Monteith Brothers Co.

In the Matter Of MONTEITH BROTHERS COMPANY, AND MONTEITH BROTHERS, INC. and INTERNATIONAL UNION, UNITED AUTOMOBILE WORKERS OF AMERICA, LOCAL 693, AFFILIATED WITH THE CONGRESS OF INDUSTRIAL ORGANIZATIONS Case No. C-1855.Decided August 25, 1941 Jurisdiction : automobile parts rebuilding and assembling industry. Unfair Labor Practices Interference, Restraint, and Coercion: anti-union statements ; posting anti-union notices ; threats to close down plant if union succeeded in organizing employees Company-Dominated Union: domination and interference with formation of an "employees' grievance committee" ; participation in administration by repre- sentative of management ; contribution of financial and other support. Discrimination: employee discharged because of his leadership in union ; alleged violation of plant rules as justification for, held without merit; evidence of alleged action in breaking a broaching machine held offered in a retrospective attempt to justify discharge. Remedial Orders : disestablishment of dominated organization ordered; rein- statement and back pay awarded. Mr. Robert R. Rissman, for the Board. Mr. Verne G. Cawley, of Elkhart, Ind., for the respondents. Mr. Nose Kucela, of Mishawaka, Ind., for the Union. Mr. William H. Bartley, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon a second amended charge, filed by International Union, United Automobile Workers of America, Local 693, affiliated with the Con- gress of Industrial Organizations, herein called the Union, the Na- tional Labor Relations Board, herein called the Board, by the Regional Director for the Thirteenth Region (Chicago, Illinois), issued its complaint dated December 16, 1940, against Monteith Brothers Company, herein called the Company, and Monteith 3 The original charge was filed May 7, 1940, and the first amended charge was filed August 22, 1940. The second amended charge upon which the complaint was issued was filed on December 7, 1940 34 N. L. R. B., No. 110. 896 MONTEITH BROTHERS COMPANY 897 Brothers, Inc., herein called the Corporation, both of Elkhart, In- diana, and both hereinafter referred to as the respondents, alleging ,that the respondents had engaged in and were engaging in unfair labor practices affecting commerce, within the meaning of Section 8 (1), (2), and (3) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. A copy of the complaint, accompanied by a notice of hearing, was duly served upon the respondents, the Union, and the Workers' Council, herein called the Council, a labor organization alleged in the complaint to be dominated by the respondents. With respect to the unfair labor practices, the complaint alleged in substance that the respondents (1) on or about November 1, 1939, created and established a labor organization among their employees known as the Council, and thereafter dominated and interfered with the administration of said Council and contributed financial aid and other support thereto; (2) discouraged membership in the Union by discharging Lindsey Whitt on or about April 8, 1940, and thereafter refusing to employ him, because he joined and assisted the Union and otherwise engaged in concerted activities with other employees at the plant for the purpose of collective bargaining and other mutual aid and protection; (3) from on or about November 1, 1939, advised, urged, and warned their employees not to become. affiliated with the Union, threatened to close the plant if the employees became or re- mained members of the Union, warned them to cease their activities on its behalf, and by the foregoing and other acts interfered with, restrained, and coerced their employees in the exercise of the rights guaranteed in Section 7 of the Act. Each respondent filed an answer to the complaint denying that it had committed any unfair labor practices. Pursuant to notice duly served upon the parties, a hearing was held in Elkhart, Indiana, from January 6 to 10, 1941, before Martin Raphael, the Trial Examiner duly designated by the Chief Trial Examiner. The Board and the respondents were represented by counsel and the Union by an official; all participated in the hearing. The Council did not participate in the hearing. Full 'opportunity was afforded all parties to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues. During the course of the hearing the Trial Examiner reserved decision on the respondents' motion to strike out certain testimony respecting an alleged conversation between Lindsey Whitt and Humke, another employee. In his Intermediate Report he granted the motion. At the conclusion of the entire case, counsel for the Board moved to conform the complaint to the proof respecting changes in names and dates. The motion was granted. During the course of the hearing the Trial Examiner made a number of rulings 898 DECISIONS OF NATIONAL LABOR RELATIONS BOARD on other motions and on objections to- the admission of evidence. The Board has reviewed the rulings and finds that no prejudicial errors were committed. The rulings are hereby affirmed. The parties were afforded an opportunity at the conclusion of the hearing to file briefs and to argue orally before the Trial Examiner. Oral argument was had by the respondents and the Union and the • respondents filed a brief which the Trial Examiner considered. Thereafter the Trial Examiner issued his Intermediate Report, dated April 7, 1941, copies of which were duly served upon all the parties, finding that the respondents had engaged in and were en- gaging in unfair labor practices affecting commerce, within the mean- ing of Section 8 (1), (2), and (3) and Section 2 (6) and (7) of the Act. He recommended that the respondents cease and desist from their unfair labor practices and take certain affirmative* action to remedy the situation. On May 19, 1941, the respondents separately and individually filed exceptions to the Intermediate Report and also filed briefs in support of the exceptions. Pursuant to notice duly served upon the parties, a hearing for the purpose of oral argument was held before the Board on May 27, 1941, in Washington, D. C. The respondents appeared by counsel and the Union by its representative; both par- ticipated in the oral argument. The Board has considered the briefs filed by the respondents with the Trial Examiner, the respondents' exceptions to the Intermediate Report, and the briefs filed in support thereof. In their exceptions the respondents allege, among other things, that the Trial Examiner was biased and prejudiced and that the respondents were therefore not afforded a fair hearing. We have already indicated that we find the Trial Examiner's rulings to be free from prejudicial error. Upon full consideration of the record and the respondents' excep- tions we reject the respondents' allegation of bias and prejudice on the part of the Trial Examiner as unfounded. Except in so far as the exceptions are consistent with the findings, conclusions, and order herein, the Board finds them to be without merit. Upon the, entire record in the case, the Board makes the following : FINDINGS OF FAor 1. THE BUSINESS OF THE RESPONDENTS Monteith Brothers Company is an Indiana corporation with its principal office in Elkhart, Indiana, where it is engaged in rebuilding and assembling automobile parts, principally generators, armatures, and connecting rods. Monteith Brothers, Inc., is an Indiana corpora- tion with its principal place of business in Elkhart, Indiana, where it is engaged principally in selling the merchandise produced by the MONTEITH BROTHERS COMPANY 899 Company and by Monteith Missouri Corporation. All the sales made by the Corporation are of merchandise produced by the Company and the Monteith Missouri Corporation. The office and storeroom of the corporation are located in the same building as the Company's offices and plant. The Company and the Corporation have the same stockholders and directors, consisting of C. E. Monteith, Mark L. Monteith, Roy C. Monteith, and Cecil J. Kistler. The officers of the Company are Roy C. Monteith, president; Cecil J. Kistler, vice president; Mark L. Monteith, secretary; Curtis E. Monteith, treas- urer. Those of the Corporation are Curtis E. Monteith, president; Mark L. Monteith, vice president; Cecil J. Kistler, secretary; and Roy C. Monteith, treasurer. Labor policies of both respondents are formulated by their boards of directors which, as has been stated, are identical in composition. These policies are carried out by Mark Monteith who, as general manager for both corporations, hires and discharges employees for both. Employees are transferred between the respondents almost daily; the respondents do not shift them from one pay roll to the other unless they work for more than a week at the new jobs. The Council, which the Company admits initiating and which, as here- inafter appears, is partly administered by Mark Monteith, was set up to represent employees of the respondents regardless of whether they are on the pay roll of the Company or the Corporation. The employees of both respondents work under the same shop rules and working conditions. The respondents contend that each corporate entity is autonomous. They point out that the Board has heretofore found 2 that employees of the Company constitute an appropriate unit for the purposes of collective bargaining and argue that an order against both the Com- pany and the Corporation would be inconsistent with that finding. The Corporation, however, was not a party to the proceeding in which that finding was made. In any event, the respondents' contention is without merit. This case involves employees whose names appear on the pay rolls of both respondents. In view of the substantial degree of integration in the operation of both respondents, their unified ownership, management, and control, and in the light of the entire record, we find that both respondents are the employers of the employees involved herein.8 The motion by the respondent Monteith Brothers, Inc., to dismiss the complaint as to it is hereby denied. 8 Matter o f Monteith Brothers Company, a corporation , and United Automobile Workers of America, affiliated with the C. 1 0., 26 N. L. R. B. 216, decided June 18, 1940. 8 See National Labor Relations Board v. Wm . Randolph Hearst, et al. (C. C. A. 9), de- cided March 23, 1939, 102 F. (2d) 658; see also National Labor Relations Board v Christian A. Lund, doing business as C A. Lund Co. and Northern Ski Manufacturing Co. (C. C. A. 8) decided May 10, 1939, 103 F (2d) 815; National Labor Relations Board v. Pennsylvania Greyhound Lines, Inc., 303 U. S. 261; Consolidated Edison Co. v. National Labor Relations Board, 305 U. S. 197. 900 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The principal materials employed by the Company in the manu- facture of its products are used automobile parts, paint, bolts, nuts, screws, and other miscellaneous parts and accessories. For the year 1939 the total cost of the materials purchased by the Company was $283,000, approximately 95 per cent of which represented purchases made directly by the Company, or indirectly through the Corpora- tion, from points outside the State of Indiana. - Materials valued at ,approximately $182,000 were purchased in 1939 by the Company from the Corporation at Elkhart, Indiana. About 95 per cent by value of such materials was transported to the place of business of the respondents at Elkhart from points outside the State of Indiana. In the same year the Company sold products valued,at about $500,000 to the Corporation at Elkhart. Approximately 95 per cent of such products were in turn sold by the Corporation and shipped to points outside the State of Indiana. II. THE ORGANIZATIONS INVOLVED International Union, United Automobile Workers of America, Local 693, affiliated with the Congress of Industrial Organizations, is a labor organization which admits to membership employees of the respondents. Workers' Council is an unaffiliated labor organization admitting to membership employees of the respondents. III. THE UNFAIR LABOR PRACTICES A. The formation and domination of the Workers' Council The answer of the Company admits that in November 1939 it inaugurated, created, and established the organization now known as the Workers' Council ; that it conducted or'permitted employees to conduct elections for membership on the Council in its plant during working hours ; and that it paid members of the committee constituting the Council for the time spent in attending meetings of the Council which were held on its property . The Company's answer denies that the Council is a labor organization within the meaning of the Act and that the Company "dominated find interfered with the administra- tion of the Workers' Council ." The answer of the Corporation gener- ally denies the allegation that the "respondents, jointly and severally," had formed and dominated the Council. During the latter part of October 1939, the Union began the organi- zation of the respondents' employees. The first open meeting of the Union took place on November 2, 1939. On or about November MONTEITH BROTHERS COMPANY 901 1, 1939,4 a notice, signed by Curtis Monteith was posted on a bulletin board used by both respondents. This notice read in part as follows : In order to promote better understanding and to straighten out any difference that develop either among employees them- selves or between the employees and the company, we ask the employees to elect a committee of five who can bring any ques- tions or grievance to our attention. The shop is to be divided into five sections and each section is to elect one of their own men to represent them on this com- mittee. We believe that an election should be held every three months so that the committee members change and eventually every man will have a better knowledge of the various problems of our business. [Here five sections were named, each listing the employees in the section.] CONSIDER THESE NAMES UNTIL THURSDAY AFTERNOON WHEN You WML VOTE Section 1 listed the employees under the heading "Watchman, Ship- ping, Forging, Machine, Tool." Since the shipping employees., as Curtis Monteith testified, are carried on the pay roll of the Corpora- tion, whereas the other employees listed are carried on the pay roll of the Company, it is clear that the proposed grievance committee was to represent employees of both respondents. An election was held in the plant during working hours on No- vember 2, 1939, the respondents furnishing the ballots. The following five committeemen were elected from among the employees : Blosser, Davis, Egolf, White, and Whitt. Shortly after the election, Curtis Monteith summoned the five committeemen to his office and explained that their duties were "to watch conditions in the shop, anything that might come up that pertained t6 a worker in the shop or to equipment," to report such matters and grievances generally to the management, and, in turn, to communicate to the employees the respondents' position on these matters. Curtis Monteith testified further concerning the first meeting with the committeemen : At the meeting I told them that whenever the time came we could not run our business, that the Union was going to run it for us, we would have to get out of business. At the hearing Curtis Monteith was questioned and testified as follows : 4 Counsel for the Board and the respondents first stipulated that November 4, 1939, was the approximate date , but later counsel for the respondents withdrew from the stip- ulation From the whole record we are convinced that November 1, 1939, is approximately the correct date 451269-42-vol. 34-58 902 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Q. So you knew at the time you put up the notice that the Union was attempting to organize your employees? A. I must have known. The notice referred to was a sign reading, "You do not have to join any union to work here : use your own judgement [sic]" and was posted in October 1939. Although the respondents' representatives denied knowledge of the organizational efforts of the Union at the time of the formation of the grievance committee, Curtis Monteith's testimony, above quoted, disproves their contention. When Curtis Monteith was asked to explain his reference to the Union at the first Council meeting, he testified : "I do not know what the reason for that expression was." But the quoted statements, when considered in connection with the notice calling for the election of representatives, demonstrates that the respondents' purpose in setting up the grievance committee was to prevent the Union from gaining a foothold in their plant. Shortly after the grievance committee began to function, it assumed the name, "Workers' Council." It is undisputed that the Council pre- sented numerous grievances to the respondents with respect to wages, hours of work, safety, sanitary conditions, and other conditions of em- ployment and that the respondents dealt with the Council concerning a policy of seniority and the institution of new rates of pay. The members of the Council met once each week by themselves in the office of Mark Monteith, the general manager of both respondents. There they would discuss the grievances, which were taken up with Mark Monteith on the afternoon of the same day. After such afternoon meeting Monteith would prepare a typewritten bulletin setting forth his synopsis of what he had discussed with the councilmen. This bulletin would later be placed on the bulletin board for the information of the employees generally. The results of conferences between the Council and the respondents were also orally communicated to the employees by the individual councilmen. The respondents from the beginning encouraged the councilmen to do this. The councilmen were paid by the respondents for the time spent in consultation among themselves and for time spent at the meetings with Mark Monteith. The Council has no constitution or bylaws, collects no dues, and holds no general meetings of the employees. There is evidence that the respondents did not intend the Council to act as a bargaining agency for the employees and that Kistler informed the other direc- tors that unless an organization could bargain collectively for em- ployees, it was neither a labor organization nor an organization which it was illegal for employers to form. Section 2 (5) of the Act, how- ever, defines a labor organization as : * * * any organization of any kind, * * * in which em- ployees participate and which exists for the purpose, in whole MONTEITH BROTHERS COMPANY 903 or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work. The findings above made, the admissions of the respondents' officers, and the entire record demonstrate conclusively that the Council, by virtue of the purposes for which it was formed and exists and the functions in which it has engaged, is a labor organization within the meaning of the Act. The contention that the respondents did not dominate or interfere with the administration of the Council after its formation is without merit. The proof clearly shows that Mark Monteith, general manager for both respondents, actively participated and still participates in the administration of the Council and that the respondents gave it and still give it financial and other support. The Council was not only the respondents' creature, but remained subservient to their will after its formation. We find, as did the Trial Examiner, that the respondents have dom- inated and interfered with the formation and administration of the Council and have contributed financial and other support to it, and that the respondents thereby interfered with, restrained, and coerced their employees in the exercise of the rights guaranteed in Section 7 of the Act. B. Interference, restraint, and coercion In October 1939, as we have shown, the respondents posted a notice in the plant near the time clock, which read as follows : YOU DO NOT HAVE TO JOIN ANY UNION TO WORK HERE : USE YOUR OWN JUDGEMENT (sic) The original posting of this notice occurred at the beginning of the Union's organizational effort. The notice remained posted until about the time of the hearing. This notice in effect urged employees to refrain from joining the Union and was clearly an interference with the rights of the respondents' employees to self-organization. On November 3, 1939, Curtis Monteith called five employees into his office. Warren Kidder, one of these employees, testified; ... finally he [Curtis Monteith] said he knew that there had been a union meeting the previous night and he said that he didn't want any union in that shop, that before he would he would sell the shop and go out of business, that he and his brothers all felt that way about it. Curtis Monteith denied that he made this statement. 904 DECISIONS OF NATIONAL LABOR RELATIONS BOARD As related in the preceding section, Curtis Monteith addressed the five councilmen in his office shortly after their election. Whitt testi- fied that during this meeting, Curtis Monteith said : It is a definite fact that the C. I. O. will never come in here or any other union organization and tell us how to run our business. Before we do, we will lock the shop up and throw the key away. Whitt's testimony was corroborated by Davis. Curtis Monteith de- nied making the statement above quoted, and testified that he said : At that meeting I told them that whenever the time came we could not run our business, that the union was going to run it for us, we would have to get out of business. In view of the corroboration of Whitt's testimony; the evasive char- acter of Curtis Monteith's testimony, on this point, and in the light of the entire record we find, as did the Trial Examiner, that Curtis Monteith made, in substance, the statements attributed to him by Whitt and Davis at the meeting above mentioned. We also find that he made the statement attributed to him by Kidder at the other interview. On or about March 4, 1940, Curtis Montieth sent a letter to' the respondents' employees, in which he "explained" the respondents' attitude toward the employees' right to join labor organizations. Among other things, the letter stated : Several of our employees have recently informed their foreman that they have been urged by other employees, or by an organizer, to join a labor union, which, we are informed, has been, or is being, organized in our plant, and these employees have stated that they have been informed of the possible advantages that will accrue to them' if they do join, and they have also been in- formed that if they do not join they may lose their jobs, appar- ently because the union may induce, or require, us to employ only members of the union. These employees have requested their foremen's advice as to whether they should join the union or whether any of the things stated above may happen to them if they do not join, and one of the purposes of writing this letter to each one of our employees is to answer these questions. In the first place, the National Labor Relations Act provides, in substance, that any employee may, if he wishes, join a labor organization of his own choosing,, and it prohibits the employer from discharging the employee because he does join such an organization or because he is an active member of it. It, of course, does not prevent an employer from discharging an em- ployee for any reason which the employer thinks sufficient, other MONTEITH BROTHERS COMPANY 905 than because that employee does belong to a labor organization or is active in its behalf. You must decide for yourself whether you will join a labor union. In making your decision, you should consider whether by so doing you will be benefited financially, or otherwise, in an amount equal to the membership fee you, will be required to pay when you do join and the dues you will be required to pay if you remain a member of the union and just what benefits or ad- vantage you will obtain by belonging to a union, which you would not obtain if you did not so belong. This Company will give no consideration to the fact that an employee belongs to a union in determining whether the employee shall be advanced to a better job or paid a higher rate, but those questions will be determined solely upon the ability of the employee and the manner in which he does his work. The owners of this company are convinced that over a period of years, you will not benefit, either financially or otherwise, merely because you belong to a union, because whenever increases in pay, promotions or other terms or conditions of employment, which may hereafter be granted to you, will be granted volun- tarily by the company, whether you do or do not belong to a labor organization. (Italics added.) When business is slack and it becomes necessary to lay off some of our employees, the names of those to be laid off will be deter- mined without reference 'to the fact that they are or are not members of a labor union, and the same,thing is true when business picks up and additional employees are needed. So far as ,the statement that has been made that you must belong to a union in order to hold your job with this company, or that it will be operated as a closed shop is concerned, whoever made such a statement was talking about something that he knows nothing about. Unless the opinion of the owners of this company changes from what it now is, there never will be a time when an employee must belong to a union in order to retain his job. While they recognize the right of an employee to join a union, if he sees fit to do so, they do not recognize the right of that employee or the union to which he belongs to tell the man- agement that only members of that organization can become or remain employees of this company. The advice on the subject of membership in a labor organization contained in this letter is given you only because some of your fellow workers have asked that it be given and you will, of course, at all times bear in mind that you can follow, or refuse to follow the advice contained in this letter as you see fit since this com- 906 DECISIONS OF NATIONAL LABOR RELATIONS BOARD pany is not concerned with your membership in a labor or other organization but only with the manner in which you perform your work. If you have any questions in mind on the general subject of joining or remaining a member of a labor organization which are not answered by this letter, the writer will be glad to have you call upon him and discuss these questions either now or at any time in the future. This letter told the employees in unequivocal terms that they would not gain anything by joining a union; its clear implication was that the employees stood to lose financially by joining, since the respond- ents would voluntarily grant all the financial benefits the employees might obtain through a union. The letter also stated that the respondents would never agree to a closed shop in the plant. The Union had not requested a closed shop. It is well settled that, under the circumstances of their utterance and publication, these state- ments are intimidatory, coercive, and violative of the Act. e These statements cannot be reasonably disassociated from the interference inherent in the formation and domination of the Council or from Curtis Monteith's statements in which he threatened to close down the plant if the Union succeeded in organizing the employees. We find that the respondents, by the two posted notices referred to above, and by the statements of Curtis Monteith, interfered with, restrained, and coerced their.employees in the rights guaranteed them by Section 7 of the Act. C. The discriminatory discharge of Lindsey Whitt In answer to the allegation of the complaint that the respondents discriminatorily discharged Lindsey Whitt on April 8, 1940, both respondents made a general denial. In addition, the Company pleaded affirmatively that it discharged Whitt on April 8, 1940, be- cause he continued to engage in excessive talking and visiting with other employees after repeated warnings; upon many occasions stopped work and departed from the place where he was required to perform his duties; came into the shop when not working and visited with other employees during working hours; failed to return to work at the expiration of the rest periods; left the building where he was employed without the permission of his foreman; solicited another employee to join the Union during working hours in the 5 Cf. N. L. R. B. v. Griswold Manufacturing Company, 106 P. (2d) 713, 722 (C. C A. 3), enforcing 6 N. L. R. B. 298: "It is because of its (Congress') recognition that the em- ployee is sensitive and responsive to even the most subtle expression on the part of his employer, whose good will is so necessary , that limitations have been placed upon the activities of the employer in carrying out the principle of collective bargaining." MONTEITH BROTHERS COMPANY 907 Company's plant; so carelessly operated a broaching machine that upon several occasions he broke the machine necessitating expensive repairs; deliberately violated rules governing the Company's employees so that he would be discharged; and refused to comply with plant rules. Whitt began employment with the Company on July 14, 1929. In 1935 he quit after a dispute concerning wage rates. He was rehired in April 1937 upon solicitation by Vescelus, his old foreman, under an arrangement whereby he could also continue on another job until he decided whether he preferred working for the respondents. He then worked for the respondents until his discharge on April 8, 1940. Foreman Vescelus testified that prior to January 1940 Whitt had been reprimanded by him "at least a dozen times" for leaving his work, leaving his department, and excessive talking. This testimony was corroborated in part by Mark Monteith and Curtis Monteith. How- ever, Vescelus further testified that Whitt's performance of his duties continued to be generally satisfactory until early 1940 when "I would notice occasionally that he [Whitt] was gone for his job." Whitt joined the Union on November 2, 1939, and thereafter was active on its behalf. According to his own testimony, he tried to get all the employees to join it. Curtis Monteith testified, "I know he [Whitt] was very active in the plant." Whitt, as pointed out above, was one of the five original employees elected to the Council. His term had expired before the time of his discharge. In January or February 1940, Curtis Monteith engaged Whitt in a conversation concerning the Union in the rod room where Whitt worked. Whitt testified as follows concerning this conversation : A. And he [Curtis Monteith] says, "You know, this damn C. I. 0. has just gotten me so upset-" pardon my language- "that I don't know where I am at." He went ahead and stated that he was in the war over in France, that he had seen men with bayonets run through them and he said he just didn't care for the racket any more. He said he had spent the biggest part of his life building up the shop to where it was and he just would never see the C. I. 0. or any other union come in there and ruin what he had got started. He talked in circles. Q. Tell us what he said. A. By that I mean he said, "Tucky," 6 he says to me, "if the C. :I. 0. comes in here I will lock this shop up and throw away the key." And he didn't talk over five minutes until he says, "You know if the C. I. 0. comes in here you are going to be making less money than you are today." 7 Whitt was sometimes referred to in the record as "Tucky" or "Kentucky" both by representatives of the respondents and by his fellow employees. • 908 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Thereafter, according to Whitt, Curtis Monteith asked him whether he thought the C. I. O. represented a majority of the employees in the plant, and Whitt replied that he thought it did. There then fol- lowed some discussion between them as to what a majority was. At about that point in the conversation, James Kidder, another employee, entered the room and participated in the conversation. The follow- ing testimony of Whitt concerning the continuing conversation was corroborated by Kidder: A. He [Curtis Monteith] says, "You have got something that I envy you of." He says, "You can sell the little fellows. I haven't got that. I couldn't get them. I can sell the big fel- lows, the bigger the better." He said, "You brought this in here by meetings; you sold this idea, and you can unsell it." Q. What, if anything, did you say in that conversation? A. I told Curtis Monteith I belonged to the Union. He said, "Yes, I know you do, Kentucky." He said, "I think I know practically everybody that does belong to it." I says, "Then if you do; why ask me ?" Well, he said, "Maybe not everybody, but practically ... Concerning this conversation, Curtis Monteith testified that Whitt told him that he was a member of the Union and that he told Whitt, with respect to the C. I. 0.: "You have done a damn good job of selling and you can unsell it." Curtis Monteith denied that he said to Whitt, "If the C. I. O. comes in here I will lock this shop up and throw away the key," but did not specifically deny having made the other statements attributed to him by Whitt and Kidder. We find, as did the Trial Examiner, that the testimony of Whitt and Kidder with respect to the foregoing conversation is to be credited.7 Curtis Monteith's statements to Whitt constituted a direct attempt to dissuade Whitt from persevering in his activity on behalf of the Union. On or about January 1, 1940, the respondents adopted a "shop policy" which consisted of a series of rules governing employees' conduct within the plant. The rules were posted on the bulletin board. Prior to his discharge on April 8, Whitt received three writ- ten statements from officials or supervisory employees declaring that he had violated the rules contained in the shop policy. The first, dated January 4, 1940, alleged that Whitt had violated Rule A, stat- ing that "any worker in the shop may stop work from 9: 25 to 9: 35 7 The respondents contend that the Trial Examiner erred in crediting Whitt's testimony where it conflicted with that of other witnesses No occasion appears, however , for over- ruling. the Trial Examiner who was present during the hearing and had the opportunity to observe the demeanor of the witnesses and whose observations led him to accept Whitt's credibility . We find the respondents' contention to be without merit. MONTEITH BROTHERS COMPANY 909 each morning . . . during"the balance of the day, employees must work according to the shop policy." According to Vescelus' testi- mony, Whitt had not been back on his job at 9:36. On January 11, 1940, Whitt received another slip, stating : You are hereby notified that at the end of the ten minutes rest period, you are to be back on the job. In order to make this possible, arrangements are being made for two people to work in the store during the morning rush. I believe this will give sufficient time so no violation of this can occur again. Vescelus admitted that on this occasion Whitt had satisfactorily ex- plained his lateness and had not been guilty of a violation.. On Jan- uary 23, Whitt received another notice, from Mark Monteith, reading as follows : It is the opinion of the Workers Council and the management that you are violating the shop policy when you come into the shop and talk with other employees during regular working hours. This is covered by Rule No. 21. Rule'21 of the shop policy states : For employees' conduct not covered herein : changes of this policy 'will be made as found necessary and it is possible that some unusual acts of misconduct not mentioned here will have to be acted upon by the Workers Council and management. Section B of the shop policy states : Violators will be notified in writing with copy coming to office. 1st time a notice of violation. 2nd notice of the same violation-one week off-no pay. 3rd notice of the same violation-discharge [italics supplied]. The three notices to Whitt did not cover the same violation, and it is clear from Foreman Vescelus' testimony that the second incident was satisfactorily explained, and was not considered by him to be a violation of the shop policy. Whitt testified that when he received his first notice of rules vio- lations on January 4, he showed it to "at least 50 people" and then posted it above the time clock for everyone to see. The respondents contend that Whitt's action indicated a deliberate attempt to be dis- charged. Whitt testified that he thought that he had received the first such notice given to an employee and hence that others would be interested in seeing it. It was, in fact, one of the first such notices issued. The respondents also point to the testimony of two em- ployees that at a card game on April 1, 1940, Whitt suddenly said, 910 DECISIONS OF NATIONAL LABOR RELATIONS BOARD "What does a man have to do around here to get another ticket? I have tried everything I know and they won't give me any more." Further questioning of these employees led them to say that they understood "ticket" to mean another written violation slip. The respondents contend that this also points to a deliberate attempt by Whitt to be discharged. However, the issuance of written violation slips had been' discontinued in February, 2 months prior to the card game, and it seems clear that there is no merit in the respondents' contention." The respondents offered evidence that a broaching machine which Whitt operated in January and February of 1940 had broken and the answer of the Company alleges that Whitt "so carelessly op- erated the broaching machine that upon two occasions he broke the machine necessitating expensive repairs to the machine." Whitt denied breaking the machine on either occasion. The first breakdown of the broaching machine occurred in the middle of January. Vescelus testified that he did not know what caused the machine to. break and he refused to make the definite charge that Whitt was responsible for it. Curtis Monteith testified respecting the first breakage that "we had absolutely no proof of what happened there, but we had an awfully good idea of what happened." There is no evidence that Whitt was responsible in any way for the first break in the machine. Other employees besides Whitt operated it, and no testimony was, offered that an investigation was made to determine who was responsible for the damage. Curtis nevertheless suspected Whitt. He testified "There has always been a doubt in our minds as to how that machine broke, so when it was repaired he was watched very closely." On February 5, 1940, the machine was put into use again. Curtis Monteith testified that thereafter he inspected the machine every night during the week of February 5 after the employees had gone home. On Saturday, February 10, Whitt op- erated the machine until early in the afternoon and went home earlier than usual because there were no more rods to put in the machine. Curtis Monteith testified that he inspected the machine with the fore- man at noon on Saturday, February 10, and found it to be in good condition. On the following Monday, February 12, the machine was again found broken. Whitt testified, credibly and without contradiction, that when he came to work that morning, he found the machine broken before he started to operate it. There is no convincing proof 8 The system of giving written notices was abandoned because some of the employees resented it. Between February and April 8, according to Vescelus , Whitt was verbally warned twice about rules violations . Whitt admitted receiving one such warning, but said it was a "friendly tip" and not an official statement. MONTEITH BROTHERS COMPANY 911, that Whitt broke the machine. Whitt was at no time accused of having caused the machine to break on either occasion, nor was this given to him as the reason for his discharge 2 months later. Nor is there credible evidence that those who decided to discharge Whitt took into consideration his alleged breaking of the machine as a basis for his discharge. In the middle of February, Whitt was given the job of boring con- necting rods. After doing that work for several weeks, he was trans- ferred to the job of babbitting s connecting rods under Foreman Vescelus, and remained at that job until his discharge. On the morning of April 8, 1940, Robert Lentz, a new employee, was put to work at a machine about 6 feet from the bench on which' Whitt was working. About 2 p. in., Whitt engaged in a brief con- versation with Lentz during which Whitt asked Lentz if he was willing to sign a card giving the Union the right to bargain for him. Di- rectly thereafter Mark Monteith rushed over to Whitt and the fol- lowing conversation ensued, according to Whitt : [Mark Monteith said] "Do that after working hours, Kentucky." I said, "Do what?" He said, "What you just did; and•I heard you." I said, "Okay, Twill." Directly afterwards, Mark Monteith told Vescelus that he had caught Whitt talking with Lentz. Lentz was called to Mark Monteith's office and questioned as to what Whitt had told him. Lentz related, according to his testimony, substantially the facts hereinbefore set forth concerning his conversation with Whitt. After Lentz had given his story, the directors-of the respondents conferred and decided to discharge Whitt. Concerning the discussion preceding this decision, Mark Monteith testified : I discussed the fact that Whitt had received three of these vio- lations and there was little doubt but what he could have received more. ' Then we.weighed this thing of him soliciting union membership. It was Kistler's opinion that we might be liable [under the Act] if we permitted him to do that with our knowledge, and we decided then and there that we would let him go. Curtis Monteith and Kistler also claimed that the directors considered Whitt's prior employment history, Kistler testifying that they "went over practically the whole employment record . . . and the question of how it would be in reaction under the National Labor Relations Act." Later in the day, Whitt was notified that he was discharged. On the afternoon of the same day Mark Monteith assembled the Council and informed the councilmen of Whitt's discharge. Mark 9 Babbit is an anti-friction alloy used in connecting rod bearings. Babbitting is a tech- nical operation in which a part of connecting iod is covered with the molten metal 912 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Monteith testified that he said to members of the Council "we felt that his soliciting union membership would not permit us to let it go on that way." Councilman Reed testified that Mark Monteith stated that Whitt had violated a labor law, that he had not violated a shop policy, and that was the reason for his discharge. Councilman Kidder testified that Mark Monteith stated that Whitt was being dis- missed for talking union on company time and property and that when some of the councilmen asked whether there would be any "kick back" from the Board, Mark Monteith replied that the respondents "had received instructions that they were within their rights in firing him because they would be aiding one union against another if they would leave him solicit union membership, and they didn't know how many unions there were in the shop at that time." We credit, as did the Trial Examiner, the testimony of Councilman Reed and Kidder, and find that Mark Monteith made the statements which they attributed to him. On April 10 the Council held another meeting to discuss Whitt's case. Several of the members of the Council thought that they should have something to say about Whitt's case, because "We couldn't see clearly how he had violated a labor law." Mark Monteith was called to the meeting where he again repeated that Whitt had violated the labor law and that the Council had nothing to say about it. Reed asked Mark Monteith if the Council could get a copy of the law. Mark Monteith called in Kistler who read something from a small book to the effect that if the respondents were to allow Whitt to solicit members for the Union, they would be aiding one union against "pos- sibly" another, that that would be a violation of the labor law, and that they were not sure how many unions were trying to get into the shop. The testimony shows that to the respondents' knowledge, only the Union was attempting to organize its employees, and the only other labor organization present in the plant was the respondents' creature, the Council. It is significant that while they objected to Whitt's activities during working hours, the respondents allowed the members of the Council to leave their work at any time to discuss council activities.with fellow employees, and in fact encouraged such acts. Subsequent to Whitt's discharge, Kistler made out a separation report on the form provided by the Unemployment Compensation Division of the State of Indiana. Under "Reason for Separation," Kistler stated : "Soliciting union membership during working hours." About May 17, 1940, Daniel Weggeland, a Field Examiner for the, Board, conferred with Curtis Monteith concerning the Union's charges of discrimination against Whitt. On cross-examination Curtis Mon- teith testified that he might have told Weggeland that the reason for Whitt's discharge was that Whitt spoke to an employee about joining MONTEITH BROTHERS COMPANY 913 the Union; that he told Weggeland that he understood that an em- ployer would be violating the Act if he allowed an employee to discuss union affairs during working hours; that he told Weggeland that Whitt was a "trouble maker" around the plant; and that he might have told him, by way of indicating what Whitt's troublemaking activities were, that Whitt joined a picket line in a strike at the Schult Trailer Company. From these facts and the whole record there can be no doubt that the respondents' main adverse concern with respect to Whitt was his activities on behalf of the Union. This concern bears a marked contrast to the respondents' encouragement and support, financial and otherwise, of activity on behalf of the Council. The conclusion is plain that Whitt was discharged because he was a member and leader of the Union. With respect to the evidence concerning the breaking of the broaching machine, we are of the opinion, and find, as did the Trial Examiner, that such evidence was offered in a retrospective attempt to justify Whitt's discharge, and that belief in Whitt's responsibility for the damage, if it in fact existed, played no part in the determination to discharge him. That Whitt's alleged violations of the shop policy did not cause his dis- charge appears, inter alia, from Mark Monteith's admission to that effect in his statement to the Workers' Council. That Whitt's act in talking to Lentz on April 8, 1940, and the attendant consequence, a slight interruption in his work, was not the cause for his discharge is demonstrated by the fact that the members of the Council spent more time away from their work on Council business than Whitt (lid and were not only not discharged for doing so, but on the con- trary, were encouraged in such conduct by the* respondents, who paid councilmen for time spent on Council business. The real reason for Whitt's discharge was his leadership of the Union. The respond- ents manifested their recognition of and unmistakable opposition to Whitt's leadership of the Union when Curtis Monteith attempted to'persuade him to "unsell" the Union. Finally, Mark Monteith conceded to the Council that Whitt was discharged because he so- licited for the Union. We find, as did the Trial Examiner, that respondents, by discharg- ing Lindsey Whitt on April 8, 1940, discriminated in regard to his hire and tenure of employment, thereby discouraging membership in the Union and interfering with, restraining, and coercing their employees in the exercise of the rights guaranteed in Section 7 of the Act. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondents set forth in Section III, above, occurring in connection with the operations of the respondents de- 914 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 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 that they cease and desist therefrom and that they take certain affirmative action designed to effectuate the policies of the Act. Since it has been found that respondents ini- tiated, and dominated and interfered with the administration of, the Council, and contributed financial and other support thereto, we shall order the respondents to withdraw all recognition from and completely disestablish the Council as a representative of the respond- ents' employees for the purposes of dealing with the respondents con- cerning grievances, labor disputes, wages, rates of pay, hours of em- ployment, and other conditions of work. Having found that Lind- sey Whitt was discriminatorily discharged, we shall order the re- spondents to offer him reinstatement and to make him whole for any loss of pay he has suffered by reason of his discharge, by payment to him of a sum equal to the amount which he normally would have earned as wages from the date of his discharge to the date of the re- spondents' offer of reinstatement, 'less his net earnings 10 during said period. 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. International Union, United Automobile Workers of America, Local 693, affiliated with the Congress of Industrial Organizations, and the Workers' Council, are labor organizations within the meaning of Section 2 (5) of the Act. 2. By dominating and interfering with the formation and adminis- tration of, and contributing financial and other support to, the Work- ers' Council, the respondents have engaged in and are engaging in unfair labor practices, within the meaning of Section 8 (2) of the Act. 10 By "net earnings" is meant earnings less expenses , such as for transportation, room, and board, incurred by an employee in connection with obtaining work and working else- where than for the respondent which would not have been incurred but for his unlawful discharge and the consequent necessity of his seeking employment elsewhere. See Hatter of Crossett 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 Corp. v. National Labor Relations Board, 311 U. S. 7. 1 MONTEITH BROTHERS COMPANY 915 3. By discriminating in regard to the hire and tenure of employ- ment of Lindsey Whitt, thereby discouraging membership in a labor organization, the respondents, have engaged in and are engag- ing in unfair labor practices, within the meaning of Section 8 (3) of the Act. 4. By interfering with, restraining, and coercing their em- ployees in the exercise of the rights guaranteed in Section 7 of the. Act, the respondents have engaged in and are engag- ing in unfair labor practices, within the meaning of Section 8 (1) of the Act. 5. The aforesaid unfair practices are unfair labor practices affect- ing 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 respondents, their officers, agents, successors, and assigns shall : 1. Cease and desist from : (a) Discouraging membership in International iUnion, United Automobile Workers of America, Local 693, affiliated with the Con- gress of Industrial Organizations, or any other labor organization of their employees, by discharging, laying off, or refusing to rein- state any of their employees, or in any other manner discriminating in regard to their hire and tenure of employment or any term or condition of their employment; (b) Dominating or interfering with the administration, of the Workers' Council or with the formation or administration of any other labor organization of their employees; or contributing financial and other support to the Workers' Council, or to any other labor organization of their employees; (c) 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 and other mutual aid or protection as guaranteed in Section 7 of the National Labor Relations Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : _ (a) Offer to Lindsey Whitt immediate and full reinstatement to his former or substantially equivalent position, without prejudice to his seniority and other rights and privileges; 916 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (b) Make whole the said Lindsey Whitt for any loss of pay he may have suffered by reason of the respondents' discrimination against him by payment to him of a sum of money equal to the amount which he would normally have earned as wages during the period from the date of the respondents' discrimination against him to the date of the respondents' offer of reinstatement, less his net earnings during said period ; (c) Withdraw all recognition from the Workers' Council 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 employment, and completely disestablish the Workers' Council as such representative; (d) Immediately post and maintain for a period of at least sixty (60) consecutive days from the date of posting, notices in con- spicuous places throughout their plant stating that they will not engage in the conduct from which they are ordered to cease and desist in paragraphs 1 (a), (b), and (c), above, and that they will take the affirmative action set forth in paragraphs 2 (a), (b), and (c), above; (e) Notify the Regional Director for the Thirteenth Region in writing within ten (10) days from the date of this Order what steps the respondents have taken to comply herewith. MR. EDWIN S. SMITH took no part in the consideration of the above Decision and Order.