Rogers' office about November 1940, Rogers drew up a form contract which the respondent proposed, but to several provisions of which the Union objected. The main objection was the bond requirement, quoted below. This form of contract, after,stating that "The Company recognizes the Union as the exclusive bargaining agent of its employees in its Atlanta, Georgia, plant, .. " contained the following article : ARTICLE 6. In the event of any dissatisfaction on the part of any employee, the matter shall be taken up by the employee with the employee's immediate supervisor, and if not satisfactorily ad- justed, the grievance thus arising shall be reduced to writing and presented by the Union's certified committeemen to the Company's superintendent. Thereafter follow two articles dealing with the method of handling grievances, and the form oI. contract continues : ARTICLE 9. The Union guarantees that during the life of this, agreement and until the provisions of Articles 6, 7, and 8 have been complied with and exhausted, in writing, that it and the Company's designated representatives have been unable to adjust. and settle the grievance, [sic] there will be no strike, walkout, stoppage' of work or interference with work or lockout by the Company, and any employee guilty thereof shall be subject to discharge at the discretion of the Company, and in such event such discharge shall. not constitute a grievance and shall not be the subject of conference or discussion, and any guilty employee and the Union hereby expressly waives and renounces any right which 9 There was no serious consideration of a "satisfactory" reduced amount for a bond because the Union's proposal of a closed shop and check-off was not accepted by the respondent. 424 DECISIONS OF" NATIONAL LABOR RELATIONS BOARD he, she, or it might have to picket the plant or premises of the Company, or to participate, directly or indirectly, in any such picketing or in any boycott, or to do any other thing towards inducing any employee to cease his work with the Company, or towards inducing any person to-refrain from accepting employ- ment with the Company, and neither the Union nor any of its affiliated Unions or organizations shall aid, directly or indirectly, any strike, walkout, stoppage of work or any individual or group engaged therein. ARTICLE 10. Inasmuch as the Union is a voluntary association and not recognized as a legal entity under the laws of the State'of Georgia and consequently not subject to suit in the State of Geor- gia, and since the Company would, therefore, be dependent entirely for the enforcement of this agreement upon the good faith and ability of the Union's designated representatives, the Union has contemporaneously with the execution of this agreement given to the Company an indemnity bond in the amount of One Hundred Thousand Dollars ($100,000), to guarantee its faithful perform- ance of this agreement and to indemnify the Company against loss or damage resulting from the Union's failure to comply with the terms hereof. In the event of a violation of this agreement by the Union and consequent interruption of the normal operation of the Company's business, the Company shall be entitled to liqui- dated damages in the following amounts : One-half normal. oper- ations of plant $500 per day; entire cessation of operations of plant $1,000 per day. Rogers informed the Union's representatives that, under his inter= pretation, the contract did not make it a violation on the part of the Union itself if any employee who was not a member of the Union, and over whom it had no direct control, violated it. The onion representa- tives still insisted that the Union would not post the bond, and the respondent remained adamant that such a bond, would have to be posted, or that some "satisfactory" alternative be substituted therefor. By letter of January 24, 1941, to the respondent, the Union suggested that an arbitration clause be substituted for the bond requirement and that the form of contract, with such substitution, be executed by the parties. A day or two after January 24, at a meeting held at the respondent's office, the respondent declined to accept the proposal made in the Union's letter. The respondent continued to demand that a bond or other "satisfactory" arrangement be contained in any agree- ment entered into. It is clear that on January 24 the parties were in substantial agreement on the provisions of the contract, other than the one respecting the bond. It is also clear that only the respondent's insistence upon the posting of a bond or the incorporation of the SCRIPTO MANUFACTURING COMPANY 425. Union prevented the execution of a collective bargaining agreement. It is apparent that the only "satisfactory alternative" to thebond was. incorporation: On February ,7, 1941, a, meeting called by representatives of the Board and held at the Regional Office, was attended by Rogers and the Union's representatives. At that time Rogers dictated a written memorandum as a, summarization of the discussion, which he signed after all parties had agreed that it correctly summarized the events of the meeting. This statement is as follows : We have been discussing here the result of the 'negotiations between Scripto Manufacturing Company and the Interhational Aluminum Workers to arrive at a contract between the Union and the Company, with respect to the hours, wages, and general working conditions of the employees of Scripto. We have here, and have had under discussion, a form of pro- posed contract, which is the last reduction to contract form of our concerted efforts; that is the efforts of the Company and the Union. It seems that all provisions of the proposed contract are agreeable to both parties, with the exception of Article 3, Article 4 (we have changed here Article 5 by inserting Thanksgiving Day)., and Article 1010 Messrs. Goodard and Gillman, of the Union, have stated to the Company that the Union will not enter into any contract with the Company which contains the requirement that the Union post a bond for its faithful performance of the contract. The Company has stated that it will not enter into a contract which does not contain such a requirement, or some satisfactory alternative requirement., by which the Union subjects itself to suit in the courts of the State of Georgia for violation of the contract, or by which it agrees to indemnify the Company in some amount,, or in some respect, for any damages which it may occasion the Company by reason of its violation of its agreement. The Company is willing to continue negotiations with the Union, and will arrange to meet the designated representatives of the Union at any and all reasonable times and places, to con- tinue negotiations, and will 'even continue negotiations with re- spect to the bond 'requirement; and if it can be convinced by the, Union that it does not need such requirement, or such alt'e'rnative io These `references are to the cohtract proposed by t1fe respondent, about which the negotiations revolted 'after its introduction. Article 3 related to seniority. The dif- ferences between the parties. in that respect were not substantial. Article 4 relat'edinter alia to the recall 'of laid-off etnployces . The respondent proposed that employees who failed to report within 2 days after posting of a notice in the plant and ni'ailink of a letter or card should he cohsidered as having quit.., The Union originally insisted upon it 5-day provision, 'but later reduced it 'to 3. Article 10 related to the bond. 1 426 DECISIONS OF NATIONAL LABOR RELATIONS BOARD requirement, it will,'of course, eliminate such requirement from further negotiation. If the Union, however, continues to insist that it will not sign a contract with the bond requirement, or cannot offer any satisfactory alternative provision, the Company cannot see any advantage of any further negotiations, but of course will be willing to carry them on, 'and- with an open mind. (Signed) E. P. Rooms. 2/7/41. Following this meeting, the Union filed a charge with the Board alleging that the respondent had refused to bargain -collectively. -There were no further meetings between the parties. b. Concluding findings - The respondent's position is that, as it had entered into a.defense contract containing penalties for failure of performance,"'. it needed assurances. that the Union would comply, with its obligations under any contract entered into, and, as the Union was a voluntary associa- tion of individuals, and, therefore, in Rogers' opinion, not suable in the courts of the State of Georgia, the respondent ilisisted upon the filing of a bond or upon what it termed the Union's subjecting, itself to the jurisdiction of the Georgia courts.- At the hearing, the respond- ent's counsel, stated that, in his' opinion, such -jurisdiction could be obtained only by incorporation of the Union. According to Rogers, there was a discussion about the incorporation of unions 'generally, and that it was his 'position that it would be.the best thing for the Union to do. As noted above, the respondent was unwillilig' to recede from its position, and declined to accept. any counterproposals made by the Union. Only the respondent's insistence that the'contract con- tain one or the- other of its alternative proposals, prevented the -consummation of an agreement. The problem involved in a requirement that a union post' a bond' to guarantee 'performance of an agreement. is one on which the Board has already commented. In Matter of Jasper Blackburn Products Corporation, ,12 the Board said : The Act also requires, in ordinary circumstances, a willingness to consummate any understandings thatmay be reached in a bilateral signed agreement ... The -Respondent, in refusing to, execute 11 As to the nature . of the purported penalties themselves there is an absence of proof. The record is devoid of. any . evidence as to their existence and character other .than the ..generic assertion indicated above. The respondent has not offered specific proof (a) ,that . the penalties exist in fact , and (b ) that they would be applicable to non-performance arising from a labor . dispute. "Matter of Jasper Blackburn Products Corporation and District No. 9, Internatipnai Association of Machinists, afilliated with the American Federation of Labor, 21 N. L. It. B. 1240. "SCRIPTO MANUFACTURING COMPANY - 427 a signed agreement, binding upon both parties, unless the Union posted a bond, sought to prefix the fulfillment of its statutory -,obligation with a condition not within the provisions, and maui- festly inconsistent with •the'policy; of the Act. Even assuming a bond of the kind requested to be obtainable, the employer can- not lay down the blanket requirement that the Union pay a tax to a surety company before the result contemplated by the Act, a signed bilateral agreement, can come to pass. The reasoning applied in that case wherein the employer was found to have violated Section 8 (5) of the Act, is applicable to the present case. By insisting upon the execution of a bond the respondent by unilateral action was attempting to add a condition precedent to bar- gaining not found in the terms of the Act. Also the evidence in the present case showed that such 'a bond would require the payment of a premium in. addition to the posting of collateral having a value equal to the`face ;amount of, the, bond. It is apparent that the execu- tion of a few such contracts with similar bonds would very soon seri- ously impair, if not totally destroy, the Union's ability to execute signed agreements and thus frustrate one of the essential aims of the Act 1S Furthermore the only other "satisfactory alternative" to the bond, incorporation of the Union, is equally obnoxious to the stated purposes ,of the Act which granted employees the right to "bargain collectively through representatives of their own choosing." By, its insistence upon incorporation of the Union, the respondent in effect said to the employees, ".We will not bargain with the legal entity you chose as your representative but we will bargain with a different legal entity, satisfactory to. us, namely 'an incorporated union." By its insistence upon this alternative the respondent attempted to deprive the employ- ees of one.'of, the rights guaranteed by Section 7 of the Act 14 is Compliance bonds are not historically within the scope of bargaining agreements. The subjects normally found in such contracts are recognition of the bargaining agency, pro- visions for wages; hours, seniority , grievance ; procedure, and -administrative and • inter- pretative machinery such as arbitration . Cf. Bulletin No. 4, November 1939 , National Labor Relations Board , Written Trade Agreements in Collective Bargaining, Page XI, and chapter 3 ; Robert R. R. Brooks, When Labor Organizes, page 223. Nor is the bond requirement within the normal historical concept of collective bargaining: "Collective ' bargaining is the process whereby representatives of a union meet with an Employer * * * to fix the terms of Employment for a certain period of'time." Carroll R. Daugherty, Labor Problems in American Industry (Rev. Ed., 1938 ) page 450; see "Twentieth Century Fund , Inc..: Labor and the Government, page 5. 14 In connection with the respondent's proposal for the incorporation of the Union, and 'its insistence upon a compliance bond , the following observation is apt : • * • It is doubtful if. the cause of collective bargaining would be helped even if trade agreements were made like other contracts by the incorporation of unions and the inclusion of legal "consideration." Their observance depends on the mutual good will and confidence of the contracting parties * * * On the whole . there had better be no trade agreements if their execution stands or falls in the Courts. Their value 428 DECISIONS OF NATIONAL LABOR RELATIONS BOARD We find that by its refusal to 'execute an agreement respecting terms 'and conditions of employment unless the Union posted a bond or in- corporated, the respondent has refused to bargain collectively with the exclusive. representative of its employees within the meaning of Section 8 (5) of the Act.- We find that the respondent, 'on and at all. times after October 29, 1940, refused to bargain collectively with the Union as the exclusive representative of its employees in an 'appropriate unit in respect to rates of pay, wages, hours of employment, and other conditions of employment, and that by the' above conduct, the respondent 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 We find that the activities of the respondent set forth in Section III above, occurring in connection with the operations of airs respondent described in Section I above, have a close, intimate ; and substantial relation to trade, traffic, and comriierce among the several States and tend to lead to labor disputes burdening arid obstructing 'coininerce 'and the free flow of commerce. arises from the fact that they do make for industrial peace by reducing the possible area of friction and dispute. Carroll R. Dougherty, Labor Problems in American Industry (Rev. Ed., 1938), page 45b; cf. page 455. Implicit in the re'spondent's argument for the bond or ilicorpocatioh of the Uhlbh is the assumption that the Union is irresponsible. That thesis is also a flat negation of the principle of representative bargaining declared by the Act. Cf. Matter of Inland Steel Com- pany and Steel Workers Organizing Committee and Amalganca'teil. Association 'of Ieo`n,'Steel, ,and Tin Workers of North America, Lodge No's. 611, 1010, and 1101, 9 N. L: B. B., 758,'set aside and remanded on other grounds , 109 F. (2d) 9 (C. C. A. 7'). is The respondent throughout seems to have labored under a misapprehension as to the purposes of the 'Act, the nature of the collective bargaining process, and its own statutory obligations . The following argument taken from the respondent 's Statement of Exceptions to the Intermediate Report is indicative of the respondent's apparent 'confusion : "Respondent excepts to the following statement of the Trial Examiner, beginning in line .4, on page 12, of his report: By its insi 'ste'nce upon incorporation 'of the Union , the 'resp'ondent iii effect said to the'employees "We will not bargain with the legal 'eritit' you chose as Your representa- tive but we wi11 bargain with a different legal entity, satisfactory to us, namely an incorporated union." ."For the reason ' that this `statement or conclusion is not supported or justified by the, evidence or law. In the first place the statement is based upon the proposition that the union chosen by the employees as their representative was a legal entity when as a matter of fact it was not, and is based upon the further assumption that to bargain means to consummate a written, signed contract , and, it presupposes that an employer must enter into a written , signed contract with any individual , group, association or body which its employees might choose and designate as their bargaining agent, irrespective of the nature and character of such agent . This, we submit, is not justified in fact or in law. An employer is not 'subjected by the National Labor Relations Act to airy such harsh, unreason- able or untenable treatment or result and .if such were the fhte'rpretatioii placed 'upon the Act, it would clearly be unconstitutional." SCRIPTO; MANUFACTURING COMPANY 429. V. 'THE REMEDY Having found that the respondent,has engaged in unfair labor prac- tices, •we shall order it to cease and desist therefrom and, in aid of such cease, and desist order, to take certain affirmative action herein- after set forth which we find necessary to effectuate the policies of the Act. Having found that the respondent has refused to bargain collectively with the Union as the exclusive representative of its employees within an appropriate unit, we shall order the respondent, upon request, to bargain collectively with, the Union as the exclusive representative of all employees in the appropriate unit, and, if an understanding is reached, embody. such understanding in, a signed agreement, upon request,=with-the U,nion,..without requiring the Union to post any, bond or to become incorporated, or to adopt any similar alternatives.. We have found that the respondent discriminated against Kathryn Johnson with regard to the tenure of her employment because of her union membership and. activities, and because. she filed charges, under the Act.. We. shall, accordingly, order. the respondent to offer Kathryn Johnson immediate reinstatement to her former or a substantially equivalent position, without prejudice to her seniority or other rights and privileges, and to, make her whole, for. any loss of pay she; may have suffered by reason of the respondent's discrimination against her, by payment to,Kathryn Johnson of a sum of money equal, to the amount which she normally would have earned as wages from the date, of her discharge to the date of the offer of reinstatement, less her net earn- ings 16 during such period. Upon the basis of the foregoing findings of fact and upon the entire record in the case, the Board makes. the. f ollowing: .1 11 . COh1CLIISIQNS, oFr LAW, 1. International Union Aluminum Workers of America, affiliated with the C. I.O., is a labor organization within the meaning of Section 2 (5) of the Act. 2. By discriminating against Kathryn Johnson in regard to her hire and tenure of employment and thereby discouraging membership in International Union Aluminum Workers of America, the respondent 16 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 elsewhere . See Matter of.Cro8sett Lumber. Company, and United. Brotherhood of.Carpenters and Joiners of. America, Lumber and Sawmill Workers Union, Local 2590, 8 N. L. R. B. 440. Monies received for work performed upon Federal , 'State, county, municipal , or other work-relief projects shall be considered , as earnings . See Republic Steel Corporation v. N. L. if . B. .311 U. S. 7. 430 DECISIONS OF NATIONAL LABOR .RELATIONS BOARD has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (3) of the Act. 3. By discriminating against Kathryn Johnson because she filed charges under the Act, the respondent has engaged in and is engaging in unfair labor practices , within the meaning of Section 8 (4) of the Act. 4. The employees of the respondent , exclusive of employees in the engineering department and exclusive of supervisory and clerical em- ployees, and composing what is known as the production and mainte- nance employees, have at all times material herein constituted and now constitute a unit appropriate for the purposes of collective bargaining, within the meaning of Section 9 (b) of the Act. 5. International Union Aluminum Workers of America was, on October 8, 1940, and at all times thereafter has been, 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. 6. By refusing to bargain collectively with International Union Aluminum Workers of America as the exclusive representative of its' employees in the appropriate unit, the respondent has engaged in and' is engaging in unfair labor practices .within the meaning of Section 8 (5) of the Act. 7. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, the re- spondent has engaged in and is engaging in unfair labor 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. 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, spondent, Scripto Manufacturing Company, and its officers, agents,.,. successors, and assigns, shall : . 1. Cease and desist from : (a) Discouraging membership in International. Union Aluminum Workers of America, or in any other labor organization of its em- by discharging or refusing to reinstate any of its employees or in any other manner discriminating in regard to their hire or tenure of employment or any term or condition of their employment; (b) Refusing to reinstate or otherwise discriminating against any of its employees because he has filed charges under the Act; (c) Refusing to bargain collectively with International Union Aluminum Workers of America as the exclusive representative of all SCRIPTO MANUFACTURING COMPANY 431 its employees, exclusive of employees in the engineering department and exclusive of supervisory and clerical employees, and composing what is known as the production and maintenance employees; - (d) In any other manner interfering with, restraining, or coercing its employees in the exercise of their right to self-organization, to form, join, or assist labor organizations, to bargain collectively through rep- resentatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protec- tion, 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) Offer to Kathryn Johnson immediate and full reinstatement to her former or a substantially equivalent position without prejudice to her seniority and other rights and privileges; (b) Make whole Kathryn Johnson for any loss of pay she may have suffered as a result of the respondent's discrimination against her, in the manner set forth in the Section entitled "The remedy" above; (c) Upon request, bargain collectively with International Union Aluminum Workers of America as the exclusive representative of the employees of the respondent, exclusive of employees in the engineering department and exclusive of supervisory and clerical employees, and composing what is known. as the production and maintenance em- ployees, in respect to rates of pay, wages, hours of employment, and other conditions of employment; and if an understanding is reached on such matters, upon request, embody such understanding in a signed agreement with the Union, without requiring the Union to post any bond or to become incorporated, or to adopt similar alternatives; (d) Post immediately in conspicuous places throughout the respond- ent's plant, 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 is ordered to cease and desist in paragraphs 1 (a), (b), (c), and (d) of this Order; (2) that the respondent will take the affirmative action set forth in paragraphs 2 (a), (b), and (c) of this Order; and (3)' that its em- ployees are free to remain or become members of International Union Aluminum Workers of America, affiliated with the C. I. 0., and that the respondent will not discriminate against any employee because of such membership; (e) Notify the- Regional-Director for the Tenth Region in writing within ten (10) days from the date of this Order what steps the re- spondent has taken to comply herewith. MR. GERARD D. REILLY took no part in the consideration of the above Decision and Order.