Newton Chevrolet, Inc.

t r ' I ,In the. Matter of NEWTON CHEVROLET, INC. and INTERNATIONAL Asso- CIATION OF MACHINISTS, AUTOMOTIVE MACHINISTS LODGE No., 1001 Case No. C-1934.-Decided December 6, 1941 Jurisdiction : automobile sales and servicing industry. Unfair Labor Practices Interference, Restraint, alnd Coercion: conduct of president in interrogating em- ployees concerning union affiliation and cautioning them against permitting outsiders to interfere in labor relations. Discrimination: discharge of chief, union representative and leader purportedly for failure to report to work ; lock-out of paint shop employees ; charges dis- missed as to foreman discharged for insubordination and misconduct. Collective Bargaining: majority established by membership in union; employees whose discharges are found discriminatory included in determination of- refusal to bargain ; insistence that union secure agreement from employer's competitors as condition precedent to effectiveness of agreement ; putting into effect changes in wages, hours, and working conditions substantially in accord- ance with demands of union but without giving union any credit for such changes-failure to negotiate in good faith : insistence upon inclusion in bar- gaining contract of article delaying effective date of agreement until employer's competitors had substantially similar contract although employer made changes in wages, hours, and working conditions substantially in accord with union's demands; discriminatory discharge of five union members during course of bar- gaining negotiations. Remedial Orders : discharged and locked-out employees ordered reinstated with back pay; respondent not ordered unconditionally to expand paint shop oper- ations in order to give employment to paint shop employees since respondent may be able to comply with order by providing other equivalent jobs; amount of compensation to be paid employees discriminatorily discharged from paint shop not to be diminished on account of curtailment of paint shop operations since curtailment itself constituted an unfair labor practice; employer ordered to bargain. Unit Appropriate for Collective, Bargaining : all the respondent's employees in its service department, including painters but excluding supervisors; no contro- versy as to-employees whose discharges are found discriminatory included in appropriate unit. Mr. Earle K. Shawe and Mr. Alexander E. Wilson, Jr., for the Board. Mr. John A. Chambliss, of Chattanooga, Tenn., for the respondent. Mr. W. R. Barney, of Chattanooga, Tenn., for the Lodge. Mr. Eugene R. Thorrens, of counsel to the Board. 37 N. L. R B., No. 57. 334 NEWTON CHEVROLET, INC. .- DECISION AND ORDER STATEMENT OF THE CASE . Upon a charge duly filed by International Association of 'Machinists; Automotive Machinists Lodge No. 1001, herein called the Lodge, the National Labor Relations Board, herein called the Board, by 'the Regional Director for the Tenth Region (Atlanta, -Georgia), issued its complaint dated May 28, 1941, against Newton Chevrolet, Inc., Chattanooga, Tennessee, herein called the respondent, alleging that the respondent had engaged in and was engaging in unfair labor prac- tices affecting commerce, within the meaning of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. Copies of the complaint accompanied by notices of hearing thereon were duly served upon the respondent and the Lodge. With respect to the unfair labor practices, the complaint alleged in substance: (1) that on- or about January 6, 1941, the respondent discharged and has since refused to reemploy A. W. Hamic 1 because he had joined and assisted the Lodge' and, had engaged in concerted activities with other employees of the respondent for the purposes of collective bargaining and other mutual aid and protection; (2) that a majority of the respondent's employees in a unit appropriate for the purposes of collective bargaining had designated the Lodge as their bargaining agent, and that the respondent, on or about January 1, 1941; and -at -all times thereafter, refused to bargain collectively with the Lodge; and (3) that`the respondent by these and other'specified acts 2 interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed- in Section 7 of the Act.3 - On June 7, 1941, the' respondent filed its answer, in which, among other things, it denied the material allegations of the complaint with respect to the unfair labor practices. Pursuant to notice, a hearing was held at Chattanooga; Tennessee, from June 9 through June 12, 1941, before Thomas S. Wilson, the 1The 'complaint misspelled Hamic ' s name, but was amended at the healing to correct the spelling 7 These included ( a) threatening its employees with discharge or other discipline if they became or remained members of the Lodge ; ( b) advising employees that membership in the Lodge would not benefit them , ( c) questioning employees as to their motivation in joining a labor organization ; and (d ) =advising employees that membership in the Lodge "would cause them to get less work with " the respondent 3 The complaint alleged that the respondent interfered with , restrained, and coerced Its employees in the exercise of the lights guaranteed in Section 7' of the Act at all times since December 15, 1940. At the hearing the date 1940 was amended without objection to 1939. 336 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Trial Examiner duly designated by the Chief Trial Examiner. The Board and the respondent were represented by counsel, and the Lodge by a union representative. All participated in the hearing and full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues was afforded all parties. Upon an amended charge filed by the Lodge during the course of the hearing, counsel 'for'the Board moved to 'arielid the complaint by add- ing the allegation that the respondent had d'i criniinatorily discharged five named additional employees.4 There-being no objection, the Trial Examiner granted the motion with the understanding that the resp'ond- ent's answer theretofore filed be considered as denying the, allegations of the complaint as thus amended. At the close of the hearing, the Board's motion to conform the pleadings to the prof was granted without objection.' During the course of the hearing the Trial Exam- iner ruled on other motions and - on objections to the admission of evidence. The Board has-reviewed the rulings of. the Trial Examiner and finds that no prejudicial errors were committed. The rulings are hereby affirmed. The Trial Examiner thereafter filed 'his Intermediate Report, dated July 17, 1941, copies of which were duly served upon the respondent and the Lodge. He found that the respondent had en- gaged in and was engaging in unfair labor practices; within the meaning of Section 8, (1), (3), and (5) and Section 2 (6) and (7) of the Act, and recommended that the respondent cease'and desist from engaging in the unfair labor practices, and affirmatively, that the respondent reinstate with back pay the six employees named in the complaint as amended, and bargain collectively with the Lodge. 'On August 21, 1941, the respondent filed exceptions to the Intermediate Report. ' Neither ` the . respondent nor the Lodge" filed' ' briefs, or requested oral argument, and oral argument was not held. The Board has considered the exceptions to the Intermediate i Re- port- and, to the extent that they are inconsistent with the findings of fact, conclusions of law, and order below, finds them to be without merit. Upon the entire record in,the case, the Board makes the, following : FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT The respondent, a Tennessee corporation,, is engaged in 'the sale, exchange, service, and repair of new and used automobiles, trucks, + The amendment named the following :'C. B. Shipley, Sam Painter, J' D 'McGee, James ,Smith, and C. W. Hudson. _ 11 1 NEWTON CHEVROLET, :INC. 337 parts; accessories,. and equipment in Chattanooga, Tennessee. The respondent operates under an agreement with the Chevrolet Division of General Motors, Inc., Detroit, Michigan,-for the, sale ^of General Motors' products. within the cities of Chattanooga, Signal Mountain, and Lookout Mountain, Tennessee, and Rossville, Georgia. During 1940, the respondent purchased 570 new cars and trucks having a value in excess of $450,000. All these new cars and trucks were shipped from Chevrolet factories in the State of Michigan to the respondent's place of 'business in Chattanooga, Tennessee. During the same period, the respondent sold 579 new automobiles and trucks having a value in excess of $450,000, of which approximately 5 to 10 per cent were sold to customers located outside the State of Tennes- see: During the same period, the respondent sold 943 used cars hav- ing, a value in excess of $200,000. Approximately 58 of these used cars, having a value of approximately $12,000, originated from sources outside the State of Tennessee. Approximately 5 or 10 per cent of the used cars were sold by the-respondent to customers' located outside the State of Tennessee. In addition, during the same period the respondent purchased parts, accessories, and equipment -having a value of approximately $55,000, most of which originated at Flint, Michigan, and sold about $53,000 worth of parts, accessories, and equipment, of which about 5 to 10 per cent represented sales to pur- chasers located outside the State of Tennessee. II. TIIE ORGANIZATION INVOLVED International Association of Machinists, Automotive Machinists Lodge No. 1001, affiliated with the American Federation of Labor, is a labor organization admitting to membership employees of the respondent. I III. THE UNFAIR LABOR PRACTICES A. Interference, restraint, and coercion About August 1939, International Association of Machinists launched a drive to organize automobile mechanics in and near the city of Chattanooga. On December 22, 1939, it chartered Lodge No. 1001 for employees of automobile dealers and garage owners located in,,the Chattanooga area. Aboutt 16 of the charter members of the Lodge were employees of the respondent. In the latter part of 1939 or early in 1940, Emmett S. Newton, president of, the -respondent,. learned of 'the Lodge's organizational campaign among employees in the plant. Newton, investigated the 338 DECISIONS OF' NATIONAL LABOR RELATIONS, BOARD union affiliation of the respondent's employees and learned that, a' majority of them belonged to the Lodge.5 - In the 'spring or' summer.of.,1940, Newton addressed the 'employees in the respondent's service department after the close of a regular "pep" meeting. -On 'this. occasion, according to uncontroverted- testi- mony, he told the employees in substance that he had heard that they were organizing, that that was their business, but that he wanted to talk to them as a group. Newton further added : "I 'thought we, were getting along pretty good here, a sort of a big, happy family, and I did not know' whether there was anything wrong. . . . I want you boys to watch yourself and not let some outsider come in and get'you all excited and make' you do something that you will be sorry of later on." Newton then called the names of individual employees, and re- quired each to state publicly whether he, belonged to the °Lodge. After completing the roll, Newton stated that it appeared that the Lodge represented a majority of the employees. He then asked the employees to make, individually, statements "about the matter," but none responded. Newton reiterated A hat the employees "should watch" their "step," . . . "not do 'anything they would be sorry of, and not let some outsider come in to cause any trouble or dissen- sion," and the meeting ended. - We-find; as did the Trial Examiner, that by Newton's statements to the employees and by his investigation of their union affiliation as set forth above, the respondent interfered with, restrained, and co- erced its employees in 'the exercise of the rights guaranteed in Sec- tion 7 of the Act. B. The refusal to bargain (1) The appropriate unit The, complaint alleges and the respondent's answer admits that the mechanics in the service department at the respondent's shop, exclu- sive of the supervisory employees, constitute a unit appropriate for the purposes of collective bargaining.5 The respondent's business falls into three separate divisions and in- eludes the sale of new and used automobiles, the servicing of new and used automobiles, and clerical work in connection with the other two divisions. The respondent performs the work of servicing new and used cars in its service department, which is staffed with mechanics' and painters. The mechanics do mechanical work on automobiles, the Newton; testified at the hearing' that he made the investigation by use of the grape- vine. . . . through different ones in the organization , as],ungp,different men in , the shop just how they- felt about it ' [and this was ] unofficially [ieported back to me]"' 6 At the hearing counsel for the Board stated that the unit alleged to be appropriate included painters in the service department. NEWTON CVEVROLET^ INC. 33^ straightening and aligning of frames and'bodies; and the painters are; engaged in' the painting and general upkeep of automobiles.' ' The mechanics • and painters work- under 'the supervision of the sane fore- men and. the' painting is coordinated with the work of the mechanics.. Although the-painters are paid by the week, while the mechanics are in general paid on' a piece-work basis; their problem's are in 'some re- spects similar and in others, related. At the hearing, Newton stated that, he regarded the mechanics in the service department, including- the painters, as an appropriate unit. We'find that the' employees in the service department of the re= spondent, including painters, and exclusive of supervisory employees,. constituted at all-times material herein, and that they now constitute,. a unit appropriate for-the purposes of collective bargaining with re- spect to wages, rates of pay, hours of employment, and other condi- tions of employment. We further find that said unit insures to em- ployees of the respondent the full benefit of their right to self-organi- zation ' and 'to collective bargaining"'and otherwise effectuates the policies of the Act. (2) Representation by the Lodge of a majority in the appropriate unit As of January 1, 1941, the respondent had on its pay roll in the unit hereinabove found appropriate 25 employees,7 of whom 20 had by that date become members of the Lodge, and as of the time of the hear- ing, 28 employees 8 in the appropriate unit, of whom 18 belonged to the Lodge: The Trial Examiner found that the -Lodge represented on January 1, 1941, and thereafter, a majority of the respondent's, employees in the unit hereinabove found appropriate. The respond- ent took no exception to the Trial Examiner's finding. We find that on January 1, 1941, and at all times thereafter, the. Lodge was, and now is,,the duly designated representative of a major- ity of the employees in the appropriate unit and, by virtue of Section 9 -(a), of the Act, the exclusive representative of all employees in such unit for the purposes of collective -bargaining. - (3) The refusal to bargain Prior, to October 1940, the Lodge, which includes within its mein- bership, in addition to those of the respondent, employees of auto- 7 This, figure includes the"four employees in the paint shop who, as appears below, were discharged 'on December 20, 1940 Since we hereinafter find that their discharges were discriminatory within the meaning of Section 8 (3) of the Act, they are included within the appropriate unit Black Diamond Steamship Coip v AT L R B, 94 F (2d) 675 (C C A 2), cert denied 304 U S 579, enf'g platter of Black Diamond Steamship Corp and Marine Beneficial Association, Local, 33, 3 N L R B 84 8This -figure includes empkoyees;in the paint shop discharged on or ' after'December'20, 1940 , as well as A W. Hamic, found below to have been discnnunatonly discharged. 34Q DECISIONS OF- NATIONAL LABOR , RELATIONS, BOARD mobile , dealers, ,and garage ,owners in the Chattanooga area, sought. to bargain collectively with the Dealers' Association , an organization) composed,of Chattanooga automobile dealers. , Newton, who was pres- ident,of ,the .Dealers' Association, as, well as of the ,respondent , advised the Lodge that the Dealers' Association , as such, would not deal with the Lodge. Thereafter, the, Lodge. sought to, bargain collectively with the respondent. , About October 14, 1940, the Lodge presented to the respondent a pro- posed contract prepared and approved by the Lodge covering the service-department employees. Thereafter, numerous conferences were held between the respondent and a union committee .consisting of W. R. Barney, business representative of the Lodge, and the ,negotiat-, ing committee of the Lodge, composed of A. W. Hamic, C. B. Shipley, and one other employee. By January 1941, the parties were in sub- stantial agreement with respect to provisions dealing with wages, hours, . and working conditions .9 Thereafter, in January 1941, the respondent reduced to writing and presented to the Lodge a proposed contract containing such provisions . In addition, however, the pro- posed contract contained as Article VI thereof the following: EFFECTIVE DATE OF CONTRACT Whenever five shops operated by dealers in Chattanooga which are on a parity and in the class with the shop operated by the EM- PLOrE_ RJ shall have substantially similar contracts, this contract shall be effective and its various provisions shall be complied, with. Lodge representatives objected to Article VI in the proposed con- tract and refused to sign it because of the respondent's insistence upon the inclusion of that paragraph. The respondent, however, refused to eliminate the provision, urging that its inclusion was necessary to protect its competitive position.' Shortly following the respondent's refusal to eliminate Article VI, the Lodge, on January 29, 1941, filed with the Board charges that the respondent had refused to bargain with the Lodge. On the day that the Board issued its complaint alleging, among other things, that the respondent had refused to bargain with the Lodge, John A. Chambliss, attorney for the respondent, telephoned Barney and inquired if the. Lodge would sign the proposed contract if Article VI were eliminated. Barney answered that he would have to see the document, as he had forgotten its contents since the January conference, but,that if the proposed contract was as he remembered it the Lodge would sign. P At no time during the negotiations did the respondent question the appropriateness of the service-department unit or the fact that the Lodge represented a majority of the employees in the unit. NEWTON CHEVROLET, INC. 341 Barney requested Chambliss to prepare a draft omitting Article VI. The conversation ended when Chambliss said that he would telephone Barney later. About an hour thereafter, Barney was told by Cham- bliss that he had spoken to President Newton during the interval and that Newton had said. "We better go to bat as it stood." Thereafter, there was no further attempt to bargain. By insisting upon the inclusion of Article VI in the proposed con- tract and by refusing to sign a contract which did not contain such a provision, the respondent unlawfully refused to bargain with, the Lodge. As heretofore stated by the Board: 10 There is nothing in the Act to justify the imposition of a duty upon an exclusive bargaining representative to secure an agree- ment from a majority of an employer's competitors as a condition precedent to the negotiation of an agreement with the employer. To permit individual employers to refuse to bargain collectively until some or all of their competitors had done so clearly would lead to frustration of the fundamental purpose of the Act to encourage the practice of collective bargaining. Moreover, during the course of bargaining negotiations the respond- ent argued in support of the alleged necessity for the inclusion of Article VI in the proposed agreement that the absence of such para- graph would place the respondent at a competitive disadvantage with other automobile dealers. However, the respondent put into effect, prior to January 1941, and as a result of discussions with the Lodge, changes in wages, hours, and working conditions substantially in accord with the demands of the Lodge. It is therefore plain that the respondent's insistence upon the inclusion of Article VI was not in good faith." Furthermore, the respondent put these changes into effect by its own unilateral action, without giving the Lodge any credit for such changes. Such action on the part of the respondent constitutes a refusal to bargain.12 10 Matter of Samuel Youlin , et al, and International Ladies Garment Workers Union, C. 1. 0 , 22 N . L R B 879, and cases cited therein Cf Pueblo Gas and Fuel Co. v. Y. L R B , 118 F. (2d) 304 (C. iC A. 10), enf'g 23 N L . R B. 1028 11 In appraising the respondent's good faith we further note that , as we hereinafter find, the respondent discriminatorily discharged five Lodge members , including two of the Lodge's three committeemen , during the course of the bargaining negotiations. See Matter of United Dredging Company, New Orleans, Louisiana and Inland Boatmen's Division, National Maritime Union, Gulf District, affiliated with C. 1. 0., 30 N. L R. B., No. 118, and cases cited therein . Cf. Matter of ' Chicago Apparatus Company and Federa- tion of Architects, Engineers, Chemists and Technicians, Local 107, 12 N. L R. B. 1002, enf'd in N L. It B v Chicago Apparatus Co, 116 F (2d) 753 (C C. A 7). 13 See, for example , Matter of Whittier Mills Co , etc. and Textile Workers Organizing Committee, 15 N. L R B. 457, enf 'd in N. L. it. B. v. Whittier Mills Co, 111 F. (2d) 474 (C C A 5) ; N. L R B. v. George P. Pilling & Sons Co , 119 F (2d) 32 (C C. A. 3), enf'g 16 N L R. B 650; Singer Mfg Co. v. N. L R B, 119 F. ( 2d) 131 ( C. C. A. 7) enf'g as mod 24 N. L. R. B. 444, cert. denied, 313 U. S. 595. 433257-42-v or. 37-23 342 DECISIONS OF'NATIONAL, LABOR RELATIONS, BOARD We'find'that during January 1941, and thereafter, the respondent refused to bargain collectively with the Lodge as the exclusive repre- sentative of its employees in an appropriate unit, with respect to rates of pay, wages, hours of employment, and other conditions of employment, and that the respondent thereby interfered with, re- strained, and coerced its employees in the exercise of the rights guar- anteed in Section 7 of the Act. C. The discharges (1) Hamic A. W. Hamic, an automotive mechanic with 20 years' experience, was employed by the respondent in the latter part of September 1939, to do, alignment work. Until his discharge on January 6, 1941, he was the-only man in,the shop employed at that work. At the sug- gestion of Herbert Pickett, foreman of the service department, Hamic taught the trade to two other employees during the last few months before his discharge. His work was satisfactory. He had been com- plimented on occasions for his ability by Foreman Pickett. In De- cember 1940, about a month prior to his discharge, Hamic received an increase in his rate of pay.13 In January 1940, Hamic Joined the Lodge as a charter member. He was active in soliciting a large percentage of the respondent's employees to join the Lodge. About August 1940, he was eluted chairman of its negotiating committee to which he appointed Shipley and Greer as the other two members. With the assistance of W. R. Barney, the committee drafted a contract for presentation to the respondent. Hamic and Shipley presented a proposed contract to Newton and requested the opening of negotiations. Hamic attended numerous bargaining meetings from October 1940 to January 1941 and took an active part in the negotiations. After each meeting: with the respondent, Hamic reported to the Lodge members and received instructions and advice for the following meeting. At, the close of one of the negotiating meetings, Newton asked Hamic to use his influ- ence with the employees to secure a reduction in their demands. Hamic answered that he would "wait and see how things turned out."' In the eyes of the employees and management Hamic was the leader and chief representative of the Lodge in the shop. On the morning of January 6, 1941, Hamic felt sick and, instead of going to work, went to the office of W. R. Buttram, a physician in Chattanooga. Dr. Buttram, who diagnosed the ailment as influenza, gave Hamic a prescription and sent him home. Instead of going 78 The respondent paid Hamic a percentage of the charge made to customers for work done by Hamic. He received no other compensation. NEWTON CHEVROLET; INC. 343 home, Hamic had the prescription filled and went to his wife's sister's home nearby in Chattanooga, where he took the medicine prescribed .and rested until late in the afternoon, when he felt well enough to drive home. Hamic failed to notify the respondent that he would not be in for work. About 9: 30 that morning, Foreman Pickett appeared at Hamic's home, located about 7 miles from Chattanooga, and inquired as to Hamic's whereabouts. Mrs. Hamic informed Pickett that Hamic was sick but had gone to work or to the doctor's office. Sometime before noon that day, Pickett made a second trip to the Hamic home, and upon learning that Hamic was still absent, handed Mrs. Hamic the following letter signed by President Newton : DEAR MR. HAMIc : This morning, when you failed to appear at the usual and regular time to go to work, I was advised, after the lapse of some time. I sent some one to find out whether you were ill, whether you had suffered an accident, or if there was any other reason for your absence. I am advised that Mrs. Hamic is at home today and that she stated that she thought you were at wcrke Evidently, there is no illness, and no reason for your absence. You remember that an incident of this nature occurred in the latter part of November. I do,not feel that you show a proper interest and concern. Accordingly, this is to advise you that your service with this company is terminated as of this day. The following day Hamic visited the respondent's shop and received a discharge slip which assigned "Failure to report to work," 'as the reason for the termination of his employment. When Hamic asked Pickett for, a further explanation Pickett answered, "The less you can say about it,, the better. Forget it." Hamic has not since been rein- stated. The reason given Hamic for his discharge was without- precedent in the respondent's history. In numerous instances other employees had taken leave without prior permission for a day or more without any punishment other than a request that on the next occasion they give the respondent advance notice that they were not coming to work. In no other instance has the respondent discharged an employee for the reason given Hamic. Nor has there been any other instance in which the respondent discharged an employee by letter. The other incident upon which the respondent relied in the January 6 letter as a basis for the statement that Hamic did not "show a proper interest and concern" occurred on Saturday, Noyember' 23, 1940. About 11 a. in. on that day, Pickett assigned Hamic to a rush realign- ment job, which required a full day or a day and a half for completion. 'About noon that day, because he was suffering from a cold, Hamic re- quested Pickett to secure the customer's consent to a postponement of 344 DECISIONS,OF NATIONAL LABOR- RELATIONS BOARD the delivery of the car. Hamic further told Pickett : "If you don't call me or let me know further on it [the postponement], I will consider that you have made arrangements for the job to be turned out at a later date and it would not be compulsory for that job to be delivered Saturday or Sunday." Pickett replied, "We will see." After lunch that day, Pickett requested Hamic to abandon temporarily the realign- ment job and assigned him to another job. Hamic spent approxi- mately an hour and a half on the second assignment before he could resume work on the realignment job. At 5 o'clock, the regular quit- ting time, having heard nothing further from Pickett, Hamic quit work. On Monday, Pickett complained to Hamic because the realign- ment job had not been completed. Hamic finished the job late Mon- day afternoon, and the car,wa's,them delivered to the customer. When the customer's messenger called for the car, he made no complaint about delay and told Hamic that no emergency existed which warranted Saturday night or Sunday work. However, on the same day, the respondent by its attorney, sent Barney a letter dated November 25, 1940, complaining of Hamic's failure to work overtime. Late Mon- day evening, Hamic explained the facts to Newton, who, according to Hamic's uncontradicted testimony, answered, "Well, if an employee is sick I don't want him working." The treatment accorded Hamic, we believe, was discriminatory. Although Pickett testified at the hearing, he was not interrogated about the November 23 incident which as we have found above, as did the Trial Examiner, resulted from a misunderstanding and for which Hamic was not blamed. It is undisputed that the respondent had not theretofore discharged employees for the cause assigned to Hamic and it was undenied that Pickett had been informed by Mrs. Hamic that Hamic, a piece worker, was sick and had either gone to work or to visit a doctor. Thus the complaint contained in Newton's letter of January 6 that Hamic had shown indifference to his work had no basis in fact. It is apparent that the respondent was searching for an excuse to dis- charge its most active union employee and that the respondent used Hamic's conduct on January 6 as that excuse. We find, as did the Trial Examiner, that the respondent, by dis- charging Hamic, discriminated in regard to his hire and tenure of employment, thereby discouraging membership in the Lodge and inter- fering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act. (2) Shipley, Painter, Smith, and McGee The respondent operated a paint shop in connection with its business at all times since Newton acquired the business in 1929. C. W. Hudson served as working foreman of the paint shop under NEWTON CHEVROLET, INC. 345 the general supervision of Pickett, foreman of- the, service depart- ment, from 1937 until his discharge in March 1941.14. In the early part, of 1940, the paint-shop force, in addition-to Hudson, consisted of C. B. Shipley, Sam Painter, James Smith, and Lloyd Shropshire, all of whom had been employed in that department for periods begin- ning prior to 1937. In April 1940, the respondent hired J. D. McGee as a painter. Shipley, Painter, and Smith became charter members of the Lodge in December 1939, while Shropshire joined in September 1940, and McGee, in October 1940. Hudson and Pickett discussed the Lodge and agreed that, as "bosses," they were ineligible for membership. At the time of the poll of employees, mentioned above, Newton called Hudson's name and Hudson answered that he was not a member of the Lodge. However, as his was the only foreman's name called, Hudson thereafter decided that he was not considered ineligible for union membership and joined the Lodge on September 6, 1940. About this time Pickett, according to uncontradicted testimony, asked Hud- son if the paint-shop employees had joined the Lodge. Hudson replied that all paint-shop employees had joined. Shipley, as a member of the negotiating committee, participated in the presentation of the Lodge's proposed contract to Newton, and in the arrangements for bargaining conferences. He was the only member of that committee, other than Hamic, who attended and actively participated in each of the bargaining meetings. In Oc- tober 1940, a day or so after Shipley and Hamic had presented the Lodge's proposed contract to Newton, according to undenied testi- mony, Roseborough, the respondent's secretary and treasurer, asked Hudson "what was the matter with Shipley." After Hudson dis- claimed knowledge, Roseborough stated "I thought he was pretty well satisfied . . . he joined the union and is hollering for more money." To meet the needs of increased business, on October 24, 1940, the respondent hired, as painters' helpers, Earl Marshall and E. L. Wat- son, neither of whom joined the Lodge. Considerable' dissatisfaction arose when it was learned that Marshall and Watson were being paid $14 a week while several of the Lodge members with several years' experience as painters were being paid only $12. Hudson consulted Pickett and succeeded in securing a raise for at least one of the older employees with the result that his salary equalled those paid the newcomers. In late November 1940, according to undenied testimony, Pickett complained to Hudson that "the paint shop was losing money." Soon thereafter Pickett informed Hudson that unless the paint shop began 14 The circumstances of Hudson's discharge are, hereinafter related. 346 DECISIONS OF NATIONAL LABOR- RELATIONS BOARD to show a 'profit it would be closed., However, Pickett, cited no figures with respect. to the alleged losses. In order to ascertain whether the paint shop was operating at a loss, Hudson in December , began to keep accounts with respect to the business done in the shop. On December 20, Pickett again complained that "the paint shop was losing money" and told Hudson that the higher-paid employees would have to be laid off in order to reduce expenses.15 Hudson urged that the higher-paid employees were the better men and that since President Newton believed in seniority, the newer employees should be laid off first. As a result, Pickett laid off Smith, McGee, Marshall, and Watson, retaining among others, Shropshire, who was related to on official of the respondent. Although Shropshire's wages were being charged to the paint department, Newton ruled that Shropshire was in the upholstery department and ordered that Smith, who had greater seniority than Shropshire, should be laid off rather than Shropshire.1' On December 20, when Pickett laid off the four employees named above, there were about 6. cars in the shop being painted and about 12 or 14 others on hand to be painted. The respondent sent to outside shops some of these cars to be painted. On January 2, 1941, Pickett ordered Hudson to lay off Shipley and Painter, stating that, Hudson would' be kept to work on customers' cars and the rest of the painting work would be sent to outside shops where pit could be done at less cost. The following day Shipley. and Painter received discharge slips which assigned "Lack of work" as the reason for, their separation. At the time Shipley and Painter were separated from employment there were about 10 automobiles in the shop to be painted in addition to a number of automobiles in the process of being painted. The respondent sent some; of these cars to, outside shops for painting., Pickett testified that Newton made the decision to curtail paint- shop operations and that Newton informed Pickett 'of the decision on January 2, 1941. Although Newton appeared at the hearing as a witness, he failed to explain the basis for his decision. The respondent contends that it decided to send paint work to outside shops and to discontinue its paint shop, except to retain Hudson to service cus- tomers' cars, because, its paint shop-was operating at a loss. In sup- port of this contention the respondent introduced in evidence a state- ment compiled from its books purporting to show the monthly profit and loss during 1939 and 1940 on labor in the paint shop.17 The state- 15 As of December 20, 1940, the respondent paid Shipley $20 weekly , Painter and Smith $15, the other paint-shop employees , except McGee, $14, and McGee, $12. 15 Shropshire, however, as did Smith, belonged to the Lodge 17 The profit and loss was computed by subtracting wages paid to paint -shop employees from charges made for labor in connection with paint -shop work . The record contains no data with respect to the respondent 's overhead or fixed charges nor does the respondent explain how labor charges were computed. NEWTON CHEVROLET, INC. 347 anent fails to support the respondent's claim that it was operating its paint shop-at a loss 18 The respondent had operated a paint shop for more than, 10 years. Its paint-shop business in the latter part.of 1940 did'not differ materially from that of prior years. Indeed, the re- spond-ent'had-added two employees to its paint-shop force in October 1940. Finally, the respondent did not improve its financial condition by sending its paint work to outside shops. Under the circumstances, we find, as did the Trial Examiner, that the respondent was not operating its paint shop at a loss at the time of the discharge of the paint-shop employees and for a substantial period prior thereto. We are of the opinion that, in curtailing its paint-shop operations and discharging the paint-shop employees, the respondent was not moti- vated by concern over its alleged financial losses resulting from paint- shop operations. The real reason for the discharge of the paint-shop employees, we believe, lies in the union activity among them. Shipley, a member of the Lodge's negotiating committee, was employed in that department. The respondent had information that substantially all employees in the paint shop belonged to the Lodge. The Lodge first presented a proposed contract for the respondent's consideration in October 1940. On November 25, the respondent took the initial step toward eliminat- ing Hamic from its employ by sending the letter mentioned above ,to the Lodge. Also in the latter part of November, Pickett first com- .plained that the paint shop was operating at a loss. The respondent's figures, however, show that the respondent made a profit on labor in the paint department that month. But for Hudson's protests, Pickett would have succeeded in discharging Shipley and other Lodge mem- bers in preference to new non-union employees on December 20 when he first proposed the elimination of the "higher-paid" employees in disregard of efficiency and seniority.' This abortive attempt, coupled with the attack on Hamic, indicates the respondent's design to remove "The statement shows an annual profit on labor for 1939 of $1,366 46, and for 1940 of $409 56. The statement further purports to show that the respondent suffered losses on labor in 5 of the last 7 months of 1940. The largest loss sustained was $134.73 for September 1940. During this month , however, the paint-shop employees spent almost 2 weeks' time cleaning and painting the respondent 's premises . The money disbursed for the time so spent, as wage payments , is reflected upon the respondent's books as a loss inasmuch as the respondent received no cash remuneration for work performed by painters during that period to, offset the disbursements . The statement also fails to note that, in addition to a profit on labor, the respondent made a profit on paint materials during 1939 of $1,274 47 and during 1940 of $1 , 258 36 . Besides, a large portion of the paint work was done on used cars belonging to the respondent for which the respondent made on its books to itself a charge approximating cost. While the respondent's figures show a loss of $2.11 on labor for December 1940 , Hudson's figures , which were not im- peached at the hearing , show a profit on labor of $ 113.73 and on materials of $116 95 for that month Furthermore , the respondent's figures for December 1940 contain Inaccuracies since they include a portion of employees ' wages earned during the preceding month and , in addition , Shropshire's monthly salary, although he was transferred to the upholstery-department pay roll on December 20, 1940. 348 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Lodge's leaders. Newton's decision on January 2, 1941, to curtail paint-shop operations by the elimination of all employees, except Hud- son, w4s made precipitately. Since substantial painting work was on hand on December 20 and on January 2 when the paint-shop employees were discharged and some of the work was sent to outside shops, the respondent's claim of lack of work to justify termination of their employment was palpably without basis in fact. Indeed, at the hear- ing the respondent abandoned that pretext and relied for its defense upon the alleged losses sustained in the operation of the paint shop. On January 6, 1941, 4 days later, Hamic was discharged under cir- cumstances hereinabove related. As a result, when the respondent proposed a contract in January 1941, the Lodge's sole representative was Barney, its business representative. Since January 6, 1941, the Lodge has not elected members for the negotiating committee to re- place Hamic and Shipley. We are satisfied and find that the respond- ent's conduct in farming out its paint work to outside shops and in discharging its paint-shop employees was part of its plan to intimidate its employees as a means of forestalling effective concerted action by them. We find, as did the Trial Examiner, that the respondent, by dis- charging C. B. Shipley, Sam Painter, J. D. McGee, and James Smith, discriminated in regard to their hire and tenure of employment, thereby discouraging membership in the Lodge and interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act. (3) Hudson After January 2, 1941, Hudson remained the only employee in the ,paint shop until his discharge on March 18, 1941. On March 17, the 'day before Hudson's discharge, he was assigned a car for painting by Pickett. Hudson informed Pickett that the job could not be com- pleted that day because other paint work was on hand. Pickett there- fore sent the car to another shop for painting. The following morn- ing-the same car, having been partially painted in the interim, was assigned to Hudson for completion. Hudson complained to Pickett that the proposed charge of $2 for the work to be done was extremely low 19 Pickett told Hudson to do the work "or else." Hudson an- swered that he was not concerned about the "or else" and referred to Pickett in abusive and indecent terms. A few minutes later Pickett reappeared in the paint shop, having been outside in the meantime, and told Hudson ". . . if we are going to have a paint shop, I am going to have it the way I want it run, or we won't have one." Whereupon, 11 The job involved the "rubbing out" of three fenders and a door. NEWTON CHEVROLET, INC. 349 according to Hudson's own testimony, he warned Pickett ".. . not to give'[Hudson] no smart talk or [he] will slap [Pickett's] teeth out of his mouth." Pickett removed Hudson's time card from the rack and departed for the office. Later that day Hudson was given a separation report and was discharged. Shortly thereafter, the respondent re- placed Hudson with a former employee, a non-union man, ignoring Shipley who had made prompt application for Hudson's job upon learning of his discharge. While it is true that, prior to March 18, Pickett and Hudson had on many occasions engaged in argument concerning charges made to customers in which profanity was used without the invocation of dis- ciplinary measures and that in replacing Hudson with a non-Lodge member the respondent passed over a former Lodge committeeman, Shipley, an apparently qualified workman, we do not agree with the Trial Examiner's conclusion that the respondent used the March 18 incident as an excuse to consummate its plan to rid itself of all Lodge members in the paint shop. The respondent had knowledge of Hudson's union membership prior to January 1941. Yet it re- tained him in its employment thereafter. The discharge came only after Hudson had insulted his superior with abusive and indecent remarks. While the respondent's failure to give Hudson's job to Shipley indicates further discrimination against Shipley, we are of the opinion that Hudson's discharge is directly traceable to his insubordinate conduct. We therefore find that the respondent, by discharging Hudson, did not discriminate in regard to his hire and tenure of employment to discourage membership in the Lodge. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondent set forth in Section III above, occurring in connection with the operations of the respondent 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 respondent has engaged in unfair labor practices, we will order it to cease and desist therefrom and to take certain affirmative action designed to effectuate the purposes of the Act. As we have found above, the respondent's conduct in sending its paint work to other shops and in discharging Shipley, Painter, McGee, and Smith, all of whom worked in the paint shop, was in pursuance of unfair labor practices. The normal action necessary 350 DECISIONS OF. NATIONAL LABOR RELATIONS BOARD ,to remedy the unfair labor practices is to require the respondent, to offer full reinstatement to the aforesaid. employees. We see no reason for departing from the usual order in this case. The record shows that the respondent continues to accept paint work in- approximately the same quantities as prior to the decision to curtail operations ,in the paint shop ;, .its painting equipment and space are, intact ,.and available. As we have found, there is no merit in the claim that the respondent suffered losses in its paint-shop operations, nor has the respondent improved- its position by sending out paint work. More- over, the fact that the respondent retained one employee to perform paint work indicates that it never intended to close the shop per- manently but merely adopted that stratagem as a temporary measure in order to defeat the Lodge. Under these circumstances, we do not believe that it would effectuate the policies of the Act to qualify our reinstatement order by providing that, in lieu of reinstatement, the respondent may place these employees upon a preferential list if the respondent does not have available positions other than in the paint shop and if the respondent chooses not to resume normal operations in the paint shop 20 The curtailment of work being an unfair labor practice and in the circumstances here disclosed tantamount to a lock-out, and since the absence of available jobs is only apparent, we find that the approximate remedy to effectuate the policies of the Act is to order the respondent to offer Shipley, Painter, McGee, and Smith immediate, and full reinstatement to their former or substantially equivalent positions without prejudice to their seniority and other rights and privileges, and we shall so order.21 We shall make a similar order with respect to Hamic. We shall also order the respondent to make whole A. W. Hamic, C. B. Shipley, Sam Painter, J. D. McGee, and James Smith for, any loss of pay they may have suffered by reason of the respondent's discrimination against them by payment to each of them of a sum of money equal ' to the amount which he normally would have earned as wages from the date of his discharge to ' the date of the offer of reinstatement'22 less his net earnings 23 during such period. ° Cf. Matter of Williams Motor . Company , and Lodge 1426, International Association of Machinists, A. F of L, 31 N L. R B , No. 122. n;ll'e do not require the respondent to expand its paint-shop operations in order to, provide jobs for these employees . It is for the respondent to determine whether com- pliance with our order will necessitate such action See Matter of Edward F. Reichelt, et al and Chicago Fur Workers Union, Local No 45, 21 N. L. R B 262 r' The amount of compensation to be paid Shipley, Painter, McGee, and Smith shall not be diminished on account of the curtailment of paint-shop operations , since , that action itself constituted an unfair labor practice See Matter of Williams Motor Company and Lodge 1426, International Association of Machinists, A. F. of L., 31 N L. R. B., No. "122 ; Matter of Edward F. Reichelt at al. and Chicago Fur Workers Union, Local No. 45, 21 N. L. R B. 262. 23 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 work- 'NEWTON CHEVROLET, 'INC. 351. We have found that the respondent has refused,to bargain col- lectively with the Lodge, although the 'Lodge represented a majority of -.the 'respondent's employees in an appropriate unit. We -`shall therefore order that the respondent, upon request, bargain collec- tively with the Lodge as the exclusive representative of such em- ployees with respect to rates of pay, wages, hours of employment, and other conditions of employment. Upon the basis of the above findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. International Association of Machinists, Automotive Machinists Lodge No. 1001, affiliated with the American Federation of Labor, is a labor organization within the meaning of Section 2 (5) of the Act, 2. By discriminating in regard to the hire and tenure of employment of A. W. Hamic, C., B. Shipley, Sam Painter, J. D. McGee, and James Smith, thereby discouraging membership in International Association of Machinists, Automotive Machinists Lodge No.' 1001, the respondent has engaged in'and is engaging in unfair labor practices within the meaning of Section 8 (3) of the Act. 3. The employees in the service department of the respondent, includ- ing painters and exclusive of supervisory employees, at all times mate- rial herein constituted and now constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9 (b) of the Act. 4. International Association of Machinists, Automotive Machinists Lodge No. 1001, is and at all times since January 1, 1941, has been, the exclusive representative of all the employees in the above unit for the purposes of collective bargaining within the meaning of Section 9 (a) of the Act. 5. By refusing during January 1941, and at all times thereafter, to bargain collectively with International Association of Machinists, Automotive Machinists Lodge No. 1001, as the exclusive representative of its employees in such unit, the respondent has engaged in and' is engaging in unfair labor practices within the meaning of Section 8 '(5) of the Act. ` ' 6. By interfering with, restraining, and coercing its employees in the exercise of the rights guaranteed in Section 7 of the Act, the ing elsewhere than for the respondent, which would not have been incurred but for his unlawful discharge, and the consequent necessity of his seeking employment elsewhere. See Matter of 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 othei work-relief projects shall be considered as earnings. See Republic Steel Corporation v N. L. R. B., 311 U. S. 7. 352 DECISIONS OF NATIONAL LABOR RELATIONS BOARD respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8 (1) of the Act. 7. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2 (6) and (7) of the Act. 8. The respondent, by discharging C. W. Hudson, has not engaged in, unfair labor practices within the meaning of Section 8 (3) of the Act. ORDER Upon the basis of the above findings of fact and conclusions of law, and pursuant to Section 10 (c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the respondent, Newton Chevrolet, Inc., Chattanooga, Tennessee, and its officers, agents, successors, and assigns, shall: 1. Cease and desist from : (a) Discouraging membership in International Association of Machinists, Automotive Machinists Lodge No. 1001, or in any other labor organization of its employees, by discharging or refusing to rein- state any of its employees, or in any other manner discriminating in regard to their hire or tenure of employment or any term or condition of their employment; (b) Refusing to bargain collectively with International Associa- tion of Machinists, Automotive Machinists Lodge No. 1001, as the exclusive representative of the employees in the service department of the respondent, including painters and exclusive of supervisory employees; (c) In any other manner interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, as guaranteed in Section 7 of the Act. 2. Take the following affirmative action which the Board finds will effectuate the policies of the Act : (a) Offer to A. W. Hamic; C. B. Shipley, Sam Painter, J. D. McGee, and James Smith immediate and full reinstatement to their former or substantially equivalent positions, without prejudice to their seniority ahd other rights and privileges; (b) Make whole A. W. Hamic, C. B. Shipley, Sam Painter, J. D. McGee, and James Smith for any loss of pay they may have suffered by reason of the respondent's discrimination in regard to their hire and tenure of employment by payment to each of them of a sum of money equal to the amount which each normally would have earned as wages (luring the period from the date of his discharge to the date NEWTON CHEVROLET, INC. 353 of the respondent's offer of reinstatement, less his net earnings dur- ing such period; (c) Upon request, bargain collectively with International Associ- ation of Machinists, Automotive Machinists Lodge No. 1001, as the exclusive representative of the employees in the service department of the respondent, including painters and exclusive of supervisory employees; (d) Post immediately in conspicuous places throughout its plant and maintain for a period of at least sixty (60) consecutive days from the date of posting,, notices to its employees stating : (1) that the respondent will not engage in the conduct from which it is ordered to cease and desist in paragraphs 1 (a), (b),'and (c) of this Order; (2) that the respondent will take the affirmative action set forth in paragraphs 2 (a), (b), and (c) of this Order; and (3) that the respondent's employees are free to become or remain members of International Association of Machinists, Automotive Machinists, Lodge No. 1001, and that the respondent will not discriminate against any employee because of membership in or activity in behalf of that organization ; (e) Notify the Regional Director for the Tenth Region in writing within ten (10) days from,the date of this Order what steps the respondent has taken to comply herewith. . , . AND IT is FURTHER oxnExm that the complaint , to the extent that it alleges that the respondent discriminated in regard to the hire and tenure of employment of C. W. Hudson, within the meaning of Section 8 (3) of the Act, be, and it hereby is, dismissed.