Sussex Dye & Print Works, Inc.

In the Matter of SUSSEX DYE & PRINT WORKS, INC., AND BERNARD R. ARMOUR and FEDERATION OF DYERS, FINISHERS, PRINTERS AND BLEACHERS OF AMERICA Case No. C-1745.-Decided August 01, 1941 Jurisdiction : fabric dyeing, printing, and processing industry. Unfair Labor Practices Interference, Restraint, and Coercion: anti-union statements; discriminatory pro- hibition of legitimate union's activities at plant ; discrimination in rehiring members of legitimate union. Company-Dominated Union: sponsoring and permitting membership solicitation for the dominated union on company property, at company expense, and wjth the assistance of a supervisory employee, memberships so secured causing dominated union to defeat legitimate union in consent card count by Regional Director ; entering into closed-shop agreement with dominated union ; con- tributing financial support to it through candy distributing machine on com- pany property; causing dominated union's president to serve as a supervisory employee and placing him in charge of hiring new employees ; discriminatory rehiring of disproportionate number of dominated union's members ; permitting collection of dues for dominated union on company time and property and by a supervisory employee, while prohibiting even talking in behalf of legitimate union ; exploiting the closed-shop contract through supervisory employees, coercing employees to join dominated organization. Remedial Orders : dominated union disestablished; contract with dominated union abrogated. Definitions Individual who had important part in forming corporation, who is principal creditor and source of working capital of corporation, and who controls its business and labor policies, held to act "in the interest of" the corporation and to be joint employer of corporation's employees although he is not an officer, director, or employee of corporation. Corporation held to conduct its interstate operations as a creature and instrumentality of individual. Practice and Procedure Employer's contention that a stipulation between it, the charging union, and the alleged dominated union for a determination of representatives by a card count forecloses consideration of unfair labor practices prior thereto held without merit where after card count was agreed upon the employer assisted the dominated union to insure its victory in card count without revealing such fact at the time stipulation was executed and where after card count it continued to support the dominated union and com- mitted other unfair labor practices. Equally unmeritorious is the em- ployer's reliance upon the Regional Director's failure to vacate result of card count when challenged by the legitimate union since such non-action does not indicate an acceptance or ruling upon the legitimacy of the dominated organization. 34 N L R B., No 81. 625 626 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Mr. Shad Polier, for the Board. Mr. Julien D. Goell, and Weisman, Celler, Quinn, Allan & Spett, by Mr. Samuel S. Allan, of New York City, for the respondents. Mr. John F. Bello and Mr. Vito Fritz, of Paterson, N. J., for the Union. Miss Edna Loeb, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE ,.CASE Upon charges and amended charges duly filed by Federation of Dyers, Finishers, Printers and Bleachers of America, herein called the Union, the National Labor Relations Board, herein called the Board, by Elinore M. Herrick, Regional Director for the Second Region (New York City), issued its complaint dated August 15, 1940, against Sussex Dye & Print Works, Inc., Newton, New Jersey, a corporation, herein called Sussex, and against Bernard R. Armour, New York City, an individual, herein called Armour, alleging that they had engaged in and were engaging in unfair labor practices affecting commerce, within the the meaning of Section 8 (1) and (2) and Section 2 (6) (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Sussex and Armour are jointly referred to herein as the respondents. Copies of the complaint and accompany- ing notice of hearing were duly served upon the respondents, the Union, and Textile Workers of Newton, New Jersey, a labor organi- zation, herein called the Independent. The complaint, as amended at the hearing,' alleges in substance that on and after November 3, 1939, the respondents (1) sought to dis- credit the Union by words and acts; (2) discouraged persons apply- ing for employment from joining or assisting the Union; (3) threatened to discriminate and discriminated against employees be- cause of their adherence to the Union; (4) urged employees and pros- pective employees to join or remain members of the Independent and to designate it as their collective bargaining representative; (5) engaged in and permitted organizational activities by employees on behalf of the Independent during working hours without loss of pay; and (6) on and after November 3, 1939, caused to be circulated and approved by employees a petition, herein called the membership petition, designating the Independent as collective bargaining repre- 1 See footnote 2, infra. I SUSSEX DYEI & PRINT WORKS INC. 627 sentative. The complaint further alleges (7) that on November 3 and 6, 1939, the Union, the Independent, and Sussex entered into an agreement- for a card count by the Regional Director to determine whether the Union or the Independent had been designated as col- lective bargaining agent by a majority of an agreed group of eligible persons; (8) that the Independent submitted the membership peti- tion as part of its proof of representation; (9) that the Regional Director conducted the count on November 6, 1939, and on Novem- ber 7, 1939, announced that the Independent had shown more desig- nations than had the Union; (10) that had it not been for the desig- nations contained in the said petition, the Union's designations would have exceeded those of the Independent; (11) that Armour caused Sussex to enter into an exclusive recognition agreement with the Independent on November 17, 1939; and (12) that the respondents by the foregoing and other- acts dominated and interfered with the formation and administration of the Independent, and interfered with, restrained, and coerced the employees in the exercise of rights guaranteed in Section 7 of the Act. On September 25, 1940, Sussex filed an answer to the complaint, in which it admitted several allegations, denied that it had engaged in the alleged unfair labor practices, and alleged certain affirmative defenses. On the same date Armour also filed an answer to the complaint, in which he denied that he organized or controlled Sussex, as the complaint alleges, or that he had engaged in the alleged unfair labor practices. Pursuant to notice, a hearing on the complaint was held at Newton, New Jersey, on October 14-18 and 21, 1940, before Thomas H. Ken- nedy, the Trial Examiner duly designated by the Chief Trial Ex- aminer. The Board and the respondents were represented by counsel, the Union by a representative, and all participated in the hearing. The Independent did not appear. All parties were afforded a full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues. At the opening of the hearing Armour moved to dismiss the complaint as to him on the ground that it did not allege that he was engaged in interstate com- merce. This motion was granted by the Trial Examiner with leave to counsel for the Board to amend the complaint. The complaint was then amended on motion of counsel for the Board to allege that Armour's activities set forth in the complaint were in interstate com- merce. Thereupon, the Trial Examiner and the parties treated the complaint as reinstated with respect to Armour. At the close of the Board's case, counsel for the Board moved to amend the complaint 628 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to conform to the proof.2 The Trial Examiner granted this motion. The respondents then moved to dismiss the complaint and the Trial Examiner reserved ruling. The respondents renewed their 'motions to dismiss at the close of the hearing and the Trial Examiner again reserved his ruling. The Board has reviewed the rulings of the Trial Examiner on motions and on objections to the admission of evidence and finds that no prejudicial errors were committed. The rulings are hereby affirmed. At the close of the hearing the Trial Examiner afforded the parties an opportunity to argue orally before him, but they. waived this privilege. Pursuant to permission granted by the Trial Examiner, counsel for the Board thereafter filed with him a list of authorities, and the respondents filed a brief, both of which were considered by the Trial Examiner. On December 2, 1940, the Trial Examiner filed his Intermediate Report, copies of which were duly served upon the parties and the Independent. In the Intermediate Report the Trial Examiner found that Armour was not an employer within the meaning of the Act and recommended dismissal of the complaint with respect to him. The Trial Examiner found that Sussex had engaged in and was engaging in unfair labor practices affecting commerce within the meaning of Section 8 (1) and (2) and Section 2 (6) and (7) of the Act, and recommended that it cease and desist therefrom and with- draw recognition from and disestablish the Independent. The Trial Examiner recommended that the respondents' motion to dismiss the complaint with respect to Armour be granted but recommended that the motion be denied with respect to Sussex. Sussex and the Union thereafter filed exceptions to the Intermediate Report. Pursuant to notice, on February 20, 1941, a hearing for the purpose of oral argument was held before the Board at Washington, D. C. The respondents appeared by counsel, the Union by a representative. All participated in the oral argument and submitted briefs. The Board has considered the exceptions and briefs of the parties and in so far as the exceptions are inconsistent with the findings, conclusions, and order below, finds no merit in them. 2 Shortly before the close of, the Board 's case, counsel for the Board moved to amend the complaint in certain particulars. The respondents objected thereto, claiming that the amendments changed the theory of the Board's case as originally pleaded and that they were therefore confronted with surprise. The respondents' objections were overruled and the motion to amend granted by the Trial Examiner , with the provision that upon the completion of the Board's case, the respondents would be given a reasonable time within which to prepare to meet any new issues raised by the said amendments. The respondents thereafter indicated that they did not desire any additional time within which to prepare their defenses. SiUSISEX DYE & PRINT WORKS, INC. 629 Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT I THE BUSINESS OF THE RESPONDENTS Sussex is a New Jersey corporation engaged since November 1939 in printing, dyeing, processing, and distributing fabrics at its plant in Newton, New Jersey. In the course of its' operations between November 1, 1939, and September 30, 1940, materials, products, and fabrics costing more than $55,000, were shipped to its plant from points outside New Jersey. During the same period, processed fabrics valued at more than $50,000 were shipped from the plant to points outside New Jersey. Sussex admits that it is engaged in commerce within the meaning of the Act. Armour is an individual whose relationship to, and control of, Sussex appears below in our recital of the circumstances surrounding the formation of Sussex and the events prior and subsequent thereto. A. Corporate developments leading to the formation of Sussex and Armour's control thereof The Newton plant, now owned by Sussex, was formerly owned and operated by Associated Dyeing and Printing Co., Inc., herein called Associated, Inc., a New Jersey corporation which also owned and operated three plants at Paterson, New Jersey. From 1929 to September 1937, Armour was president of Associated Inc. and super- vised, directed, and controlled its labor policies and labor relations. In May 1937 the Newton plant ceased operations and did not resume them until November 1939. On August 12, 1937, Armour caused the incorporation of Clark Dye and Print Company of New Jersey, a New Jersey corporation which on August 31, 1937, was renamed Associated Dyeing and Printing Company of New Jersey, Inc., herein called Associated of New Jer- sey. On the latter date, Associated Inc. leased the Newton plant and one of the Paterson plants to Associated of New Jersey. In Septem- ber 1937 Associated Inc. was adjudicated bankrupt and the referee in bankruptcy thereafter approved the above leases. Armour has continuously supplied Associated of New Jersey with working capi- tal by loans to it, and from August 31, 1937, to August 25, 1939, Asso- ciated of New Jersey paid the expenses of maintaining the Newton plant. On or about September 20, 1938, the trustee in bankruptcy sold and transferred the Newton plant and all the other property of Asso- ciated Inc. to Adams Dyeing and Printing Company of New Jersey, Inc., herein called Adams. Adams, a New Jersey corporation oper- 451269-42-vol. 31 --41 630 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ating as a holding company, was organized by Armour and other holders of liens on the property of Associated Inc. Armour, directly and indirectly, held the majority of the liens upon Associated Inc., and therefore became the holder, directly and indirectly, of a major- ity of the capital stock of Adams. In January 1939 the stockholders of Adams organized Sussex, and on or about August 25, 1939, Adams sold and transferred the Newton plant to Sussex, selling the other former properties 'of Associated Inc. to Associated of New Jersey. In consideration for the transfer of the Newton plant, Sussex issued to Adams bonds in the amount of $75,000, secured,by a mortgage on the said property. The capital stock of Associated of New Jersey and Sussex is in the nominal amount of $1,000. All this stock except qualifying shares is owned by Julien D. Goell, Armour's nephew, and one Joseph Broad- man, none of it by Armour. Armour holds no office in Adams, Sussex, or Associated of New Jersey and is not a member of their respective boards of directors. Goell and Broadman, are officers and directors of all three corporations, however, and a majority of their officers and directors are common to all three corporations. B. Negotiations for the reopening of the Newton plant, Armour's par- ticipation therein and control of the business and labor policies of Sussex. As already noted, Armour was president and director of labor poli- cies and labor relations of Associated Inc., which operated the New- ton plant until its shut-down in May 1937. In 1938 former employees of the plant and other Newton citizens appealed to Armour to reopen the plant, but he at first refused to do so on the ground of unprofit- ability. Early in the same year former employees formed the Inde- ' pendent as a vehicle to secure the plant's reopening, and this organi- zation presented to Armour a 'proposed contract specifying hours, wages, and working conditions desired upon the reopening. After several appeals by the 'Independent and Newton citizens, in the fall of 1938 Armour agreed to reopen on the condition that the workers would agree to accept lower wages than those specified in the proposed contract, and the further condition that Newtwon citizens would sub- scribe to one-half of a bond issue to finance the plant's operations, the other half to be bought by Armour himself. He informed the Independent that if these conditions were met, the plant would be reopened by a new corporation named Sussex. Apparently at the Independent's request, Armour consented to attend a meeting at New- ton to announce publicly the terms upon which he would reopen, and he thereafter told his nephew Goell that if everything "shaped up," he was going to place Goell and Broadman in charge of the Newton SUSISIEX DYE & PRJNT WORKS, INC. 631 plant.. The Independent called a meeting for December 16, 1938, an- nouncing by letter that "Representatives of newly formed company" would be present and that contract terms would be discussed. At the meeting, which was attended also by Goell, members of the Independent, and other citizens of Newton, Armour reiterated the terms under which he would reopen the plant, namely, the bond issue and the reduced wage scale. His terms were approved at the meet- ing, Goell drew up incorporation papers for Sussex, and it was in- corporated in January 1939. In accordance with Armour's statement to Goell in December 1938, the latter became secretary of Sussex, allegedly in charge of its labor policy, Broadman became vice presi- dent in charge of sales, and the two officers held all of Sussex's capital stock except qualifying shares. Early in 1939 both the Union and the Independent claimed to rep- resent a majority of the persons employed at the plant prior to the shut-down, and apparently each organization sought to secure a bar- gaining contract with Sussex before the plant's reopening. On Oc- tober 27, 1939, after preliminary unsuccessful negotiations for settle- ment of the conflicting claims, Armour and Goell met with repre- sentatives of the Union, requested resolution of the controversy by an election, and discussed that proposition. Goell agreed that upon the reopening of the plant, Sussex would rehire without discrimina- tion all persons named on the last full pay roll of Associated Inc., and the Union suggested that these former employees be rehired ac- cording to seniority. Armour objected to the latter proposal, stating that he wanted to rehire the most competent men first, and the Union acceded to his wishes. On November 6, 1939, pursuant to an agree- ment between Sussex and the two unions, and apparently with Ar- mour's approval, the representation dispute was submitted to the Regional Director for resolution by a check of union designations against a May 1937 pay roll of Associated-Inc.; on November 7 the Regional Director announced that the Independent had more designa- tions than the Union ; and on November 8 the plant resumed opera- tions. In accordance with the agreement made between Armour and the citizens of Newton in December 1938, Sussex's operations were financed by a $40,000 bond issue secured by a mortgage on its property, one- half of which issue was bought by Armour, the other by Newton resi- dents. Moreover, in return for an unsecured note, Armour advanced Sussex $8,000 for payment of accrued taxes on its property. As al- ready noted, between August 1937 and August 1939 the plant was maintained by Associated of New Jersey, whose working capital is furnished by loans from Armour. During October 1939 the plant was prepared for reopening apparently at Armour's instigation, by 632 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Carlson and Knauss, employees of two other corporations in which Armour has financial interests. This work was done without charge to Sussex. The record shows that Sussex shares the purchasing agent, consulting engineer, and bookkeeping facilities with Associated of New Jersey, and another corporation in which Armour has a financial interest. In addition to being a principal creditor of Sussex, Armour is almost its sole source of working capital. He is admittedly con- sulted by Sussex officers regarding the fixing or changing of all busi- ness policies except labor policy, and if he does not approve of the proposals made, they are abandoned, allegedly because they require ,expenditure of money and because Sussex officers have confidence in Armour's business judgment. Goell, Armour's nephew, who is nomi- nally in charge of Sussex labor policies, testified that Armour is in- formed but is not consulted regarding labor matters. We cannot credit the latter testimony. Armour's participation in the negotia- tion and fixing of 'employment conditions and settlement of rival representation claims has already been noted. Since Armour con- trols Sussex's finances, it is apparent that he would have to approve such changes in labor relations as the granting of employee wage in- creases. Moreover, the record shows that after the reopening of the plant in November 1939, Armour actively participated in control of labor relations at the plant, as described below. In about March 1940 Armour went to the plant, caused Harry Babcock, an employee, to be brought before him, discharged him, and told William C. Goble, plant superintendent, not to rehire Babcock until he heard from Armour. Thereafter, the Union asked Goell to reinstate Babcock and also Anson Hooey, another employee who had been discharged, but Goell refused to do so, stating that if the Union was dissatisfied with his decision, it might appeal to Armour. The Union did so and sometime in March 1940 had a conference with Armour. The latter indicated that he might reinstate the men but insisted upon securing an apology from Babcock for certain conduct on his part. The Union's representatives testified without contra- diction that in discussing the discharges of, and proposals to rein- state, Babcock and Hooey, Armour stated that he had to maintain discipline in the plant, had to operate his plant efficiently and eco- nomically and maintain uninterrupted production. After this con- ference Babcock's wife wrote to Armour requesting her husband's reinstatement, and on April 3 Armour replied, stating that he would "have him reinstated" only if he would write to Armour apologizing for his conduct and promising to behave himself in the future. On April 5 Babcock wrote Armour a letter of apology. Armour there- upon arranged a conference with him and Mrs. Babcock regarding the matter, met with them and with Hooey on or about April 18, and arranged for the reinstatement of both men. The Independent pro- S?TSIStX DYE & PRINT WORKS, INC. 633 tested their reinstatement since they were both members of the Union, but Armour secured a withdrawal of this protest by explaining to the Independent that the Board was investigating Sussex and the Inde- pendent and suggesting that they cooperate in showing the Board that Sussex and the Independent were not "bad fellows." Babcock and Hooey were reinstated on or about April 22, 1940. Section 2 (2) of the Act reads : "The term `employer' includes any person acting in the interest of an employer directly or indirectly " It is clear that Armour, in his activities set forth above, is "acting in the interest of" Sussex. We find that as Sussex's principal creditor and source of working capital, Armour in fact controls the business and labor, policies of Sussex, and that Sussex conducts its interstate operations as a creature and, instrumentality of Armour. We find that Armour is an employer of the employees herein involved within the meaning of the Act. H. THE ORGANIZATIONS INVOLVED Federation of Dyers, Finishers, Printers and Bleachers of America is a labor organization affiliated with the Congress of Industrial Or- ganizations. It admits to membership employees of the respondents. Textile Workers of Newton, New Jersey, is an unaffiliated labor organization which admits to membership only the employees of the respondents at the Newton plant. III. THE UNFAIR LABOR PRACTICES A. Background, formation of the Independent As already noted, Associated Inc. shut down the Newton plant in May 1937, and it remained closed until operations were begun by Sussex on November 8, 1939. Sometime shortly before April 8, 1938, William W. Struble and other former employees of Associated Inc. had the following petition prepared by a local justice of the peace: We, the undersigned previous employees of the above-named corporation express herein our desire that we be allowed to resume our work and express our entire satisfaction with the wages we were receiving and working conditions as they existed at the time of the closing of the plant. FURTHER, should the plant be reopened with this understanding, we agree not to join any union other than a local one. This petition was then circulated in and about Newton and was signed by 113 individuals, including several who occupied supervisory posi- tions in the plant prior to its shut-down in May 1937 and again 634 DECISIONS OF NATIONAL LABOR RELATIONS BOARD after its reopening in November 1939. Among these supervisors were Walter Hendershot and Kenneth Smith, foremen, who are paid salaries as contrasted with the hourly wages paid to production workers, give orders to strawbosses under them, determine the distribution of work to employees under their jurisdiction, and recommend employees for discharge. Another supervisor who signed the petition was Struble, referred to above as one of the originators of the petition. Struble was excluded from the card check made by the Regional Director in November 1939, referred to in Section I above, pursuant to the parties' agreement that employees earning more than 52 cents per hour prior to the shut-down should be ineligible in the count. Struble was rehired after the reopening of the plant at 58 cents an hour, in contrast to the average wage of 45 cents paid to production workers. Since then he has worked in the beaming or make-up department with about nine other employees, and his only supervisor is Goble, super- intendent of the entire plant. Struble does some clerical work which the other workers on the shift do not do. He assorts various grades of materials, sees that they are placed upon the right print order, lays out work for the other employees, and gives them their work orders. It is his duty to report to Goble when anything goes wrong in the department. He has reported a few employees who were not doing their work properly, and it appears that one such report resulted in an employee's discharge. Employees in the department resort to Struble for information regarding their work, and he either supplies this information or consults Goble regarding the matter. Foreman Smith testified that he consults Struble regarding misplaced patterns or poor work which has passed through Struble's department, and that Struble has summoned beaming department employees and ques- tioned them about such matters in his presence. Struble and W. Clifford Lane, an employee whom we find below to be a supervisory employee, are the only two employees, other than salaried foremen, who are permitted to make entries on employees' time cards when the time clocks do not work or when employees forget to punch the clocks. Employees are paid upon the basis of entries on their time cards. Under the circumstances disclosed by this record, we find the making of such entries to be a supervisory function. Goble denied that Struble is a supervisory employee but was unable to give any satis- factory explanation of the difference between his duties and those of admitted foremen at the plant. It appears that, Struble did sub- santially the same work prior to the shut-down, and upon all the evidence we find that he was a supervisory employee prior to'the shut- down and continued to be one after the reopening of the plant. At about the time of the circulation of the petition, a group of former employees of Associated- Inc. engaged one Frank Sherred, a Newton attorney, to draft articles of incorporation for the formation SUSISEX DYE & PRINT WORKS, INC. 635 of the Independent. On April 8, 1938, Struble, Hendershot, and Jacob Aupperlee, Louis Beatty, and Arthur Dalrymple, other former employees, signed the said articles and thereafter had the Independent incorporated under the laws of New Jersey. The signers of the articles were named in it as, and became, the trustees of the Inde- pendent. The articles state that the Independent's purpose is to associate workers engaged in the textile industry in.order to provide for collective bargaining and other mutual aid and protection. The Independent was formed primarily as a vehicle to secure the reopening of the plant. On May 6, 1938, pursuant to a notice issued by the trustees, the first meeting of the Independent was held at Newton. Hendershot and Struble attended and addressed those assembled at the meeting; the president of the local chamber of commerce made a speech encouraging those present to take steps leading to the opening of the mill; and the trustees were authorized to present to and negotiate with Armour a proposed 1-year contract Bylaws for the organiza- tion, apparently prepared by Sherred, were read and adopted. The bylaws do not exclude foremen from the Independent's membership. They provide that all signers of the above petition addressed to As- sociated Inc. shall constitute the membership of the organization; that the trustees shall constitute the governing body thereof ; and that the signers of the articles of incorporation shall serve as trustees for 1 year or until their successors are elected. - The record shows that Struble and Hendershot did not resign their trusteeships until several months after the plant's reopening, if ever, and that new trustees were not elected prior to the hearing herein. Membership cards were distributed after the meeting, and on the same day Foreman Smith and Adelaide. Anderson, a salaried fore- lady before the shut-down and after the reopening, signed such cards. It does not appear that Anderson ever resigned from the Inde- pendent.3 Smith testified that he resigned therefrom, apparently several months after the plant's reopening. Thereafter the Independent functioned without any funds and without any regular officers other than - the trustees. Sherred con- tinued to serve as its counsel without remuneration by it. As already noted,, during 1938 the Independent presented a proposed contract to Armour; appealed to him for the plant's reopening; participated in inducing him to agree to do so; secured his attendance at the Decem- ber 16, 1938, meeting to announce the conditions under which he would reopen; and after the incorporation of Sussex in January 1939, engaged in a representation contest with the Union, both unions seeking to secure bargaining contracts. Sussex refused to recognize s She left the respondents' employ several months after the plant's reopening. 636 DECISIONS OF NATIONAL LABOR RELATIONS BOARD either organization as bargaining agent because of the conflicting claims, and the parties engaged in extended negotiations in an effort to come to some agreement whereby the plant might reopen. The Independent filed with the Regional Director two petitions for in- vestigation and certification of representatives, which were with- drawn and dismissed, 'respectively. The Union threatened to picket the plant if it did not secure a contract before the reopening, and in fact picketed orq one occasion when Sussex put a clean-up crew in the mill for a short time. Sometime in 1939 the Independent trustees appointed as president of the Independent W. Clifford Lane, who had been employed at the plant as an electrician for about 18 years prior to the shut-down. In October 1939 Sussex hired Lane and about 15 other workers to prepare the plant for reopening, and the Union again began to picket. B. Domination of the Independent, interference, restraint and coercion The above negotiations were continued and by November 3, 1939, the Union and Sussex, apparently with Armour's approval, had agreed that the dispute should be resolved on November 6 by the Regional Director's conduct of a card check against Associated Inc.'s last full pay roll of hourly-paid employees, that Sussex would grant a contract to the union showing majority representation therein, and that all employees of Associated Inc. prior to the shut-down would be rehired without regard to their union affiliation or the outcome of the count. On November 3 Goell, secretary of Sussex and Armour's nephew, made two telephone calls from New York City to Lane, Independent president, at the Newton plant. The Union had removed its picket line from the plant and had complained to Goell that the maintenance employees at the plant were "heckling" members of the Union about having given up the fight. Goell telephoned Lane and instructed him to discontinue, and to see that the other employees discontinued, engaging in such conduct. He also informed Lane that Sussex had made an agreement not to interfere with the union affairs of its employees and stated that he wanted, the management and its repre- sentatives to live up to this agreement. In his other call, Goell asked Lane how things were progressing at the plant and told him that there was going to be an election on November 6. Lane replied that he would have to get busy. Lane was allegedly employed as an electrician only but he in fact performed supervisory duties under the jurisdiction of Carlson and Knauss, who were in charge of the plant's rehabilitation. He made entries upon employees' time-cards, SUSSEX DYE- & PRSNT WORKS, INC. 637 a function which we have found to be supervisory, transmitted work- ing orders to other employees, and in the absence of his superiors was more or less in charge of the plant. The Trial Examiner found that Lane acted as "second in command" at the mill prior to the reopening. Upon all the evidence, including Goell's above inquiry of and instructions to Lane, we agree with the Trial Examiner's finding and find that Lane was , a supervisory employee during that period. Immediately after Goell informed him of the impending card count, Lane started to circulate the following petition, herein called the membership petition, among the workers in the mill during work- ing hours : NovEMBER 1, 1939. MEMBERSHIP CERTIFICATION - TO NATIONAL LABOR RELATIONS BOARD, OR TO WHOM IT MAY CONCERN : We hereby certify, by our proper signatures annexed hereto, that we are members of the Textile Workers of Newton and ARE NOT affiliated with • any other labor • organization. We hereby affirm our allegiance to our organization known as Textile Work- ers of Newton as of this first day of November, A. D. 1939.4 Lane induced all the workers to sign this petition, affixed his own signature to it, and on the same day gave it to Beatty, an Independent trustee who was employed at the mill at general clean-up duties, with instructions to circulate it outside the plant. Beatty thereupon left the plant, on that and the two succeeding days circulated the membership petition -among former employees of Associated Inc. in and about Newton, and secured numerous signatures thereto. On the afternoons of November 3 and 4, Beatty 'did no work at the mill but at Lane's bidding engaged in membership solicitation outside the plant during his normal working hours. Sussex paid Beatty for the work- ing time spent in that fashion.5 4 Sherred had prepared and delivered this petition to Lane on November 1, in response to Lane's suggestion on October 31 that there might be a contest between the Independent and the Union and that it would be prudent to prepare a petition for circulation among the workers in the interest of the Independent. 6 According to his time card, on November 3 Beatty worked at the mill from 7: 51 in the morning until 4: 30 p. in. His card was punched "in" at 7: 51 a. m and "out" at 12: 11 p. in. His record of work on the afternoon of that day is shown on the card by pen and ink notations "in" at 12: 30 and "out" at 4 • 30, accompanied by Lane's initials. For the following day, November 4, Beatty's card states that he reported "in" at 7: 40 In the morning, "out" at 12: 00 noon , "in" at 12 : 28 p. m. and "out" at 4:30 p. in. -The registrations for this day are made by the clock with the exception of the 4:30 entry which is made in pen and ink followed by Lane's initials. 638 DECISIONS OF NATIONAL LABOR RELATIONS BOARD A total of 100 signatures were affixed to the membership petition, including those of Struble, Smith, Anderson,' and other supervisory employees subsequently employed by Sussex, all of whom had appar- ently been supervisors prior to the shut-down. On November 6, 1939, the Union filed with the Regional Director a petition for investigation and certification of representatives. On the same date representatives of Sussex and the two unions met with the Regional Director in New York City and executed a formal stipu- lation embodying the previous agreement for 'a card count and for the award of a contract to the union showing a majority therein. By express authorization of Lane, Beatty journeyed from Newton to New York City to attend the conference. His time card contains entries indicating that he went to work that day at the mill at 7:55 a. in., left at noon, returned at 12: 30 p. in., and checked out at 4: 30 p. in. The noon and 12: 30 entries are in pen and ink followed by Lane's initials, the other entries made by the time clock. Since Beatty was admittedly in New York City during the middle of the day, the Trial Examiner found that Sussex paid him for the time which he spent upon this trip there. Sussex does not deny that Beatty or other Independent representatives attended the card count at its expense, and we concur in the Trial Examiner's finding. On November 6 the Regional Director checked the unions' proof of representation against Associated Inc.'s May 11, 1937, pay roll of hourly paid employees. As already noted, Struble was ruled ineligi- ble, because he formerly earned more than 52 cents an hour. Lane also was excluded therefrom, apparently because he had been a salaried employee prior to the shut-down, only hourly paid employees being eligible. On November 7 the Regional Director issued a notice announcing the results of her check, as follows : Eligible employees__________________________________________ 163 Members of the Independent________________________________ 76 Members of the Union_______________________________________ 72 Members of both unions as of the same date------------------ 3 Members of neither union ___________________________________ 12 Before making the count, the Regional Director had ruled that in case of overlapping designations of both unions, she would count the designation of most recent date. - The record establishes that the Regional Director counted the. designations on the membership peti- tion which Lane circulated and caused to be circulated on company time and at company expense. From all the evidence we find that had it not been for the' recent designations secured by it in this fash- ion, the Independent, instead of polling a plurality of 4, would have SUSSEX DYE, & PRINT WORKS, INC. 639 shown approximately 22 designations less than the Union, and that the Union would have polled a majority.e The plant resumed operations on November 8, 1939. The Trial Examiner found that Lane continued to act in a supervisory capacity, and we agree with that finding. In addition to making entries upon time cards, including his own,, he began to serve as employment man- ager. All employees hired after November 6, 1939; were either procured by him or referred to him by Goble, the plant superintend- ent, for interviewing, and were hired only with Lane's ,approval. He also began to engage in certain clerical duties, including making up requisitions for supplies and telephoning long distance to Sussex's purchasing agent in Paterson, New Jersey, for such supplies. Lane was constantly moving about the plant, often not in the course of his work, and it appears that such freedom of movement was not granted to employees generally. In the course of his tours, as will appear in greater detail below, he engaged in criticizing certain employees dur- ing working hours for their activities on behalf of the Union. The respondents asserted that Lane was a subordinate of one Powers, foreman of the maintenance gang, but we cannot credit this conten- tion. Lane was the highest hourly paid employee at the plant, earn- ing 80 cents per hour. He received more pay than Powers, adjusted inaccuracies and made entries on Powers' time card, informed the latter of machines which needed repairs, and when new employees were needed for the maintenance crew, procured them for Powers. Upon all the evidence we find that Lane was and continued to be a supervisory employee after the reopening. On November 17, 1939, Sussex and the Independent entered into a contract for a term of 1 year, automatically renewable from year to year until terminated or modified upon specified notice. In this contract Sussex granted the Independent recognition as bargaining agent for all its employees and agreed, inter alia, that "all employees hired shall be or become members" of the Independent "within 15 days of such hiring," under penalty of discharge. The contract was not negotiated between the parties but was apparently prepared by the respondents, was presented to Lane and several trustees of the Independent, and was executed by them without objection, discussion, or alteration. Lane testified that the contract was merely an em- bodiment of the Independent's proposed contract submitted .to and modified by Armour in 1938, and that the modifications thereto were approved at the Independent meeting attended by Armour on Decem- 6 On November 16, 1939, the Union Med with the Regional Director an amended petition in effect asking for a recount because of company interference . No formal action was taken on this petition. In January 1940 the Union filed charges that Sussex had domi- nated the Independent. On July 30 , 1940, the Union requested withdrawal of its petition, and by order dated August 3, 1940 , the Board permitted withdrawal thereof. 640 DECISIONS OF NATIONAL LABOR RELATIONS BOARD her 16, 1938. We cannot credit this testimony for there are several important differences between the contract and the said 1938 proposal, as modified, which differences are set forth in the margin.7 From December 1939 until the time of the hearing the Independent held meetings every month except July 1940. • Lane presided at all the meetings and continued to hold office as Independent president. At the December 1939 meeting Lane announced the results of the card count, but it does not appear that he mentioned the contract of No- vember 17. Foreman Smith addressed the meeting regarding a new process which he had introduced at the plant and which would prob- ably provide year-round work for the employees. Smith did not resign his membership in the Independent until at least a month or two thereafter. - As mentioned above, prior to the plant's reopening Goell, who is Armour's nephew and a director and officer of Sussex, allegedly in charge of its labor policy, agreed to reinstate, as soon as possible after the reopening, all former employees of the mill, without regard to their union affiliation or the outcome of the card count. Between November 8, 1939, when the plant reopened, and January 8, 1940, approximately 109 employees were hired at the plant by Lane or with his approval. Determining the prior employment status and union membership, if any, of the 109 employees upon the evidence and by the standards used by the Regional Director in the card count as of November 6, we find that approximately 50 per cent of them were Independent members, 25 per cent were persons not for- merly employed by Associated Inc., and only 6 per cent were mem- bers ofthe Union. The group included approximately 66 per cent of the Independent's members but only approximately 10 per cent 11. The 1938 proposal , as modified, specifies 1-hour lunch periods for certain depart- ments, the Installation of drinking fountains in every department, and maintenance of sanitary conditions . The contract omits any reference to those provisions. 2. The 1938 proposal , as modified, stipulates that all employees be required to apply for membership in the Independent within 30 days of their hiring and that if membership is refused them , Sussex shall not employ them more than 10 days longer, provided the Inde- pendent can replace them with qualified employees . The contract strengthens this provi- sion, stating that all employees hired shall be or become Independent members within 15 days of their hiring and that Sussex shall discharge any employee forthwith upon notice by the Independent that he has not became a member or is not a member in good standing. The contract omits the proviso that the Independent must be able to replace the employee. 3. Both the 1938 proposal , as modified , and the contract provide for 30-day notice of proposed strikes , but the contract stipulates in addition that watchmen , firemen, and necessary maintenance men shall not be subject to strike call and that strikes and stop- pages shall not be countenanced until all peaceful methods of settling disputes have been tried. - 4. As to grievances, the 1938 proposal , as modified , provides that Independent officers may appeal to the plant manager. The contract sets up a detailed grievance procedure, first an appeal to the foreman , then written notice to Sussex, a meeting within 48 hours thereof, and a decision thereon by Sussex within 5 days. 5. The 1938 proposal , as modified , sets a 1-year contract term. The contract provides for a 1 -year term , automatically renewable from year to year. The contract and the 1938 proposal are in evidence . The modifications to the 1938 proposal are set forth ' in the minutes of the Independent meeting of December 16, 1938, which minutes are also in evidence. SUSSEX DYE & PRINT WORKS, INC. 641 of the Union's members." Early in January 1940 the Union's rep- resentative complained to Goell that its members had been discrimi- nated against, in contravention of Goell's agreement. The latter instructed Goble, plant superintendent, to offer employment to all the said union members, and a number of union members were hired on and after January 9, 1940. Lane, together with several Independent members protested to Goell regarding the employment of union mem- bers under the Independent's closed-shop contract. Goell stated that Sussex had to,reinstate them in view of the Board's investiga- tion of Sussex and the Independent and suggested that the closed- shop provision of the contract be suspended pending the said investi- gation in order to show the Board that they were not "bad fellows." Lane withdrew his protest and agreed that full enforcement of the contract be held in abeyance as suggested. Lane admitted that the general membership of the Independent was not informed of the latter agreement. In about January 1940, Struble, whom we have found to be a supervisory employee, repeatedly approached Joseph Kampka, an employee, and solicited his membership in the Independent. He told Kampka, "If you want to work you should sign, if you don't want to sign you will have to get out." Kampka signed an Independent application card. - Until January 1940 the Independent had no funds or treasury. Sometime in January it started a drive to have all its members sign new membership cards and pay initiation fees and dues for the first time. Lane became chairman of a committee to solicit paying mem- bers and collected dues from employees in the plant during working hours. Taking a list of delinquent members throughout the plant, he told several employees that he "saw by this list" that they were "dragging their feet." At a meeting on February 23, 1940, the Inde- pendent's membership for the first time elected a grievance committee and officers other than Lane. Forelady Anderson attended the meet- ing at Lane's request. Thereafter, W. H. Chammings, newly elected secretary of the Independent, collected Independent dues during working hours in a department other than, that in which he worked. It appears that employees generally were not permitted to leave The employees hired may be classified approximately as follows : 27------persons not formerly employed by Associated Inc. 20------former employees not on pay roll used in card count and therefore not counted therein. 53------Independent members, from a total of approximately 80 Independent members polled.- 7------ C. I. 0. members, from a total of approximately 70 C. I . 0. members polled. 2------ members of neither union, from a total of approximately 12 non-union persons polled. 109 642 DECISIONS OF NATIONAL LABOR RELATIONS BOARD their departments at will during working hours, and the contract of November 17, 1939, did not provide for dues collections on company time or property. Sometime early in 1940, Eston D. Bell, Independent vice president - and an employee in charge of the plant stockroom directly under the supervision of Superintendent Goble, suggested to one Ratti, who is not employed by the respondents, that a candy vending machine be installed at the mill. The respondents permitted such a machine to be installed in the plant near Goble's office, and thereafter Ratti gave to the Independent at least 15 per cent of the machine's pro- ceeds. Although the respondents denied that they knew of these contributions, we cannot believe that they are unaware of the condi- tions under which machines are installed and operated on their property. We find that the respondents were on notice of and per- mitted the said contributions to the Independent. The record contains evidence, set forth below, regarding member- ship solicitation in the early part of 1940 by Louis Beatty, Independ- ent trustee, and Walter T. Raitt, both employees on the Inde- pendent's membership committee. Beatty and Raitt earned 21/2 cents per hour more than the average wage of the ordinary produc- tion workers and had minor supervisory duties. Until April 15, 1940, when he quit his job, Raitt was a "special pusher" in two dry- ing rooms." It was his duty to see that the work kept moving and was done in proper order, to check the goods to be handled, to keep lots and odd lots assorted, to see that the drying machines were kept at the proper temperature and that the goods stayed in them for the proper length of time, and if anything went wrong, to notify Fore- man Hendershot, a trustee of the Independent, who spent little time in these rooms. Beatty was an ordinary worker until the latter part of November 1939, when he broke his wrist. Thereafter he became a sort of protege or assistant of Foreman Hendershot, who is in charge of dyeing at the plant. Hendershot admitted that he would probably break Beatty in as a dyer, a position for which an employee would ordinarily require a number of years' experience unless given special training. Beatty does clerical work regarding dyeing, pre- pares and matches samples, and marks tickets to be used by the employees in mixing dyes, work similar to that done by Hendershot himself. Beatty apparently replaces Hendershot when the latter is not there, gives some orders, and in Hendershot's absence has sent workers home for the day. The employees appear to regard him as Hendershot's assistant. Upon all the evidence we find that Beatty is a minor supervisory employee and that Raitt was also one during the period in question. ° Raitt was reemployed in October 1940 on another job. SUSSEX DYE- & PRINT WORKS, INC. 643 On April 3, 1940, Raitt signed up four employees as Inde- pendent members. His time card shows that he was paid for more than 17 hours' work that day, from about 7 a. in. until after midnight. The four employees whom he signed up worked between 8 and 13 hours that day. At first Raitt testified that he did not recall taking any applications in the plant and that he believed he secured these applications from the employees at their homes. When counsel for the Board reminded Raitt of the hours which he had worked that day, Raitt was unable to give any adequate explanation of the time and place in which he took the applications, and he appears to admit that he did not visit the men's homes after midnight that night. We conclude that Raitt either signed up these men at the plant on com- pany time, or that he left the plant at company expense and visited them in the morning, before they reported for work but after Raitt's working hours had begun. Beatty and Raitt engaged in other membership solicitation out- side company time and property. They sought to persuade employees to join by pointing out that the contract required employees to become Independent members within 15 days of hiring and threatened that employees would have to join "or else . . . " On or about April 4, 1940, Bell, Independent vice president, told one Swayze that he could come to work if he "signed up." Swayze signed an Independent card furnished him by-Bell and was hired at the plant 4 days later. All this was done despite Lane's agreement with Goell and Armour for the suspension of the above provision of the contract during the .Board's investigation. Superintendent Goble interpreted the said provision to grant closed-shop rights to the Independent. The Trial Examiner found that because of that interpretation ; the use of argu- ments and reasoning to that effect by Beatty, Raitt, and Bell; and Lane's control of hiring, all employees hired after March 1940 be- came members of the Independent. We concur in this finding. In contrast with the respondents' attitude toward Independent activities, in the latter part of 1939 and in .1940 supervisory employees of the respondents made numerous statements to workers discourag- ing activity on behalf of the Union, and also further encouraging membership in the Independent. Thus Superintendent Goble ap- proached George O'Brien during working hours and directed him to cease talking on behalf of the Union while at work. O'Brien was one of the union members hired in January 1940 after the Union's complaint of discrimination, and the only remark regarding the Union which he had made was that he would not be back at work had it not been for the union. Goble issued similar instructions during working hours to Ray White and Lloyd Miller, other em- ployees. Goble also summoned to his office Harry Babcock, an 644 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employee, and ordered him to cease displaying his union book while working at the mill. Sometime before January 1940, when Lloyd Miller was hired at the plant, Foreman Smith told him, "If it goes C. I. O. why Armour will close the plant down." Smith told Babcock, "Look here, Bab- cock, no more showing your union book in the building. If I see any more I will take you to the office and get your money." We have noted that Lane enjoyed unique freedom of action in the plant, collecting dues during working hours and criticizing employees for their activities in behalf of the Union. Sometime in 1940 Lane had several conversations during working hours with White, who was a member of the Union. Upon receiving a report that White had been talking in favor of the Union while at work, Lane asked White whether he wanted to work in the mill. The latter replied that he did, and Lane said, "Then keep your damn mouth shut." Later he warned White to refrain from displaying his union card at work. On another occasion Lane led White to believe that he would be better off if he joined the Independent, although he did not directly solicit White's membership, and he questioned White as to why he was not at a party being held by the Union that day. White was working at the time but Lane was merely walking about the plant. Once Lane asked White what he was dissatisfied with at the mill, and when White said that he was satisfied, Lane asked what was "the big idea" soliciting members for the Union, whether "he thought the strike wasn't over," why the Union wanted new members, why he did not "let things go the way they were," and whether he was' not "satisfied with his money." Apparently some of these conversa- tions were quite heated. Lane also told Walter Young, another employee and a member of the Union, "You want to cut out talking about unions here, if you know when you are well off." No general rule was promulgated forbidding employee discussion of organizational affairs in the plant, and the testimony reveals only one instance of curtailment of Independent activities. According to Goble, he asked one employee to refrain from talking about the Inde- pendent in the plant. C. Concluding Findings The facts found above plainly show that the respondents dom- inated, interfered with, supported, and assisted the Independent to the end that it might destroy the Union, and that the respondents other- wise interfered with, restrained, and coerced their employees in the exercise of rights guaranteed in Section 7 of the Act. Thus, through delegation of supervisory authority to Lane, president of the Inde- pendent, the respondents early placed their stamp of approval on ,S'USISEX DYE & PRINT WORKS, INC. 645 the Independent, an organization formed during the shut-down by former supervisory and other employees who had expressly agreed in their 1938 petition not to join "any union other than a local one." From October 1939 when the respondents began to prepare the plant for reopening, through the period at and around the card count, the respondents placed second command of the mill in the hands of Lane, the Independent's sole officer, who had formerly been employed only as an electrician. Thereafter, they permitted him to interview job applicants and gave him veto power over the hiring of all employees, which powers were calculated to insure that none of the workers hired were favorable to the Union. It is plain that the respondents selected Lane as their chief lieutenant in their campaign against the Union and equipped him with all the authority necessary to entrench the Independent firmly among the employees and to oust the Union. Through Lane the respondents caused the circulation, on company time and property and at company expense, of the membership peti- tion, the document which caused the Independent to win the card count and to become transformed from a more or less paper organi- zation into an organization entitled, under the terms of the November 6 stipulation, to a collective bargaining contract. Had it not been for the respondents' assistance to the Independent at this crucial.stage of its existence, the Union would have been victorious in the card count and entitled to exclusive recognition as representative of the respondents' employees. Soon thereafter the respondents presented the Independent with a contract which strengthened the closed-shop provision embodied in the Independent's 1938 proposal and crystallized the Independent's position in the plant. Had the Independent been a bona fide or- ganization freely representing the employees instead of an organiza- tion controlled by the respondents through Lane, it is hardly likely that the respondents would so readily have granted it a closed-shop contract, or that the Independent would have accepted a bargaining agreement drafted by employers without requesting any modifications thereof. In view of the respondents' assistance to and control of it through Lane, the Independent was not a free agent of the employees on November 17 when the contract was executed. As the Trial Examiner correctly found, the contract was not the result of collective bargaining between the respondents and the freely designated repre- sentative of their employees, but was a part of the respondents' program of discouraging membership in.the Union and assisting the Independent. The contract, having been made with an organization illegally dominated and assisted by the respondents, was entered into in violation of the Act, was therefore invalid in its inception, and constituted further support of the Independent. 451269-42-vol. 34-42 646 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The respondents gave the Independent financial assistance through the candy machine. They lent it further assistance and prestige through Lane and other supervisory employees, Foremen Hendershot and Smith, Forelady Anderson, Struble, Beatty, and Raitt, all of whom were Independent members and held office, attended meetings, or. solicited membership for the organization, sometimes on company property or at company expense. The respondents permitted Lane and Chammings to collect dues on company time and property. In contrast to the assistance, support, and latitude extended to the Independent was the respondents' conduct in discriminating against and discouraging membership in the Union. An early act of dis- crimination was the grant of employment and other supervisory powers to Lane, the Independent's president. This delegation of authority took place prior to the execution of the contract and cannot, of course, be justified on the basis of that invalid agreement. Under Lane's guidance, between November 8, 1939, and January 8, 1940, ap- proximately 66 per cent of the Independent's members were rehired but only about 10 per cent of the Union's members, seven workers. This discrimination was in express derogation of the rehiring agree- ment made prior to the reopening by Goell, who is an officer and director of Sussex and, we find, a representative of both respondents. The respondents discontinued this discrimination only upon demand by the Union. Furthermore, the respondents discouraged membership in the Union and encouraged Independent affiliation by the coercive use of the closed-shop provision of the contract, the enforcement of which was allegedly held in abeyance. As we have found, Supervisors Struble, Beatty, and Raitt exploited the said provision with threats of loss of employment for failure to join the Independent, and the result of their activities and of Lane's control of employment was that all em- ployees hired after March 1940 became Independent members. Finally, the respondents, through Superintendent Goble, Foreman Smith, and Lane, discouraged membership in the Union by statements to employees and forebade activity or talking on behalf of the Union at the plant. Since a great deal of freedom of action was granted the Independent, since no general rule was announced forbidding activity on behalf of any labor organization in the plant during work- ing hours, and since the record contains only one instance of curtail- ment of talking on the Independent's behalf, it is apparent and we find that activity on the Union's behalf was discriminatorily pro- hibited in favor of the Independent. Sussex urges as an affirmative defense that the November 6, 1939, stipulation between it, the Union, and the Independent, providing for determination of representatives by a card count, forecloses considera- S'USISEX DY'E' & PRINT WORKSI, INC. 647 tion of any unfair labor practices engaged in prior to that time. We cannot agree that this stipulation has the effect contended for by the respondent.1° It was merely a formalization of the oral agreement for a card count reached on November 3. And as we have found above, as soon-as the arrangements therefor had been completed on the latter date, the respondents set in motion and carried out through Lane the circulation of the membership petition whereby the Independent was assured of victory in the November 6 contest. At no time prior to the count did the respondents disclose that they had assisted the Independent in that illegal fashion, and the record is bare of evidence that either the Regional Director or the Union was aware thereof on November 6, or, if they were, that they induced the respondent reason- ably to believe that the Board would not proceed against the respond- ent for having unlawfully sponsored the Independent. Moreover, following the count and the plant's reopening, the respondents con- tinued their unlawful support of the Independent, implementing it by discrimination against the Union. Under all the circumstances'dis-' closed by this record, we find that the above contention of Sussex has no merit. Equally unmeritorious is the respondents' reliance upon the Re- gional Director's failure to vacate her announcement of the results of the card count after the Union questioned the validity thereof. In addition to the considerations set forth above, we do not agree with this contention because such non-action by the Regional Director does not indicate that she accepted or ruled upon the legitimacy of the Independent. That failure to act is consistent with the hypothesis that the Regional Director felt that her announcement of the results of the count terminated her powers and duties with respect thereto, and further felt that the proper procedure for challenging the Inde- pendent's legitimacy was by way of charges. The Union did in fact file charges which resulted in the issuance of the complaint herein." We find that the respondents have dominated and interfered with the administration of the Independent and have contributed support to !t; and that by this and other conduct, the respondents have interfered with, restrained, and coerced their 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, as guaranteed in Section 7 of the Act. 10 National Labor Relations Board v. Hawk & Buck Co, decided June 13, 1941 (C. C. A. 5), 8 L. R R . 604, enf'g Matter of Hawk & Buck Company, Inc. and United Garment Work- cis of America, etc, 25 N. L. R. 13. 837; National Labor Relations Board v . McKesson & Robbins, Inc., decided May 5, 1941 (App. D. C. ), 8 L. R. R. 383, rehearing den., enf'g as mod., Matter of Mchtsson & Robbins, Inc., etc., and International Longshoremen, etc., 19 N. L. R. B. 778. n See footnote 6, supra. 648 DECISIONS OF NATIONAL LABOR RELATIONS BOARD IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondents set forth in Section III above, occurring in connection with the operations of the respondents de- scribed in Section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that the respondents have engaged in unfair labor practices, we shall order them to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act, and to restore as nearly as possible the conditions which existed prior to the commission of the unfair labor practices. We have found that the respondents have dominated and interfered with the administration of, and contributed support to, the Inde- pendent. In order to effectuate the policies of the Act and free the employees of the respondents from such domination and interference and the effects thereof, which constitute a continuing obstacle to the exercise by the employees of the rights guaranteed them by the Act, we shall order the respondents to withdraw all recognition from the Indepedent as representative of the respondents' employees for the purpose of dealing with the respondents concerning grievances, labor disputes, wages, rates of pay, hours of employment, and conditions of work, and to disestablish it as such representative. Since the contract between Sussex and the Independent embodies recognition of the Independent as representative of all the employ- ees and requires membership in the Independent under penalty of discharge, and since the agreement represents the fruit of the re- spondents' unfair labor practices, a device to perpetuate their effects, and a cover under which the respondents may continue to commit unfair labor practices, we will order the respondents to cease and desist from giving effect to this or any other agreement which they may have entered into with the Independent with respect to rates of pay, wages, hours of employment, or other conditions of work. and to cease and desist from recognizing the Independent as repre- sentative of any of their employees. Nothing in the Order, however, shall be taken to require the respondents to vary those wages, hours, and other such substantive features of their relations with the em- ployees themselves, which the respondents may have established in performance of the contract as extended, renewed, modified, supple- mented, or superseded. Of course, this proviso does not privilege the respondents to impose as a condition of employment membership in the Independent. SUSSEX DYE & PRINT WORKS, INC. 649 Upon the basis of the foregoing findings of fact and upon the entire record in the case, the Board makes the following: CONCLUSIONS OF LAW 1. Federation of Dyers, Finishers, Printers and Bleachers of Amer- ica and Textile Workers of Newton, New Jersey, are labor organiza- tions, within the meaning of Section ,2 (5) of the Act. 2. Sussex Dye & Print Works, Inc., Newton, New Jersey, and Bernard R. Armour, New York City, are employers of the employees at the Newton, New Jersey, plant, within the meaning of Section 2 (2) of the Act. 3. By dominating and interfering with the administration of Tex- tile Workers of Newton, New Jersey, and by contributing support to it, the respondents have engaged in and are engaging in unfair labor practices, within the meaning of Section 8 (2) of the Act. 4. By interfering with, restraining, and coercing their employees in the exercise of rights guaranteed in Section 7 of the Act, the re- spondents have engaged in and are engaging in unfair labor prac- tices, within the meaning of Section 8 (1) of the Act. 5. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. ORDER Upon the basis of the above findings of fact and conclusions of law, and pursuant to Section 10 (c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the respond- ents, Sussex Dye & Print Works, Inc., Newton, New Jersey, and Bernard R. Armour, New York City, their officers, agents, successors, and assigns, shall: 1. Cease and desist from : (a) Dominating or interfering with the administration of Textile Workers of Newton, New Jersey, or with the formation or adminis- tration of any other labor organization of their employees, and con- tributing any financial or other support to Textile Workers of Newton, New Jersey, or to any other labor organization of their employees ; (b) Recognizing Textile Workers of Newton, New Jersey, as rep- resentative of any of their employees for the purpose of dealing with the respondents concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work; (c) Giving effect to the contract of November 17, 1939, between Sussex Dye & Print Works, Inc., and Textile Workers of Newton, New Jersey, or to any extension, renewal, modification, or supplement 650 DECISIONS OF NATIONAL LABOR RELATIONS BOARD thereof or to any superseding contract with Textile Workers of Newton, New Jersey, which may now be in force; (d) In any other manner interfering with, restraining, or coercing their 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 con- certed activities for the purposes of collective bargaining or other mutual aid or protection, as guaranteed in Section 7 of the National Labor Relations Act. 2. Take the following affirmative action which the National Labor Relations Board finds will effectuate the policies of the National Labor Relations Act : (a) Withdraw all recognition from Textile Workers of Newton, New Jersey, as the representative of any of their employees for the purpose of dealing with the respondents concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work, and completely disestablish Textile Workers of Newton, New Jersey, as such representative ; (b) Immediately post in conspicuous places in and around the plant in Newton, New Jersey, and keep posted for a period of at least sixty (60) consecutive days from the date of the posting, notices to their employees stating : (1) that the respondents will not engage in the conduct from which they are ordered to cease and desist in the man- tier set forth in paragraph 1 (a), (b), (c), and (d) of this Order; and (2) that the respondents will take the affirmative action required in paragraph 2 (a) of this Order; (c) Notify the Regional Director for the Second Region in writing within ten (10) days from the date of this Order what steps the respondent has taken to comply herewith.